As filed with the Securities and Exchange Commission on
June 6, 2003
Registration No. 2-45272
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-14
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
/ X /
PRE-EFFECTIVE AMENDMENT NO.___
/ /
POST-EFFECTIVE AMENDMENT NO.__
/ /
OPPENHEIMER GROWTH FUND
(Exact Name of Registrant as Specified in Charter)
6803 South Tucson Way, Centennial, Colorado 80112
(Address of Principal Executive Offices)
303-768-3200
(Registrant's Telephone Number)
Robert G. Zack, Esq.
Senior Vice President & General Counsel
OppenheimerFunds, Inc.
498 Seventh Avenue, New York, New York 10148
(212) 323-0250
(Name and Address of Agent for Service)
As soon as practicable after the Registration Statement
becomes effective.
(Approximate Date of Proposed Public Offering)
Title of Securities Being Registered: Class A, Class B,
Class C, Class N and Class Y shares of Oppenheimer Growth
Fund.
It is proposed that this filing will become effective on
July 6, 2003 pursuant to Rule 488.
No filing fee is due because of reliance on Section 24(f)
of the Investment Company Act of 1940.
CONTENTS OF REGISTRATION STATEMENT
This Registration Statement contains the following pages
and documents:
Front Cover
Contents Page
Cross-Reference Sheet
Part A
Proxy Statement for Oppenheimer Trinity Large Cap Growth
Fund and Prospectus for Oppenheimer Growth Fund
Part B
Statement of Additional Information
Part C
Other Information
Signatures
Exhibits
FORM N-14
OPPENHEIMER GROWTH FUND
CROSS REFERENCE SHEET
Part A of Form N-14
Item No. Proxy Statement and Prospectus Heading and/or
- -------- ------------------------------------------------
Title of Document
- -----------------
1. (a) Cross Reference Sheet.
(b) Front Cover Page.
2. (a) *
(b) Table of Contents.
3. (a) Synopsis.
(b) Comparative Fee Tables.
(c) Principal Risk Factors.
4. (a) Synopsis; Approval or Disapproval of the
Reorganization of Oppenheimer Trinity Large Cap
Growth Fund into Oppenheimer Growth Fund.
5. (a) Method of Carrying Out the Reorganization;
Additional Information.
(b) Approval or Disapproval of the Reorganization -
Capitalization Table.
(c) Statement of Additional Information of Oppenheimer
Growth Fund (see Part B); Annual Report of
Oppenheimer Growth Fund (see Part B);
Semi-Annual Report of Oppenheimer Growth Fund
(see Part B).
6. Synopsis; Comparison Between Oppenheimer Trinity
Large Cap Growth Fund and Oppenheimer Growth
Fund.
7. *
8. (a) *
(b) *
9. *
Part B of Form N-14
Item No. Statement of Additional Information Heading
- -------- ------------------------------------------------
and/or Title of Document
- ------------------------
10. Cover Page.
11. Table of Contents.
12. (a) Statement of Additional Information of
Oppenheimer Growth Fund.
(b) *
13. (a) Statement of Additional Information of
Oppenheimer Trinity Large Cap Growth Fund.
(b) *
14. Annual Report of Oppenheimer Growth Fund at
August 31, 2002;
Semi-Annual Report of Oppenheimer Growth Fund
at February 28, 2003;
Annual Report of Oppenheimer Trinity Large Cap
Growth Fund at July 31, 2002;
Semi-Annual Report of Oppenheimer Trinity Large
Cap Growth Fund at January 31, 2003.
Part C of Form N-14
Item No. Other Information Heading
- -------- -------------------------
15. Indemnification.
16. Exhibits.
17. Undertakings.
- ---------------
* Not Applicable or negative answer
270 Form N-14
John V. Murphy
- --------------
President &
OppenheimerFunds Logo
Chief Executive Officer 498 Seventh
Avenue, 10th Floor
New York,
NY 10018
800.225.5677
www.oppenheimerfunds.com
August 4,
2003
Dear Oppenheimer Trinity Large Cap Growth Fund Shareholder,
One of the things we are proud of at OppenheimerFunds, Inc.
is our commitment to our Fund shareholders. I am writing to
you today to let you know about a positive change that has
been proposed for Oppenheimer Trinity Large Cap Growth Fund.
After careful consideration, the Board of Trustees has
determined that it would be in the best interest of
shareholders of Oppenheimer Trinity Large Cap Growth Fund
("Trinity Large Cap Growth Fund") to reorganize into
another Oppenheimer fund, Oppenheimer Growth Fund ("Growth
Fund"). A shareholder meeting has been scheduled in
October, and all Trinity Large Cap Growth Fund shareholders
of record as of July 9th are being asked to vote either in
person or by proxy, on the proposed reorganization. You
will find a notice of the meeting, a ballot card, a proxy
statement detailing the proposal, a Growth Fund prospectus
and a postage-paid return envelope enclosed for your use.
Why does the Board of Trustees recommend this change?
- -----------------------------------------------------
The proposal would reorganize the Trinity Large Cap Growth
Fund into the larger Growth Fund which has a comparable
investment objective and lower expenses. Trinity Large Cap
Growth Fund and Growth Fund have similar investment
objectives. Trinity Large Cap Growth Fund's investment
objective is to seek long-term growth of capital. Growth
Fund's investment objective is to seek a high total return.
In seeking their investment objectives, Trinity Large Cap
Growth Fund and Growth Fund utilize a similar investing
strategy. Trinity Large Cap Growth Fund invests in common
stocks that are included in the S&P 500. Growth Fund
currently invests mainly in common stocks of U.S. companies
of different capitalization ranges, presently focusing on
large-capitalization issuers. Both funds are managed with a
quantitative investment process. Both Funds invest in a
similar universe of companies, although Growth has a larger
potential investment universe.
Among other factors, the Trinity Large Cap Growth Fund
Board considered that the expense ratio of Growth Fund has
been lower than the expense ratio of Trinity Large Cap
Growth Fund. Although past performance is not predictive
of future results, shareholders of Trinity Large Cap Growth
Fund would have an opportunity to become shareholders of a
fund with a better long-term performance history.
How do you vote?
No matter how large or small your investment, your vote is
important, so please review the proxy statement carefully.
To cast your vote, simply mark, sign and date the enclosed
proxy ballot and return it in the postage-paid envelope
today. Remember, it can be costly for the Fund--and
ultimately for you as a shareholder--to remail ballots if
not enough responses are received to conduct the meeting.
If you have any questions about the proposal, please feel
free to contact your financial advisor or call us at
1.800.225.5677. As always, we appreciate your confidence
in OppenheimerFunds and look forward to serving you for
many years to come.
Sincerely,
John V. Murphy
Enclosures
OPPENHEIMER TRINITY LARGE CAP
GROWTH FUND
498 Seventh Avenue, 10th Floor, New York, New York
10018
1-800-525-7048
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON SEPTEMBER 12, 2003
To the Shareholders of Oppenheimer Trinity Large
Cap Growth Fund:
Notice is hereby given that a Special Meeting of
the Shareholders of Oppenheimer Trinity Large Cap
Growth Fund ("Trinity Large Cap Growth Fund"), a
registered investment management company, will be
held at 6803 South Tucson Way, Englewood, CO 80112
at 1:00 P.M., Mountain time, on September 12, 2003,
or any adjournments thereof (the "Meeting"), for
the following purposes:
1. To approve an Agreement and Plan of
Reorganization between Oppenheimer Trinity Large
Cap Growth Fund ("Trinity Large Cap Growth Fund")
and Oppenheimer Growth Fund ("Growth Fund"), and
the transactions contemplated thereby, including
(a) the transfer of all the assets of Trinity Large
Cap Growth Fund to Growth Fund in exchange for
Class A, Class B, Class C, Class N and Class Y
shares of Growth Fund, (b) the distribution of
these shares of Growth Fund to the corresponding
Class A, Class B, Class C, Class N and Class Y
shareholders of Trinity Large Cap Growth Fund in
complete liquidation of Trinity Large Cap Growth
Fund and (c) the cancellation of the outstanding
shares of Trinity Large Cap Growth Fund (all of the
foregoing being referred to as the "Proposal").
2. To act upon such other matters as may properly
come before the Meeting.
Shareholders of record at the close of business on
July 9, 2003 are entitled to notice of, and to vote
at, the Meeting. The Proposal is more fully
discussed in the Proxy Statement and Prospectus.
Please read it carefully before telling us, through
your proxy or in person, how you wish your shares
to be voted. The Board of Trustees of Trinity
Large Cap Growth Fund recommends a vote in favor of
the Proposal. WE URGE YOU TO SIGN, DATE AND MAIL
THE ENCLOSED PROXY PROMPTLY.
By Order of the Board of Trustees,
Robert G. Zack, Secretary
July 5, 2003
[341]
Shareholders who do not expect to attend the Meeting
are requested to indicate voting instructions on the
enclosed proxy and to date, sign and return it in the
accompanying postage-paid envelope. To avoid
unnecessary duplicate mailings, we ask your cooperation
in promptly mailing your proxy no matter how large or
small your holdings may be.
As with all mutual funds, the Securities and Exchange
Commission has not approved or disapproved these
securities or passed upon the adequacy of this
Prospectus/Proxy Statement. Any representation to the
contrary is a criminal offense.
Proxy Card
Oppenheimer Trinity Large Cap Growth Fund
Proxy For a Special Shareholders Meeting of shareholders To
Be Held on September 12, 2003
The undersigned, revoking prior proxies, hereby appoints
Brian Wixted, Philip Vottiero, Kate Ives and Philip
Masterson, and each of them, as attorneys-in-fact and
proxies of the undersigned, with full power of
substitution, to vote shares held in the name of the
undersigned on the record date at the Special Meeting of
Shareholders of Oppenheimer Trinity Large Cap Growth Fund
(the "Fund") to be held at 6803 South Tucson Way,
Centennial, Colorado, 80112, on September 12, 2003, at 1:00
P.M. Mountain time, or at any adjournment thereof, upon the
proposals described in the Notice of Meeting and
accompanying Proxy Statement, which have been received by
the undersigned.
This proxy is solicited on behalf of the Fund's Board of
Trustees, and the proposal (set forth on the reverse side
of this proxy card) has been proposed by the Board of
Trustees. When properly executed, this proxy will be voted
as indicated on the reverse side or "FOR" a proposal if no
choice is indicated. The proxy will be voted in accordance
with the proxy holders' best judgment as to any other
matters that may arise at the Meeting.
VOTE VIA THE TELEPHONE:
1-800-597-7836
CONTROL NUMBER: 999 9999
9999 999
Note: Please sign this proxy
exactly as your name or names
appear hereon. Each joint
owner should sign. Trustees
and other fiduciaries should
indicate the capacity in
which they sign. If a
corporation, partnership or
other entity, this signature
should be that of a duly
authorized individual who
should state his or her title.
Signature
Signature of joint owner, if
any
Date
PLEASE VOTE ON THE REVERSE SIDE, SIGN AND DATE THIS PROXY
AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE
The Proposal:
To approve an Agreement and Plan of Reorganization between
Oppenheimer Growth Fund ("Growth Fund"), and Oppenheimer
Trinity Large Cap Growth Fund ("Trinity Large Cap Growth
Fund") and the transactions contemplated thereby,
including: (a) the transfer of substantially all the assets
of Trinity Large Cap Growth Fund to Growth Fund in exchange
for Class A, Class B, Class C, Class N and Class Y shares
of Growth Fund, (b) the distribution of such shares of
Growth Fund to the corresponding Class A, Class B, Class C,
Class N and Class Y shareholders of Trinity Large Cap
Growth Fund in complete liquidation of Trinity Large Cap
Growth Fund, and (c) the cancellation of the outstanding
shares of Trinity Large Cap Growth Fund.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK. Example:
[ ]
FOR [___] AGAINST [___] ABSTAIN
[---]
Telephone Voting Instructions
1.800.597.7836
Vote your OppenheimerFunds proxy over the phone
Voting your proxy is important.
And now OppenheimerFunds has
made it easy. Vote at your
convenience, 24 hours a day, and
save postage costs, ultimately
reducing fund expenses. Read
your Proxy Card carefully. To
exercise your proxy, just follow
these simple steps:
1. Call the toll free number: 1.800.597.7836.
2. Enter the 14-digit Control Number, located on your
Proxy Card.
3. Follow the voice instructions.
If vote by phone, please do not mail your Proxy Card.
COMBINED PROSPECTUS AND PROXY STATEMENT
DATED JULY 6, 2003
Acquisition of the Assets of OPPENHEIMER TRINITY LARGE CAP
GROWTH FUND
By and in exchange for Class A, Class B, Class C, Class N
and Class Y shares of
OPPENHEIMER GROWTH FUND
This combined Prospectus and Proxy Statement solicits
proxies from the shareholders of Oppenheimer Trinity Large
Cap Growth Fund ("Trinity Large Cap Growth Fund") to be
voted at a Special Meeting of Shareholders (the "Meeting")
to approve the Agreement and Plan of Reorganization (the
"Reorganization Agreement") and the transactions
contemplated thereby (the "Reorganization") between Trinity
Large Cap Growth Fund and Oppenheimer Growth Fund ("Growth
Fund"). This combined Prospectus/Proxy Statement
constitutes the Prospectus of Growth Fund and the Proxy
Statement of Trinity Large Cap Growth Fund filed on Form
N-14 with the Securities and Exchange Commission ("SEC").
If shareholders vote to approve the Reorganization
Agreement and the Reorganization, the net assets of Trinity
Large Cap Growth Fund will be acquired by and in exchange
for shares of Growth Fund. The Meeting will be held at the
offices of OppenheimerFunds, Inc. at 6803 South Tucson Way,
Englewood, CO 80112 on September 12, 2003 at 1:00 P.M.
Mountain time. The Board of Trustees of Trinity Large Cap
Growth Fund is soliciting these proxies on behalf of
Trinity Large Cap Growth Fund. This Prospectus/Proxy
Statement will first be sent to shareholders on or about
August 4, 2003.
If the shareholders vote to approve the
Reorganization Agreement, you will receive Class A shares
of Growth Fund equal in value to the value as of the
Valuation Date of your Class A shares of Trinity Large Cap
Growth Fund; Class B shares of Growth Fund equal in value
to the value as of the Valuation Date of your Class B
shares of Trinity Large Cap Growth Fund; Class C shares of
Growth Fund equal in value to the value as of the Valuation
Date of your Class C shares of Trinity Large Cap Growth
Fund; Class N shares of Growth Fund equal in value to the
value as of the Valuation Date of your Class N shares of
Trinity Large Cap Growth Fund; and Class Y shares of Growth
Fund equal in value to the value as of the Valuation Date
of your Class Y shares of Trinity Large Cap Growth Fund.
Trinity Large Cap Growth Fund will then be liquidated and
de-registered under the Investment Company Act of 1940.
Growth Fund will retain its name following the
Reorganization.
Growth Fund's investment objective seeks long-term
growth of capital by investing primarily in common stocks
with low price-earnings ratios and better-than-anticipated
earnings. Realization of current income is a secondary
consideration. The Fund may invest mainly in common stocks
of different capitalization ranges. The Fund also can buy
other investments, including preferred stocks, rights and
warrants and convertible debt securities; and securities of
U.S. and foreign companies, although there are limits on
the Fund's investments in foreign securities.
This Prospectus/Proxy Statement gives information
about Class A, Class B, Class C, Class N and Class Y shares
of Growth Fund that you should know before investing. You
should retain it for future reference. A Statement of
Additional Information relating to the Reorganization
described in this Proxy Statement and Prospectus, dated
July 6, 2003, (the "Proxy Statement of Additional
Information") has been filed with the Securities and
Exchange Commission ("SEC") as part of the Registration
Statement on Form N-14 (the "Registration Statement") and
is incorporated herein by reference. You may receive a
copy by written request to the Transfer Agent or by calling
toll-free as detailed above. The Proxy Statement of
Additional Information includes the following documents:
(i) Annual Report and Semi-Annual Report, as of August 31,
2002 and February 28, 2003, respectively, of Growth Fund;
(ii) Annual Report and Semi-Annual Report, as of July 31,
2002 and January 31, 2003, respectively, of Trinity Large
Cap Growth Fund; (iii) the Growth Fund Statement of
Additional Information; and (iv) Trinity Large Cap Growth
Fund Statement of Additional Information.
The Prospectus of Growth Fund dated October 23, 2002
is attached to and considered a part of this
Prospectus/Proxy Statement and is intended to provide you
with information about Growth Fund.
The following documents have been filed with the SEC
and are available without charge upon written request to
OppenheimerFunds Services (the "Transfer Agent") or by
calling the toll-free number shown above: (i) a Prospectus
for Trinity Large Cap Growth Fund, dated September 24,
2002, as supplemented November 1, 2002 and May 14, 2003;
(ii) a Statement of Additional Information for Trinity
Large Cap Growth Fund, dated September 24, 2002, as revised
January 15, 2003, and as supplemented March 31, 2003; and
(iii) a Statement of Additional Information for Growth
Fund, dated October 23, 2002, as revised February 12, 2003
and as supplemented January 2, 2003.
Mutual fund shares are not deposits or obligations of any
bank, and are not insured or guaranteed by the Federal
Deposit Insurance Corporation or any other U.S. government
agency. Mutual fund shares involve investment risks
including the possible loss of principal.
This Proxy Statement and Prospectus is dated July 6, 2003.
TABLE OF CONTENTS
COMBINED PROSPECTUS AND PROXY STATEMENT
Page
- ----
Synopsis
What am I being asked to vote on?
.......................................................... 6
What are the general tax consequences of the
Reorganization?........................ 7
Comparisons of Some Important Features
How do the investment objectives and policies of the
Funds compare?............... 7
Who manages the Funds?..................................................................... 8
What are the fees and expenses of each Fund and those
expected after the
Reorganization?............................................................................. 8
Where can I find more financial information about the
Funds?......................... 13
How have the Funds performed?.............................................................
14
What are other Key Features of the Funds?
.................................................. 19
Investment Management and Fees
....................................................19
Transfer Agency and Custody Services
..............................................20
Distribution Services...................................................................20
Purchases, Redemptions, Exchanges and other
Shareholder Services.......... 21
Dividends and Distributions
........................................................... 21
What are the Principal Risks of an Investment in
Growth Fund?........... 21
Reasons for the Reorganization
Information about the Reorganization
How will the Reorganization be carried out?
................................................. 23
Who will pay the Expenses of the Reorganization?
......................................... 24
What are the Tax Consequences of the Reorganization?
................................... 24
What should I know about Class A, Class B, Class C,
Class N and Class Y shares of Growth Fund?
.................................................................. 25
What are the capitalizations of the Funds and what
might the capitalizations be after the
Reorganization?.............................................................................. 25
Comparison of Investment Objectives and Policies
Are there any significant differences between the
investment objectives and strategies of
the Funds?..................................................................................... 27
What are the main risks associated with investment in
the Funds?..................... 27
How do the investment policies of the Funds
compare?.................................. . 27
What are the fundamental investment restrictions of
the Funds?........................ 29
How do the Account Features and Shareholder Services
for the Funds Compare?.... 30
Investment Management
............................................................. 31
Distribution.............................................................................. 31
Purchases and Redemptions
........................................................... 32
Shareholder Services ..................................................................
33
Dividends and Distributions
.......................................................... 33
Voting Information
How many votes are necessary to approve the
Reorganization Agreement?........... 33
How do I ensure my vote is accurately recorded?
.......................................... 34
Can I revoke my proxy? .....................................................................
34
What other matters will be voted upon at the Meeting?
.................................. 34
Who is entitled to vote?
....................................................................... 34
What other solicitations will be made?
..................................................... 35
Are there any appraisal rights?
.............................................................. 35
Information about Growth Fund
Information about Trinity Large Cap Growth Fund
Principal Shareholders
Exhibit A - Agreement and Plan of Reorganization by and
between Oppenheimer Trinity Large Cap Growth Fund, and
Oppenheimer Growth Fund
Enclosures:
Prospectus of Oppenheimer Growth Fund, dated December 23,
2002.
Annual Report of Oppenheimer Growth Fund, dated August 31,
2002
SYNOPSIS
This is only a summary and is qualified in its
entirety by the more detailed information contained in or
incorporated by reference in this Prospectus and Proxy
Statement and by the Reorganization Agreement which is
attached as Exhibit A. Shareholders should carefully
review this Prospectus and Proxy Statement and the
Reorganization Agreement in their entirety and, in
particular, the current Prospectus of Growth Fund which
accompanies this Prospectus and Proxy Statement and is
incorporated herein by reference.
Shareholders of Trinity Large Cap Growth Fund holding
certificates representing their shares will not be required
to surrender their certificates in connection with the
reorganization. However, former Class A shareholders of
Trinity Large Cap Growth Fund whose shares are represented
by outstanding share certificates will not be allowed to
redeem or exchange class shares of Growth Fund they receive
in the Reorganization until the certificates for the
exchanged Trinity Large Cap Growth Fund have been returned
to the Transfer Agent.
What am I being asked to vote on?
Your Fund's investment manager, OppenheimerFunds,
Inc. (the "Manager"), proposed to the Board of Trustees a
reorganization of your Fund, Trinity Large Cap Growth Fund,
with and into Growth Fund so that shareholders of Trinity
Large Cap Growth Fund may become shareholders of a
substantially larger fund advised by the same investment
advisor with generally historically comparable performance,
and investment objectives, policies, and strategies very
similar to those of their current Fund. In addition,
portfolio management of the surviving Growth Fund will be
the same one that manages Trinity Large Cap Growth Fund.
The Board also considered the fact that the surviving fund
has the potential for lower overall operating expenses. In
addition, the Board considered that both Funds have Class
A, Class B, Class C, Class N and Class Y shares offered
under identical sales charge arrangements. The Board also
considered that the Reorganization would be a tax-free
reorganization, and there would be no sales charge imposed
in effecting the Reorganization. In addition, due to the
relatively moderate costs of the reorganization, the Boards
of both Funds concluded that neither Fund would experience
dilution as a result of the Reorganization.
A reorganization of Trinity Large Cap Growth Fund
with and into Growth Fund is recommended by the Manager
based on the fact that both Funds have very similar
investment policies, practices and objectives.
At a meeting held on April 17, 2003, the Board of
Trustees of Trinity Large Cap Growth Fund approved a
reorganization transaction that will, if approved by
shareholders, result in the transfer of the net assets of
Trinity Large Cap Growth Fund to Growth Fund, in exchange
for an equal value of shares of Growth Fund. The shares of
Growth Fund will then be distributed to Trinity Large Cap
Growth Fund shareholders and Trinity Large Cap Growth Fund
will be liquidated. As a result of the Reorganization, you
will cease to be a shareholder of Trinity Large Cap Growth
Fund and will become a shareholder of Growth Fund. This
exchange will occur on the Closing Date of the
Reorganization.
Approval of the Reorganization means you will receive
Class A shares of Growth Fund equal in value to the value
as of the Valuation Date of your Class A shares of Trinity
Large Cap Growth Fund; Class B shares of Growth Fund equal
in value to the value as of the Valuation Date of your
Class B shares of Trinity Large Cap Growth Fund; Class C
shares of Growth Fund equal in value to the value as of the
Valuation Date of your Class C shares of Trinity Large Cap
Growth Fund; Class N shares of Growth Fund equal in value
to the value as of the Valuation Date of your Class N
shares of Trinity Large Cap Growth Fund; and Class Y shares
of Growth Fund equal in value as of the Valuation Date of
your Class Y shares of Trinity Large Cap Growth Fund. The
shares you receive will be issued at net asset value
without a sales charge or the payment of a contingent
deferred sales charge ("CDSC") although if your shares of
Trinity Large Cap Growth Fund are subject to a CDSC, your
Growth Fund shares will continue to be subject to the same
CDSC applicable to your shares.
For the reasons set forth in the "Reasons for the
Reorganization" section, the Board of Trinity Large Cap
Growth Fund has determined that the Reorganization is in
the best interests of the shareholders of Trinity Large Cap
Growth Fund.
THE BOARD OF TRUSTEES RECOMMENDS THAT YOU VOTE
TO APPROVE THE AGREEMENT AND PLAN OF REORGANIZATION
What are the general tax consequences of the Reorganization?
It is expected that shareholders of Trinity Large Cap
Growth Fund who are U.S. citizens will not recognize any
gain or loss for federal income tax purposes, as a result
of the exchange of their shares for shares of Growth Fund.
You should, however, consult your tax advisor regarding the
effect, if any, of the Reorganization in light of your
individual circumstances. You should also consult your tax
advisor about state and local tax consequences. For further
information about the tax consequences of the
Reorganization, please see the "Information About the
Reorganization--What are the Tax Consequences of the
Reorganization?"
COMPARISONS OF SOME IMPORTANT FEATURES
How do the investment objectives and policies of the Funds
compare?
Trinity Large Cap Growth Fund and Growth Fund have
the same investment objective--to seek long-term growth of
capital. In seeking their investment objectives, Trinity
Large Cap Growth Fund and Growth Fund utilize a similar
investing strategy. Trinity Large Cap Growth Fund invests
in common stocks that are included in the S&P 500/Barra
Growth Index, a subset of stocks included in the S&P Index.
Growth Fund currently invests primarily in common stocks
with low price-earnings ratios and better-than-anticipated
earnings. However, in practice, the Oppenheimer Growth
Fund's investments are typically selected among stocks in
the S&P 500/Barra Growth Index. Trinity Large Cap Growth
Fund is managed with a quantitative investment process;
Oppenheimer Growth Fund is managed with a fundamental
"bottom up" investment style.
Please refer to the Annual and Semi-Annual Reports of
both Funds for a complete listing of the investments for
each Fund.
Who Manages the Funds?
The day-to-day management of the business and affairs
of each Fund is the responsibility of the Manager. Trinity
Large Cap Growth Fund is an open-end diversified investment
management company with an unlimited number of authorized
shares of beneficial interest organized as a Massachusetts
business trust on January 14, 1998. It commenced
operations on December 17, 1998. Trinity Large Cap Growth
Fund is governed by a Board of Trustees, which is
responsible for protecting the interests of shareholders
under Massachusetts law. Trinity Large Cap Growth Fund is
located at 498 Seventh Avenue, New York, New York 10018.
Growth Fund, is an open-end, diversified investment
management company with an unlimited number of authorized
shares of beneficial interest organized as a Maryland
corporation in 1972 and reorganized as a Massachusetts
business trust in July 1988. It commenced operations on
March 15, 1973. Growth Fund is governed by a Board of
Trustees, which is responsible for protecting the interests
of shareholders under Massachusetts law. Growth Fund is
located at 498 Seventh Avenue, New York, New York 10018.
The Manager, located at 498 Seventh Avenue, New York,
New York 10018, acts as investment advisor to both Funds.
The members of the portfolio management team for Trinity
Large Cap Growth Fund, Blake Gall and Daniel Burke, are
employees of Trinity Investment Management Corporation, the
fund's Sub-Advisor. They have been the portfolio managers
for the Fund since the Fund's commencement of operations on
September 1, 1999.
The portfolio manager for Growth Fund is Bruce
Bartlett. Mr. Bartlett is a Vice President of the Fund and
of the Manager and is a portfolio manager of other
Oppenheimer funds. Mr. Bartlett became the Fund's portfolio
manager on December 22, 1998. Prior to joining the Manager
in April 1995, Mr. Bartlett was a Vice President and Senior
Portfolio Manager with First of America Investment
Corporation.
Additional information about the Funds and the
Manager is set forth below in "Comparison of Investment
Objectives and Policies."
What are the Fees and Expenses of each Fund and those
expected after the Reorganization?
Trinity Large Cap Growth Fund and Growth Fund each
pay a variety of expenses directly for management of their
assets, administration and distribution of their shares and
other services. Those expenses are subtracted from each
Fund's assets to calculate the fund's net asset values per
share. Shareholders pay these expenses indirectly.
Shareholders pay other expenses directly, such as sales
charges.
The following tables are provided to help you understand
and compare the fees and expenses of investing in shares of
Trinity Large Cap Growth Fund with the fees and expenses of
investing in shares of Growth Fund. The pro forma expenses
of the surviving Growth Fund show what the fees and
expenses are expected to be after giving effect to the
Reorganization. All amounts shown are a percentage of net
assets of each class of shares of the Funds.
FEE TABLE
For the 12 month period ended 3/31/03
- ------------------------------------------------------------------------------------
Pro Forma
Trinity Large Cap Growth Fund Class A Surviving Growth
Growth Fund Shares Fund Class A shares
Class A shares
- ------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------
Shareholder Transaction Expenses (charges paid directly from a shareholder's
investment)
- ------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------
Maximum Sales
Charge (Load) on
purchases (as a 5.75% 5.75% 5.75%
% of offering
price)
- ------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------
Maximum Deferred
Sales Charge (Load)
(as a % of the
lower of the
original offering None1 None1 None1
price or redemption
proceeds)
- ------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------
Annual Fund Operating Expenses (as a percentage of average daily net assets)
- ------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------
Management Fees 0.75% 0.65% 0.65%
- ------------------------------------------------------------------------------------
Distribution and/or
Service (12b-1) Fees 0.23% 0.23% 0.23%
- ------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------
Other Expenses4 0.93% 0.46% 0.46%
- ------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------
Total Fund
Operating Expenses 1.91% 1.34% 1.34%
- ------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------
Pro Forma
Trinity Large Cap Growth Fund Class B Surviving Growth
Growth Fund Class Shares Fund Class B shares
B shares
- ------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------
Shareholder Transaction Expenses (charges paid directly from a shareholder's
investment)
- ------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------
Maximum Sales
Charge (Load) on None None None
purchases (as a
% of offering
price)
- ------------------------------------------------------------------------------------
Maximum Deferred
Sales Charge (Load) 5%2 5%2 5%2
(as a % of the
lower of the
original offering
price or redemption
proceeds)
- ------------------------------------------------------------------------------------
Annual Fund Operating Expenses (as a percentage of average daily net assets)
- ------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------
Management Fees 0.75% 0.65% 0.65%
- ------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------
Distribution and/or
Service (12b-1) Fees 1.00% 1.00% 1.00%
- ------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------
Other Expenses4 1.01% 0.47% 0.47%
- ------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------
Total Fund
Operating Expenses 2.76% 2.12% 2.12%
- ------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
Pro Forma
Trinity Large Cap Growth Fund Class Surviving Growth
Growth Fund C Shares Fund
Class C Shares Class C Shares
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
Shareholder Transaction Expenses (charges paid directly from a shareholder's
investment)
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
Maximum Sales
Charge (Load) on None None None
purchases (as a %
of offering price)
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
Maximum Deferred
Sales Charge (Load) 1%3 1%3 1%3
(as a % of the
lower of the
original offering
price or redemption
proceeds)
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
Annual Fund Operating Expenses (as a percentage of average daily net assets)
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
Management Fees 0.75% 0.65% 0.65%
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
Distribution and/or
Service (12b-1) Fees 1.00% 1.00% 1.00%
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
Other Expenses4 0.94% 0.45% 0.45%
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
Total Fund
Operating Expenses 2.69% 2.10% 2.10%
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
Pro Forma
Trinity Large Cap Growth Fund Class N Surviving Growth
Growth Fund Class Shares Fund Class N
N shares shares
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
Shareholder Transaction Expenses (charges paid directly from a shareholder's
investment)
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
Maximum Sales
Charge (Load) on None None None
purchases (as a
% of offering
price)
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
Maximum Deferred
Sales Charge (Load) 1%5 1%5 1%5
(as a % of the
lower of the
original offering
price or redemption
proceeds)
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
Annual Fund Operating Expenses (as a percentage of average daily net assets)
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
Management Fees 0.75% 0.65% 0.65%
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
Distribution and/or
Service (12b-1) Fees 0.50% 0.50% 0.50%
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
Other Expenses4 1.01% 0.11% 0.11%
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
Total Fund
Operating Expenses 2.26% 1.26% 1.26%
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
Pro Forma
Trinity Large Cap Growth Fund Class Y Surviving Growth
Growth Fund Shares Fund Class Y Shares
Class Y Shares
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
Shareholder Transaction Expenses (charges paid directly from a shareholder's
investment)
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
Maximum Sales
Charge (Load) on None None None
purchases (as a
% of offering
price)
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
Maximum Deferred
Sales Charge (Load) None None None
(as a % of the
lower of the
original offering
price or redemption
proceeds)
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
Annual Fund Operating Expenses (as a percentage of average daily net assets)
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
Management Fees 0.75% 0.65% 0.65%
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
Distribution and/or
Service (12b-1) Fees N/A N/A N/A
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
Other Expenses4 0.34% 0.53% 0.53%
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
Total Fund
Operating Expenses 1.09% 1.18% 1.18%
- -----------------------------------------------------------------------------------
Note: Expenses may vary in future years.
1. A contingent deferred sales charge may apply to
redemptions of investments of $1 million or more ($500,000
for retirement plan accounts) of Class A shares. See "How
to Buy Shares" in each Fund's Prospectus.
2. Applies to redemptions within the first year after
purchase. The contingent deferred sales charge declines to
1% in the sixth year and is eliminated after that.
3. Applies to shares redeemed within 12 months of
purchase.
4. Other Expenses include transfer agent fees and
custodial, accounting and legal expenses.
5. Applies to shares redeemed within 18 months of
retirement plan's first purchase of Class N shares.
The 12b-1 fees for Class A shares of both Trinity
Large Cap Growth Fund and Growth Fund are service plan fees
which are a maximum of 0.25% of average annual net assets
of Class A shares. The 12b-1 fees for Class B, Class C and
Class N shares of both Funds are Distribution and Service
Plan fees which include a service fee of 0.25% of average
annual net assets, and an asset-based sales charge for
Class B and Class C shares of 0.75% and an asset-based
sales charge of 0.25% for Class N shares of the average net
assets.
Examples
These examples below are intended to help you compare
the cost of investing in each Fund and the proposed
surviving Growth Fund. These examples assume an annual
return for each class of 5%, the operating expenses
described above and reinvestment of your dividends and
distributions.
Your actual costs may be higher or lower because
expenses will vary over time. For each $10,000 investment,
you would pay the following projected expenses if you sold
your shares after the number of years shown.
12 Months Ended 3/31/03
- -----------------------
Trinity Large Cap Growth Fund
- -----------------------------------------------------------------------------------------
If shares are redeemed: 1 year 3 years 5 years 10 years
- -----------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------
Class A $758 $1,141 $1,547 $2,679
- -----------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------
Class B $779 $1,156 $1,659 $2,6991
- -----------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------
Class C $372 $835 $1,425 $3,022
- -----------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------
Class N $329 $706 $1,210 $2,595
- -----------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------
Class Y $111 $347 $601 $1,329
- -----------------------------------------------------------------------------------------
Trinity Large Cap Growth Fund
- -----------------------------------------------------------------------------------------
If shares are not 1 year 3 years 5 years 10 years
redeemed:
- -----------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------
Class A $758 $1,141 $1,547 $2,679
- -----------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------
Class B $279 $856 $1,459 $2,6991
- -----------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------
Class C $272 $835 $1,425 $3,022
- -----------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------
Class N $229 $706 $1,210 $2,595
- -----------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------
Class Y $111 $347 $601 $1,329
- -----------------------------------------------------------------------------------------
Growth Fund
- -----------------------------------------------------------------------------------------
If shares are redeemed: 1 year 3 years 5 years 10 years
- -----------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------
Class A $704 $975 $1,267 $2,095
- -----------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------
Class B $715 $964 $1,339 $2,0701
- -----------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------
Class C $313 $658 $1,129 $2,431
- -----------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------
Class N $228 $400 $692 $1,523
- -----------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------
Class Y $120 $375 $649 $1,432
- -----------------------------------------------------------------------------------------
Growth Fund
- -----------------------------------------------------------------------------------------
If shares are not 1 year 3 years 5 years 10 years
redeemed:
- -----------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------
Class A $704 $975 $1,267 $2,095
- -----------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------
Class B $215 $664 $1,139 $2,0701
- -----------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------
Class C $213 $658 $1,129 $2,431
- -----------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------
Class N $128 $400 $692 $1,523
- -----------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------
Class Y $120 $375 $649 $1,432
- -----------------------------------------------------------------------------------------
Pro Forma Surviving Growth Fund
- -----------------------------------------------------------------------------------------
If shares are redeemed: 1 year 3 years 5 years 10 years
- -----------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------
Class A $704 $975 $1,267 $2,095
- -----------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------
Class B $715 $964 $1,339 $2,070 1
- -----------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------
Class C $313 $658 $1,129 $2,431
- -----------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------
Class N $228 $400 $692 $1,523
- -----------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------
Class Y $120 $375 $649 $1,432
- -----------------------------------------------------------------------------------------
Pro Forma Surviving Growth Fund
- -----------------------------------------------------------------------------------------
If shares are not 1 year 3 years 5 years 10 years
redeemed:
- -----------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------
Class A $704 $975 $1,267 $2,095
- -----------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------
Class B $215 $664 $1,139 $2,0701
- -----------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------
Class C $213 $658 $1,129 $2,431
- -----------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------
Class N $128 $400 $692 $1,523
- -----------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------
Class Y $120 $375 $649 $1,432
- -----------------------------------------------------------------------------------------
In the first example, expenses include the initial sales
charge for Class A and the applicable Class B, Class C, or
Class N contingent deferred sales charge. In the second
example, the Class A expenses include the sales charge, but
Class B, Class C and Class N expenses do not include the
contingent deferred sales charges.
1 Class B expenses for years 7 through 10 are based on
Class A expenses, since Class B shares automatically
convert to Class A after 6 years.
Where can I find more financial information about the Funds?
Performance information for both Growth Fund and
Trinity Large Cap Growth Fund is set forth in each Fund's
Prospectus under the section "The Fund's Past
Performance." Growth Fund's Prospectus accompanies this
Prospectus/Proxy Statement and is incorporated by
reference.
The financial statements of Growth Fund and
additional information with respect to its performance
during its fiscal year ended August 31, 2002, including a
discussion of factors that materially affected its
performance and relevant market conditions, is set forth in
Growth Fund's Annual Report and Semi-Annual Report, dated
as of August 31, 2002 and February 28, 2003, respectively,
that are included in the Proxy Statement of Additional
Information and incorporated herein by reference. This
document is available upon request. See section entitled
"Information About Growth Fund."
The financial statements of Trinity Large Cap Growth
Fund and additional information with respect to the Fund's
performance during its fiscal year ended July 31, 2002 (and
the six month semi-annual period ended January 31, 2003),
including a discussion of factors that materially affected
its performance and relevant market conditions, is set
forth in Trinity Large Cap Growth Fund's Annual and
Semi-Annual Reports dated as of July 31, 2002 and January
31, 2003, respectively, that are included in the Proxy
Statement of Additional Information and incorporated herein
by reference. These documents are available upon request.
See section entitled "Information About Trinity Large Cap
Growth Fund."
How have the Funds performed?
The following past performance information for each
Fund is set forth below: (i) a bar chart detailing annual
total returns of Class A shares of each Fund as of December
31st for each of the full calendar years since each Fund's
inception; and (ii) a table showing how the average annual
total returns of each Funds' shares, both before and after
taxes, compare to those of a borad-based market index. The
after-tax returns are show for Class A shares of each Fund
only and are calculated using the historical highest
individual federal marginal income tax rates in effect
during the periods show, and do not reflect the impact of
state or local taxes. The after-tax returns for the other
classes of shares will vary. In certain cases, the figure
representing "Return After Taxes on Distributions and Sale
of Fund Shares" may be higher than the other return figures
for the same period. A higher after-tax return results when
a capital loss occurs upon redemption and translates into
an assumed tax deduction that benefits the shareholder. The
after-tax returns are calculated based on certain
assumptions mandated by regulation and your actual
after-tax returns may differ from those shown, depending on
your individual tax situation. The after-tax returns set
forth below are not relevant to investors who hold their
fund shares through tax-deferred arrangements such as
401(k) plans or IRAs or to institutional investors not
subject to tax. The Fund's past investment performance both
before and after taxes, is not necessarily an indication of
how the Fund will perform in the future.
Calendar year average annual total returns for the Funds
for the period ended December 31, 2002, are as follows:
[See appendix to prospectus/proxy statement for data in bar
chart showing annual total returns for Oppenheimer Trinity
Large Cap Growth Fund.]
Sales charges are not included in the calculations of
return in this bar chart, and if those charges were
included, the returns may be less than those shown.
For the period from 1/1/03 through 3/31/03 the cumulative
return (not annualized) for Class A shares before taxes was
- -0.96%.
During the period shown in the bar chart, the highest
return for Oppenheimer Trinity Large Cap Growth Fund (not
annualized) for a calendar quarter was 20.49% (4th Q'99)
and the lowest return (not annualized) for a calendar
quarter was -22.44% (4th Q00).
[See appendix to prospectus/proxy statement for data in bar
chart showing annual total returns for Oppenheimer Growth
Fund.]
Sales charges are not included in the calculations of
return in this bar chart, and if those charges were
included, the returns may be less than those shown.
For the period from 1/1/03 through 3/31/03 the cumulative
return (not annualized) for Class A shares before taxes was
- -0.85%.
During the period shown in the bar chart, the highest
return for Oppenheimer Growth Fund (not annualized) for a
calendar quarter was 30.16% (4Q'99) and the lowest return
(not annualized) for a calendar quarter was -25.55% (4Q'00).
Average annual total returns for the Funds for the period
ended March 31, 2002 are as follows:
- --------------------------------------------------------------------------
Trinity Large Cap Growth Fund Past 1-year Past Past
5-years 10-years
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
Trinity Large Cap Growth Fund Class A -26.34% -10.20%* N/A
Shares Return Before Taxes (inception
12/17/98)
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
Class A Shares Return After Taxes -26.34% -11.00%* N/A
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
Class A Shares Return After Taxes on -16.04% -8.07%* N/A
Distributions and Sale of Fund Shares
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
S&P 500 Barra Growth Index (from -23.59% -9.65% N/A
12/31/98)
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
Trinity Large Cap Growth Fund Class B -26.26% -11.75%* N/A
(inception 3/1/99)
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
Trinity Large Cap Growth Fund Class C -23.16% -11.12%* N/A
(inception 3/01/99)
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
Trinity Large Cap Growth Fund Class N -22.83% -18.40%* N/A
(inception 3/1/01)
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
Trinity Large Cap Growth Fund Class Y -21.38% -8.39%* N/A
(inception 9/1/99)
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
Growth Fund
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
Growth Fund Class A Shares Return -29.98% -5.24% 4.69%
Before Taxes (inception 3/15/73)
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
Class A Shares Return After Taxes -29.98% -6.27% 2.68%
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
Class A Shares Return After Taxes on
Distributions and Sale of Fund Shares -18.25% -3.85% 3.49%
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
S&P 500 Index (from 12/31/92) -22.09% -0.58% 9.34%
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
Growth Fund Class B (inception 8/17/93) -30.05% -5.18% 5.24%*
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
Growth Fund Class C (inception 11/1/95) -27.08% -4.86% 1.75%*
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
Growth Fund Class N (inception 3/1/01) -25.49% -21.40%* N/A
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
Growth Fund Class Y (inception 6/1/94) -25.60% -3.88% 5.93%*
- --------------------------------------------------------------------------
*Or life-of-class
Average annual total returns for the Funds for the period
ended March 31, 2003 are as follows:
- ---------------------------------------------------------------------------
Past 1-year Past Past 10
Trinity Large Cap Growth Fund 5-years years
- ---------------------------------------------------------------------------
- ---------------------------------------------------------------------------
Trinity Large Cap Growth Fund Class A -26.31% -9.84% N/A
Shares Return Before Taxes (inception
12/17/98)
- ---------------------------------------------------------------------------
- ---------------------------------------------------------------------------
Class A Shares Return After Taxes -26.31% -10.59%* N/A
- ---------------------------------------------------------------------------
- ---------------------------------------------------------------------------
Class A Shares Return After Taxes on
Distributions and Sale of Fund Shares -16.16% -7.77%* N/A
- ---------------------------------------------------------------------------
- ---------------------------------------------------------------------------
S&P BARRA Growth Index (from 12/31/98) -23.61% -9.29% N/A
- ---------------------------------------------------------------------------
- ---------------------------------------------------------------------------
Trinity Large Cap Growth Fund Class B -26.29% -11.16%* N/A
(inception 3/1/99)
- ---------------------------------------------------------------------------
- ---------------------------------------------------------------------------
Trinity Large Cap Growth Fund Class C -23.29% -10.76%* N/A
(inception 3/1/99)
- ---------------------------------------------------------------------------
- ---------------------------------------------------------------------------
Trinity Large Cap Growth Fund Class N -22.83% -16.84%* N/A
(inception 3/1/01)
- ---------------------------------------------------------------------------
- ---------------------------------------------------------------------------
Trinity Large Cap Growth Fund Class Y -21.34% -8.12%* N/A
(inception 12/17/98)
- ---------------------------------------------------------------------------
- ---------------------------------------------------------------------------
Growth Fund
- ---------------------------------------------------------------------------
- ---------------------------------------------------------------------------
Growth Fund Class A Shares Return -28.19% -7.15% 4.62%
Before Taxes (inception 9/16/85)
- ---------------------------------------------------------------------------
- ---------------------------------------------------------------------------
Class A Shares Return After Taxes -28.19% -8.16% 2.61%
- ---------------------------------------------------------------------------
- ---------------------------------------------------------------------------
Class A Shares Return After Taxes on -17.31% -5.29% 3.45%
Distributions and Sale of Fund Shares
- ---------------------------------------------------------------------------
- ---------------------------------------------------------------------------
S&P 500 Index (from 12/31/92) -24.75% -3.76% 8.53%
- ---------------------------------------------------------------------------
- ---------------------------------------------------------------------------
Growth Fund Class B (inception 10/2/95) -28.20% -7.07% 5.01%*
- ---------------------------------------------------------------------------
- ---------------------------------------------------------------------------
Growth Fund Class C (inception 5/1/96) -25.20% -6.78% 1.55%*
- ---------------------------------------------------------------------------
- ---------------------------------------------------------------------------
Growth Fund Class N (inception 3/1/01) -23.85% -19.60%* N/A
- ---------------------------------------------------------------------------
- ---------------------------------------------------------------------------
Growth Fund Class Y (inception 12/16/96) -23.68% -5.81% 5.66%*
- ---------------------------------------------------------------------------
*Or life-of-class.
The Funds' average annual total returns in the table
include the applicable sales charges: for Class A shares of
each Fund, the current maximum initial sales charge is
5.75%; for Class B shares of Oppenheimer Trinity Large Cap
Growth Fund, the contingent deferred sales charges is 5%
(1-year), 4% (2-years) and 3% (life-of-class); for Class B
shares of Oppenheimer Growth Fund, the contingent deferred
sales charges of 5% (1-year), 4% (2-years), 3% (3 years),
3% (4 years), 2% (5 years) and 1% (6 years); and for Class
C and Class N of each fund, the 1% contingent deferred
sales charge for the 1-year period. Because Class B shares
convert to Class A shares 72 months after purchase, Class B
"life-of-class" performance does not include the contingent
deferred sales charge and uses Class A performance for the
period after conversion. There is no sales charge on Class
Y shares. The Funds' returns measure the performance of a
hypothetical account and assume that all dividends and
capital gains distributions have been reinvested in
additional shares. The performance of the Funds' Class A
shares is compared to the S&P 500/Barra Growth Index, which
are unmanaged indices of equity securities. Index
performance reflects the reinvestment of income but does
not consider the effect of transaction costs, fees,
expenses or taxes. The Funds may have investments that vary
from those in the index.
What are other Key Features of the Funds?
The description of certain key features of the Funds
below is supplemented by each Fund's Prospectus and
Statement of Additional Information, which are incorporated
by reference.
Investment Management and Fees - The Manager manages
the assets of both Funds and makes their respective
investment decisions. Both Funds obtain investment
management services from the Manager according to the terms
of management agreements that are identical.
- ---------------------------------------------------------------------------------
Trinity Large Cap Growth Fund Growth Fund
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
0.75% of the first $200 million 0.75% of the first $200 million
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
0.72% of the next $200 million 0.72% of the next $200 million
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
0.69% of the next $200 million 0.69% of the next $200 million
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
0.66% of the next $200 million 0.66% of the next $200 million
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
0.60% in excess of $800 million 0.60% of the next $700 million
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
0.58% of the next $1.0
billion
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
0.56% of the next $2.0 billion
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
0.54% in excess of $4.5 billion
- ---------------------------------------------------------------------------------
Based on average annual net assets of the respective Fund.
The management fee for Trinity Large Cap Growth Fund
for the twelve months ended March 31, 2003 was 0.75% of the
average annual net assets for each class of shares. The
management fee for Growth Fund for the twelve months ended
March 31, 2003 was 0.65% of the average annual net assets
for each class of shares. The 12b-1 distribution plans for
both Funds are substantially similar. However, the other
expenses the Funds incur, including transfer agent fees and
custodial, accounting and legal expenses, have differed,
with Growth Fund's "Other Expenses" being less than those
of Trinity Large Cap Growth Fund because Growth Fund is the
significantly larger fund.
- -------------------------------------------------------------------------------------
Management Distribution Other Total Annual
Fee and/or 12b-1 Expenses Operating
Fees1 Expense
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
Trinity Large Cap Growth 0.75% 0.23% 0.93% 1.91%
Fund Class A shares
(12 months ended 3/31/03)
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
Growth Fund Class A Shares 0.65% 0.23% 0.46% 1.34%
(12 months ended 3/31/03)
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
Pro Forma - Combined at 0.65% 0.23% 0.46% 1.34%
3/31/03
- -------------------------------------------------------------------------------------
"Other Expenses" include transfer agent fees and custodial,
accounting and legal expenses the Funds pay. This chart is
for illustrative purposes only.
1. Class A shares 12b-1 fee is not full 25 basis points due
to monies invested by OppenheimerFunds, Inc.
The net assets under management for Growth Fund on
March 31, 2003 were $1,410,745,297 as compared to
$33,022,245 for Trinity Large Cap Growth Fund. Effective
upon the Closing of the Reorganization, the management fee
rate for Growth Fund is expected to be 0.65% of average
annual net assets based on combined assets of the Funds as
of March 31, 2003. Additionally, the "Other Expenses" of
the surviving Fund are expected to be the same as the
"Other Expenses" of Growth Fund.
For a detailed description of each Fund's investment
management agreement, see the section below entitled
"Comparison of Investment Objectives and Policies - How do
the Account Features and Shareholder Services for the Funds
Compare?"
Transfer Agency and Custody Services - Both Funds receive
shareholder accounting and other clerical services from
OppenheimerFunds Services in its capacity as transfer agent
and dividend paying agent. It acts on a fixed fee basis for
both Funds. The terms of the transfer agency agreement for
both Funds are substantially similar.
Citibank, N.A. is the Custodian Bank for Trinity
Large Cap Growth Fund and Growth Fund. They are located at
111 Wall Street, New York, New York 10005.
Distribution Services - OppenheimerFunds Distributor,
Inc. (the "Distributor") acts as the principal underwriter
in a continuous public offering of shares of both Funds,
but is not obligated to sell a specific number of shares.
Both Funds have adopted a Service Plan and Agreement under
Rule 12b-1 of the Investment Company Act for their Class A
shares. The Service Plan provides for the reimbursement to
OppenheimerFunds Distributor, Inc. (the "Distributor"), for
a portion of its costs incurred in connection with the
personal service and maintenance of accounts that hold
Class A shares of the respective Funds. Under the Class A
Service Plans, payment 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 respective Funds. The Distributor
currently 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 of the
respective Funds.
Both Funds have adopted Distribution and Service
Plans and Agreements under Rule 12b-1 of the Investment
Company Act for Class B, Class C and Class N shares. These
plans compensate the Distributor for its services and costs
in connection with the distribution of Class B, Class C and
Class N shares and the personal service and maintenance of
shareholder accounts. Under each Class B and Class C Plan,
the Funds pay the Distributor a service fee at an annual
rate of 0.25% of average annual net assets and an
asset-based sales charge at an annual rate of 0.75% of
average annual net assets. Under each Class N Plan the
Funds pay the Distributor a service fee at an annual rate
of 0.25% of average annual net assets and an asset-based
sales charge at an annual rate of 0.25% of average annual
net assets. All fee amounts are computed on the average
annual net assets of the class determined as of the close
of each regular business day of each Fund. The Distributor
uses all of the service fees to compensate dealers for
providing personal services and maintenance of accounts of
their customers that hold shares of the Funds. The Class B
and Class N asset-based sales charge is retained by the
Distributor. After the first year, the Class C asset-based
sales charge is paid to the broker-dealer as an ongoing
concession for shares that have been outstanding for a year
or more. The terms of the Funds' respective Distribution
and Service Plans are substantially similar.
For a detailed description of each Fund's
distribution-related services, see the section below titled
"Comparison of Investment Objectives and Policies - How do
the Account Features and Shareholder Services for the Funds
Compare?"
Purchases, Redemptions, Exchanges and other
Shareholder Services - Both Funds have the same
requirements and restrictions in connection with purchases,
redemptions and exchanges. In addition, each Fund also
offers the same types of shareholder services. More
detailed information regarding purchases, redemptions,
exchanges and shareholder services can be found below in
the section below titled "Comparison of Investment
Objectives and Policies - How do the Account Features and
Shareholder Services for the Funds Compare?"
Dividends and Distributions - Both Funds declare
dividends separately for each class of shares from net
investment income annually and pay those dividends to
shareholders in December on a date selected by the Board of
each Fund.
For a detailed description of each Fund's policy on
dividends and distributions, see the section entitled
"Comparison of Investment Objectives and Policies - How do
the Account Features and Shareholder Services for the Funds
Compare?"
What are the Principal Risks of an Investment in Growth
Fund?
As with most investments, investments in Growth Fund
and Trinity Large Cap Growth Fund involve risks. There can
be no guarantee against loss resulting from an investment
in either Fund, nor can there be any assurance that either
Fund will achieve its investment objective. The risks
associated with an investment in each Fund are similar.
Because both Funds invest primarily in stocks of U.S.
companies, the value of each Fund's portfolio will be
affected by changes in the U.S. stock markets. The prices
of individual stocks do not all move in the same direction
uniformly at the same time. A particular company's stock
price can be affected by a poor earnings report, loss of
major customers, major litigation against the company, or
changes in government regulations affecting the company or
its industry.
For more information about the risks of the Funds,
see "What are the Risk Factors Associated with Investments
in the Funds?" under the heading "Comparison of Investment
Objectives and Policies."
REASONS FOR THE REORGANIZATION
At a meeting of the Board of Trustees of Trinity
Large Cap Growth Fund held April 17, 2003, the Board
considered whether to approve the proposed Reorganization
and reviewed and discussed with the Manager and independent
legal counsel the materials provided by the Manager
relevant to the proposed Reorganization. Included in the
materials was information with respect to the Funds'
respective investment objectives and policies, management
fees, distribution fees and other operating expenses,
historical performance and asset size.
The Board reviewed information demonstrating that
Trinity Large Cap Growth Fund is a relatively smaller fund
with approximately $33,022,245 in net assets as of March
31, 2003. The Board anticipates that Trinity Large Cap
Growth Fund's assets will not increase substantially in
size in the near future. In comparison, Growth Fund had
approximately $1,410,745,297 in net assets as of March 31,
2003. After the Reorganization, the shareholders of
Trinity Large Cap Growth Fund would become shareholders of
a larger fund that is anticipated to have lower overall
operating expenses than Trinity Large Cap Growth Fund.
Economies of scale may benefit shareholders of Trinity
Large Cap Growth Fund.
The Board considered the fact that both Funds have
similar investment objectives. Additionally, the Board
considered that both Funds invest a substantial portion of
their assets in common stocks of U.S. companies.
The Board noted that Growth Fund's management fee is
currently the same as that of Trinity Large Cap Growth
Fund. The Board also considered that Growth Fund's
performance has been similar to that of Trinity Large Cap
Growth Fund.
The Board considered that if the reorganization is
approved, Growth Fund would change its name to "Oppenheimer
Growth Fund" and would benchmark itself to the S&P 500
Index Fund. The Board considered the Manager's
representation that the end result of the reorganization
will be a larger, style-specific fund in Lipper's Large Cap
Growth Fund category that will better fit the quantitative
investment process already used by Growth Fund.
The Board also considered that the procedures for
purchases, exchanges and redemptions of shares of both
Funds are identical and that both Funds offer the same
investor services and options.
The Board also considered the terms and conditions of
the Reorganization, including that there would be no sales
charge imposed in effecting the Reorganization and that the
Reorganization is expected to be a tax-free reorganization.
The Board concluded that Trinity Large Cap Growth Fund's
participation in the transaction is in the best interests
of the Fund and that the Reorganization would not result in
a dilution of the interests of existing shareholders of
Trinity Large Cap Growth Fund.
After consideration of the above factors, and such
other factors and information as the Board of Trinity Large
Cap Growth Fund deemed relevant, the Board, including the
Trustees who are not "interested persons" (as defined in
the Investment Company Act) of either Trinity Large Cap
Growth Fund or the Manager (the "Independent Trustees"),
unanimously approved the Reorganization and the
Reorganization Agreement and voted to recommend its
approval to the shareholders of Trinity Large Cap Growth
Fund.
The Board of Growth Fund also determined that the
Reorganization was in the best interests of Growth Fund and
its shareholders and that no dilution would result to those
shareholders. Growth Fund shareholders do not vote on the
Reorganization. The Board of Growth Fund, including the
Independent Trustees, unanimously approved the
Reorganization and the Reorganization Agreement.
For the reasons discussed above, the Board, on behalf
of Trinity Large Cap Growth Fund, recommends that you vote
FOR the Reorganization Agreement. If shareholders of
Trinity Large Cap Growth Fund do not approve the
Reorganization Agreement, the Reorganization will not take
place.
INFORMATION ABOUT THE REORGANIZATION
This is only a summary of the Reorganization Agreement. You
should read the actual form of Reorganization Agreement. It
is attached as Exhibit A.
How Will the Reorganization be Carried Out?
If the shareholders of Trinity Large Cap Growth Fund
approve the Reorganization Agreement, the Reorganization
will take place after various conditions are satisfied by
Trinity Large Cap Growth Fund and Growth Fund, including
delivery of certain documents. The closing date is
presently scheduled for September 20, 2003 and the
Valuation Date is presently scheduled for September 19,
2003.
If shareholders of Trinity Large Cap Growth Fund
approve the Reorganization Agreement, Trinity Large Cap
Growth Fund will deliver to Growth Fund substantially all
of its assets on the closing date. In exchange,
shareholders of Trinity Large Cap Growth Fund will receive
Class A, Class B, Class C Class N and Class Y Growth Fund
shares that have a value equal to the dollar value of the
assets delivered by Trinity Large Cap Growth Fund to Growth
Fund. Trinity Large Cap Growth Fund will then be
liquidated and its outstanding shares will be cancelled.
The stock transfer books of Trinity Large Cap Growth Fund
will be permanently closed at the close of business on the
Valuation Date. Only redemption requests received by the
Transfer Agent in proper form on or before the close of
business on the Valuation Date will be fulfilled by Trinity
Large Cap Growth Fund. Redemption requests received after
that time will be considered requests to redeem shares of
Growth Fund.
Shareholders of Trinity Large Cap Growth Fund who
vote their Class A, Class B, Class C, Class N and Class Y
shares in favor of the Reorganization will be electing in
effect to redeem their shares of Trinity Large Cap Growth
Fund at net asset value on the Valuation Date, after
Trinity Large Cap Growth Fund subtracts a cash reserve, and
reinvest the proceeds in Class A, Class B, Class C, Class N
and Class Y shares of Growth Fund at net asset value. The
cash reserve is that amount retained by Trinity Large Cap
Growth Fund which is deemed sufficient in the discretion of
the Board for the payment of the Fund's outstanding debts
and expenses of liquidation. Growth Fund is not assuming
any debts of Trinity Large Cap Growth Fund except debts for
unsettled securities transactions and outstanding dividend
and redemption checks. Trinity Large Cap Growth Fund will
recognize capital gain or loss on any sales of portfolio
securities made prior to the Reorganization.
Under the Reorganization Agreement, within one year
after the Closing Date, Trinity Large Cap Growth Fund
shall: (a) either pay or make provision for all of its
debts and taxes; and (b) either (i) transfer any remaining
amount of the cash reserve to Growth Fund, if such
remaining amount is not material (as defined below) or (ii)
distribute such remaining amount to the shareholders of
Trinity Large Cap Growth Fund who were shareholders on the
Valuation Date. The remaining amount shall be deemed to be
material if the amount to be distributed, after deducting
the estimated expenses of the distribution, equals or
exceeds one cent per share of the number of Trinity Large
Cap Growth Fund shares outstanding on the Valuation Date.
If the cash reserve is insufficient to satisfy any of
Trinity Large Cap Growth Fund's liabilities, the Manager
will assume responsibility for any such unsatisfied
liability. Within one year after the Closing Date, Trinity
Large Cap Growth Fund will complete its liquidation.
Under the Reorganization Agreement, either Trinity
Large Cap Growth Fund or Growth Fund may abandon and
terminate the Reorganization Agreement for any reason and
there shall be no liability for damages or other recourse
available to the other Fund, provided, however, that in the
event that one of the Funds terminates this Agreement
without reasonable cause, it shall, upon demand, reimburse
the other Fund for all expenses, including reasonable
out-of-pocket expenses and fees incurred in connection with
this Agreement.
To the extent permitted by law, the Funds may agree
to amend the Reorganization Agreement without shareholder
approval. They may also agree to terminate and abandon the
Reorganization at any time before or, to the extent
permitted by law, after the approval of shareholders of
Trinity Large Cap Growth Fund.
Who Will Pay the Expenses of the Reorganization?
The Funds will bear the cost of their respective tax
opinions. Any documents such as existing prospectuses or
annual reports that are included in the proxy mailing or at
a shareholder's request will be a cost of the Fund issuing
the document. Any other out-of-pocket expenses associated
with the Reorganization will be paid by the Funds in the
amounts incurred by each.
What are the Tax Consequences of the Reorganization?
The Reorganization is intended to qualify as a
tax-free reorganization for federal income tax purposes
under Section 368(a)(1) of the Internal Revenue Code of
1986, as amended. Based on certain assumptions and
representations received from Trinity Large Cap Growth Fund
and Growth Fund, it is expected to be the opinion of KPMG
LLP, tax advisor to Trinity Large Cap Growth Fund, that
shareholders of Trinity Large Cap Growth Fund will not
recognize any gain or loss for federal income tax purposes
as a result of the exchange of their shares for shares of
Growth Fund, and that shareholders of Growth Fund will not
recognize any gain or loss upon receipt of Trinity Large
Cap Growth Fund's assets. If this type of tax opinion is
not forthcoming, the Fund may still choose to go forward
with the merger, pending shareholder approval. In addition,
neither Fund is expected to recognize a gain or loss as a
result of the Reorganization.
Immediately prior to the Valuation Date, Trinity
Large Cap Growth Fund will pay a dividend which will have
the effect of distributing to Trinity Large Cap Growth
Fund's shareholders all of Trinity Large Cap Growth Fund's
net investment company taxable income for taxable years
ending on or prior to the Closing Date (computed without
regard to any deduction for dividends paid) and all of its
net capital gains, if any, realized in taxable years ending
on or prior to the Closing Date (after reduction for any
available capital loss carry-forward). Such dividends will
be included in the taxable income of Trinity Large Cap
Growth Fund's shareholders as ordinary income and capital
gain, respectively.
You will continue to be responsible for tracking the
purchase cost and holding period of your shares and should
consult your tax advisor regarding the effect, if any, of
the Reorganization in light of your individual
circumstances. You should also consult your tax advisor as
to state and local and other tax consequences, if any, of
the Reorganization because this discussion only relates to
federal income tax consequences.
What should I know about Class A, Class B, Class C, Class N
and Class Y shares of Growth Fund?
The rights of shareholders of both Funds are
substantially the same. Class A, Class B, Class C, Class N
and/or Class Y shares of Growth Fund will be distributed to
shareholders of Class A, Class B, Class C, Class N and/or
Class Y shares of Trinity Large Cap Growth Fund,
respectively, in connection with the Reorganization. Each
share will be fully paid and nonassessable when issued will
have no preemptive or conversion rights and will be
transferable on the books of Growth Fund. Each 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.
Neither Fund permits cumulative voting. The shares of
Growth Fund will be recorded electronically in each
shareholder's account. Growth Fund will then send a
confirmation to each shareholder. Shareholders of Trinity
Large Cap Growth Fund holding certificates representing
their shares will not be required to surrender their
certificates in connection with the reorganization.
However, former Class A shareholders of Trinity Large Cap
Growth Fund whose shares are represented by outstanding
share certificates will not be allowed to redeem or
exchange class shares of Growth Fund they receive in the
Reorganization until the certificates for the exchanged
Trinity Large Cap Growth Fund have been returned to the
Transfer Agent.
Like Trinity Large Cap Growth Fund, Growth Fund does
not routinely hold annual shareholder meetings.
What are the capitalizations of the Funds and what might
the capitalization be after the Reorganization?
The following table sets forth the capitalization
(unaudited) of Trinity Large Cap Growth Fund and Growth
Fund and indicates the pro forma combined capitalization as
of March 31, 2003 as if the Reorganization had occurred on
that date.
Net
Asset
Shares
Growth
Net Assets Outstanding
Per Share
Trinity Large Cap Growth Fund
Class A $16,197,254 2,614,515
$6.20
Class B $11,610,864 1,937,847
$5.99
Class C $4,704,804 785,194
$5.99
Class N $395,208 64,247
$6.15
Class Y $114,115 18,008
$6.34
TOTAL $33,022,245 5,419,811
Growth Fund
Class A $1,022,985,552
46,002,874 $22.24
Class B $256,756,346
12,310,904 $20.86
Class C $68,159,153 3,214,405
$21.20
Class N $5,465,885 245,260
$22.29
Class Y $57,378,361
2,573,084 $22.30
TOTAL $1,410,745,297 64,346,527
Growth Fund
(Pro Forma Surviving Fund)
Class A $1,039,182,806 46,731,252
$22.24
Class B $268,367,210
12,867,619 $20.86
Class C $72,863,957 3,436,285
$21.20
Class N $5,861,093 262,993
$22.29
Class Y $57,492,476 2,578,201
$22.30
TOTAL $1,443,767,542 65,876,350
*Reflects the issuance of 728,378 Class A shares, 556,715
Class B shares, 221,880 Class C shares, 17,773 Class N
shares and 5,117 Class Y shares of Growth Fund in a
tax-free exchange for the net assets of Trinity Large Cap
Growth Fund, aggregating 33,022,245.
COMPARISON OF INVESTMENT OBJECTIVES AND POLICIES
This section describes key investment policies of
Trinity Large Cap Growth Fund and Growth Fund, and certain
noteworthy differences between the investment objectives
and policies of the two Funds. For a complete description
of Growth Fund's investment policies and risks, please
review its prospectus dated December 23, 2002, which is
attached to this Prospectus/Proxy Statement as Exhibit A.
Are there any significant differences between the
investment objectives and strategies of the Funds?
In considering whether to approve the Reorganization,
shareholders of Trinity Large Cap Growth Fund should
consider the differences in investment objectives, policies
and risks of the Funds. Further information about Growth
Fund is set forth in its Prospectus, which accompanies this
Prospectus/Proxy Statement and is incorporated herein by
reference. Additional information about both Funds is
set forth in their Statements of Additional Information,
Annual Reports and Semi-Annual Reports, which may be
obtained upon request to the Transfer Agent. See
"Information about Trinity Large Cap Growth Fund" and
"Information about Growth Fund."
Trinity Large Cap Growth Fund and Growth Fund have
similar investment objectives. Trinity Large Cap Growth
Fund's investment objective is to seek long-term growth of
capital. Growth Fund's investment objective is to seek a
high total return. In seeking their investment objectives,
Trinity Large Cap Growth Fund and Growth Fund utilize a
similar investing strategy. Trinity Large Cap Growth Fund
invests in common stocks that are included in the S&P 500.
Growth Fund currently invests mainly in common stocks of
U.S. companies of different capitalization ranges,
presently focusing on large-capitalization issuers. Both
funds are managed with a quantitative investment process.
Both Funds invest in a similar universe of companies,
although Growth has a larger potential investment universe.
If the reorganization is approved, Growth Fund will
retain its benchmark against the S&P 500 Index. The end
result of the reorganization will be a larger,
style-specific fund in Lipper's Large Cap Core Fund
category that will better fit investment process already
used by the personnel who manage Growth Fund.
What are the Risk Factors Associated with an investment in
the Funds?
Like all investments, an investment in both of the
Funds involves risk. There is no assurance that either
Fund will meet its investment objective. The achievement
of the Funds' goals depends upon market conditions,
generally, and on the portfolio manager's analytical and
portfolio management skills. The risks described below
collectively form the risk profiles of the
Funds, and can affect the Growth of the Funds' investments,
investment performance and prices per share. There is also
the risk that poor securities selection by the Manager will
cause the Fund to underperform other funds having a similar
objective. These risks mean that you can lose money by
investing in either Fund. When you redeem your shares,
they may be worth more or less than what you paid for
them.
How Do the Investment Policies of the Funds Compare?
Trinity Large Cap Growth Fund invests in common
stocks that are included in the S&P 500. Growth Fund
currently invests mainly in common stocks of U.S. companies
of different capitalization ranges, presently focusing on
large-capitalization issuers. If the Reorganization is
approved, Growth Fund anticipates that it will limit its
stock purchases to those issuers included in the S&P 500
index and would no longer make investments in foreign
securities.
Other Equity Securities. While Growth Fund emphasizes
investments in common stocks, it can also buy
preferred stocks and securities convertible into
common stock. The Manager considers some convertible
securities to be "equity equivalents" because of the
conversion feature and in that case their rating has
less impact on the Manager's investment decision than
in the case of other debt securities. Trinity Large
Cap Growth Fund, in contrast, only purchases common
stocks included in the S&P 500 Index. If the
Reorganization is approved, Growth Fund anticipates it
would no longer invest in preferred stocks or
securities convertible into common stock.
Foreign Securities. Growth Fund can buy securities of
companies or governments in any country, developed or
underdeveloped. While there is no limit on the amount
of the Fund's assets that may be invested in foreign
securities, the Manager does not currently invest
significant amounts of Growth Fund's assets in
foreign securities. While foreign securities offer
special investment opportunities, they also have
special risks.
The change in value of a foreign currency against the
U.S. dollar will result in a change in the U.S. dollar
value of securities denominated in that foreign
currency. Additional risks of foreign securities
include higher transaction and operating costs for the
Fund; foreign issuers are not subject to the same
accounting and disclosure requirements that apply to
U.S. companies; and lack of uniform accounting,
auditing and financial reporting standards in foreign
countries comparable to those applicable to domestic
issuers. If the Reorganization is approved, Growth
Fund anticipates it would no longer purchase foreign
securities.
Derivatives. Growth Fund can invest in a number of
different kinds of "derivative" investments. In
general terms, a derivative investment is an
investment contract whose value depends on (or is
derived from) the value of an underlying asset,
interest rate or index. In the broadest sense,
options, futures contracts, and other hedging
instruments Growth Fund might use may be considered
"derivative" investments. Growth Fund currently does
not use derivatives to a significant degree and is
not required to use them in seeking its objective.
Derivatives have risks. If the issuer of the
derivative investment does not pay the amount due,
Growth Fund can lose money on the investment. The
underlying security or investment on which a
derivative is based, and the derivative itself, may
not perform the way the Manager expected it to. As a
result of these risks Growth Fund could realize less
principal or income from the investment than expected
or its hedge might be unsuccessful. As a result,
Growth Fund's share prices could fall. Certain
derivative investments held by Growth Fund might be
illiquid. Trinity Large Cap Growth Fund does not
invest in derivative securities. If the
Reorganization is approved, Growth Fund anticipates
it would no longer purchase derivatives.
Hedging. Growth Fund can buy and sell futures
contracts, put and call options, forward contracts
and options on futures and securities indices. These
are all referred to as "hedging instruments." Some
of these strategies would hedge Growth Fund's
portfolio against price fluctuations. Other hedging
strategies, such as buying futures and call options,
would tend to increase Growth Fund's exposure to the
securities market.
There are also special risks in particular hedging
strategies. Options trading involves the payment of
premiums and can increase portfolio turnover. If the
Manager used a hedging instrument at the wrong time
or judged market conditions incorrectly, the strategy
could reduce Growth Fund's return.
Temporary Defensive Investments. In times of adverse or
unstable market, economic or political conditions,
both Funds can invest up to 100% of its assets in
temporary defensive investments. Generally they would
be high-quality, short-term money market instruments,
such as a U.S. government securities, highly rated
commercial paper, short-term corporate debt
obligations or repurchase agreements. To the extent
either Fund invests defensively in these securities,
it might not achieve its investment objective.
Illiquid and Restricted Securities. Investments may be
illiquid because they do not have an active trading
market, making it difficult to value them or dispose
of them promptly at an acceptable price. A restricted
security is one that has a contractual restriction on
its resale or which cannot be sold publicly until it
is registered under the Securities Act of 1933.
Growth Fund will not invest more than 10% (the Board
can increase that limit to 15%) of its net assets in
illiquid or restricted securities. The Manager
monitors holdings of illiquid securities on an ongoing
basis to determine whether to sell any holdings to
maintain adequate liquidity. Trinity Large Cap Growth
Fund does not invest in illiquid or restricted
securities.
What are the fundamental investment restrictions of the
Funds?
Both Trinity Large Cap Growth Fund and Growth Fund
have certain additional investment restrictions that,
together with their investment objectives, are fundamental
policies, changeable only by shareholder approval.
Generally, these investment restrictions are similar
between the Funds and are discussed below.
o Neither Fund can concentrate investments. That means
they cannot invest 25% or more of its total assets in
any industry. However, there is no limitation on
investments in U.S. government securities.
o Neither Fund can buy or sell real estate. However,
they can purchase readily-marketable securities of
companies holding real estate or interests in real
estate.
o The Funds cannot underwrite securities of other
companies. A permitted exception is in case a Fund is
deemed to be an underwriter under the Securities Act of
1933 when reselling any securities held in its own
portfolio.
o Neither Fund can issue "senior securities," but this
does not prohibit certain investment activities for
which assets of the Funds are designated as segregated,
or margin, collateral or escrow arrangements are
established, to cover the related obligations. Examples
of those activities include borrowing money, reverse
repurchase agreements, delayed-delivery and when-issued
arrangements for portfolio securities transactions, and
contracts to buy or sell derivatives, hedging
instruments, options or futures.
o Neither Fund can invest in physical commodities or
physical commodity contracts. However, it may buy and
sell hedging instruments permitted by any of its other
investment policies.
o Neither Fund can buy securities issued or guaranteed
by any one issuer if more than 5% of its total assets
would be invested in securities of that issuer or if it
would then own more than 10% of that issuer's voting
securities. That restriction applies to 75% of the
Fund's total assets. The limit does not apply to
securities issued by the U.S. government or any of its
agencies or instrumentalities. This means that both
Funds are presently a "diversified" investment company
under the 1940 Act.
o Trinity Large Cap Growth Fund cannot borrow money
except from banks in amounts not in excess of 5% of its
assets as a temporary measure to meet redemptions.
Growth Fund cannot borrow money in excess of 33 1/3% of
the value of its total assets (including the amount
borrowed). Growth Fund may borrow only from banks and/or
affiliated investment companies. With respect to this
fundamental policy, Growth Fund can borrow only if
maintains a 300% ratio of assets to borrowings at all
times in the manner set forth in the Investment Company
Act of 1940.
o Neither Fund can make loans. However, they can
invest in debt securities that the Fund's investment
policies and restrictions permit it to purchase. The
Funds may also lend their portfolio securities and enter
into repurchase agreements.
o Neither Fund can mortgage, pledge or otherwise
hypothecate any of its assets. However, this does not
prohibit the Fund from escrow arrangements contemplated
by the put and call activities of the Fund or other
collateral or margin arrangements in connection with any
of the hedging instruments permitted by any of its other
policies.
o Neither Fund cannot invest in companies for the
purpose of acquiring control or management of them.
How do the Account Features and Shareholder Services for
the Funds Compare?
Investment Management- Pursuant to each investment
advisory agreement, the Manager acts as the investment
advisor for both Funds. For Trinity Large Cap Growth Fund,
the Manager has retained Trinity Investment Management, the
Sub-Advisor, to provide day-to-day portfolio management for
Trinity Large Cap Growth Fund. The sub-advisory fee is
paid by the Manager out of its management fee. Separate
and apart from the proxy statement, shareholders of Growth
Fund will be asked to approve a Sub-Advisory Agreement
between the borrower and Trinity Investment Management
Corporation with the same sub-advisory fee.
The investment advisory agreements state that the
Manager will provide administrative services for the Funds,
including compilation and maintenance of records,
preparation and filing of reports required by the SEC,
reports to shareholders, and composition of proxy
statements and registration statements required by Federal
and state securities laws. Further, the Sub-Advisor has
agreed to furnish the Funds with office space, facilities
and equipment and arrange for its employees to serve as
officers of the Funds. The administrative services to be
provided by the Manager under the investment advisory
agreement will be at its own expense.
Expenses not expressly assumed by the Manager under
each Fund's advisory agreement or by the Distributor under
the General Distributor's Agreement are paid by the Funds.
The investment advisory agreements list examples of
expenses paid by the Funds, 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 costs.
Both investment advisory agreements generally provide
that in the absence of willful misfeasance, bad faith,
gross negligence in the performance of its duties or
reckless disregard of its obligations and duties under the
investment advisory agreement, the Manager is not liable
for any loss sustained by reason of good faith errors or
omissions in connection with any matters to which the
agreement(s) relate. The agreements permit the Manager to
act as investment advisor for any other person, firm or
corporation. Pursuant to each agreement, the Manager is
permitted to use the name "Oppenheimer" in connection with
other investment companies for which it may act as
investment advisor or general distributor. If the Manager
shall no longer act as investment advisor to the Funds, the
Manager may withdraw the right of the Funds to use the name
"Oppenheimer" as part of their names.
The Manager is controlled by Oppenheimer Acquisition
Corp., a holding company owned in part by senior officers
of the Manager and ultimately controlled by Massachusetts
Mutual Life Insurance Company, a mutual life insurance
company that also advises pension plans and investment
companies. The Manager has been an investment advisor since
January 1960. The Manager (including subsidiaries and an
affiliate) managed more than $120 billion in assets as of
March 31, 2003, including more than 65 funds with more than
5 million shareholder accounts. The Manager is located at
498 Seventh Avenue, 10th Floor, New York, New York 10018.
OppenheimerFunds Services, a division of the Manager, acts
as transfer and shareholder servicing agent on an at-cost
basis for both Trinity Large Cap Growth Fund and Growth
Fund and for certain other open-end funds managed by the
Manager and its affiliates.
Distribution - Pursuant to General Distributor's
Agreements, the Distributor acts as principal underwriter
in a continuous public offering of shares of Trinity Large
Cap Growth Fund and Growth Fund, but is not obligated to
sell a specific number of shares. Expenses normally
attributable to sales, including advertising and the cost
of printing and mailing prospectuses other than those
furnished to existing shareholders, are borne by the
Distributor, except for those for which the Distributor is
paid under each Fund's Rule 12b-1 Distribution and Service
Plan described below.
Both Funds have adopted a Service Plan and Agreement
under Rule 12b-1 of the Investment Company Act for their
Class A shares. The Service Plan provides for the
reimbursement to the Distributor for a portion of its costs
incurred in connection with the personal service and
maintenance of accounts that hold Class A shares. Under
the plan, payment 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 Funds. The Distributor currently
uses all of those fees to compensate dealers, brokers,
banks and other financial institutions quarterly for
expenses they incur in providing personal service and
maintenance of accounts of their customers that hold Class
A shares.
Both Funds have adopted Distribution and Service
Plans under Rule 12b-1 of the 1940 Act for their Class B,
Class C and Class N shares. The Funds' Plans compensate
the Distributor for its services in distributing Class B,
Class C and Class N shares and servicing accounts. Under
both Funds' Plans, the Funds pay the Distributor an
asset-based sales charge at an annual rate of 0.75% of
Class B and Class C assets, and an annual asset-based sales
charge of 0.25% on Class N shares. The Distributor also
receives a service fee 0.25% of average annual net assets
under each plan. All fee amounts are computed on the
average annual net assets of the class determined as of the
close of each regular business day of each Fund. The
Distributor uses all of the service fees to compensate
broker-dealers for providing personal services and
maintenance of accounts of their customers that hold shares
of the Funds. The Class B and Class N asset-based sales
charges are retained by the Distributor. After the first
year, the Class C asset-based sales charges are paid to
broker-dealers who hold or whose clients hold Class C
shares as an ongoing concession for shares that have been
outstanding for a year or more.
Purchases and Redemptions - Both Funds are part of
the OppenheimerFunds family of mutual funds. The
procedures for purchases, exchanges and redemptions of
shares of the Funds are identical. Shares of either Fund
may be exchanged for shares of the same class of other
Oppenheimer funds offering such shares. Exchange
privileges are subject to amendment or termination at any
time.
Both Funds have the same initial and subsequent
minimum investment amounts for the purchase of shares.
These amounts are $1,000 and $25, respectively. Both Funds
have a maximum initial sales charge of 5.75% on Class A
shares for purchases of less than $25,000. The sales
charge of 5.75% is reduced for purchases of Class A shares
of $25,000 or more. Investors who purchase $1 million or
more of Class A shares pay no initial sales charge but may
have to pay a contingent deferred sales charge of up to 1%
if the shares are sold within 18 calendar months from the
end of the calendar month during which they were
purchased. Class B shares of the Funds are sold without a
front-end sales charge but may be subject to a contingent
deferred sales charge ("CDSC") upon redemption depending on
the length of time the shares are held. The CDSC begins at
5% for shares redeemed in the first year and declines to 1%
in the sixth year and is eliminated after that. Class C
shares may be purchased without an initial sales charge,
but if redeemed within 12 months of buying them, a CDSC of
1% may be deducted. Class N shares are, purchased without
an initial sales charge, but if redeemed within 18 months
of the retirement plan's first purchase of N shares, a CDSC
of 1% may be deducted.
Class A, Class B, Class C, Class N and Class Y shares
of Growth Fund received in the Reorganization will be
issued at net asset value, without a sales charge and no
CDSC will be imposed on any Trinity Large Cap Growth Fund
shares exchanged for Growth Fund shares as a result of the
Reorganization. However, any CDSC that applies to Trinity
Large Cap Growth Fund shares as of the date of the exchange
will carry over to Growth Fund shares received in the
Reorganization.
Shareholder Services--Both Funds also offer the
following privileges: (i) Right of Accumulation, (ii)
Letter of Intent, (iii) reinvestment of dividends and
distributions at net asset value, (iv) net asset Growth
purchases by certain individuals and entities, (v) Asset
Builder (automatic investment) Plans, (vi) Automatic
Withdrawal and Exchange Plans for shareholders who own
shares of the Funds valued at $5,000 or more, (vii)
AccountLink and PhoneLink arrangements, (viii) exchanges of
shares for shares of the same class of certain other funds
at net asset value, and (ix) telephone and Internet
redemption and exchange privileges. All of such services
and privileges are subject to amendment or termination at
any time and are subject to the terms of the Funds'
respective prospectuses.
Dividends and Distributions - Both Funds intend to
declare dividends separately for each class of shares from
net investment income on an annual basis and to pay those
dividends to shareholders in December on a date selected by
the Board of Trustees of each Fund. Dividends and the
distributions paid on Class A, Class B, Class C, Class N or
Class Y shares may vary over time, depending on market
conditions, the composition of the Funds' portfolios, and
expenses borne by the particular class of shares.
Dividends paid on Class A shares will generally be higher
than those paid on Class B, Class C, Class N or Class Y
shares, which normally have higher expenses than Class A.
The Funds have no fixed dividend rates and there can be no
guarantee that either Fund will pay any dividends or
distributions.
Either Fund may realize capital gains on the sale of
portfolio securities. If it does, it may make
distributions out of any net short-term or long-term
capital gains in December of each year. The Funds may make
supplemental distributions of dividends and capital gains
following the end of their fiscal years.
VOTING INFORMATION
How many votes are necessary to approve the Reorganization
Agreement?
The affirmative vote of the holders of a majority of
the total number of shares of Trinity Large Cap Growth Fund
outstanding and entitled to vote is necessary to approve
the Reorganization Agreement and the transactions
contemplated thereby. Each shareholder will be entitled to
one vote for each full share, and a fractional vote for
each fractional share of Trinity Large Cap Growth Fund held
on the Record Date. If sufficient votes to approve the
proposal are not received by the date of the Meeting, the
Meeting may be adjourned to permit further solicitation of
proxies. The holders of a majority of shares entitled to
vote at the Meeting and present in person or by proxy
(whether or not sufficient to constitute a quorum) may
adjourn the Meeting to permit further solicitation of
proxies.
How do I ensure my vote is accurately recorded?
You can vote in either of two ways:
o By mail, with the enclosed proxy card.
o In person at the Meeting.
A proxy card is, in essence, a ballot. If you simply
sign and date the proxy but give no voting instructions,
your shares will be voted in favor of the Reorganization
Agreement. Shareholders may also be able to vote by
telephone to the extent permitted by state law.
Can I revoke my proxy?
Yes. You may revoke your proxy at any time before it
is voted by (i) writing to the Secretary of Trinity Large
Cap Growth Fund at 498 Seventh Avenue, 10th Floor, New
York, New York 10018 (if received in time to be acted
upon); (ii) attending the Meeting and voting in person; or
(iii) signing and returning a later-dated proxy (if
returned and received in time to be voted).
What other matters will be voted upon at the Meeting?
The Board of Trustees of Trinity Large Cap Growth
Fund does not intend to bring any matters before the
Meeting other than those described in this proxy. It is
not aware of any other matters to be brought before the
Meeting by others. If any other matters legally come
before the Meeting, the proxy ballots confer discretionary
authority with respect to such matters, and it is the
intention of the persons named to vote proxies to vote in
accordance with their judgment in such matters.
Who is entitled to vote?
Shareholders of record of Trinity Large Cap Growth
Fund at the close of business on July 9, 2003 (the "record
date") will be entitled to vote at the Meeting. On
________, there were ____________outstanding shares of
Trinity Large Cap Growth Fund, consisting of _____________
Class A shares, ____________ Class B shares, ___________
Class C shares, _________ Class N shares and ________ Class
Y shares. On __________ there were _________ outstanding
shares of Growth Fund, consisting of ___________ Class A
shares, __________ Class B shares, _________ Class C
shares, _________ Class N shares and _________ Class Y
shares. Under relevant state law and Trinity Large Cap
Growth Fund's charter documents, proxies representing
abstentions and broker non-votes will be included for
purposes of determining whether a quorum is present at the
Meeting, but will be treated as votes not cast and,
therefore, will not be counted for purposes of determining
whether the matters and proposals and motions to be voted
upon at the Meeting have been approved. For purposes of
the Meeting, a majority of shares outstanding and entitled
to vote, present in person or represented by proxy,
constitutes a quorum. Growth Fund shareholders do not vote
on the Reorganization.
What other solicitations will be made?
Trinity Large Cap Growth Fund will request
broker-dealer firms, custodians, nominees and fiduciaries
to forward proxy material to the beneficial owners of the
shares of record, and may reimburse them for their
reasonable expenses incurred in connection with such proxy
solicitation. In addition to solicitations by mail,
officers of Trinity Large Cap Growth Fund or officers and
employees of OppenheimerFunds Services, without extra pay,
may conduct additional solicitations personally or by
telephone or telegraph. Any expenses so incurred will be
borne by OppenheimerFunds Services. Proxies may also be
solicited by a proxy solicitation firm hired at Trinity
Large Cap Growth Fund's expense. If a proxy solicitation
firm is hired, it is anticipated that the cost of engaging
a proxy solicitation firm would not exceed $32,000, plus
the additional costs which would be incurred in connection
with contacting those shareholders who have not voted, in
the event of a need for resolicitation of votes.
Shares owned of record by broker-dealers for the
benefit of their customers ("street account shares") will
be voted by the broker-dealer based on instructions
received from its customers. If no instructions are
received, and the broker-dealer does not have discretionary
power to vote such street account shares under applicable
stock exchange rules, the shares represented thereby will
be considered to be present at the Meeting for purposes of
only determining the quorum ("broker non-votes"). Because
of the need to obtain a majority vote for the
Reorganization proposal to pass, broker non-votes will have
the same effect as a vote "against" the Proposal.
Are there appraisal rights?
No. Under the 1940 Act, shareholders do not have
rights of appraisal as a result of the Reorganization.
Although appraisal rights are unavailable, you have the
right to redeem your shares at net asset value until the
closing date for the Reorganization. After the closing
date, you may redeem your new Growth Fund shares or
exchange them into shares of certain other funds in the
OppenheimerFunds family of mutual funds, subject to the
terms of the prospectuses of both funds.
INFORMATION ABOUT GROWTH FUND
Information about Growth Fund is included in Growth
Fund's Prospectus, which is attached to and considered a
part of this Proxy Statement and Prospectus. Additional
information about Growth Fund is included the Fund's
Statement of Additional Information dated October 23, 2002,
its Annual Report and Semi-Annual Reports dated August 31,
2002 and February 28, 2003, respectively, which have been
filed with the SEC and are incorporated herein by
reference. You may request a free copy of these materials
and other information by calling 1.800.525.7048 or by
writing to Growth Fund at OppenheimerFunds Services, P.O.
Box 5270, Denver, CO 80217. Growth Fund also files proxy
materials, reports and other information with the SEC in
accordance with the informational requirements of the
Securities and Exchange Act of 1934 and the 1940 Act.
These materials can be inspected and copied at: the SEC's
Public Reference Room in Washington, D.C. (Phone:
1.202.942.8090) or the EDGAR database on the SEC's Internet
website at http://www.sec.gov. Copies may be obtained upon
payment of a duplicating fee by electronic request at the
SEC's e-mail address: PUBLICINFO@SEC.GOV or by writing to
------------------
the SEC's Public Reference Section, Washington, D.C.
20549-0102.
INFORMATION ABOUT TRINITY LARGE CAP GROWTH FUND
Information about Trinity Large Cap Growth Fund is
included in the current Trinity Large Cap Growth Fund
Prospectus. This document has been filed with the SEC and
is incorporated by reference herein. Additional
information about Trinity Large Cap Growth Fund is also
included in the Fund's Statement of Additional Information
dated September 24, 2002, as revised January 15, 2003,
Annual Report dated July 31, 2002 and Semi-Annual Report
dated January 31, 2003, which have been filed with the SEC
and are incorporated by reference herein. You may request
free copies of these or other documents relating to Trinity
Large Cap Growth Fund by calling 1.800.525.7048 or by
writing to OppenheimerFunds Services, P.O. Box 5270,
Denver, CO 80217. Reports and other information filed by
Trinity Large Cap Growth Fund can be inspected and copied
at: the SEC's Public Reference Room in Washington, D.C.
(Phone: 1.202.942.8090) or the EDGAR database on the SEC's
Internet website at http://www.sec.gov. Copies may be
obtained upon payment of a duplicating fee by electronic
request at the SEC's e-mail address: PUBLICINFO@SEC.GOV or
------------------
by writing to the SEC's Public Reference Section,
Washington, D.C. 20549-0102.
PRINCIPAL SHAREHOLDERS
As of July 9, 2003, the officers and Trustees of Trinity
Large Cap Growth Fund, as a group, owned less than 1% of
the outstanding voting shares of Trinity Large Cap Growth
Fund and Growth Fund. As of July 9, 2003, the only persons
who owned of record or was known by the Trinity Large Cap
Growth Fund to own beneficially 5% or more of any class of
the Fund's outstanding shares were as follows:
By Order of the Board of Trustees
Robert G. Zack, Secretary
July 6, 2003
EXHIBITS TO THE COMBINED PROXY
STATEMENT AND PROSPECTUS
Exhibit
- -------
A Agreement and Plan of Reorganization between
Oppenheimer Trinity Large Cap Growth Fund and
Oppenheimer Growth Fund
EXHIBIT A
AGREEMENT AND PLAN OF REORGANIZATION
AGREEMENT AND PLAN OF REORGANIZATION (the
"Agreement") dated as of April 28, 2003 by and between
Oppenheimer Trinity Large Cap Growth Fund ("Trinity Large
Cap Growth Fund"), a Massachusetts business trust and
Oppenheimer Growth Fund ("Growth Fund"), a Massachusetts
business trust.
W I T N E S S E T H:
WHEREAS, the parties are each open-end investment
companies of the management type; and
WHEREAS, the parties hereto desire to provide for
the reorganization pursuant to Section 368(a)(1) of the
Internal Revenue Code of 1986, as amended (the "Code"), of
Trinity Large Cap Growth Fund through the acquisition by
Growth Fund of substantially all of the assets of Trinity
Large Cap Growth Fund in exchange for the voting shares of
beneficial interest ("shares") of Class A, Class B, Class
C, Class N and Class Y shares of Growth Fund and the
assumption by Growth Fund of certain liabilities of
Trinity Large Cap Growth Fund, which Class A, Class B,
Class C, Class N and Class Y shares of Growth Fund are to
be distributed by Trinity Large Cap Growth Fund pro rata
to its shareholders in complete liquidation of Trinity
Large Cap Growth Fund and complete cancellation of its
shares;
NOW, THEREFORE, in consideration of the mutual
promises herein contained, the parties hereto agree as
follows:
1. The parties hereto hereby adopt this Agreement
and Plan of Reorganization (the "Agreement") pursuant to
Section 368(a)(1) of the Code as follows: The
reorganization will be comprised of the acquisition by
Growth Fund of substantially all of the assets of Trinity
Large Cap Growth Fund in exchange for Class A, Class B,
Class C, Class N and Class Y shares of Growth Fund and the
assumption by Growth Fund of certain liabilities of
Trinity Large Cap Growth Fund, followed by the
distribution of such Class A, Class B, Class C, Class N
and Class Y shares of Growth Fund to the Class A, Class B,
Class C, Class N and Class Y shareholders of Trinity Large
Cap Growth Fund in exchange for their Class A, Class B,
Class C, Class N and Class Y shares of Trinity Large Cap
Growth Fund, all upon and subject to the terms of the
Agreement hereinafter set forth.
The share transfer books of Trinity Large Cap
Growth Fund will be permanently closed at the close of
business on the Valuation Date (as hereinafter defined)
and only redemption requests received in proper form on or
prior to the close of business on the Valuation Date shall
be fulfilled by Trinity Large Cap Growth Fund; redemption
requests received by Trinity Large Cap Growth Fund after
that date shall be treated as requests for the redemption
of the shares of Growth Fund to be distributed to the
shareholder in question as provided in Section 5 hereof.
2. On the Closing Date (as hereinafter defined), all
of the assets of Trinity Large Cap Growth Fund on that
date, excluding a cash reserve (the "cash reserve") to be
retained by Trinity Large Cap Growth Fund sufficient in its
discretion for the payment of the expenses of Trinity Large
Cap Growth Fund's dissolution and its liabilities, but not
in excess of the amount contemplated by Section 10E, shall
be delivered as provided in Section 8 to Growth Fund, in
exchange for and against delivery to Trinity Large Cap
Growth Fund on the Closing Date of a number of Class A,
Class B, Class C, Class N and Class Y shares of Growth
Fund, having an aggregate net asset value equal to the
value of the assets of Trinity Large Cap Growth Fund so
transferred and delivered.
3. The net asset value of Class A, Class B, Class C,
Class N and Class Y shares of Growth Fund and the value of
the assets of Trinity Large Cap Growth Fund to be
transferred shall in each case be determined as of the
close of business of The New York Stock Exchange on the
Valuation Date. The computation of the net asset value of
the Class A, Class B, Class C, Class N and Class Y shares
of Growth Fund and the Class A, Class B, Class C, Class N
and Class Y shares of Trinity Large Cap Growth Fund shall
be done in the manner used by Growth Fund and Trinity Large
Cap Growth Fund, respectively, in the computation of such
net asset value per share as set forth in their respective
prospectuses. The methods used by Growth Fund in such
computation shall be applied to the valuation of the assets
of Trinity Large Cap Growth Fund to be transferred to
Growth Fund.
Trinity Large Cap Growth Fund shall declare and
pay, immediately prior to the Valuation Date, a dividend or
dividends which, together with all previous such dividends,
shall have the effect of distributing to Trinity Large Cap
Growth Fund's shareholders all of Trinity Large Cap Growth
Fund's investment company taxable income for taxable years
ending on or prior to the Closing Date (computed without
regard to any dividends paid) and all of its net capital
gain, if any, realized in taxable years ending on or prior
to the Closing Date (after reduction for any capital loss
carry-forward).
4. The closing (the "Closing") shall be at the
offices of OppenheimerFunds, Inc. (the "Agent"), 6803 S
Tucson Way, Englewood, CO 80112, on such time or such place
as the parties may designate or as provided below (the
"Closing Date"). The business day preceding the Closing
Date is herein referred to as the "Valuation Date."
In the event that on the Valuation Date either
party has, pursuant to the Investment Company Act of 1940,
as amended (the "Act"), or any rule, regulation or order
thereunder, suspended the redemption of its shares or
postponed payment therefore, the Closing Date shall be
postponed until the first business day after the date when
both parties have ceased such suspension or postponement;
provided, however, that if such suspension shall continue
for a period of 60 days beyond the Valuation Date, then the
other party to the Agreement shall be permitted to
terminate the Agreement without liability to either party
for such termination.
5. In conjunction with the Closing, Trinity Large Cap
Growth Fund shall distribute on a pro rata basis to the
shareholders of Trinity Large Cap Growth Fund as of the
Valuation Date Class A, Class B, Class C, Class N and Class
Y shares of Growth Fund received by Trinity Large Cap
Growth Fund on the Closing Date in exchange for the assets
of Trinity Large Cap Growth Fund in complete liquidation of
Trinity Large Cap Growth Fund; for the purpose of the
distribution by Trinity Large Cap Growth Fund of Class A,
Class B, Class C, Class N and Class Y shares of Growth Fund
to Trinity Large Cap Growth Fund's shareholders, Growth
Fund will promptly cause its transfer agent to: (a) credit
an appropriate number of Class A, Class B, Class C, Class N
and Class Y shares of Growth Fund on the books of Growth
Fund to each Class A, Class B, Class C, Class N and Class Y
shareholder of Trinity Large Cap Growth Fund in accordance
with a list (the "Shareholder List") of Trinity Large Cap
Growth Fund shareholders received from Trinity Large Cap
Growth Fund; and (b) confirm an appropriate number of Class
A, Class B, Class C, Class N and Class Y shares of Growth
Fund to each Class A, Class B, Class C, Class N and Class Y
shareholder of Trinity Large Cap Growth Fund; certificates
for Class A shares of Growth Fund will be issued upon
written request of a former shareholder of Trinity Large
Cap Growth Fund but only for whole shares, with fractional
shares credited to the name of the shareholder on the books
of Growth Fund and only after any share certificates for
Trinity Large Cap Growth Fund are returned to the transfer
agent.
The Shareholder List shall indicate, as of the
close of business on the Valuation Date, the name and
address of each shareholder of Trinity Large Cap Growth
Fund, indicating his or her share balance. Trinity Large
Cap Growth Fund agrees to supply the Shareholder List to
Growth Fund not later than the Closing Date. Shareholders
of Trinity Large Cap Growth Fund holding certificates
representing their shares shall not be required to
surrender their certificates to anyone in connection with
the reorganization. After the Closing Date, however, it
will be necessary for such shareholders to surrender their
certificates in order to redeem, transfer or pledge the
shares of Growth Fund which they received.
6. Within one year after the Closing Date, Trinity
Large Cap Growth Fund shall (a) either pay or make
provision for payment of all of its liabilities and taxes,
and (b) either (i) transfer any remaining amount of the
cash reserve to Growth Fund, if such remaining amount (as
reduced by the estimated cost of distributing it to
shareholders) is not material (as defined below) or (ii)
distribute such remaining amount to the shareholders of
Trinity Large Cap Growth Fund on the Valuation Date. Such
remaining amount shall be deemed to be material if the
amount to be distributed, after deduction of the estimated
expenses of the distribution, equals or exceeds one cent
per share of Trinity Large Cap Growth Fund outstanding on
the Valuation Date.
7. Prior to the Closing Date, there shall be
coordination between the parties as to their respective
portfolios so that, after the Closing, Growth Fund will be
in compliance with all of its investment policies and
restrictions. At the Closing, Trinity Large Cap Growth
Fund shall deliver to Growth Fund two copies of a list
setting forth the securities then owned by Trinity Large
Cap Growth Fund. Promptly after the Closing, Trinity Large
Cap Growth Fund shall provide Growth Fund a list setting
forth the respective federal income tax bases thereof.
8. Portfolio securities or written evidence
acceptable to Growth Fund of record ownership thereof by
The Depository Trust Company or through the Federal Reserve
Book Entry System or any other depository approved by
Trinity Large Cap Growth Fund pursuant to Rule 17f-4 and
Rule 17f-5 under the Act shall be endorsed and delivered,
or transferred by appropriate transfer or assignment
documents, by Trinity Large Cap Growth Fund on the Closing
Date to Growth Fund, or at its direction, to its custodian
bank, in proper form for transfer in such condition as to
constitute good delivery thereof in accordance with the
custom of brokers and shall be accompanied by all necessary
state transfer stamps, if any. The cash delivered shall be
in the form of certified or bank cashiers' checks or by
bank wire or intra-bank transfer payable to the order of
Growth Fund for the account of Growth Fund. Class A, Class
B, Class C, Class N and Class Y shares of Growth Fund
representing the number of Class A, Class B, Class C, Class
N and Class Y shares of Growth Fund being delivered against
the assets of Trinity Large Cap Growth Fund, registered in
the name of Trinity Large Cap Growth Fund, shall be
transferred to Trinity Large Cap Growth Fund on the Closing
Date. Such shares shall thereupon be assigned by Trinity
Large Cap Growth Fund to its shareholders so that the
shares of Growth Fund may be distributed as provided in
Section 5.
If, at the Closing Date, Trinity Large Cap Growth Fund
is unable to make delivery under this Section 8 to Growth
Fund of any of its portfolio securities or cash for the
reason that any of such securities purchased by Trinity
Large Cap Growth Fund, or the cash proceeds of a sale of
portfolio securities, prior to the Closing Date have not
yet been delivered to it or Trinity Large Cap Growth Fund's
custodian, then the delivery requirements of this Section 8
with respect to said undelivered securities or cash will be
waived and Trinity Large Cap Growth Fund will deliver to
Growth Fund by or on the Closing Date with respect to said
undelivered securities or cash executed copies of an
agreement or agreements of assignment in a form reasonably
satisfactory to Growth Fund, together with such other
documents, including a due bill or due bills and brokers'
confirmation slips as may reasonably be required by Growth
Fund.
9. Growth Fund shall not assume the liabilities
(except for portfolio securities purchased which have not
settled and for shareholder redemption and dividend checks
outstanding) of Trinity Large Cap Growth Fund, but Trinity
Large Cap Growth Fund will, nevertheless, use its best
efforts to discharge all known liabilities, so far as may
be possible, prior to the Closing Date. The cost of
printing and mailing the proxies and proxy statements will
be borne by Trinity Large Cap Growth Fund. Trinity Large
Cap Growth Fund and Growth Fund will bear the cost of their
respective tax opinion. Any documents such as existing
prospectuses or annual reports that are included in that
mailing will be a cost of the Fund issuing the document.
Any other out-of-pocket expenses of Growth Fund and Trinity
Large Cap Growth Fund associated with this reorganization,
including legal, accounting and transfer agent expenses,
will be borne by Trinity Large Cap Growth Fund and Growth
Fund, respectively, in the amounts so incurred by each.
10. The obligations of Growth Fund hereunder shall be
subject to the following conditions:
A. The Board of Trustees of Trinity Large Cap Growth
Fund shall have authorized the execution of the Agreement,
and the shareholders of Trinity Large Cap Growth Fund shall
have approved the Agreement and the transactions
contemplated hereby, and Trinity Large Cap Growth Fund
shall have furnished to Growth Fund copies of resolutions
to that effect certified by the Secretary or the Assistant
Secretary of Trinity Large Cap Growth Fund; such
shareholder approval shall have been by the affirmative
vote required by the Massachusetts Law and its charter
documents at a meeting for which proxies have been
solicited by the Proxy Statement and Prospectus (as
hereinafter defined).
B. Growth Fund shall have received an opinion dated
as of the Closing Date from counsel to Trinity Large Cap
Growth Fund, to the effect that (i) Trinity Large Cap
Growth Fund is a business trust duly organized, validly
existing and in good standing under the laws of the State
of Massachusetts with full corporate powers to carry on its
business as then being conducted and to enter into and
perform the Agreement; and (ii) that all action necessary
to make the Agreement, according to its terms, valid,
binding and enforceable on Trinity Large Cap Growth Fund
and to authorize effectively the transactions contemplated
by the Agreement have been taken by Trinity Large Cap
Growth Fund. Massachusetts counsel may be relied upon for
this opinion.
C. The representations and warranties of Trinity
Large Cap Growth Fund contained herein shall be true and
correct at and as of the Closing Date, and Growth Fund
shall have been furnished with a certificate of the
President, or a Vice President, or the Secretary or the
Assistant Secretary or the Treasurer of Trinity Large Cap
Growth Fund, dated as of the Closing Date, to that effect.
D. On the Closing Date, Trinity Large Cap Growth Fund
shall have furnished to Growth Fund a certificate of the
Treasurer or Assistant Treasurer of Trinity Large Cap
Growth Fund as to the amount of the capital loss
carry-over and net unrealized appreciation or
depreciation, if any, with respect to Trinity Large Cap
Growth Fund as of the Closing Date.
E. The cash reserve shall not exceed 10% of the value of
the net assets, nor 30% in value
of the gross assets, of Trinity Large Cap Growth Fund at
the close of business on the Valuation Date.
F. A Registration Statement on Form N-14 filed by Growth
Fund under the Securities Act of 1933, as amended (the
"1933 Act"), containing a preliminary form of the Proxy
Statement and Prospectus, shall have become effective
under the 1933 Act.
G. On the Closing Date, Growth Fund shall have
received a letter of Robert G. Zack or other senior
executive officer of OppenheimerFunds, Inc. acceptable to
Growth Fund, stating that nothing has come to his or her
attention which in his or her judgment would indicate that
as of the Closing Date there were any material, actual or
contingent liabilities of Trinity Large Cap Growth Fund
arising out of litigation brought against Trinity Large Cap
Growth Fund or claims asserted against it, or pending or to
the best of his or her knowledge threatened claims or
litigation not reflected in or apparent from the most
recent audited financial statements and footnotes thereto
of Trinity Large Cap Growth Fund delivered to Growth Fund.
Such letter may also include such additional statements
relating to the scope of the review conducted by such
person and his or her responsibilities and liabilities as
are not unreasonable under the circumstances.
H. Growth Fund shall have received an opinion, dated as
of the Closing Date, of KPMG LLP, to the same effect as the
opinion contemplated by Section 11.E. of the Agreement.
I. Growth Fund shall have received at the Closing all of
the assets of Trinity Large Cap Growth Fund to be conveyed
hereunder, which assets shall be free and clear of all
liens, encumbrances, security interests, restrictions and
limitations whatsoever. The obligations of Trinity Large
Cap Growth Fund hereunder shall be subject to the
following conditions:
A. The Board of Trustees of Growth Fund shall have
authorized the execution of the Agreement, and the
transactions contemplated thereby, and Growth Fund shall
have furnished to Trinity Large Cap Growth Fund copies of
resolutions to that effect certified by the Secretary or
the Assistant Secretary of Growth Fund.
B. Trinity Large Cap Growth Fund's shareholders shall
have approved the Agreement and the transactions
contemplated hereby, by an affirmative vote required by the
Massachusetts Law and its charter documents and Trinity
Large Cap Growth Fund shall have furnished Growth Fund
copies of resolutions to that effect certified by the
Secretary or an Assistant Secretary of Trinity Large Cap
Growth Fund.
C. Trinity Large Cap Growth Fund shall have received
an opinion dated as of the Closing Date from counsel to
Growth Fund, to the effect that (i) Growth Fund is a
business trust duly organized, validly existing and in good
standing under the laws of the Commonwealth of
Massachusetts with full powers to carry on its business as
then being conducted and to enter into and perform the
Agreement; (ii) all actions necessary to make the
Agreement, according to its terms, valid, binding and
enforceable upon Growth Fund and to authorize effectively
the transactions contemplated by the Agreement have been
taken by Growth Fund, and (iii) the shares of Growth Fund
to be issued hereunder are duly authorized and when issued
will be validly issued, fully-paid and non-assessable,
except as set forth under "Shareholder and Trustee
Liability" in Growth Fund's Statement of Additional
Information. Massachusetts counsel may be relied upon for
this opinion.
D. The representations and warranties of Growth Fund
contained herein shall be true and correct at and as of the
Closing Date, and Trinity Large Cap Growth Fund shall have
been furnished with a certificate of the President, a Vice
President or the Secretary or the Assistant Secretary or
the Treasurer of the Trust to that effect dated as of the
Closing Date.
E. Trinity Large Cap Growth Fund shall have received
an opinion of KPMG LLP to the effect that the federal tax
consequences of the transaction, if carried out in the
manner outlined in the Agreement and in accordance with (i)
Trinity Large Cap Growth Fund's representation that there
is no plan or intention by any Trinity Large Cap Growth
Fund shareholder who owns 5% or more of Trinity Large Cap
Growth Fund's outstanding shares, and, to Trinity Large Cap
Growth Fund's best knowledge, there is no plan or intention
on the part of the remaining Trinity Large Cap Growth Fund
shareholders, to redeem, sell, exchange or otherwise
dispose of a number of Growth Fund shares received in the
transaction that would reduce Trinity Large Cap Growth Fund
shareholders' ownership of Growth Fund shares to a number
of shares having a value, as of the Closing Date, of less
than 50% of the value of all of the formerly outstanding
Trinity Large Cap Growth Fund shares as of the same date,
and (ii) the representation by each of Trinity Large Cap
Growth Fund and Growth Fund that, as of the Closing Date,
Trinity Large Cap Growth Fund and Growth Fund will qualify
as regulated investment companies or will meet the
diversification test of Section 368(a)(2)(F)(ii) of the
Code, will be as follows:
1. The transactions contemplated by the Agreement will
qualify as a tax-free "reorganization" within the meaning
of Section 368(a)(1) of the Code, and under the regulations
promulgated thereunder.
2. Trinity Large Cap Growth Fund and Growth Fund will
each qualify as a "party to a reorganization" within the
meaning of Section 368(b)(2) of the Code.
3. No gain or loss will be recognized by the
shareholders of Trinity Large Cap Growth Fund upon the
distribution of Class A, Class B and Class C shares of
beneficial interest in Growth Fund to the shareholders of
Trinity Large Cap Growth Fund pursuant to Section 354 of
the Code.
4. Under Section 361(a) of the Code no gain or loss
will be recognized by Trinity Large Cap Growth Fund by
reason of the transfer of substantially all its assets in
exchange for Class A, Class B and Class C shares of Growth
Fund.
5. Under Section 1032 of the Code no gain or loss
will be recognized by Growth Fund by reason of the transfer
of substantially all of Trinity Large Cap Growth Fund's
assets in exchange for Class A, Class B and Class C shares
of Growth Fund and Growth Fund's assumption of certain
liabilities of Trinity Large Cap Growth Fund.
6. The shareholders of Trinity Large Cap Growth Fund
will have the same tax basis and holding period for the
Class A, Class B and Class C shares of beneficial interest
in Growth Fund that they receive as they had for Trinity
Large Cap Growth Fund shares that they previously held,
pursuant to Section 358(a) and 1223(1), respectively, of
the Code.
7. The securities transferred by Trinity Large Cap
Growth Fund to Growth Fund will have the same tax basis and
holding period in the hands of Growth Fund as they had for
Trinity Large Cap Growth Fund, pursuant to Section 362(b)
and 1223(1), respectively, of the Code.
F. The cash reserve shall not exceed 10% of the value
of the net assets, nor 30% in value of the gross assets, of
Trinity Large Cap Growth Fund at the close of business on
the Valuation Date.
G. A Registration Statement on Form N-14 filed by
Growth Fund under the 1933 Act, containing a preliminary
form of the Proxy Statement and Prospectus, shall have
become effective under the 1933 Act.
H. On the Closing Date, Trinity Large Cap Growth Fund
shall have received a letter of Robert G. Zack or other
senior executive officer of OppenheimerFunds, Inc.
acceptable to Trinity Large Cap Growth Fund, stating that
nothing has come to his or her attention which in his or
her judgment would indicate that as of the Closing Date
there were any material, actual or contingent liabilities
of Growth Fund arising out of litigation brought against
Growth Fund or claims asserted against it, or pending or,
to the best of his or her knowledge, threatened claims or
litigation not reflected in or apparent by the most recent
audited financial statements and footnotes thereto of
Growth Fund delivered to Trinity Large Cap Growth Fund.
Such letter may also include such additional statements
relating to the scope of the review conducted by such
person and his or her responsibilities and liabilities as
are not unreasonable under the circumstances.
I. Trinity Large Cap Growth Fund shall acknowledge
receipt of the Class A, Class B and Class C shares of
Growth Fund.
12. Trinity Large Cap Growth Fund hereby represents
and warrants that:
A. The audited financial statements of Trinity Large
Cap Growth Fund as of July 31, 2002 and unaudited financial
statements as of January 31, 2003 heretofore furnished to
Growth Fund, present fairly the financial position, results
of operations, and changes in net assets of Trinity Large
Cap Growth Fund as of that date, in conformity with
generally accepted accounting principles applied on a basis
consistent with the preceding year; and that from January
31, 2003 through the date hereof there have not been, and
through the Closing Date there will not be, any material
adverse change in the business or financial condition of
Trinity Large Cap Growth Fund, it being agreed that a
decrease in the size of Trinity Large Cap Growth Fund due
to a diminution in the value of its portfolio and/or
redemption of its shares shall not be considered a material
adverse change;
B. Contingent upon approval of the Agreement and the
transactions contemplated thereby by Trinity Large Cap
Growth Fund's shareholders, Trinity Large Cap Growth Fund
has authority to transfer all of the assets of Trinity
Large Cap Growth Fund to be conveyed hereunder free and
clear of all liens, encumbrances, security interests,
restrictions and limitations whatsoever;
C. The Prospectus, as amended and supplemented,
contained in Trinity Large Cap Growth Fund's Registration
Statement under the 1933 Act, as amended, is true, correct
and complete, conforms to the requirements of the 1933 Act
and does not contain any untrue statement of a material
fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not
misleading. The Registration Statement, as amended, was,
as of the date of the filing of the last Post-Effective
Amendment, true, correct and complete, conformed to the
requirements of the 1933 Act and did not contain any untrue
statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the
statements therein not misleading;
D. There is no material contingent liability of
Trinity Large Cap Growth Fund and no material claim and no
material legal, administrative or other proceedings pending
or, to the knowledge of Trinity Large Cap Growth Fund,
threatened against Trinity Large Cap Growth Fund, not
reflected in such Prospectus;
E. Except for the Agreement, there are no material
contracts outstanding to which Trinity Large Cap Growth
Fund is a party other than those ordinary in the conduct of
its business;
F. Trinity Large Cap Growth Fund is a Massachusetts
business trust duly organized, validly existing and in good
standing under the laws of the State of Massachusetts; and
has all necessary and material Federal and state
authorizations to own all of its assets and to carry on its
business as now being conducted; and Trinity Large Cap
Growth Fund that is duly registered under the Act and such
registration has not been rescinded or revoked and is in
full force and effect;
G. All Federal and other tax returns and reports of
Trinity Large Cap Growth Fund required by law to be filed
have been filed, and all federal and other taxes shown due
on said returns and reports have been paid or provision
shall have been made for the payment thereof and to the
best of the knowledge of Trinity Large Cap Growth Fund no
such return is currently under audit and no assessment has
been asserted with respect to such returns and to the
extent such tax returns with respect to the taxable year of
Trinity Large Cap Growth Fund ended July 31, 2002 have not
been filed, such returns will be filed when required and
the amount of tax shown as due thereon shall be paid when
due; and
H. Trinity Large Cap Growth Fund has elected that
Trinity Large Cap Growth Fund be treated as a regulated
investment company and, for each fiscal year of its
operations, Trinity Large Cap Growth Fund has met the
requirements of Subchapter M of the Code for qualification
and treatment as a regulated investment company and Trinity
Large Cap Growth Fund intends to meet such requirements
with respect to its current taxable year.
13. Growth Fund hereby represents and warrants that:
A. The audited financial statements of Growth Fund as of
August 31, 2002 and unaudited financial statements as of
February 28, 2003 heretofore furnished to Trinity Large Cap
Growth Fund, present fairly the financial position, results
of operations, and changes in net assets of Growth Fund, as
of that date, in conformity with generally accepted
accounting principles applied on a basis consistent with
the preceding year; and that from February 28, 2003 through
the date hereof there have not been, and through the
Closing Date there will not be, any material adverse
changes in the business or financial condition of Growth
Fund, it being understood that a decrease in the size of
Growth Fund due to a diminution in the value of its
portfolio and/or redemption of its shares shall not be
considered a material or adverse change;
B. The Prospectus, as amended and supplemented,
contained in Growth Fund's Registration Statement under the
1933 Act, is true, correct and complete, conforms to the
requirements of the 1933 Act and does not contain any
untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to
make the statements therein not misleading. The
Registration Statement, as amended, was, as of the date of
the filing of the last Post-Effective Amendment, true,
correct and complete, conformed to the requirements of the
1933 Act and did not contain any untrue statement of a
material fact or omit to state a material fact required to
be stated therein or necessary to make the statements
therein not misleading;
C. Except for this Agreement, there is no material
contingent liability of Growth Fund and no material claim
and no material legal, administrative or other proceedings
pending or, to the knowledge of Growth Fund, threatened
against Growth Fund, not reflected in such Prospectus;
D. There are no material contracts outstanding to
which Growth Fund is a party other than those ordinary in
the conduct of its business;
E. Growth Fund is a business trust duly organized,
validly existing and in good standing under the laws of the
Commonwealth of Massachusetts; Growth Fund has all
necessary and material Federal and state authorizations to
own all its properties and assets and to carry on its
business as now being conducted; the Class A, Class B and
Class C shares of Growth Fund which it issues to Trinity
Large Cap Growth Fund pursuant to the Agreement will be
duly authorized, validly issued, fully-paid and
non-assessable, except as set forth under "Shareholder &
Trustee Liability" in Growth Fund's Statement of Additional
Information, will conform to the description thereof
contained in Growth Fund's Registration Statement and will
be duly registered under the 1933 Act and in the states
where registration is required; and Growth Fund is duly
registered under the Act and such registration has not been
revoked or rescinded and is in full force and effect;
F. All federal and other tax returns and reports of
Growth Fund required by law to be filed have been filed,
and all federal and other taxes shown due on said returns
and reports have been paid or provision shall have been
made for the payment thereof and to the best of the
knowledge of Growth Fund, no such return is currently under
audit and no assessment has been asserted with respect to
such returns and to the extent such tax returns with
respect to the taxable year of Growth Fund ended August 31,
2002 have not been filed, such returns will be filed when
required and the amount of tax shown as due thereon shall
be paid when due;
G. Growth Fund has elected to be treated as a
regulated investment company and, for each fiscal year of
its operations, Growth Fund has met the requirements of
Subchapter M of the Code for qualification and treatment as
a regulated investment company and Growth Fund intends to
meet such requirements with respect to its current taxable
year;
H. Growth Fund has no plan or intention (i) to
dispose of any of the assets transferred by Trinity Large
Cap Growth Fund, other than in the ordinary course of
business, or (ii) to redeem or reacquire any of the Class
A, Class B, Class C, Class N and Class Y shares issued by
it in the reorganization other than pursuant to valid
requests of shareholders; and
I. After consummation of the transactions
contemplated by the Agreement, Growth Fund intends to
operate its business in a substantially unchanged manner.
14. Each party hereby represents to the other that no
broker or finder has been employed by it with respect to
the Agreement or the transactions contemplated hereby. Each
party also represents and warrants to the other that the
information concerning it in the Proxy Statement and
Prospectus will not as of its date contain any untrue
statement of a material fact or omit to state a fact
necessary to make the statements concerning it therein not
misleading and that the financial statements concerning it
will present the information shown fairly in accordance
with generally accepted accounting principles applied on a
basis consistent with the preceding year. Each party also
represents and warrants to the other that the Agreement is
valid, binding and enforceable in accordance with its terms
and that the execution, delivery and performance of the
Agreement will not result in any violation of, or be in
conflict with, any provision of any charter, by-laws,
contract, agreement, judgment, decree or order to which it
is subject or to which it is a party. Growth Fund hereby
represents to and covenants with Trinity Large Cap Growth
Fund that, if the reorganization becomes effective, Growth
Fund will treat each shareholder of Trinity Large Cap
Growth Fund who received any of Growth Fund's shares as a
result of the reorganization as having made the minimum
initial purchase of shares of Growth Fund received by such
shareholder for the purpose of making additional
investments in shares of Growth Fund, regardless of the
value of the shares of Growth Fund received.
15. Growth Fund agrees that it will prepare and file a
Registration Statement on Form N-14 under the 1933 Act
which shall contain a preliminary form of proxy statement
and prospectus contemplated by Rule 145 under the 1933
Act. The final form of such proxy statement and prospectus
is referred to in the Agreement as the "Proxy Statement and
Prospectus." Each party agrees that it will use its best
efforts to have such Registration Statement declared
effective and to supply such information concerning itself
for inclusion in the Proxy Statement and Prospectus as may
be necessary or desirable in this connection. Trinity
Large Cap Growth Fund covenants and agrees to liquidate and
dissolve as soon as practicable to the extent required
under the laws of the State of Massachusetts, and, upon
Closing, to cause the cancellation of its outstanding
shares.
16. The obligations of the parties shall be subject
to the right of either party to abandon and terminate the
Agreement for any reason and there shall be no liability
for damages or other recourse available to a party not so
terminating this Agreement, provided, however, that in the
event that a party shall terminate this Agreement without
reasonable cause, the party so terminating shall, upon
demand, reimburse the party not so terminating for all
expenses, including reasonable out-of-pocket expenses and
fees incurred in connection with this Agreement.
17. The Agreement may be executed in several
counterparts, each of which shall be deemed an original,
but all taken together shall constitute one Agreement. The
rights and obligations of each party pursuant to the
Agreement shall not be assignable.
18. All prior or contemporaneous agreements and
representations are merged into the Agreement, which
constitutes the entire contract between the parties
hereto. No amendment or modification hereof shall be of
any force and effect unless in writing and signed by the
parties and no party shall be deemed to have waived any
provision herein for its benefit unless it executes a
written acknowledgment of such waiver.
19. Growth Fund understands that the obligations of
Trinity Large Cap Growth Fund under the Agreement are not
binding upon any Trustee or shareholder of Trinity Large
Cap Growth Fund personally, but bind only Trinity Large Cap
Growth Fund and Trinity Large Cap Growth Fund's property.
20. Trinity Large Cap Growth Fund understands that the
obligations of Growth Fund under the Agreement are not
binding upon any trustee or shareholder of Growth Fund
personally, but bind only Growth Fund and Growth Fund's
property. Trinity Large Cap Growth Fund represents that it
has notice of the provisions of the Declaration of Trust of
Growth Fund disclaiming shareholder and trustee liability
for acts or obligations of Growth Fund.
IN WITNESS WHEREOF, each of the parties has caused the
Agreement to be executed and attested by its officers
thereunto duly authorized on the date first set forth
above.
OPPENHEIMER TRINITY LARGE CAP GROWTH FUND
By: /s/ Robert G. Zack
Robert G. Zack
Secretary
OPPENHEIMER GROWTH FUND
By: /s/ Robert G. Zack
Robert G. Zack
Secretary
Part B
- ------
STATEMENT OF ADDITIONAL INFORMATION
TO PROSPECTUS/PROXY STATEMENT
Acquisition of the Assets of the
OPPENHEIMER TRINITY LARGE CAP GROWTH FUND
By and in exchange for Shares of the
OPPENHEIMER GROWTH FUND
This Statement of Additional Information to this
Prospectus/Proxy Statement (the "SAI") relates specifically
to the proposed delivery of substantially all of the assets
of Oppenheimer Trinity Large Cap Growth Fund ("Trinity
Large Cap Growth Fund") for shares of Oppenheimer Growth
Fund ("Growth Fund").
This SAI consists of this Cover Page and the
following documents: (i) Annual and Semi-Annual Reports
dated July 31, 2002 and January 31, 2003, respectively, of
Trinity Large Cap Growth Fund; (ii) the Annual and
Semi-Annual Reports dated August 31, 2002 and February 28,
2003, respectively of Growth Fund; (iii) the Prospectus of
Trinity Large Cap Growth Fund dated September 24, 2002 as
supplemented November 1, 2002; (iv) the Statement of
Additional Information of Trinity Large Cap Growth Fund
dated September 24, 2002 as revised January 15, 2003; and
(iv) the Statement of Additional Information of Growth Fund
dated December 23, 2002 as supplemented April 30, 2003.
This SAI is not a Prospectus; you should read this
SAI in conjunction with the Prospectus/Proxy Statement
dated July 6, 2003, relating to the above-referenced
transaction. You can request a copy of the Prospectus/Proxy
Statement by calling 1.800.525.7048 or by writing
OppenheimerFunds Services at P.O. Box 5270, Denver,
Colorado 80217. The date of this SAI is July 6, 2003.
OPPENHEIMER GROWTH FUND
Supplement dated May 1, 2003 to the
Prospectus dated October 23, 2002
The Prospectus is changed as follows:
1. The sections captioned "WHAT DOES THE FUND MAINLY
INVEST IN?", "HOW DOES THE PORTFOLIO MANAGER DECIDE
WHAT SECURITIES TO BUY OR SELL?" and "WHO IS THE FUND
DESIGNED FOR?" on page 3 are deleted and replaced by the
following:
WHAT DOES THE FUND MAINLY INVEST IN? The Fund invests
mainly in common stocks of "growth companies." The Fund
currently focuses on stocks of companies having a large or
mid-size market capitalization, but this focus could change
over time. The Fund can invest in domestic companies and
foreign companies, although most of its investments are in
stocks of U.S. companies.
HOW DOES THE PORTFOLIO MANAGER DECIDE WHAT SECURITIES TO
BUY OR SELL? The portfolio manager looks for stocks of
companies with high growth potential, and normally invests
in between 20 and 60 companies, to focus the portfolio.
Currently, the manager implements that investment approach
by looking for:
o Companies that have exceptional revenue growth
o Companies with above-average earnings growth
o Companies that can sustain exceptional revenue and
earnings growth
o Companies that are well established as leaders in
high growth markets
WHO IS THE FUND DESIGNED FOR? The Fund is designed for
investors seeking capital appreciation in their investment
over the long term. Those investors should be willing to
assume the risks of short-term share price fluctuations
that are typical for a growth fund focusing on relatively
few aggressive growth companies. Those investors should
understand that the Fund's strategy of investing in
relatively few companies and industries may subject the
Fund to greater risk and increased volatility than more
broadly diversified funds. Since the Fund does not seek
income and its income from investments, if any, will likely
be small, it is not designed for investors needing current
income or looking for preservation of capital. Because of
its focus on long-term growth, the Fund may be appropriate
for a portion of a retirement plan investment. The Fund is
not a complete investment program.
2. The following is added after the sub-section
captioned "RISKS OF INVESTING IN STOCKS." on page 3:
SECTOR RISK. To the extent that the Fund focuses its
investments in relatively few industry sectors, if those
sectors are volatile or more volatile than other sectors
due to industry-specific factors, there is the possibility
that the Fund's share price will be more volatile than
funds that have broader sector exposure. Additionally,
while the Fund is a diversified fund, by investing in
relatively fewer stocks than more broadly diversified
funds, its share prices may be subject to greater
volatility from factors affecting one or a few of its
investments.
3. The first paragraph under the section captioned "HOW
RISKY IS THE FUND OVERALL?" on page 4 is deleted and
replaced with the following:
The risks described above collectively form the
overall risk profile of the Fund, and can affect the value
of the Fund's investments, its investment performance and
its prices per share. Particular investments and
investment strategies have risks. By focusing on a
relatively smaller number of investments and industry
sectors than more broadly diversified funds, the Fund's
risk is increased because each investment has a greater
effect on the Fund's performance. The Fund is also subject
to the risk that the stocks the Manager selects will
underperform the stock market, the relevant indices or
other funds with similar investment objectives and
investment strategies. These risks mean that you can lose
money by investing in the Fund. When you redeem your
shares, they may be worth more or less than what you paid
for them. There is no assurance that the Fund will achieve
its investment objective.
May 1, 2003 PS0270.017
Oppenheimer
Growth Fund
Prospectus dated October 23, 2002
Oppenheimer Growth Fund is a mutual
fund that seeks capital appreciation
to make your investment grow. It
currently emphasizes investments in
stocks of mid-cap and large-cap
companies.
This Prospectus contains
important information about the
Fund's objective, its investment
policies, strategies and risks. It
also contains important information
about how to buy and sell shares of
the Fund and other account features.
Please read this Prospectus
carefully before you invest and keep
it for future reference about your
account.
As with all mutual funds, the
Securities and Exchange Commission
has not approved or disapproved the
Fund's securities nor has it
determined that this Prospectus is
accurate or complete. It is a
criminal offense to represent
otherwise.
(logo) OppenheimerFunds
The Right Way to Invest
CONTENTS
- ---------------------------------------------------------------------------------
ABOUT THE FUND
3 The Fund's Investment Objective and Strategies
3 Main Risks of Investing in the Fund
4 The Fund's Past Performance
5 Fees and Expenses of the Fund
7 About the Fund's Investments
10 How the Fund is Managed
10
ABOUT YOUR ACCOUNT
11
How to Buy Shares
Class A Shares
Class B Shares
Class C Shares
Class N Shares
Class Y Shares
19
Special Investor Services
AccountLink
PhoneLink
OppenheimerFunds Internet Website
22 Retirement Plans
How to Sell Shares
By Mail
23 By Telephone
25
26 How to Exchange Shares
29 Shareholder Account Rules and Policies
Dividends, Capital Gains and Taxes
Financial Highlights
- ---------------------------------------------------------------------------------
A B O U T T H E F U N D
The Fund's Investment Objective and Strategies
WHAT IS THE FUND'S INVESTMENT OBJECTIVE? The Fund seeks
capital appreciation.
WHAT DOES THE FUND MAINLY INVEST IN? The Fund invests mainly
in common stocks of "growth companies." The Fund currently
focuses on stocks of companies having a large capitalization
or mid-size capitalization, but this could change over time.
The Fund can invest in domestic companies and foreign
companies, although most of its investments are in stocks of
U.S. companies.
HOW DOES THE PORTFOLIO MANAGER DECIDE WHAT SECURITIES TO BUY
OR SELL? The Fund's portfolio manager looks for high-growth
companies. Currently, the portfolio manager looks for:
o Companies that have exceptional revenue growth
o Companies with above-average earnings growth
o Companies that can sustain exceptional revenue and
earnings growth
o Companies that are well established as leaders in
high growth markets
WHO IS THE FUND DESIGNED FOR? The Fund is designed for
investors seeking capital appreciation over the long term.
Those investors should be willing to assume the risks of
short-term share price fluctuations that are typical for a
growth fund focusing on stock investments. Since the Fund
does not seek income and its income from investments will
likely be small, it is not designed for investors needing
current income. Because of its focus on long-term growth, the
Fund may be appropriate for a portion of a retirement plan
investment. However, the Fund is not a complete investment
program.
Main Risks of Investing in the Fund
All investments have risks to some degree. The Fund's
investments in stocks are subject to changes in their value
from a number of factors described below. There is also the
risk that poor security selection by the Fund's investment
Manager, OppenheimerFunds, Inc., will cause the Fund to
underperform other funds having a similar objective.
RISKS OF INVESTING IN STOCKS. Stocks fluctuate in price, and
their short-term volatility at times may be great. Because
the Fund invests primarily in common stocks of U.S.
companies, the value of the Fund's portfolio will be affected
by changes in the U.S. stock markets. Market risk will
affect the Fund's net asset values per share, which will
fluctuate as the values of the Fund's portfolio securities
change. The prices of individual stocks do not all move in
the same direction uniformly or at the same time. Different
stock markets may behave differently from each other.
Other factors can affect a particular stock's price,
such as poor earnings reports by the issuer, loss of major
customers, major litigation against the issuer, or changes in
government regulations affecting the issuer or its industry.
The Manager may increase the relative emphasis of the Fund's
investments in a particular industry from time to time.
Stocks of issuers in a particular industry may be affected by
changes in economic conditions, changes in government
regulations, availability of basic resources or supplies, or
other events that affect that industry more than others. To
the extent that the Fund increases the relative emphasis of
its investments in a particular industry, its share values
may fluctuate in response to events affecting that industry.
HOW RISKY IS THE FUND OVERALL? The risks described above
collectively form the overall risk profile of the Fund, and
can affect the value of the Fund's investments, its
investment performance and its prices per share. Particular
investments and investment strategies also have risks. These
risks mean that you can lose money by investing in the Fund.
When you redeem your shares, they may be worth more or less
than what you paid for them. There is no assurance that the
Fund will achieve its investment objective.
In the short term, the stock markets can be volatile,
and the price of the Fund's shares can go up and down
substantially. Growth stocks may be more volatile than other
equity investments. The Fund generally does not use
income-oriented investments to help cushion the Fund's total
return from changes in stock prices. In the OppenheimerFunds
spectrum, the Fund is generally more aggressive than funds
that invest in both stocks and bonds or in investment grade
debt securities, but may be less volatile than small-cap and
emerging markets stock funds.
An investment in the Fund is not a deposit of any bank and is
not insured or guaranteed by the Federal Deposit Insurance
Corporation or any other government agency.
The Fund's Past Performance
The bar chart and table below show one measure of the risks
of investing in the Fund, by showing changes in the Fund's
performance for its Class A shares from year to year for the
last 10 calendar years and by showing how the average annual
total returns of the Fund's shares, both before and after
taxes, compare to those of a broad-based market index. The
-
after-tax returns are shown for Class A shares only and are
calculated using the historical highest individual federal
marginal income tax rates in effect during the periods shown,
and do not reflect the impact of state or local taxes. The
after-tax returns for the other classes of shares will vary.
The after-tax returns are calculated based on certain
assumptions mandated by regulation and your actual after-tax
returns may differ from those shown, depending on your
individual tax situation. The after-tax returns set forth
below are not relevant to investors who hold their fund
shares through tax-deferred arrangements such as 401(k) plans
or IRAs or to institutional investors not subject to tax.
The Fund's past investment performance, before and after
taxes, is not necessarily an indication of how the Fund will
perform in the future.
Annual Total Returns (Class A) (as of 12/31 each year)
[See appendix to prospectus for data in bar chart showing
annual total returns]
Sales charges and taxes are not included in the calculations
of return in this bar chart, and if those charges were
included, the returns would be less than those shown.
For the period from 1/1/02 through 9/30/02, the cumulative
return (not annualized) for Class A shares was ______%.
During the period shown in the bar chart, the highest return
(not annualized) for a calendar quarter was _____% (__th
Q'___) and the lowest return (not annualized) for a calendar
quarter was (_______)% (__th Q'___).
- -------------------------------------------------------------------------------------
Average Annual Total Returns 1 Year 5 Years 10 Years
for the periods ended (or life of (or life of (or life of
December 31, 2001 class, if less) class, if less) class, if less)
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
Class A Shares (inception
03/15/73) ______% ______% ______%
Return Before Taxes ______% ______% ______%
Return After Taxes on ______% ______% ______%
Distributions
Return After Taxes on
Distributions and Sale of
Fund Shares
- -------------------------------------------------------------------------------------
S & P 500 Index (reflects no
deduction for fees, expenses
or taxes) ______% ______% ______%1
- -------------------------------------------------------------------------------------
Class B Shares (inception ______% ______% ______%
08/17/93)
- -------------------------------------------------------------------------------------
Class C Shares (inception ______% ______% ______%
11/01/95)
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
Class N Shares (inception ______%2 N/A N/A
03/01/01)
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
Class Y Shares (inception ______% ______% ______%
06/01/94)
- -------------------------------------------------------------------------------------
1. From 12/31/91.
2. The total return for Class N shares is cumulative and
is not annualized.
The Fund's average annual total returns include the
applicable sales charge: for Class A, the current maximum
initial sales charge of 5.75%; for Class B, the contingent
deferred sales charges of 5% (1-year) and 2% (5-year).
Because Class B shares convert to Class A shares 72 months
after purchase, Class B "life-of-class" performance does not
include any contingent deferred sales charge and uses Class A
performance for the period after conversion. For Class C and
Class N, average annual total returns include the 1%
contingent deferred sales charge for the 1-year period. There
is no sales charge for Class Y shares.
The returns measure the performance of a hypothetical account
and assume that all dividends and capital gains distributions
have been reinvested in additional shares. The performance of
the Fund's Class A shares is compared to the S&P 500 Index,
an unmanaged index of equity securities. The index
performance includes the reinvestment of income but does not
reflect transaction costs. The Fund's investments vary from
the securities in the index.
Fees and Expenses of the Fund
The Fund pays a variety of expenses directly for management
of its assets, administration, distribution of its shares and
other services. Those expenses are subtracted from the Fund's
assets to calculate the Fund's net asset values 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 meant to help you understand the fees and expenses you
may pay if you buy and hold shares of the Fund. The numbers
below are based on the Fund's expenses during its fiscal year
ended August 31, 2002.
Shareholder Fees (charges paid directly from your investment):
Class A Class B Class C Class N Class Y
Shares Shares Shares Shares Shares
------------------------------------------------------------------------------
------------------------------------------------------------------------------
Maximum Sales Charge (Load) on
Purchases (as % of offering price) 5.75% None None None None
------------------------------------------------------------------------------
------------------------------------------------------------------------------
Maximum Deferred Sales Charge
(Load)
(as % of the lower of the original None1 5%2 1%3 1%4 None
offering
price or redemption proceeds)
1. A contingent deferred sales charge may apply to
redemptions of investments of $1 million or more ($500,000
for certain retirement plan accounts) of Class A shares.
See "How to Buy Shares" for details.
2. Applies to redemptions in first year after purchase.
The contingent deferred sales charge declines to 1% in the
sixth year and is eliminated after that.
3. Applies to shares redeemed within 12 months of
purchase.
4. Applies to shares redeemed within 18 months of a
retirement plan's first purchase of Class N shares.
Annual Fund Operating Expenses (deducted from Fund assets):
(% of average daily net assets)
Class A Class B Class C Class N Class Y
Shares Shares Shares Shares Shares
------------------------------------------------------------------------------
------------------------------------------------------------------------------
Management Fees % % % % %
------------------------------------------------------------------------------
------------------------------------------------------------------------------
Distribution and/or Service % 1.00% 1.00% 0.50% None
(12b-1) Fees
------------------------------------------------------------------------------
------------------------------------------------------------------------------
Other Expenses % % % % %
------------------------------------------------------------------------------
------------------------------------------------------------------------------
Total Annual Operating % % % % %
Expenses
Expenses may vary in future years. "Other expenses"
include transfer agent fees, custodial expenses, and
accounting and legal expenses the Fund pays. The "Other
Expenses" in the table are based on, among other things, the
fees the Fund would have paid if the transfer agent had not
waived a portion of its fee under a voluntary undertaking to
the Fund to limit these fees to 0.25% of average daily net
assets per fiscal year for Class Y shares and 0.35% of
average daily net assets per fiscal year for all other
classes. That undertaking is effective October 1, 2001 (for
Class Y only, January 1, 2001), is pro-rated for the
remainder of the fiscal year ending after that date, and may
be amended or withdrawn at any time. After the waiver, the
actual "Other Expenses" and "Total Annual Operating Expenses"
as percentages of average daily net assets were ___% and ___%
for Class A shares, ___% and ___% for Class B shares.
EXAMPLES. The following examples are intended to help you
compare the cost of investing in the Fund with the cost of
investing in other mutual funds. The examples assume that
you invest $10,000 in a class of shares of the Fund for the
time periods indicated and reinvest your dividends and
distributions.
The first example assumes that you redeem all of your
shares at the end of those periods. The second example
assumes that you keep your shares. Both examples also assume
that your investment has a 5% return each year and that the
class' operating expenses remain the same. Your actual costs
may be higher or lower because expenses will vary over time.
Based on these assumptions your expenses would be as follows:
If shares are redeemed: 1 Year 3 Years 5 Years 10 Years(1)
------------------------------------------------------------------------------
------------------------------------------------------------------------------
Class A Shares $ $ $ $
------------------------------------------------------------------------------
------------------------------------------------------------------------------
Class B Shares $ $ $ $
------------------------------------------------------------------------------
------------------------------------------------------------------------------
Class C Shares $ $ $ $
------------------------------------------------------------------------------
------------------------------------------------------------------------------
Class N Shares $ $ $ $
---------------------------------- ----------- ------------
------------------------------------------------------------------------------
Class Y Shares $ $ $ $
If shares are not redeemed: 1 Year 3 Years 5 Years 10 Years(1)
------------------------------------------------------------------------------
------------------------------------------------------------------------------
Class A Shares $ $ $ $
------------------------------------------------------------------------------
------------------------------------------------------------------------------
Class B Shares $ $ $ $
------------------------------------------------------------------------------
------------------------------------------------------------------------------
Class C Shares $ $ $ $
------------------------------------------------------------------------------
------------------------------------------------------------------------------
Class N Shares $ $ $ $
------------------------------------------------------------------------------
------------------------------------------------------------------------------
Class Y Shares $ $ $ $
In the first example, expenses include the initial sales
charge for Class A and the applicable Class B, Class C or
Class N contingent deferred sales charges. In the second
example, the Class A expenses include the sales charge, but
Class B, Class C and Class N expenses do not include the
contingent deferred sales charges.
1. Class B expenses for years 7 through 10 are based on
Class A expenses since Class B shares automatically convert
to Class A shares after 6 years.
About the Fund's Investments
THE FUND'S PRINCIPAL INVESTMENT POLICIES. The allocation of
the Fund's portfolio among different investments will vary
over time based on the Manager's evaluation of economic and
market trends. The Fund's portfolio might not always include
all of the different types of investments described below.
The Statement of Additional Information contains more
detailed information about the Fund's investment policies and
risks.
The Manager tries to reduce risks by carefully
researching securities before they are purchased. The Fund
attempts to reduce its exposure to market risks by
diversifying its investments, that is, by not holding a
substantial amount of stock of any one company and by not
investing too great a percentage of the Fund's assets in any
one company. Also, the Fund does not concentrate 25% or more
of its assets in investments in any one industry.
However, changes in the overall market prices of
securities can occur at any time. The share prices of the
Fund will change daily based on changes in market prices of
securities and market conditions and in response to other
economic events.
Stock Investments. The Fund currently focuses on larger, more
established U.S. growth companies that exhibit strong
internal revenue growth. Growth companies, for example,
may be developing new products or services, or they may
be expanding into new markets for their products. Newer
growth companies tend to retain a large part of their
earnings for research, development or investment in
capital assets. Therefore, they do not tend to emphasize
paying dividends and may not pay any dividends for some
time. The Manager looks for stocks of growth companies
for the Fund's portfolio that the Manager believes will
increase in value over time.
The Fund does not limit its investments to issuers in a
particular market capitalization range or ranges, although it
currently focuses on large-cap and mid-cap issuers. "Market
capitalization" refers to the total market value of an
issuer's common stock. The stock prices of large-cap issuers
tend to be less volatile than the prices of mid-cap and
small-cap companies in the short term, but these companies
may not afford the same growth opportunities as mid-cap and
small-cap companies.
Industry Focus. Stocks of issuers in a particular industry
might be affected by changes in economic conditions or
by changes in government regulations, availability of
basic resources or supplies, or other events that affect
that industry more than others. To the extent that the
Fund has a greater emphasis on investments in a
particular industry, its share values may fluctuate in
response to events affecting that industry.
Portfolio Turnover. A change in the securities held by the
Fund is known as "portfolio turnover." The Fund may
engage in short-term trading to try to achieve its
objective. It might have a turnover rate in excess of
100% annually. Portfolio turnover increases brokerage
costs the Fund pays. If the Fund realizes capital gains
when it sells its portfolio investments, it must
generally pay those gains out to the shareholders,
increasing their taxable distributions. The Financial
Highlights table at the end of this Prospectus shows the
Fund's portfolio turnover rate during past fiscal years.
CAN THE FUND'S INVESTMENT OBJECTIVE AND POLICIES CHANGE? The
Fund's Board of Trustees can change non-fundamental
investment policies without shareholder approval,
although significant changes will be described in
amendments to this Prospectus. Fundamental policies
cannot be changed without the approval of a majority of
the Fund's outstanding voting shares. The Fund's
objective is a fundamental policy. Other investment
restrictions that are fundamental policies are listed in
the Statement of Additional Information. An investment
policy is not fundamental unless this Prospectus or the
Statement of Additional Information says that it is.
OTHER INVESTMENT STRATEGIES. To seek its objective, the Fund
can also use the investment techniques and strategies
described below. The Fund might not always use all of them.
These techniques have risks, although some are designed to
help reduce overall investment or market risks.
Other Equity Securities. While the Fund emphasizes
investments in common stocks, it can also buy preferred
stocks and securities convertible into common stock. The
Manager considers some convertible securities to be
"equity equivalents" because of the conversion feature
and in that case their credit rating has less impact on
the Manager's investment decision than in the case of
other debt securities.
Risks of Foreign Investing. The Fund can buy foreign equity
and debt securities. The Fund currently limits its
investments in foreign securities to not more than 10%
of its total assets, although it has the ability to
invest up to 25% of its total assets.
While foreign securities offer special investment
opportunities, they also have special risks. The change
in value of a foreign currency against the U.S. dollar
will result in a change in the U.S. dollar value of
securities denominated in that foreign currency. Foreign
issuers are not subject to the same accounting and
disclosure requirements to which U.S. companies are
subject. The value of foreign investments may be
affected by exchange control regulations, expropriation
or nationalization of a company's assets, foreign taxes,
delays in settlement of transactions, changes in
governmental economic or monetary policy in the U.S. or
abroad, or other political and economic factors.
Illiquid and Restricted Securities. Investments may be
illiquid because they do not have an active trading
market, making it difficult to value them or dispose of
them promptly at an acceptable price. Restricted
securities may have terms that limit their resale to
other investors or may require registration under
federal securities laws before they can be sold
publicly. The Fund will not invest more than 10% of its
net assets in illiquid or restricted securities. The
Board can increase that limit to 15%. Certain restricted
securities that are eligible for resale to qualified
institutional purchasers may not be subject to that
limit. The Manager monitors holdings of illiquid
securities on an ongoing basis to determine whether to
sell any holdings to maintain adequate liquidity.
Derivative Investments. The Fund can invest in a number of
different kinds of "derivative" investments. In general
terms, a derivative investment is an investment contract
whose value depends on (or is derived from) the value of
an underlying asset, interest rate or index. In the
broadest sense, options, futures contracts, and other
hedging instruments the Fund might use may be considered
"derivative" investments. In addition to using
derivatives for hedging, the Fund might use other
derivative investments because they offer the potential
for increased value. The Fund currently does not use
derivatives to a significant degree and is not required
to use them in seeking its objective.
Derivatives have risks. If the issuer of the derivative
investment does not pay the amount due, the Fund can
lose money on the investment. The underlying security
or investment on which a derivative is based, and the
derivative itself, may not perform the way the Manager
expected it to. As a result of these risks the Fund
could realize less principal or income from the
investment than expected or its hedge might be
unsuccessful. As a result, the Fund's share prices could
fall. Certain derivative investments held by the Fund
might be illiquid.
o Hedging. The Fund can buy and sell futures contracts,
put and call options, and forward contracts. These are
all referred to as "hedging instruments." The Fund does
not currently use hedging extensively or for speculative
purposes. It has limits on its use of hedging
instruments and is not required to use them in seeking
its objective.
Some of these strategies would hedge the Fund's
portfolio against price fluctuations. Other hedging
strategies, such as buying futures and call options,
would tend to increase the Fund's exposure to the
securities market.
There are also special risks in particular hedging
strategies. Options trading involves the payment of
premiums and can increase portfolio turnover. If the
Manager used a hedging instrument at the wrong time or
judged market conditions incorrectly, the strategy could
reduce the Fund's return.
Temporary Defensive and Interim Investments. In times of
adverse or unstable market, economic or political
conditions, the Fund can invest up to 100% of its
assets in temporary defensive investments. Generally,
they would be high-quality, short-term money market
instruments, such as U.S. government securities, highly
rated commercial paper, short-term corporate debt
obligations, bank deposits or repurchase agreements.
The Fund could also hold these types of securities
pending the investment of proceeds from the sale of
Fund shares or portfolio securities or to meet
anticipated redemptions of Fund shares. To the extent
the Fund invests defensively in these securities, it
might not achieve its investment objective of capital
appreciation.
How the Fund Is Managed
THE MANAGER. The Manager chooses the Fund's investments and
handles its day-to-day business. The Manager carries out its
duties, subject to the policies established by the Fund's
Board of Trustees, under an investment advisory agreement
that states the Manager's responsibilities. The agreement
sets the fees the Fund pays to the Manager and describes the
expenses that the Fund is responsible to pay to conduct its
business.
The Manager has been an investment advisor since January
1960. The Manager (including subsidiaries managed more than
$___ billion in assets as of September 30, 2002 including
other Oppenheimer funds, with more than __ million
shareholder accounts. The Manager is located at 498 Seventh
Avenue, New York, New York 10018.
Portfolio Manager. The Fund's portfolio manager is Bruce
Bartlett, who is the person primarily responsible for
the day-to-day management of the Fund's portfolio. Mr.
Bartlett is a Vice President of the Fund and of the
Manager and is a portfolio manager of other Oppenheimer
funds. Mr. Bartlett became the Fund's portfolio manager
on December 22, 1998. Prior to joining the Manager in
April, 1995, Mr. Bartlett was a Vice President and
Senior Portfolio Manager with First of America
Investment Corporation.
Advisory Fees. Under the investment advisory agreement, the
Fund pays the Manager an advisory fee at an annual rate
that declines as the Fund's assets grow: 0.75% of the
first $200 million of average annual net assets of the
Fund, 0.72% of the next $200 million, 0.69% of the next
$200 million, 0.66% of the next $200 million, 0.60% of
the next $700 million, 0.58% of the next $1.0 billion,
0.56% of the next $2.0 billion, and 0.54% of the average
annual net assets in excess of $4.5 billion. The Fund's
management fee for its fiscal year ended August 31, 2002
was ____% of average annual net assets for each class of
shares.
ABOUT your account
How to Buy Shares
HOW DO YOU BUY SHARES? You can buy shares several ways, as
described below. The Fund's Distributor, OppenheimerFunds
Distributor, Inc., may appoint servicing agents to accept
purchase (and redemption) orders. The Distributor, in its
sole discretion, may reject any purchase order for the Fund's
shares.
Buying Shares Through Your Dealer. You can buy shares through
any dealer, broker or financial institution that has a
sales agreement with the Distributor. Your dealer will
place your order with the Distributor on your behalf.
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 with a financial advisor before you make a
purchase to be sure that the Fund is appropriate for
you.
o Paying by Federal Funds Wire. Shares purchased through
the Distributor may be paid for by Federal Funds wire.
The minimum investment is $2,500. Before sending a
wire, call the Distributor's Wire Department at
1.800.525.7048 to notify the Distributor of the wire
and to receive further instructions.
o Buying Shares Through OppenheimerFunds AccountLink.
With AccountLink, you pay for shares by electronic
funds transfers from your bank account. Shares are
purchased for your account by a transfer of money from
your bank account through the Automated Clearing House
(ACH) system. You can provide those instructions
automatically, under an Asset Builder Plan, described
below, or by telephone instructions using
OppenheimerFunds PhoneLink, also described below.
Please refer to "AccountLink," below for more details..
o Buying Shares Through Asset Builder Plans. You may
purchase shares of the Fund (and up to four other
Oppenheimer funds) automatically each month from your
account at a bank or other financial institution under an
Asset Builder Plan with AccountLink. Details are in the
Asset Builder Application and the Statement of Additional
Information.
HOW MUCH MUST YOU INVEST? You can buy Fund shares with a
minimum initial investment of $1,000 and make additional
investments at any time with as little as $25 (effective
November 1, 2002, the additional purchase amount is $50).
There are reduced minimum investments under special
investment plans.
o With Asset Builder Plans, 403(b) plans, Automatic
Exchange Plans and military allotment plans, you can
make initial and subsequent investments for as little
as $25. The minimum initial investment in any such plan
accounts established on or after November 1, 2002 is
$50. The minimum additional investment to such plan
accounts that were established prior to November 1,
2002 will remain $25. To establish a new Asset Builder
Plan account on or after November 1, 2002, you must
first invest at least $500.
o Under retirement plans, such as IRAs, pension and
profit-sharing plans and 401(k) plans, you can start
your account with as little as $250. If your IRA is
started as an Asset Builder Plan, the $25 minimum
applies. Additional purchases may be for as little as
$25. To establish any type of IRA account on or after
November 1, 2002, the minimum investment is $500. The
minimum additional investment to any type of IRA
account after November 1, 2002 is $50.
o The minimum investment requirement does not apply to
reinvesting dividends from the Fund or other
Oppenheimer funds (a list of them appears in the
Statement of Additional Information, or you can ask
your dealer or call the Transfer Agent), or reinvesting
distributions from unit investment trusts that have
made arrangements with the Distributor.
AT WHAT PRICE ARE SHARES SOLD? Shares are sold at their
offering price which is the net asset value per share plus
any initial sales charge that applies. The offering price
that applies to a purchase order is based on the next
calculation of the net asset value per share that is made
after the Distributor receives the purchase order at its
offices in Colorado, or after any agent appointed by the
Distributor receives the order and sends it to the
Distributor.
Net Asset Value. The Fund calculates the net asset value of
each class of shares as of the close of The New York
Stock Exchange, on each day the Exchange is open for
trading (referred to in this Prospectus as a "regular
business day"). The Exchange normally closes at 4:00
P.M., Eastern time, but may close earlier on some days.
All references to time in this Prospectus mean "Eastern
time."
The net asset value per share is determined by dividing
the value of the Fund's net assets attributable to a
class by the number of shares of that class that are
outstanding. To determine net asset value, the Fund's
Board of Trustees has established procedures to value
the Fund's securities, in general, based on market
value. The Board has adopted special procedures for
valuing illiquid and restricted securities and
obligations for which market values cannot be readily
obtained. Because some foreign securities trade in
markets and on exchanges that operate on weekends and
U.S. holidays, the values of some of the Fund's foreign
investments may change on days when investors cannot
buy or redeem Fund shares.
If, after the close of the principal market on which a
security held by the Fund is traded, and before the
time the Fund's securities are priced that day, an
event occurs that the Manager deems likely to cause a
material change in the value of such security, the
Fund's Board of Trustees has authorized the Manager,
subject to the Board's review, to ascertain a fair
value for such security.
The Offering Price. To receive the offering price for a
particular day, in most cases the Distributor or its
designated agent must receive your order by the time of
day The New York Stock Exchange closes that day. If
your order is received on a day when the Exchange is
closed or after it has closed, the order will receive
the next offering price that is determined after your
order is received.
Buying Through a Dealer. If you buy shares through a dealer,
your dealer must receive the order by the close of The
New York Stock Exchange and transmit it to the
Distributor so that it is received before the
Distributor's close of business on a regular business
day (normally 5:00 P.M.) to receive that day's offering
price. Otherwise, the order will receive the next
offering price that is determined.
- ---------------------------------------------------------------
WHAT CLASSES OF SHARES DOES THE FUND OFFER? The Fund offers
investors five different classes of shares. The different
classes of shares represent investments in the same portfolio
of securities, but the classes are subject to different
expenses and will likely have different share prices. When
you buy shares, be sure to specify the class of shares. If
you do not choose a class, your investment will be made in
Class A shares.
- ---------------------------------------------------------------
- ---------------------------------------------------------------
- ---------------------------------------------------------------
- ---------------------------------------------------------------
Class A Shares. If you buy Class A shares, you pay an initial
sales charge (on investments up to $1 million for
regular accounts or $500,000 for certain retirement
plans). The amount of that sales charge will vary
depending on the amount you invest. The sales charge
rates are listed in "How Can You Buy Class A Shares?"
below.
- ---------------------------------------------------------------
Class B Shares. If you buy Class B shares, you pay no sales
charge at the time of purchase, but you will pay an
annual asset-based sales charge. If you sell your
shares within 6 years of buying them, you will normally
pay a contingent deferred sales charge. That contingent
deferred sales charge varies depending on how long you
own your shares, as described in "How Can You Buy Class
B Shares?" below.
- ---------------------------------------------------------------
Class C Shares. If you buy Class C shares, you pay no sales
charge at the time of purchase, but you will pay an
annual asset-based sales charge. If you sell your
shares within 12 months of buying them, you will
normally pay a contingent deferred sales charge of
1.0%, as described in "How Can You Buy Class C Shares?"
below.
- ---------------------------------------------------------------
Class N Shares. If you buy Class N shares (available only
through certain retirement plans), you pay no sales
charge at the time of purchase, but you will pay an
annual asset-based sales charge. If you sell your
shares within 18 months of the retirement plan's first
purchase of Class N shares, you may pay a contingent
deferred sales charge of 1.0%, as described in "How Can
You Buy Class N Shares?" below.
Class Y Shares. Class Y shares are offered only to certain
institutional investors that have special agreements
with the Distributor.
WHICH CLASS OF SHARES SHOULD YOU CHOOSE? Once you decide that
the Fund is an appropriate investment for you, the decision
as to which class of shares is best suited to your needs
depends on a number of factors that you should discuss with
your financial advisor. Some factors to consider are how much
you plan to invest and how long you plan to hold your
investment. If your goals and objectives change over time and
you plan to purchase additional shares, you should
re-evaluate those factors to see if you should consider
another class of shares. The Fund's operating costs that
apply to a class of shares and the effect of the different
types of sales charges on your investment will vary your
investment results over time.
The discussion below is not intended to be investment
advice or a recommendation, because each investor's financial
considerations are different. The discussion below assumes
that you will purchase only one class of shares and not a
combination of shares of different classes. Of course, these
examples are based on approximations of the effects of
current sales charges and expenses projected over time, and
do not detail all of the considerations in selecting a class
of shares. You should analyze your options carefully with
your financial advisor before making that choice.
How Long Do You Expect to Hold Your Investment? While future
financial needs cannot be predicted with certainty,
knowing how long you expect to hold your investment
will assist you in selecting the appropriate class of
shares. Because of the effect of class-based expenses,
your choice will also depend on how much you plan to
invest. For example, the reduced sales charges
available for larger purchases of Class A shares may,
over time, offset the effect of paying an initial sales
charge on your investment, compared to the effect over
time of higher class-based expenses on shares of Class
B, Class C or Class N. For retirement plans that
qualify to purchase Class N shares, Class N shares will
generally be more advantageous than Class B and Class C
shares.
o Investing for the Shorter Term. While the Fund is meant
to be a long-term investment, if you have a relatively
short-term investment horizon (that is, you plan to
hold your shares for not more than six years), you
should probably consider purchasing Class A or Class C
shares rather than Class B shares. That is because of
the effect of the Class B contingent deferred sales
charge if you redeem within six years, as well as the
effect of the Class B asset-based sales charge on the
investment return for that class in the short-term.
Class C shares might be the appropriate choice
(especially for investments of less than $100,000),
because there is no initial sales charge on Class C
shares, and the contingent deferred sales charge does
not apply to amounts you sell after holding them one
year.
However, if you plan to invest more than $100,000 for
the shorter term, then as your investment horizon
increases toward six years, Class C shares might not be
as advantageous as Class A shares. That is because the
annual asset-based sales charge on Class C shares will
have a greater impact on your account over the longer
term than the reduced front-end sales charge available
for larger purchases of Class A shares.
And for non-retirement plan investors who invest $1
million or more, in most cases Class A shares will be
the most advantageous choice, no matter how long you
intend to hold your shares. For that reason, the
Distributor normally will not accept purchase orders of
$500,000 or more of Class B shares or $1 million or
more of Class C shares from a single investor.
o Investing for the Longer Term. If you are investing
less than $100,000 for the longer-term, for example for
retirement, and do not expect to need access to your
money for seven years or more, Class B shares may be
appropriate.
Are There Differences in Account Features That Matter to You?
Some account features may not be available to Class B,
Class C and Class N shareholders. Other features may
not be advisable (because of the effect of the
contingent deferred sales charge) for Class B, Class C
and Class N shareholders. Therefore, you should
carefully review how you plan to use your investment
account before deciding which class of shares to buy.
Additionally, the dividends payable to Class B, Class C
and Class N shareholders will be reduced by the
additional expenses borne by those classes that are not
borne by Class A or Class Y shares, such as the Class
B, Class C and Class N asset-based sales charge
described below and in the Statement of Additional
Information. Share certificates are only available on
Class A shares. If you are considering using your
shares as collateral for a loan, that may be a factor
to consider.
How Do Share Classes Affect Payments to Your Broker? A
financial advisor may receive different compensation
for selling one class of shares than for selling
another class. It is important to remember that Class
B, Class C and Class N contingent deferred sales
charges and asset-based sales charges have the same
purpose as the front-end sales charge on sales of Class
A shares: to compensate the Distributor for concessions
and expenses it pays to dealers and financial
institutions for selling shares. The Distributor may
pay additional compensation from its own resources to
securities dealers or financial institutions based upon
the value of shares of the Fund owned by the dealer or
financial institution for its own account or for its
customers.
SPECIAL SALES CHARGE ARRANGEMENTS AND WAIVERS. Appendix B to
the Statement of Additional Information details the
conditions for the waiver of sales charges that apply in
certain cases, and the special sales charge rates that apply
to purchases of shares of the Fund by certain groups, or
under specified retirement plan arrangements or in other
special types of transactions. To receive a waiver or special
sales charge rate, you must advise the Distributor when
purchasing shares or the Transfer Agent when redeeming shares
that the special conditions apply.
HOW CAN YOU BUY CLASS A SHARES? Class A shares are sold at
their offering price, which is normally net asset value plus
an initial sales charge. However, in some cases, described
below, purchases are not subject to an initial sales charge,
and the offering price will be the net asset value. In other
cases, reduced sales charges may be available, as described
below or in the Statement of Additional Information. 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 or allocated to your dealer as a concession.
The Distributor reserves the right to reallow the entire
concession to dealers. The current sales charge rates and
concessions paid to dealers and brokers are as follows:
------------------------------------------------------------------------------
Front-End Sales
Front-End Sales Charge As a
Charge As a Percentage of Concession As
Percentage of Net Percentage of
Amount of Purchase Offering Price Amount Invested Offering Price
------------------------------------------------------------------------------
------------------------------------------------------------------------------
Less than $25,000 5.75% 6.10% 4.75%
------------------------------------------------------------------------------
------------------------------------------------------------------------------
$25,000 or more but 5.50% 5.82% 4.75%
less than $50,000
------------------------------------------------------------------------------
------------------------------------------------------------------------------
$50,000 or more but 4.75% 4.99% 4.00%
less than $100,000
------------------------------------------------------------------------------
------------------------------------------------------------------------------
$100,000 or more but 3.75% 3.90% 3.00%
less than $250,000
------------------------------------------------------------------------------
------------------------------------------------------------------------------
$250,000 or more but 2.50% 2.56% 2.00%
less than $500,000
------------------------------------------------------------------------------
------------------------------------------------------------------------------
$500,000 or more but 2.00% 2.04% 1.60%
less than $1 million
------------------------------------------------------------------------------
Can You Reduce Class A Sales Charges? You may be eligible to
buy Class A shares at reduced sales charge rates under
the Fund's "Right of Accumulation" or a Letter of
Intent, as described in "Reduced Sales Charges" in the
Statement of Additional Information.
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, or for certain purchases by particular types
of retirement plans that were permitted to purchase
such shares prior to March 1, 2001 ("grandfathered
retirement accounts"). Retirement plans are not
permitted to make initial purchases of Class A shares
subject to a contingent deferred sales charge. The
Distributor pays dealers of record concessions in an
amount equal to 1.0% of purchases of $1 million or more
other than by grandfathered retirement accounts. For
grandfathered retirement accounts, the concession is
0.75% of the first $2.5 million of purchases plus 0.25%
of purchases in excess of $2.5 million. In either case,
the concession will not be paid on purchases of shares
by exchange or that were previously subject to a
front-end sales charge and dealer concession.
If you redeem any of those shares within an 18-month
"holding period" measured from the beginning 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:
o the aggregate net asset value of the redeemed shares at
the time of redemption (excluding shares purchased by
reinvestment of dividends or capital gain
distributions) or
o the original net asset value of the redeemed shares.
The Class A contingent deferred sales charge will not
exceed the aggregate amount of the concessions the
Distributor paid to your dealer on all purchases of
Class A shares of all Oppenheimer funds you made that
were subject to the Class A contingent deferred sales
charge.
Purchases by Certain Retirement Plans. There is no initial
sales charge on purchases of Class A shares of any one
or more Oppenheimer funds by retirement plans that have
$10 million or more in plan assets and that have
entered into a special agreement with the Distributor
and by retirement plans which are part of a retirement
plan product or platform offered by certain banks,
broker-dealers, financial advisors, insurance companies
or recordkeepers which have entered into a special
agreement with the Distributor. The Distributor
currently pays dealers of record concessions in an
amount equal to 0.25% of the purchase price of Class A
shares by those retirement plans from its own resources
at the time of sale, subject to certain exceptions as
described in the Statement of Additional Information.
There is no contingent deferred sales charge upon the
redemption of such shares.
HOW CAN YOU BUY 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 six years from
the beginning of the calendar month of their purchase, a
contingent deferred sales charge will be deducted from the
redemption proceeds. The Class B contingent deferred sales
charge is paid to compensate the Distributor for its expenses
of providing distribution-related services to the Fund in
connection with the sale of Class B shares.
The 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 for the Class B contingent deferred sales charge
holding period:
- -------------------------------------------------------------------------------
Years Since Beginning of Month in Contingent Deferred Sales Charge on
Which Purchase Order was Accepted Redemptions in That Year
(As % of Amount Subject to Charge)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
0 - 1 5.0%
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
1 - 2 4.0%
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
2 - 3 3.0%
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
3 - 4 3.0%
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
4 - 5 2.0%
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
5 - 6 1.0%
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
6 and following None
- -------------------------------------------------------------------------------
In the table, a "year" is a 12-month period. In applying the
contingent deferred sales charge, all purchases are
considered to have been made on the first regular business
day of the month in which the purchase was made.
Automatic Conversion of Class B Shares. Class B shares
automatically convert to Class A shares 72 months after
you purchase them. This conversion feature relieves
Class B shareholders of the asset-based sales charge
that applies to Class B shares under the Class B
Distribution and Service Plan, described below. The
conversion is based on the relative net asset value of
the two classes, and no sales load or other charge is
imposed. When any Class B shares that you hold convert,
any other Class B shares that were acquired by
reinvesting dividends and distributions on the
converted shares will also convert to Class A shares.
For further information on the conversion feature and
its tax implications, see "Class B Conversion" in the
Statement of Additional Information.
How Can you Buy 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 a holding
period of 12 months from the beginning of the calendar month
of their purchase, a contingent deferred sales charge of 1.0%
will be deducted from the redemption proceeds. The Class C
contingent deferred sales charge is paid to compensate the
Distributor for its expenses of providing
distribution-related services to the Fund in connection with
the sale of Class C shares.
HOW CAN YOU BUY CLASS N SHARES? Class N shares are offered
for sale to retirement plans (including IRAs and 403(b)
plans) that purchase $500,000 or more of Class N shares of
one or more Oppenheimer funds or to group retirement plans
(which do not include IRAs and 403(b) plans) that have assets
of $500,000 or more or 100 or more eligible participants. See
"Availability of Class N shares" in the Statement of
Additional Information for other circumstances where Class N
shares are available for purchase.
A contingent deferred sales charge of 1.0% will be
imposed upon the redemption of Class N shares, if:
o The group retirement plan is terminated or Class N
shares of all Oppenheimer funds are terminated as an
investment option of the plan and Class N shares are
redeemed within 18 months after the plan's first
purchase of Class N shares of any Oppenheimer fund, or
o With respect to an IRA or 403(b) plan, Class N shares
are redeemed within 18 months of the plan's first
purchase of Class N shares of any Oppenheimer fund.
Retirement plans that offer Class N shares may impose
charges on plan participant accounts. The procedures for
buying, selling, exchanging and transferring the Fund's other
classes of shares (other than the time those orders must be
received by the Distributor or Transfer Agent in Colorado)
and the special account features applicable to purchasers of
those other classes of shares described elsewhere in this
prospectus do not apply to Class N shares offered through a
group retirement plan. Instructions for buying, selling,
exchanging or transferring Class N shares offered through a
group retirement plan must be submitted by the plan, not by
plan participants for whose benefit the shares are held.
Who Can Buy Class Y Shares? Class Y shares are sold at net
asset value per share without a sales charge directly to
institutional investors that have special agreements with the
Distributor for this purpose. They may include insurance
companies, registered investment companies and employee
benefit plans. Individual investors cannot buy Class Y shares
directly.
An institutional investor that buys Class Y shares for
its customers' accounts may impose charges on those accounts.
The procedures for buying, selling, exchanging and
transferring the Fund's other classes of shares (other than
the time those orders must be received by the Distributor or
Transfer Agent at their Colorado office) and the special
account features available to investors buying those other
classes of shares do not apply to Class Y shares.
Instructions for buying, selling, exchanging or transferring
Class Y shares must be submitted by the institutional
investor, not by its customers for whose benefit the shares
are held.
DISTRIBUTION AND SERVICE (12b-1) PLANS.
Service Plan for Class A Shares. The Fund has adopted a
Service Plan for Class A shares. It reimburses the
Distributor for a portion of its costs incurred for
services provided to accounts that hold Class A shares.
Reimbursement is made quarterly at an annual rate of up
to 0.25% of the average annual net assets of Class A
shares of the Fund. The Distributor currently uses all
of those fees to pay dealers, brokers, banks and other
financial institutions quarterly for providing personal
service and maintenance of accounts of their customers
that hold Class A shares. . With respect to Class A
shares subject to a Class A contingent deferred sales
charge purchased by grandfathered retirement accounts,
the Distributor pays the 0.25% service fee to dealers
in advance for the first year after the shares are sold
by the dealer. After the shares have been held for a
year, the Distributor pays the service fee to dealers
on a quarterly basis.
Distribution and Service Plans for Class B, Class C and Class
N Shares. The Fund has adopted Distribution and Service
Plans for Class B, Class C and Class N shares to pay
the Distributor for its services and costs in
distributing Class B, Class C and Class N shares and
servicing accounts. Under the plans, the Fund pays the
Distributor an annual asset-based sales charge of 0.75%
on Class B and Class C shares and 0.25% on Class N
shares. The Distributor also receives a service fee of
0.25% per year under the Class B, Class C and Class N
plans.
The asset-based sales charge and service fees increase
Class B and Class C expenses by 1.0% and increase Class
N expenses by 0.50% of the net assets per year of the
respective class. Because these fees are paid out of
the Fund's assets on an on-going basis, over time these
fees will increase the cost of your investment and may
cost you more than other types of sales charges.
The Distributor uses the service fees to compensate
dealers for providing personal services for accounts
that hold Class B, Class C or Class N shares. The
Distributor pays the 0.25% service fees to dealers in
advance for the first year after the shares are sold by
the dealer. After the shares have been held for a year,
the Distributor pays the service fees to dealers on a
quarterly basis. The Distributor retains the service
fees for accounts for which it renders the required
personal services.
The Distributor currently pays a sales concession of
3.75% of the purchase price of Class B shares to
dealers from its own resources at the time of sale.
Including the advance of the service fee, the total
amount paid by the Distributor to the dealer at the
time of sale of Class B shares is therefore 4.00% of
the purchase price. The Distributor retains the Class B
asset-based sales charge. See the Statement of
Additional Information for exceptions.
The Distributor currently pays a sales concession 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 1.0% of the
purchase price. The Distributor pays the asset-based
sales charge as an ongoing concession to the dealer on
Class C shares that have been outstanding for a year or
more. See the Statement of Additional Information for
exceptions.
The Distributor currently pays a sales concession of
0.75% of the purchase price of Class N 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 N shares is therefore 1.0% of the
purchase price. The Distributor retains the asset-based
sales charge on Class N shares. See the Statement of
Additional Information for exceptions.
Special Investor Services
ACCOUNTLINK. You can use our AccountLink feature to link your
Fund account with an account at a U.S. bank or other
financial institution. It must be an Automated Clearing House
(ACH) member. AccountLink lets you:
o transmit funds electronically to purchase shares by
telephone (through a service representative or by
PhoneLink) or automatically under Asset Builder Plans,
or
o have the Transfer Agent send redemption proceeds or
transmit dividends and distributions directly to your
bank account. Please call the Transfer Agent for more
information.
You may purchase shares by telephone only after your
account has been established. To purchase shares in amounts
up to $250,000 through a telephone representative, call the
Distributor at 1.800.852.8457. The purchase payment will be
debited from your bank account.
AccountLink privileges should be requested on your
Application or your dealer's settlement instructions if you
buy your shares through a dealer. After your account is
established, you can request AccountLink privileges by
sending signature-guaranteed instructions to the Transfer
Agent. AccountLink privileges will apply to each shareholder
listed in the registration on your account as well as to your
dealer representative of record unless and until the Transfer
Agent receives written instructions terminating or changing
those privileges. After you establish AccountLink for your
account, any change of bank account information must be made
by signature-guaranteed instructions to the Transfer Agent
signed by all shareholders who own the account.
PHONELINK. PhoneLink is the OppenheimerFunds automated
telephone system that enables shareholders to perform a
number of account transactions automatically using a
touch-tone phone. PhoneLink may be used on
already-established Fund accounts after you obtain a Personal
Identification Number (PIN), by calling the special PhoneLink
number, 1.800.533.3310.
Purchasing Shares. You may purchase shares in amounts up to
$100,000 by phone, by calling 1.800.533.3310. You must
have established AccountLink privileges to link your
bank account with the Fund to pay for these purchases.
Exchanging Shares. With the OppenheimerFunds Exchange
Privilege, described below, you can exchange shares
automatically by phone from your Fund account to
another OppenheimerFunds account you have already
established by calling the special PhoneLink number.
Selling Shares. You can redeem shares by telephone
automatically by calling the PhoneLink number and the
Fund will send the proceeds directly to your
AccountLink bank account. Please refer to "How to Sell
Shares," below for details.
CAN YOU SUBMIT TRANSACTION REQUESTS BY FAX? You may send
requests for certain types of account transactions to the
Transfer Agent by fax (telecopier). Please call
1.800.525.7048 for information about which transactions may
be handled this way. Transaction requests submitted by fax
are subject to the same rules and restrictions as written and
telephone requests described in this Prospectus.
OPPENHEIMERFUNDS INTERNET WEBSITE. You can obtain information
about the Fund, as well as your account balance, on the
OppenheimerFunds Internet website, at
www.oppenheimerfunds.com. Additionally, shareholders listed in
the account registration (and the dealer of record) may
request certain account transactions through a special
section of that website. To perform account transactions or
obtain account information online, you must first obtain a
user I.D. and password on that website. If you do not want to
have Internet account transaction capability for your
account, please call the Transfer Agent at 1.800.525.7048. At
times, the website may be inaccessible or its transaction
features may be unavailable.
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. Please call the Transfer Agent or consult the
Statement of Additional Information for details.
REINVESTMENT PRIVILEGE If you redeem some or all of your
Class A or Class B shares of the Fund, you have up to six
months to reinvest all or part of the redemption proceeds in
Class A shares of the Fund or other Oppenheimer funds without
paying a sales charge. This privilege applies only 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. This
privilege does not apply to Class C, Class N or Class Y
shares. You must be sure to ask the Distributor for this
privilege when you send your payment.
RETIREMENT PLANS. You may buy shares of the Fund for your
retirement plan account. If you participate in a plan
sponsored by your employer, the plan trustee or administrator
must buy the shares for your plan account. The Distributor
also offers a number of different retirement plans that
individuals and employers can use:
Individual Retirement Accounts (IRAs). These include regular
IRAs, Roth IRAs, SIMPLE IRAs and rollover IRAs.
SEP-IRAs. These are Simplified Employee Pension Plan IRAs for
small business owners or self-employed individuals.
403(b)(7) Custodial Plans. These are tax-deferred plans for
employees of eligible tax-exempt organizations, such as
schools, hospitals and charitable organizations.
401(k) Plans. These are special retirement plans for
businesses.
Pension and Profit-Sharing Plans. These plans are designed
for businesses and self-employed individuals.
Please call the Distributor for OppenheimerFunds
retirement plan documents, which include applications and
important plan information.
How to Sell Shares
You can sell (redeem) some or all of your shares on any
regular business day. Your shares will be sold at the next
net asset value calculated after your order is received in
proper form (which means that it must comply with the
procedures described below) and is accepted by the Transfer
Agent. The Fund lets you sell your shares by writing a letter
or by telephone. You can also set up Automatic Withdrawal
Plans to redeem shares on a regular basis. If you have
questions about any of these procedures, and especially if
you are redeeming shares in a special situation, such as due
to the death of the owner or from a retirement plan account,
please call the Transfer Agent first, at 1.800.525.7048, for
assistance.
Certain Requests Require a Signature Guarantee. To protect
you and the Fund from fraud, the following redemption
requests must be in writing and must include a
signature guarantee (although there may be other
situations that also require a signature guarantee):
o You wish to redeem more than $100,000 and receive a
check
o The redemption check is not payable to all shareholders
listed on the account statement
o The redemption check is not sent to the address of
record on your account statement
o Shares are being transferred to a Fund account with a
different owner or name
o Shares are being redeemed by someone (such as an
Executor) other than the owners.
Where Can You Have Your Signature Guaranteed? The Transfer
Agent will accept a guarantee of your signature by a
number of financial institutions, including:
o a U.S. bank, trust company, credit union or savings
association,
o a foreign bank that has a U.S. correspondent bank,
o a U.S. registered dealer or broker in securities,
municipal securities or government securities, or
o a U.S. national securities exchange, a registered
securities association or a clearing agency.
If you are signing on behalf of a corporation,
partnership or other business or as a fiduciary, you
must also include your title in the signature.
Retirement Plan Accounts. There are special procedures to
sell shares in an OppenheimerFunds retirement plan
account. Call the Transfer Agent for a distribution
request form. Special income tax withholding
requirements apply to distributions from retirement
plans. You must submit a withholding form with your
redemption request to avoid delay in getting your money
and if you do not want tax withheld. If your employer
holds your retirement plan account for you in the name
of the plan, you must ask the plan trustee or
administrator to request the sale of the Fund shares in
your plan account.
HOW DO you SELL SHARES BY MAIL? Write a letter of instruction
that includes:
o Your name
o The Fund's name
o Your Fund account number (from your account statement)
o The dollar amount or number of shares to be redeemed
o Any special payment instructions
o Any share certificates for the shares you are selling
o The signatures of all registered owners exactly as the
account is registered, and
o Any special documents requested by the Transfer Agent
to assure proper authorization of the person asking to
sell the shares.
Use the following address for Send courier or express mail
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
HOW DO you SELL SHARES BY TELEPHONE? You and your dealer
representative of record may also sell your shares by
telephone. To receive the redemption price calculated on a
particular regular business day, 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 account or under a share
certificate by telephone.
o To redeem shares through a service representative, call
1.800.852.8457
o To redeem shares automatically on PhoneLink, call
1.800.533.3310
Whichever method you use, you may have a check sent to
the address on the account statement, or, if you have linked
your Fund account to your bank account on AccountLink, you
may have the proceeds sent to that bank account.
Are There Limits on Amounts Redeemed by Telephone?
Telephone Redemptions Paid by Check. Up to $100,000 may be
redeemed by telephone in any seven-day period. The
check must be payable to all owners of record of the
shares and must be sent to the address on the account
statement. This service is not available within 30 days
of changing the address on an account.
Telephone Redemptions Through AccountLink. There are no
dollar limits on telephone redemption proceeds sent to
a bank account designated when you establish
AccountLink. Normally the ACH transfer to your bank is
initiated on the business day after the redemption. You
do not receive dividends on the proceeds of the shares
you redeemed while they are waiting to be transferred.
CAN YOU SELL SHARES THROUGH your DEALER? The Distributor has
made arrangements to repurchase Fund shares from dealers and
brokers on behalf of their customers. Brokers or dealers may
charge for that service. If your shares are held in the name
of your dealer, you must redeem them through your dealer.
HOW CONTINGENT DEFERRED SALES CHARGES AFFECT REDEMPTIONS. If
you purchase shares subject to a Class A, Class B, Class C or
Class N contingent deferred sales charge and redeem any of
those shares during the applicable holding period for the
class of shares, the contingent deferred sales charge will be
deducted from the redemption proceeds (unless you are
eligible for a waiver of that sales charge based on the
categories listed in Appendix B to the Statement of
Additional Information and you advise the Transfer Agent of
your eligibility for the waiver when you place your
redemption request.)
A contingent deferred sales charge will be based on the
lesser of the net asset value of the redeemed shares at the
time of redemption or the original net asset value. A
contingent deferred sales charge is not imposed on:
o the amount of your account value represented by an
increase in net asset value over the initial purchase
price,
o shares purchased by the reinvestment of dividends or
capital gains distributions, or
o shares redeemed in the special circumstances described
in Appendix B to the Statement of Additional Information
To determine whether a 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 the holding period that applies to the
class, and
3. shares held the longest during the holding period.
Contingent deferred sales charges are not charged when you
exchange shares of the Fund for shares of other Oppenheimer
funds. However, if you exchange them within the applicable
contingent deferred sales charge holding period, the holding
period will carry over to the fund whose shares you acquire.
Similarly, if you acquire shares of this Fund by exchanging
shares of another Oppenheimer fund that are still subject to
a contingent deferred sales charge holding period, that
holding period will carry over to this Fund.
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. Shares of the Fund can be
purchased by exchange of shares of other Oppenheimer funds on
the same basis. To exchange shares, you must meet several
conditions:
o Shares of the fund selected for exchange must be
available for sale in your state of residence.
o The prospectuses of both funds must offer the exchange
privilege.
o You must hold the shares you buy when you establish
your account for at least seven days before you can
exchange them. After the account is open seven days,
you can exchange shares every regular business day.
o You must meet the minimum purchase requirements for the
fund whose shares you purchase by exchange.
o Before exchanging into a fund, you must obtain and read
its prospectus
Shares of a particular class of the Fund may be
exchanged only for shares of the same class in the other
Oppenheimer funds. For example, you can exchange Class A
shares of this Fund only for Class A shares of another fund.
In some cases, sales charges may be imposed on exchange
transactions. For tax purposes, exchanges of shares involve a
sale of the shares of the fund you own and a purchase of the
shares of the other fund, which may result in a capital gain
or loss. Please refer to "How to Exchange Shares" in the
Statement of Additional Information for more details.
You can find a list of Oppenheimer funds currently
available for exchanges in the Statement of Additional
Information or obtain one by calling a service representative
at 1.800.525.7048. That list can change from time to time.
HOW DO you SUBMIT EXCHANGE REQUESTS? Exchanges may be
requested in writing or by telephone:
Written Exchange Requests. Submit an OppenheimerFunds
Exchange Request form, signed by all owners of the
account. Send it to the Transfer Agent at the address
on the back cover. Exchanges of shares held under
certificates cannot be processed unless the Transfer
Agent receives the certificates with the request.
Telephone Exchange Requests. Telephone exchange requests may
be made either by calling a service representative at
1.800.852.8457, or by using PhoneLink for automated
exchanges by calling 1.800.533.3310. Telephone
exchanges may be made only between accounts that are
registered with the same name(s) and address. Shares
held under certificates may not be exchanged by
telephone.
ARE THERE LIMITATIONS ON EXCHANGES? There are certain
exchange policies you should be aware of:
o Shares are normally redeemed from one fund and
purchased from the other fund in the exchange
transaction on the same regular business day on which
the Transfer Agent receives an exchange request that
conforms to the policies described above. It must be
received by the close of The New York Stock Exchange
that day, which is normally 4:00 P.M. but may be
earlier on some days. However, either fund may delay
the purchase of shares of the fund you are exchanging
into up to seven days if it determines it would be
disadvantaged by the same day exchange.
o The interests of the Fund's long-term shareholders and
its ability to manage its investments may be adversely
affected when its shares are repeatedly bought and sold
in response to short-term market fluctuations--also
known as "market timing." When large dollar amounts are
involved, the Fund may have difficulty implementing
long-term investment strategies, because it cannot
predict how much cash it will have to invest. Market
timing also may force the Fund to sell portfolio
securities at disadvantageous times to raise the cash
needed to buy a market timer's Fund shares. These
factors may hurt the Fund's performance and its
shareholders. When the Manager believes frequent
trading would have a disruptive effect on the Fund's
ability to manage its investments, the Manager and the
Fund may reject purchase orders and exchanges into the
Fund by any person, group or account that the Manager
believes to be a market timer.
o The Fund may amend, suspend or terminate the exchange
privilege at any time. The Fund will provide you notice
whenever it is required to do so by applicable law, but
it may impose changes at any time for emergency
purposes.
o If the Transfer Agent cannot exchange all the shares
you request because of a restriction cited above, only
the shares eligible for exchange will be exchanged.
Shareholder Account Rules and Policies
More information about the Fund's policies and procedures for
buying, selling and exchanging shares is contained in the
Statement of Additional Information.
Effective September 27, 2002, a $12 annual fee will be
charged on any account valued at less than $500.
See the Statement of Additional Information for
circumstances when this fee will not be charged.
The offering of shares may be suspended during any period in
which the determination of net asset value is
suspended, and the offering may be suspended by the
Board of Trustees at any time the Board believes it is
in the Fund's best interest to do so.
Telephone transaction privileges for purchases, redemptions
or exchanges may be modified, suspended or terminated
by the Fund at any time. The Fund will provide you
notice whenever it is required to do so by applicable
law. If an account has more than one owner, the Fund
and the Transfer Agent may rely on the instructions of
any one owner. Telephone privileges apply to each owner
of the account and the dealer representative of record
for the account unless the Transfer Agent receives
cancellation instructions from an owner of the account.
The Transfer Agent will record any telephone calls to verify
data concerning transactions and has adopted other
procedures to confirm that telephone instructions are
genuine, by requiring callers to provide tax
identification numbers and other account data or by
using PINs, and by confirming such transactions in
writing. The Transfer Agent and the Fund will not be
liable for losses or expenses arising out of telephone
instructions reasonably believed to be genuine.
Redemption or transfer requests will not be honored until the
Transfer Agent receives all required documents in
proper form. From time to time, the Transfer Agent in
its discretion may waive certain of the requirements
for redemptions stated in this Prospectus.
Dealers that perform account transactions for their clients
by participating in NETWORKING through the National
Securities Clearing Corporation are responsible for
obtaining their clients' permission to perform those
transactions, and are responsible to their clients who
are shareholders of the Fund if the dealer performs any
transaction erroneously or improperly.
The redemption price for shares will vary from day to day
because the value of the securities in the Fund's
portfolio fluctuates. The redemption price, which is
the net asset value per share, will normally differ for
each class of shares. The redemption value of your
shares may be more or less than their original cost.
Payment for redeemed shares ordinarily is made in cash. It is
forwarded by check, or through AccountLink (as elected
by the shareholder) within seven days after the
Transfer Agent receives redemption instructions in
proper form. However, under unusual circumstances
determined by the Securities and Exchange Commission,
payment may be delayed or suspended. For accounts
registered in the name of a broker-dealer, payment will
normally be forwarded within three business days after
redemption.
The Transfer Agent may delay forwarding a check or processing
a payment via AccountLink for recently purchased
shares, but only until the purchase payment has
cleared. That delay may be as much as 10 days from the
date the shares were purchased. That delay may be
avoided if you purchase shares by Federal Funds wire or
certified check, or arrange with your bank to provide
telephone or written assurance to the Transfer Agent
that your purchase payment has cleared
Involuntary redemptions of small accounts may be made by the
Fund if the account value has fallen below $500 for
reasons other than the fact that the market value of
shares has dropped. In some cases, involuntary
redemptions may be made to repay the Distributor for
losses from the cancellation of share purchase orders.
Shares may be "redeemed in kind" under unusual circumstances
(such as a lack of liquidity in the Fund's portfolio to
meet redemptions). This means that the redemption
proceeds will be paid with liquid securities from the
Fund's portfolio.
"Backup withholding" of federal income tax may be applied
against taxable dividends, distributions and redemption
proceeds (including exchanges) if you fail to furnish
the Fund your correct, certified Social Security or
Employer Identification Number when you sign your
application, or if you under-report your income to the
Internal Revenue Service.
To avoid sending duplicate copies of materials to households,
the Fund will mail only one copy of each prospectus,
annual and semi-annual report and annual notice of the
Fund's privacy policy to shareholders having the same
last name and address on the Fund's records. The
consolidation of these mailings, called householding,
benefits the Fund through reduced mailing expense.
If you want to receive multiple copies of these
materials, you may call the Transfer Agent at
1.800.525.7048. You may also notify the Transfer Agent
in writing. Individual copies of prospectuses, reports
and privacy notices will be sent to you commencing
within 30 days after the Transfer Agent receives your
request to stop householding.
Dividends, Capital Gains and Taxes
Dividends. The Fund intends to declare dividends separately
for each class of shares from net investment income on an
annual basis and to pay them to shareholders in December on a
date selected by the Board of Trustees. Dividends and
distributions paid to Class A and Class Y shares will
generally be higher than dividends for Class B, Class C and
Class N shares, which normally have higher expenses than
Class A and Class Y. The Fund has no fixed dividend rate and
cannot guarantee that it will pay any dividends or
distributions.
Capital Gains. The Fund may realize capital gains on the sale
of portfolio securities. If it does, it may make
distributions out of any net short-term or long-term capital
gains in December of each year. The Fund may make
supplemental distributions of dividends and capital gains
following the end of its fiscal year. There can be no
assurance that the Fund will pay any capital gains
distributions in a particular year.
WHAT CHOICES DO YOU HAVE FOR RECEIVING DISTRIBUTIONS? When
you open your account, specify on your application how you
want to receive your dividends and distributions. You have
four options:
Reinvest All Distributions in the Fund. You can elect to
reinvest all dividends and capital gains distributions
in additional shares of the Fund.
Reinvest Dividends or Capital Gains. You can elect to
reinvest some distributions (dividends, short-term
capital gains or long-term capital gains distributions)
in the Fund while receiving the other types of
distributions by check or having them sent to your bank
account through AccountLink.
Receive All Distributions in Cash. You can elect to receive a
check for all dividends and capital gains distributions
or have them sent to your bank through AccountLink.
Reinvest Your Distributions in Another OppenheimerFunds
Account. You can reinvest all distributions in the same
class of shares of another OppenheimerFunds account you
have established.
TAXES. If your shares are not held in a tax-deferred
retirement account, you should be aware of the following tax
implications of investing in the Fund. Distributions are
subject to federal income tax and may be subject to state or
local taxes. Dividends paid from short-term capital gains and
net investment income are taxable as ordinary income.
Long-term capital gains are taxable as long-term capital
gains when distributed to shareholders. It does not matter
how long you have held your shares. Whether you reinvest your
distributions in additional shares or take them in cash, the
tax treatment is the same.
Every year the Fund will send you and the IRS a
statement showing the amount of any taxable distribution you
received in the previous year. Any long-term capital gains
will be separately identified in the tax information the Fund
sends you after the end of the calendar year.
Avoid "Buying a Dividend." If you buy shares on 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
capital gain.
Remember, There May be Taxes on Transactions. Because the
Fund's share prices fluctuate, 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
received when you sold them. Any capital gain is
subject to capital gains tax.
Returns of Capital Can Occur. In certain cases, distributions
made by the Fund may be considered a non-taxable return
of capital to shareholders. If that occurs, it will be
identified in notices to shareholders.
This information is only a summary of certain federal
income tax information about your investment. You should
consult with your tax advisor about the effect of an
investment in the Fund on your particular tax situation.
Financial Highlights
The Financial Highlights Table is presented to help you
understand the Fund's financial performance for the past five
fiscal years. Certain information reflects financial results
for a single Fund share. The total returns in the table
represent the rate that an investor would have earned (or
lost) on an investment in the Fund (assuming reinvestment of
all dividends and distributions). This information has been
audited by KPMG LLP, the Fund's independent auditors, whose
report, along with the Fund's financial statements, is
included in the Statement of Additional Information, which is
available on request.
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
CLASS A YEAR ENDED AUGUST 31, 2002
2001 2000 1999 1998
=======================================================================================================
PER SHARE OPERATING DATA
- -------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 29.20 $
62.31 $ 39.77 $ 31.54 $ 40.42
- -------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss)
(.13) .18 (.02) .10 .73
Net realized and unrealized gain (loss) (4.74)
(30.05) 25.42 11.69 (5.05)
- -------------------------------------------------------
Total from investment operations (4.87)
(29.87) 25.40 11.79 (4.32)
- -------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income
(.14) -- (.03) (.48) (.66)
Distributions from net realized gain --
(3.24) (2.83) (3.08) (3.90)
- -------------------------------------------------------
Total dividends and/or distributions
to shareholders (.14)
(3.24) (2.86) (3.56) (4.56)
- -------------------------------------------------------------------------------------------------------
Net asset value, end of period $24.19
$29.20 $62.31 $39.77 $31.54
========================================================
=======================================================================================================
TOTAL RETURN, AT NET ASSET VALUE(1) (16.77)%
(49.87)% 67.10% 39.39% (11.62)%
- -------------------------------------------------------------------------------------------------------
=======================================================================================================
RATIOS/SUPPLEMENTAL DATA
- -------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $1,173,027
$1,553,066 $3,176,435 $1,730,087 $1,356,905
- -------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $1,430,735
$2,149,795 $2,390,125 $1,620,201 $1,640,181
- -------------------------------------------------------------------------------------------------------
Ratios to average net assets:(2)
Net investment income (loss) (0.54)%
0.45% (0.01)% 0.24% 1.90%
Expenses 1.31%
1.06% 1.01% 1.05% 1.00%(3)
- -------------------------------------------------------------------------------------------------------
Portfolio turnover rate
60% 92% 49% 106% 34%
1. Assumes an investment on the business day before the first
day of the fiscal
period, 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.
2. Annualized for periods of less than one full year.
3. Expense ratio has been calculated without adjustment for
the reduction to
custodian expenses.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
18
OPPENHEIMER GROWTH FUND
CLASS B YEAR ENDED AUGUST 31, 2002
2001 2000 1999 1998
=======================================================================================================
PER SHARE OPERATING DATA
- -------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 27.60 $
59.55 $ 38.37 $ 30.54 $ 39.34
- -------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) (.54)
(.10) (.21) (.20) .43
Net realized and unrealized gain (loss) (4.26)
(28.61) 24.22 11.32 (4.89)
- -------------------------------------------------------
Total from investment operations (4.80)
(28.71) 24.01 11.12 (4.46)
- -------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income
- -- -- -- (.21) (.44)
Distributions from net realized gain --
(3.24) (2.83) (3.08) (3.90)
- -------------------------------------------------------
Total dividends and/or distributions
to shareholders --
(3.24) (2.83) (3.29) (4.34)
- -------------------------------------------------------------------------------------------------------
Net asset value, end of period $22.80
$27.60 $59.55 $38.37 $30.54
========================================================
=======================================================================================================
TOTAL RETURN, AT NET ASSET VALUE(1) (17.39)%
(50.26)% 65.82% 38.27% (12.32)%
- -------------------------------------------------------------------------------------------------------
=======================================================================================================
RATIOS/SUPPLEMENTAL DATA
- -------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $317,725
$483,298 $996,000 $445,629 $330,442
- -------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $415,965
$692,159 $676,485 $410,058 $353,574
- -------------------------------------------------------------------------------------------------------
Ratios to average net assets:(2)
Net investment income (loss) (1.30)%
(0.31)% (0.78)% (0.58)% 1.08%
Expenses 2.08%
1.83% 1.78% 1.86% 1.81%(3)
- -------------------------------------------------------------------------------------------------------
Portfolio turnover rate
60% 92% 49% 106% 34%
1. Assumes an investment on the business day before the first
day of the fiscal
period, 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.
2. Annualized for periods of less than one full year.
3. Expense ratio has been calculated without adjustment for
the reduction to
custodian expenses.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
19
OPPENHEIMER GROWTH FUND
FINANCIAL HIGHLIGHTS Continued
- --------------------------------------------------------------------------------
CLASS C YEAR ENDED AUGUST 31, 2002
2001 2000 1999 1998
========================================================================================================
PER SHARE OPERATING DATA
- --------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 28.06 $
60.48 $ 38.92 $ 30.93 $ 39.87
- --------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) (.43)
(.04) (.09) (.20) .46
Net realized and unrealized gain (loss) (4.45)
(29.14) 24.48 11.47 (4.99)
- --------------------------------------------------------
Total from investment operations (4.88)
(29.18) 24.39 11.27 (4.53)
- -------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income
- -- -- -- (.21) (.51)
Distributions from net realized gain --
(3.24) (2.83) (3.07) (3.90)
- --------------------------------------------------------
Total dividends and/or distributions
to shareholders --
(3.24) (2.83) (3.28) (4.41)
- -------------------------------------------------------------------------------------------------------
Net asset value, end of period $23.18
$28.06 $60.48 $38.92 $30.93
========================================================
=======================================================================================================
TOTAL RETURN, AT NET ASSET VALUE(1) (17.39)%
(50.26)% 65.87% 38.28% (12.33)%
- -------------------------------------------------------------------------------------------------------
=======================================================================================================
RATIOS/SUPPLEMENTAL DATA
- -------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $75,229
$102,144 $176,150 $57,970 $44,377
- -------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $93,082
$133,823 $103,076 $53,501 $43,817
- -------------------------------------------------------------------------------------------------------
Ratios to average net assets:(2)
Net investment income (loss) (1.31)%
(0.32)% (0.77)% (0.58)% 1.06%
Expenses 2.08%
1.84% 1.78% 1.86% 1.81%(3)
- -------------------------------------------------------------------------------------------------------
Portfolio turnover rate
60% 92% 49% 106% 34%
1. Assumes an investment on the business day before the first
day of the fiscal
period, 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.
2. Annualized for periods of less than one full year.
3. Expense ratio has been calculated without adjustment for
the reduction to
custodian expenses.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
20
OPPENHEIMER GROWTH FUND
CLASS N YEAR ENDED AUGUST 31,
2002 2001(1)
================================================================================
PER SHARE OPERATING DATA
- --------------------------------------------------------------------------------
Net asset value, beginning of period $
29.13 $ 35.39
- --------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss)
(.13)(2) (.01)
Net realized and unrealized loss
(4.78)(2) (6.25)
- ---------------------------------
Total from investment operations
(4.91) (6.26)
- --------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income
(.23) --
Distributions from net realized
gain -- --
- ---------------------------------
Total dividends and/or distributions to shareholders
(.23) --
- --------------------------------------------------------------------------------
Net asset value, end of period
$23.99 $29.13
=================================
================================================================================
TOTAL RETURN, AT NET ASSET VALUE(3)
(17.00)% (17.69)%
- --------------------------------------------------------------------------------
================================================================================
RATIOS/SUPPLEMENTAL DATA
- --------------------------------------------------------------------------------
Net assets, end of period (in thousands)
$2,243 $274
- --------------------------------------------------------------------------------
Average net assets (in thousands)
$1,623 $ 70
- --------------------------------------------------------------------------------
Ratios to average net assets:(4)
Net investment loss
(0.90)% (0.33)%
Expenses
1.57% 1.40%
- --------------------------------------------------------------------------------
Portfolio turnover
rate 60% 92%
1. For the period from March 1, 2001 (inception of offering)
to August 31, 2001.
2. Per share amounts calculated based on the average shares
outstanding during
the period.
3. Assumes an 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.
4. Annualized for periods of less than one full year.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
21
OPPENHEIMER GROWTH FUND
FINANCIAL HIGHLIGHTS Continued
- --------------------------------------------------------------------------------
CLASS Y YEAR ENDED AUGUST 31, 2002
2001 2000 1999 1998
=======================================================================================================
PER SHARE OPERATING DATA
- -------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 29.27 $
62.33 $ 39.76 $ 31.54 $ 40.43
- -------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss)
(.06) .28 .16 .18 .87
Net realized and unrealized gain (loss) (4.73)
(30.10) 25.37 11.69 (5.09)
- -------------------------------------------------------
Total from investment operations (4.79)
(29.82) 25.53 11.87 (4.22)
- -------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income
(.24) -- (.13) (.58) (.77)
Distributions from net realized gain --
(3.24) (2.83) (3.07) (3.90)
- -------------------------------------------------------
Total dividends and/or distributions
to shareholders (.24)
(3.24) (2.96) (3.65) (4.67)
- -------------------------------------------------------------------------------------------------------
Net asset value, end of period $24.24
$29.27 $62.33 $39.76 $31.54
========================================================
=======================================================================================================
TOTAL RETURN, AT NET ASSET VALUE(1) (16.50)%
(49.77)% 67.56% 39.74% (11.38)%
- -------------------------------------------------------------------------------------------------------
=======================================================================================================
RATIOS/SUPPLEMENTAL DATA
- -------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $66,769 $
88,284 $191,267 $ 93,936 $132,146
- -------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $81,127
$124,168 $134,650 $116,615 $135,098
- -------------------------------------------------------------------------------------------------------
Ratios to average net assets:(2)
Net investment income (loss) (0.25)%
0.67% 0.27% 0.65% 2.16%
Expenses 1.13%
0.86% 0.73% 0.80% 0.71%(3)
Expenses, net of voluntary waiver of
transfer agent fees and/or reduction
to custodian expenses 1.02%
0.86% 0.73% 0.80% 0.71%
- -------------------------------------------------------------------------------------------------------
Portfolio turnover rate
60% 92% 49% 106% 34%
1. Assumes an investment on the business day before the first
day of the fiscal
period, 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.
2. Annualized for periods of less than one full year.
3. Expense ratio has been calculated without adjustment for
the reduction to
custodian expenses.
INFORMATION AND SERVICES
For More Information on Oppenheimer Growth Fund
The following additional information about the Fund is
available without charge upon request:
STATEMENT OF ADDITIONAL INFORMATION. This document includes
additional information about the Fund's investment policies,
risks, and operations. It is incorporated by reference into
this Prospectus (which means it is legally part of this
Prospectus).
ANNUAL AND SEMI-ANNUAL REPORTS. Additional information about
the Fund's investments and performance is available in the
Fund's Annual and Semi-Annual Reports to shareholders. The
Annual Report includes a discussion of market conditions and
investment strategies that significantly affected the Fund's
performance during its last fiscal year.
How to Get More Information
You can request the Statement of Additional Information, the
Annual and Semi-Annual Reports, the notice explaining the
Fund's privacy policy and other information about the Fund or
your account:
- ---------------------------------------------------------------------------------
By Telephone: Call OppenheimerFunds Services toll-free:
1.800.525.7048
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
By Mail: Write to:
OppenheimerFunds Services
P.O. Box 5270
Denver, Colorado 80217-5270
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
On the Internet: You can send us a request by e-mail or
read or download documents on the
OppenheimerFunds website:
www.oppenheimerfunds.com
- ---------------------------------------------------------------------------------
Information about the Fund including the Statement of
Additional Information can be reviewed and copied at the
SEC's Public Reference Room in Washington, D.C.
Information on the operation of the Public Reference Room
may be obtained by calling the SEC at 1.202.942.8090.
Reports and other information about the Fund are
available on the EDGAR database on the SEC's Internet
website at www.sec.gov. Copies may be obtained after
payment of a duplicating fee by electronic request at the
SEC's e-mail address: publicinfo@sec.gov or by writing to
the SEC's Public Reference Section, Washington, D.C.
20549-0102.
No one has been authorized to provide any information about
the Fund or to make any representations about the Fund other
than what is contained in this Prospectus. This Prospectus is
not an offer to sell shares of the Fund, nor a solicitation
of an offer to buy shares of the Fund, to any person in any
state or other jurisdiction where it is unlawful to make such
an offer.
The Fund's shares are distributed by:
[logo] OppenheimerFunds(R)
Distributor, Inc.
The Fund's SEC File No.: 811-2306.
PR0270.001.1002
Printed on recycled paper.
Appendix to Prospectus of
Oppenheimer Growth Fund
Graphic Material included in the Prospectus of
Oppenheimer Growth Fund: "Annual Total Returns (Class A) (%
as of 12/31 each year)":
A bar chart will be included in the Prospectus of
Oppenheimer Growth Fund (the "Fund") depicting the annual
total returns of a hypothetical investment in Class A shares
of the Fund for each of the ten most recent calendar years,
without deducting sales charges. Set forth below are the
relevant data points that will appear on the bar chart.
Calendar Oppenheimer
Year Growth Fund
Ended Class A Shares
- ----- --------------
12/31/01 %
12/31/00 -11.16%
12/31/99 46.73%
12/31/98 10.95%
12/31/97 18.12%
12/31/96 23.46%
12/31/95 34.95%
12/31/94 2.38%
12/31/93 2.72%
12/31/92 13.37%
Oppenheimer Growth Fund
Supplement dated January 2, 2003 to the
Statement of Additional Information dated October 23, 2002
The Statement of Additional Information is changed as
follows:
1. Effective December 31, 2002, Mr. Leon Levy resigned
as a Trustee of the Fund and Mr. Clayton Yeutter was
elected as Chairman of the Board, effective January 1,
2003. Therefore, the Statement of Additional
Information is revised by deleting the biography for Mr.
Levy on page 23 and by adding the following to Mr.
Yeutter's biography on page 25: "Chairman of the Board
of Trustees."
2. In the Trustee compensation table on pages 28 and 29,
the title of "Chairman" after
Mr. Levy's name is deleted and the title of "Chairman"
is added after Mr. Yeutter's
name. In addition, the following footnote is added
following Mr. Levy's name and
following Mr. Yeutter's name:
7. Effective January 1, 2003, Clayton Yeutter became
Chairman of the Board of
Trustees/Directors of the Board I
Funds upon the retirement of Leon
Levy.
January 2, 2003
PX0270.008
Oppenheimer Growth Fund
- ------------------------------------------------------------
- ------------------------------------------------------------
6803 South Tucson Way, Centennial, Colorado 80112
1.800.225.5677
Statement of Additional Information dated October 23, 2002
This Statement of Additional Information is not a
Prospectus. This document contains additional information
about the Fund and supplements information in the
Prospectus dated October 23, 2002. It should be read
together with the Prospectus. You can obtain the
Prospectus by writing to the Fund's Transfer Agent,
OppenheimerFunds Services, at P.O. Box 5270, Denver,
Colorado 80217, or by calling the Transfer Agent at the
toll-free number shown above, or by downloading it from the
OppenheimerFunds Internet website at
www.oppenheimerfunds.com.
Contents
Page
About the Fund
Additional Information About the Fund's Investment Policies
and Risks..............................................................
2
The Fund's Investment Policies.....................................
2
Other Investment Techniques and Strategies.........................
4
Investment Restrictions............................................
20
How the Fund is Managed ...............................................
21
Organization and History...........................................
21
Board of Trustees and Oversight Committees.........................
23
Trustees and Officers of the Fund..................................
23
The Manager........................................................
31
Brokerage Policies of the Fund.........................................
34
Distribution and Service Plans.........................................
36
Performance of the Fund................................................
40
About Your Account
How To Buy Shares......................................................
46
How To Sell Shares.....................................................
57
How To Exchange Shares.................................................
61
Dividends, Capital Gains and Taxes.....................................
65
Additional Information About the Fund..................................
70
Financial Information About the Fund
Independent Auditors' Report...........................................
71
Financial Statements...................................................
72
Appendix A: Industry Classifications...................................
A-1
Appendix B: Special Sales Charge Arrangements and Waivers..............
B-1
70
-------------------------------------------------------------------------------
ABOUT THE FUND
-------------------------------------------------------------------------------
Additional Information About the Fund's Investment Policies
and Risks
The investment objective, the principal investment
policies and the main risks of the Fund are described in
the Prospectus. This Statement of Additional Information
contains supplemental information about those policies and
risks and the types of securities that the Fund's
investment Manager, OppenheimerFunds, Inc. (the "Manager"),
can select for the Fund. Additional information is also
provided about the strategies that the Fund may use to try
to achieve its objective.
The Fund's Investment Policies. The composition of the
Fund's portfolio and the techniques and strategies that the
Fund's Manager may use in selecting portfolio securities
will vary over time. The Fund is not required to use all of
the investment techniques and strategies described below at
all times in seeking its goal. It may use some of the
special investment techniques and strategies at some times
or not at all.
|X| Cyclical Opportunities. The Fund might also seek
to take advantage of changes in the business cycle by
investing in companies that are sensitive to those changes
if the Manager believes they have growth potential. For
example, when the economy is expanding, companies in the
consumer durable and technology sectors might benefit and
offer long-term growth opportunities. Other cyclical
industries include insurance, for example. The fund focuses
on seeking growth over the long term, but could seek to
take tactical advantage of short-term market movements or
events affecting particular issuers or industries.
|X| Investments in Equity Securities. The Fund
focuses its investments in equity securities of mid-cap
issuers (having market capitalizations between $2 billion
and $11.5 billion) and large-cap issuers (having market
capitalizations greater than $11.5 billion). At times, the
market may favor or disfavor securities of issuers of a
particular capitalization range. Therefore the Fund may
focus its equity investments in securities of large cap or
mid cap issuers, or a combination of the two capitalization
ranges, based upon the Manager's judgment of where are the
best market opportunities to seek the Fund's objective.
Current income is not a criterion used to select portfolio
securities.
The Fund can also invest in securities of small cap
issuers (having market capitalizations of less than $1
billion). Securities of small capitalization issuers may be
subject to greater price volatility in general than
securities of large-cap and mid-cap companies. Therefore,
to the degree that the Fund has investments in smaller
capitalization companies at times of market volatility, the
Fund's share price may fluctuate more. As noted below, the
Fund limits such investments in unseasoned small cap
issuers.
o Convertible Securities. While convertible securities
are a form of debt security in many cases, their conversion
feature (allowing conversion into equity securities) causes
them to be regarded by the Manager more as "equity
equivalents." As a result, the rating assigned to the
security has less impact on the Manager's investment
decision with respect to convertible securities than in the
case of non-convertible fixed income securities.
The value of a convertible security is a function of
its "investment value" and its "conversion value." If the
investment value exceeds the conversion value, the security
will behave more like a debt security and the security's
price will likely increase when interest rates fall and
decrease when interest rates rise. If the conversion value
exceeds the investment value, the security will behave more
like an equity security. In that case it will likely sell
at a premium over its conversion value and its price will
tend to fluctuate directly with the price of the underlying
security.
To determine whether convertible securities
should be regarded as "equity equivalents," the Manager
examines the following factors:
(1) whether, at the option of the investor, the
convertible security can be exchanged for a
fixed number of shares of common stock of
the issuer,
(2) whether the issuer of the convertible securities has
restated its earnings per share of common
stock on a fully diluted basis (considering
the effect of conversion of the convertible
securities), and
(3) the extent to which the convertible security may be a
defensive "equity substitute," providing the
ability to participate in any appreciation
in the price of the issuer's common stock.
|X| Foreign Securities. The Fund can purchase equity
securities issued or guaranteed by foreign companies or
debt securities issued by foreign governments. "Foreign
securities" include equity and debt securities of companies
organized under the laws of countries other than the United
States and debt securities issued by foreign governments
and their agencies. They may be traded on foreign
securities exchanges or in the foreign over-the-counter
markets.
Securities of foreign issuers that are represented by
American Depository Receipts or that are listed on a U.S.
securities exchange or traded in the U.S. over-the-counter
markets are not considered "foreign securities" for the
purpose of the Fund's investment allocations. That is
because they are not subject to many of the special
considerations and risks, discussed below, that apply to
foreign securities traded and held abroad.
Investing in foreign securities offers potential
benefits not available from investing solely in securities
of domestic issuers. They include the opportunity to invest
in foreign issuers that appear to offer growth potential,
or in foreign countries with economic policies or business
cycles different from those of the U.S., or to reduce
fluctuations in portfolio value by taking advantage of
foreign stock markets that do not move in a manner parallel
to U.S. markets. The Fund will hold foreign currency only
in connection with the purchase or sale of foreign
securities.
o Risks of Foreign Investing. Investments in foreign
securities may offer special opportunities for investing
but also present special additional risks and
considerations not typically associated with investments in
domestic securities. Some of these additional risks are:
o reduction of income by foreign taxes;
o fluctuation in value of foreign investments due to
changes in currency rates or currency control
regulations (for example, currency blockage);
o transaction charges for currency exchange;
o
lack of public information about foreign issuers;
o lack of uniform accounting, auditing and financial
reporting standards in foreign countries
comparable to those applicable to domestic
issuers;
o less volume on foreign exchanges than on U.S.
exchanges;
o greater volatility and less liquidity on foreign
markets than in the U.S.;
o less governmental regulation of foreign issuers,
stock exchanges and brokers than in the U.S.;
o greater difficulties in commencing lawsuits;
o higher brokerage commission rates than in the U.S.;
o increased risks of delays in settlement of portfolio
transactions or loss of certificates for portfolio
securities;
o possibilities in some countries of expropriation,
confiscatory taxation, political, financial or
social instability or adverse diplomatic
developments; and
o unfavorable differences between the U.S. economy and
foreign economies.
In the past, U.S. government policies have
discouraged certain investments abroad by U.S. investors,
through taxation or other restrictions, and it is possible
that such restrictions could be re-imposed.
|X| Portfolio Turnover. "Portfolio turnover"
describes the rate at which the Fund traded its portfolio
securities during its last fiscal year. For example, if a
fund sold all of its securities during the year, its
portfolio turnover rate would have been 100%. The Fund's
portfolio turnover rate will fluctuate from year to year,
although the Fund might have a portfolio turnover rate of
more than 100% annually. Increased portfolio turnover
creates higher brokerage and transaction costs for the
Fund, which could reduce its overall performance.
Additionally, the realization of capital gains from selling
portfolio securities may result in distributions of taxable
long-term capital gains to shareholders, since the Fund
will normally distribute all of its capital gains realized
each year, to avoid excise taxes under the Internal Revenue
Code.
Other Investment Techniques and Strategies. In seeking its
objective, the Fund may from time to time employ the types
of investment strategies and investments described below.
It is not required to use all of these strategies at all
times, and at times may not use them.
|X| Investing in Small, Unseasoned Companies. The
Fund can invest in securities of small, unseasoned
companies. These are companies that have been in operation
for less than three years, including the operations of any
predecessors. Securities of these companies may be subject
to volatility in their prices. They may have a limited
trading market, which may adversely affect the Fund's
ability to dispose of them and can reduce the price the
Fund might be able to obtain for them. Other investors that
own a security issued by a small, unseasoned issuer for
which there is limited liquidity might trade the security
when the Fund is attempting to dispose of its holdings of
that security. In that case the Fund might receive a lower
price for its holdings than might otherwise be obtained.
As a fundamental policy, the Fund cannot make an
investment that will result in more than 15% of the Fund's
total assets being invested in the securities of small,
unseasoned companies. The Fund currently intends to invest
no more than 5% of its net assets in those securities.
|X| Repurchase Agreements. The Fund can acquire
securities subject to repurchase agreements. It may do so
for liquidity purposes to meet anticipated redemptions of
Fund shares, or pending the investment of the proceeds from
sales of Fund shares, or pending the settlement of
portfolio securities transactions, or for temporary
defensive purposes, as described below.
In a repurchase transaction, the Fund buys a security
from, and simultaneously resells it to, an approved vendor
for delivery on an agreed-upon future date. The resale
price exceeds the purchase price by an amount that reflects
an agreed-upon interest rate effective for the period
during which the repurchase agreement is in effect.
Approved vendors include U.S. commercial banks, U.S.
branches of foreign banks, or broker-dealers that have been
designated as primary dealers in government securities.
They must meet credit requirements set by the Manager from
time to time.
The majority of these transactions run from day to
day, and delivery pursuant to the resale typically occurs
within one to five days of the purchase. Repurchase
agreements having a maturity beyond seven days are subject
to the Fund's limits on holding illiquid investments. The
Fund will not enter into a repurchase agreement that causes
more than 10% of its net assets to be subject to repurchase
agreements having a maturity beyond seven days. There is no
limit on the amount of the Fund's net assets that may be
subject to repurchase agreements having maturities of seven
days or less.
Repurchase agreements, considered "loans" under the
Investment Company Act, are collateralized by the
underlying security. The Fund's repurchase agreements
require that at all times while the repurchase agreement is
in effect, the value of the collateral must equal or exceed
the repurchase price to fully collateralize the repayment
obligation. However, if the vendor fails to pay the resale
price on the delivery date, the Fund may incur costs in
disposing of the collateral and may experience losses if
there is any delay in its ability to do so. The Manager
will impose creditworthiness requirements to confirm that
the vendor is financially sound and will continuously
monitor the collateral's value.
Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission, the Fund, along with
other affiliated entities managed by the Manager, may
transfer uninvested cash balances into one or more joint
repurchase accounts. These balances are invested in one or
more repurchase agreements, secured by U.S. government
securities. Securities that are pledged as collateral for
repurchase agreements are held by a custodian bank until
the agreements mature. Each joint repurchase arrangement
requires that the market value of the collateral be
sufficient to cover payments of interest and principal;
however, in the event of default by the other party to the
agreement, retention or sale of the collateral may be
subject to legal proceedings.
|X| Illiquid and Restricted Securities. Under the
policies and procedures established by the Fund's Board of
Trustees, the Manager determines the liquidity of certain
of the Fund's investments. To enable the Fund to sell its
holdings of a restricted security not registered under the
Securities Act of 1933, the Fund may have to cause those
securities to be registered. The expenses of registering
restricted securities may be negotiated by the Fund with
the issuer at the time the Fund buys the securities. When
the Fund must arrange registration because the Fund
wishes to sell the security, a considerable period may
elapse between the time the decision is made to sell the
security and the time the security is registered so that
the Fund could sell it. The
Fund would bear the risks of any downward price fluctuation
during that period.
The Fund may also acquire restricted securities
through private placements. Those securities have
contractual restrictions on their public resale. Those
restrictions might limit the Fund's ability to dispose of
the securities and might lower the amount the Fund could
realize upon the sale.
The Fund has limitations that apply to purchases of
restricted securities, as stated in the Prospectus. Those
percentage restrictions do not limit purchases of
restricted securities that are eligible for sale to
qualified institutional purchasers under Rule 144A of the
Securities Act of 1933, if those securities have been
determined to be liquid by the Manager under Board-approved
guidelines. Those guidelines take into account the trading
activity for such securities and the availability of
reliable pricing information, among other factors. If there
is a lack of trading interest in a particular Rule 144A
security, the Fund's holdings of that security may be
considered to be illiquid.
Illiquid securities include repurchase agreements
maturing in more than seven days and participation
interests that do not have puts exercisable within seven
days.
|X| Loans of Portfolio Securities. To raise cash for
liquidity purposes, the Fund can lend its portfolio
securities to brokers, dealers and other types of financial
institutions approved by the Fund's Board of Trustees.
These loans are limited to not more than 25% of the value
of the Fund's total assets. The Fund currently does not
intend to engage in loans of securities in the coming year,
but if it does so, such loans will not likely exceed 5% of
the Fund's total assets.
There are some risks in connection with securities
lending. The Fund might experience a delay in receiving
additional collateral to secure a loan, or a delay in
recovery of the loaned securities if the borrower defaults.
The Fund must receive collateral for a loan. Under current
applicable regulatory requirements (which are subject to
change), on each business day the loan collateral must be
at least equal to the value of the loaned securities. It
must consist of cash, bank letters of credit, securities of
the U.S. government or its agencies or instrumentalities,
or other cash equivalents in which the Fund is permitted to
invest. To be acceptable as collateral, letters of credit
must obligate a bank to pay amounts demanded by the Fund if
the demand meets the terms of the letter. The terms of the
letter of credit and the issuing bank both must be
satisfactory to the Fund.
When it lends securities, the Fund receives amounts
equal to the dividends or interest on loaned securities. It
also receives one or more of (a) negotiated loan fees, (b)
interest on securities used as collateral, and (c) interest
on any short-term debt securities purchased with such loan
collateral. Either type of interest may be shared with the
borrower. The Fund may also pay reasonable finder's,
custodian and administrative fees in connection with these
loans. The terms of the Fund's loans must meet applicable
tests under the Internal Revenue Code and must permit the
Fund to reacquire loaned securities on five days' notice or
in time to vote on any important matter.
|X| Borrowing for Leverage. As a fundamental
investment policy, the Fund may not borrow money, except to
the extent permitted under the Investment Company Act of
1940, (the "Investment Company Act") the rules or
regulations thereunder or any exemption therefrom that is
applicable to the Fund, as such statute, rules or
regulations may be amended or interpreted
from time to time. Currently, under the Investment Company
Act, a mutual fund may borrow only from banks and the
maximum amount it may borrow is up to one-third of its
total assets (including the amount borrowed). The Fund may
borrow up to 5% of its total assets for temporary purposes
from any person. Under the Investment Company Act, there is
a rebuttable presumption that a loan is temporary if it is
repaid within 60 days and not extended or renewed. If the
value of the Fund's assets fails to meet this 300% asset
coverage requirement, the Fund will reduce its bank debt
within three days to meet the requirement. To do so the
Fund might have to sell a portion of its investments at a
disadvantageous time.
The Fund will pay interest on these loans, and that
interest expense will raise the overall expenses of the
Fund and reduce its returns. If it does borrow, its
expenses will be greater than comparable funds that do not
borrow for leverage. Additionally, the Fund's net asset
value per share might fluctuate more than that of funds
that do not borrow. Currently, the Fund does not
contemplate using this technique, but if it does so, it
will not likely do so to a substantial degree.
Interfund Borrowing and Lending Arrangements. Consistent
with its fundamental policies and pursuant to an exemptive
order issued by the Securities and Exchange Commission
("SEC"), the Fund may engage in borrowing and lending
activities with other funds in the OppenheimerFunds
complex. Borrowing money from affiliated funds may afford
the Fund the flexibility to use the most cost-effective
alternative to satisfy its borrowing requirements. Lending
money to an affiliated fund may allow the Fund to obtain a
higher rate of return than it could from interest rates on
alternative short-term investments. Implementation of
interfund lending will be accomplished consistent with
applicable regulatory requirements, including the
provisions of the SEC order.
o Interfund Borrowing. The Fund will not borrow from
affiliated funds unless the terms of the borrowing
arrangement are at least as favorable as the terms the Fund
could otherwise negotiate with a third party. To assure
that the Fund will not be disadvantaged by borrowing from
an affiliated fund, certain safeguards may be implemented.
Examples of these safeguards include the following:
o the Fund will not borrow money from affiliated funds
unless the interest rate is more favorable
than available bank loan rates;
o the Fund's borrowing from affiliated funds must be
consistent with its investment objective and
investment policies;
o the loan rates will be the average of the overnight
repurchase agreement rate available through
the OppenheimerFunds joint repurchase
agreement account and a pre-established
formula based on quotations from independent
banks to approximate the lowest interest
rate at which bank loans would be available
to the Fund;
o if the Fund has outstanding borrowings from all
sources greater than 10% of its total
assets, then the Fund must secure each
additional outstanding interfund loan by
segregating liquid assets of the Fund as
collateral;
o
the Fund cannot borrow from an affiliated fund
in excess of 125% of its total redemptions
for the preceding seven days;
o each interfund loan may be repaid on any day by the
Fund; and
o the Trustees will be provided with a report of all
interfund loans and the Trustees will
monitor all such borrowings to ensure that
the Fund's participation is appropriate.
There is a risk that a borrowing fund could have a
loan called on one day's notice. In that circumstance, the
Fund might have to borrow from a bank at a higher interest
cost if money to lend were not available from another
Oppenheimer fund.
o Interfund Lending. To assure that the Fund will not
be disadvantaged by making loans to affiliated funds,
certain safeguards will be implemented. Examples of these
safeguards include the following:
o the Fund will not lend money to affiliated funds
unless the interest rate on such loan is
determined to be reasonable under the
circumstances;
o the Fund may not make interfund loans in excess of
15% of its net assets;
o an interfund loan to any one affiliated fund shall
not exceed 5% of the Fund's net assets;
o an interfund loan may not be outstanding for more
than seven days;
o each interfund loan may be called on one business
day's notice; and
o the Manager will provide the Trustees reports on all
interfund loans demonstrating that the
Fund's participation is appropriate and that
the loan is consistent with its investment
objectives and policies.
When the Fund lends assets to another affiliated
fund, the Fund is subject to the credit that the borrowing
fund fails to repay the loan.
|X| Derivatives. The Fund can invest in a variety of
derivative investments to seek income for liquidity needs
or for hedging purposes. Some derivative investments the
Fund can use are the hedging instruments described below in
this Statement of Additional Information. However, the Fund
does not use, and does not currently contemplate using,
derivatives or hedging instruments to a significant degree.
Some of the derivative investments the Fund can use
include debt exchangeable for common stock of an issuer or
"equity-linked debt securities" of an issuer. At maturity,
the debt security is exchanged for common stock of the
issuer or it is payable in an amount based on the price of
the issuer's common stock at the time of maturity. Both
alternatives present a risk that the amount payable at
maturity will be less than the principal amount of the debt
because the price of the issuer's common stock may not be
as high as the Manager expected.
|X| Hedging. Although the Fund does not anticipate
the extensive use of hedging instruments, the Fund can use
hedging instruments. To attempt to protect against declines
in the market value of the Fund's portfolio, to permit the
Fund to retain unrealized gains in the value of portfolio
securities which have appreciated, or to facilitate selling
securities for investment reasons, the Fund could:
o sell futures contracts,
o buy puts on such futures or on securities, or
o write covered calls on securities or futures. Covered
calls may also be used to increase the Fund's
income, but the Manager does not expect to engage
extensively in that practice.
The Fund can use hedging to establish a position in
the securities market as a temporary substitute for
purchasing particular securities. In that case the Fund
would normally seek to purchase the securities and then
terminate that hedging position. The Fund might also use
this type of hedge to attempt to protect against the
possibility that its portfolio securities would not be
fully included in a rise in value of the market. To do so
the Fund could:
o buy futures, or
o buy calls on such futures or on securities.
The Fund's strategy of hedging with futures and
options on futures will be incidental to the Fund's
activities in the underlying cash market. The particular
hedging instruments the Fund can use are described below.
The Fund may employ new hedging instruments and strategies
when they are developed, if those investment methods are
consistent with the Fund's investment objective and are
permissible under applicable regulations governing the
Fund.
o Futures. The Fund may buy and sell futures contracts
that relate to (1) broadly-based stock indices (these are
referred to as "stock index futures"), (2) an individual
stock ("single stock futures"), (3) other broadly-based
securities indices (these are referred to as "financial
futures") and (4) foreign currencies (these are referred to
as "forward contracts").
A broadly-based stock index is used as the basis for
trading stock index futures. They may in some cases be
based on stocks of issuers in a particular industry or
group of industries. A stock index assigns relative values
to the common stocks included in the index and its value
fluctuates in response to the changes in value of the
underlying stocks. A stock index cannot be purchased or
sold directly. Financial futures are similar contracts
based on the future value of the basket of securities that
comprise the index. These contracts obligate the seller to
deliver, and the purchaser to take, cash to settle the
futures transaction. There is no delivery made of the
underlying securities to settle the futures obligation.
Either party may also settle the transaction by entering
into an offsetting contract.
A single stock future obligates the seller to deliver
(and the purchaser to take) cash or a specified equity
security to settle the futures transaction. Either party
could also enter into an offsetting contract to close out
the position. Single stock futures trade on a very limited
number of exchanges, with contracts typically not fungible
among the exchanges.
No payment is paid or received by the Fund on the
purchase or sale of a future. Upon entering into a futures
transaction, the Fund will be required to deposit an
initial margin payment with the futures commission merchant
(the "futures broker"). Initial margin payments will be
deposited with the Fund's custodian bank in an account
registered in the futures broker's name. However, the
futures broker can gain access to that account only under
specified conditions. As the future is marked to market
(that is, its value on the Fund's books is changed) to
reflect changes in its market value, subsequent margin
payments, called variation margin, will be paid to or by
the futures broker daily.
At any time prior to expiration of the future, the
Fund may elect to close out its position by taking an
opposite position, at which time a final determination of
variation margin is made and any additional cash must be
paid by or released to the Fund. Any loss or gain on the
future is then realized by the Fund for tax purposes. All
futures transactions (except forward contracts) are
effected through a clearinghouse associated with the
exchange on which the contracts are traded.
o Put and Call Options. The Fund can buy and sell
certain kinds of put options ("puts") and call options
("calls"). The Fund can buy and sell exchange-traded and
over-the-counter put and call options, including index
options, securities options, currency options, options on
commodity indices, and options on the other types of
futures described above.
o Writing Covered Call Options. The Fund can
write (that is, sell) covered calls. If the Fund sells a
call option, it must be covered. That means the Fund must
own the security subject to the call while the call is
outstanding, or, for certain types of calls, the call may
be
covered by segregating liquid assets to enable the Fund to
satisfy its obligations if the call is exercised. Up to 25%
of the Fund's total assets may be subject to calls the Fund
writes.
When the Fund writes a call on a security, it
receives cash (a premium). The Fund agrees to sell the
underlying security to a purchaser of a corresponding call
on the same security during the call period at a fixed
exercise price regardless of market price changes during
the call period. The call period is usually not more than
nine months. The exercise price may differ from the market
price of the underlying security. The Fund has the risk of
loss that the price of the underlying security may decline
during the call period. That risk may be offset to some
extent by the premium the Fund receives. If the value of
the investment does not rise above the call price, it is
likely that the call will lapse without being exercised. In
that case the Fund would keep the cash premium and the
investment.
When the Fund writes a call on an index, it receives
cash (a premium). If the buyer of the call exercises it,
the Fund will pay an amount of cash equal to the difference
between the closing price of the call and the exercise
price, multiplied by a specified multiple that determines
the total value of the call for each point of difference.
If the value of the underlying investment does not rise
above the call price, it is likely that the call will lapse
without being exercised. In that case, the Fund would keep
the cash premium.
The Fund's custodian, or a securities depository
acting for the custodian, will act as the Fund's escrow
agent, through the facilities of the Options Clearing
Corporation ("OCC"), as to
the investments on which the Fund has written calls traded
on exchanges or as to other acceptable escrow securities.
In that way, no margin will be required for such
transactions. OCC will release the securities on the
expiration of the option or when the Fund enters into a
closing transaction.
When the Fund writes an over-the-counter ("OTC")
option, it will enter into an arrangement with a primary
U.S. government securities dealer which will establish a
formula price at which the Fund will have the absolute
right to repurchase that OTC option. The formula price will
generally be based on a multiple of the premium received
for the option, plus the amount by which the option is
exercisable below the market price of the underlying
security (that is, the option is "in the money"). When the
Fund writes an OTC option, it will treat as illiquid (for
purposes of its restriction on holding illiquid securities)
the mark-to-market value of any OTC option it holds, unless
the option is subject to a buy-back agreement by the
executing broker.
To terminate its obligation on a call it has written,
the Fund may purchase a corresponding call in a "closing
purchase transaction." The Fund will then realize a profit
or loss, depending upon whether the net of the amount of
the option transaction costs and the premium received on
the call the Fund wrote is more or less than the price of
the call the Fund purchases to close out the transaction.
The Fund may realize a profit if the call expires
unexercised, because the Fund will retain the underlying
security and the premium it received when it wrote the
call. Any such profits are considered short-term capital
gains for federal income tax purposes, as are the premiums
on lapsed calls. When distributed by the Fund they are
taxable as ordinary income. If the Fund cannot effect a
closing purchase transaction due to the lack of a market,
it will have to hold the callable securities until the call
expires or is exercised.
The Fund may also write calls on a futures contract
without owning the futures contract or securities
deliverable under the contract. To do so, at the time the
call is written, the Fund must cover the call by
identifying on its books an equivalent dollar amount of
liquid assets. The Fund will identify additional liquid
assets if the value of the identified assets drops below
100%
of the current value of the future. Because of this
segregation requirement, in no circumstances would the
Fund's receipt of an exercise notice as to that future
require the Fund to deliver a futures contract. It would
simply put the Fund in a short futures position, which is
permitted by the Fund's hedging policies.
o Writing Put Options. The Fund can sell put
options. A put option on securities gives the purchaser the
right to sell, and the writer the obligation to buy, the
underlying investment at the exercise price during the
option period. The Fund will not write puts if, as a
result, more than 25% of the Fund's net assets would be
required to be identified to cover such put options.
If the Fund writes a put, the put must be covered by
identified liquid assets. The premium the Fund receives
from writing a put represents a profit, as long as the
price of the underlying investment remains equal to or
above the exercise price of the put. However, the Fund also
assumes the obligation during the option period to buy the
underlying investment from the buyer of the put at the
exercise price, even if the value of the investment falls
below the exercise price. If a put the Fund has written
expires unexercised, the Fund realizes a gain in the amount
of the premium less the transaction costs incurred. If the
put is exercised, the Fund must fulfill its
obligation to purchase the underlying investment at the
exercise price. That price will usually exceed the market
value of the investment at that time. In that case, the
Fund may incur a loss if it sells the underlying
investment. That loss will be equal to the sum of the sale
price of the underlying investment and the premium received
minus the sum of the exercise price and any transaction
costs the Fund incurred.
When writing a put option on a security, to secure
its obligation to pay for the underlying security the Fund
will identify liquid assets with a value equal to or
greater than the exercise price of the underlying
securities. The Fund therefore forgoes the opportunity of
investing the identified assets or writing calls against
those assets.
As long as the Fund's obligation as the put writer
continues, it may be assigned an exercise notice by the
broker-dealer through which the put was sold. That notice
will require the Fund to take delivery of the underlying
security and pay the exercise price. The Fund has no
control over when it may be required to purchase the
underlying security, since it may be assigned an exercise
notice at any time prior to the termination of its
obligation as the writer of the put. That obligation
terminates upon expiration of the put. It may also
terminate if, before it receives an exercise notice, the
Fund effects a closing purchase transaction by purchasing a
put of the same series as it sold. Once the Fund has been
assigned an exercise notice, it cannot effect a closing
purchase transaction.
The Fund may decide to effect a closing purchase
transaction to realize a profit on an outstanding put
option it has written or to prevent the underlying security
from being put. Effecting a closing purchase transaction
will also permit the Fund to write another put option on
the security, or to sell the security and use the proceeds
from the sale for other investments. The Fund will realize
a profit or loss from a closing purchase transaction
depending on whether the cost of the transaction is less or
more than the premium received from writing the put option.
Any profits from writing puts are considered short-term
capital gains for federal tax purposes, and when
distributed by the Fund, are taxable as ordinary income.
o Purchasing Calls and Puts. The Fund can
purchase calls to protect against the possibility that the
Fund's portfolio will not participate in an anticipated
rise in the securities market. When the Fund buys a call
(other than in a closing purchase transaction), it pays a
premium. The Fund then has the right to buy the underlying
investment from a seller of a corresponding call on the
same investment during the call period at a fixed exercise
price. The Fund benefits only if it sells the call at a
profit or if, during the call period, the market price of
the underlying investment is above the sum of the call
price plus the transaction costs and the premium paid for
the call and the Fund exercises the call. If the Fund does
not exercise the call or sell it (whether or not at a
profit), the call will become worthless at its expiration
date. In that case the Fund will have paid the premium but
lost the right to purchase the underlying investment.
The Fund can buy puts whether or not it holds the
underlying investment in its portfolio. When the Fund
purchases a put, it pays a premium and, except as to puts
on indices, has the right to sell the underlying investment
to a seller of a put on a corresponding investment during
the put period at a fixed exercise price. Buying a put on
securities or futures the Fund owns enables the Fund to
attempt to protect itself during the put period against a
decline in the value of the underlying investment below the
exercise price by selling the underlying investment at the
exercise price to a seller of a corresponding put. If the
market price of the underlying investment is equal to or
above the exercise price and, as a result, the put is not
exercised or resold, the put will become worthless at its
expiration date. In that case the Fund will have paid the
premium but lost the right to sell the underlying
investment. However, the Fund may sell the put prior to its
expiration. That sale may or may not be at a profit.
Buying a put on an investment the Fund does not own
(such as an index or future) permits the Fund to resell the
put or to buy the underlying investment and sell it at the
exercise price. The resale price will vary inversely to the
price of the underlying investment. If the market price of
the underlying investment is above the exercise price and,
as a result, the put is not exercised, the put will become
worthless on its expiration date.
When the Fund purchases a call or put on an index or
future, it pays a premium, but settlement is in cash rather
than by delivery of the underlying investment to the Fund.
Gain or loss depends on changes in the index in question
(and thus on price movements in the securities market
generally) rather than on price movements in individual
securities or futures contracts.
The Fund may buy a call or put only if, after the
purchase, the value of all call and put options held by the
Fund will not exceed 5% of the Fund's total assets.
o Buying and Selling Options on Foreign
Currencies. The Fund can buy and sell calls and puts on
foreign currencies. They include puts and calls that trade
on a securities or commodities exchange or in the
over-the-counter markets or are quoted by major recognized
dealers in such options. The Fund could use these calls and
puts to try to protect against declines in the dollar value
of foreign securities and increases in the dollar cost of
foreign securities the Fund wants to acquire.
If the Manager anticipates a rise in the dollar value
of a foreign currency in which securities to be acquired
are denominated, the increased cost of those securities may
be partially offset by purchasing calls or writing puts on
that foreign currency. If the Manager anticipates a
decline in the dollar value of a foreign currency, the
decline in the dollar value of portfolio securities
denominated in that currency might be partially offset by
writing calls or purchasing puts on that foreign currency.
However, the currency rates could fluctuate in a direction
adverse to the Fund's position. The Fund will then have
incurred option premium payments and transaction costs
without a corresponding benefit.
A call the Fund writes on a foreign currency is
"covered" if the Fund owns the underlying foreign currency
covered by the call or has an absolute and immediate right
to acquire that foreign currency without additional cash
consideration (or it can do so for additional cash
consideration identified on its books with the custodian
bank) upon conversion or exchange of other foreign currency
held in its portfolio.
The Fund could write a call on a foreign currency to
provide a hedge against a decline in the U.S. dollar value
of a security which the Fund owns or has the right to
acquire and which is denominated in the currency underlying
the option. That decline might be one that occurs due to
an expected adverse change in the exchange rate. This is
known as a "cross-hedging" strategy. In those
circumstances, the Fund covers the option by maintaining
and identifying cash, U.S. government securities or other
liquid, high grade debt securities in an amount equal to
the exercise price of the option, with the Fund's custodian
bank.
o Risks of Hedging with Options and Futures. The use of
hedging instruments requires special skills and knowledge
of investment techniques that are different than what is
required for normal portfolio management. If the Manager
uses a hedging instrument at the wrong time or judges
market conditions incorrectly, hedging strategies may
reduce the Fund's return. The Fund could also experience
losses if the prices of its futures and options positions
were not correlated with its other investments.
The Fund's option activities might affect its
portfolio turnover rate and brokerage commissions. The
exercise of calls written by the Fund might cause the Fund
to sell related portfolio securities, thus increasing its
turnover rate. The exercise by the Fund of puts on
securities will cause the sale of underlying investments,
increasing portfolio turnover. Although the decision
whether to exercise a put it holds is within the Fund's
control, holding a put might cause the Fund to sell the
related investments for reasons that would not exist in the
absence of the put.
The Fund could pay a brokerage commission each time
it buys a call or put, sells a call or put, or buys or
sells an underlying investment in connection with the
exercise of a call or put. Those commissions could be
higher on a relative basis than the commissions for direct
purchases or sales of the underlying investments. Premiums
paid for options are small in relation to the market value
of the underlying investments. Consequently, put and call
options offer large amounts of leverage. The leverage
offered by trading in options could result in the Fund's
net asset value being more sensitive to changes in the
value of the underlying investment.
If a covered call written by the Fund is exercised on
an investment that has increased in value, the Fund will be
required to sell the investment at the call price. It will
not be able to realize any profit if the investment has
increased in value above the call price.
An option position may be closed out only on a market
that provides secondary trading for options of the same
series, and there is no assurance that a liquid secondary
market will exist for any particular option. The Fund might
experience losses if it could not close out a position
because of an illiquid market for the future or option.
There is a risk in using short hedging by selling
futures or purchasing puts on broadly-based indices or
futures to attempt to protect against declines in the value
of the Fund's portfolio securities. The risk is that the
prices of the futures or the applicable index will
correlate imperfectly with the behavior of the cash prices
of the Fund's securities. For example, it is possible that
while the Fund has used hedging instruments in a short
hedge, the market may advance and the value of the
securities held in the Fund's portfolio might decline. If
that occurred, the Fund would lose money on the hedging
instruments and also experience a decline in the value of
its portfolio securities. However, while this could occur
for a very brief period or to a very small degree, over
time the value of a diversified portfolio of securities
will tend to move in the same direction as the indices upon
which the hedging instruments are based.
The risk of imperfect correlation increases as the
composition of the Fund's portfolio diverges from the
securities included in the applicable index. To compensate
for the imperfect correlation of movements in the price of
the portfolio securities being hedged and movements in the
price of the hedging instruments, the Fund might use
hedging instruments in a greater dollar amount than the
dollar amount of portfolio securities being hedged. It
might do so if the historical volatility of the prices of
the portfolio securities being hedged is more than the
historical volatility of the applicable index.
The ordinary spreads between prices in the cash and
futures markets are subject to distortions, due to
differences in the nature of those markets. First, all
participants in the futures market are subject to margin
deposit and maintenance requirements. Rather than meeting
additional margin deposit requirements, investors may close
futures contracts through offsetting transactions which
could distort the normal relationship between the cash and
futures markets. Second, the liquidity of the futures
market depends on participants entering into offsetting
transactions rather than making or taking delivery. To the
extent participants decide to make or take delivery,
liquidity in the futures market could be reduced, thus
producing distortion. Third, from the point of view of
speculators, the deposit requirements in the futures market
are less onerous than margin requirements in the securities
markets. Therefore, increased participation by speculators
in the futures market may cause temporary price
distortions.
The Fund can use hedging instruments to establish a
position in the securities markets as a temporary
substitute for the purchase of individual securities (long
hedging) by buying futures and/or calls on such futures,
broadly-based indices or on securities. It is possible that
when the Fund does so the market might decline. If the Fund
then concludes not to invest in securities because of
concerns that the market might decline further or for other
reasons, the Fund will realize a loss on the hedging
instruments that is not offset by a reduction in the price
of the securities purchased.
o Forward Contracts. Forward contracts are foreign
currency exchange contracts. They are used to buy or sell
foreign currency for future delivery at a fixed price. The
Fund uses them to "lock in" the U.S. dollar price of a
security denominated in a foreign currency that the
Fund has bought or sold, or to protect against possible
losses from changes in the relative values of the U.S.
dollar and a foreign currency. The Fund limits its exposure
in foreign currency exchange contracts in a particular
foreign currency to the amount of its assets denominated in
that currency or a closely-correlated currency. The Fund
may also use "cross-hedging" where the Fund hedges against
changes in currencies other than the currency in which a
security it holds is denominated.
Under a forward contract, one party agrees to
purchase, and another party agrees to sell, a specific
currency at a future date. That date may be any fixed
number of days from the date of the contract agreed upon by
the parties. The transaction price is set at the time the
contract is entered into. These contracts are traded in the
inter-bank market conducted directly among currency traders
(usually large commercial banks) and their customers.
The Fund may use forward contracts to protect against
uncertainty in the level of future exchange rates. The use
of forward contracts does not eliminate the risk of
fluctuations in the prices of the underlying securities the
Fund owns or intends to acquire, but it does fix a rate of
exchange in advance. Although forward contracts may reduce
the risk of loss from a decline in
the value of the hedged currency, at the same time they
limit any potential gain if the value of the hedged
currency increases.
When the Fund enters into a contract for the purchase
or sale of a security denominated in a foreign currency, or
when it anticipates receiving dividend payments in a
foreign currency, the Fund might desire to "lock-in" the
U.S. dollar price of the security or the U.S. dollar
equivalent of the dividend payments. To do so, the Fund
could enter into a forward contract for the purchase or
sale of the amount of foreign currency involved in the
underlying transaction, in a fixed amount of U.S. dollars
per unit of the foreign currency. This is called a
"transaction hedge." The transaction hedge will protect the
Fund against a loss from an adverse change in the currency
exchange rates during the period between the date on which
the security is purchased or sold or on which the payment
is declared, and the date on which the payments are made or
received.
The Fund could also use forward contracts to lock in
the U.S. dollar value of portfolio positions. This is
called a "position hedge." When the Fund believes that
foreign currency might suffer a substantial decline against
the U.S. dollar, it could enter into a forward contract to
sell an amount of that foreign currency approximating the
value of some or all of the Fund's portfolio securities
denominated in that foreign currency. When the Fund
believes that the U.S. dollar might suffer a substantial
decline against a foreign currency, it could enter into a
forward contract to buy that foreign currency for a fixed
dollar amount. Alternatively, the Fund could enter into a
forward contract to sell a different foreign currency for a
fixed U.S. dollar amount if the Fund believes that the U.S.
dollar value of the foreign currency to be sold pursuant to
its forward contract will fall whenever there is a decline
in the U.S. dollar value of the currency in which portfolio
securities of the Fund are denominated. That is referred to
as a "cross hedge."
The Fund will cover its short positions in these
cases by identifying to its custodian bank assets having a
value equal to the aggregate amount of the Fund's
commitment under forward contracts. The Fund will not enter
into forward contracts or maintain a net exposure to such
contracts if the consummation of the contracts would
obligate the Fund to deliver an amount of foreign currency
in excess of the value of the Fund's portfolio securities
or other assets denominated in that currency or another
currency that is the subject of the hedge.
However, to avoid excess transactions and transaction
costs, the Fund may maintain a net exposure to forward
contracts in excess of the value of the Fund's portfolio
securities or other assets denominated in foreign
currencies if the excess amount is "covered" by liquid
securities denominated in any currency. The cover must be
at least equal at all times to the amount of that excess.
As one alternative, the Fund may purchase a call option
permitting the Fund to purchase the amount of foreign
currency being hedged by a forward sale contract at a price
no higher than the forward contract price. As another
alternative, the Fund may purchase a put option permitting
the Fund to sell the amount of foreign currency subject to
a forward purchase contract at a price as high or higher
than the forward contact price.
The precise matching of the amounts under forward
contracts and the value of the securities involved
generally will not be possible because the future value of
securities denominated in foreign currencies will change as
a consequence of market movements between the date the
forward contract is entered into and the date it is sold.
In some cases the Manager might decide to sell the security
and deliver foreign currency to settle the original
purchase obligation. If the market value of the security is
less than the amount of foreign currency the Fund is
obligated to deliver, the Fund might have to purchase
additional foreign currency on the "spot" (that is, cash)
market to settle the security trade. If the market value of
the security instead
exceeds the amount of foreign currency the Fund is
obligated to deliver to settle the trade, the Fund might
have to sell on the spot market some of the foreign
currency received upon the sale of the security. There will
be additional transaction costs on the spot market in those
cases.
The projection of short-term currency market
movements is extremely difficult, and the successful
execution of a short-term hedging strategy is highly
uncertain. Forward contracts involve the risk that
anticipated currency movements will not be accurately
predicted, causing the Fund to sustain losses on these
contracts and to pay additional transactions costs. The use
of forward contracts in this manner might reduce the Fund's
performance if there are unanticipated changes in currency
prices to a greater degree than if the Fund had not entered
into such contracts.
At or before the maturity of a forward contract
requiring the Fund to sell a currency, the Fund might sell
a portfolio security and use the sale proceeds to make
delivery of the currency. In the alternative the Fund might
retain the security and offset its contractual obligation
to deliver the currency by purchasing a second contract.
Under that contract the Fund will obtain, on the same
maturity date, the same amount of the currency that it is
obligated to deliver. Similarly, the Fund might close out a
forward contract requiring it to purchase a specified
currency by entering into a second contract entitling it to
sell the same amount of the same currency on the maturity
date of the first contract. The Fund would realize a gain
or loss as a result of entering into such an offsetting
forward contract under either circumstance. The gain or
loss will depend on the extent to which the exchange rate
or rates between the currencies involved moved between the
execution dates of the first contract and offsetting
contract.
The costs to the Fund of engaging in forward
contracts varies with factors such as the currencies
involved, the length of the contract period and the market
conditions then prevailing. Because forward contracts are
usually entered into on a principal basis, no brokerage
fees or commissions are involved. Because these contracts
are not traded on an exchange, the Fund must evaluate the
credit and performance risk of the counterparty under each
forward contract.
Although the Fund values its assets daily in terms of
U.S. dollars, it does not intend to convert its holdings of
foreign currencies into U.S. dollars on a daily basis. The
Fund may convert foreign currency from time to time, and
will incur costs in doing so. Foreign exchange dealers do
not charge a fee for conversion, but they do seek to
realize a profit based on the difference between the prices
at which they buy and sell various currencies. Thus, a
dealer might offer to sell a foreign currency to the Fund
at one rate, while offering a lesser rate of exchange if
the Fund desires to resell that currency to the dealer.
o Regulatory Aspects of Hedging Instruments. When using
futures and options on futures, the Fund is required to
operate within certain guidelines and restrictions with
respect to the use of futures as established by the
Commodities Futures Trading Commission (the "CFTC"). In
particular, the Fund is exempted from registration with the
CFTC as a "commodity pool operator" if the Fund complies
with the requirements of Rule 4.5 adopted by the CFTC. The
Rule does not limit the percentage of the Fund's assets
that may be used for futures margin and related options
premiums for a bona fide hedging position. However, under
the Rule, the Fund must limit its aggregate initial futures
margin and related options premiums to not more than 5% of
the Fund's net assets for hedging strategies that are not
considered bona fide hedging strategies under
the Rule. Under the Rule, the Fund must also use short
futures and options on futures solely for bona fide hedging
purposes within the meaning and intent of the applicable
provisions of the Commodity Exchange Act.
Transactions in options by the Fund are subject to
limitations established by the option exchanges. The
exchanges limit the maximum number of options that may be
written or held by a single investor or group of investors
acting in concert. Those limits apply regardless of whether
the options were written or purchased on the same or
different exchanges or are held in one or more accounts or
through one or more different exchanges or through one or
more brokers. Thus, the number of options that the Fund may
write or hold may be affected by options written or held by
other entities, including other investment companies having
the same advisor as the Fund (or an advisor that is an
affiliate of the Fund's advisor). The exchanges also impose
position limits on Futures transactions. An exchange may
order the liquidation of positions found to be in violation
of those limits and may impose certain other sanctions.
Under the Investment Company Act, when the Fund
purchases a future, it must maintain cash or readily
marketable short-term debt instruments in an amount equal
to the market value of the securities underlying the
future, less the margin deposit applicable to it.
o Tax Aspects of Certain Hedging Instruments. Certain
foreign currency exchange contracts in which the Fund may
invest are treated as "Section 1256 contracts" under the
Internal Revenue Code. In general, gains or losses relating
to Section 1256 contracts are characterized as 60%
long-term and 40% short-term capital gains or losses under
the Code. However, foreign currency gains or losses arising
from Section 1256 contracts that are forward contracts
generally are treated as ordinary income or loss. In
addition, Section 1256 contracts held by the Fund at the
end of each taxable year are "marked-to-market," and
unrealized gains or losses are treated as though they were
realized. These contracts also may be marked-to-market for
purposes of determining the excise tax applicable to
investment company distributions and for other purposes
under rules prescribed pursuant to the Internal Revenue
Code. An election can be made by the Fund to exempt those
transactions from this marked-to-market treatment.
Certain forward contracts the Fund enters into may
result in "straddles" for federal income tax purposes. The
straddle rules may affect the character and timing of gains
(or losses) recognized by the Fund on straddle positions.
Generally, a loss sustained on the disposition of a
position making up a straddle is allowed only to the extent
that the loss exceeds any unrecognized gain in the
offsetting positions making up the straddle. Disallowed
loss is generally allowed at the point where there is no
unrecognized gain in the offsetting positions making up the
straddle, or the offsetting position is disposed of.
Under the Internal Revenue Code, the following gains
or losses are treated as ordinary income or loss:
(1) gains or losses attributable to fluctuations in
exchange rates that occur between the time the
Fund accrues interest or other receivables or
accrues expenses or other liabilities denominated
in a foreign currency and the time the Fund
actually collects such receivables or pays such
liabilities, and
(2) gains or losses attributable to fluctuations in
the value of a foreign currency between the date
of acquisition of a debt security denominated in
a foreign currency or foreign currency forward
contracts and the date of disposition.
Currency gains and losses are offset against market
gains and losses on each trade before determining a net
"Section 988" gain or loss under the Internal Revenue Code
for that trade, which may increase or decrease the amount
of the Fund's investment company income available for
distribution to its shareholders.
|X| Investment in Other Investment Companies. As a
non-fundamental policy, the Fund generally cannot invest in
securities of other investment companies, except to the
extent permitted under the Investment Company Act, the
rules or regulations thereunder or any exemption therefrom,
as such statute, rules or regulations may be amended or
interpreted from time to time. To the extent that the Fund
can invest in shares of other investment companies, those
investments can include open-end funds, closed-end funds
and unit investment trusts, subject to the limits set forth
in the Investment Company Act that apply to those types of
investments. For example, the Fund can invest in
exchange-traded funds, which are typically open-end funds
or unit investment trusts, listed on a stock exchange. The
Fund might do so as a way of gaining exposure to the
segments of the equity or fixed-income markets represented
by the exchange-traded fund's portfolio at times when the
Fund may not be able to buy those portfolio securities
directly. An investment in another investment company may
involve the payment of substantial premiums above the value
of such investment company's portfolio securities and is
subject to limitations under the Investment Company Act.
The Fund does not intend to invest in other investment
companies unless the Manager believes that the potential
benefits of the investment justify the payment of any
premiums or sales charges. As a shareholder is an
investment company, the Fund would be subject to its
ratable share of that investment company's expenses,
including its advisory and administration fees. At the
same time, the Fund would bear its own management fees and
other expenses. The Fund does not anticipate investing a
substantial amount of its net assets in shares of other
investment companies.
|X| Temporary Defensive Investments. When market,
economic or political conditions are unstable, or the
Manager believes it is otherwise appropriate to reduce
holdings in stocks, the Fund can invest in a variety of
debt securities for defensive purposes. The Fund can also
purchase these securities for liquidity purposes to meet
cash needs due to the redemption of Fund shares, or to hold
while waiting to reinvest cash received from the sale of
other portfolio securities. The Fund can buy:
o high-quality (rated in the top two rating categories
of nationally-recognized rating organizations or
deemed by the Manager to be of comparable
quality), short-term money market instruments,
including those issued by the U. S. Treasury or
other government agencies,
o commercial paper (short-term, unsecured, promissory
notes of domestic or foreign companies),
o short-term debt obligations of corporate issuers,
o certificates of deposit and bankers' acceptances of
domestic and foreign banks and savings and loan
associations, and
o repurchase agreements.
These short-term debt securities would be selected
for defensive or cash management purposes because they can
normally be disposed of quickly, are not generally subject
to significant fluctuations in principal value and their
value will be less subject to interest rate risk than
longer-term debt securities. If securities of foreign
companies are selected, the issuer must have assets of at
least (U.S.) $1 billion.
Investment Restrictions
|X| What Are "Fundamental Policies?" Fundamental
policies are those policies that the Fund has adopted to
govern its investments that can be changed only by the vote
of a "majority" of the Fund's outstanding voting
securities. Under the Investment Company Act, a "majority"
vote is defined as the vote of the holders of the lesser of:
o 67% or more of the shares present or represented by
proxy at a shareholder meeting, if the holders of
more than 50% of the outstanding shares are
present or represented by proxy, or
o more than 50% of the outstanding shares.
The Fund's investment objective is a fundamental
policy. Other policies described in the Prospectus or this
Statement of Additional Information are "fundamental" only
if they are identified as such. The Fund's Board of
Trustees can change non-fundamental policies without
shareholder approval. However, significant changes to
investment policies will be described in supplements or
updates to the Prospectus or this Statement of Additional
Information, as appropriate. The Fund's most significant
investment policies are described in the Prospectus.
|X| Does the Fund Have Additional Fundamental
Policies? The following investment restrictions are
fundamental policies of the Fund.
o The Fund cannot buy securities issued or guaranteed
by any one issuer if more than 5% of its total
assets would be invested in securities of that
issuer or if it would then
own more than 10% of that issuer's voting
securities. That restriction applies to 75% of the
Fund's total assets. The limit does not apply to
securities issued by the U.S. government or any of
its agencies or instrumentalities.
o The Fund cannot deviate from the percentage
restrictions that apply to its investments in
small, unseasoned companies, borrowing for
leverage and loans of portfolio securities.
o The Fund cannot make loans, except to the extent
permitted under the Investment Company Act, the
rules or regulations thereunder or any exemption
therefrom that is applicable to the Fund, as such
statute, rules or regulations may be amended or
interpreted from time to time.
o The Fund may not borrow money, except as permitted by
the Investment Company Act, the rules or
regulations thereunder or any exemption therefrom
that is applicable to the Fund, as such statute,
rules or regulations may be amended or interpreted
from time to time.
o The Fund cannot invest 25% or more of its total
assets in any one industry. That limit does not
apply to securities issued or guaranteed by the
U.S. government or its agencies and
instrumentalities or securities issued by
investment companies.
o The Fund cannot invest in real estate. However, the
Fund can purchase readily-marketable securities of
companies holding real estate or interests in real
estate.
o The Fund cannot invest in commodities or commodity
contracts other than the hedging instruments
permitted by any of its other fundamental
policies, whether or not such hedging instrument
is considered to be a commodity or commodity
contract.
o The Fund cannot underwrite securities of other
companies. A permitted exception is in case it is
deemed to be an underwriter under the Securities
Act of 1933 when reselling any securities held in
its own portfolio.
The Fund currently has an operating policy (which is
not a fundamental policy but will not be changed without
the approval of a shareholder vote) that prohibits the Fund
from issuing senior securities. However, that policy does
not prohibit certain investment activities that are
permitted by the Fund's other policies, including, for
example, borrowing money, and entering into contracts to
buy or sell derivatives, hedging instruments, options,
futures and the related margin, collateral or escrow
arrangements.
Unless the Prospectus or this Statement of Additional
Information states that a percentage restriction applies on
an ongoing basis, it applies only at the time the Fund
makes an investment. The Fund need not sell securities to
meet the percentage limits if the value of the investment
increases in proportion to the size of the Fund.
For purposes of the Fund's policy not to concentrate
its investments as described above, the Fund has adopted
the industry classifications set forth in Appendix A to
this Statement of Additional Information. This is not a
fundamental policy.
How the Fund is Managed
Organization and History. The Fund is an open-end,
diversified management investment company with an unlimited
number of authorized shares of beneficial interest. The
Fund was organized as a Maryland corporation in 1972 and
reorganized as a Massachusetts business trust in July 1988.
The Fund is governed by a Board of Trustees, which is
responsible for protecting the interests of shareholders
under Massachusetts law. The Trustees meet periodically
throughout the year to oversee the Fund's activities,
review its performance, and review the actions of the
Manager. 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 action described in the Fund's
Declaration of Trust.
|X| Classes of Shares. The Trustees are authorized,
without shareholder approval, to create new series and
classes of shares. The Trustees may reclassify unissued
shares of the Fund into additional series or classes of
shares. The Trustees also may divide or combine the shares
of a class into a greater or lesser number of shares
without changing the proportionate beneficial interest of a
shareholder in the Fund. Shares do not have cumulative
voting rights or preemptive or subscription rights. Shares
may be voted in person or by proxy at shareholder meetings.
The Fund currently has five classes of shares: Class
A, Class B, Class C, Class N and Class Y. All classes
invest in the same investment portfolio. Only retirement
plans may purchase Class N shares. Only certain
institutional investors may elect to purchase Class Y
shares. Each class of shares:
o has its own dividends and distributions,
o pays certain expenses which may be different for the
different classes,
o may have a different net asset value,
o may have separate voting rights on matters in which
interests of one class are different from interests
of another class, and
o votes as a class on matters that affect that class
alone.
Shares are freely transferable, and each share of
each class has one vote at shareholder meetings, with
fractional shares voting proportionally on matters
submitted to the vote of shareholders. Each share of the
Fund represents an interest in the Fund proportionately
equal to the interest of each other share of the same
class.
|X| Meetings of Shareholders. As a Massachusetts
business trust, the Fund is not required to hold, and does
not plan to hold, regular annual meetings of shareholders.
The Fund will hold meetings when required to do so by the
Investment Company Act or other applicable law. It will
also do so when a shareholder meeting is called by the
Trustees or upon proper request of the shareholders.
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 shareholders to vote on the removal of a Trustee
upon the written request of the record holders of 10% of
its outstanding shares. If the Trustees receive a request
from at least 10 shareholders stating that they wish to
communicate with other shareholders to request a meeting to
remove a Trustee, the Trustees will then either make the
Fund's shareholder list available to the applicants or mail
their communication to all other shareholders at the
applicants' expense. The shareholders making the request
must have been shareholders for at least six months and
must hold shares of the Fund valued at $25,000 or more or
constituting at least 1% of the Fund's outstanding shares,
whichever is less. The Trustees may also take other action
as permitted by the Investment Company Act.
|X| Shareholder and Trustee Liability. The Fund's
Declaration of Trust contains an express disclaimer of
shareholder or Trustee liability for the Fund's
obligations. It also provides for indemnification and
reimbursement of expenses out of the Fund's property for
any shareholder held personally liable for its
obligations. The Declaration of Trust also states that
upon request, the Fund shall assume the defense of any
claim made against a shareholder for any act or obligation
of the Fund and shall satisfy any judgment on that claim.
Massachusetts law
permits a shareholder of a business trust (such as the
Fund) to be held personally liable as a "partner" under
certain circumstances. However, the risk that a Fund
shareholder will incur financial loss from being held
liable as a "partner" of the Fund is limited to the
relatively remote circumstances in which the Fund would be
unable to meet its obligations.
The Fund's contractual arrangements state that any
person doing business with the Fund (and each shareholder
of the Fund) agrees under its Declaration of Trust to look
solely to the assets of the Fund for satisfaction of any
claim or demand that may arise out of any dealings with the
Fund. Additionally, the Trustees shall have no personal
liability to any such person, to the extent permitted by
law.
Board of Trustees and Oversight Committees. The Fund is
governed by a Board of Trustees, which is responsible for
protecting the interests of shareholders under
Massachusetts law. The Trustees meet periodically
throughout the year to oversee the Fund's activities,
review its performance, and review the actions of the
Manager. 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 action described in the Fund's
Declaration of Trust.
The Board of Trustees has an Audit Committee, a Study
Committee and a Proxy Committee. The members of the Audit
Committee are Kenneth Randall (Chairman), Benjamin Lipstein
and Edward Regan. The Audit Committee held five meetings
during the Fund's fiscal year ended August 31, 2002. The
Audit Committee provides the Board with recommendations
regarding the selection of the Fund's independent auditor.
The Audit Committee also reviews the scope and results of
audits and the audit fees charged, reviews reports from the
Fund's independent auditor concerning the Fund's internal
accounting procedures, and controls and reviews reports of
the Manager's internal auditor, among other duties as set
forth in the Committee's charter.
The members of the Study Committee are Benjamin
Lipstein (Chairman), Robert Galli and Elizabeth Moynihan.
The Study Committee held eight meetings during the Fund's
fiscal year ended August 31, 2002. The Study Committee
evaluates and reports to the Board on the Fund's
contractual arrangements, including the Investment Advisory
and Distribution Agreements, transfer and shareholder
service agreements and custodian agreements as well as the
policies and procedures adopted by the Fund to comply with
the Investment Company Act and other applicable law, among
other duties as set forth in the Committee's charter.
The members of the Proxy Committee are Edward Regan
(Chairman), Russell Reynolds and Clayton Yeutter. The
Proxy Committee held one meeting during the Fund's fiscal
year ended August 31, 2002. The Proxy Committee provides
the Board with recommendations for proxy voting and
monitors proxy voting by the Fund.
Trustees and Officers of the Fund. Except for Mr. Murphy,
each of the Trustees is an independent trustee of the Fund
("Independent Trustee"). Mr. Murphy is an "Interested
Trustee," because he is affiliated with the Manager by
virtue of his positions as an officer and director of the
Manager, and as a shareholder of its parent company.
The Fund's Trustees and officers and their positions
held with the Fund and length of service in such
position(s) and their principal occupations and business
affiliations during the past five years are listed in the
chart below. The information for the Trustees also includes
the dollar range of shares of the Fund as well as the
aggregate dollar range of shares beneficially owned in any
of the Oppenheimer funds overseen by the Trustees. All of
the Trustees are also trustees or directors of the
following publicly-offered Oppenheimer funds (referred to
as "Board I Funds"):
Oppenheimer California Municipal Fund Oppenheimer International Growth Fund
Oppenheimer International Small Company
Oppenheimer Capital Appreciation Fund Fund
Oppenheimer Capital Preservation Fund Oppenheimer Money Market Fund, Inc.
Oppenheimer Developing Markets Fund Oppenheimer Multiple Strategies Fund
Oppenheimer Discovery Fund Oppenheimer Multi-Sector Income Trust
Oppenheimer Emerging Growth Fund Oppenheimer Multi-State Municipal Trust
Oppenheimer Emerging Technologies Fund Oppenheimer Municipal Bond Fund
Oppenheimer Enterprise Fund Oppenheimer New York Municipal Fund
Oppenheimer Europe Fund Oppenheimer Series Fund, Inc.
Oppenheimer Global Fund Oppenheimer Trinity Core Fund
Oppenheimer Global Growth & Income Fund Oppenheimer Trinity Large Cap Growth Fund
Oppenheimer Gold & Special Minerals
Fund Oppenheimer Trinity Value Fund
Oppenheimer Growth Fund Oppenheimer U.S. Government Trust
In addition to being a trustee or director of the
Board I Funds, Mr. Galli is also a director or trustee of
10 other portfolios in the OppenheimerFunds complex.
Present or former officers, directors, trustees and
employees (and their immediate family members) of the Fund,
the Manager and its affiliates, and retirement plans
established by them for their employees are permitted to
purchase Class A shares of the Fund and the other
Oppenheimer funds at net asset value without sales charge.
The sales charges on Class A shares is waived for that
group because of the economics of sales efforts realized by
the Distributor.
Messrs. Bartlett, Murphy, Molleur, Masterson,
Vottiero, Wixted and Zack, and Mses. Bechtolt, Feld and
Ives respectively hold the same offices with one or more of
the other Board I Funds as with the Fund. As of September
26, 2002, the Trustees and officers of the Fund, as a group
owned of record or beneficially less than 1% of each class
of shares of the Fund. The foregoing statement does not
reflect ownership of shares of the Fund held of record by
an employee benefit plan for employees of the Manager,
other than the shares beneficially owned under the plan by
the officers of the Fund listed above. In addition, each
Independent Trustee, and his or her family members, do not
own securities of either the Manager or Distributor of the
Board I Funds or any person directly or indirectly
controlling, controlled by or under common control with the
Manager or Distributor.
|X| Affiliated Transactions and Material Business
Relationships. Mr. Reynolds has reported he has a
controlling interest in The Directorship Group, Inc. ("The
Directorship Search Group"), a director recruiting firm
that provided consulting services to Massachusetts Mutual
Life Insurance Company (which controls the Manager) for
fees aggregating $247,500 from January 1, 2001 through
December 31, 2002. Mr. Reynolds estimates that The
Directorship
Search Group will not provide consulting services to
Massachusetts Mutual Life Insurance Company during the
calendar year 2003.
The Independent Trustees have unanimously (except for
Mr. Reynolds, who abstained) determined that the consulting
arrangements between The Directorship Search Group and
Massachusetts Mutual Life Insurance Company were not
material business or professional relationships that would
compromise Mr. Reynolds' status as an Independent Trustee.
Nonetheless, to assure certainty as to determinations of
the Board and the Independent Trustees as to matters upon
which the Investment Company Act or the rules thereunder
require approval by a majority of Independent Trustees, Mr.
Reynolds will not be counted for purposes of determining
whether a quorum of Independent Trustees was present or
whether a majority of Independent Trustees approved the
matter.
The address of each Trustee in the chart below is
6803 S. Tucson Way, Centennial, CO 80112-3924. Each Trustee
serves for an indefinite term, until his or her
resignation, retirement, death or removal.
- -------------------------------------------------------------------------------------
Independent Trustees
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
Name; Principal Occupation(s) During Past 5 Dollar Aggregate
Dollar
Range of
Shares
Beneficially
Owned in
Years; Range of any of the
Position(s) Held Other Trusteeships/Directorships Held by Shares Oppenheimer
with Fund; Trustee; BeneficiallFunds
Length of Service; Number of Portfolios in Fund Complex Owned in Overseen
Age Currently Overseen by Trustee the Fund by Trustee
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
As of December 31,
2001
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
Robert G. Galli, A trustee or director of other $0 Over
Trustee since 1993 Oppenheimer funds. Formerly Vice $100,000
Age: 69 Chairman (October 1995-December 1997) of
the Manager. Oversees 41 portfolios in
the OppenheimerFunds complex.
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
Phillip A. The Director (since 1991) of the $0 Over
Griffiths, Trustee Institute for Advanced Study, Princeton, $100,000
since 1999 N.J., director (since 2001) of GSI
Age: 64 Lumonics and a member of the National
Academy of Sciences (since 1979);
formerly (in descending chronological
order) a director of Bankers Trust
Corporation, Provost and Professor of
Mathematics at Duke University, a
director of Research Triangle Institute,
Raleigh, N.C., and a Professor of
Mathematics at Harvard University.
Oversees 31 portfolios in the
OppenheimerFunds complex.
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
Benjamin Lipstein, Professor Emeritus of Marketing, Stern $10,001-$50Over
Trustee since 1974 Graduate School of Business $100,000
Age: 79 Administration, New York University.
Oversees 31 portfolios in the
OppenheimerFunds complex.
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
Joel W. Motley, Director (January 2002-present), $01 None1
Trustee since 2002 Columbia Equity Financial Corp.
Age: 50 (privately-held financial adviser);
Managing Director (January
2002-present), Carmona Motley, Inc.
(privately-held financial adviser);
Formerly he held the following
positions: Managing Director (January
1998-December 2001), Carmona Motley
Hoffman Inc. (privately-held financial
adviser); Managing Director (January
1992-December 1997), Carmona Motley &
Co. (privately-held financial adviser).
Oversees 31 portfolios in the
OppenheimerFunds complex.
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
Elizabeth B. Author and architectural historian; a $10,001-50,$50,001-$100,000
Moynihan, trustee of the Freer Gallery of Art and
Trustee since 1992 Arthur M. Sackler Gallery (Smithsonian
Age: 73 Institute), Trustees Council of the
National Building Museum; a member of
the Trustees Council, Preservation
League of New York State. Oversees 31
portfolios in the OppenheimerFunds
complex.
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
Kenneth A. A director of Dominion Resources, Inc. $1 - Over
Randall, Trustee (electric utility holding company) and $10,000 $100,000
since 1980 Prime Retail, Inc. (real estate
Age: 75 investment trust); formerly a director
of Dominion Energy, Inc. (electric power
and oil & gas producer), President and
Chief Executive Officer of The
Conference Board, Inc. (international
economic and business research) and a
director of Lumbermens Mutual Casualty
Company, American Motorists Insurance
Company and American Manufacturers
Mutual Insurance Company. Oversees 31
portfolios in the OppenheimerFunds
complex.
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
Edward V. Regan, President, Baruch College, CUNY; a $1 - $50,001-$100,000
Trustee since 1993 director of RBAsset (real estate $10,000
Age: 72 manager); a director of OffitBank;
formerly Trustee, Financial Accounting
Foundation (FASB and GASB), Senior
Fellow of Jerome Levy Economics
Institute, Bard College, Chairman of
Municipal Assistance Corporation for the
City of New York, New York State
Comptroller and Trustee of New York
State and Local Retirement Fund.
Oversees 31 investment companies in the
OppenheimerFunds complex.
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
Russell S. Chairman (since 1993) of The $1 - $10,001-$50,000
Reynolds, Jr., Directorship Search Group, Inc. $10,000
Trustee since 1989 (corporate governance consulting and
Age: 70 executive recruiting); a life trustee of
International House (non-profit
educational organization), and a trustee
(since 1996) of the Greenwich Historical
Society. Oversees 31 portfolios in the
OppenheimerFunds complex.
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
Donald W. Spiro, Chairman Emeritus (since January 1991) $0 Over
Vice Chairman of of the Manager. Formerly a director $100,000
the Board of (January 1969-August 1999) of the
Trustees, Manager. Oversees 31 portfolios in the
Trustee since 1985 OppenheimerFunds complex.
Age: 76
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
Clayton K. Of Counsel (since 1993), Hogan & Hartson $50,001-$10$50,001-$100,000
Yeutter, Chairman (a law firm). Other directorships:
of the Board of Caterpillar, Inc. (since 1993) and
Trustees, Weyerhaeuser Co. (since 1999). Oversees
Trustee since 1991 31 portfolios in the OppenheimerFunds
Age: 71 complex.
- -------------------------------------------------------------------------------------
The address of Mr. Murphy in the chart below is 498
Seventh Avenue, New York, NY 10018. Mr. Murphy serves for
an indefinite term, until his resignation, retirement,
death or removal.
- -------------------------------------------------------------------------------------
Interested Trustee and Officer
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
Name; Principal Occupation(s) During Past 5 Dollar Aggregate
Dollar
Range of
Shares
Years; Range of Beneficially
Position(s) Held Other Trusteeships/Directorships Held by Shares Owned in
with Fund; Trustee; Beneficiallany of the
Length of Service; Number of Portfolios in Fund Complex Owned in Oppenheimer
Age Currently Overseen by Trustee the Fund Funds
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
As of December 31,
2001
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
John V. Murphy, Chairman, Chief Executive Officer and $0 Over
President and director (since June 2001) and President $100,000
Trustee, (since September 2000) of the Manager;
Trustee since 2001 President and a director or trustee of
Age: 53 other Oppenheimer funds; President and a
director (since July 2001) of
Oppenheimer Acquisition Corp. (the
Manager's parent holding company) and of
Oppenheimer Partnership Holdings, Inc.
(a holding company subsidiary of the
Manager); a director (since November
2001) of OppenheimerFunds Distributor,
Inc. (a subsidiary of the Manager);
Chairman and a director (since July
2001) of Shareholder Services, Inc. and
of Shareholder Financial Services, Inc.
(transfer agent subsidiaries of the
Manager); President and a director
(since July 2001) of OppenheimerFunds
Legacy Program (a charitable trust
program established by the Manager); a
director of the investment advisory
subsidiaries of the Manager: OFI
Institutional Asset Management, Inc. and
Centennial Asset Management Corporation
(since November 2001), HarbourView Asset
Management Corporation and OFI Private
Investments, Inc. (since July 2001);
President (since November 1, 2001) and a
director (since July 2001) of
Oppenheimer Real Asset Management, Inc.;
a director (since November 2001) of
Trinity Investment Management Corp. and
Tremont Advisers, Inc. (Investment
advisory affiliates of the Manager);
Executive Vice President (since February
1997) of Massachusetts Mutual Life
Insurance Company (the Manager's parent
company); a director (since June 1995)
of DBL Acquisition Corporation;
formerly, Chief Operating Officer
(September 2000-June 2001) of the
Manager; President and trustee (November
1999-November 2001) of MML Series
Investment Fund and MassMutual
Institutional Funds (open-end investment
companies); a director (September
1999-August 2000) of C.M. Life Insurance
Company; President, Chief Executive
Officer and director (September
1999-August 2000) of MML Bay State Life
Insurance Company; a director (June
1989-June 1998) of Emerald Isle Bancorp
and Hibernia Savings Bank (a
wholly-owned subsidiary of Emerald Isle
Bancorp). Oversees 69 portfolios in the
OppenheimerFunds complex.
- -------------------------------------------------------------------------------------
The address of the Officers in the chart below is as
follows: for Messrs. Bartlett, Molleur and Zack and Ms.
Feld, 498 Seventh Avenue, New York, NY 10018, for Messrs.
Masterson, Vottiero and Wixted and Mses. Bechtolt and Ives,
6803 S. Tucson Way, Centennial, CO 80112-3924. Each Officer
serves for an annual term or until his or her earlier
resignation, death or removal.
- -------------------------------------------------------------------------------------
Officers of the Fund
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
Name; Principal Occupation(s) During Past 5 Years
Position(s) Held with Fund;
Length of Service;
Age
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
Bruce Bartlett, Senior Vice President (since January 1999) of the
Vice President and Manager. Formerly, Vice President of the Manager
Portfolio Manager (April 1995-December 1998). An officer of 6 portfolios
since 1998 in the OppenheimerFunds complex.
Age: 52
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
Brian W. Wixted, Senior Vice President and Treasurer (since March 1999)
Treasurer, Principal of the Manager; Treasurer (since March 1999) of
Financial and Accounting HarbourView Asset Management Corporation, Shareholder
Officer Services, Inc., Oppenheimer Real Asset Management
since 1999 Corporation, Shareholder Financial Services, Inc.,
Age: 43 Oppenheimer Partnership Holdings, Inc., OFI Private
Investments, Inc. (since March 2000), OppenheimerFunds
International Ltd. and Oppenheimer Millennium Funds
plc (since May 2000) and OFI Institutional Asset
Management, Inc. (since November 2000) (offshore fund
management subsidiaries of the Manager); Treasurer and
Chief Financial Officer (since May 2000) of
Oppenheimer Trust Company (a trust company subsidiary
of the Manager); Assistant Treasurer (since March
1999) of Oppenheimer Acquisition Corp. and
OppenheimerFunds Legacy Program (since April 2000);
formerly Principal and Chief Operating Officer (March
1995-March 1999), Bankers Trust Company-Mutual Fund
Services Division. An officer of 85 portfolios in the
OppenheimerFunds complex.
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
Philip Vottiero, Vice President/Fund Accounting of the Manager (since
Assistant Treasurer March 2002; formerly Vice President/Corporate
since 2002 Accounting of the Manager (July 1999-March 2002) prior
Age: 39 to which he was Chief Financial Officer at Sovlink
Corporation (April 1996-June 1999). An officer of 82
portfolios in the OppenheimerFunds complex.
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
Connie Bechtolt, Assistant Vice President of the Manager (since
Assistant Treasurer September 1998); formerly Manager/Fund Accounting
since 2002 (September 1994-September 1998) of the Manager. An
Age: 39 officer of 82 portfolios in the OppenheimerFunds
complex.
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
Robert G. Zack, Senior Vice President (since May 1985) and General
Secretary Counsel (since February 2002) of the Manager; General
since 2001 Counsel and a director (since November 2001) of
Age: 54 OppenheimerFunds Distributor, Inc.; Senior Vice
President and General Counsel (since November 2001) of
HarbourView Asset Management Corporation; Vice
President and a director (since November 2000) of
Oppenheimer Partnership Holdings, Inc.; Senior Vice
President, General Counsel and a director (since
November 2001) of Shareholder Services, Inc.,
Shareholder Financial Services, Inc., OFI Private
Investments, Inc., Oppenheimer Trust Company and OFI
Institutional Asset Management, Inc.; General Counsel
(since November 2001) of Centennial Asset Management
Corporation; a director (since November 2001) of
Oppenheimer Real Asset Management, Inc.; Assistant
Secretary and a director (since November 2001) of
OppenheimerFunds International Ltd.; Vice President
(since November 2001) of OppenheimerFunds Legacy
Program; Secretary (since November 2001) of
Oppenheimer Acquisition Corp.; formerly Acting General
Counsel (November 2001-February 2002) and Associate
General Counsel (May 1981-October 2001) of the
Manager; Assistant Secretary of Shareholder Services,
Inc. (May 1985-November 2001), Shareholder Financial
Services, Inc. (November 1989-November 2001);
OppenheimerFunds International Ltd. and Oppenheimer
Millennium Funds plc (October 1997-November 2001). An
officer of 85 portfolios in the OppenheimerFunds
complex.
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
Philip T. Masterson, Vice President and Assistant Counsel of the Manager
Assistant Secretary (since July 1998); formerly, an associate with Davis,
since 2002 Graham, & Stubbs LLP (January 1997-June 1998). An
Age: 38 officer of 82 portfolios in the OppenheimerFunds
complex.
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
Denis R. Molleur, Vice President and Senior Counsel of the Manager
Assistant Secretary (since July 1999); formerly a Vice President and
since 2001 Associate Counsel of the Manager (September 1995-July
Age: 45 1999). An officer of 82 portfolios in the
OppenheimerFunds complex.
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
Katherine P. Feld, Vice President and Senior Counsel (since July 1999) of
Assistant Secretary the Manager; Vice President (since June 1990) of
since 2001 OppenheimerFunds Distributor, Inc.; Director, Vice
Age: 44 President and Assistant Secretary (since June 1999) of
Centennial Asset Management Corporation; Vice
President (since 1997) of Oppenheimer Real Asset
Management, Inc.; formerly Vice President and
Associate Counsel of the Manager (June 1990-July
1999). An officer of 85 portfolios in the
OppenheimerFunds complex.
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
Kathleen T. Ives, Vice President and Assistant Counsel (since June 1998)
Assistant Secretary of the Manager; Vice President (since 1999) of
since 2001 OppenheimerFunds Distributor, Inc.; Vice President and
Age: 36 Assistant Secretary (since 1999) of Shareholder
Services, Inc.; Assistant Secretary (since December
2001) of OppenheimerFunds Legacy Program and
Shareholder Financial Services, Inc.; formerly
Assistant Vice President and Assistant Counsel of the
Manager (August 1997-June 1998); Assistant Counsel of
the Manager (August 1994-August 1997). An officer of
85 portfolios in the OppenheimerFunds complex.
- -------------------------------------------------------------------------------------
|X| Remuneration of Trustees. The officers of the
Fund and one of the Trustees of the Fund (Mr. Murphy) who
are affiliated with the Manager receive no salary or fee
from the Fund. The remaining Trustees of the Fund received
the compensation shown below from the Fund with respect to
the Fund's fiscal year ended August 31, 2002. The
compensation from all of the Board I Funds (including the
Fund) represents compensation received as a director,
trustee or member of a committee of the Board during the
calendar year 2001.
- ----------------------------------------------------------------------------------
Trustee Name and For Fiscal Year Ended For Calendar Year Ended 12/31/01
Other Fund
Position(s)
(as applicable) 08/31/02
- ----------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------
Aggregate Retirement Estimated Total
Compensation
Annual From All
Retirement Oppenheimer
Benefits Benefits Paid Funds For Which
Accrued as at Retirement Individual
Part of from all Board Serves As
Compensation Fund I Funds Trustee/Director
From Fund1 Expenses (33 Funds) 2 (33 Funds)
- ----------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------
Leon Levy $11,426 $2,721 $137,560 $173,700
- ----------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------
Robert G. Galli $6,957 $8,059 $32,766 2 $202,8863
Study Committee Member
- ----------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------
Phillip Griffiths $3,9144 $2,128 $6,803 $54,889
- ----------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------
Benjamin Lipstein $9,877 None $118,911 $150,152
Study Committee
Chairman, Audit
Committee Member
- ----------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------
Joel W. Motley6 $0 $0 $0 $0
- ----------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------
Elizabeth B. Moynihan $6,957 $10,406 $52,348 $105,760
Study Committee Member
- ----------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------
Kenneth A. Randall $6,381 $6,332 $76,827 $97,012
Audit Committee
Chairman
- ----------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------
Edward V. Regan $6,312 $11,027 $42,748 $95,960
Proxy Committee
Chairman, Audit
Committee Member
- ----------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------
Russell S. Reynolds, $4,722 $6,823 $46,197 $71,792
Jr.
Proxy Committee Member
- ----------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------
Donald Spiro $4,757 $2,560 $3,625 $64,080
- ----------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------
Clayton K. Yeutter7 $4,7225 $5,207 $31,982 $71,792
Proxy Committee
Member
- ----------------------------------------------------------------------------------
1. Aggregate compensation from the Fund includes fees
and deferred compensation, if any.
2. Estimated annual retirement benefits paid at
retirement is based on a straight life payment plan
election. The amount for Mr. Galli includes $14,818 for
serving as a trustee or director of 10 Oppenheimer funds
that are not Board I Funds.
3. Includes $97,126 for Mr. Galli for serving as trustee
or director of 10 Oppenheimer funds that are not Board I
Funds.
4. Aggregate total compensation from the Fund includes
$3,914 deferred under Deferred Compensation Plan described
below.
5. Aggregate compensation from the Fund includes $1,181
deferred under Deferred Compensation Plan described below.
6. Elected to the Board on October 10, 2002 and
therefore did not receive any compensation.
7. Effective January 1, 2003, Clayton Yeutter became
Chairman of the Board of Trustees/Directors of the Board
I Funds upon the retirement of Leon Levy.
|X| Retirement Plan for Trustees. The Fund has
adopted a retirement plan that provides for payments to
retired Trustees. Payments are up to 80% of the average
compensation paid during a Trustee's five years of service
in which the highest compensation was received. A Trustee
must serve as trustee for any of the Board I Oppenheimer
funds for at least 15 years to be eligible for the maximum
payment. Each Trustee's retirement benefits will depend on
the amount of the Trustee's future compensation and length
of service. Therefore the amount of those benefits cannot
be determined at this time, nor can we estimate the number
of years of credited service that will be used to determine
those benefits.
|X| Deferred Compensation Plan for Trustees. The
Board of Trustees has adopted a Deferred Compensation Plan
for disinterested trustees that enables them to elect to
defer receipt of all or a portion of the annual fees they
are entitled to receive from the Fund. Under the plan, the
compensation deferred by a Trustee is periodically adjusted
as though an equivalent amount had been invested in shares
of one or more Oppenheimer funds selected by the Trustee.
The amount paid to the Trustee under the plan will be
determined based upon the performance of the selected
funds.
Deferral of Trustees' fees under the plan will not
materially affect the Fund's assets, liabilities or net
income per share. The plan will not obligate the Fund to
retain the services of any Trustee or to pay any particular
level of compensation to any Trustee. Pursuant to an Order
issued by the Securities and Exchange Commission, the Fund
may invest in the funds selected by the Trustee under the
plan without shareholder approval for the limited purpose
of determining the value of the Trustee's deferred fee
account.
|X| Major Shareholders. As of September 26, 2002,
there were no persons who owned of record or were known by
the Fund to own beneficially 5% or more of any class of the
Fund's outstanding Class A, Class B and Class C shares and
the only persons who owned of record or were known by the
Fund to own beneficially 5% or more of the Fund's
outstanding Class N shares and Class Y shares were:
Smith Barney, 7th Floor, 333 West 34th Street, New York, NY
10001-2483, which owned 256,791.895 Class C shares (7.99%
of the outstanding Class C shares).
RPSS TR, Empress International Ltd., 401(k) Plan, 10 Harbor
Park Dr., Port Washington, NY 11050-4648, which owned
6,458.793 Class N shares (6.58% of the outstanding Class N
shares).
RPSS TR IRA, FBO Dennis B. Baskin, P.O. Box 1935, San
Andreas, CA 95249-1935, who owned 5,065.127 Class N shares
(5.16% of the outstanding Class N shares).
Wayne Casteen TR, Murphy Brown Deferred Comp Plan, 2822 W.
NC Highway 24, Warsaw, NC 28398-7952, who owned 8,876.823
Class N shares (9.05% of the outstanding Class N shares).
The Manager. The Manager is wholly-owned by Oppenheimer
Acquisition Corp., a holding company controlled by
Massachusetts Mutual Life Insurance Company.
|X| Code of Ethics. The Fund, the Manager and the
Distributor 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. Covered persons include persons with
knowledge of the investments and investment intentions of
the Fund and other funds advised by the Manager. The Code
of Ethics does permit personnel subject to the Code to
invest in securities, including securities that may be
purchased or held by the Fund, subject to a number of
restrictions and controls. Compliance with the Code of
Ethics is carefully monitored and enforced by the Manager.
The Code of Ethics is an exhibit to the Fund's
registration statement filed with the Securities and
Exchange Commission and can be reviewed and copied at the
SEC's Public Reference Room in Washington, D.C. You can
obtain information about the hours of operation of the
Public Reference Room by calling the SEC at
1.202.942.8090. The Code of Ethics can also be viewed as
part of the Fund's registration statement on the SEC's
EDGAR database at the SEC's Internet website at
www.sec.gov. Copies may be obtained, after paying a
duplicating fee, by electronic request at the following
E-mail address: publicinfo@sec.gov, or by writing to the
SEC's Public Reference Section, Washington, D.C.
20549-0102.
|X| The Investment Advisory Agreement. The Manager
provides investment advisory and management services to the
Fund under an investment advisory agreement between the
Manager and the Fund. The Manager selects securities for
the Fund's portfolio and handles its day-to-day business.
The portfolio manager of the Fund is employed by the
Manager and is the person who is principally responsible
for the day-to-day management of the Fund's portfolio.
Other members of the Manager's Equity Portfolio Team
provide the portfolio manager with counsel and support in
managing the Fund's portfolio.
The agreement requires the Manager, at its expense,
to provide the Fund with adequate office space, facilities
and equipment. It also requires the Manager to provide and
supervise the activities of all administrative and clerical
personnel required to provide effective administration for
the Fund. Those responsibilities include the compilation
and maintenance of records with respect to its operations,
the preparation and filing of specified reports, and
composition of proxy materials and registration statements
for continuous public sale of shares of the Fund.
The Fund pays expenses not expressly assumed by the
Manager under the advisory agreement. The advisory
agreement lists examples of expenses paid by the Fund. The
major categories relate to interest, taxes, brokerage
commissions, fees to Independent Trustees, legal and audit
expenses, custodian and transfer agent expenses, share
issuance costs, certain printing and registration costs and
non-recurring expenses, including litigation costs. The
management fees paid by the Fund to the Manager are
calculated at the rates described in the Prospectus, which
are applied to the assets of the Fund as a whole. The fees
are allocated to each class of shares based upon the
relative proportion of the Fund's net assets represented by
that class. The management fees paid by the Fund to the
Manager during its last three fiscal years were:
------------------------------------------------------------------------------
Fiscal Year ended 8/31: Management Fees Paid to OppenheimerFunds, Inc.
------------------------------------------------------------------------------
------------------------------------------------------------------------------
2000 $20,119,482
------------------------------------------------------------------------------
------------------------------------------------------------------------------
2001 $19,009,822
------------------------------------------------------------------------------
------------------------------------------------------------------------------
2002 $12,880,111
------------------------------------------------------------------------------
The investment advisory agreement states that in the
absence of willful misfeasance, bad faith, gross negligence
in the performance of its duties or reckless disregard of
its obligations and duties under the investment advisory
agreement, the Manager is not liable for any loss the Fund
sustains for any investment adoption of any investment
policy, or the purchase, sale or retention of any security.
The agreement permits the Manager to act as
investment advisor for any other person, firm or
corporation and to use the name "Oppenheimer" in connection
with other investment companies for which it may act as
investment advisor or general distributor. If the Manager
shall no longer act as investment advisor to the Fund, the
Manager may withdraw the right of the Fund to use the name
"Oppenheimer" as part of its name.
|X| Annual Approval of Investment Advisory
Agreement. Each year, the Board of Trustees, including a
majority of the Independent Trustees, is required to
approve the renewal of the investment advisory agreement.
The Investment Company Act requires that the Board request
and evaluate and the Manager provide such information as
may be reasonably necessary to evaluate the terms of the
investment advisory agreement. The Board employs an
independent consultant to prepare a report that provides
such information as the Board requests for this purpose.
The Board also receives information about the 12b-1
distribution fees the Fund pays. These distribution fees
are reviewed and approved at a different time of the year.
The Board reviewed the foregoing information in arriving at
its decision to renew the investment advisory agreement.
Among other factors, the Board considered:
o The nature, cost, and quality of the services
provided to the Fund and its shareholders;
o The profitability of the Fund to the Manager;
o The investment performance of the Fund in comparison
to regular market indices
o Economies of scale that may be available to the Fund
from the Manager;
o Fees paid by other mutual funds for similar services;
o The value and quality of any other benefits or
services received by the Fund from its
relationship with the Manager, and
o The direct and indirect benefits the Manager received
from its relationship with the Fund. These
included services provided by the Distributor and
the Transfer Agent, and brokerage and soft dollar
arrangements permissible under Section 28(e) of
the Securities Exchange Act.
The Board considered that the Manager must be able to
pay and retain high quality personnel at competitive rates
to provide services to the Fund. The Board also considered
that maintaining the financial viability of the Manager is
important so that the Manager will be able to continue to
provide quality services to the Fund and its shareholders
in adverse times. The Board also considered the investment
performance of other mutual funds advised by the Manager.
The Board is aware that there are alternatives to the use
of the Manager.
These matters were also considered by the Independent
Trustees, meeting separately from the full Board with
experienced Counsel to the Fund who assisted the Board in
its deliberations. The Fund's Counsel is independent of
the Manager within the meaning and intent of the SEC Rules
regarding the independence of counsel.
After careful deliberation the Board of Trustees
concluded that it was in the best interests of shareholders
to continue the investment advisory agreement for another
year. In arriving at a decision, the Board did not single
out any one factor or group of factors as being more
important than other factors, but considered all factors
together. The Board judged the terms and conditions of the
investment advisory agreement, including the investment
advisory fee, in light of all of the surrounding
circumstances.
Brokerage Policies of the Fund
Brokerage Provisions of the Investment Advisory Agreement.
One of the duties of the Manager under the investment
advisory agreement is to arrange the portfolio transactions
for the Fund. The advisory agreement contains provisions
relating to the employment of broker-dealers to effect the
Fund's portfolio transactions. 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. The Manager may employ
broker-dealers that the Manager thinks, in its best
judgment based on all relevant factors, will implement the
policy of the Fund to obtain, at reasonable expense, the
"best execution" of the Fund's portfolio transactions.
"Best execution" means prompt and reliable execution at the
most favorable price obtainable. The Manager need not seek
competitive commission bidding. However, it is expected to
be aware of the current rates of eligible brokers and to
minimize the commissions paid to the extent consistent with
the interests and policies of the Fund as established by
its Board of Trustees.
Under the investment advisory agreement, the Manager
may select brokers (other than affiliates) 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
charge, if the Manager makes a good faith determination
that the commission is fair and reasonable in relation to
the services provided. Subject to those considerations, as
a factor in selecting brokers for the Fund's portfolio
transactions, the Manager may also consider sales of shares
of the Fund and other investment companies for which the
Manager or an affiliate serves as investment advisor.
Brokerage Practices Followed by the Manager. The Manager
allocates brokerage for the Fund subject to the provisions
of the investment advisory agreement and the procedures and
rules described above. Generally, the Manager's portfolio
traders allocate brokerage based upon recommendations from
the Manager's portfolio managers. In certain instances,
portfolio managers may directly place trades and allocate
brokerage. In either case, the Manager's executive
officers supervise the allocation of brokerage.
Transactions in securities other than those for which
an exchange is the primary market are generally done with
principals or market makers. In transactions on foreign
exchanges, the Fund may be required to pay fixed brokerage
commissions and therefore would not have the benefit of
negotiated commissions available in U.S. markets.
Brokerage commissions are paid primarily for transactions
in listed securities or for certain fixed-income agency
transactions in the secondary market. Otherwise brokerage
commissions are paid only if it appears likely that a
better price or execution can be obtained by doing so. In
an option transaction, the Fund ordinarily uses the same
broker for the purchase or sale of the option and any
transaction in the securities to which the option relates.
Other funds advised by the Manager have investment
policies similar to those of the Fund. Those other funds
may purchase or sell the same securities as the Fund at the
same time as the Fund, which could affect the supply and
price of the securities. If two or more funds advised by
the Manager purchase the same security on the same day from
the same dealer, the transactions under those combined
orders are averaged as to price and allocated in accordance
with the purchase or sale orders actually placed for each
account.
Most purchases of debt obligations are principal
transactions at net prices. Instead of using a broker for
those transactions, the Fund normally deals directly with
the selling or purchasing principal or market maker unless
the Manager determines that a better price or execution can
be obtained by using the services of a broker. Purchases
of portfolio securities from underwriters include a
commission or concession paid by the issuer to the
underwriter. Purchases from dealers include a spread
between the bid and asked prices. The Fund seeks to obtain
prompt execution of these orders at the most favorable net
price.
The investment advisory agreement permits the Manager
to allocate brokerage for research services. The research
services provided by a particular broker may be useful only
to one or more of the advisory accounts of the Manager and
its affiliates. The investment research received for the
commissions of those other accounts may be useful both to
the Fund and one or more of the Manager's other accounts.
Investment research may be supplied to the Manager by a
third party at the instance of a broker through which
trades are placed.
Investment research services include information and
analysis on particular companies and industries as well as
market or economic trends and portfolio strategy, market
quotations for portfolio evaluations, information systems,
computer hardware and similar products and services. If a
research service also assists the Manager in a non-research
capacity (such as bookkeeping or other administrative
functions), then only the percentage or component that
provides assistance to the Manager in the investment
decision-making process may be paid in commission dollars.
The Board of Trustees permits the Manager to use
stated commissions on secondary fixed-income agency trades
to obtain research if the broker represents to the Manager
that: (i) the trade is not from or for the broker's own
inventory, (ii) the trade was executed by the broker on an
agency basis at the stated commission, and (iii) the trade
is not a riskless principal transaction.
The Board of Trustees permits the Manager to use
commissions on fixed-price offerings to obtain research, in
the same manner as is permitted for agency transactions.
The research services provided by brokers broadens
the scope and supplements the research activities of the
Manager. That research provides additional views and
comparisons for consideration, and helps the Manager to
obtain market information for the valuation of securities
that are either held in the Fund's portfolio or are being
considered for purchase. The Manager provides information
to the Board about the commissions paid to brokers
furnishing such services, together with the Manager's
representation that the amount of such commissions was
reasonably related to the value or benefit of such
services.
- -------------------------------------------------------------------------------
Fiscal Year Ended 8/31: Total Brokerage Commissions Paid by the Fund1
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
2000 $1,551,0402
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
2001 $3,838,7033
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
2002 $2,307,9974
- -------------------------------------------------------------------------------
1. Amounts do not include spreads or concessions on
principal transactions on a net trade basis.
2. In the fiscal year ended 8/31/00, the amount of
transactions directed to brokers for research services was
$691,230,606 and the amount of the commissions paid to
broker-dealers for those services was $624,828.
3. In the fiscal year ended 8/31/01, the amount of
transactions directed to brokers for research services was
$1,460,471,538 and the amount of the commissions paid to
broker-dealers for those services was $1,651,878.
4. In the fiscal year ended 8/31/02, the amount of
transactions directed to brokers for research services was
$1,064,536,313 and the amount of the commissions paid to
broker-dealers for those services was $1,430,277.
Distribution and Service Plans
The Distributor. Under its General Distributor's Agreement
with the Fund, the Distributor acts as the Fund's principal
underwriter in the continuous public offering of the Fund's
classes of shares. The Distributor bears the expenses
normally attributable to sales, including advertising and
the cost of printing and mailing prospectuses, other than
those furnished to existing shareholders. The Distributor
is not obligated to sell a specific number of shares.
Expenses normally attributable to sales are borne by the
Distributor.
The sales charges and concessions paid to, or
retained by, the Distributor from the sale of shares during
the Fund's three most recent fiscal years, and the
contingent deferred sales charges retained by the
Distributor on the redemption of shares for the most recent
fiscal year are shown in the tables below.
- -------------------------------------------
Fiscal Aggregate Class A
Front-End
Year Front-End Sales Sales Charges
Ended Charges on Retained by
8/31: Class A Shares Distributor1
- -------------------------------------------
- -------------------------------------------
2000 $4,977,997 $1,530,627
- -------------------------------------------
- -------------------------------------------
2001 $5,039,994 $1,431,582
- -------------------------------------------
- -------------------------------------------
2002 $2,350,474 $668,545
- -------------------------------------------
1. Includes amounts retained by a broker-dealer that is an
affiliate or a parent of the Distributor.
- -----------------------------------------------------------------------------
Fiscal Concessions on Concessions on Concessions on Concessions on
Year Class A Shares Class B Shares Class C Shares Class N Shares
Ended Advanced by Advanced by Advanced by Advanced by
8/31: Distributor1 Distributor1 Distributor1 Distributor1
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
2000 $457,833 $6,360,803 $457,702 N/A
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
2001 $993,657 $6,136,274 $470,959 $2,2272
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
2002 $204,213 $2,130,360 $174,319 $31,178
- -----------------------------------------------------------------------------
1. The Distributor advances concession payments to dealers
for certain sales of Class A shares and for sales of Class
B and Class C shares from its own resources at the time of
sale.
2. The inception date of Class N shares was March 1, 2001.
- -----------------------------------------------------------------------------
Fiscal Class A Class B Class C Class N
Contingent Contingent Contingent Contingent
Year Deferred Sales Deferred Sales Deferred Sales Deferred Sales
Ended Charges Charges Charges Charges
8/31 Retained by Retained by Retained by Retained by
Distributor Distributor Distributor Distributor
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
2002 $21,386 $1,099,479 $22,633 $249
- -----------------------------------------------------------------------------
Distribution and Service Plans. The Fund has adopted a
Service Plan for Class A shares and Distribution and
Service Plans for Class B, Class C and Class N shares under
Rule 12b-1 of the Investment Company Act. Under those
plans the Fund pays the Distributor for all or a portion of
its costs incurred in connection with the distribution
and/or servicing of the shares of the particular class.
Under the plans, the Manager and the Distributor may
make payments to affiliates and in their sole discretion,
from time to time, may use their own resources (at no
direct cost to the Fund) to make payments to brokers,
dealers or other financial institutions for distribution
and administrative services they perform. The Manager may
use its profits from the advisory fee it receives from the
Fund. In their sole discretion, the Distributor and the
Manager may increase or decrease the amount of payments
they make from their own resources to plan recipients.
Unless a plan is terminated as described below, the
plan continues in effect from year to year but only if the
Fund's Board of Trustees and its Independent Trustees
specifically vote annually to approve its continuance.
Approval must be by a vote cast in person at a meeting
called for the purpose of voting on continuing the plan. A
plan may be terminated at any time by the vote of a
majority of the Independent Trustees or by the vote of the
holders of a "majority" (as defined in the Investment
Company Act) of the outstanding shares of that class.
The Board of Trustees and the Independent Trustees
must approve all material amendments to a plan. An
amendment to increase materially the amount of payments to
be made under a plan must be approved by shareholders of
the class affected by the amendment. Because Class B
shares of the Fund automatically convert into Class A
shares after six years, the Fund must obtain the approval
of both Class A and Class B shareholders for a proposed
material amendment to the Class A Plan that would
materially increase payments under the Plan. That approval
must be by a "majority" (as defined in the Investment
Company Act) of the shares of each Class, voting separately
by class.
While the Plans are in effect, the Treasurer of the
Fund shall provide separate written reports on the plans to
the Board of Trustees at least quarterly for its review.
The reports shall detail the amount of all payments made
under a plan, the purpose for which the payments were made
and the identity of each recipient of a payment. The
reports on the Class B Plan and Class C Plan shall also
include the Distributor's distribution costs for that
quarter and in the case of the Class B plan the amount of
those costs for previous fiscal periods that have been
carried forward. Those reports are subject to the review
and approval of the Independent Trustees.
Each Plan states that while it is in effect, the
selection and nomination of those Trustees of the Fund who
are not "interested persons" of the Fund is committed to
the discretion of the Independent Trustees. This does not
prevent the involvement of others in the selection and
nomination process as long as the final decision as to
selection or nomination is approved by a majority of the
Independent Trustees.
Under the plan for a class, no payment will be made
to any recipient in any quarter in which the aggregate net
asset value of all Fund shares of that class held by the
recipient for itself and its customers does not exceed a
minimum amount, if any, that may be set from time to time
by a majority of the Independent Trustees. The Board of
Trustees has set no minimum amount of assets to qualify for
payments under the plans.
o Class A Service Plan Fees. Under the Class A service
plan, the Distributor currently uses the fees it receives
from the Fund to pay brokers, dealers and other financial
institutions (they are referred to as "recipients") for
personal services and account maintenance services they
provide for their customers who hold Class A shares. The
services include, among others, answering customer
inquiries about the Fund, assisting in establishing and
maintaining accounts in the Fund, making the Fund's
investment plans available and providing other services at
the request of the Fund or the Distributor. While the plan
permits the Board to authorize payments to the Distributor
to reimburse itself for services under the plan, the Board
has not yet done so, except in the case of the special
arrangement described below. The Distributor makes
payments to plan recipients quarterly at an annual rate not
to exceed 0.25% of the average annual net assets consisting
of Class A shares, held in the accounts of the recipients
or their customers.
For the fiscal year ended August 31, 2002 payments
under the Class A Plan totaled $3,313,032, of which
$668,545 was retained by the Distributor under the
arrangement described above, and included $156,580 paid to
an affiliate of the Distributor's parent company. Any
unreimbursed expenses the Distributor incurs with respect
to Class A shares in any fiscal year cannot be recovered in
subsequent years. The Distributor may not use payments
received the Class A Plan to pay any of its interest
expenses, carrying charges, or other financial costs, or
allocation of overhead.
o Class B, Class C and Class N Service and Distribution
Plan Fees. Under each plan, service fees and distribution
fees are computed on the average of the net asset value of
shares in the respective class, determined as of the close
of each regular business day during the period. The Class
B, Class C and Class N plans provide for the Distributor to
be compensated at a flat rate, whether the Distributor's
distribution expenses are more or less than the amounts
paid by the Fund under the plan during the period for which
the fee is paid. The types of services that recipients
provide are similar to the services provided under the
Class A service plan, described above.
The Class B, Class C and Class N plans permit the
Distributor to retain both the asset-based sales charges
and the service fees or to pay recipients the service fee
on a quarterly basis, without payment in advance. However,
the Distributor currently intends to pay the service fee to
recipients in advance for the first year after the shares
are purchased. After the first year shares are
outstanding, the Distributor makes service fee payments
quarterly on those shares. The advance payment is based on
the net asset value of shares sold. Shares purchased by
exchange do not qualify for the advance service fee
payment. If Class B, Class C or Class N shares are
redeemed during the first year after their purchase, the
recipient of the service fees on those shares will be
obligated to repay the Distributor a pro rata portion of
the advance payment of the service fee made on those shares.
The Distributor retains the asset-based sales charge
on Class B and Class N shares. The Distributor retains the
asset-based sales charge on Class C shares during the first
year the shares
are outstanding. It pays the asset-based sales charge as
an ongoing concession to the recipient on Class C shares
outstanding for a year or more. If a dealer has a special
agreement with the Distributor, the Distributor will pay
the Class B, Class C and/or Class N service fee and the
asset-based sales charge to the dealer quarterly in lieu of
paying the sales concessions and service fee in advance at
the time of purchase.
The asset-based sales charges on Class B, Class C and
Class N shares allow investors to buy shares without a
front-end sales charge while allowing the Distributor to
compensate dealers that sell those shares. The Fund pays
the asset-based sales charges to the Distributor for its
services rendered in distributing Class B, Class C and
Class N shares. The payments are made to the Distributor
in recognition that the Distributor:
o pays sales concessions to authorized brokers and
dealers at the time of sale and pays service
fees as described above,
o may finance payment of sales concessions and/or the
advance of the service fee payment to
recipients under the plans, or may provide such
financing from its own resources or from the
resources of an affiliate,
o employs personnel to support distribution of Class B,
Class C and Class N shares,
o bears the costs of sales literature, advertising and
prospectuses (other than those furnished to
current shareholders) and state "blue sky"
registration fees and certain other
distribution expenses, may not be able to
adequately compensate dealers that sell Class
B, Class C and Class N shares without receiving
payment under the plans and therefore may not
be able to offer such Classes for sale absent
the plans,
o receives payments under the plans consistent with the
service fees and asset-based sales charges paid
by other non-proprietary funds that charge
12b-1 fees,
o may use the payments under the plan to include the
Fund in various third-party distribution
programs that may increase sales of Fund shares,
o may experience increased difficulty selling the
Fund's shares if payments under the plan are
discontinued because most competitor funds have
plans that pay dealers for rendering
distribution services as much or more than the
amounts currently being paid by the Fund, and
o may not be able to continue providing, at the same or
at a lesser cost, the same quality distribution
sales efforts and services, or to obtain such
services from brokers and dealers, if the plan
payments were to be discontinued.
When Class B, Class C or Class N shares are sold
without the designation of a broker-dealer, the Distributor
is automatically designated as the broker-dealer of record.
In those cases, the Distributor retains the service fee and
asset-based sales charge paid on Class B, Class C and Class
N shares.
The Distributor's actual expenses in selling Class B,
Class C and Class N shares may be more than the payments it
receives from the contingent deferred sales charges
collected on redeemed shares and from the Fund under the
plans. If the Class B, Class C or Class N 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.
- --------------------------------------------------------------------------------
Distribution Fees Paid to the Distributor for the Year Ended 8/31/02
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Class: Total Amount Distributor's Distributor's
Aggregate Unreimbursed
Unreimbursed Expenses as %
Payments Retained by Expenses Under of Net Assets
Under Plan Distributor Plan of Class
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Class B Plan $4,141,613 $3,277,8611 $11,192,681 3.52%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Class C Plan $931,561 $193,6572 $1,590,674 2.11%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Class N Plan $8,087 $8,000 $56,842 2.53%
- --------------------------------------------------------------------------------
1. Includes $73,823 paid to an affiliate of the
Distributor's parent company.
2. Includes $30,375 paid to an affiliate of the
Distributor's parent company.
All payments under the Class B, Class C and Class N
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.
Performance of the Fund
Explanation of Performance Terminology. The Fund uses a
variety of terms to illustrate its investment performance.
Those terms include "cumulative total return," "average
annual total return," "average annual total return at net
asset value" and "total return at net asset value." An
explanation of how total returns are calculated is set
forth below. The charts below show the Fund's performance
as of the Fund's most recent fiscal year end. You can
obtain current performance information by calling the
Fund's Transfer Agent at 1.800.225.5677 or by visiting the
OppenheimerFunds Internet website at
www.oppenheimerfunds.com.
- ------------------------
The Fund's illustrations of its performance data in
advertisements must comply with rules of the Securities and
Exchange Commission. Those rules describe the types of
performance data that may be used and how it is to be
calculated. In general, any advertisement by the Fund of
its performance data must include the average annual total
returns for the advertised class of shares of the Fund.
Those returns must be shown 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 (or its submission for
publication).
Use of standardized performance calculations enables
an investor to compare the Fund's performance to the
performance of other funds for the same periods. However, a
number of factors should be considered before using the
Fund's performance information as a basis for comparison
with other investments:
Total returns measure the performance of a
hypothetical account in the Fund over various periods and
do not show the performance of each shareholder's account.
Your account's performance will vary from the model
performance data if your dividends are received in cash, or
you buy or sell shares during the period, or you bought
your shares at a different time and price than the shares
used in the model.
o The Fund's performance returns may not reflect the
effect of taxes on dividends and capital gains
distributions.
o An investment in the Fund is not insured by the FDIC
or any other government agency.
o The principal value of the Fund's shares and total
returns are not guaranteed and normally will
fluctuate on a daily basis.
o When an investor's shares are redeemed, they may be
worth more or less than their original cost.
o Total returns for any given past period represent
historical performance information and are not,
and should not be considered, a prediction of
future returns.
The performance of each class of shares is shown
separately, because the performance of each class of shares
will usually be different. That is because of the different
kinds of expenses each class bears. The total returns of
each class of shares of the Fund are affected by market
conditions, the quality of the Fund's investments, the
maturity of debt investments, the types of investments the
Fund holds, and its operating expenses that are allocated
to the particular class.
|X| Total Return Information. There are different
types of "total returns" to measure the Fund's performance.
Total return is the change in value of a hypothetical
investment in the Fund over a given period, assuming that
all dividends and capital gains distributions are
reinvested in
additional shares and that the investment is redeemed at
the end of the period. Because of differences in expenses
for each class of shares, the total returns for each class
are separately measured. The cumulative total return
measures the change in value over the entire period (for
example, ten years). An average annual total return shows
the average rate of return for each year in a period that
would produce the cumulative total return over the entire
period. However, average annual total returns do not show
actual year-by-year performance. The Fund uses standardized
calculations for its total returns as prescribed by the
SEC. The methodology is discussed below.
In calculating total returns for Class A shares, the
current maximum sales charge of 5.75% (as a percentage of
the offering price) is deducted from the initial investment
("P") (unless the return is shown without sales charge, as
described below). For Class B shares, payment of the
applicable contingent deferred sales charge is applied,
depending on the period for which the return is shown: 5.0%
in the first year, 4.0% in the second year, 3.0% in the
third and fourth years, 2.0% in the fifth year, 1.0% in the
sixth year and none thereafter. For Class C shares, the 1%
contingent deferred sales charge is deducted for returns
for the one-year period. For Class N shares, the 1%
contingent deferred sales charge is deducted for returns
for the one year period, and, if applicable, the total
returns for the periods prior to March 1, 2001 (the
inception date for
Class N shares) is based on the Fund's Class A returns,
adjusted to reflect the higher Class N 12b-1 fees. There is
no sales charge for Class Y shares.
o Average Annual Total Return. The "average annual
total return" of each class is an average annual compounded
rate of return for each year in a specified number of
years. It is the rate of return based on the change in
value of a hypothetical initial investment of $1,000 ("P"
in the formula below) held for a number of years ("n" in
the formula) to achieve an Ending Redeemable Value ("ERV"
in the formula) of that investment, according to the
following formula:
ERV l/n - 1 Average Annual Total
Return
P
o Average Annual Total Return (After Taxes on
Distributions). The "average annual total return (after
taxes on distributions)" of Class A shares is an average
annual compounded rate of return for each year in a
specified number of years, adjusted to show the effect of
federal taxes (calculated using the highest individual
marginal federal income tax rates in effect on any
reinvestment date) on any distributions made by the Fund
during the specified period. 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" in the formula) to achieve an ending value
("ATVD" in the formula) of that investment, after taking
into account the effect of taxes on Fund distributions, but
not on the redemption of Fund shares, according to the
following formula:
ATVD - 1= Average Annual Total Return (After Taxes on
- ----
1/n Distributions)
P
o Average Annual Total Return (After Taxes on
Distributions and Redemptions). The "average annual total
return (after taxes on distributions and redemptions)" of
Class A shares is an average annual compounded rate of
return for each year in a specified number of years,
adjusted to show the effect of federal taxes (calculated
using the highest individual marginal federal income tax
rates in effect on any reinvestment date) on any
distributions made by the Fund during the specified period
and the effect of capital gains taxes or capital loss tax
benefits (each calculated using the highest federal
individual capital gains tax rate in effect on the
redemption date) resulting from the redemption of the
shares at the end of the period. 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" in the formula) to achieve an ending
value ("ATVDR" in the formula) of that investment, after
taking into account the effect of taxes on fund
distributions and on the redemption of Fund shares,
according to the following formula:
ATVDR - 1= Average Annual Total Return (After Taxes on
- -----
1/n Distributions and Redemption)
P
o Cumulative Total Return. The "cumulative total
return" calculation measures the change in value of a
hypothetical investment of $1,000 over an entire period of
years. Its calculation uses some of the same factors as
average annual total return, but it does not average the
rate of return on an annual basis. Cumulative total return
is determined as follows:
ERV - P = Total Return
- -----------
P
o Total Returns at Net Asset Value. From time to time
the Fund may also quote a cumulative or an average annual
total return "at net asset value" (without deducting sales
charges) for Class A, Class B, Class C or Class N shares.
There is no sales charge on Class Y 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 Fund's Total Returns for the Periods Ended 8/31/02
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Cumulative Total Average Annual Total Returns
Class Returns (10
of years or Life of
Shares Class)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
5-Year 10-Year
1-Year (or (or
life-of-class) life-of-class)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
After Without After Without After Without After Without
Sales Sales Sales Sales Sales Sales Sales Sales
Charge Charge Charge Charge Charge Charge Charge Charge
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Class A 96.20% 108.18% -21.55% -16.77% -4.14% -3.00% 6.97% 7.61%
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Class B 74.08%1 74.08%1 -21.52% -17.39% -4.02% -3.75% 6.32%1 6.32%1
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Class C 22.52%2 22.52%2 -18.22% -17.39% -3.75% -3.75% 3.02%2 3.02%2
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Class N -32.35%3 -31.68%3 -17.82% -17.00% -22.94%3 -22.43%3 N/A N/A
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Class Y 76.82%4 N/A -16.50% N/A -2.74% -2.74% 7.15%4 7.15%4
- -------------------------------------------------------------------------------
1. Inception of Class B: 8/17/93
2. Inception of Class C: 11/1/95
3. Inception of Class N: 3/01/01
4. Inception of Class Y: 6/1/94
- ------------------------------------------------------------------------------
Average Annual Total Returns for Class A Shares (After Sales Charge)
For the Periods Ended 8/31/02
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
1-Year 5-Year 10-Year
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
After Taxes on -21.70% -5.81% 4.73%
Distributions
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
After Taxes on
Distributions and -13.11% -3.22% 5.26%
Redemption of Fund Shares
- ------------------------------------------------------------------------------
Other Performance Comparisons. The Fund compares its
performance annually to that of an appropriate
broadly-based market index in its Annual Report to
shareholders. You can obtain
that information by contacting the Transfer Agent at the
addresses or telephone numbers shown on the cover of this
Statement of Additional Information. The Fund may also
compare its performance to that of other investments,
including other mutual funds, or use rankings of its
performance by independent ranking entities. Examples of
these performance comparisons are set forth below.
o Lipper Rankings. From time to time the Fund may
publish the ranking of the performance of its classes of
shares by Lipper Inc. ("Lipper"). Lipper is a
widely-recognized independent mutual fund monitoring
service. Lipper monitors the performance of regulated
investment companies, including the Fund, and ranks their
performance for various periods in categories based on
investment styles. The performance of the Fund is ranked
by Lipper against all other growth 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. Lipper also publishes "peer-group"
indices of the performance of all mutual funds in a
category that it monitors and averages of the performance
of the funds in particular categories.
o Morningstar Ratings. From time to time the Fund may
publish the star rating of the performance of its classes
of shares by Morningstar, Inc., an independent mutual fund
monitoring service. Morningstar ranks mutual funds in
their specialized market sector. The Fund is ranked among
domestic stock funds.
Morningstar proprietary star ratings reflect
historical risk-adjusted total investment return. For each
fund with at least a three-year history, Morningstar
calculates a Morningstar Rating(TM)based on a Morningstar
Risk-Adjusted Return measure that accounts for variation in
a fund's monthly performance (including the effects of
sales charges, loads, and redemption fees), placing more
emphasis on downward variations and rewarding consistent
performance. The top 10% of funds in each category
receive 5 stars, the next 22.5% receive 4 stars, the next
35% receive 3 stars, the next 22.5% receive 2 stars, and
the bottom 10% receive 1 star. (Each share class is
counted as a fraction of one fund within this scale and
rated separately, which may cause slight variations in the
distribution percentages.) The Overall Morningstar Rating
for a fund is derived from a weighted average of the
performance figures associated with its three-, five-and
ten-year (if applicable) Morningstar Rating metrics.
The Fund may also compare its performance to that of
other funds in its Morningstar category. In addition to its
star ratings, 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.
o Performance Rankings and Comparisons by Other
Entities and Publications. From time to time the Fund may
include in its advertisements and sales literature
performance information about the Fund cited in newspapers
and other periodicals such as The New York Times, The Wall
Street Journal, Barron's, or similar publications. That
information may include performance quotations from other
sources, including Lipper and Morningstar. The performance
of the Fund's classes of shares may be compared in
publications to the performance of various market indices
or other investments, and averages, performance rankings or
other benchmarks prepared by recognized mutual fund
statistical services.
Investors may also wish to compare the returns on the
Fund's share classes to the return on fixed-income
investments available from banks and thrift institutions.
Those include certificates of deposit, ordinary
interest-paying checking and savings accounts, and other
forms of fixed or variable time deposits, and various other
instruments such as Treasury bills. However, the Fund's
returns and share price are not guaranteed or insured by
the FDIC or any other agency and will fluctuate daily,
while bank depository obligations may be insured by the
FDIC and may provide fixed rates of return. Repayment of
principal and payment of interest on Treasury securities is
backed by the full faith and credit of the U.S. government.
From time to time, the Fund may publish rankings or
ratings of the Manager or Transfer Agent, and of 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 and investor services by third parties may
include comparisons of their services to those provided by
other mutual fund families selected by the rating or
ranking services. They may be based upon the opinions of
the rating or ranking service itself, using its research or
judgment, or based upon surveys of investors, brokers,
shareholders or others.
From time to time the Fund may include in its
advertisements and sales literature the total return
performance of a hypothetical investment account that
includes shares of the fund and other Oppenheimer funds.
The combined account may be part of an illustration of an
asset allocation model or similar presentation. The account
performance may combine total return performance of the
fund and the total return performance of other Oppenheimer
funds included in the account. Additionally, from time to
time, the Fund's advertisements and sales literature may
include, for illustrative or comparative purposes,
statistical data or other information about general or
specific market and economic conditions. That may include,
for example,
o information about the performance of certain
securities or commodities markets or segments of
those markets,
o information about the performance of the economies of
particular countries or regions,
o the earnings of companies included in segments of
particular industries, sectors, securities markets,
countries or regions,
o the availability of different types of securities or
offerings of securities,
o information relating to the gross national or gross
domestic product of the United States or other
countries or regions,
o comparisons of various market sectors or indices to
demonstrate performance, risk, or other
characteristics of the Fund.
ABOUT your account
How to Buy Shares
Additional information is presented below about the methods
that can be used to buy shares of the Fund. Appendix B
contains more information about the special sales charge
arrangements offered by the Fund, and the circumstances in
which sales charges may be reduced or waived for certain
classes of investors.
AccountLink. When shares are purchased through
AccountLink, each purchase must be at least $25. Effective
November 1, 2002, for any new Asset Builder Plan, each
purchase through AccountLink must be at least $50 and
---
shareholders must invest at least $500 before an Asset
Builder Plan can be established on a new account. Accounts
established prior to November 1, 2001, will remain at $25
for additional purchases. Shares will be purchased on the
regular business day the Distributor is instructed to
initiate the Automated Clearing House ("ACH") transfer to
buy the shares. Dividends will begin to accrue on shares
purchased with 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
three days after the transfers are initiated. If the
proceeds of the ACH transfer are not received on a timely
basis, the Distributor reserves the right to cancel the
purchase order. The Distributor and the Fund are not
responsible for any delays in purchasing shares resulting
from delays in ACH transmissions.
Reduced Sales Charges. As discussed in the Prospectus, a
reduced sales charge rate may be obtained for Class A
shares under Right of Accumulation and Letters of Intent
because of the economies of sales efforts and reduction in
expenses realized by the Distributor, dealers and brokers
making such sales. No sales charge is imposed in certain
other circumstances described in Appendix B to this
Statement of Additional Information because the Distributor
or dealer or broker incurs little or no selling expenses.
|X| 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:
o Class A and Class B shares you purchase for your
individual accounts (including IRAs and 403(b)
plans), or for your joint accounts, or for
trust or custodial accounts on behalf of your
children who are minors, and
o 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, and
o 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.
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. The Distributor will add the value, at
current offering price, of the shares you previously
purchased and currently own to the value of current
purchases to determine the sales charge rate that applies.
The reduced sales charge will apply only to current
purchases. You must request it when you buy shares.
The Oppenheimer Funds. The Oppenheimer funds are those
mutual funds for which the Distributor acts as the
distributor and currently include the following:
Oppenheimer Bond Fund Oppenheimer Municipal Bond Fund
Oppenheimer California Municipal Fund Oppenheimer New Jersey Municipal Fund
Oppenheimer Capital Appreciation Fund Oppenheimer New York Municipal Fund
Oppenheimer Capital Preservation Fund Oppenheimer Pennsylvania Municipal Fund
Oppenheimer Capital Income Fund Oppenheimer Quest Balanced Value Fund
Oppenheimer Quest Capital Value Fund,
Oppenheimer Champion Income Fund Inc.
Oppenheimer Quest Global Value Fund,
Oppenheimer Convertible Securities Fund Inc.
Oppenheimer Developing Markets Fund Oppenheimer Quest Opportunity Value Fund
Oppenheimer Disciplined Allocation Fund Oppenheimer Quest Value Fund, Inc.
Oppenheimer Discovery Fund Oppenheimer Real Asset Fund
Oppenheimer Rochester National
Oppenheimer Emerging Growth Fund Municipals
Oppenheimer Emerging Technologies Fund Oppenheimer Senior Floating Rate Fund
Oppenheimer Enterprise Fund Oppenheimer Small Cap Value Fund
Oppenheimer Europe Fund Oppenheimer Strategic Income Fund
Oppenheimer Global Fund Oppenheimer Total Return Fund, Inc.
Oppenheimer Global Growth & Income Fund Oppenheimer Trinity Core Fund
Oppenheimer Trinity Large Cap Growth
Oppenheimer Gold & Special Minerals Fund Fund
Oppenheimer Growth Fund Oppenheimer Trinity Value Fund
Oppenheimer High Yield Fund Oppenheimer U.S. Government Trust
Oppenheimer International Bond Fund Oppenheimer Value Fund
Oppenheimer International Growth Fund Limited-Term New York Municipal Fund
Oppenheimer International Small Company
Fund Rochester Fund Municipals
Oppenheimer Limited-Term Government Fund OSM1- Gartmore Millennium Growth Fund II
Oppenheimer Limited Term Municipal Fund OSM1 - Jennison Growth Fund
Oppenheimer Main Street Growth & Income OSM1 - Mercury Advisors S&P 500 Index
Fund Fund
OSM1 - Mercury Advisors Focus Growth
Oppenheimer Main Street Opportunity Fund Fund
Oppenheimer Main Street Small Cap Fund OSM1 - QM Active Balanced Fund
Oppenheimer MidCap Fund OSM1 - Salomon Brothers All Cap Fund
Oppenheimer Multiple Strategies Fund
And the following money market funds:
Centennial America Fund, L. P. Centennial New York Tax Exempt Trust
Centennial California Tax Exempt Trust Centennial Tax Exempt Trust
Centennial Government Trust Oppenheimer Cash Reserves
Centennial Money Market Trust Oppenheimer Money Market Fund, Inc.
1 - "OSM" stands for Oppenheimer Select Managers
There is an initial sales charge on the purchase of
Class A shares of each of the Oppenheimer funds described
above except the money market funds. Under certain
circumstances described in this Statement of Additional
Information, redemption proceeds of certain money market
fund shares may be subject to a contingent deferred sales
charge.
Letters of Intent. Under a Letter of Intent, if you
purchase Class A shares or Class A and Class B shares of
the Fund and other Oppenheimer funds during a 13-month
period, you can reduce the sales charge rate that applies
to your purchases of Class A shares. The total amount of
your intended purchases of both Class A and Class B shares
will determine the reduced sales charge rate for the Class
A shares purchased during that period. You can include
purchases made up to 90 days before the date of the
Letter. Letters of Intent do not consider Class C or Class
N shares you purchase or may have purchased.
A Letter of Intent is an investor's statement in
writing to the Distributor of the intention to purchase
Class A shares or Class A and Class B shares of the Fund
(and other Oppenheimer funds) during a 13-month period (the
"Letter of Intent period"). At the investor's request, this
may 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 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. However, 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. That amount is
described in "Terms of Escrow," below (those terms may be
amended by the Distributor 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 a Letter of Intent. If those terms are
amended, as they may be from time to time by the Fund, the
investor agrees to be bound by the amended terms and 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 concessions previously paid to the
dealer of record for the account and the amount of sales
charge retained by the Distributor will be adjusted to the
rates applicable to actual total purchases. If total
eligible purchases during the Letter of Intent
period exceed the intended purchase amount and exceed the
amount needed to qualify for the next sales charge rate
reduction set forth in the Prospectus, the sales charges
paid will be adjusted to the lower rate. That adjustment
will be made only if and when the dealer returns to the
Distributor the excess of the amount of concessions allowed
or paid to the dealer over the amount of concessions that
apply to the actual amount of purchases. The excess
concessions 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.
The Transfer Agent will not hold shares in escrow for
purchases of shares of the Fund and other Oppenheimer funds
by OppenheimerFunds prototype 401(k) plans under a Letter
of Intent. If the intended purchase amount under a Letter
of Intent entered into by an OppenheimerFunds prototype
401(k) plan is not purchased by the plan by the end of the
Letter of Intent period, there will be no adjustment of
concessions paid to the broker-dealer or financial
institution of record for accounts held in the name of that
plan.
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.
|X| 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 offering
price adjusted for a $50,000 purchase). Any dividends and
capital gains distributions on the escrowed shares will be
credited to the investor's account.
2. If the total minimum investment 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 13-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. That sales charge adjustment will
apply to any shares redeemed prior to the completion of the
Letter. If the difference in sales charges is not paid
within twenty days after a request from the Distributor or
the dealer, the Distributor will, within sixty days of the
expiration of the Letter, redeem the number of escrowed
shares necessary to realize such difference in sales
charges. Full and fractional shares remaining after such
redemption will be released from escrow. If a request is
received to redeem escrowed shares prior to the payment of
such additional sales charge, the sales charge will be
withheld from the redemption proceeds.
4. By signing the Letter, the investor irrevocably
constitutes and appoints the Transfer Agent as
attorney-in-fact to surrender for redemption any or all
escrowed shares.
5. The shares eligible for purchase under the Letter (or
the holding of which may be counted toward completion of a
Letter) include:
(a) Class A shares sold with a front-end sales charge or
subject to a Class A contingent deferred sales
charge,
(b) Class B shares of other Oppenheimer funds acquired
subject to a contingent deferred sales charge,
and
(c) Class A or Class B shares acquired by exchange of
either (1) 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 (2) 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 to
buy shares directly from a bank account, you must enclose a
check (the minimum is $25) for the initial purchase with
your application. Currently, the minimum investment is $25
to establish an Asset Builder Plan, and will remain at $25
for those accounts established prior to November 1, 2002.
However, as described above under "AccountLink," for Asset
Builder Plans established on or after November 1, 2002, the
minimum investment for new Asset Builder Plans will
increase to $50, each purchase must be at least $50 and
---
shareholders must invest at least $500 before an Asset
Builder Plan can be established. Shares purchased by Asset
Builder Plan payments from bank accounts are subject to the
redemption restrictions for recent purchases described in
the Prospectus. Asset Builder Plans are available only if
your bank is an ACH member. Asset Builder Plans may not be
used to buy shares for OppenheimerFunds employer-sponsored
qualified retirement accounts. Asset Builder Plans also
enable shareholders of Oppenheimer Cash Reserves to use
their fund account to make monthly automatic purchases of
shares of up to four other Oppenheimer funds.
If you make payments from your bank account to
purchase shares of the Fund, your bank account will be
debited automatically. Normally the debit will be made two
business days prior to the investment dates you selected on
your application. Neither the Distributor, the Transfer
Agent nor the Fund shall be responsible for any delays in
purchasing shares that result from delays in ACH
transmissions.
Before you establish Asset Builder payments, you
should obtain a prospectus of the selected fund(s) from
your financial advisor (or the Distributor) and request an
application from the Distributor. Complete the application
and return it. You may change the amount of your Asset
Builder payment or you can terminate these automatic
investments at any time by writing to the Transfer Agent.
The Transfer Agent requires a reasonable period
(approximately 10 days) after receipt of your instructions
to implement them. The Fund reserves the right to amend,
suspend or discontinue offering Asset Builder plans at any
time without prior notice.
Retirement Plans. Certain types of retirement plans are
entitled to purchase shares of the Fund without sales
charge or at reduced sales charge rates, as described in
Appendix B to this Statement of Additional Information.
Certain special sales charge arrangements described in that
Appendix apply to retirement plans whose records are
maintained on a daily valuation basis by Merrill Lynch
Pierce Fenner & Smith, Inc. ("Merrill Lynch") or an
independent record keeper that has a contract or special
arrangement with Merrill Lynch. If on the date the plan
sponsor signed the Merrill Lynch record keeping service
agreement the plan has less than $3 million in assets
(other than assets invested in money market funds) invested
in applicable investments, then the retirement plan may
purchase only Class B shares of the Oppenheimer funds. Any
retirement plans in that category that currently invest in
Class B shares of the Fund will have their Class B shares
converted to Class A shares of the Fund when the plan's
applicable investments reach $5 million. OppenheimerFunds
has entered into arrangements with certain record keepers
whereby the Transfer Agent compensates the record keeper
for its record keeping and account servicing functions that
it performs on behalf of the participant level accounts of
a retirement plan. While such compensation may act to
reduce the record keeping fees charged by the retirement
plan's record keeper, that compensation arrangement may be
terminated at any time, potentially affecting the record
keeping fees charged by the retirement plan's record keeper.
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 values 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.
Classes of Shares. Each class of shares of the Fund
represents an interest in the same portfolio of investments
of the Fund. However, each class has different shareholder
privileges and features. The net income attributable to
Class B, Class C or Class N shares and the dividends
payable on Class B, Class C or Class N shares will be
reduced by incremental expenses borne solely by that class.
Those expenses include the asset-based sales charges to
which Class B, Class C and Class N shares are subject.
The availability of different classes of shares
permits an investor to choose the method of purchasing
shares that is more appropriate for the investor. That may
depend on the amount of the purchase, the length of time
the investor expects to hold shares, and other relevant
circumstances. Class A shares normally are sold subject to
an initial sales charge. While Class B, Class C and Class N
shares have no initial sales charge, the purpose of the
deferred sales charge and asset-based sales charge on Class
B, Class C and Class N shares is the same as that of the
initial sales charge on Class A shares - to compensate the
Distributor and brokers, dealers and financial institutions
that sell shares of the Fund. A salesperson who is
entitled to receive compensation from his or her firm for
selling Fund shares may receive different levels of
compensation for selling one class of shares rather than
another.
The Distributor will not accept any order in the
amount of $500,000 or more for Class B shares or $1 million
or more for Class C shares on behalf of a single investor
(not including dealer "street name" or omnibus accounts).
That is because generally it will be more advantageous for
that investor to purchase Class A shares of the Fund.
|X| Class A Shares Subject to a Contingent Deferred Sales
Charge. For purchases of Class A shares at net asset value
whether or not subject to a contingent deferred sales
charge as described in the Prospectus, no sales concessions
will be paid to the broker-dealer of record, as described
in the Prospectus, on sales of Class A shares purchased
with the redemption proceeds of shares of another mutual
fund offered as an investment option in a retirement plan
in which Oppenheimer funds are also offered as investment
options under a special arrangement with the Distributor,
if the purchase occurs more than 30 days after the
Oppenheimer funds are added as an investment option under
that plan. Additionally, that concession will not be paid
on purchases of Class A shares by a retirement plan made
with the redemption proceeds of Class N shares of one or
more Oppenheimer funds held by the plan for more than 18
months.
|X| Class B Conversion. Under current
interpretations of applicable federal income tax law by the
Internal Revenue Service, the conversion of Class B shares
to Class A shares after six years is not treated as a
taxable event for the shareholder. If those laws or the IRS
interpretation of those laws should change, the automatic
conversion feature may be suspended. In that event, no
further conversions of Class B shares would occur while
that suspension remained in effect. Although Class B
shares could then be exchanged for Class A shares on the
basis of relative net asset value of the two classes,
without the imposition of a sales charge or fee, such
exchange could constitute a taxable event for the
shareholder, and absent such exchange, Class B shares might
continue to be subject to the asset-based sales charge for
longer than six years.
|X| Availability of Class N Shares. In addition to
the description of the types of retirement plans which may
purchase Class N shares contained in the prospectus, Class
N shares also are offered to the following:
o to all rollover IRAs, (including SEP IRAs and SIMPLE
IRAs),
o to all rollover contributions made to Individual
401(k) plans, Profit-Sharing Plans and Money
Purchase Pension Plans,
o to all direct rollovers from
OppenheimerFunds-sponsored Pinnacle and
Ascender retirement plans,
o to all trustee-to-trustee IRA transfers,
o to all 90-24 type 403(b) transfers,
o to Group Retirement Plans (as defined in Appendix B
to this Statement of Additional Information)
which have entered into a special agreement
with the Distributor for that purpose,
o to Retirement Plans qualified under Sections 401(a)
or 401(k) of the Internal Revenue Code, the
recordkeeper or the plan sponsor for which has
entered into a special agreement with the
Distributor,
o to Retirement Plans of a plan sponsor where the
aggregate assets of all such plans invested in
the Oppenheimer funds is $500,000 or more,
o
to OppenheimerFunds-sponsored Ascender 401(k)
plans that pay for the purchase with the
redemption proceeds of Class A shares of one or
more Oppenheimer funds.
o to certain customers of broker-dealers and financial
advisors that are identified in a special
agreement between the broker-dealer or
financial advisor and the Distributor for that
purpose.
The sales concession and the advance of the service
fee, as described in the Prospectus, will not be paid to
dealers of record on sales of Class N shares on:
o purchases of Class N shares in amounts of $500,000 or
more by a retirement plan that pays for the
purchase with the redemption proceeds of Class
A shares of one or more Oppenheimer funds
(other than rollovers from an
OppenheimerFunds-sponsored Pinnacle or Ascender
401(k) plan to any IRA invested in the
Oppenheimer funds),
o purchases of Class N shares in amounts of $500,000 or
more by a retirement plan that pays for the
purchase with the redemption proceeds of Class
C shares of one or more Oppenheimer funds held
by the plan for more than one year (other than
rollovers from an OppenheimerFunds-sponsored
Pinnacle or Ascender 401(k) plan to any IRA
invested in the Oppenheimer funds), and
o on purchases of Class N shares by an
OppenheimerFunds-sponsored Pinnacle or Ascender
401(k) plan made with the redemption proceeds
of Class A shares of one or more Oppenheimer
funds.
No sales concessions will be paid to the
broker-dealer of record, as described in the Prospectus, on
sales of Class N shares purchased with the redemption
proceeds of shares of another mutual fund offered as an
investment option in a retirement plan in which Oppenheimer
funds are also offered as investment options under a
special arrangement with the Distributor, if the purchase
occurs more than 30 days after the Oppenheimer funds are
added as an investment option under that plan.
|X| Allocation of Expenses. The Fund pays expenses
related to its daily operations, such as custodian fees,
Trustees' fees, transfer agency fees, legal fees and
auditing costs. Those expenses are paid out of the Fund's
assets and are not paid directly by shareholders. However,
those expenses reduce the net asset values of shares, and
therefore are indirectly borne by shareholders through
their investment.
The methodology for calculating the net asset value,
dividends and distributions of the Fund's share classes
recognizes two types of expenses. General expenses that do
not pertain specifically to any one class are allocated pro
rata to the shares of all classes. The allocation is based
on the percentage of the Fund's total assets that is
represented by the assets of each class, and then equally
to each outstanding share within a given class. Such
general expenses include management fees, legal,
bookkeeping and audit fees, printing and mailing costs of
shareholder reports, Prospectuses, Statements of Additional
Information and other materials for current shareholders,
fees to unaffiliated Trustees, custodian expenses, share
issuance costs, organization and start-up costs, interest,
taxes and brokerage commissions, and non-recurring
expenses, such as litigation costs.
Other expenses that are directly attributable to a
particular class are allocated equally to each outstanding
share within that class. Examples of such expenses include
distribution and service plan (12b-1) fees, transfer and
shareholder servicing agent fees and expenses, and
shareholder meeting expenses (to the extent that such
expenses pertain only to a specific class).
Account Fees. As stated in the Prospectus, a $12 annual fee
will be charge on any account valued at less than $500.
This fee will not be charged for:
o Accounts that have balances below $500 due to the
automatic conversion of shares from Class B to
Class A shares;
o Accounts with an active Asset Builder Plan, payroll
deduction plan or a military allotment plan;
o OppenheimerFunds-sponsored group retirement accounts
that are making continuing purchases;
o Certain accounts held by broker-dealers through the
National Securities Clearing Corporation; and
o Accounts that fall below the $500 threshold due
solely to market fluctuations within the
12-month period preceding the date the fee is
deducted.
The annual fee will be charged on or about the second
to last business day of September. This annual fee will be
waived for any shareholders who elect to access their
account documents through electronic document delivery
rather than in paper copy and who elect to utilize the
Internet or PhoneLink as their primary source for their
general servicing needs. To sign up to access account
documents electronically via eDocs Direct, please visit the
Service Center on our website at www.oppenheimerfunds.com
------------------------
or call 1.888.470.0862 for instructions.
Determination of Net Asset Values Per Share. The net asset
values per share of each class of shares of the Fund are
determined as of the close of business of The New York
Stock Exchange ("the Exchange") on each day that the
Exchange is open. The calculation is done 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 Exchange normally closes at 4:00 P.M., Eastern time,
but may close earlier on
some other days (for example, in case of weather
emergencies or on days falling before a U.S. holiday). All
references to time in this Statement of Additional
Information mean "Eastern time." The Exchange's most recent
annual announcement (which is subject to change) states
that it will close on New Year's Day, Presidents' Day,
Martin Luther King, Jr. Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day and Christmas
Day. It may also close on other days.
Dealers other than Exchange members may conduct
trading in certain securities on days on which the Exchange
is closed (including weekends and holidays) or after 4:00
P.M. on a regular business day. Because the Fund's net
asset values will not be calculated on those days, the
Fund's net asset values per share may be significantly
affected on such days when shareholders may not purchase or
redeem shares. Additionally, trading on European and Asian
stock exchanges and over-the-counter markets normally is
completed before the close of The New York Stock Exchange.
Changes in the values of securities traded on foreign
exchanges or markets as a result of events that occur after
the prices of those securities are determined, but before
the close of The New York Stock Exchange, will not be
reflected in the Fund's calculation of its net asset values
that day unless the Manager determines that the event is
likely to effect a material change in the value of the
security. The Manager, or an internal valuation committee
established by the Manager, as applicable, may establish a
valuation, under procedures established by the Board and
subject to the approval, ratification and confirmation by
the Board at its next ensuing meeting.
|X| Securities Valuation. The Fund's Board of
Trustees has established procedures for the valuation of
the Fund's securities. In general those procedures are as
follows:
o Equity securities traded on a U.S. securities
exchange or on Nasdaq(R)are valued as follows:
(1) if last sale information is regularly reported, they
are valued at the last reported sale price
on the principal exchange on which they are
traded or on Nasdaq, as applicable, on that
day, or
(2) if last sale information is not available on a
valuation date, they are valued at the last
reported sale price preceding the valuation
date if it is within the
spread of the closing "bid" and "asked"
prices on the valuation date or, if not, at
the closing "bid" price on the valuation
date.
o Equity securities traded on a foreign securities
exchange generally are valued in one of the following ways:
(1) at the last sale price available to the pricing
service approved by the Board of Trustees,
or
(2) at the last sale price obtained by the Manager from
the report of the principal exchange on
which the security is traded at its last
trading session on or immediately before the
valuation date, or
(3) at the mean between the "bid" and "asked" prices
obtained from the principal exchange on
which the security is traded or, on the
basis of reasonable inquiry, from two market
makers in the security.
o Long-term debt securities having a remaining maturity
in excess of 60 days are valued based on the mean between
the "bid" and "asked" 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.
o The following securities are valued at the mean
between the "bid" and "asked" 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:
(1) debt instruments that have a maturity of more than
397 days when issued,
(2) debt instruments that had a maturity of 397 days or
less when issued and have a remaining
maturity of more than 60 days, and
(3) non-money market debt instruments that had a maturity
of 397 days or less when issued and which
have a remaining maturity of 60 days or less.
o The following securities are valued at cost, adjusted
for amortization of premiums and accretion of discounts:
(1) money market debt securities held by a non-money
market fund that had a maturity of less than
397 days when issued that have a remaining
maturity of 60 days or less, and
(2) debt instruments held by a money market fund that
have a remaining maturity of 397 days or
less.
o 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, a security may be priced at the mean between
the "bid" and "asked" prices provided by a single active
market maker (which in certain cases may be the "bid" price
if no "asked" price is available).
In the case of U.S. government securities,
mortgage-backed securities, corporate bonds and foreign
government securities, when last sale information is not
generally available, the Manager may use pricing services
approved by the Board of Trustees. The pricing service may
use "matrix" comparisons to the prices for comparable
instruments on the basis of quality, yield and maturity.
Other special factors may be involved (such as the
tax-exempt status of the interest paid by municipal
securities). The Manager will monitor the accuracy of the
pricing services. That monitoring may include comparing
prices used for portfolio valuation to actual sales prices
of selected securities.
The closing prices in the London foreign exchange
market on a particular business day that are provided to
the Manager by a bank, dealer or pricing service that the
Manager has determined to be reliable are used to value
foreign currency, including forward contracts, and to
convert to U.S. dollars securities that are denominated in
foreign currency.
Puts, calls, and futures are valued at the last sale
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, they shall be
valued at the last sale price on the preceding trading day
if it is within the spread of the closing "bid" and "asked"
prices on the principal exchange or on Nasdaq on the
valuation date. If not, the value shall be the closing bid
price on the principal exchange or on Nasdaq on the
valuation date. If the put, call or future is not traded
on an exchange or on Nasdaq, it shall be valued by the mean
between "bid" and "asked" prices obtained by the Manager
from two active market makers. In certain cases that may be
at the "bid" price if no "asked" price is available.
When the Fund writes an option, an amount equal to
the premium received is included in the Fund's Statement of
Assets and Liabilities as an asset. An equivalent credit is
included in the liability section. The credit is adjusted
("marked-to-market") to reflect the current market value of
the option. In determining the Fund's gain on investments,
if a call or put written by the Fund is exercised, the
proceeds are increased by the premium received. If a call
or put written by the Fund expires, the Fund has a gain in
the amount of the premium. If the Fund enters into a
closing purchase transaction, it will have a gain or loss,
depending on whether the premium received was more or less
than the cost of the closing transaction. If the Fund
exercises a put it holds, the amount the Fund receives on
its sale of the underlying investment is reduced by the
amount of premium paid by the Fund.
How to Sell Shares
The information below supplements the terms and conditions
for redeeming shares set forth in the Prospectus.
Reinvestment Privilege. Within six months of a redemption,
a shareholder may reinvest all or part of the redemption
proceeds of:
o Class A shares purchased subject to an initial sales
charge or Class A shares on which a contingent deferred
sales charge was paid, or
o Class B shares that were subject to the Class B
contingent deferred sales charge when redeemed.
The reinvestment may be made without sales charge
only in Class A shares of the Fund or any of the other
Oppenheimer funds into which shares of the Fund are
exchangeable as described in "How to Exchange Shares"
below. Reinvestment will be at the net asset value next
computed after the Transfer Agent receives the reinvestment
order. The shareholder must ask the Transfer Agent for
that privilege at the time of reinvestment. This privilege
does not apply to Class C, and Class N or Class Y shares.
The Fund may amend, suspend or cease offering this
reinvestment privilege at any time as to shares redeemed
after the date of such amendment, suspension or cessation.
Any capital gain that was realized when the shares
were redeemed is taxable, and reinvestment will not alter
any capital gains tax payable on that gain. If there has
been a capital loss on the redemption, some or all of the
loss may not be tax deductible, depending on the timing and
amount of the reinvestment. Under the Internal Revenue
Code, if the redemption proceeds of Fund shares on which a
sales charge was paid are reinvested 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.
Payments "In Kind." The Prospectus states that payment for
shares tendered for redemption is ordinarily made in cash.
However, under certain circumstances, 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
liquid securities from the portfolio of the Fund, in lieu
of cash. If payment in made by a distribution "in kind" of
portfolio securities, then the recipient will bear the risk
that the value of those securities may increase or decrease
before the securities can be sold.
The Fund has elected to be governed by Rule 18f-1
under the Investment Company Act. Under that rule, 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 Fund will value securities used to pay
redemptions in kind using the same method the Fund uses to
value its portfolio securities described above under
"Determination of Net Asset Values Per Share." That
valuation will be made as of the time the redemption price
is determined.
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 $500 or such lesser amount as the
Board may fix. The Board will not cause the involuntary
redemption of shares in an account if the aggregate net
asset value of such shares has fallen below the stated
minimum solely as a result of market fluctuations. If the
Board exercises this right, it may also fix the
requirements for any notice to be given to the shareholders
in question (not less than 30 days). The Board may
alternatively set requirements for the shareholder to
increase the investment, or set other terms and conditions
so that the shares would not be involuntarily redeemed.
Transfers of Shares. A transfer of shares to a different
registration is not an event that triggers the payment of
sales charges. Therefore, shares are not subject to the
payment of a contingent deferred sales charge of any class
at the time of transfer to the name of another person or
entity. It does not matter whether the transfer occurs by
absolute assignment, gift or bequest, as long as it does
not involve, directly or indirectly, a public sale of the
shares. When shares subject to a contingent deferred sales
charge are transferred, the transferred shares will remain
subject to the contingent deferred sales charge. It will be
calculated as if the transferee shareholder had acquired
the transferred shares in the same manner and at the same
time as the transferring shareholder.
If less than all shares held in an account are
transferred, and some but not all shares in the account
would be subject to a contingent deferred sales charge if
redeemed at the time of transfer, the priorities described
in the Prospectus under "How to Buy Shares" for the
imposition of the Class B, Class C and Class N contingent
deferred sales charge will be followed in determining the
order in which shares are transferred.
Distributions From Retirement Plans. Requests for
distributions from OppenheimerFunds-sponsored IRAs,
SEP-IRAs, SIMPLE IRAs, 403(b)(7) custodial plans, 401(k)
plans or pension or profit-sharing plans should be
addressed to "Trustee, OppenheimerFunds Retirement Plans,"
c/o the Transfer Agent at its address listed in "How To
Sell Shares" in the Prospectus or on the back cover of this
Statement of Additional Information. The request must:
(1) state the reason for the distribution;
(2) state the owner's awareness of tax penalties if the
distribution is premature; and
(3) conform to the requirements of the plan and the
Fund's other redemption requirements.
Participants (other than self-employed plan sponsors)
in OppenheimerFunds-sponsored pension or profit-sharing
plans with shares of the Fund held in the name of the plan
or its fiduciary may not directly request redemption of
their accounts. The plan administrator or fiduciary must
sign the request.
Distributions from pension and profit sharing plans
are subject to special requirements under the Internal
Revenue Code and certain documents (available from the
Transfer Agent) must be completed and submitted to the
Transfer Agent before the distribution may be made.
Distributions from retirement plans are subject to
withholding requirements under the Internal Revenue Code,
and IRS Form W-4P (available from the Transfer Agent) must
be submitted to the Transfer Agent with the distribution
request, or the distribution may be delayed. Unless the
shareholder has provided the Transfer Agent with a
certified tax identification number, the Internal Revenue
Code requires that tax be withheld from any distribution
even if the shareholder elects not to have tax withheld.
The Fund, the Manager, the Distributor, and the Transfer
Agent assume no responsibility to determine whether a
distribution satisfies the conditions of applicable tax
laws and will not be responsible for any tax penalties
assessed in connection with a distribution.
Special Arrangements for Repurchase of Shares from Dealers
and Brokers. The Distributor is the Fund's agent to
repurchase its shares from authorized dealers or brokers on
behalf of their customers. Shareholders should contact
their broker or dealer to arrange this type of redemption.
The repurchase price per share will be the net asset value
next computed after the Distributor receives an order
placed by the dealer or broker. However, if the Distributor
receives a repurchase order from a dealer or broker after
the close of The New York Stock Exchange on a regular
business day, it will be processed at that day's net asset
value if the order was received by the dealer or broker
from its customers prior to the time the Exchange closes.
Normally, the Exchange closes at 4:00 P.M., but may do so
earlier on some days. Additionally, the order must have
been transmitted to and received by the Distributor prior
to its close of business that day (normally 5:00 P.M.).
Ordinarily, for accounts redeemed by a broker-dealer
under this procedure, payment will be made within three
business days after the shares have been redeemed upon the
Distributor's receipt of the required redemption documents
in proper form. The signature(s) of the registered owners
on the redemption documents must be guaranteed as described
in the Prospectus.
Automatic Withdrawal and Exchange Plans. Investors owning
shares of the Fund valued at $5,000 or more can authorize
the Transfer Agent to redeem shares (having a value of at
least $50) automatically on a monthly, quarterly,
semi-annual or annual basis under an Automatic Withdrawal
Plan. Shares will be redeemed three business days prior to
the date requested by the shareholder for receipt of the
payment. Automatic withdrawals of up to $1,500 per month
may be requested by telephone if payments are to be made by
check payable to all shareholders of record. Payments must
also be sent to the address of record for the account and
the address must not have been changed within the prior 30
days. Required minimum distributions from
OppenheimerFunds-sponsored retirement plans may not be
arranged on this basis.
Payments are normally made by check, but shareholders
having AccountLink privileges (see "How To Buy Shares") may
arrange to have Automatic Withdrawal Plan payments
transferred to the bank account designated on the account
application or by signature-guaranteed instructions sent to
the Transfer Agent. Shares are normally redeemed pursuant
to an Automatic Withdrawal Plan three business days before
the payment transmittal date you select in the account
application. If a contingent deferred sales charge applies
to the redemption, the amount of the check or payment will
be reduced accordingly.
The Fund cannot guarantee receipt of a payment on the
date requested. The Fund reserves the right to amend,
suspend or discontinue offering these 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,
Class C and Class N shareholders should not establish
automatic withdrawal plans, because of the potential
imposition of the contingent deferred sales charge on such
withdrawals (except where the Class B, Class C or Class N
contingent deferred sales charge is waived as described in
Appendix B to this Statement of Additional Information).
By requesting an Automatic Withdrawal or Exchange
Plan, the shareholder agrees to the terms and conditions
that apply to such plans, as stated below. These
provisions may be amended from time to time by the Fund
and/or the Distributor. When adopted, any amendments will
automatically apply to existing Plans.
|X| Automatic Exchange Plans. Shareholders can
authorize the Transfer Agent to exchange a pre-determined
amount of shares of the Fund for shares (of the same class)
of other Oppenheimer funds automatically on a monthly,
quarterly, semi-annual or annual basis under an Automatic
Exchange Plan. The minimum amount that may be exchanged to
each other fund account is $25. Effective November 1, 2002,
the minimum amount that may be exchanged to each other fund
account is $50. Instructions should be provided on the
OppenheimerFunds Application or signature-guaranteed
instructions. Exchanges made under these plans are subject
to the restrictions that apply to exchanges as set forth in
"How to Exchange Shares" in the Prospectus and below in
this Statement of Additional Information.
|X| Automatic Withdrawal Plans. Fund shares will be
redeemed as necessary to meet withdrawal payments. Shares
acquired without a sales charge will be redeemed first.
Shares acquired with reinvested dividends and capital gains
distributions will be redeemed next, followed by shares
acquired with a sales charge, to the extent necessary to
make withdrawal payments. Depending upon the amount
withdrawn, the investor's principal may be depleted.
Payments made under these plans should not be considered as
a yield or income on your investment.
The Transfer Agent will administer the investor's
Automatic Withdrawal Plan as agent for the shareholder(s)
(the "Planholder") who executed the Plan authorization and
application submitted to the Transfer Agent. Neither the
Fund nor the Transfer Agent shall incur any liability to
the Planholder for any action taken or not taken by the
Transfer Agent in good faith to administer the Plan. Share
certificates will not be issued for shares of the Fund
purchased for and held under the Plan, but the Transfer
Agent will credit all such shares to the account of the
Planholder on the records of the Fund. Any share
certificates held by a Planholder may be surrendered
unendorsed to the Transfer Agent with the Plan application
so that the shares represented by the certificate may be
held under the Plan.
For accounts subject to Automatic Withdrawal Plans,
distributions of capital gains must be reinvested in shares
of the Fund, which will be done at net asset value without
a sales charge. Dividends on shares held in the account may
be paid in cash or reinvested.
Shares will be redeemed to make withdrawal payments
at the net asset value per share determined on the
redemption date. Checks or AccountLink payments
representing the proceeds of Plan withdrawals will normally
be transmitted three business days prior to the date
selected for receipt of the payment, according to the
choice specified in writing by the Planholder. Receipt of
payment on the date selected cannot be guaranteed.
The amount and the interval of disbursement payments
and the address to which checks are to be mailed or
AccountLink payments are to be sent may be changed at any
time by the Planholder by writing to the Transfer Agent.
The Planholder should allow at least two weeks' time after
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 to redeem all, or any
part of, the shares held under the Plan. That notice must
be in proper form in accordance with the requirements of
the then-current Prospectus of the Fund. In that case, the
Transfer Agent will redeem the number of shares requested
at the net asset value per share in effect and will mail a
check for the proceeds to the Planholder.
The Planholder may terminate a Plan at any time by
writing to the Transfer Agent. The Fund may also give
directions to the Transfer Agent to terminate a Plan. The
Transfer Agent will also terminate a Plan upon its receipt
of evidence satisfactory to it that the Planholder has died
or is legally incapacitated. Upon termination of a Plan by
the Transfer Agent or the Fund, shares that have not been
redeemed will be held in uncertificated form in the name of
the Planholder. The account will continue as a
dividend-reinvestment, uncertificated account unless and
until proper instructions are received from the Planholder,
his or her executor or guardian, or another authorized
person.
To use shares held under the Plan as collateral for a
debt, the Planholder may request issuance of a portion of
the shares in certificated form. Upon written request from
the Planholder, the Transfer Agent will determine the
number of shares for which a certificate may be issued
without causing the withdrawal checks to stop. However,
should such uncertificated shares become exhausted, Plan
withdrawals will terminate.
If the Transfer Agent ceases to act as transfer agent
for the Fund, the Planholder will be deemed to have
appointed any successor transfer agent to act as agent in
administering the Plan.
How to Exchange Shares
As stated in the Prospectus, shares of a particular class
of Oppenheimer funds having more than one class of shares
may be exchanged only for shares of the same class of other
Oppenheimer funds. Shares of Oppenheimer funds that have a
single class without a class designation are deemed "Class
A" shares for this purpose. You can obtain a current list
showing which funds offer which classes of shares by
calling the Distributor.
o All of the Oppenheimer funds currently offer Class A,
B, C, N and Y shares with the following exceptions:
The following funds only offer Class A shares:
Centennial America Fund, L.P. Centennial New York Tax Exempt
Trust
Centennial California Tax Exempt Trust Centennial Tax Exempt Trust
Centennial Government Trust Oppenheimer Money Market Fund, Inc.
Centennial Money Market Trust
The following funds do not offer Class N shares:
Oppenheimer California Municipal Fund Oppenheimer Pennsylvania Municipal
Fund
Oppenheimer Limited Term Municipal Fund Oppenheimer Rochester National
Municipals
Oppenheimer Municipal Bond Fund Rochester Fund Municipals
Oppenheimer New Jersey Municipal Fund Oppenheimer Senior Floating Rate
Fund
Oppenheimer New York Municipal Fund Limited Term New York Municipal
Fund
The following funds do not offer Class Y shares:
Oppenheimer California Municipal Fund Oppenheimer Limited Term Municipal
Fund
Oppenheimer Capital Income Fund Oppenheimer New Jersey Municipal
Fund
Oppenheimer Cash Reserves Oppenheimer New York Municipal Fund
Oppenheimer Champion Income Fund Oppenheimer Pennsylvania Municipal
Fund
Oppenheimer Convertible Securities Fund Oppenheimer Rochester National
Municipals
Oppenheimer Disciplined Allocation Fund Oppenheimer Senior Floating Rate
Fund
Oppenheimer Gold & Special Minerals Oppenheimer Small Cap Value Fund
Fund
Oppenheimer International Small Limited Term New York Municipal
Company Fund Fund
o Class Y shares of Oppenheimer Real Asset Fund may not
be exchanged for shares of any other fund.
o Class B, Class C and Class N shares of Oppenheimer
Cash Reserves are generally available only by
exchange from the same class of shares of other
Oppenheimer funds or through
OppenheimerFunds-sponsored 401(k) plans.
o Class M shares of Oppenheimer Convertible Securities
Fund may be exchanged only for Class A shares of
other Oppenheimer funds. They may not be acquired by
exchange of shares of any class of any other
Oppenheimer funds except Class A shares of
Oppenheimer Money Market Fund or Oppenheimer Cash
Reserves acquired by exchange of Class M shares.
o Class X shares of Limited Term New York Municipal
Fund may be exchanged only for Class B shares of
other Oppenheimer funds and no exchanges may be made
to Class X shares.
o Shares of Oppenheimer Capital Preservation Fund may
not be exchanged for shares of Oppenheimer Money
Market Fund, Inc., Oppenheimer Cash Reserves or
Oppenheimer Limited-Term Government Fund. Only
participants in certain retirement plans may purchase
shares of Oppenheimer Capital Preservation Fund, and
only those participants may exchange shares of other
Oppenheimer funds for shares of Oppenheimer Capital
Preservation Fund.
o Class A shares of Oppenheimer Senior Floating Rate
Fund are not available by exchange of shares of
Oppenheimer Money Market Fund or Class A shares of
Oppenheimer Cash Reserves.
o Shares of Oppenheimer Select Managers Mercury
Advisors S&P Index Fund and Oppenheimer Select
Managers QM Active Balanced Fund are only available
to retirement plans and are available only by
exchange from the same class of shares of other
Oppenheimer funds held by retirement plans.
o Class A shares of Oppenheimer funds may be exchanged
at net asset value for shares of any money market
fund offered by the Distributor. Shares of any money
market fund purchased without a sales charge may be
exchanged for shares of Oppenheimer funds offered
with a sales charge upon payment of the sales charge.
They may also be used to purchase shares of
Oppenheimer funds subject to an early withdrawal
charge or contingent deferred sales charge.
o Shares of Oppenheimer Money Market Fund, Inc.
purchased with the redemption proceeds of shares of
other mutual funds (other than funds managed by the
Manager or its subsidiaries) redeemed within the 30
days prior to that purchase may subsequently be
exchanged for shares of other Oppenheimer funds
without being subject to an initial sales charge or
contingent deferred sales charge. To qualify for that
privilege, the investor or the investor's dealer must
notify the Distributor of eligibility for this
privilege at the time the shares of Oppenheimer Money
Market Fund, Inc. are purchased. If requested, they
must supply proof of entitlement to this privilege.
o Shares of the Fund acquired by reinvestment of
dividends or distributions from any of the other
Oppenheimer funds or from any unit investment trust
for which reinvestment arrangements have been made
with the Distributor may be exchanged at net asset
value for shares of any of the Oppenheimer funds.
The Fund may amend, suspend or terminate the exchange
privilege at any time. Although the Fund may impose these
changes at any time, it will provide you with notice of
those changes whenever it is required to do so by
applicable law. It may be required to provide 60 days'
notice prior to materially amending or terminating the
exchange privilege. That 60 day notice is not required in
extraordinary circumstances.
|X| How Exchanges Affect Contingent Deferred Sales
Charges. No contingent deferred sales charge is imposed on
exchanges of shares of any class purchased subject to a
contingent deferred sales charge, with the following
exceptions:
o When Class A shares of any Oppenheimer fund (other
than Rochester National Municipals and Rochester Fund
Municipals) acquired by exchange of Class A shares of any
Oppenheimer fund purchased subject to a Class A contingent
deferred sales charge are redeemed within 18 months
measured from the beginning 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.
o When Class A shares of Rochester National Municipals
and Rochester Fund Municipals acquired by exchange of Class
A shares of any Oppenheimer fund purchased subject to
a Class A contingent deferred sales charge are redeemed
within 24 months of the beginning 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.
o If any Class A shares of another Oppenheimer fund
that are exchanged for Class A shares of Oppenheimer Senior
Floating Rate Fund are subject to the Class A contingent
deferred sales charge of the other Oppenheimer fund at the
time of exchange, the holding period for that Class A
contingent deferred sales charge will carry over to the
Class A shares of Oppenheimer Senior Floating Rate Fund
acquired in the exchange. The Class A shares of Oppenheimer
Senior Floating Rate Fund acquired in that exchange will be
subject to the Class A Early Withdrawal Charge of
Oppenheimer Senior Floating Rate Fund if they are
repurchased before the expiration of the holding period.
o When Class A shares of Oppenheimer Cash Reserves and
Oppenheimer Money Market Fund, Inc. acquired by exchange of
Class A shares of any Oppenheimer fund purchased subject to
a Class A contingent deferred sales charge are redeemed
within the Class A holding period of the fund from which
the shares were exchanged, the Class A contingent deferred
sales charge of the fund from which the shares were
exchanged is imposed on the redeemed shares.
o With respect to Class B shares, the Class B
contingent deferred sales charge is imposed on Class B
shares acquired by exchange if they are redeemed within six
years of the initial purchase of the exchanged Class B
shares.
o With respect to Class C 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.
o With respect to Class N shares, a 1% contingent
deferred sales charge will be imposed if the retirement
plan (not including IRAs and 403(b) plans) is terminated or
Class N
shares of all Oppenheimer funds are terminated as an
investment option of the plan and Class N shares are
redeemed within 18 months after the plan's first purchase
of Class N shares of any Oppenheimer fund or with respect
to an individual retirement plan or 403(b) plan, Class N
shares are redeemed within 18 months of the plan's first
purchase of Class N shares of any Oppenheimer fund.
o When Class B or Class C shares are redeemed to effect
an exchange, the priorities described in "How To Buy
Shares" in the Prospectus for the imposition of the Class B
or the Class C contingent deferred sales charge will be
followed in determining the order in which the shares are
exchanged. Before exchanging shares, shareholders should
take into account how the exchange may affect any
contingent deferred sales charge that might be imposed in
the subsequent redemption of remaining shares.
Shareholders owning shares of more than one class
must specify which class of shares they wish to exchange.
|X| Limits on Multiple Exchange Orders. The Fund
reserves the right to reject telephone or written exchange
requests submitted in bulk by anyone on behalf of more than
one account. The Fund may accept requests for exchanges of
up to 50 accounts per day from representatives of
authorized dealers that qualify for this privilege.
|X| Telephone Exchange Requests. When exchanging
shares by telephone, a shareholder must have an existing
account in the fund to which the exchange is to be made.
Otherwise, the investors must obtain a prospectus of that
fund before the exchange request may be submitted. If all
telephone lines are busy (which might occur, for example,
during periods of substantial market fluctuations),
shareholders might not be able to request exchanges by
telephone and would have to submit written exchange
requests.
|X| Processing Exchange Requests. Shares to be exchanged
are redeemed on the regular business day the Transfer Agent
receives an exchange request in proper form (the
"Redemption Date"). Normally, shares of the fund to be
acquired are purchased on the Redemption Date, but such
purchases may be delayed by either fund up to five business
days if it determines that it
would be disadvantaged by an immediate transfer of the
redemption proceeds. The Fund reserves the right, in its
discretion, to refuse any exchange request that may
disadvantage it. For example, if the receipt of multiple
exchange requests from a dealer might require the
disposition of portfolio securities at a time or at a price
that might be disadvantageous to the Fund, the Fund may
refuse the request.
When you exchange some or all of your shares from one
fund to another, any special account feature such as an
Asset Builder Plan or Automatic Withdrawal Plan, will be
switched to the new fund account unless you tell the
Transfer Agent not to do so. However, special redemption
and exchange features such as Automatic Exchange Plans and
Automatic Withdrawal Plans cannot be switched to an account
in Oppenheimer Senior Floating Rate Fund.
In connection with any exchange request, the number
of shares exchanged may be less than the number requested
if the exchange or the number requested would include
shares subject to a restriction cited in the Prospectus or
this Statement of Additional Information, or would include
shares covered by a share certificate that is not tendered
with the request. In those cases, only the shares
available for exchange without restriction will be
exchanged.
The different Oppenheimer funds available for
exchange have different investment objectives, policies and
risks. A shareholder should assure that the fund selected
is appropriate for his or her investment and should be
aware of the tax consequences of an exchange. For federal
income tax purposes, an exchange transaction is treated as
a redemption of shares of one fund and a purchase of shares
of another. "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. The Fund has no fixed dividend
rate and there can be no assurance as to the payment of any
dividends or the realization of any capital gains. The
dividends and distributions paid by a class of shares will
vary from time to time depending on market conditions, the
composition of the Fund's portfolio, and expenses borne by
the Fund or borne separately by a class. Dividends are
calculated in the same manner, at the same time, and on the
same day for each class of shares. However, dividends on
Class B, Class C and Class N shares are expected to be
lower than dividends on Class A and Class Y shares. That is
because of the effect of the asset-based sales charge on
Class B, Class C and Class N shares. Those dividends will
also differ in amount as a consequence of any difference in
the net asset values of the different classes of shares.
Dividends, distributions and proceeds of the
redemption of Fund shares represented by
checks returned to the Transfer Agent by the Postal Service
as undeliverable will be invested in shares of Oppenheimer
Money Market Fund, Inc. Reinvestment will be made as
promptly as possible after the return of such checks to the
Transfer Agent, to enable the investor to earn a return on
otherwise idle funds. Unclaimed accounts may be subject to
state escheatment laws, and the Fund and the Transfer Agent
will not be liable to shareholders or their representatives
for compliance with those laws in good faith.
Tax Status of the Fund's Dividends, Distributions and
Redemptions of Shares. The federal tax treatment of the
Fund's dividends and capital gains distributions is briefly
highlighted in the Prospectus. The following is only a
summary of certain additional tax considerations generally
affecting the Fund and its shareholders.
The tax discussion in the Prospectus and this
Statement of Additional Information is based on tax law in
effect on the date of the Prospectus and this Statement of
Additional Information. Those laws and regulations may be
changed by legislative, judicial, or administrative action,
sometimes with retroactive effect. State and local tax
treatment of ordinary income dividends and capital gain
dividends from regulated investment companies may differ
from the treatment under the Internal Revenue Code
described below. Potential purchasers of shares of the Fund
are urged to consult their tax advisers with specific
reference to their own tax circumstances as well as the
consequences of federal, state and local tax rules
affecting an investment in the Fund.
Qualification as a Regulated Investment Company. The Fund
has elected to be taxed as a regulated investment company
under Subchapter M of the Internal Revenue Code of 1986, as
amended. As a regulated investment company, the Fund is
not subject to federal income tax on the portion of its net
investment income (that is, taxable interest, dividends,
and other taxable ordinary income, net of expenses) and
capital gain net income (that is, the excess of net
long-term capital gains over net short-term capital losses)
that it distributes to shareholders. That qualification
enables the Fund to "pass through" its income and realized
capital gains to shareholders without having to pay tax on
them. This avoids a "double tax" on that income and capital
gains, since shareholders normally will be taxed on the
dividends and capital gains they receive from the Fund
(unless their Fund shares are held in a retirement account
or the shareholder is otherwise exempt from tax).
The Internal Revenue Code contains a number of
complex tests relating to qualification that the Fund might
not meet in a particular year. If it did not qualify as a
regulated investment company, the Fund would be treated for
tax purposes as an ordinary corporation and would receive
no tax deduction for payments made to shareholders.
To qualify as a regulated investment company, the
Fund must distribute at least 90% of its investment company
taxable income (in brief, net investment income and the
excess of net short-term capital gain over net long-term
capital loss) for the taxable year. The Fund must also
satisfy certain other requirements of the Internal Revenue
Code, some of which are described below. Distributions by
the Fund made during the taxable year or, under specified
circumstances, within 12 months after the close of the
taxable year, will be considered distributions of income
and gains for the taxable year and will therefore count
toward satisfaction of the above-mentioned requirement.
To qualify as a regulated investment company, the
Fund must derive at least 90% of its gross income from
dividends, interest, certain payments with respect to
securities loans, gains from the sale or other disposition
of stock or securities or foreign currencies (to the extent
such currency gains are directly related to the regulated
investment company's principal business of investing in
stock or securities) and certain other income.
In addition to satisfying the requirements described
above, the Fund must satisfy an asset diversification test
in order to qualify as a regulated investment company.
Under that test, at the
close of each quarter of the Fund's taxable year, at least
50% of the value of the Fund's assets must
consist of cash and cash items (including receivables),
U.S. government securities, securities of other regulated
investment companies, and securities of other issuers. As
to each of those issuers, the Fund must not have invested
more than 5% of the value of the Fund's total assets in
securities of each such issuer and the Fund must not hold
more than 10% of the outstanding voting securities of each
such issuer. No more than 25% of the value of its total
assets may be invested in the securities of any one issuer
(other than U.S. government securities and securities of
other regulated investment companies), or in two or more
issuers which the Fund controls and which are engaged in
the same or similar trades or businesses. For purposes of
this test, obligations issued or guaranteed by certain
agencies or instrumentalities of the U.S. government are
treated as U.S. government securities.
Excise Tax on Regulated Investment Companies. Under the
Internal Revenue Code, by December 31 each year, the Fund
must distribute 98% of its taxable investment income earned
from January 1 through December 31 of that year and 98% of
its capital gains realized in the period from November 1 of
the prior year through October 31 of the current year. If
it does not, the Fund must pay an excise tax on the amounts
not distributed. It is presently anticipated that the Fund
will meet those requirements. To meet this requirement, in
certain circumstances the Fund might be required to
liquidate portfolio investments to make sufficient
distributions to avoid excise tax liability. However, the
Board of Trustees and the Manager might determine in a
particular year that it would be in the best interests of
shareholders for the Fund not to make such distributions at
the required levels and to pay the excise tax on the
undistributed amounts. That would reduce the amount of
income or capital gains available for distribution to
shareholders.
Taxation of Fund Distributions. The Fund anticipates
distributing substantially all of its investment company
taxable income for each taxable year. Those distributions
will be taxable to shareholders as ordinary income and
treated as dividends for federal income tax purposes.
Special provisions of the Internal Revenue Code
govern the eligibility of the Fund's dividends for the
dividends-received deduction for corporate shareholders.
Long-term capital gains distributions are not eligible for
the deduction. The amount of dividends paid by the Fund
that may qualify for the deduction is limited to the
aggregate amount of qualifying dividends that the Fund
derives from portfolio investments that the Fund has held
for a minimum period, usually 46 days. A corporate
shareholder will not be eligible for the deduction on
dividends paid on Fund shares held for 45 days or less. To
the extent the Fund's dividends are derived from gross
income from option premiums, interest income or short-term
gains from the sale of securities or dividends from foreign
corporations, those dividends will not qualify for the
deduction.
The Fund may either retain or distribute to
shareholders its net capital gain for each taxable year.
The Fund currently intends to distribute any such amounts.
If net long term capital gains are distributed and
designated as a capital gain distribution, it will be
taxable to shareholders as a long-term capital gain and
will be properly identified in reports sent to shareholders
in January of each year. Such treatment will apply no
matter how long the shareholder has held his or her shares
or whether that gain was recognized by the Fund before the
shareholder acquired his or her shares.
If the Fund elects to retain its net capital gain,
the Fund will be subject to tax on it at the 35% corporate
tax rate. If the Fund elects to retain its net capital
gain, the Fund will provide to
shareholders of record on the last day of its taxable year
information regarding their pro rata share
of the gain and tax paid. As a result, each shareholder
will be required to report his or her pro rata share of
such gain on their tax return as long-term capital gain,
will receive a refundable tax credit for his/her pro rata
share of tax paid by the Fund on the gain, and will
increase the tax basis for his/her shares by an amount
equal to the deemed distribution less the tax credit.
Investment income that may be received by the Fund
from sources within foreign countries may be subject to
foreign taxes withheld at the source. The United States
has entered into tax treaties with many foreign countries
which entitle the Fund to a reduced rate of, or exemption
from, taxes on such income.
Distributions by the Fund that do not constitute
ordinary income dividends or capital gain distributions
will be treated as a return of capital to the extent of the
shareholder's tax basis in their shares. Any excess will be
treated as gain from the sale of those shares, as discussed
below. Shareholders will be advised annually as to the U.S.
federal income tax consequences of distributions made (or
deemed made) during the year. If prior distributions made
by the Fund must be re-characterized as a non-taxable
return of capital at the end of the fiscal year as a result
of the effect of the Fund's investment policies, they will
be identified as such in notices sent to shareholders.
Distributions by the Fund will be treated in the
manner described above regardless of whether the
distributions are paid in cash or reinvested in additional
shares of the Fund (or of another fund). Shareholders
receiving a distribution in the form of additional shares
will be treated as receiving a distribution in an amount
equal to the fair market value of the shares received,
determined as of the reinvestment date.
The Fund will be required in certain cases to
withhold 30% (29% for payments after December 31, 2003) of
ordinary income dividends, capital gains distributions and
the proceeds of the redemption of shares, paid to any
shareholder (1) who has failed to provide a correct
-------
taxpayer identification number or to properly certify that
number when required, (2) who is subject to backup
withholding for failure to report the receipt of interest
or dividend income properly, or (3) who has failed to
certify to the Fund that the shareholder is not subject to
backup withholding or is an "exempt recipient" (such as a
corporation). All income and any tax withheld by the Fund
is remitted by the Fund to the U.S. Treasury and is
identified in reports mailed to shareholders in January of
each year.
Tax Effects of Redemptions of Shares. If a
shareholder redeems all or a portion of his/her shares, the
-
shareholder will recognize a gain or loss on the redeemed
shares in an amount equal to the difference between the
proceeds of the redeemed shares and the shareholder's
adjusted tax basis in the shares. All or a portion of any
loss recognized in that manner may be disallowed if the
shareholder purchases other shares of the Fund within 30
days before or after the redemption.
In general, any gain or loss arising from the
redemption of shares of the Fund will be considered capital
gain or loss, if the shares were held as a capital asset.
It will be long-term capital gain or loss if the shares
were held for more than one year. However, any capital
loss arising from
the redemption of shares held for six months or less will
be treated as a long-term capital loss to the extent of the
amount of capital gain dividends received on those shares.
Special holding period rules under the Internal Revenue
Code apply in this case to determine the holding period of
shares and there are limits on the deductibility of capital
losses in any year.
Foreign Shareholders. Under U.S. tax law, taxation of a
shareholder who is a foreign person (to include, but not
limited to, a nonresident alien individual, a foreign
trust, a foreign estate, a foreign corporation, or a
foreign partnership) primarily depends on whether the
foreign person's income from the Fund is effectively
connected with the conduct of a U.S. trade or business.
Typically, ordinary income dividends paid from a mutual
fund are not considered "effectively connected" income.
Ordinary income dividends that are paid by the Fund
(and are deemed not "effectively connected income") to
foreign persons will be subject to a U.S. tax withheld by
the Fund at a rate of 30%, provided the Fund obtains a
properly completed and signed Certificate of Foreign
Status. The tax rate may be reduced if the foreign person's
country of residence has a tax treaty with the U.S.
allowing for a reduced tax rate on ordinary income
dividends paid by the Fund. All income and any tax withheld
by the Fund is remitted by the Fund to the U.S. Treasury
and is identified in reports mailed to shareholders in
March of each year.
If the ordinary income dividends from the Fund are
---
effectively connected with the conduct of a U.S. trade or
business, then the foreign person may claim an exemption
from the U.S. tax described above provided the Fund obtains
a properly completed and signed Certificate of Foreign
Status.
If the foreign person fails to provide a
certification of his/her foreign status, the Fund will be
required to withhold U.S. tax at a rate of 30% (29% for
payments after December 31, 2003) on ordinary income
dividends, capital gains distributions and the proceeds of
the redemption of shares, paid to any foreign person. All
income and any tax withheld (in this situation) by the Fund
is remitted by the Fund to the U.S. Treasury and is
identified in reports mailed to shareholders in January of
each year.
The tax consequences to foreign persons entitled to
claim the benefits of an applicable tax treaty may be
different from those described herein. Foreign
shareholders are urged to consult their own tax advisors or
the U.S. Internal Revenue Service with respect to the
particular tax consequences to them of an investment in the
Fund, including the applicability of the U.S. withholding
taxes described above.
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 above. Reinvestment will
be made without sales charge at the net asset value per
share in effect at the close of business on the payable
date of the dividend or distribution. To elect this option,
the shareholder must notify the Transfer Agent in writing
and must have an existing account in the fund selected for
reinvestment. Otherwise the shareholder first must obtain a
prospectus for that fund and an application from the
Distributor to establish an account. Dividends and/or
distributions from shares of certain other Oppenheimer
funds (other than Oppenheimer Cash Reserves) may be
invested in shares of this Fund on the same basis.
Additional Information About the Fund
The Distributor. The Fund's shares are sold through
dealers, brokers and other financial institutions that have
a sales agreement with OppenheimerFunds Distributor, Inc.,
a subsidiary of the Manager that acts as the Fund's
Distributor. The Distributor also distributes shares of
the other Oppenheimer funds and is sub-distributor for
funds managed by a subsidiary of the Manager.
The Transfer Agent. OppenheimerFunds Services, the Fund's
Transfer Agent, is a division of the Manager. It is
responsible for maintaining the Fund's shareholder registry
and shareholder accounting records, and for paying
dividends and distributions to shareholders. It also
handles shareholder servicing and administrative functions.
It serves as the Transfer Agent for an annual per account
fee. It also acts as shareholder servicing agent for the
other Oppenheimer funds. Shareholders should direct
inquiries about their accounts to the Transfer Agent at the
address and toll-free numbers shown on the back cover.
The Custodian. Citibank, N.A. is 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 is 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. The Fund's cash balances with the
custodian in excess of $100,000 are not protected by
federal deposit insurance. Those uninsured balances at
times may be substantial.
Independent Auditors. KPMG LLP are the independent auditors
of the Fund. They audit the Fund's financial statements and
perform other related audit services. They also act as
auditors for certain other funds advised by the Manager and
its affiliates.
INDEPENDENT AUDITORS' REPORT
- --------------------------------------------------------------------------------
================================================================================
THE BOARD OF TRUSTEES AND SHAREHOLDERS OF
OPPENHEIMER GROWTH FUND:
We have audited the accompanying statement of assets and
liabilities of
Oppenheimer Growth Fund, including the statement of
investments, as of August
31, 2002, and the related statement of operations for the
year then ended, the
statements of changes in 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. These financial statements and financial
highlights are the
responsibility of the Fund's management. Our responsibility
is to express an
opinion on these financial statements and financial
highlights based on our
audits.
We conducted our audits in accordance with auditing
standards generally
accepted in the United States of America. Those standards
require that we plan
and perform the audit to obtain reasonable assurance about
whether the
financial statements and financial highlights are free of
material
misstatement. An audit includes examining, on a test basis,
evidence supporting
the amounts and disclosures in the financial statements.
Our procedures
included confirmation of securities owned as of August 31,
2002, by
correspondence with the custodian and brokers. An audit
also includes assessing
the accounting principles used and significant estimates
made by management, as
well as evaluating the overall financial statement
presentation. We believe
that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial
highlights referred
to above present fairly, in all material respects, the
financial position of
Oppenheimer Growth Fund as of August 31, 2002, 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
accounting principles
generally accepted in the United States of America.
KPMG LLP
Denver, Colorado
September 23, 2002
STATEMENT OF INVESTMENTS August 31, 2002
- --------------------------------------------------------------------------------
MARKET VALUE
SHARES SEE NOTE 1
============================================================
COMMON STOCKS--81.4%
- ------------------------------------------------------------
CONSUMER DISCRETIONARY--22.9%
- ------------------------------------------------------------
AUTOMOBILES--3.9%
Harley-Davidson, Inc. 1,300,000 $ 63,999,000
- ------------------------------------------------------------
MEDIA--0.8%
Comcast Corp.,
Cl. A Special(1) 517,000 12,320,110
- ------------------------------------------------------------
MULTILINE RETAIL--13.4%
BJ's Wholesale
Club, Inc.(1) 680,000 16,694,000
- ------------------------------------------------------------
Costco Wholesale
Corp.(1) 1,750,000 58,467,500
- ------------------------------------------------------------
Kohl's Corp(1) 1,604,500 111,865,740
- ------------------------------------------------------------
Target Corp. 950,000 32,490,000
--------------
219,517,240
- ------------------------------------------------------------
SPECIALTY RETAIL--4.8%
Bed Bath & Beyond, Inc.(1) 2,445,000 78,386,700
- ------------------------------------------------------------
CONSUMER STAPLES--3.8%
- ------------------------------------------------------------
FOOD & DRUG RETAILING--3.8%
Walgreen Co. 1,800,000 62,550,000
- ------------------------------------------------------------
FINANCIALS--14.0%
- ------------------------------------------------------------
DIVERSIFIED FINANCIALS--10.9%
AMBAC Financial
Group, Inc. 795,600 45,754,956
- ------------------------------------------------------------
Freddie Mac 490,500 31,441,050
- ------------------------------------------------------------
SLM Corp. 1,100,000 100,815,000
--------------
178,011,006
- ------------------------------------------------------------
INSURANCE--3.1%
MBIA, Inc. 1,112,600 51,135,096
- ------------------------------------------------------------
HEALTH CARE--30.5%
- ------------------------------------------------------------
BIOTECHNOLOGY--4.3%
Gilead Sciences, Inc.(1) 1,250,000 40,100,000
- ------------------------------------------------------------
IDEC Pharmaceuticals
Corp.(1) 755,000 30,335,900
--------------
70,435,900
MARKET VALUE
SHARES SEE NOTE 1
============================================================
HEALTH CARE EQUIPMENT & SUPPLIES--6.2%
Biomet, Inc. 937,100 $ 25,170,506
- ------------------------------------------------------------
Stryker Corp. 1,327,500 74,831,175
--------------
100,001,681
- ------------------------------------------------------------
HEALTH CARE PROVIDERS & SERVICES--14.2%
AmerisourceBergen Corp. 625,000 45,318,750
- ------------------------------------------------------------
Cardinal Health, Inc. 732,000 47,462,880
- ------------------------------------------------------------
Lincare Holdings, Inc.(1) 1,399,200 44,844,360
- ------------------------------------------------------------
McKesson Corp. 980,000 32,869,200
- ------------------------------------------------------------
Tenet Healthcare Corp.(1) 1,312,500 61,910,625
--------------
232,405,815
- ------------------------------------------------------------
PHARMACEUTICALS--5.8%
Johnson & Johnson 1,750,000 95,042,500
- ------------------------------------------------------------
INDUSTRIALS--5.2%
- ------------------------------------------------------------
COMMERCIAL SERVICES & SUPPLIES--5.2%
Concord EFS, Inc.(1) 2,300,000 46,943,000
- ------------------------------------------------------------
First Data Corp. 1,074,800 37,349,300
--------------
84,292,300
- ------------------------------------------------------------
INFORMATION TECHNOLOGY--5.0%
- ------------------------------------------------------------
COMMUNICATIONS EQUIPMENT--0.5%
Cisco Systems, Inc.(1) 650,000 8,983,000
- ------------------------------------------------------------
COMPUTERS & PERIPHERALS--0.4%
EMC Corp.(1) 1,000,000 6,760,000
- ------------------------------------------------------------
SEMICONDUCTOR EQUIPMENT & PRODUCTS--0.6%
Broadcom Corp., Cl. A(1) 550,000 9,069,500
- ------------------------------------------------------------
SOFTWARE--3.5%
Microsoft Corp.(1) 1,175,000 57,669,000
--------------
Total Common
Stocks (Cost $1,350,683,668) 1,330,578,848
============================================================
OTHER SECURITIES--1.4%
- ------------------------------------------------------------
Nasdaq-100 Unit
Investment Trust(1)
(Cost $37,369,749) 1,000,000 23,490,000
12
OPPENHEIMER GROWTH FUND
PRINCIPAL MARKET VALUE
AMOUNT SEE NOTE 1
============================================================
SHORT-TERM NOTES--8.4%
- ------------------------------------------------------------
Barton Capital Corp.,
1.75%, 9/20/02 $ 13,093,000 $ 13,080,907
- ------------------------------------------------------------
Fairway Finance Corp.,
1.74%, 9/9/02 26,551,000 26,540,734
- ------------------------------------------------------------
Neptune Funding Corp.,
1.78%, 10/1/02 38,370,000 38,313,084
- ------------------------------------------------------------
Wyeth:
2%, 9/17/02 25,000,000 24,979,222
2%, 9/26/02 35,000,000 34,954,549
-------------
Total Short-Term Notes
(Cost $137,868,496) 137,868,496
PRINCIPAL MARKET VALUE
AMOUNT SEE NOTE 1
============================================================
JOINT REPURCHASE AGREEMENTS--8.9%
- ------------------------------------------------------------
Undivided interest of 36.29% in joint
repurchase agreement with DB Alex Brown
LLC, 1.81%, dated 8/30/02, to be
repurchased at $400,896,609 on 9/3/02,
collateralized by U.S. Treasury Bonds,
5.50%-6.125%, 8/15/28-8/15/29, with a
value of $410,193,562 (Cost
$145,455,000)
$145,455,000 $145,455,000
- ------------------------------------------------------------
TOTAL INVESTMENTS,
AT VALUE
(Cost $1,671,376,913) 100.1% 1,637,392,344
- ------------------------------------------------------------
LIABILITIES IN EXCESS OF
OTHER ASSETS (0.1) (2,399,339)
------------------------------
NET ASSETS 100.0% $1,634,993,005
==============================
FOOTNOTES TO STATEMENT OF INVESTMENTS
1. Non-income producing security.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
13
OPPENHEIMER GROWTH FUND
STATEMENT OF ASSETS AND LIABILITIES August 31, 2002
- --------------------------------------------------------------------------------
=========================================================================
ASSETS
- -------------------------------------------------------------------------
Investments, at value (cost $1,671,376,913)--
see accompanying statement $
1,637,392,344
- -------------------------------------------------------------------------
Cash
611,843
- -------------------------------------------------------------------------
Receivables and other assets:
Shares of beneficial interest
sold 716,433
Interest and
dividends 649,612
Other
14,203
- --------------
Total assets
1,639,384,435
=========================================================================
LIABILITIES
- -------------------------------------------------------------------------
Payables and other liabilities:
Shares of beneficial interest
redeemed 2,079,475
Transfer and shareholder servicing agent
fees 812,090
Distribution and service plan
fees 642,356
Trustees'
compensation
419,183
Shareholder
reports 401,180
Other
37,146
- --------------
Total
liabilities
4,391,430
=========================================================================
NET ASSETS
$1,634,993,005
==============
=========================================================================
COMPOSITION OF NET ASSETS
- -------------------------------------------------------------------------
Par value of shares of beneficial interest
$ 68,521
- -------------------------------------------------------------------------
Additional paid-in capital
2,341,849,093
- -------------------------------------------------------------------------
Overdistributed net investment
income (402,691)
- -------------------------------------------------------------------------
Accumulated net realized loss on investment
transactions (672,537,349)
- -------------------------------------------------------------------------
Net unrealized depreciation on
investments (33,984,569)
- --------------
NET ASSETS
$1,634,993,005
==============
14
OPPENHEIMER GROWTH FUND
================================================================================
NET ASSET VALUE PER SHARE
- --------------------------------------------------------------------------------
Class A Shares:
Net asset value and redemption price per share (based on net
assets of $1,173,027,251 and 48,489,125 shares of beneficial
interest
outstanding)
$24.19
Maximum offering price per share (net asset value plus
sales charge of 5.75% of offering
price) $25.67
- --------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes applicable
contingent deferred sales charge) and offering price per
share (based on net assets of $317,725,011 and 13,937,727
shares of beneficial interest
outstanding) $22.80
- --------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes applicable
contingent deferred sales charge) and offering price per
share (based on net assets of $75,228,794 and 3,245,756
shares of beneficial interest
outstanding) $23.18
- --------------------------------------------------------------------------------
Class N Shares:
Net asset value, redemption price (excludes applicable
contingent deferred sales charge) and offering price per
share (based on net assets of $2,242,739 and 93,476 shares
of beneficial interest
outstanding) $23.99
- --------------------------------------------------------------------------------
Class Y Shares:
Net asset value, redemption price and offering price per
share (based on net assets of $66,769,210 and 2,754,559
shares of beneficial interest
outstanding) $24.24
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
15
OPPENHEIMER GROWTH FUND
STATEMENT OF OPERATIONS For the Year Ended August 31, 2002
- --------------------------------------------------------------------------------
=========================================================================
INVESTMENT INCOME
- -------------------------------------------------------------------------
Dividends (net of foreign withholding taxes of $35,014)
$ 7,920,000
- -------------------------------------------------------------------------
Interest
7,455,844
- -------------
Total investment
income 15,375,844
=========================================================================
EXPENSES
- -------------------------------------------------------------------------
Management
fees
12,880,111
- -------------------------------------------------------------------------
Distribution and service plan fees:
Class
A
3,313,032
Class
B
4,141,613
Class
C
931,561
Class
N
8,087
- -------------------------------------------------------------------------
Transfer and shareholder servicing agent fees:
Class
A
4,947,368
Class
B
1,465,583
Class
C
328,649
Class
N
5,563
Class
Y
320,809
- -------------------------------------------------------------------------
Shareholder
reports 1,503,019
- -------------------------------------------------------------------------
Trustees'
compensation
121,287
- -------------------------------------------------------------------------
Custodian fees and
expenses 99,581
- -------------------------------------------------------------------------
Other
93,018
- -------------
Total
expenses
30,159,281
Less reduction to custodian
expenses (11,345)
Less voluntary waiver of transfer and shareholder
servicing agent fees--Class A, B, C and
N (131,324)
Less voluntary waiver of transfer and shareholder
servicing agent fees--Class
Y (90,843)
- -------------
Net
expenses
29,925,769
=========================================================================
NET INVESTMENT
LOSS (14,549,925)
=========================================================================
REALIZED AND UNREALIZED GAIN (LOSS)
- -------------------------------------------------------------------------
Net realized gain (loss) on:
Investments
(315,329,422)
Closing and expiration of option contracts
written 207,652
- -------------
Net realized
loss (315,121,770)
- -------------------------------------------------------------------------
Net change in unrealized depreciation on
investments (23,465,967)
- -------------
Net realized and unrealized
loss (338,587,737)
=========================================================================
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS
$(353,137,662)
=============
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
16
OPPENHEIMER GROWTH FUND
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
YEAR ENDED AUGUST 31,
2002 2001
===============================================================================
OPERATIONS
- -------------------------------------------------------------------------------
Net investment income (loss) $
(14,549,925) $ 8,048,187
- -------------------------------------------------------------------------------
Net realized loss
(315,121,770) (357,415,519)
- -------------------------------------------------------------------------------
Net change in unrealized depreciation
(23,465,967) (1,979,523,397)
- -------------------------------
Net decrease in net assets resulting
from operations
(353,137,662) (2,328,890,729)
===============================================================================
DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS
- -------------------------------------------------------------------------------
Dividends from net investment income:
Class A
(7,204,260) --
Class B
- -- --
Class C
- -- --
Class N
(7,852) --
Class Y
(714,194) --
- -------------------------------------------------------------------------------
Distributions from net realized gain:
Class A
- -- (169,073,487)
Class B
- -- (57,798,213)
Class C
- -- (10,658,043)
Class N
- -- --
Class Y
- -- (10,089,485)
===============================================================================
BENEFICIAL INTEREST TRANSACTIONS
- -------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting
from beneficial interest transactions:
Class A
(124,336,568) 154,610,675
Class B
(92,299,250) 69,919,439
Class C
(10,045,794) 36,664,993
Class N
2,370,990 292,597
Class Y
(6,698,416) 2,236,334
===============================================================================
NET ASSETS
- -------------------------------------------------------------------------------
Total decrease
(592,073,006) (2,312,785,919)
- -------------------------------------------------------------------------------
Beginning of period
2,227,066,011 4,539,851,930
- -------------------------------
End of period [including undistributed
(overdistributed) net investment income
of $(402,691) and $7,619,531, respectively]
$1,634,993,005 $2,227,066,011
===============================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
17
OPPENHEIMER GROWTH FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
CLASS A YEAR ENDED AUGUST 31,
2002 2001 2000 1999 1998
=======================================================================================================
PER SHARE OPERATING DATA
- -------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 29.20
$ 62.31 $ 39.77 $ 31.54 $ 40.42
- -------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss)
(.13) .18 (.02) .10 .73
Net realized and unrealized gain (loss) (4.74)
(30.05) 25.42 11.69 (5.05)
- -------------------------------------------------------
Total from investment operations (4.87)
(29.87) 25.40 11.79 (4.32)
- -------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income
(.14) -- (.03) (.48) (.66)
Distributions from net realized gain
- -- (3.24) (2.83) (3.08) (3.90)
- -------------------------------------------------------
Total dividends and/or distributions
to shareholders
(.14) (3.24) (2.86) (3.56) (4.56)
- -------------------------------------------------------------------------------------------------------
Net asset value, end of period $24.19
$29.20 $62.31 $39.77 $31.54
========================================================
=======================================================================================================
TOTAL RETURN, AT NET ASSET VALUE(1) (16.77)%
(49.87)% 67.10% 39.39% (11.62)%
- -------------------------------------------------------------------------------------------------------
=======================================================================================================
RATIOS/SUPPLEMENTAL DATA
- -------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $1,173,027
$1,553,066 $3,176,435 $1,730,087 $1,356,905
- -------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $1,430,735
$2,149,795 $2,390,125 $1,620,201 $1,640,181
- -------------------------------------------------------------------------------------------------------
Ratios to average net assets:(2)
Net investment income (loss)
(0.54)% 0.45% (0.01)% 0.24% 1.90%
Expenses
1.31% 1.06% 1.01% 1.05% 1.00%(3)
- -------------------------------------------------------------------------------------------------------
Portfolio turnover rate
60% 92% 49% 106% 34%
1. Assumes an investment on the business day before the
first day of the fiscal
period, 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.
2. Annualized for periods of less than one full year.
3. Expense ratio has been calculated without adjustment for
the reduction to
custodian expenses.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
18
OPPENHEIMER GROWTH FUND
CLASS B YEAR ENDED AUGUST 31,
2002 2001 2000 1999 1998
=======================================================================================================
PER SHARE OPERATING DATA
- -------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 27.60
$ 59.55 $ 38.37 $ 30.54 $ 39.34
- -------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss)
(.54) (.10) (.21) (.20) .43
Net realized and unrealized gain (loss) (4.26)
(28.61) 24.22 11.32 (4.89)
- -------------------------------------------------------
Total from investment operations (4.80)
(28.71) 24.01 11.12 (4.46)
- -------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income
- -- -- -- (.21) (.44)
Distributions from net realized gain
- -- (3.24) (2.83) (3.08) (3.90)
- -------------------------------------------------------
Total dividends and/or distributions
to shareholders
- -- (3.24) (2.83) (3.29) (4.34)
- -------------------------------------------------------------------------------------------------------
Net asset value, end of period $22.80
$27.60 $59.55 $38.37 $30.54
========================================================
=======================================================================================================
TOTAL RETURN, AT NET ASSET VALUE(1) (17.39)%
(50.26)% 65.82% 38.27% (12.32)%
- -------------------------------------------------------------------------------------------------------
=======================================================================================================
RATIOS/SUPPLEMENTAL DATA
- -------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $317,725
$483,298 $996,000 $445,629 $330,442
- -------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $415,965
$692,159 $676,485 $410,058 $353,574
- -------------------------------------------------------------------------------------------------------
Ratios to average net assets:(2)
Net investment income (loss)
(1.30)% (0.31)% (0.78)% (0.58)% 1.08%
Expenses
2.08% 1.83% 1.78% 1.86% 1.81%(3)
- -------------------------------------------------------------------------------------------------------
Portfolio turnover rate
60% 92% 49% 106% 34%
1. Assumes an investment on the business day before the
first day of the fiscal
period, 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.
2. Annualized for periods of less than one full year.
3. Expense ratio has been calculated without adjustment for
the reduction to
custodian expenses.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
19
OPPENHEIMER GROWTH FUND
FINANCIAL HIGHLIGHTS Continued
- --------------------------------------------------------------------------------
CLASS C YEAR ENDED AUGUST 31,
2002 2001 2000 1999 1998
========================================================================================================
PER SHARE OPERATING DATA
- --------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 28.06
$ 60.48 $ 38.92 $ 30.93 $ 39.87
- --------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss)
(.43) (.04) (.09) (.20) .46
Net realized and unrealized gain (loss) (4.45)
(29.14) 24.48 11.47 (4.99)
- --------------------------------------------------------
Total from investment operations (4.88)
(29.18) 24.39 11.27 (4.53)
- -------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income
- -- -- -- (.21) (.51)
Distributions from net realized gain
- -- (3.24) (2.83) (3.07) (3.90)
- --------------------------------------------------------
Total dividends and/or distributions
to shareholders
- -- (3.24) (2.83) (3.28) (4.41)
- -------------------------------------------------------------------------------------------------------
Net asset value, end of period $23.18
$28.06 $60.48 $38.92 $30.93
========================================================
=======================================================================================================
TOTAL RETURN, AT NET ASSET VALUE(1) (17.39)%
(50.26)% 65.87% 38.28% (12.33)%
- -------------------------------------------------------------------------------------------------------
=======================================================================================================
RATIOS/SUPPLEMENTAL DATA
- -------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $75,229
$102,144 $176,150 $57,970 $44,377
- -------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $93,082
$133,823 $103,076 $53,501 $43,817
- -------------------------------------------------------------------------------------------------------
Ratios to average net assets:(2)
Net investment income (loss)
(1.31)% (0.32)% (0.77)% (0.58)% 1.06%
Expenses
2.08% 1.84% 1.78% 1.86% 1.81%(3)
- -------------------------------------------------------------------------------------------------------
Portfolio turnover rate
60% 92% 49% 106% 34%
1. Assumes an investment on the business day before the
first day of the fiscal
period, 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.
2. Annualized for periods of less than one full year.
3. Expense ratio has been calculated without adjustment for
the reduction to
custodian expenses.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
20
OPPENHEIMER GROWTH FUND
CLASS N YEAR ENDED AUGUST
31, 2002 2001(1)
================================================================================
PER SHARE OPERATING DATA
- --------------------------------------------------------------------------------
Net asset value, beginning of period $
29.13 $ 35.39
- --------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income
(loss) (.13)(2) (.01)
Net realized and unrealized loss
(4.78)(2) (6.25)
- ---------------------------------
Total from investment operations
(4.91) (6.26)
- --------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment
income (.23) --
Distributions from net realized
gain -- --
- ---------------------------------
Total dividends and/or distributions to
shareholders (.23) --
- --------------------------------------------------------------------------------
Net asset value, end of period
$23.99 $29.13
=================================
================================================================================
TOTAL RETURN, AT NET ASSET VALUE(3)
(17.00)% (17.69)%
- --------------------------------------------------------------------------------
================================================================================
RATIOS/SUPPLEMENTAL DATA
- --------------------------------------------------------------------------------
Net assets, end of period (in thousands)
$2,243 $274
- --------------------------------------------------------------------------------
Average net assets (in thousands)
$1,623 $ 70
- --------------------------------------------------------------------------------
Ratios to average net assets:(4)
Net investment loss
(0.90)% (0.33)%
Expenses
1.57% 1.40%
- --------------------------------------------------------------------------------
Portfolio turnover
rate 60% 92%
1. For the period from March 1, 2001 (inception of
offering) to August 31, 2001.
2. Per share amounts calculated based on the average shares
outstanding during
the period.
3. Assumes an 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.
4. Annualized for periods of less than one full year.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
21
OPPENHEIMER GROWTH FUND
FINANCIAL HIGHLIGHTS Continued
- --------------------------------------------------------------------------------
CLASS Y YEAR ENDED AUGUST 31,
2002 2001 2000 1999 1998
=======================================================================================================
PER SHARE OPERATING DATA
- -------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 29.27
$ 62.33 $ 39.76 $ 31.54 $ 40.43
- -------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss)
(.06) .28 .16 .18 .87
Net realized and unrealized gain (loss) (4.73)
(30.10) 25.37 11.69 (5.09)
- -------------------------------------------------------
Total from investment operations (4.79)
(29.82) 25.53 11.87 (4.22)
- -------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income
(.24) -- (.13) (.58) (.77)
Distributions from net realized gain
- -- (3.24) (2.83) (3.07) (3.90)
- -------------------------------------------------------
Total dividends and/or distributions
to shareholders
(.24) (3.24) (2.96) (3.65) (4.67)
- -------------------------------------------------------------------------------------------------------
Net asset value, end of period $24.24
$29.27 $62.33 $39.76 $31.54
========================================================
=======================================================================================================
TOTAL RETURN, AT NET ASSET VALUE(1) (16.50)%
(49.77)% 67.56% 39.74% (11.38)%
- -------------------------------------------------------------------------------------------------------
=======================================================================================================
RATIOS/SUPPLEMENTAL DATA
- -------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $66,769 $
88,284 $191,267 $ 93,936 $132,146
- -------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $81,127
$124,168 $134,650 $116,615 $135,098
- -------------------------------------------------------------------------------------------------------
Ratios to average net assets:(2)
Net investment income (loss)
(0.25)% 0.67% 0.27% 0.65% 2.16%
Expenses
1.13% 0.86% 0.73% 0.80% 0.71%(3)
Expenses, net of voluntary waiver of
transfer agent fees and/or reduction
to custodian expenses
1.02% 0.86% 0.73% 0.80% 0.71%
- -------------------------------------------------------------------------------------------------------
Portfolio turnover rate
60% 92% 49% 106% 34%
1. Assumes an investment on the business day before the
first day of the fiscal
period, 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.
2. Annualized for periods of less than one full year.
3. Expense ratio has been calculated without adjustment for
the reduction to
custodian expenses.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
22
OPPENHEIMER GROWTH FUND
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
================================================================================
1. SIGNIFICANT ACCOUNTING POLICIES
Oppenheimer Growth Fund (the Fund) is registered under the
Investment Company
Act of 1940, as amended, as an open-end management
investment company. The
Fund's investment objective is to seek capital
appreciation. The Fund's
investment advisor is OppenheimerFunds, Inc. (the Manager).
The Fund offers Class A, Class B, Class C, Class N and
Class Y shares. Class
A shares are sold at their offering price, which is
normally net asset value
plus a front-end sales charge. Class B, Class C and Class N
shares are sold
without a front-end sales charge but may be subject to a
contingent deferred
sales charge (CDSC). Class N shares are sold only through
retirement plans.
Retirement plans that offer Class N shares may impose
charges on those
accounts. Class Y shares are sold to certain institutional
investors without
either a front-end sales charge or a CDSC. All classes of
shares have identical
rights and voting privileges. Earnings, net assets and net
asset value per
share may differ by minor amounts due to each class having
its own expenses
directly attributable to that class. Classes A, B, C and N
have separate
distribution and/or service plans. No such plan has been
adopted for Class Y
shares. Class B shares will automatically convert to Class
A shares six years
after the date of purchase.
The following is a summary of significant accounting
policies consistently
followed by the Fund.
- --------------------------------------------------------------------------------
SECURITIES VALUATION. Securities listed or traded on
National Stock Exchanges
or other domestic or foreign exchanges are valued based on
the last sale price
of the security traded on that exchange prior to the time
when the Fund's
assets are valued. In the absence of a sale, the security
is valued at the last
sale price on the prior trading day, if it is within the
spread of the closing
bid and asked prices, and if not, at the closing bid price.
Securities
(including restricted securities) for which quotations are
not readily
available are valued primarily using dealer-supplied
valuations, a portfolio
pricing service authorized by the Board of Trustees, or at
their fair value.
Fair value is determined in good faith under consistently
applied procedures
under the supervision of the Board of Trustees. Short-term
"money market type"
debt securities with remaining maturities of sixty days or
less are valued at
amortized cost (which approximates market value).
- --------------------------------------------------------------------------------
FOREIGN CURRENCY TRANSLATION. The accounting records of the
Fund are maintained
in U.S. dollars. Prices of securities denominated in
foreign currencies are
translated into U.S. dollars at the closing rates of
exchange. Amounts related
to the purchase and sale of foreign securities and
investment income are
translated at the rates of exchange prevailing on the
respective dates of such
transactions.
The effect of changes in foreign currency exchange rates
on investments is
separately identified from the fluctuations arising from
changes in market
values of securities held and reported with all other
foreign currency gains
and losses in the Fund's Statement of Operations.
23
OPPENHEIMER GROWTH FUND
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
================================================================================
1. SIGNIFICANT ACCOUNTING POLICIES Continued
JOINT REPURCHASE AGREEMENTS. The Fund, along with other
affiliated funds of the
Manager, may transfer uninvested cash balances into one or
more joint
repurchase agreement accounts. These balances are invested
in one or more
repurchase agreements, secured by U.S. government
securities. Securities
pledged as collateral for repurchase agreements are held by
a custodian bank
until the agreements mature. Each agreement requires that
the market value of
the collateral be sufficient to cover payments of interest
and principal;
however, in the event of default by the other party to the
agreement, retention
of the collateral may be subject to legal proceedings.
- --------------------------------------------------------------------------------
ALLOCATION OF INCOME, EXPENSES, GAINS AND LOSSES. Income,
expenses (other than
those attributable to a specific class), gains and losses
are allocated daily
to each class of shares based upon the relative proportion
of net assets
represented by such class. Operating expenses directly
attributable to a
specific class are charged against the operations of that
class.
- --------------------------------------------------------------------------------
FEDERAL TAXES. The Fund intends to continue to comply with
provisions of the
Internal Revenue Code applicable to regulated investment
companies and to
distribute all of its taxable income, including any net
realized gain on
investments not offset by capital loss carryforwards, if
any, to shareholders.
Therefore, no federal income or excise tax provision is
required.
As of August 31, 2002, the Fund had approximately
$229,706,000 of
post-October losses available to offset future capital
gains, if any. Such
losses, if unutilized, will expire in 2011.
As of August 31, 2002, the Fund had available for federal
income tax purposes
unused capital loss carryforwards as follows:
EXPIRING
------------------------
2009 $ 50,983,636
2010 391,696,099
------------
Total $442,679,735
============
- --------------------------------------------------------------------------------
TRUSTEES' COMPENSATION. The Fund has adopted an unfunded
retirement plan for
the Fund's independent trustees. Benefits are based on
years of service and
fees paid to each trustee during the years of service.
During the year ended
August 31, 2002, the Fund's projected benefit obligations
were increased by
$55,263 and payments of $12,454 were made to retired
trustees, resulting in an
accumulated liability of $402,757 as of August 31, 2002.
The Board of Trustees has adopted a deferred
compensation plan for
independent trustees that enables trustees to elect to
defer receipt of all or
a portion of annual compensation they are entitled to
receive from the Fund.
Under the plan, the compensation deferred is periodically
adjusted as though an
equivalent amount had been invested for the Board of
Trustees in shares of one
or more Oppenheimer funds selected by the trustee. The
amount paid to the Board
of Trustees under the plan will be determined based upon
the performance of the
selected funds. Deferral of trustees' fees under the plan
will not affect the
net assets of the Fund, and will not materially affect the
Fund's assets,
liabilities or net investment income per share.
24
OPPENHEIMER GROWTH FUND
- --------------------------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. Dividends and
distributions to
shareholders, which are determined in accordance with
income tax regulations,
are recorded on the ex-dividend date.
- -------------------------------------------------------------------------------
CLASSIFICATION OF DIVIDENDS AND DISTRIBUTIONS TO
SHAREHOLDERS. Net investment
income (loss) and net realized gain (loss) may differ for
financial statement
and tax purposes. The character of dividends and
distributions made during the
fiscal year from net investment income or net realized
gains may differ from
their ultimate characterization for federal income tax
purposes. Also, due to
timing of dividends and distributions, the fiscal year in
which amounts are
distributed may differ from the fiscal year in which the
income or net realized
gain was recorded by the Fund.
The Fund adjusts the classification of distributions to
shareholders to
reflect the differences between financial statement amounts
and distributions
determined in accordance with income tax regulations.
Accordingly, during the
year ended August 31, 2002, amounts have been reclassified
to reflect a
decrease in paid-in capital of $14,454,009. Overdistributed
net investment
income was decreased by the same amount. Net assets of the
Fund were unaffected
by the reclassifications.
The tax character of distributions paid during the years
ended August 31, 2002
and August 31, 2001 was as follows:
YEAR
ENDED YEAR ENDED
AUGUST 31,
2002 AUGUST 31, 2001
- -----------------------------------------------------------
Distributions paid from:
Ordinary income
$7,926,306 $ 96,345,987
Long-term capital gain
- -- 151,273,241
Return of capital
- -- --
- ---------------------------
Total
$7,926,306 $247,619,228
===========================
As of August 31, 2002, the components of distributable
earnings on a tax basis
were as follows:
Overdistributed net
investment income $ (402,691)
Accumulated net realized loss (672,537,349)
Net unrealized depreciation (33,984,569)
-------------
Total $(706,924,609)
=============
- --------------------------------------------------------------------------------
INVESTMENT INCOME. Dividend income is recorded on the
ex-dividend date or upon
ex-dividend notification in the case of certain foreign
dividends where the
ex-dividend date may have passed. Non-cash dividends
included in dividend
income, if any, are recorded at the fair market value of
the securities
received. Interest income, which includes accretion of
discount and
amortization of premium, is accrued as earned.
- --------------------------------------------------------------------------------
SECURITY TRANSACTIONS. Security transactions are recorded
on the trade date.
Realized gains and losses on securities sold are determined
on the basis of
identified cost.
25
OPPENHEIMER GROWTH FUND
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
================================================================================
1. SIGNIFICANT ACCOUNTING POLICIES Continued
OTHER. The preparation of financial statements in
conformity with accounting
principles generally accepted in the United States of
America requires
management to make estimates and assumptions that affect
the reported amounts
of assets and liabilities and disclosure of contingent
assets and liabilities
at the date of the financial statements and the reported
amounts of income and
expenses during the reporting period. Actual results could
differ from those
estimates.
================================================================================
2. SHARES OF BENEFICIAL INTEREST
The Fund has authorized an unlimited number of $0.001 par
value shares of
beneficial interest. Transactions in shares of beneficial
interest were as
follows:
YEAR ENDED AUGUST 31, 2002
YEAR ENDED AUGUST 31, 2001(1)
SHARES
AMOUNT SHARES AMOUNT
- ---------------------------------------------------------------------------------------
CLASS A
Sold 6,933,882 $ 195,310,273
10,569,340 $ 434,907,471
Dividends and/or
distributions reinvested 229,470
6,758,016 3,414,802 158,822,473
Redeemed (11,867,029) (326,404,857)
(11,769,825) (439,119,269)
- ------------------------------------------------------------
Net increase (decrease) (4,703,677)
$(124,336,568) 2,214,317 $ 154,610,675
============================================================
- ---------------------------------------------------------------------------------------
CLASS B
Sold 2,659,840 $
70,453,666 5,557,121 $ 229,365,850
Dividends and/or
distributions reinvested --
- -- 1,227,686 54,263,720
Redeemed (6,235,475) (162,752,916)
(5,997,793) (213,710,131)
- ------------------------------------------------------------
Net increase (decrease) (3,575,635) $
(92,299,250) 787,014 $ 69,919,439
============================================================
- ---------------------------------------------------------------------------------------
CLASS C
Sold 1,099,282 $
29,093,790 1,717,522 $ 69,151,022
Dividends and/or
distributions reinvested --
- -- 217,183 9,762,405
Redeemed (1,493,796) (39,139,584)
(1,207,014) (42,248,434)
- ------------------------------------------------------------
Net increase (decrease) (394,514) $
(10,045,794) 727,691 $ 36,664,993
============================================================
- ---------------------------------------------------------------------------------------
CLASS N
Sold 140,675 $
3,970,419 9,401 $ 292,765
Dividends and/or
distributions reinvested 268
7,845 -- --
Redeemed (56,863)
(1,607,274) (5) (168)
- ------------------------------------------------------------
Net increase (decrease) 84,080 $
2,370,990 9,396 $ 292,597
============================================================
- ---------------------------------------------------------------------------------------
CLASS Y
Sold 877,421 $
24,490,320 1,574,830 $$ 65,369,945
Dividends and/or
distributions reinvested 24,235
713,722 216,565 10,076,798
Redeemed (1,162,874) (31,902,458)
(1,844,136) (73,210,409)
- ------------------------------------------------------------
Net increase (decrease) (261,218) $
(6,698,416) (52,741) $ 2,236,334
============================================================
1. For the year ended August 31, 2001, for Class A, B, C
and Y shares and for
the period from March 1, 2001 (inception of offering) to
August 31, 2001, for
Class N shares.
26
OPPENHEIMER GROWTH FUND
================================================================================
3. PURCHASES AND SALES OF SECURITIES
The aggregate cost of purchases and proceeds from sales of
securities, other
than short-term obligations, for the year ended August 31,
2002, were
$999,741,770 and $1,084,966,491, respectively.
As of August 31, 2002, unrealized appreciation
(depreciation) based on cost of
securities for federal income tax purposes of
$1,671,528,206 was composed of:
Gross unrealized appreciation $
153,121,143
Gross unrealized depreciation
(187,257,005)
- -------------
Net unrealized depreciation $
(34,135,862)
=============
The difference between book-basis and tax-basis unrealized
appreciation and
depreciation, if applicable, is attributable primarily to
the tax deferral of
losses on wash sales, or return of capital dividends, and
the realization for
tax purposes of unrealized gain (loss) on certain futures
contracts,
investments in passive foreign investment companies, and
forward foreign
currency exchange contracts.
================================================================================
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES
MANAGEMENT FEES. Management fees paid to the Manager were
in accordance with
the investment advisory agreement with the Fund which
provides for a fee of
0.75% of the first $200 million of average annual net
assets of the Fund, 0.72%
of the next $200 million, 0.69% of the next $200 million,
0.66% of the next
$200 million, 0.60% of the next $700 million, 0.58% of the
next $1.0 billion,
0.56% of the next $2.0 billion, and 0.54% of the average
annual net assets in
excess of $4.5 billion.
- --------------------------------------------------------------------------------
TRANSFER AGENT FEES. OppenheimerFunds Services (OFS), a
division of the Manager,
acts as the transfer and shareholder servicing agent for
the Fund. The Fund pays
OFS a $19.75 per account fee.
Additionally, Class Y shares are subject to minimum fees
of $5,000 for
assets of less than $10 million and $10,000 for assets of
$10 million or more.
The Class Y shares are subject to the minimum fees in the
event that the per
account fee does not equal or exceed the applicable minimum
fees. OFS may
voluntarily waive the minimum fees.
OFS has voluntarily agreed to limit transfer and
shareholder servicing agent
fees up to an annual rate of 0.25% of average net assets of
Class Y shares and
for all other classes, up to an annual rate of 0.35% of
average net assets of
each class. This undertaking may be amended or withdrawn at
any time.
- --------------------------------------------------------------------------------
DISTRIBUTION AND SERVICE PLAN (12B-1) FEES. Under its
General Distributor's
Agreement with the Manager, OppenheimerFunds Distributor,
Inc. (the Distributor)
acts as the Fund's principal underwriter in the continuous
public offering of
the different classes of shares of the Fund.
27
OPPENHEIMER GROWTH FUND
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
================================================================================
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES Continued
The compensation paid to (or retained by) the Distributor
from the sale of
shares or on the redemption of shares is shown in the table
below for the period
indicated.
AGGREGATE CLASS A
CONCESSIONS CONCESSIONS CONCESSIONS CONCESSIONS
FRONT-END FRONT-END ON CLASS
A ON CLASS B ON CLASS C ON CLASS N
SALES CHARGES SALES CHARGES
SHARES SHARES SHARES SHARES
ON CLASS A RETAINED BY ADVANCED
BY ADVANCED BY ADVANCED BY ADVANCED BY
YEAR ENDED SHARES DISTRIBUTOR
DISTRIBUTOR(1) DISTRIBUTOR(1) DISTRIBUTOR(1) DISTRIBUTOR(1)
- ---------------------------------------------------------------------------------------------------------
August 31, 2002 $2,350,474 $668,545
$204,213 $2,130,360 $174,319 $31,178
1. The Distributor advances concession payments to dealers
for certain sales of
Class A shares and for sales of Class B, Class C and Class
N shares from its
own resources at the time of sale.
CLASS A CLASS B
CLASS C CLASS N
CONTINGENT CONTINGENT
CONTINGENT CONTINGENT
DEFERRED DEFERRED
DEFERRED DEFERRED
SALES CHARGES SALES CHARGES SALES
CHARGES SALES CHARGES
RETAINED BY RETAINED BY
RETAINED BY RETAINED BY
YEAR ENDED DISTRIBUTOR DISTRIBUTOR
DISTRIBUTOR DISTRIBUTOR
- -------------------------------------------------------------------------------
August 31, 2002 $21,386 $1,099,479
$22,633 $249
- --------------------------------------------------------------------------------
SERVICE PLAN FOR CLASS A SHARES. The Fund has adopted a
Service Plan for Class
A Shares. It reimburses the Distributor for a portion of
its costs incurred for
services provided to accounts that hold Class A shares.
Reimbursement is made
quarterly at an annual rate of up to 0.25% of the average
annual net assets of
Class A shares of the Fund. For the year ended August 31,
2002 , payments under
the Class A Plan totaled $3,313,032, all of which were paid
by the Distributor
to recipients, and included $156,580 paid to an affiliate
of the Manager. Any
unreimbursed expenses the Distributor incurs with respect
to Class A shares in
any fiscal year cannot be recovered in subsequent years.
- --------------------------------------------------------------------------------
DISTRIBUTION AND SERVICE PLANS FOR CLASS B, CLASS C AND
CLASS N SHARES. The
Fund has adopted Distribution and Service Plans for Class
B, Class C and Class
N shares. Under the plans, the Fund pays the Distributor an
annual asset-based
sales charge of 0.75% per year on Class B shares and on
Class C shares and the
Fund pays the Distributor an annual asset-based sales
charge of 0.25% per year
on Class N shares. The Distributor also receives a service
fee of 0.25% per
year under each plan.
Distribution fees paid to the Distributor for the year
ended August 31, 2002,
were as follows:
DISTRIBUTOR'S
DISTRIBUTOR'S AGGREGATE
AGGREGATE UNREIMBURSED
UNREIMBURSED EXPENSES AS %
TOTAL PAYMENTS AMOUNT RETAINED
EXPENSES OF NET ASSETS
UNDER PLAN BY DISTRIBUTOR UNDER
PLAN OF CLASS
- -----------------------------------------------------------------------------
Class B Plan $4,141,613 $3,277,861
$11,192,681 3.52%
Class C Plan 931,561 193,657
1,590,674 2.11
Class N Plan 8,087 8,000
56,842 2.53
================================================================================
5. OPTION ACTIVITY
The Fund may buy and sell put and call options, or write
put and covered call
options on portfolio securities in order to produce
incremental earnings or
protect against changes in the value of portfolio
securities.
28
OPPENHEIMER GROWTH FUND
The Fund generally purchases put options or writes
covered call options to
hedge against adverse movements in the value of portfolio
holdings. When an
option is written, the Fund receives a premium and becomes
obligated to sell or
purchase the underlying security at a fixed price, upon
exercise of the option.
Options are valued daily based upon the last sale price
on the principal
exchange on which the option is traded and unrealized
appreciation or
depreciation is recorded. The Fund will realize a gain or
loss upon the
expiration or closing of the option transaction. When an
option is exercised,
the proceeds on sales for a written call option, the
purchase cost for a
written put option, or the cost of the security for a
purchased put or call
option is adjusted by the amount of premium received or
paid.
Securities designated to cover outstanding call options
are noted in the
Statement of Investments where applicable. Shares subject
to call, expiration
date, exercise price, premium received and market value are
detailed in a note
to the Statement of Investments. Options written are
reported as a liability in
the Statement of Assets and Liabilities. Realized gains and
losses are reported
in the Statement of Operations.
The risk in writing a call option is that the Fund gives
up the opportunity
for profit if the market price of the security increases
and the option is
exercised. The risk in writing a put option is that the
Fund may incur a loss
if the market price of the security decreases and the
option is exercised. The
risk in buying an option is that the Fund pays a premium
whether or not the
option is exercised. The Fund also has the additional risk
of not being able to
enter into a closing transaction if a liquid secondary
market does not exist.
Written option activity for the year ended August 31, 2002
was as follows:
CALL OPTIONS
- ----------------------------
NUMBER
OF AMOUNT OF
CONTRACTS PREMIUMS
- ------------------------------------------------------
Options outstanding as of
August 31, 2001
- -- $ --
Options written
1,750 207,652
Options closed or expired
(1,750) (207,652)
- ------------------------
Options outstanding as of
August 31, 2002
- -- $ --
========================
================================================================================
6. BANK BORROWINGS
The Fund may borrow from a bank for temporary or emergency
purposes including,
without limitation, funding of shareholder redemptions
provided asset coverage
for borrowings exceeds 300%. The Fund has entered into an
agreement which
enables it to participate with other Oppenheimer funds in
an unsecured line of
credit with a bank, which permits borrowings up to $400
million, collectively.
Interest is charged to each fund, based on its borrowings,
at a rate equal to
the Federal Funds Rate plus 0.45%. Borrowings are payable
within 30 days after
such loan is executed. The Fund also pays a commitment fee
equal to its pro rata
share of the average unutilized amount of the credit
facility at a rate of 0.08%
per annum.
The Fund had no borrowings outstanding during the year
ended or at August 31, 2002.
STATEMENT OF INVESTMENTS February
28, 2003 / Unaudited
Market Value
Shares See Note 1
- -------------------------------------------------------------------------------------------------
Common Stocks--85.8%
- -------------------------------------------------------------------------------------------------
Consumer Discretionary--19.1%
- -------------------------------------------------------------------------------------------------
Automobiles--4.5%
Harley-Davidson, Inc.
1,560,000 $ 61,760,400
- -------------------------------------------------------------------------------------------------
Multiline Retail--8.7%
Costco Wholesale
Corp. 1
1,550,000 47,306,000
- -------------------------------------------------------------------------------------------------
Kohl's Corp. 1
1,454,500 71,125,050
- -----------------
118,431,050
- -------------------------------------------------------------------------------------------------
Specialty Retail--5.9%
Bed Bath &
Beyond, Inc. 1
2,445,000 80,782,800
- -------------------------------------------------------------------------------------------------
Consumer Staples--2.7%
- -------------------------------------------------------------------------------------------------
Food & Drug Retailing--2.7%
Walgreen Co.
1,300,000 36,582,000
- -------------------------------------------------------------------------------------------------
Financials--14.3%
- -------------------------------------------------------------------------------------------------
Diversified Financials--8.9%
Freddie Mac
441,400 24,122,510
- -------------------------------------------------------------------------------------------------
SLM Corp.
900,000 98,055,000
- -----------------
122,177,510
- -------------------------------------------------------------------------------------------------
Insurance--5.4%
AMBAC Financial
Group, Inc.
715,600 34,957,060
- -------------------------------------------------------------------------------------------------
MBIA, Inc.
1,001,600 38,191,008
- -----------------
73,148,068
- -------------------------------------------------------------------------------------------------
Health Care--32.8%
- -------------------------------------------------------------------------------------------------
Biotechnology--8.3%
Amgen, Inc. 1
1,250,000 68,300,000
- -------------------------------------------------------------------------------------------------
Gilead Sciences, Inc. 1
1,350,000 45,900,000
- -----------------
114,200,000
- -------------------------------------------------------------------------------------------------
Health Care Equipment & Supplies--14.8%
Biomet, Inc.
1,037,100 31,351,533
- -------------------------------------------------------------------------------------------------
Medtronic, Inc.
975,000 43,582,500
- -------------------------------------------------------------------------------------------------
Stryker Corp.
1,277,500 83,293,000
- -------------------------------------------------------------------------------------------------
Varian Medical
Systems, Inc. 1
863,000 43,624,650
- -----------------
201,851,683
Market Value
Shares See Note 1
- -------------------------------------------------------------------------------------------------
Health Care Providers & Services--3.8%
Lincare Holdings, Inc. 1
1,754,200 $ 52,450,580
- -------------------------------------------------------------------------------------------------
Pharmaceuticals--5.9%
Forest Laboratories,
Inc. 1
950,000 47,310,000
- -------------------------------------------------------------------------------------------------
Johnson & Johnson
500,000 26,225,000
- -------------------------------------------------------------------------------------------------
Pfizer, Inc.
250,000 7,455,000
- -----------------
80,990,000
- -------------------------------------------------------------------------------------------------
Industrials--0.7%
- -------------------------------------------------------------------------------------------------
Commercial Services & Supplies--0.7%
Concord EFS, Inc. 1
910,000 10,101,000
- -------------------------------------------------------------------------------------------------
Information Technology--16.2%
- -------------------------------------------------------------------------------------------------
Computers & Peripherals--6.1%
Dell Computer Corp. 1
2,300,000 62,008,000
- -------------------------------------------------------------------------------------------------
International Business
Machines Corp.
280,000 21,826,000
- -----------------
83,834,000
- -------------------------------------------------------------------------------------------------
Software--10.1%
Microsoft Corp.
3,000,000 71,100,000
- -------------------------------------------------------------------------------------------------
Oracle Corp. 1
2,500,000 29,900,000
- -------------------------------------------------------------------------------------------------
Symantec Corp. 1
900,000 36,450,000
- -----------------
137,450,000
- -----------------
Total Common Stocks
(Cost
$1,168,709,073)
1,173,759,091
- -------------------------------------------------------------------------------------------------
Other Securities--3.1%
Nasdaq-100 Unit
Investment Trust 1
(Cost $41,417,126)
1,700,000 42,789,000
Principal
Amount
- -------------------------------------------------------------------------------------------------
Short-Term Notes--2.9%
Crown Point Capital Co.,
1.29%, 3/3/03
(Cost $39,997,133) $
40,000,000 39,997,133
8 | OPPENHEIMER GROWTH FUND
Principal Market Value
Amount See Note 1
- ---------------------------------------------------------------------------------------------------
Joint Repurchase Agreements--8.3%
- ---------------------------------------------------------------------------------------------------
Undivided interest of 29.98% in joint repurchase
agreement (Market Value $378,392,000) with Banc
One Capital Markets, Inc., 1.31%, dated 2/28/03,
to be repurchased at $113,462,385 on 3/3/03,
collateralized by U.S. Treasury Nts., 3%--5.625%,
8/31/03--5/15/08, with a value of $346,658,393 and
U.S. Treasury Bonds, 3.625%, 3/31/04, with a
value of $39,549,064
(Cost $113,450,000) $
113,450,000 $ 113,450,000
Market Value
See Note 1
- ---------------------------------------------------------------------------------------------------
Total Investments,
at Value
(Cost $1,363,573,332)
100.1% $ 1,369,995,224
- ---------------------------------------------------------------------------------------------------
Liabilities in Excess
of Other Assets
(0.1) (1,952,983)
- ------------------------------------------------------
Net Assets
100.0% $ 1,368,042,241
======================================================
Footnotes to Statement of Investments
1. Non-income producing security.
See accompanying Notes to Financial Statements.
9 | OPPENHEIMER GROWTH FUND
STATEMENT OF ASSETS AND LIABILITIES Unaudited
February 28, 2003
- --------------------------------------------------------------------------------
Assets
Investments, at value (cost $1,363,573,332)--
see accompanying
statement
$1,369,995,224
- --------------------------------------------------------------------------------
Cash
652,729
- --------------------------------------------------------------------------------
Receivables and other assets:
Investments
sold
37,615,470
Shares of beneficial interest
sold 863,238
Interest and
dividends
575,524
Other
21,601
- ---------------
Total
assets
1,409,723,786
- --------------------------------------------------------------------------------
Liabilities
Payables and other liabilities:
Investments
purchased
36,934,910
Shares of beneficial interest
redeemed 2,500,813
Shareholder
reports
807,644
Distribution and service plan
fees 526,888
Trustees'
compensation
419,422
Transfer and shareholder servicing agent
fees 370,127
Other
121,741
- ---------------
Total
liabilities
41,681,545
- --------------------------------------------------------------------------------
Net
Assets
$1,368,042,241
===============
- --------------------------------------------------------------------------------
Composition of Net Assets
Par value of shares of beneficial
interest $ 64,384
- --------------------------------------------------------------------------------
Additional paid-in
capital 2,250,383,147
- --------------------------------------------------------------------------------
Overdistributed net investment
income (7,257,643)
- --------------------------------------------------------------------------------
Accumulated net realized loss on
investment
transactions
(881,569,539)
- --------------------------------------------------------------------------------
Net unrealized appreciation on
investments 6,421,892
- ---------------
Net
Assets
$1,368,042,241
===============
10 | OPPENHEIMER GROWTH FUND
- --------------------------------------------------------------------------------
Net Asset Value Per Share
Class A Shares:
Net asset value and redemption price per share
(based on net assets of $990,416,916 and
45,958,151 shares of beneficial interest
outstanding) $21.55
Maximum offering price per share
(net asset value plus sales charge of
5.75% of offering
price) $22.86
- --------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes
applicable contingent deferred sales charge)
and offering price per share (based on net assets
of $251,887,306 and 12,454,099 shares of beneficial
interest
outstanding)
$20.23
- --------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes
applicable contingent deferred sales charge)
and offering price per share (based on net assets
of $64,895,880 and 3,155,970 shares of beneficial
interest
outstanding)
$20.56
- --------------------------------------------------------------------------------
Class N Shares:
Net asset value, redemption price (excludes
applicable contingent deferred sales charge)
and offering price per share (based on net assets
of $4,814,691 and 222,875 shares of beneficial
interest
outstanding)
$21.60
- --------------------------------------------------------------------------------
Class Y Shares:
Net asset value, redemption price and offering
price per share (based on net assets of $56,027,448
and 2,593,065 shares of beneficial interest
outstanding) $21.61
See accompanying Notes to Financial Statements.
11 | OPPENHEIMER GROWTH FUND
STATEMENT OF OPERATIONS Unaudited
For the Six Months Ended February 28, 2003
- ----------------------------------------------------------------------------------------------------------
Investment Income
Dividends
$ 2,500,214
- ----------------------------------------------------------------------------------------------------------
Interest
1,661,643
- ----------------
Total investment
income
4,161,857
- ----------------------------------------------------------------------------------------------------------
Expenses
Management
fees
4,929,438
- ----------------------------------------------------------------------------------------------------------
Distribution and service plan fees:
Class
A
1,258,843
Class
B
1,425,624
Class
C
353,179
Class
N
8,427
- ----------------------------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees:
Class
A
1,315,347
Class
B
820,967
Class
C
171,393
Class
Y
151,643
- ----------------------------------------------------------------------------------------------------------
Shareholder
reports
883,313
- ----------------------------------------------------------------------------------------------------------
Trustees'
compensation
46,352
- ----------------------------------------------------------------------------------------------------------
Custodian fees and
expenses
27,579
- ----------------------------------------------------------------------------------------------------------
Other
114,444
- ----------------
Total
expenses
11,506,549
Less reduction to custodian
expenses
(9,014)
Less voluntary waiver of transfer and shareholder
servicing agent fees--Class A (239)
Less voluntary waiver of transfer and shareholder
servicing agent fees--Class B (380,459)
Less voluntary waiver of transfer and shareholder
servicing agent fees--Class C (61,124)
Less voluntary waiver of transfer and shareholder
servicing agent fees--Class Y (38,904)
- ----------------
Net
expenses
11,016,809
- ----------------------------------------------------------------------------------------------------------
Net Investment
Loss
(6,854,952)
- ----------------------------------------------------------------------------------------------------------
Realized and Unrealized Gain (Loss)
Net realized loss on
investments
(209,032,190)
- ----------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation on
investments
40,406,461
- ----------------
Net realized and unrealized
loss
(168,625,729)
- ----------------------------------------------------------------------------------------------------------
Net Decrease in Net Assets Resulting from
Operations
$(175,480,681)
================
See accompanying Notes to Financial Statements.
12 | OPPENHEIMER GROWTH FUND
STATEMENTS OF CHANGES IN NET ASSETS
Six Months Year
Ended Ended
February 28, 2003 August 31,
(Unaudited) 2002
- ------------------------------------------------------------------------------------------------------------
Operations
Net investment
loss $
(6,854,952) $ (14,549,925)
- ------------------------------------------------------------------------------------------------------------
Net realized
loss
(209,032,190) (315,121,770)
- ------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation
(depreciation) 40,406,461
(23,465,967)
- ----------------------------------------------
Net decrease in net assets resulting from
operations (175,480,681)
(353,137,662)
- ------------------------------------------------------------------------------------------------------------
Dividends and/or Distributions to Shareholders
Dividends from net investment income:
Class
A
- -- (7,204,260)
Class
B
- -- --
Class
C
- -- --
Class
N
- -- (7,852)
Class
Y
- -- (714,194)
- ------------------------------------------------------------------------------------------------------------
Beneficial Interest Transactions
Net increase (decrease) in net assets resulting
from beneficial interest transactions:
Class
A
(57,141,361) (124,336,568)
Class
B
(31,779,835) (92,299,250)
Class
C
(1,822,194) (10,045,794)
Class
N
2,986,835 2,370,990
Class
Y
(3,713,528) (6,698,416)
- ------------------------------------------------------------------------------------------------------------
Net Assets
Total
decrease
(266,950,764) (592,073,006)
- ------------------------------------------------------------------------------------------------------------
Beginning of
period
1,634,993,005 2,227,066,011
- ----------------------------------------------
End of period [including overdistributed net investment
income of $7,257,643 and $402,691,
respectively] $1,368,042,241
$1,634,993,005
==============================================
See accompanying Notes to Financial Statements.
13 | OPPENHEIMER GROWTH FUND
FINANCIAL HIGHLIGHTS
Six
Months
Year
Ended
Ended
February 28,
2003
August 31,
Class A
(Unaudited) 2002 2001 2000
1999 1998
- -----------------------------------------------------------------------------------------------------------------------------
Per Share Operating Data
Net asset value, beginning of period $
24.19 $ 29.20 $ 62.31 $ 39.77 $ 31.54
$ 40.42
- -----------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss)
(.07) (.13) .18 (.02)
..10 .73
Net realized and unrealized gain (loss)
(2.57) (4.74) (30.05) 25.42
11.69 (5.05)
- --------------------------------------------------------------------------
Total from investment operations
(2.64) (4.87) (29.87) 25.40
11.79 (4.32)
- -----------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income
- -- (.14) -- (.03) (.48)
(.66)
Distributions from net realized gain
- -- -- (3.24) (2.83) (3.08)
(3.90)
- --------------------------------------------------------------------------
Total dividends and/or distributions
to shareholders
- -- (.14) (3.24) (2.86) (3.56)
(4.56)
- -----------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period
$21.55 $24.19 $29.20 $62.31
$39.77 $31.54
==========================================================================
- -----------------------------------------------------------------------------------------------------------------------------
Total Return, at Net Asset Value 1
(10.91)% (16.77)% (49.87)% 67.10%
39.39% (11.62)%
- -----------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
Net assets, end of period
(in thousands) $
990,417 $1,173,027 $1,553,066 $3,176,435 $1,730,087
$1,356,905
- -----------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands)
$1,092,267 $1,430,735 $2,149,795 $2,390,125
$1,620,201 $1,640,181
- -----------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 2
Net investment income (loss)
(0.72)% (0.54)% 0.45% (0.01)%
0.24% 1.90%
Expenses
1.27% 1.31% 1.06% 1.01%
1.05% 1.00% 3
Expenses, net of voluntary waiver
of transfer agent fees and/or reduction
to custodian expenses
1.27% 4 1.31% 1.06% 1.01%
1.05% 1.00%
- -----------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate
37% 60% 92% 49%
106% 34%
1. Assumes an investment on the business day before the
first day of the fiscal
period, 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.
2. Annualized for periods of less than one full year.
3. Expense ratio has been calculated without adjustment for
the reduction to
custodian expenses.
4. Less than 0.01%.
See accompanying Notes to Financial Statements.
14 | OPPENHEIMER GROWTH FUND
Six
Months
Year
Ended
Ended
February 28,
2003
August 31,
Class B
(Unaudited) 2002 2001 2000
1999 1998
- ---------------------------------------------------------------------------------------------------------------------------
Per Share Operating Data
Net asset value, beginning of period $
22.80 $ 27.60 $ 59.55 $ 38.37 $ 30.54
$ 39.34
- ---------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss)
(.29) (.54) (.10) (.21)
(.20) .43
Net realized and unrealized gain (loss)
(2.28) (4.26) (28.61) 24.22
11.32 (4.89)
- -------------------------------------------------------------------------
Total from investment operations
(2.57) (4.80) (28.71) 24.01
11.12 (4.46)
- ---------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income
- -- -- -- -- (.21)
(.44)
Distributions from net realized gain
- -- -- (3.24) (2.83) (3.08)
(3.90)
- -------------------------------------------------------------------------
Total dividends and/or distributions
to shareholders
- -- -- (3.24) (2.83) (3.29)
(4.34)
- ---------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period
$20.23 $22.80 $27.60 $59.55
$38.37 $30.54
=========================================================================
- ---------------------------------------------------------------------------------------------------------------------------
Total Return, at Net Asset Value 1
(11.27)% (17.39)% (50.26)% 65.82%
38.27% (12.32)%
- ---------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
Net assets, end of period
(in thousands)
$251,887 $317,725 $483,298 $996,000
$445,629 $330,442
- ---------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands)
$287,195 $415,965 $692,159 $676,485
$410,058 $353,574
- ---------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 2
Net investment income (loss)
(1.55)% (1.30)% (0.31)% (0.78)%
(0.58)% 1.08%
Expenses
2.38% 2.08% 1.83% 1.78%
1.86% 1.81% 3
Expenses, net of voluntary waiver
of transfer agent fees and/or reduction
to custodian expenses
2.11% 2.08% 1.83% 1.78%
1.86% 1.81%
- ---------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate
37% 60% 92% 49%
106% 34%
1. Assumes an investment on the business day before the
first day of the fiscal
period, 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. less than one full year.
2. Annualized for periods of less than one full year.
3. Expense ratio has been calculated without adjustment for
the reduction to
custodian expenses.
See accompanying Notes to Financial Statements.
15 | OPPENHEIMER GROWTH FUND
FINANCIAL HIGHLIGHTS Continued
Six
Months
Year
Ended
Ended
February 28,
2003
August 31,
Class C
(Unaudited) 2002 2001 2000
1999 1998
- ------------------------------------------------------------------------------------------------------------------------------
Per Share Operating Data
Net asset value, beginning of period $
23.18 $ 28.06 $ 60.48 $ 38.92 $
30.93 $ 39.87
- ------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss)
(.19) (.43) (.04) (.09)
(.20) .46
Net realized and unrealized gain (loss)
(2.43) (4.45) (29.14) 24.48
11.47 (4.99)
- ----------------------------------------------------------------------------
Total from investment operations
(2.62) (4.88) (29.18) 24.39
11.27 (4.53)
- ------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income
- -- -- -- --
(.21) (.51)
Distributions from net realized gain
- -- -- (3.24) (2.83)
(3.07) (3.90)
- ----------------------------------------------------------------------------
Total dividends and/or
distributions
to shareholders
- -- -- (3.24) (2.83)
(3.28) (4.41)
- ------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period
$20.56 $23.18 $28.06 $60.48
$38.92 $30.93
============================================================================
- ------------------------------------------------------------------------------------------------------------------------------
Total Return, at Net Asset Value 1
(11.30)% (17.39)% (50.26)% 65.87%
38.28% (12.33)%
- ------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
Net assets, end of period (in thousands)
$64,896 $75,229 $102,144 $176,150
$57,970 $44,377
- ------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands)
$71,164 $93,082 $133,823 $103,076
$53,501 $43,817
- ------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 2
Net investment income (loss)
(1.56)% (1.31)% (0.32)% (0.77)%
(0.58)% 1.06%
Expenses
2.29% 2.08% 1.84% 1.78%
1.86% 1.81% 3
Expenses, net of voluntary waiver
of transfer agent fees and/or reduction
to custodian expenses
2.12% 2.08% 1.84% 1.78%
1.86% 1.81%
- ------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate
37% 60% 92% 49%
106% 34%
1. Assumes an investment on the business day before the
first day of the fiscal
period, 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.
2. Annualized for periods of less than one full year.
3. Expense ratio has been calculated without adjustment for
the reduction to
custodian expenses.
See accompanying Notes to Financial Statements.
16 | OPPENHEIMER GROWTH FUND
Six Months Year
Ended Ended
February 28, 2003 August
31,
Class
N
(Unaudited) 2002 2001 1
- -------------------------------------------------------------------------------------------------------------------------
Per Share Operating Data
Net asset value, beginning of
period $23.99
$29.13 $35.39
- -------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income
(loss)
..08 (.13) 2 (.01)
Net realized and unrealized
loss
(2.47) (4.78) 2 (6.25)
- -------------------------------------------------------
Total from investment
operations
(2.39) (4.91) (6.26)
- -------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment
income --
(.23) --
Distributions from net realized
gain --
- -- --
- -------------------------------------------------------
Total dividends and/or distributions to
shareholders --
(.23) --
- -------------------------------------------------------------------------------------------------------------------------
Net asset value, end of
period
$21.60 $23.99 $29.13
=======================================================
- -------------------------------------------------------------------------------------------------------------------------
Total Return, at Net Asset Value
3 (9.96)%
(17.00)% (17.69)%
- -------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
Net assets, end of period (in
thousands) $4,815
$2,243 $274
- -------------------------------------------------------------------------------------------------------------------------
Average net assets (in
thousands)
$3,413 $1,623 $ 70
- -------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment income
(loss)
0.83% (0.90)% (0.33)%
Expenses
1.30% 1.57% 1.40%
- -------------------------------------------------------------------------------------------------------------------------
Portfolio turnover
rate
37% 60% 92%
1. For the period from March 1, 2001 (inception of
offering) to August 31, 2001.
2. Per share amounts calculated based on the average shares
outstanding during
the period.
3. Assumes an 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.
4. Annualized for periods of less than one full year.
See accompanying Notes to Financial Statements.
17 | OPPENHEIMER GROWTH FUND
FINANCIAL HIGHLIGHTS Continued
Six
Months
Year
Ended
Ended
February 28,
2003
August 31,
Class Y
(Unaudited) 2002 2001 2000
1999 1998
- -------------------------------------------------------------------------------------------------------------------------
Per Share Operating Data
Net asset value, beginning of period $
24.24 $ 29.27 $ 62.33 $ 39.76 $ 31.54 $
40.43
- -------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss)
(.06) (.06) .28 .16
..18 .87
Net realized and unrealized gain (loss)
(2.57) (4.73) (30.10) 25.37 11.69
(5.09)
- ----------------------------------------------------------------------
Total from investment operations
(2.63) (4.79) (29.82) 25.53 11.87
(4.22)
- -------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income
- -- (.24) -- (.13) (.58)
(.77)
Distributions from net realized gain
- -- -- (3.24) (2.83) (3.07)
(3.90)
- -------------------------------------------------------------------------
Total dividends and/or distributions
to shareholders
- -- (.24) (3.24) (2.96) (3.65)
(4.67)
- -------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period
$21.61 $24.24 $29.27 $62.33 $39.76
$31.54
======================================================================
- -------------------------------------------------------------------------------------------------------------------------
Total Return, at Net Asset Value 1
(10.85)% (16.50)% (49.77)% 67.56% 39.74%
(11.38)%
- -------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
Net assets, end of period
(in thousands)
$56,027 $66,769 $ 88,284 $191,267 $ 93,936
$132,146
- -------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands)
$62,727 $81,127 $124,168 $134,650 $116,615
$135,098
- -------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 2
Net investment income (loss)
(0.61)% (0.25)% 0.67% 0.27%
0.65% 2.16%
Expenses
1.29% 1.13% 0.86% 0.73% 0.80%
0.71% 3
Expenses, net of voluntary waiver of
transfer agent fees and/or reduction
to custodian expenses
1.16% 1.02% 0.86% 0.73% 0.80%
0.71%
- -------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate
37% 60% 92% 49% 106%
34%
1. Assumes an investment on the business day before the
first day of the fiscal
period, 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.
2. Annualized for periods of less than one full year.
3. Expense ratio has been calculated without adjustment for
the reduction to
custodian expenses.
See accompanying Notes to Financial Statements.
18 | OPPENHEIMER GROWTH FUND
NOTES TO FINANCIAL STATEMENTS Unaudited
- --------------------------------------------------------------------------------
1. Significant Accounting Policies
Oppenheimer Growth Fund (the Fund) is registered under the
Investment Company
Act of 1940, as amended, as an open-end management
investment company. The
Fund's investment objective is to seek capital
appreciation. The Fund's
investment advisor is OppenheimerFunds, Inc. (the Manager).
The Fund offers Class A, Class B, Class C, Class N and
Class Y shares. Class
A shares are sold at their offering price, which is
normally net asset value
plus a front-end sales charge. Class B, Class C and Class
N shares are sold
without a front-end sales charge but may be subject to a
contingent deferred
sales charge (CDSC). Class N shares are sold only through
retirement plans.
Retirement plans that offer Class N shares may impose
charges on those
accounts. Class Y shares are sold to certain institutional
investors without
either a front-end sales charge or a CDSC. All classes of
shares have identical
rights and voting privileges. Earnings, net assets and net
asset value per
share may differ by minor amounts due to each class having
its own expenses
directly attributable to that class. Classes A, B, C and N
have separate
distribution and/or service plans. No such plan has been
adopted for Class Y
shares. Class B shares will automatically convert to Class
A shares six years
after the date of purchase.
The following is a summary of significant accounting
policies consistently
followed by the Fund.
- --------------------------------------------------------------------------------
Securities Valuation. Securities listed or traded on
National Stock Exchanges
or other domestic or foreign exchanges are valued based on
the last sale price
of the security traded on that exchange prior to the time
when the Fund's
assets are valued. In the absence of a sale, the security
is valued at the last
sale price on the prior trading day, if it is within the
spread of the closing
bid and asked prices, and if not, at the closing bid
price. Securities
(including restricted securities) for which quotations are
not readily
available are valued primarily using dealer-supplied
valuations, a portfolio
pricing service authorized by the Board of Trustees, or at
their fair value.
Fair value is determined in good faith under consistently
applied procedures
under the supervision of the Board of Trustees. Short-term
"money market type"
debt securities with remaining maturities of sixty days or
less are valued at
amortized cost (which approximates market value).
- --------------------------------------------------------------------------------
Foreign Currency Translation. The accounting records of
the Fund are maintained
in U.S. dollars. Prices of securities denominated in
foreign currencies are
translated into U.S. dollars at the closing rates of
exchange. Amounts related
to the purchase and sale of foreign securities and
investment income are
translated at the rates of exchange prevailing on the
respective dates of such
transactions.
The effect of changes in foreign currency exchange
rates on investments is
separately identified from the fluctuations arising from
changes in market
values of securities held and reported with all other
foreign currency gains
and losses in the Fund's Statement of Operations.
19 | OPPENHEIMER GROWTH FUND
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
1. Significant Accounting Policies Continued
Joint Repurchase Agreements. The Fund, along with other
affiliated funds of the
Manager, may transfer uninvested cash balances into one or
more joint
repurchase agreement accounts. These balances are invested
in one or more
repurchase agreements, secured by U.S. government
securities. Securities
pledged as collateral for repurchase agreements are held
by a custodian bank
until the agreements mature. Each agreement requires that
the market value of
the collateral be sufficient to cover payments of interest
and principal;
however, in the event of default by the other party to the
agreement, retention
of the collateral may be subject to legal proceedings.
- --------------------------------------------------------------------------------
Allocation of Income, Expenses, Gains and Losses. Income,
expenses (other than
those attributable to a specific class), gains and losses
are allocated daily
to each class of shares based upon the relative proportion
of net assets
represented by such class. Operating expenses directly
attributable to a
specific class are charged against the operations of that
class.
- --------------------------------------------------------------------------------
Federal Taxes. The Fund intends to continue to comply with
provisions of the
Internal Revenue Code applicable to regulated investment
companies and to
distribute all of its taxable income, including any net
realized gain on
investments not offset by capital loss carryforwards, if
any, to shareholders.
Therefore, no federal income or excise tax provision is
required.
As of February 28, 2003, the Fund had available for
federal income tax
purposes an estimated unused capital loss carryforward of
$881,418,187. This
estimated capital loss carryforward represents the
carryforward as of the end
of the last fiscal year, increased for losses deferred
under tax accounting
rules for the current fiscal year and is increased or
decreased by capital
losses or gains realized in the first six months of the
current fiscal year.
As of August 31, 2002, the Fund had available for federal
income tax purposes
unused capital loss carryforwards as follows:
Expiring
- -----------------------------------------
2009
$ 50,983,636
2010
391,696,099
- ------------
Total
$442,679,735
============
- --------------------------------------------------------------------------------
Trustees' Compensation. The Fund has adopted an unfunded
retirement plan for
the Fund's independent trustees. Benefits are based on
years of service and
fees paid to each trustee during the years of service.
During the six months
ended February 28, 2003, the Fund's projected benefit
obligations were
increased by $20,670 and payments of $15,659 were made to
retired trustees,
resulting in an accumulated liability of $407,768 as of
February 28, 2003.
20 | OPPENHEIMER GROWTH FUND
The Board of Trustees has adopted a deferred
compensation plan for
independent trustees that enables trustees to elect to
defer receipt of all or
a portion of the annual compensation they are entitled to
receive from the
Fund. Under the plan, the compensation deferred is
invested by the Fund in the
fund(s) selected by the trustee. Deferral of trustees'
fees under the plan will
not affect the net assets of the Fund, and will not
materially affect the
Fund's assets, liabilities or net investment income per
share.
- --------------------------------------------------------------------------------
Dividends and Distributions to Shareholders. Dividends and
distributions to
shareholders, which are determined in accordance with
income tax regulations,
are recorded on the ex-dividend date.
- --------------------------------------------------------------------------------
Classification of Dividends and Distributions to
Shareholders. Net investment
income (loss) and net realized gain (loss) may differ for
financial statement
and tax purposes primarily because of the recognition of
certain foreign
currency gains (losses) as ordinary income (loss) for tax
purposes. The
character of dividends and distributions made during the
fiscal year from net
investment income or net realized gains may differ from
their ultimate
characterization for federal income tax purposes. Also,
due to timing of
dividends and distributions, the fiscal year in which
amounts are distributed
may differ from the fiscal year in which the income or net
realized gain was
recorded by the Fund.
The tax character of distributions paid during the six
months ended February
28, 2003 and the year ended August 31, 2002 was as follows:
Six Months
Ended Year Ended
February 28, 2003
August 31, 2002
- ----------------------------------------------------------------
Distributions paid from:
Ordinary income
$-- $7,926,306
Long-term capital gain
- -- --
Return of capital
- -- --
- ----------------------
Total
$-- $7,926,306
======================
- --------------------------------------------------------------------------------
Investment Income. Dividend income is recorded on the
ex-dividend date or upon
ex-dividend notification in the case of certain foreign
dividends where the
ex-dividend date may have passed. Non-cash dividends
included in dividend
income, if any, are recorded at the fair market value of
the securities
received. Interest income, which includes accretion of
discount and
amortization of premium, is accrued as earned.
- --------------------------------------------------------------------------------
Security Transactions. Security transactions are recorded
on the trade date.
Realized gains and losses on securities sold are
determined on the basis of
identified cost.
- --------------------------------------------------------------------------------
Other. The preparation of financial statements in
conformity with accounting
principles generally accepted in the United States of
America 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.
21 | OPPENHEIMER GROWTH FUND
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
2. Shares of Beneficial Interest
The Fund has authorized an unlimited number of $0.001 par
value shares of
beneficial interest of each class. Transactions in shares
of beneficial
interest were as follows:
Six Months Ended
February 28, 2003 Year Ended August 31,
2002
Shares Amount
Shares Amount
- ----------------------------------------------------------------------------------------------------------------------------
Class A
Sold
3,098,123 $ 71,547,455
6,933,882 $ 195,310,273
Dividends and/or
distributions reinvested
- -- --
229,470 6,758,016
Redeemed
(5,629,097) (128,688,816)
(11,867,029) (326,404,857)
- -----------------------------------------------------------------------------------
Net decrease
(2,530,974) $ (57,141,361)
(4,703,677) $(124,336,568)
===================================================================================
- ----------------------------------------------------------------------------------------------------------------------------
Class B
Sold
1,250,259 $ 27,229,356
2,659,840 $ 70,453,666
Dividends and/or
distributions reinvested
- -- --
- -- --
Redeemed
(2,733,887) (59,009,191)
(6,235,475) (162,752,916)
- -----------------------------------------------------------------------------------
Net decrease
(1,483,628) $ (31,779,835)
(3,575,635) $ (92,299,250)
===================================================================================
- ----------------------------------------------------------------------------------------------------------------------------
Class C
Sold
471,508 $ 10,445,584
1,099,282 $ 29,093,790
Dividends and/or
distributions reinvested
- -- --
- -- --
Redeemed
(561,294) (12,267,778)
(1,493,796) (39,139,584)
- -----------------------------------------------------------------------------------
Net decrease
(89,786) $ (1,822,194)
(394,514) $ (10,045,794)
===================================================================================
- ----------------------------------------------------------------------------------------------------------------------------
Class N
Sold
152,473 $ 3,519,753
140,675 $ 3,970,419
Dividends and/or
distributions reinvested
- -- --
268 7,845
Redeemed
(23,074) (532,918)
(56,863) (1,607,274)
- -----------------------------------------------------------------------------------
Net increase
129,399 $ 2,986,835
84,080 $ 2,370,990
===================================================================================
- ----------------------------------------------------------------------------------------------------------------------------
Class Y
Sold
400,205 $ 9,235,795
877,421 $ 24,490,320
Dividends and/or
distributions reinvested
- -- --
24,235 713,722
Redeemed
(561,699) (12,949,323)
(1,162,874) (31,902,458)
- -----------------------------------------------------------------------------------
Net decrease
(161,494) $ (3,713,528)
(261,218) $ (6,698,416)
===================================================================================
- --------------------------------------------------------------------------------
3. Purchases and Sales of Securities
The aggregate cost of purchases and proceeds from sales of
securities, other
than short-term obligations, for the six months ended
February 28, 2003, were
$502,286,213 and $471,181,242, respectively.
22 | OPPENHEIMER GROWTH FUND
- --------------------------------------------------------------------------------
4. Fees and Other Transactions with Affiliates
Management Fees. Management fees paid to the Manager were
in accordance with
the investment advisory agreement with the Fund which
provides for a fee of
0.75% of the first $200 million of average annual net
assets of the Fund, 0.72%
of the next $200 million, 0.69% of the next $200 million,
0.66% of the next
$200 million, 0.60% of the next $700 million, 0.58% of the
next $1.0 billion,
0.56% of the next $2.0 billion, and 0.54% of the average
annual net assets in
excess of $4.5 billion.
- --------------------------------------------------------------------------------
Transfer Agent Fees. OppenheimerFunds Services (OFS), a
division of the
Manager, acts as the transfer and shareholder servicing
agent for the Fund. The
Fund pays OFS a $19.75 per account fee.
Additionally, Class Y shares are subject to minimum
fees of $5,000 for
assets of less than $10 million and $10,000 for assets of
$10 million or more.
The Class Y shares are subject to the minimum fees in the
event that the per
account fee does not equal or exceed the applicable
minimum fees. OFS may
voluntarily waive the minimum fees.
OFS has voluntarily agreed to limit transfer and
shareholder servicing agent
fees up to an annual rate of 0.35% of average annual net
assets for all
classes. This undertaking may be amended or withdrawn at
any time.
- --------------------------------------------------------------------------------
Distribution and Service Plan (12b-1) Fees. Under its
General Distributor's
Agreement with the Manager, OppenheimerFunds Distributor,
Inc. (the
Distributor) acts as the Fund's principal underwriter in
the continuous public
offering of the different classes of shares of the Fund.
The compensation paid to (or retained by) the Distributor
from the sale of
shares or on the redemption of shares is shown in the
table below for the
period indicated.
Aggregate Class
A Concessions Concessions
Concessions Concessions
Front-End
Front-End on Class A on Class B on
Class C on Class N
Sales Charges Sales
Charges Shares Shares
Shares Shares
Six Months on Class A Retained
by Advanced by Advanced by Advanced
by Advanced by
Ended Shares
Distributor Distributor 1 Distributor 1
Distributor 1 Distributor 1
- ---------------------------------------------------------------------------------------------------------------------------------
February 28, 2003 $903,856
$247,974 $71,910 $778,881
$67,206 $28,728
1. The Distributor advances concession payments to dealers
for certain sales of
Class A shares and for sales of Class B, Class C and Class
N shares from its
own resources at the time of sale.
Class A Class
B Class C Class N
Contingent
Contingent Contingent Contingent
Deferred
Deferred Deferred Deferred
Sales Charges Sales
Charges Sales Charges Sales Charges
Retained by Retained
by Retained by Retained by
Six Months Ended Distributor
Distributor Distributor Distributor
- -----------------------------------------------------------------------------------------------------------
February 28, 2003 $8,411
$568,192 $10,447 3,271
- --------------------------------------------------------------------------------
Service Plan for Class A Shares. The Fund has adopted a
Service Plan for Class
A Shares. It reimburses the Distributor for a portion of
its costs incurred for
services provided to accounts that hold Class A shares.
Reimbursement is made
quarterly at an annual rate of up to 0.25% of the average
annual net assets of
Class A shares of the Fund. For the six months ended
February 28, 2003,
payments under the Class A Plan totaled $1,258,843, all
23 | OPPENHEIMER GROWTH FUND
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
4. Fees and Other Transactions with Affiliates Continued
of which were paid by the Distributor to recipients, and
included $58,681 paid
to an affiliate of the Manager. Any unreimbursed expenses
the Distributor
incurs with respect to Class A shares in any fiscal year
cannot be recovered in
subsequent years.
- --------------------------------------------------------------------------------
Distribution and Service Plans for Class B, Class C and
Class N Shares. The
Fund has adopted Distribution and Service Plans for Class
B, Class C and Class
N shares. Under the plans, the Fund pays the Distributor
an annual asset-based
sales charge of 0.75% per year on Class B shares and on
Class C shares and the
Fund pays the Distributor an annual asset-based sales
charge of 0.25% per year
on Class N shares. The Distributor also receives a service
fee of 0.25% per
year under each plan.
Distribution fees paid to the Distributor for the six
months ended February 28,
2003, were as follows:
Distributor's
Distributor's Aggregate
Aggregate Unreimbursed
Unreimbursed Expenses as %
Total Payments Amount
Retained Expenses of Net
Assets
Under Plan by
Distributor Under Plan of
Class
- -------------------------------------------------------------------------------------------------------------------
Class B Plan $1,425,624
$1,116,951 $10,717,921
4.26%
Class C Plan 353,179
76,346 1,677,745 2.59
Class N Plan 8,427
7,080 79,451 1.65
- --------------------------------------------------------------------------------
5. Bank Borrowings
The Fund had the ability to borrow from a bank for
temporary or emergency
purposes provided asset coverage for borrowings exceeded
300%. The Fund and
other Oppenheimer funds participated in a $400 million
unsecured line of credit
with a bank. Under that unsecured line of credit, interest
was charged to each
fund, based on its borrowings, at a rate equal to the
Federal Funds Rate plus
0.45%. Under that credit facility, the Fund paid a
commitment fee equal to its
pro rata share of the average unutilized amount of the
credit facility at a
rate of 0.08% per annum. The credit facility was
terminated on November 12,
2002.
The Fund had no borrowings through November 12, 2002.
A-1
Appendix A
- ------------------------------------------------------------
Industry Classifications
- ------------------------------------------------------------
Aerospace & Defense Household Durables
Air Freight & Couriers Household Products
Airlines Industrial Conglomerates
Auto Components Insurance
Automobiles Internet & Catalog Retail
Banks Internet Software & Services
Beverages Information Technology Consulting &
Services
Biotechnology Leisure Equipment & Products
Building Products Machinery
Chemicals Marine
Commercial Services & Supplies Media
Communications Equipment Metals & Mining
Computers & Peripherals Multiline Retail
Construction & Engineering Multi-Utilities
Construction Materials Office Electronics
Containers & Packaging Oil & Gas
Distributors Paper & Forest Products
Diversified Financials Personal Products
Diversified Telecommunication Pharmaceuticals
Services
Electric Utilities Real Estate
Electrical Equipment Road & Rail
Electronic Equipment & Instruments Semiconductor Equipment & Products
Energy Equipment & Services Software
Food & Drug Retailing Specialty Retail
Food Products Textiles & Apparel
Gas Utilities Tobacco
Health Care Equipment & Supplies Trading Companies & Distributors
Health Care Providers & Services Transportation Infrastructure
Hotels Restaurants & Leisure Water Utilities
Wireless Telecommunication Services
B-6
Appendix B
OppenheimerFunds Special Sales Charge Arrangements and
- -------------------------------------------------------
Waivers
- -------
In certain cases, the initial sales charge that applies to
purchases of Class A shares2 of the Oppenheimer funds or
the contingent deferred sales charge that may apply to
Class A, Class B or Class C shares may be waived.3 That is
because of the economies of sales efforts realized by
OppenheimerFunds Distributor, Inc., (referred to in this
document as the "Distributor"), or by dealers or other
financial institutions that offer those shares to certain
classes of investors.
Not all waivers apply to all funds. For example, waivers
relating to Retirement Plans do not apply to Oppenheimer
municipal funds, because shares of those funds are not
available for purchase by or on behalf of retirement plans.
Other waivers apply only to shareholders of certain funds.
For the purposes of some of the waivers described below and
in the Prospectus and Statement of Additional Information
of the applicable Oppenheimer funds, the term "Retirement
Plan" refers to the following types of plans:
1) plans qualified under Sections 401(a) or 401(k)
of the Internal Revenue Code,
2) non-qualified deferred compensation plans,
3) employee benefit plans4
4) Group Retirement Plans5
5) 403(b)(7) custodial plan accounts
6) Individual Retirement Accounts ("IRAs"),
including traditional IRAs, Roth IRAs,
SEP-IRAs, SARSEPs or SIMPLE plans
The interpretation of these provisions as to the
applicability of a special arrangement or waiver in a
particular case is in the sole discretion of the
Distributor or the transfer agent (referred to in this
document as the "Transfer Agent") of the particular
Oppenheimer fund. These waivers and special arrangements
may be amended or terminated at any time by a particular
fund, the Distributor, and/or OppenheimerFunds, Inc.
(referred to in this document as the "Manager").
Waivers that apply at the time shares are redeemed must be
requested by the shareholder and/or dealer in the
redemption request.
I.
Applicability of Class A Contingent Deferred Sales Charges
in Certain Cases
- ------------------------------------------------------------
Purchases of Class A Shares of Oppenheimer Funds That Are
Not Subject to Initial Sales Charge but May Be Subject to
the Class A Contingent Deferred Sales Charge (unless a
waiver applies).
There is no initial sales charge on purchases of
Class A shares of any of the Oppenheimer funds in the cases
listed below. However, these purchases may be subject to
the Class A contingent deferred sales charge if redeemed
within 18 months (24 months in the case of Oppenheimer
Rochester National Municipals and Rochester Fund
Municipals) of the beginning of the calendar month of their
purchase, as described in the Prospectus (unless a waiver
described elsewhere in this Appendix applies to the
redemption). Additionally, on shares purchased under these
waivers that are subject to the Class A contingent deferred
sales charge, the Distributor will pay the applicable
concession described in the Prospectus under "Class A
Contingent Deferred Sales Charge."6 This waiver provision
applies to:
|_| Purchases of Class A shares aggregating $1 million or
more.
|_| Purchases of Class A shares by a Retirement Plan that
was permitted to purchase such shares at net asset
value but subject to a contingent deferred sales
charge prior to March 1, 2001. That included plans
(other than IRA or 403(b)(7) Custodial Plans)
that: 1) bought shares costing $500,000 or more,
2) had at the time of purchase 100 or more
eligible employees or total plan assets of
$500,000 or more, or 3) certified to the
Distributor that it projects to have annual plan
purchases of $200,000 or more.
|_| Purchases by an OppenheimerFunds-sponsored Rollover
IRA, if the purchases are made:
1) through a broker, dealer, bank or registered
investment adviser that has made special
arrangements with the Distributor for those
purchases, or
2) by a direct rollover of a distribution from a
qualified Retirement Plan if the administrator
of that Plan has made special arrangements with
the Distributor for those purchases.
|_| Purchases of Class A shares by Retirement Plans that
have any of the following record-keeping
arrangements:
1) The record keeping is performed by Merrill
Lynch Pierce Fenner & Smith, Inc. ("Merrill
Lynch") on a daily valuation basis for the
Retirement Plan. On the date the plan sponsor
signs the record-keeping service agreement with
Merrill Lynch, the Plan must have $3 million or
more of its assets invested in (a) mutual
funds, other than those advised or managed by
Merrill Lynch Investment Management, L.P.
("MLIM"), that are made available under a
Service Agreement between Merrill Lynch and the
mutual fund's principal underwriter or
distributor, and (b) funds advised or managed
by MLIM (the funds described in (a) and (b) are
referred to as "Applicable Investments").
2) The record keeping for the Retirement Plan is
performed on a daily valuation basis by a
record keeper whose services are provided under
a contract or arrangement between the
Retirement Plan and Merrill Lynch. On the date
the plan sponsor signs the record keeping
service agreement with Merrill Lynch, the Plan
must have $3 million or more of its assets
(excluding assets invested in money market
funds) invested in Applicable Investments.
3) The record keeping for a Retirement Plan is
handled under a service agreement with Merrill
Lynch and on the date the plan sponsor signs
that agreement, the Plan has 500 or more
eligible employees (as determined by the
Merrill Lynch plan conversion manager).
II.
Waivers of Class A Sales Charges of Oppenheimer Funds
- ------------------------------------------------------------
A. Waivers of Initial and Contingent Deferred Sales Charges
for Certain Purchasers.
Class A shares purchased by the following investors are not
subject to any Class A sales charges (and no concessions
are paid by the Distributor on such purchases):
|_| The Manager or its affiliates.
|_| Present or former officers, directors, trustees and
employees (and their "immediate families") of the
Fund, the Manager and its affiliates, and
retirement plans established by them for their
employees. The term "immediate family" refers to
one's spouse, children, grandchildren,
grandparents, parents, parents-in-law, brothers
and sisters, sons- and daughters-in-law, a
sibling's spouse, a spouse's siblings, aunts,
uncles, nieces and nephews; relatives by virtue of
a remarriage (step-children, step-parents, etc.)
are included.
|_| Registered management investment companies, or
separate accounts of insurance companies having an
agreement with the Manager or the Distributor for
that purpose.
|_| Dealers or brokers that have a sales agreement with
the Distributor, if they purchase shares for their
own accounts or for retirement plans for their
employees.
|_| Employees and registered representatives (and their
spouses) of dealers or brokers described above or
financial institutions that have entered into
sales arrangements with such dealers or brokers
(and which are identified as such to the
Distributor) or with the Distributor. The
purchaser must certify to the Distributor at the
time of purchase that the purchase is for the
purchaser's own account (or for the benefit of
such employee's spouse or minor children).
|_| Dealers, brokers, banks or registered investment
advisors that have entered into an agreement with
the Distributor providing specifically for the use
of shares of the Fund in particular investment
products made available to their clients. Those
clients may be charged a transaction fee by their
dealer, broker, bank or advisor for the purchase
or sale of Fund shares.
|_| Investment advisors and financial planners who have
entered into an agreement for this purpose with
the Distributor and who charge an advisory,
consulting or other fee for their services and buy
shares for their own accounts or the accounts of
their clients.
|_| "Rabbi trusts" that buy shares for their own
accounts, if the purchases are made through a
broker or agent or other financial intermediary
that has made special arrangements with the
Distributor for those purchases.
|_| Clients of investment advisors or financial planners
(that have entered into an agreement for this
purpose with the Distributor) who buy shares for
their own accounts may also purchase shares
without sales charge but only if their accounts
are linked to a master account of their investment
advisor or financial planner on the books and
records of the broker, agent or financial
intermediary with which the Distributor has made
such special arrangements . Each of these
investors may be charged a fee by the broker,
agent or financial intermediary for purchasing
shares.
|_| 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.
|_| Accounts for which Oppenheimer Capital (or its
successor) is the investment advisor (the
Distributor must be advised of this arrangement)
and persons who are directors or trustees of the
company or trust which is the beneficial owner of
such accounts.
|_| A unit investment trust that has entered into an
appropriate agreement with the Distributor.
|_| Dealers, brokers, banks, or registered investment
advisers that have entered into an agreement with
the Distributor to sell shares to defined
contribution employee retirement plans for which
the dealer, broker or investment adviser provides
administration services.
|_| Retirement Plans and deferred compensation plans and
trusts used to fund those plans (including, for
example, plans qualified or created under sections
401(a), 401(k), 403(b) or 457 of the Internal
Revenue Code), in each case if those purchases are
made through a broker, agent or other financial
intermediary that has made special arrangements
with the Distributor for those purchases.
|_| A TRAC-2000 401(k) plan (sponsored by the former
Quest for Value Advisors) whose Class B or Class C
shares of a Former Quest for Value Fund were
exchanged for Class A shares of that Fund due to
the termination of the Class B and Class C
TRAC-2000 program on November 24, 1995.
|_| A qualified Retirement Plan that had agreed with the
former Quest for Value Advisors to purchase shares
of any of the Former Quest for Value Funds at net
asset value, with such shares to be held through
DCXchange, a sub-transfer agency mutual fund
clearinghouse, if that arrangement was consummated
and share purchases commenced by December 31, 1996.
B. Waivers of Initial and Contingent Deferred Sales Charges
in Certain Transactions.
Class A shares issued or purchased in the following
transactions are not subject to sales charges (and no
concessions are paid by the Distributor on such purchases):
|_| Shares issued in plans of reorganization, such as
mergers, asset acquisitions and exchange offers,
to which the Fund is a party.
|_| Shares purchased by the reinvestment of dividends or
other distributions reinvested from the Fund or
other Oppenheimer funds (other than Oppenheimer
Cash Reserves) or unit investment trusts for which
reinvestment arrangements have been made with the
Distributor.
|_| Shares purchased through a broker-dealer that has
entered into a special agreement with the
Distributor to allow the broker's customers to
purchase and pay for shares of Oppenheimer funds
using the proceeds of shares redeemed in the prior
30 days from a mutual fund (other than a fund
managed by the Manager or any of its subsidiaries)
on which an initial sales charge or contingent
deferred sales charge was paid. This waiver also
applies to shares purchased by exchange of shares
of Oppenheimer Money Market Fund, Inc. that were
purchased and paid for in this manner. This waiver
must be requested when the purchase order is
placed for shares of the Fund, and the Distributor
may require evidence of qualification for this
waiver.
|_| Shares purchased with the proceeds of maturing
principal units of any Qualified Unit Investment
Liquid Trust Series.
|_| Shares purchased by the reinvestment of loan
repayments by a participant in a Retirement Plan
for which the Manager or an affiliate acts as
sponsor.
C. Waivers of the Class A Contingent Deferred Sales Charge
for Certain Redemptions.
The Class A contingent deferred sales charge is also waived
if shares that would otherwise be subject to the contingent
deferred sales charge are redeemed in the following cases:
|_| To make Automatic Withdrawal Plan payments that are
limited annually to no more than 12% of the
account value adjusted annually.
|_| Involuntary redemptions of shares by operation of law
or involuntary redemptions of small accounts
(please refer to "Shareholder Account Rules and
Policies," in the applicable fund Prospectus).
|_| For distributions from Retirement Plans, deferred
compensation plans or other employee benefit plans
for any of the following purposes:
1) Following the death or disability (as defined
in the Internal Revenue Code) of the
participant or beneficiary. The death or
disability must occur after the participant's
account was established.
2) To return excess contributions.
3) To return contributions made due to a mistake
of fact.
4) Hardship withdrawals, as defined in the plan.7
5) Under a Qualified Domestic Relations Order, as
defined in the Internal Revenue Code, or, in
the case of an IRA, a divorce or separation
agreement described in Section 71(b) of the
Internal Revenue Code.
6) To meet the minimum distribution requirements
of the Internal Revenue Code.
7) To make "substantially equal periodic payments"
as described in Section 72(t) of the Internal
Revenue Code.
8) For loans to participants or beneficiaries.
9) Separation from service.8
10) Participant-directed redemptions to
purchase shares of a mutual fund (other than a
fund managed by the Manager or a subsidiary of
the Manager) if the plan has made special
arrangements with the Distributor.
11) Plan termination or "in-service
distributions," if the redemption proceeds are
rolled over directly to an
OppenheimerFunds-sponsored IRA.
|_| For distributions from 401(k) plans sponsored by
broker-dealers that have entered into a special
agreement with the Distributor allowing this
waiver.
|_| For distributions from retirement plans that have $10
million or more in plan assets and that have
entered into a special agreement with the
Distributor.
|_| For distributions from retirement plans which are
part of a retirement plan product or platform
offered by certain banks, broker-dealers,
financial advisors, insurance companies or record
keepers which have entered into a special
agreement with the Distributor.
III. Waivers of Class B, Class C and Class N Sales Charges
of Oppenheimer Funds
- ---------------------------------------------------------------
The Class B, Class C and Class N contingent deferred sales
charges will not be applied to shares purchased in certain
types of transactions or redeemed in certain circumstances
described below.
A. Waivers for Redemptions in Certain Cases.
The Class B, Class C and Class N contingent deferred sales
charges will be waived for redemptions of shares in the
following cases:
|_| Shares redeemed involuntarily, as described in
"Shareholder Account Rules and Policies," in the
applicable Prospectus.
|_| Redemptions from accounts other than Retirement Plans
following the death or disability of the last
surviving shareholder. The death or disability
must have occurred after the account was
established, and for disability you must provide
evidence of a determination of disability by the
Social Security Administration.
|_| The contingent deferred sales charges are generally
not waived following the death or disability of a
grantor or trustee for a trust account. The
contingent deferred sales charges will only be
waived in the limited case of the death of the
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.
|_| Distributions from accounts for which the
broker-dealer of record has entered into a special
agreement with the Distributor allowing this
waiver.
|_| Redemptions of Class B shares held by Retirement
Plans whose records are maintained on a daily
valuation basis by Merrill Lynch or an independent
record keeper under a contract with Merrill Lynch.
|_| Redemptions of Class C shares of Oppenheimer U.S.
Government Trust from accounts of clients of
financial institutions that have entered into a
special arrangement with the Distributor for this
purpose.
|_| Redemptions requested in writing by a Retirement Plan
sponsor of Class C shares of an Oppenheimer fund
in amounts of $500,000 or more and made more than
12 months after the Retirement Plan's first
purchase of Class C shares, if the redemption
proceeds are invested in Class N shares of one or
more Oppenheimer funds.
|-|
Distributions9 from Retirement Plans or other
employee benefit plans for any of the following
purposes:
1) Following the death or disability (as defined
in the Internal Revenue Code) of the
participant or beneficiary. The death or
disability must occur after the participant's
account was established in an Oppenheimer fund.
2) To return excess contributions made to a
participant's account.
3) To return contributions made due to a mistake
of fact.
4) To make hardship withdrawals, as defined in the
plan.10
5) To make distributions required under a
Qualified Domestic Relations Order or, in the
case of an IRA, a divorce or separation
agreement described in Section 71(b) of the
Internal Revenue Code.
6) To meet the minimum distribution requirements
of the Internal Revenue Code.
7) To make "substantially equal periodic payments"
as described in Section 72(t) of the Internal
Revenue Code.
8) For loans to participants or beneficiaries.11
9) On account of the participant's separation from
service.12
10) Participant-directed redemptions to
purchase shares of a mutual fund (other than a
fund managed by the Manager or a subsidiary of
the Manager) offered as an investment option in
a Retirement Plan if the plan has made special
arrangements with the Distributor.
11) Distributions made on account of a plan
termination or "in-service" distributions, if
the redemption proceeds are rolled over
directly to an OppenheimerFunds-sponsored IRA.
12) For distributions from a participant's
account under an Automatic Withdrawal Plan
after the participant reaches age 59 1/2, as long
as the aggregate value of the distributions
does not exceed 10% of the account's value,
adjusted annually.
13) Redemptions of Class B shares under an
Automatic Withdrawal Plan for an account other
than a Retirement Plan, if the aggregate value
of the redeemed shares does not exceed 10% of
the account's value, adjusted annually.
14) For distributions from 401(k) plans
sponsored by broker-dealers that have entered
into a special arrangement with the Distributor
allowing this waiver.
|_| Redemptions of Class B shares or Class C shares under
an Automatic Withdrawal Plan from an account other
than a Retirement Plan if the aggregate value of
the redeemed shares does not exceed 10% of the
account's value annually.
B. Waivers for Shares Sold or Issued in Certain
Transactions.
The contingent deferred sales charge is also waived on
Class B and Class C shares sold or issued in the following
cases:
|_| Shares sold to the Manager or its affiliates.
|_| Shares sold to registered management investment
companies or separate accounts of insurance
companies having an agreement with the Manager or
the Distributor for that purpose.
|_| Shares issued in plans of reorganization to which the
Fund is a party.
|_| Shares sold to present or former officers, directors,
trustees or employees (and their "immediate
families" as defined above in Section I.A.) of the
Fund, the Manager and its affiliates and
retirement plans established by them for their
employees.
IV.
Special Sales Charge Arrangements for Shareholders of
Certain Oppenheimer Funds Who Were Shareholders of
Former Quest for Value Funds
- -------------------------------------------------------------
The initial and contingent deferred sales charge rates and
waivers for Class A, Class B and Class C shares described
in the Prospectus or Statement of Additional Information of
the Oppenheimer funds are modified as described below for
certain persons who were shareholders of the former Quest
for Value Funds. To be eligible, those persons must have
been shareholders on November 24, 1995, when
OppenheimerFunds, Inc. became the investment advisor to
those former Quest for Value Funds. Those funds include:
Oppenheimer Quest Value Fund, Inc. Oppenheimer
Small Cap Value Fund
Oppenheimer Quest Balanced Value Fund Oppenheimer
Quest Global Value Fund, Inc.
Oppenheimer Quest Opportunity Value Fund
These arrangements also apply to shareholders of the
following funds when they merged (were reorganized) into
various Oppenheimer funds on November 24, 1995:
Quest for Value U.S. Government Income Fund Quest for
Value New York Tax-Exempt Fund
Quest for Value Investment Quality Income Fund Quest
for Value National Tax-Exempt Fund
Quest for Value Global Income Fund Quest for Value
California Tax-Exempt Fund
All of the funds listed above are referred to in this
Appendix as the "Former Quest for Value Funds." The
waivers of initial and contingent deferred sales charges
described in this Appendix apply to shares of an
Oppenheimer fund that are either:
|_| acquired by such shareholder pursuant to an exchange
of shares of an Oppenheimer fund that was one of
the Former Quest for Value Funds, or
|_| purchased by such shareholder by exchange of shares
of another Oppenheimer fund that were acquired
pursuant to the merger of any of the Former Quest
for Value Funds into that other Oppenheimer fund
on November 24, 1995.
A. Reductions or Waivers of Class A Sales Charges.
|X| Reduced Class A Initial Sales Charge Rates for
Certain Former Quest for Value Funds Shareholders.
Purchases by Groups and Associations. The following table
sets forth the initial sales charge rates for Class A
shares purchased by members of "Associations" formed for
any purpose other than the purchase of securities. The
rates in the table apply if that Association purchased
shares of any of the Former Quest for Value Funds or
received a proposal to purchase such shares from OCC
Distributors prior to November 24, 1995.
- --------------------------------------------------------------------------------
Initial Sales Initial Sales Charge Concession as
Number of Eligible Charge as a % of as a % of Net Amount % of Offering
Employees or Members Offering Price Invested Price
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
9 or Fewer 2.50% 2.56% 2.00%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
At least 10 but not 2.00% 2.04% 1.60%
more than 49
- --------------------------------------------------------------------------------
- ------------------------------------------------------------
For purchases by Associations having 50 or more
eligible employees or members, there is no initial sales
charge on purchases of Class A shares, but those shares are
subject to the Class A contingent deferred sales charge
described in the applicable fund's Prospectus.
Purchases made under this arrangement qualify for the
lower of either the sales charge rate in the table based on
the number of members of an Association, or the sales
charge rate that applies under the Right of Accumulation
described in the applicable fund's Prospectus and Statement
of Additional Information. Individuals who qualify under
this arrangement for reduced sales charge rates as members
of Associations also may purchase shares for their
individual or custodial accounts at these reduced sales
charge rates, upon request to the Distributor.
|X| Waiver of Class A Sales Charges for Certain
Shareholders. Class A shares purchased by the following
investors are not subject to any Class A initial or
contingent deferred sales charges:
o Shareholders who were shareholders of the AMA Family
of Funds on February 28, 1991 and who acquired shares of
any of the Former Quest for Value Funds by merger of a
portfolio of the AMA Family of Funds.
o Shareholders who acquired shares of any Former Quest
for Value Fund by merger of any of the portfolios of the
Unified Funds.
|X| Waiver of Class A Contingent Deferred Sales Charge in
Certain Transactions. The Class A contingent deferred
sales charge will not apply to redemptions of Class A
shares purchased by the following investors who were
shareholders of any Former Quest for Value Fund:
Investors who purchased Class A shares from a dealer
that is or was not permitted to receive a sales load or
redemption fee imposed on a shareholder with whom that
dealer has a fiduciary relationship, under the Employee
Retirement Income Security Act of 1974 and regulations
adopted under that law.
B. Class A, Class B and Class C Contingent Deferred Sales
Charge Waivers.
|X| Waivers for Redemptions of Shares Purchased Prior to
March 6, 1995. In the following cases, the contingent
deferred sales charge will be waived for redemptions of
Class A, Class B or Class C shares of an Oppenheimer fund.
The shares must have been acquired by the merger of a
Former Quest for Value Fund into the fund or by exchange
from an Oppenheimer fund that was a Former Quest for Value
Fund or into which such fund merged. Those shares must have
been purchased prior to March 6, 1995 in connection with:
o withdrawals under an automatic withdrawal plan
holding only either Class B or Class C shares if the
annual withdrawal does not exceed 10% of the initial
value of the account value, adjusted annually, and
o liquidation of a shareholder's account if the
aggregate net asset value of shares held in the account
is less than the required minimum value of such accounts.
|X| Waivers for Redemptions of Shares Purchased on or
After March 6, 1995 but Prior to November 24, 1995. In the
following cases, the contingent deferred sales charge will
be waived for redemptions of Class A, Class B or Class C
shares of an Oppenheimer fund. The shares must have been
acquired by the merger of a Former Quest for Value Fund
into the fund or by exchange from an Oppenheimer fund that
was a Former Quest For Value Fund or into which such Former
Quest for Value Fund merged. Those shares must have been
purchased on or after March 6, 1995, but prior to November
24, 1995:
o redemptions following the death or disability of the
shareholder(s) (as evidenced by a determination of total
disability by the U.S. Social Security Administration);
o withdrawals under an automatic withdrawal plan (but
only for Class B or Class C shares) where the annual
withdrawals do not exceed 10% of the initial value of
the account value; adjusted annually, and
o liquidation of a shareholder's account if the
aggregate net asset value of shares held in the account
is less than the required minimum account value.
A shareholder's account will be credited with the
amount of any contingent deferred sales charge paid on the
redemption of any Class A, Class B or Class C shares of the
Oppenheimer fund described in this section if the proceeds
are invested in the same Class of shares in that fund or
another Oppenheimer fund within 90 days after redemption.
V. Special Sales Charge Arrangements for Shareholders of
Certain Oppenheimer Funds Who Were Shareholders of
Connecticut Mutual Investment Accounts, Inc.
- ---------------------------------------------------------
The initial and contingent deferred sale charge rates and
waivers for Class A and Class B shares described in the
respective Prospectus (or this Appendix) of the following
Oppenheimer funds (each is referred to as a "Fund" in this
section):
Oppenheimer U. S. Government Trust,
Oppenheimer Bond Fund,
Oppenheimer Value Fund and
Oppenheimer Disciplined Allocation Fund
are modified as described below for those Fund shareholders
who were shareholders of the following funds (referred to
as the "Former Connecticut Mutual Funds") on March 1, 1996,
when OppenheimerFunds, Inc. became the investment adviser
to the Former Connecticut Mutual Funds:
Connecticut Mutual Liquid Account Connecticut
Mutual Total Return Account
Connecticut Mutual Government Securities Account CMIA
LifeSpan Capital Appreciation Account
Connecticut Mutual Income Account CMIA LifeSpan
Balanced Account
Connecticut Mutual Growth Account CMIA Diversified
Income Account
A. Prior Class A CDSC and Class A Sales Charge Waivers.
|X| Class A Contingent Deferred Sales Charge. Certain
shareholders of a Fund and the other Former Connecticut
Mutual Funds are entitled to continue to make additional
purchases of Class A shares at net asset value without a
Class A initial sales charge, but subject to the Class A
contingent deferred sales charge that was in effect prior
to March 18, 1996 (the "prior Class A CDSC"). Under the
prior Class A CDSC, if any of those shares are redeemed
within one year of purchase, they will be assessed a 1%
contingent deferred sales charge on an amount equal to the
current market value or the original purchase price of the
shares sold, whichever is smaller (in such redemptions, any
shares not subject to the prior Class A CDSC will be
redeemed first).
Those shareholders who are eligible for the prior
Class A CDSC are:
1) persons whose purchases of Class A shares of a
Fund and other Former Connecticut Mutual Funds
were $500,000 prior to March 18, 1996, as a
result of direct purchases or purchases
pursuant to the Fund's policies on Combined
Purchases or Rights of Accumulation, who still
hold those shares in that Fund or other Former
Connecticut Mutual Funds, and
2) persons whose intended purchases under a
Statement of Intention entered into prior to
March 18, 1996, with the former general
distributor of the Former Connecticut Mutual
Funds to purchase shares valued at $500,000 or
more over a 13-month period entitled those
persons to purchase shares at net asset value
without being subject to the Class A initial
sales charge
Any of the Class A shares of a Fund and the other
Former Connecticut Mutual Funds that were purchased at net
asset value prior to March 18, 1996, remain subject to the
prior Class A CDSC, or if any additional shares are
purchased by those shareholders at net asset value pursuant
to this arrangement they will be subject to the prior Class
A CDSC.
|X| Class A Sales Charge Waivers. Additional Class A
shares of a Fund may be purchased without a sales charge,
by a person who was in one (or more) of the categories
below and acquired Class A shares prior to March 18, 1996,
and still holds Class A shares:
1) any purchaser, provided the total initial
amount invested in the Fund or any one or more
of the Former Connecticut Mutual Funds totaled
$500,000 or more, including investments made
pursuant to the Combined Purchases, Statement
of Intention and Rights of Accumulation
features available at the time of the initial
purchase and such investment is still held in
one or more of the Former Connecticut Mutual
Funds or a Fund into which such Fund merged;
2) any participant in a qualified plan, provided
that the total initial amount invested by the
plan in the Fund or any one or more of the
Former Connecticut Mutual Funds totaled
$500,000 or more;
3) Directors of the Fund or any one or more of the
Former Connecticut Mutual Funds and members of
their immediate families;
4) employee benefit plans sponsored by Connecticut
Mutual Financial Services, L.L.C. ("CMFS"), the
prior distributor of the Former Connecticut
Mutual Funds, and its affiliated companies;
5) one or more members of a group of at least
1,000 persons (and persons who are retirees
from such group) engaged in a common business,
profession, civic or charitable endeavor or
other activity, and the spouses and minor
dependent children of such persons, pursuant to
a marketing program between CMFS and such
group; and
6) an institution acting as a fiduciary on behalf
of an individual or individuals, if such
institution was directly compensated by the
individual(s) for recommending the purchase of
the shares of the Fund or any one or more of
the Former Connecticut Mutual Funds, provided
the institution had an agreement with CMFS.
Purchases of Class A shares made pursuant to (1) and
(2) above may be subject to the Class A CDSC of the Former
Connecticut Mutual Funds described above.
Additionally, Class A shares of a Fund may be
purchased without a sales charge by any holder of a
variable annuity contract issued in New York State by
Connecticut Mutual Life Insurance Company through the
Panorama Separate Account which is beyond the applicable
surrender charge period and which was used to fund a
qualified plan, if that holder exchanges the variable
annuity contract proceeds to buy Class A shares of the Fund.
B. Class A and Class B Contingent Deferred Sales Charge
Waivers.
In addition to the waivers set forth in the Prospectus and
in this Appendix, above, the contingent deferred sales
charge will be waived for redemptions of Class A and Class
B shares of a Fund and exchanges of Class A or Class B
shares of a Fund into Class A or Class B shares of a Former
Connecticut Mutual Fund provided that the Class A or Class
B shares of the Fund to be redeemed or exchanged were (i)
acquired prior to March 18, 1996 or (ii) were acquired by
exchange from an Oppenheimer fund that was a Former
Connecticut Mutual Fund. Additionally, the shares of such
Former Connecticut Mutual Fund must have been purchased
prior to March 18, 1996:
1) by the estate of a deceased shareholder;
2) upon the disability of a shareholder, as defined in
Section 72(m)(7) of the Internal Revenue Code;
3) for retirement distributions (or loans) to
participants or beneficiaries from retirement plans
qualified under Sections 401(a) or 403(b)(7)of the
Code, or from IRAs, deferred compensation plans
created under Section 457 of the Code, or other
employee benefit plans;
4) as tax-free returns of excess contributions to such
retirement or employee benefit plans;
5) in whole or in part, in connection with shares sold
to any state, county, or city, or any
instrumentality, department, authority, or agency
thereof, that is prohibited by applicable investment
laws from paying a sales charge or concession in
connection with the purchase of shares of any
registered investment management company;
6) in connection with the redemption of shares of the
Fund due to a combination with another investment
company by virtue of a merger, acquisition or similar
reorganization transaction;
7) in connection with the Fund's right to involuntarily
redeem or liquidate the Fund;
8) in connection with automatic redemptions of Class A
shares and Class B shares in certain retirement plan
accounts pursuant to an Automatic Withdrawal Plan but
limited to no more than 12% of the original value
annually; or
9) as involuntary redemptions of shares by operation of
law, or under procedures set forth in the Fund's
Articles of Incorporation, or as adopted by the Board
of Directors of the Fund.
VI. Special Reduced Sales Charge for Former Shareholders
of Advance America Funds, Inc.
- ------------------------------------------------------------
Shareholders of Oppenheimer Municipal Bond Fund,
Oppenheimer U.S. Government Trust, Oppenheimer Strategic
Income Fund and Oppenheimer Capital Income Fund who
acquired (and still hold) shares of those funds as a result
of the reorganization of series of Advance America Funds,
Inc. into those Oppenheimer funds on October 18, 1991, and
who held shares of Advance America Funds, Inc. on March 30,
1990, may purchase Class A shares of those four Oppenheimer
funds at a maximum sales charge rate of 4.50%.
VII. Sales Charge Waivers on Purchases of Class M Shares
of Oppenheimer Convertible Securities Fund
- ------------------------------------------------------------
Oppenheimer Convertible Securities Fund (referred to as the
"Fund" in this section) may sell Class M shares at net
asset value without any initial sales charge to the classes
of investors listed below who, prior to March 11, 1996,
owned shares of the Fund's then-existing Class A and were
permitted to purchase those shares at net asset value
without sales charge:
|_| the Manager and its affiliates,
|_| present or former officers, directors, trustees and
employees (and their "immediate families" as
defined in the Fund's Statement of Additional
Information) of the Fund, the Manager and its
affiliates, and retirement plans established by
them or the prior investment advisor of the Fund
for their employees,
|_| registered management investment companies or
separate accounts of insurance companies that had
an agreement with the Fund's prior investment
advisor or distributor for that purpose,
|_| dealers or brokers that have a sales agreement with
the Distributor, if they purchase shares for their
own accounts or for retirement plans for their
employees,
|_| employees and registered representatives (and their
spouses) of dealers or brokers described in the
preceding section or financial institutions that
have entered into sales arrangements with those
dealers or brokers (and whose identity is made
known to the Distributor) or with the Distributor,
but only if the purchaser certifies to the
Distributor at the time of purchase that the
purchaser meets these qualifications,
|_| dealers, brokers, or registered investment advisors
that had entered into an agreement with the
Distributor or the prior distributor of the Fund
specifically providing for the use of Class M
shares of the Fund in specific investment products
made available to their clients, and
|_| dealers, brokers or registered investment advisors
that had entered into an agreement with the
Distributor or prior distributor of the Fund's
shares to sell shares to defined contribution
employee retirement plans for which the dealer,
broker, or investment advisor provides
administrative services.
Oppenheimer Growth Fund
Internet Website:
www.oppenheimerfunds.com
------------------------
Investment Advisor
OppenheimerFunds, Inc.
498 Seventh Avenue,
New York, New York 10018
Distributor
OppenheimerFunds Distributor, Inc.
498 Seventh Avenue,
New York, New York 10018
Transfer Agent
OppenheimerFunds Services
P.O. Box 5270
Denver, Colorado 80217
1.800.CALL.OPP (225.5677)
Custodian Bank
Citibank, N.A.
111 Wall Street
New York, New York 10005
Independent Auditors
KPMG LLP
707 Seventeenth Street
Denver, Colorado 80202
Legal Counsel
Mayer, Brown, Rowe & Maw
1675 Broadway
New York, New York 10019-5820
1234
PX270.002.1002(rev0203)
- --------
1 Mr. Motley was elected as Trustee to the Board I Funds
effective October 10, 2002.
2 Certain waivers also apply to Class M shares of
Oppenheimer Convertible Securities Fund.
3 In the case of Oppenheimer Senior Floating Rate Fund, a
continuously-offered closed-end fund, references to
contingent deferred sales charges mean the Fund's Early
Withdrawal Charges and references to "redemptions" mean
"repurchases" of shares.
4 An "employee benefit plan" means any plan or arrangement,
whether or not it is "qualified" under the Internal Revenue
Code, under which Class N shares of an Oppenheimer fund or
funds are purchased by a fiduciary or other administrator
for the account of participants who are employees of a
single employer or of affiliated employers. These may
include, for example, medical savings accounts, payroll
deduction plans or similar plans. The fund accounts must be
registered in the name of the fiduciary or administrator
purchasing the shares for the benefit of participants in
the plan.
5 The term "Group Retirement Plan" means any qualified or
non-qualified retirement plan for employees of a
corporation or sole proprietorship, members and employees
of a partnership or association or other organized group of
persons (the members of which may include other groups), if
the group has made special arrangements with the
Distributor and all members of the group participating in
(or who are eligible to participate in) the plan purchase
shares of an Oppenheimer fund or funds through a single
investment dealer, broker or other financial institution
designated by the group. Such plans include 457 plans,
SEP-IRAs, SARSEPs, SIMPLE plans and 403(b) plans other than
plans for public school employees. The term "Group
Retirement Plan" also includes qualified retirement plans
and non-qualified deferred compensation plans and IRAs that
purchase shares of an Oppenheimer fund or funds through a
single investment dealer, broker or other financial
institution that has made special arrangements with the
Distributor.
6 However, that concession will not be paid on purchases of
shares in amounts of $1 million or more (including any
right of accumulation) by a Retirement Plan that pays for
the purchase with the redemption proceeds of Class C shares
of one or more Oppenheimer funds held by the Plan for more
than one year.
7 This provision does not apply to IRAs.
8 This provision does not apply to 403(b)(7) custodial
plans if the participant is less than age 55, nor to IRAs.
9 The distribution must be requested prior to Plan
termination or the elimination of the Oppenheimer funds as
an investment option under the Plan.
10 This provision does not apply to IRAs.
11 This provision does not apply to loans from 403(b)(7)
custodial plans and loans from the
OppenheimerFunds-sponsored Single K retirement plan.
12 This provision does not apply to 403(b)(7) custodial
plans if the participant is less than age 55, nor to IRAs.
Oppenheimer trinity LARGE CAP GROWTH fund
Supplement dated May 14, 2003 to the
Prospectus dated September 24, 2002
The Prospectus is changed as follows:
1. The following paragraph is added to the end of the section
captioned "How the Fund is Managed" on Page 11:
At a recent meeting, the Board of Trustees of the
Fund determined that it is in the best interest of the
Fund's shareholders that the Fund reorganize with and into
Oppenheimer Growth Fund. The Board unanimously approved an
agreement and plan of reorganization to be entered into
between these funds and the transactions contemplated
thereby (the "reorganization"). The Board further
determined that the reorganization should be submitted to
the Fund's shareholders for approval, and recommended that
shareholders approve the reorganization. Shareholders of
record as of a date to be determined by the Board will be
entitled to vote on the reorganization and will receive the
proxy statement describing the reorganization. The
anticipated date for the shareholder meeting is on or about
September 12, 2003, with the reorganization to be effected
shortly thereafter.
May 14, 2003 PS0775.019
Oppenheimer trinity LARGE CAP GROWTH fund
Supplement dated November 1, 2002 to the
Prospectus dated September 24, 2002
The Prospectus is changed as follows:
1. The following is added as a second paragraph to the existing
footnote under the "Annual Fund Operating Expenses" table on page 7:
Effective November 1, 2002, the limit on transfer agent
fees for Class Y shares increased to 0.35% of average daily
net assets per fiscal year. Had that limit been in effect
during the Fund's prior fiscal year, the Class Y "Other
Expenses" and "Total Annual Operating Expenses" as
percentages of average daily net assets would have been
0.55% and 1.30%, respectively.
November 1, 2002 PS0775.018
Oppenheimer Trinity Large Cap Growth FundSM
Prospectus dated September 24, 2002 Oppenheimer Trinity Large Cap Growth
FundSM is a mutual fund. It seeks
capital appreciation to make your
investment grow. The Fund invests in
common stocks selected from among
those included in the S&P 500/Barra
Growth Index.
This Prospectus contains
important information about the
Fund's objective, its investment
policies, strategies and risks. It
also contains important information
about how to buy and sell shares of
the Fund and other account features.
Please read this Prospectus
carefully before you invest and keep
it for future reference about your
account.
As with all mutual funds, the
Securities and Exchange Commission (logo) OppenheimerFunds
has not approved or disapproved the The Right Way to Invest
Fund's securities nor has it
determined that this Prospectus is
accurate or complete. It is a
criminal offense to represent
otherwise.
5
CONTENTS
- ---------------------------------------------------------------------------------
ABOUT THE FUND
The Fund's Investment Objective and Strategies
Main Risks of Investing in the Fund
The Fund's Past Performance
Fees and Expenses of the Fund
About the Fund's Investments
How the Fund is Managed
ABOUT YOUR ACCOUNT
How to Buy Shares
Class A Shares
Class B Shares
Class C Shares
Class N Shares
Class Y Shares
Special Investor Services
AccountLink
PhoneLink
OppenheimerFunds Internet Website
Retirement Plans
How to Sell Shares
By Mail
By Telephone
How to Exchange Shares
Shareholder Account Rules and Policies
Dividends, Capital Gains and Taxes
Financial Highlights
- ---------------------------------------------------------------------------------
A B O U T T H E F U N D
The Fund's Investment Objective and Strategies
WHAT IS THE FUND'S INVESTMENT OBJECTIVE? The Fund seeks capital
appreciation.
WHAT DOES THE FUND MAINLY INVEST IN? The Fund invests in common stocks
that are included in the S&P 500/Barra Growth Index, a subset of stocks
included in the Standard & Poor's Index of 500 Stocks ("S&P 500
Index"). The Fund does not expect to invest in all of the stocks
included in the S&P 500/Barra Growth Index at the same time, and the
Fund's investments in particular stocks may be allocated in amounts
that vary, at times significantly, from the proportional weightings of
those stocks in the S&P 500/Barra Growth Index. Therefore, the Fund is
not an "index" fund.
HOW DOES THE SUB-ADVISOR DECIDE WHAT SECURITIES TO BUY OR SELL? The
Fund's investment Manager, OppenheimerFunds, Inc., has engaged a
Sub-Advisor, Trinity Investment Management Corporation, to select the
securities for the Fund's portfolio. The Sub-Advisor primarily uses
growth-oriented investment analyses to determine which stocks to buy
and sell on behalf of the Fund, focusing on those stocks that appear to
have appreciation potential.
The Fund's Sub-Advisor generally adheres to the following
systematic, disciplined investment process. While the Fund's investment
process and its implementation may vary in particular cases, the
process currently includes the following strategies:
o The Sub-Advisor considers stocks that are included in the S&P
500/Barra Growth Index as investments for the Fund's portfolio.
Under normal circumstances, at least 80% of the Fund's net assets
(plus borrowings used for investment purposes) will be invested
in stocks included in the index, which is generally considered a
"large cap" index.
o The Sub-Advisor uses proprietary quantitative valuation models
incorporating data derived from qualitative fundamental research
to identify stocks within the index that it considers to have
appreciation potential. Individual stocks are selected for the
Fund's portfolio using a ranking process based on those valuation
models.
o Seeking to reduce the Fund's overall risk, the Sub-Advisor
diversifies the Fund's portfolio by allocating the Fund's
investments among industries within the S&P 500/Barra Growth
Index.
The investment process is more fully described under "About the Fund's
Investments," below.
WHO IS THE FUND DESIGNED FOR? The Fund is designed for investors
seeking capital appreciation in their investment over the long term.
Those investors should be willing to assume the risks of short-term
share price fluctuations that are typical for a growth fund focusing on
stock investments. Since the Fund does not seek income and its income
from its investments will likely be small, it is not designed for
investors needing income. Because of its focus on long-term growth, the
Fund may be appropriate for a portion of a retirement plan investment.
The Fund is not a complete investment program.
Main Risks of Investing in the Fund
All investments carry risks to some degree. The Fund's investments are
subject to changes in their value from a number of factors described
below. There is also the risk that poor security selection by the
Sub-Advisor will cause the Fund to underperform other funds having a
similar objective.
RISKS OF INVESTING IN STOCKS. Stocks fluctuate in price, and their
volatility at times may be great. Because the Fund invests primarily in
common stocks of U.S. companies, the value of the Fund's portfolio will
be affected by changes in the U.S. stock markets. Market risk will
affect the Fund's net asset values per share, which will fluctuate as
the values of the Fund's portfolio securities change. The prices of
individual stocks do not all move in the same direction uniformly or at
the same time.
Additionally, stocks of issuers in a particular industry may be
affected by changes in economic conditions that affect that industry
more than others, or by changes in government regulations, availability
of basic resources or supplies, or other events. The Fund does not
concentrate 25% or more of its total assets in any one industry, and
the portfolio management team seeks to reduce the effects of industry
risks by diversifying the Fund's investments among 34 industry groups
defined by the Sub-Advisor within the S&P 500/Barra Growth Index.
However, there is no assurance that this diversification strategy will
reduce fluctuations in the value of the Fund's shares related to events
affecting the stocks of issuers in a particular industry.
Other factors can affect a particular stock's price, such as poor
earnings reports by the issuer, loss of major customers, major
litigation against the issuer, or changes in government regulations
affecting the issuer or its industry.
HOW RISKY IS THE FUND OVERALL? The risks described above collectively
form the overall risk profile of the Fund and can affect the value of
the Fund's investments, its investment performance and its prices per
share. Particular investments and important strategies also have
risks. These risks mean that you can lose money by investing in the
Fund. When you redeem your shares, they may be worth more or less than
what you paid for them. There is no assurance that the Fund will
achieve its investment objective.
The Fund focuses on investing in growth stocks for long-term
capital appreciation. In the short term, the stock markets can be
volatile, and the price of the Fund's shares can go up and down
substantially. Growth stocks may be more volatile than other equity
investments. The Fund generally does not use income-oriented
investments to help cushion the Fund's total return from changes in
stock prices. In the OppenheimerFunds spectrum, the Fund is generally
more aggressive than funds that invest in both stocks and bonds or in
investment grade debt securities, but may be less volatile than
small-cap and emerging markets stock funds.
An investment in the Fund is not a deposit of any bank and is not
insured or guaranteed by the Federal Deposit Insurance Corporation or
any other government agency.
The Fund's Past Performance
The bar chart and table below show one measure of the risks of
investing in the Fund, by showing changes in the Fund's performance
(for its Class A shares) from year to year since the Fund's inception
and by showing how the average annual total returns of the Fund's
shares, both before and after taxes, compare to those of a broad-based
market index. The after-tax returns are shown for Class A shares only
and are calculated using the historical highest individual federal
marginal income tax rates in effect during the periods shown, and do
not reflect the impact of state or local taxes. The after-tax returns
for the other classes of shares will vary. In certain cases, the figure
representing "Return After Taxes on Distributions and Sale of Fund
Shares" may be higher than the other return figures for the same
period. A higher after-tax return results when a capital loss occurs
upon redemption and translates into an assumed tax deduction that
benefits the shareholder. The after-tax returns are calculated based on
certain assumptions mandated by regulation and your actual after-tax
returns may differ from those shown, depending on your individual tax
situation. The after-tax returns set forth below are not relevant to
investors who hold their fund shares through tax-deferred arrangements
such as 401(k) plans or IRAs or to institutional investors not subject
to tax. The Fund's past investment performance, before and after taxes,
is not necessarily an indication of how the Fund will perform in the
future.
Annual Total Returns (Class A) (as of 12/31 each year)
[See appendix to prospectus for data in bar chart showing annual total
returns]
Sales charges are not included in the calculations of return in this
bar chart, and if those charges were included, the returns may be less
than those shown.
For the period from 1/1/02 through 6/30/02, the cumulative return (not
annualized) before taxes for Class A shares was -15.48%.
During the period shown in the bar chart, the highest return (not
annualized) before taxes for a calendar quarter was 20.49% (4Qtr99) and
the lowest return (not annualized) before taxes for a calendar quarter
was -22.44% (4Qtr00).
- -------------------------------------------------------------------
Average Annual Total Returns 1 Year 5 Years
for the periods ended (or life of
December 31, 2001 class, if less)
- -------------------------------------------------------------------
- -------------------------------------------------------------------
Class A Shares (inception
12/17/98) -24.13% -6.00%
Return Before Taxes -24.13% -7.11%
Return After Taxes on -14.69% -5.15%
Distributions
Return After Taxes on
Distributions and Sale of
Fund Shares
- -------------------------------------------------------------------
S&P 500/Barra Growth Index
(reflects no deduction for
fees, expenses or taxes) -12.73% -4.46%1
- -------------------------------------------------------------------
Class B Shares (inception -24.12% -7.66%
3/1/99)
- -------------------------------------------------------------------
Class C Shares (inception -21.00% -6.76%
3/1/99)
- -------------------------------------------------------------------
- -------------------------------------------------------------------
Class N Shares (inception N/A2 N/A2
3/1/01)
- -------------------------------------------------------------------
- -------------------------------------------------------------------
Class Y Shares (inception -19.01% -3.66%
12/17/98)
- -------------------------------------------------------------------
1 From 12/31/98.
2 Because this is a new class of shares, return data for the period
specified is not available.
The Fund's average annual total returns include the applicable sales
charge: for Class A, the current maximum initial sales charge of 5.75%;
for Class B, the contingent deferred sales charges of 5% (1-year) and
3% (life of class); and for Class C, the 1% contingent deferred sales
charge for the 1-year period. There is no sales charge for Class Y
shares. The Fund's returns measure the performance of a hypothetical
account and assume that all dividends and capital gains distributions
have been reinvested in additional shares. The performance of the
Fund's Class A shares is compared to S&P 500/Barra Growth Index, an
unmanaged index of U.S. equity securities. The index performance
includes reinvestment of income but does not reflect transaction costs.
The Fund's investments vary from the securities in the index.
Fees and Expenses of the Fund
The Fund pays a variety of expenses directly for management of its
assets, administration, distribution of its shares and other services.
Those expenses are subtracted from the Fund's assets to calculate the
Fund's net asset values 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 the fees and expenses you may pay if
you buy and hold shares of the Fund. The numbers below are based on the
Fund's expenses during its fiscal year ended July 31, 2002.
Shareholder Fees (charges paid directly from your investment):
- ----------------------------------------------------------------------------
Class A Class B Class C Class N Class Y
Shares Shares Shares Shares Shares
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
Maximum Sales Charge 5.75% None None None None
(Load)
on purchases
(as % of offering price)
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
Maximum Deferred Sales
Charge (Load) (as % of
the
lower of the original None1 5%2 1%3 1%4 None
offering
price or redemption
proceeds)
- ----------------------------------------------------------------------------
1. A contingent deferred sales charge may apply to redemptions of
investments of $1 million or more ($500,000 for certain retirement
plan accounts) of Class A shares. See "How to Buy Shares" for
details.
2. Applies to redemptions in first year after purchase. The
contingent deferred sales charge declines to 1% in the sixth year
and is eliminated after that.
3. Applies to shares redeemed within 12 months of purchase.
4. Applies to shares redeemed within 18 months of a retirement
plan's first purchase of Class N shares.
Annual Fund Operating Expenses (deducted from Fund assets):
(% of average daily net assets)
- ----------------------------------------------------------------------------
Class A Class B Class C Class N Class Y
Shares Shares Shares Shares Shares
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
Management Fees 0.75% 0.75% 0.75% 0.75% 0.75%
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
Distribution and/or Service 0.23% 1.00% 1.00% 0.50% None
(12b-1) Fees
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
Other Expenses 1.05% 1.05% 1.04% 1.04% 4.08%
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
Total Annual Operating 2.03% 2.80% 2.79% 2.29% 4.83%
Expenses
- ----------------------------------------------------------------------------
Expenses may vary in future years. "Other expenses" include transfer
agent fees, custodial fees, and accounting and legal expenses that the
Fund pays. The "Other Expenses" in the table are based on, among other
things, the fees the Fund would have paid if the transfer agent had not
waived a portion of its fee under a voluntary undertaking to the Fund
to limit these fees to 0.25% of average daily net assets per fiscal
year for Class Y shares and 0.35% of average daily net assets per
fiscal year for all other classes. That undertaking is effective
October 1, 2001 (January 1, 2001 for Class Y), is pro-rated for the
remainder of the fiscal year ending after that date, and may be amended
or withdrawn at any time. After the waiver, the actual "Other Expenses"
and "Total Annual Operating Expenses" as percentages of average daily
net assets were 0.77% and 1.75% for Class A shares, 0.77% and 2.52% for
Class B shares, 0.76% and 2.51% for Class C shares, 0.76% and 2.01% for
Class N shares and 0.45% and 1.20% for Class Y shares.
EXAMPLES. The following examples are intended to help you compare the
cost of investing in the Fund with the cost of investing in other
mutual funds. The examples assume that you invest $10,000 in a class of
shares of the Fund for the time periods indicated and reinvest your
dividends and distributions.
The first example assumes that you redeem all of your shares at the end
of those periods. The second example assumes that you keep your shares.
Both examples also assume that your investment has a 5% return each
year and that the class's operating expenses remain the same. Your
actual costs may be higher or lower because expenses will vary over
time. Based on these assumptions your expenses would be as follows:
---------------------------------------------------------------------------------
If shares are 1 Year 3 Years 5 Years 10 Years
redeemed:
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Class A Shares $769 $1,175 $1,605 $2,798
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Class B Shares $783 $1,168 $1,679 $2,7761
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Class C Shares $382 $865 $1,474 $3,119
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Class N Shares $332 $715 $1,225 $2,626
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Class Y Shares $483 $1,453 $2,425 $4,871
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
If shares are not 1 Year 3 Years 5 Years 10 Years
redeemed:
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Class A Shares $769 $1,175 $1,605 $2,798
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Class B Shares $283 $868 $1,479 $2,7761
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Class C Shares $282 $865 $1,474 $3,119
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Class N Shares $232 $715 $1,225 $2,626
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Class Y Shares $483 $1,453 $2,425 $4,871
---------------------------------------------------------------------------------
In the first example, expenses include the initial sales charge for
Class A and the applicable Class B, Class C and Class N contingent
deferred sales charges. In the second example, the Class A expenses
include the sales charge, but Class B, Class C and Class N expenses do
not include contingent deferred sales charges. There is no sales
charge on Class Y shares.
1. Class B expenses for years 7 through 10 are based on Class A
expenses since Class B shares automatically convert to Class A shares
after 6 years.
About the Fund's Investments
THE FUND'S PRINCIPAL INVESTMENT POLICIES. The Fund purchases only
stocks that are included in the S&P 500/Barra Growth Index. However,
the Fund is not an index fund. In rare instances, the Fund may
temporarily hold stocks that are removed from the S&P 500/Barra Growth
Index or even the S&P 500 Index.
S&P 500 Index. The S&P 500 Index is an unmanaged index of equity
securities that is a broad-based measure of changes in domestic
stock market conditions based on the average performance of 500
widely held stocks. Standard & Poor's Corporation selects the
stocks included in the index and determines their relative
weightings within the index. The index is generally considered a
"large cap" index. The Sub-Advisor's research capabilities cover
approximately 99% of the stocks included in the S&P 500 Index.
S&P 500/Barra Growth Index. The S&P 500/Barra Growth Index is a subset
of stocks included in the S&P 500 Index. The S&P 500/Barra Growth
Index is constructed by dividing the stocks in the S&P 500 Index
according to a single attribute: book-to-price ratio. The S&P
500/Barra Growth Index contains stocks with lower book-to-price
ratios. Stocks with higher book-to-price ratios are contained in
the S&P 500/Barra Value Index. Each stock in the S&P 500 Index is
assigned to either the S&P 500/Barra Value Index or the S&P
500/Barra Growth Index so that the two indices together comprise
the S&P 500 Index.
Stocks included in the S&P 500/Barra Growth Index are generally
considered to be those with the best relative short-term
appreciation potential among the stocks included in the S&P 500
Index. Stocks included in the S&P 500/Barra Value Index are
generally considered to be currently undervalued by the market
and therefore thought to provide an opportunity for long-term
potential returns.
Investment Process. In selecting stocks for the Fund's portfolio, the
Sub-Advisor follows a three-step process intended to identify the
stocks within the S&P 500/Barra Growth Index that have the
greatest appreciation potential.
The Sub-Advisor first divides the S&P 500/Barra Growth Index into
11 broad economic sectors it has defined (see the chart below).
Second, each day the New York Stock Exchange is open for trading,
the Sub-Advisor ranks the stocks in each of the 11 economic
sectors of the index according to their growth potential.
The stocks with the greatest growth potential or the most
attractive stocks, as identified by the Sub-Adviser's growth
models are assigned a ranking of 1 (the highest ranking). The
stocks with the least amount of growth potential, as identified
by the Sub-Adviser's growth models, are assigned a ranking of 10
(the lowest ranking). The stocks with the greatest growth
potential are candidates for purchase or continued investment by
the Fund. Although lower ranked or less attractive stocks
generally are candidates for sale if held by the Fund, the Fund
does invest in some lower ranked or less attractive stocks in an
attempt to reduce overall portfolio risk.
Third, in order to diversify the Fund's investment portfolio and
attempt to reduce overall portfolio risk, the Sub-Advisor seeks
to align the Fund's portfolio investments to the sector weights
of the S&P 500/Barra Growth Index across 34 industry groups,
defined by the Sub-Advisor (see the chart below). At times, the
Fund's position in an attractive stock may be significantly
greater than that stock's proportionate weight in the index. The
Fund's portfolio characteristics, such as its yield, price to
earnings ratio and price to book ratio, will generally reflect
the underlying characteristics of the S&P 500/Barra Growth Index.
There is no assurance the Fund's selection strategy will result
in the Fund achieving its objective of capital appreciation. Nor
can there be any assurance that the Fund's diversification
strategy will actually reduce the volatility of an investment in
the Fund. The Statement of Additional Information contains
additional information about the Fund's investment policies and
risks.
S&P 500/Barra Growth Index
11 Economic Sectors, 34 Industry Groups (as defined by the Sub-Advisor)
Basic Materials Miscellaneous
Chemicals Miscellaneous
Forest Products
Metals Technology
Computer Hardware
Consumer Staples Computer Software
Food/Bev/Tobacco Electronics
Household Products
Food & Drug Retail Consumer Cyclicals
Retail/Merchandise
Health Care Entertainment
Drugs Building Materials
Hospital/Hospital Supply Lodging & Restaurant
Publishing
Transportation Consumer Durables
Automotive Retail/Clothing
Transportation
Auto Parts Finance
Consumer Finance
Capital Goods Money Center Banks
Electric Equipment Insurance
Aerospace Regional Banks
Machinery
Utilities
Energy Telephones
Integrated Oils Electric Utilities
Oil Production/Services Gas & Water
CAN THE FUND'S INVESTMENT OBJECTIVE AND POLICIES CHANGE? The Fund's
Board of Trustees can change non-fundamental investment policies
without shareholder approval, although significant changes will be
described in amendments to this Prospectus. Fundamental policies
cannot be changed without the approval of a majority of the Fund's
outstanding voting shares. The Fund's investment objective is a
fundamental policy. Other investment restrictions that are
fundamental policies are listed in the Statement of Additional
Information. An investment policy is not fundamental unless this
Prospectus or the Statement of Additional Information says that it
is.
OTHER INVESTMENT STRATEGIES. To seek its objective, the Fund can also
use the investment techniques and strategies described below. The Fund
may or may not use these investment techniques. These techniques have
certain risks, although some are designed to help reduce the overall
investment or market risks.
Portfolio Turnover. The Fund's investment process may cause the Fund to
engage in active and frequent trading. Therefore, the Fund may
engage in short-term trading while trying to achieve its
objective. Portfolio turnover increases brokerage costs the Fund
pays (and reduces performance). Additionally, securities trading
can cause the Fund to realize capital gains that are distributed
to shareholders as taxable distributions.
Temporary Defensive and Interim Investments. In times of adverse or
unstable market, economic or political conditions, the Fund can
invest up to 100% of its assets in temporary defensive
investments. Generally, they would be high-quality, short-term
money market instruments, such as U.S. government securities,
highly rated commercial paper, short-term corporate debt
obligations, bank deposits or repurchase agreements. The Fund can
also hold these types of securities pending the investment of
proceeds from the sale of Fund shares or portfolio securities or
to meet anticipated redemptions of Fund shares. To the extent the
Fund invests in these securities, it might not achieve its
investment objective of capital appreciation.
How the Fund Is Managed
THE MANAGER. The Manager supervises the Fund's investment program and
handles its day-to-day business. The Manager carries out its duties,
subject to the policies established by the Board of Trustees, under an
investment advisory agreement that states the Manager's
responsibilities. The agreement sets the fees the Fund pays to the
Manager and describes the expenses that the Fund is responsible to pay
to conduct its business.
The Manager and its subsidiaries and controlled affiliates
managed more than $125 billion in assets as of June 30, 2002, including
other Oppenheimer funds with more than 7 million shareholder accounts.
The Manager is located at 498 Seventh Avenue, New York, New York 10018.
The Sub-Advisor. The Manager retained the Sub-Advisor to provide
day-to-day portfolio management for the Fund. The Sub-Advisor has
operated as an investment advisor since 1980. As of June 30,
2002, the Sub-Advisor managed over $2.5 billion for approximately
56 clients. The Sub-Advisor also serves as sub-advisor to other
investment companies for which the Manager serves as investment
advisor. The Sub-Advisor is an affiliate of the Manager, and is
located at 301 North Spring Street, Bellefonte, Pennsylvania
16823. The Manager, not the Fund, pays the Sub-Advisor an annual
fee under a Sub-Advisory Agreement between the Manager and the
Sub-Advisor.
Advisory Fees. Under the investment advisory agreement, the Fund pays
the Manager an advisory fee at an annual rate that declines as
the Fund's assets grow: 0.75% of the first $200 million of
average annual net assets; 0.72% of the next $200 million; 0.69%
of the next $200 million; 0.66% of the next $200 million; and
0.60% of average annual net assets over $800 million. The Fund's
management fee for its last fiscal year ended July 31, 2002 was
0.75% of average annual net assets for each class of shares.
Portfolio Management Team. The Fund is managed by a team of individuals
employed by the Sub-Advisor. The portfolio management team is
primarily responsible for the selection of the Fund's portfolio
securities.
A B O U T Y O U R A C C O U N T
How to Buy Shares
HOW DO YOU BUY SHARES? You can buy shares several ways, as described
below. The Fund's Distributor, OppenheimerFunds Distributor, Inc., may
appoint servicing agents to accept purchase (and redemption) orders.
The Distributor, in its sole discretion, may reject any purchase order
for the Fund's shares.
Buying Shares Through Your Dealer. You can buy shares through any
dealer, broker or financial institution that has a sales
agreement with the Distributor. Your dealer will place your order
with the Distributor on your behalf.
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
with a financial advisor before you make a purchase to be sure
that the Fund is appropriate for you.
o Paying by Federal Funds Wire. Shares purchased through the
Distributor may be paid for by Federal Funds wire. The minimum
investment is $2,500. Before sending a wire, call the
Distributor's Wire Department at 1.800.CALL.OPP (225.5677) to
notify the Distributor of the wire and to receive further
instructions.
o Buying Shares Through OppenheimerFunds AccountLink. With
AccountLink, you pay for shares by electronic funds transfers
from your bank account. Shares are purchased for your account by
a transfer of money from your bank account through the Automated
Clearing House (ACH) system. You can provide those instructions
automatically, under an Asset Builder Plan, described below, or
by telephone instructions using OppenheimerFunds PhoneLink, also
described below. Please refer to "AccountLink," below for more
details..
o Buying Shares Through Asset Builder Plans. You may purchase
shares of the Fund automatically each month from your account at
a bank or other financial institution under an Asset Builder Plan
with AccountLink. Details are in the Asset Builder Application
and the Statement of Additional Information.
HOW MUCH MUST YOU INVEST? You can buy Fund shares with a minimum
initial investment of $1,000 and make additional investments at any
time with as little as $25 (effective November 1, 2002, the additional
purchase amount is $50). There are reduced minimum investments under
special investment plans.
o With Asset Builder Plans, 403(b) plans, Automatic Exchange Plans
and military allotment plans, you can make initial and
subsequent investments for as little as $25. The minimum
initial investment in any such plan accounts established on or
after November 1, 2002 is $50. The minimum additional
investment to such plan accounts that were established prior
to November 1, 2002 will remain $25. To establish a new Asset
Builder Plan account on or after November 1, 2002, you must
first invest at least $500.
o Under retirement plans, such as IRAs, pension and profit-sharing
plans and 401(k) plans, you can start your account with as
little as $250. If your IRA is started as an Asset Builder
Plan, the $25 minimum applies. Additional purchases may be for
as little as $25. To establish any type of IRA account on or
after November 1, 2002, the minimum investment is $500. The
minimum additional investment to any type of IRA account after
November 1, 2002 is $50.
o The minimum investment requirement does not apply to reinvesting
dividends from the Fund or other Oppenheimer funds (a list of
them appears in the Statement of Additional Information, or
you can ask your dealer or call the Transfer Agent), or
reinvesting distributions from unit investment trusts that
have made arrangements with the Distributor.
AT WHAT PRICE ARE SHARES SOLD? Shares are sold at their offering price
which is the net asset value per share plus any initial sales charge
that applies. The offering price that applies to a purchase order is
based on the next calculation of the net asset value per share that is
made after the Distributor receives the purchase order at its offices
in Colorado, or after any agent appointed by the Distributor receives
the order and sends it to the Distributor.
Net Asset Value. The Fund calculates the net asset value of each class
of shares as of the close of The New York Stock Exchange, on each
day the Exchange is open for trading (referred to in this
Prospectus as a "regular business day"). The Exchange normally
closes at 4:00 P.M., Eastern time, but may close earlier on some
days. All references to time in this Prospectus mean "Eastern
time."
The net asset value per share is determined by dividing the value
of the Fund's net assets attributable to a class by the number of
shares of that class that are outstanding. To determine net asset
value, the Fund's Board of Trustees has established procedures to
value the Fund's securities, in general, based on market value.
The Board has adopted special procedures for valuing illiquid and
restricted securities and obligations for which market values
cannot be readily obtained. Because some foreign securities trade
in markets and on exchanges that operate on weekends and U.S.
holidays, the values of some of the Fund's foreign investments
may change on days when investors cannot buy or redeem Fund
shares.
If, after the close of the principal market on which a security
held by the Fund is traded, and before the time the Fund's
securities are priced that day, an event occurs that the
Sub-Advisor deems likely to cause a material change in the value
of such security, the Fund's Board of Trustees has authorized the
Manager, subject to the Board's review, to ascertain a fair value
for such security. A security's valuation may differ depending on
the method used for determining value.
The Offering Price. To receive the offering price for a particular day,
in most cases the Distributor or its designated agent must
receive your order by the time of day The New York Stock Exchange
closes that day. If your order is received on a day when the
Exchange is closed or after it has closed, the order will receive
the next offering price that is determined after your order is
received.
Buying Through a Dealer. If you buy shares through a dealer, your
dealer must receive the order by the close of The New York Stock
Exchange and transmit it to the Distributor so that it is
received before the Distributor's close of business on a regular
business day (normally 5:00 P.M.) to receive that day's offering
price. Otherwise, the order will receive the next offering price
that is determined.
- ------------------------------------------------------------------------
WHAT CLASSES OF SHARES DOES THE FUND OFFER? The Fund offers investors
five different classes of shares. The different classes of shares
represent investments in the same portfolio of securities, but the
classes are subject to different expenses and will likely have
different share prices. When you buy shares, be sure to specify the
class of shares. If you do not choose a class, your investment will be
made in Class A shares.
- ------------------------------------------------------------------------
- ------------------------------------------------------------------------
- ------------------------------------------------------------------------
- ------------------------------------------------------------------------
Class A Shares. If you buy Class A shares, you pay an initial sales
charge (on investments up to $1 million for regular accounts or
$500,000 for certain retirement plans). The amount of that sales
charge will vary depending on the amount you invest. The sales
charge rates are listed in "How Can You Buy Class A Shares?"
below.
- ------------------------------------------------------------------------
Class B Shares. If you buy Class B shares, you pay no sales charge at
the time of purchase, but you will pay an annual asset-based
sales charge. If you sell your shares within 6 years of buying
them, you will normally pay a contingent deferred sales charge.
That contingent deferred sales charge varies depending on how
long you own your shares, as described in "How Can You Buy Class
B Shares?" below.
- ------------------------------------------------------------------------
Class C Shares. If you buy Class C shares, you pay no sales charge at
the time of purchase, but you will pay an annual asset-based
sales charge. If you sell your shares within 12 months of buying
them, you will normally pay a contingent deferred sales charge of
1.0%, as described in "How Can You Buy Class C Shares?" below.
- ------------------------------------------------------------------------
Class N Shares. If you buy Class N shares (available only through
certain retirement plans), you pay no sales charge at the time of
purchase, but you will pay an annual asset-based sales charge. If
you sell your shares within 18 months of the retirement plan's
first purchase of Class N shares, you may pay a contingent
deferred sales charge of 1.0%, as described in "How Can You Buy
Class N Shares?" below.
Class Y Shares. Class Y shares are offered only to certain
institutional investors that have special agreements with the
Distributor.
WHICH CLASS OF SHARES SHOULD YOU CHOOSE? Once you decide that the Fund
is an appropriate investment for you, the decision as to which class of
shares is best suited to your needs depends on a number of factors that
you should discuss with your financial advisor. Some factors to
consider are how much you plan to invest and how long you plan to hold
your investment. If your goals and objectives change over time and you
plan to purchase additional shares, you should re-evaluate those
factors to see if you should consider another class of shares. The
Fund's operating costs that apply to a class of shares and the effect
of the different types of sales charges on your investment will vary
your investment results over time.
The discussion below is not intended to be investment advice or a
recommendation, because each investor's financial considerations are
different. The discussion below assumes that you will purchase only one
class of shares and not a combination of shares of different classes.
Of course, these examples are based on approximations of the effects of
current sales charges and expenses projected over time, and do not
detail all of the considerations in selecting a class of shares. You
should analyze your options carefully with your financial advisor
before making that choice.
How Long Do You Expect to Hold Your Investment? While future financial
needs cannot be predicted with certainty, knowing how long you
expect to hold your investment will assist you in selecting the
appropriate class of shares. Because of the effect of class-based
expenses, your choice will also depend on how much you plan to
invest. For example, the reduced sales charges available for
larger purchases of Class A shares may, over time, offset the
effect of paying an initial sales charge on your investment,
compared to the effect over time of higher class-based expenses
on shares of Class B, Class C or Class N. For retirement plans
that qualify to purchase Class N shares, Class N shares will
generally be more advantageous than Class B and Class C shares.
o Investing for the Shorter Term. While the Fund is meant to be a
long-term investment, if you have a relatively short-term
investment horizon (that is, you plan to hold your shares for not
more than six years), you should probably consider purchasing
Class A or Class C shares rather than Class B shares. That is
because of the effect of the Class B contingent deferred sales
charge if you redeem within six years, as well as the effect of
the Class B asset-based sales charge on the investment return for
that class in the short-term. Class C shares might be the
appropriate choice (especially for investments of less than
$100,000), because there is no initial sales charge on Class C
shares, and the contingent deferred sales charge does not apply
to amounts you sell after holding them one year.
However, if you plan to invest more than $100,000 for the shorter
term, then as your investment horizon increases toward six years,
Class C shares might not be as advantageous as Class A shares.
That is because the annual asset-based sales charge on Class C
shares will have a greater impact on your account over the longer
term than the reduced front-end sales charge available for larger
purchases of Class A shares.
And for non-retirement plan investors who invest $1 million or
more, in most cases Class A shares will be the most advantageous
choice, no matter how long you intend to hold your shares. For
that reason, the Distributor normally will not accept purchase
orders of $500,000 or more of Class B shares or $1 million or
more of Class C shares from a single investor.
o Investing for the Longer Term. If you are investing less than
$100,000 for the longer-term, for example for retirement, and do
not expect to need access to your money for seven years or more,
Class B shares may be appropriate.
Are There Differences in Account Features That Matter to You? Some
account features may not be available to Class B, Class C and
Class N shareholders. Other features may not be advisable
(because of the effect of the contingent deferred sales charge)
for Class B, Class C and Class N shareholders. Therefore, you
should carefully review how you plan to use your investment
account before deciding which class of shares to buy.
Additionally, the dividends payable to Class B, Class C and Class
N shareholders will be reduced by the additional expenses borne
by those classes that are not borne by Class A or Class Y shares,
such as the Class B, Class C and Class N asset-based sales charge
described below and in the Statement of Additional Information.
Share certificates are only available for Class A shares. If you
are considering using your shares as collateral for a loan, that
may be a factor to consider.
How Do Share Classes Affect Payments to Your Broker? A financial
advisor may receive different compensation for selling one class
of shares than for selling another class. It is important to
remember that Class B, Class C and Class N contingent deferred
sales charges and asset-based sales charges have the same purpose
as the front-end sales charge on sales of Class A shares: to
compensate the Distributor for concessions and expenses it pays
to dealers and financial institutions for selling shares. The
Distributor may pay additional compensation from its own
resources to securities dealers or financial institutions based
upon the value of shares of the Fund owned by the dealer or
financial institution for its own account or for its customers.
SPECIAL SALES CHARGE ARRANGEMENTS AND WAIVERS. Appendix B to the
Statement of Additional Information details the conditions for the
waiver of sales charges that apply in certain cases, and the special
sales charge rates that apply to purchases of shares of the Fund by
certain groups, or under specified retirement plan arrangements or in
other special types of transactions. To receive a waiver or special
sales charge rate, you must advise the Distributor when purchasing
shares or the Transfer Agent when redeeming shares that the special
conditions apply.
HOW CAN YOU BUY CLASS A SHARES? Class A shares are sold at their
offering price, which is normally net asset value plus an initial sales
charge. However, in some cases, described below, purchases are not
subject to an initial sales charge, and the offering price will be the
net asset value. In other cases, reduced sales charges may be
available, as described below or in the Statement of Additional
Information. 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 or
allocated to your dealer as a concession. The Distributor reserves the
right to reallow the entire concession to dealers. The current sales
charge rates and concessions paid to dealers and brokers are as follows:
-------------------------------------------------------------------------------
Front-End Sales Front-End Sales
Charge As a Charge As a Concession As
Percentage of Percentage of Net Percentage of
Amount of Purchase Offering Price Amount Invested Offering Price
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Less than $25,000 5.75% 6.10% 4.75%
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$25,000 or more but
less 5.50% 5.82% 4.75%
than $50,000
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$50,000 or more but
less 4.75% 4.99% 4.00%
than $100,000
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$100,000 or more but 3.75% 3.90% 3.00%
less than $250,000
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$250,000 or more but 2.50% 2.56% 2.00%
less than $500,000
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$500,000 or more but 2.00% 2.04% 1.60%
less than $1 million
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Can You Reduce Class A Sales Charges? You may be eligible to buy Class
A shares at reduced sales charge rates under the Fund's "Right of
Accumulation" or a Letter of Intent, as described in "Reduced
Sales Charges" in the Statement of Additional Information.
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, or for certain
purchases by particular types of retirement plans that were
permitted to purchase such shares prior to March 1, 2001
("grandfathered retirement accounts"). Retirement plans are not
permitted to make initial purchases of Class A shares subject to
a contingent deferred sales charge. The Distributor pays dealers
of record concessions in an amount equal to 1.0% of purchases of
$1 million or more other than by grandfathered retirement
accounts. For grandfathered retirement accounts, the concession
is 0.75% of the first $2.5 million of purchases plus 0.25% of
purchases in excess of $2.5 million. In either case, the
concession will not be paid on purchases of shares by exchange or
that were previously subject to a front-end sales charge and
dealer concession.
If you redeem any of those shares within an 18-month "holding
period" measured from the beginning 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:
o the aggregate net asset value of the redeemed shares at the time
of redemption (excluding shares purchased by reinvestment of
dividends or capital gain distributions) or
o the original net asset value of the redeemed shares.
The Class A contingent deferred sales charge will not exceed the
aggregate amount of the concessions the Distributor paid to your
dealer on all purchases of Class A shares of all Oppenheimer
funds you made that were subject to the Class A contingent
deferred sales charge.
Purchases by Certain Retirement Plans. There is no initial sales charge
on purchases of Class A shares of any one or more Oppenheimer
funds by retirement plans that have $10 million or more in plan
assets and that have entered into a special agreement with the
Distributor and by retirement plans which are part of a
retirement plan product or platform offered by certain banks,
broker-dealers, financial advisors, insurance companies or
recordkeepers which have entered into a special agreement with
the Distributor. The Distributor currently pays dealers of record
concessions in an amount equal to 0.25% of the purchase price of
Class A shares by those retirement plans from its own resources
at the time of sale, subject to certain exceptions as described
in the Statement of Additional Information. There is no
contingent deferred sales charge upon the redemption of such
shares.
HOW CAN YOU BUY 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 six years from the beginning of the calendar
month of their purchase, a contingent deferred sales charge will be
deducted from the redemption proceeds. The Class B contingent deferred
sales charge is paid to compensate the Distributor for its expenses of
providing distribution-related services to the Fund in connection with
the sale of Class B shares.
The 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 for the Class B
contingent deferred sales charge holding period:
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Years Since Beginning of Month in Contingent Deferred Sales Charge on
Which Redemptions in That Year
Purchase Order was Accepted (As % of Amount Subject to Charge)
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0 - 1 5.0%
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1 - 2 4.0%
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2 - 3 3.0%
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3 - 4 3.0%
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4 - 5 2.0%
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5 - 6 1.0%
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6 and following None
- -------------------------------------------------------------------------------
In the table, a "year" is a 12-month period. In applying the
contingent deferred sales charge, all purchases are considered to have
been made on the first regular business day of the month in which the
purchase was made.
Automatic Conversion of Class B Shares. Class B shares automatically
convert to Class A shares 72 months after you purchase them. This
conversion feature relieves Class B shareholders of the
asset-based sales charge that applies to Class B shares under the
Class B Distribution and Service Plan, described below. The
conversion is based on the relative net asset value of the two
classes, and no sales load or other charge is imposed. When any
Class B shares that you hold convert, any other Class B shares
that were acquired by reinvesting dividends and distributions on
the converted shares will also convert to Class A shares. For
further information on the conversion feature and its tax
implications, see "Class B Conversion" in the Statement of
Additional Information.
How Can you Buy 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 a holding period of 12 months from the
beginning of the calendar month of their purchase, a contingent
deferred sales charge of 1.0% will be deducted from the redemption
proceeds. The Class C contingent deferred sales charge is paid to
compensate the Distributor for its expenses of providing
distribution-related services to the Fund in connection with the sale
of Class C shares.
HOW CAN YOU BUY CLASS N SHARES? Class N shares are offered for sale to
retirement plans (including IRAs and 403(b) plans) that purchase
$500,000 or more of Class N shares of one or more Oppenheimer funds or
to group retirement plans (which do not include IRAs and 403(b) plans)
that have assets of $500,000 or more or 100 or more eligible
participants. See "Availability of Class N shares" in the Statement of
Additional Information for other circumstances where Class N shares are
available for purchase.
A contingent deferred sales charge of 1.0% will be imposed upon the
redemption of Class N shares, if:
o The group retirement plan is terminated or Class N shares of all
Oppenheimer funds are terminated as an investment option of the
plan and Class N shares are redeemed within 18 months after the
plan's first purchase of Class N shares of any Oppenheimer fund,
or
o With respect to an IRA or 403(b) plan, Class N shares are
redeemed within 18 months of the plan's first purchase of Class N
shares of any Oppenheimer fund.
Retirement plans that offer Class N shares may impose charges on plan
participant accounts. The procedures for buying, selling, exchanging
and transferring the Fund's other classes of shares (other than the
time those orders must be received by the Distributor or Transfer Agent
in Colorado) and the special account features applicable to purchasers
of those other classes of shares described elsewhere in this prospectus
do not apply to Class N shares offered through a group retirement plan.
Instructions for buying, selling, exchanging or transferring Class N
shares offered through a group retirement plan must be submitted by the
plan, not by plan participants for whose benefit the shares are held.
WHO CAN BUY CLASS Y SHARES? Class Y shares are sold at net asset value
per share without a sales charge directly to institutional investors
that have special agreements with the Distributor for this purpose.
They may include insurance companies, registered investment companies
and employee benefit plans. Individual investors cannot buy Class Y
shares directly.
An institutional investor that buys Class Y shares for its
customers' accounts may impose charges on those accounts. The
procedures for buying, selling, exchanging and transferring the Fund's
other classes of shares (other than the time those orders must be
received by the Distributor or Transfer Agent at their Colorado office)
and the special account features available to investors buying those
other classes of shares do not apply to Class Y shares. Instructions
for buying, selling, exchanging or transferring Class Y shares must be
submitted by the institutional investor, not by its customers for whose
benefit the shares are held.
DISTRIBUTION AND SERVICE (12b-1) PLANS.
Service Plan for Class A Shares. The Fund has adopted a Service Plan
for Class A shares. It reimburses the Distributor for a portion
of its costs incurred for services provided to accounts that hold
Class A shares. Reimbursement is made quarterly at an annual rate
of up to 0.25% of the average annual net assets of Class A shares
of the Fund. The Distributor currently uses all of those fees to
pay dealers, brokers, banks and other financial institutions
quarterly for providing personal service and maintenance of
accounts of their customers that hold Class A shares. With
respect to Class A shares subject to a Class A contingent
deferred sales charge purchased by grandfathered retirement
accounts, the Distributor pays the 0.25% service fee to dealers
in advance for the first year after the shares are sold by the
dealer. After the shares have been held for a year, the
Distributor pays the service fee to dealers on a quarterly basis.
Distribution and Service Plans for Class B, Class C and Class N Shares.
The Fund has adopted Distribution and Service Plans for Class B,
Class C and Class N shares to pay the Distributor for its
services and costs in distributing Class B, Class C and Class N
shares and servicing accounts. Under the plans, the Fund pays the
Distributor an annual asset-based sales charge of 0.75% on Class
B and Class C shares and 0.25% on Class N shares. The Distributor
also receives a service fee of 0.25% per year under the Class B,
Class C and Class N plans.
The asset-based sales charge and service fees increase Class B
and Class C expenses by 1.0% and increase Class N expenses by
0.50% of the net assets per year of the respective class. Because
these fees are paid out of the Fund's assets on an on-going
basis, over time these fees will increase the cost of your
investment and may cost you more than other types of sales
charges.
The Distributor uses the service fees to compensate dealers for
providing personal services for accounts that hold Class B, Class
C or Class N shares. The Distributor pays the 0.25% service fees
to dealers in advance for the first year after the shares are
sold by the dealer. After the shares have been held for a year,
the Distributor pays the service fees to dealers on a quarterly
basis. The Distributor retains the service fees for accounts for
which it renders the required personal services.
The Distributor currently pays a sales concession of 3.75% of the
purchase price of Class B shares to dealers from its own
resources at the time of sale. Including the advance of the
service fee, the total amount paid by the Distributor to the
dealer at the time of sale of Class B shares is therefore 4.00%
of the purchase price. The Distributor retains the Class B
asset-based sales charge. See the Statement of Additional
Information for exceptions.
The Distributor currently pays a sales concession 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 1.0% of
the purchase price. The Distributor pays the asset-based sales
charge as an ongoing concession to the dealer on Class C shares
that have been outstanding for a year or more. See the Statement
of Additional Information for exceptions.
The Distributor currently pays a sales concession of 0.75% of the
purchase price of Class N 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 N shares is therefore 1.0% of
the purchase price. The Distributor retains the asset-based sales
charge on Class N shares. See the Statement of Additional
Information for exceptions.
Special Investor Services
ACCOUNTLINK. You can use our AccountLink feature to link your Fund
account with an account at a U.S. bank or other financial institution.
It must be an Automated Clearing House (ACH) member. AccountLink lets
you:
o transmit funds electronically to purchase shares by telephone
(through a service representative or by PhoneLink) or
automatically under Asset Builder Plans, or
o have the Transfer Agent send redemption proceeds or transmit
dividends and distributions directly to your bank account. Please
call the Transfer Agent for more information.
You may purchase shares by telephone only after your account has
been established. To purchase shares in amounts up to $250,000 through
a telephone representative, call the Distributor at 1.800.CALL.OPP. The
purchase payment will be debited from your bank account.
AccountLink privileges should be requested on your Application or
your dealer's settlement instructions if you buy your shares through a
dealer. After your account is established, you can request AccountLink
privileges by sending signature-guaranteed instructions and proper
documentation to the Transfer Agent. AccountLink privileges will apply
to each shareholder listed in the registration on your account as well
as to your dealer representative of record unless and until the
Transfer Agent receives written instructions terminating or changing
those privileges. After you establish AccountLink for your account, any
change of bank account information must be made by signature-guaranteed
instructions to the Transfer Agent signed by all shareholders who own
the account.
PHONELINK. PhoneLink is the OppenheimerFunds automated telephone system
that enables shareholders to perform a number of account transactions
automatically using a touch-tone phone. PhoneLink may be used on
already-established Fund accounts after you obtain a Personal
Identification Number (PIN), by calling the PhoneLink number,
1.800.CALL.OPP.
Purchasing Shares. You may purchase shares in amounts up to $100,000 by
phone, by calling 1.800.CALL.OPP. You must have established
AccountLink privileges to link your bank account with the Fund to
pay for these purchases.
Exchanging Shares. With the OppenheimerFunds Exchange Privilege,
described below, you can exchange shares automatically by phone
from your Fund account to another OppenheimerFunds account you
have already established by calling the special PhoneLink number.
Selling Shares. You can redeem shares by telephone automatically by
calling the PhoneLink number and the Fund will send the proceeds
directly to your AccountLink bank account. Please refer to "How
to Sell Shares," below for details.
CAN YOU SUBMIT TRANSACTION REQUESTS BY FAX? You may send requests for
certain types of account transactions to the Transfer Agent by fax
(telecopier). Please call 1.800.CALL.OPP for information about which
transactions may be handled this way. Transaction requests submitted by
fax are subject to the same rules and restrictions as written and
telephone requests described in this Prospectus.
OPPENHEIMERFUNDS INTERNET WEBSITE. You can obtain information about the
Fund, as well as your account balance, on the OppenheimerFunds Internet
website, at WWW.OPPENHEIMERFUNDS.COM. Additionally, shareholders listed
------------------------
in the account registration (and the dealer of record) may request
certain account transactions through a special section of that website.
To perform account transactions or obtain account information online,
you must first obtain a user I.D. and password on that website. If you
do not want to have Internet account transaction capability for your
account, please call the Transfer Agent at 1.800.CALL.OPP. At times,
the website may be inaccessible or its transaction features may be
unavailable.
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. Please call the
Transfer Agent or consult the Statement of Additional Information for
details.
REINVESTMENT PRIVILEGE If you redeem some or all of your Class A or
Class B shares of the Fund, you have up to six months to reinvest all
or part of the redemption proceeds in Class A shares of the Fund or
other Oppenheimer funds without paying a sales charge. This privilege
applies only 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. This privilege
does not apply to Class C, Class N or Class Y shares. You must be sure
to ask the Distributor for this privilege when you send your payment.
RETIREMENT PLANS. You may buy shares of the Fund for your retirement
plan account. If you participate in a plan sponsored by your employer,
the plan trustee or administrator must buy the shares for your plan
account. The Distributor also offers a number of different retirement
plans that individuals and employers can use:
Individual Retirement Accounts (IRAs). These include regular IRAs, Roth
IRAs, SIMPLE IRAs and rollover IRAs.
SEP-IRAs. These are Simplified Employee Pension Plan IRAs for small
business owners or self-employed individuals.
403(b)(7) Custodial Plans. These are tax-deferred plans for employees
of eligible tax-exempt organizations, such as schools, hospitals
and charitable organizations.
401(k) Plans. These are special retirement plans for businesses.
Pension and Profit-Sharing Plans. These plans are designed for
businesses and self-employed individuals.
Please call the Distributor for OppenheimerFunds retirement plan
documents, which include applications and important plan information.
How to Sell Shares
You can sell (redeem) some or all of your shares on any regular
business day. Your shares will be sold at the next net asset value
calculated after your order is received in proper form (which means
that it must comply with the procedures described below) and is
accepted by the Transfer Agent. The Fund lets you sell your shares by
writing a letter or by telephone. You can also set up Automatic
Withdrawal Plans to redeem shares on a regular basis. If you have
questions about any of these procedures, and especially if you are
redeeming shares in a special situation, such as due to the death of
the owner or from a retirement plan account, please call the Transfer
Agent first, at 1.800.CALL.OPP, for assistance.
Certain Requests Require a Signature Guarantee. To protect you and the
Fund from fraud, the following redemption requests must be in
writing and must include a signature guarantee (although there
may be other situations that also require a signature guarantee):
o You wish to redeem more than $100,000 and receive a check
o The redemption check is not payable to all shareholders listed on
the account statement
o The redemption check is not sent to the address of record on your
account statement
o Shares are being transferred to a Fund account with a different
owner or name
o Shares are being redeemed by someone (such as an Executor) other
than the owners.
Where Can You Have Your Signature Guaranteed? The Transfer Agent will
accept a guarantee of your signature by a number of financial
institutions, including:
o a U.S. bank, trust company, credit union or savings association,
o a foreign bank that has a U.S. correspondent bank,
o a U.S. registered dealer or broker in securities, municipal
securities or government securities, or
o a U.S. national securities exchange, a registered securities
association or a clearing agency.
If you are signing on behalf of a corporation, partnership or
other business or as a fiduciary, you must also include your title in
the signature.
Retirement Plan Accounts. There are special procedures to sell shares
in an OppenheimerFunds retirement plan account. Call the Transfer
Agent for a distribution request form. Special income tax
withholding requirements apply to distributions from retirement
plans. You must submit a withholding form with your redemption
request to avoid delay in getting your money and if you do not
want tax withheld. If your employer holds your retirement plan
account for you in the name of the plan, you must ask the plan
trustee or administrator to request the sale of the Fund shares
in your plan account.
HOW DO you SELL SHARES BY MAIL? Write a letter of instruction that
includes:
o Your name
o The Fund's name
o Your Fund account number (from your account statement)
o The dollar amount or number of shares to be redeemed
o Any special payment instructions
o Any share certificates for the shares you are selling
o The signatures of all registered owners exactly as the account is
registered, and
o Any special documents requested by the Transfer Agent to assure
proper authorization of the person asking to sell the shares.
Use the following address for Send courier or express mail
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
HOW DO you SELL SHARES BY TELEPHONE? You and your dealer representative
of record may also sell your shares by telephone. To receive the
redemption price calculated on a particular regular business day, 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 account or under a share certificate
by telephone.
o To redeem shares through a service representative or
automatically on PhoneLink, call 1.800.CALL.OPP.
Whichever method you use, you may have a check sent to the
address on the account statement, or, if you have linked your Fund
account to your bank account on AccountLink, you may have the proceeds
sent to that bank account.
Are There Limits on Amounts Redeemed by Telephone?
Telephone Redemptions Paid by Check. Up to $100,000 may be redeemed by
telephone in any seven-day period. The check must be payable to
all owners of record of the shares and must be sent to the
address on the account statement. This service is not available
within 30 days of changing the address on an account.
Telephone Redemptions Through AccountLink. There are no dollar limits
on telephone redemption proceeds sent to a bank account
designated when you establish AccountLink. Normally the ACH
transfer to your bank is initiated on the business day after the
redemption. You do not receive dividends on the proceeds of the
shares you redeemed while they are waiting to be transferred.
CAN YOU SELL SHARES THROUGH your DEALER? The Distributor has made
arrangements to repurchase Fund shares from dealers and brokers on
behalf of their customers. Brokers or dealers may charge for that
service. If your shares are held in the name of your dealer, you must
redeem them through your dealer.
HOW CONTINGENT DEFERRED SALES CHARGES AFFECT REDEMPTIONS. If you
purchase shares subject to a Class A, Class B, Class C or Class N
contingent deferred sales charge and redeem any of those shares during
the applicable holding period for the class of shares, the contingent
deferred sales charge will be deducted from the redemption proceeds
(unless you are eligible for a waiver of that sales charge based on the
categories listed in Appendix B to the Statement of Additional
Information and you advise the Transfer Agent of your eligibility for
the waiver when you place your redemption request.)
A contingent deferred sales charge will be based on the lesser of
the net asset value of the redeemed shares at the time of redemption or
the original net asset value. A contingent deferred sales charge is not
imposed on:
o the amount of your account value represented by an increase in
net asset value over the initial purchase price,
o shares purchased by the reinvestment of dividends or capital
gains distributions, or
o shares redeemed in the special circumstances described in
Appendix B to the Statement of Additional Information
To determine whether a 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 the holding period that applies to the class, and
3. shares held the longest during the holding period.
Contingent deferred sales charges are not charged when you
exchange shares of the Fund for shares of other Oppenheimer funds.
However, if you exchange them within the applicable contingent deferred
sales charge holding period, the holding period will carry over to the
fund whose shares you acquire. Similarly, if you acquire shares of this
Fund by exchanging shares of another Oppenheimer fund that are still
subject to a contingent deferred sales charge holding period, that
holding period will carry over to this Fund.
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. Shares of the Fund can be purchased by exchange of shares
of other Oppenheimer funds on the same basis. To exchange shares, you
must meet several conditions:
o Shares of the fund selected for exchange must be available for
sale in your state of residence.
o The prospectuses of both funds must offer the exchange privilege.
o You must hold the shares you buy when you establish your account
for at least seven days before you can exchange them. After the
account is open seven days, you can exchange shares every regular
business day.
o You must meet the minimum purchase requirements for the fund
whose shares you purchase by exchange.
o Before exchanging into a fund, you must obtain and read its
prospectus.
Shares of a particular class of the Fund may be exchanged only
for shares of the same class in the other Oppenheimer funds. For
example, you can exchange Class A shares of this Fund only for Class A
shares of another fund. In some cases, sales charges may be imposed on
exchange transactions. For tax purposes, exchanges of shares involve a
sale of the shares of the fund you own and a purchase of the shares of
the other fund, which may result in a capital gain or loss. Please
refer to "How to Exchange Shares" in the Statement of Additional
Information for more details.
You can find a list of Oppenheimer funds currently available for
exchanges in the Statement of Additional Information or obtain one by
calling a service representative at 1.800.CALL.OPP. That list can
change from time to time.
HOW DO you SUBMIT EXCHANGE REQUESTS? Exchanges may be requested in
writing or by telephone:
Written Exchange Requests. Submit an OppenheimerFunds Exchange Request
form, signed by all owners of the account. Send it to the
Transfer Agent at the address on the back cover. Exchanges of
shares held under certificates cannot be processed unless the
Transfer Agent receives the certificates with the request.
Telephone Exchange Requests. Telephone exchange requests may be made
either by calling a service representative or by using PhoneLink
for automated exchanges by calling 1.800.CALL.OPP. Telephone
exchanges may be made only between accounts that are registered
with the same name(s) and address. Shares held under certificates
may not be exchanged by telephone.
ARE THERE LIMITATIONS ON EXCHANGES? There are certain exchange policies
you should be aware of:
o Shares are normally redeemed from one fund and purchased from the
other fund in the exchange transaction on the same regular
business day on which the Transfer Agent receives an exchange
request that conforms to the policies described above. It must be
received by the close of The New York Stock Exchange that day,
which is normally 4:00 P.M. but may be earlier on some days.
However, either fund may delay the purchase of shares of the fund
you are exchanging into up to seven days if it determines it
would be disadvantaged by the same day exchange.
o The interests of the Fund's long-term shareholders and its
ability to manage its investments may be adversely affected when
its shares are repeatedly bought and sold in response to
short-term market fluctuations--also known as "market timing."
When large dollar amounts are involved, the Fund may have
difficulty implementing long-term investment strategies, because
it cannot predict how much cash it will have to invest. Market
timing also may force the Fund to sell portfolio securities at
disadvantageous times to raise the cash needed to buy a market
timer's Fund shares. These factors may hurt the Fund's
performance and its shareholders. When the Manager believes
frequent trading would have a disruptive effect on the Fund's
ability to manage its investments, the Manager and the Fund may
reject purchase orders and exchanges into the Fund by any person,
group or account that the Manager believes to be a market timer.
o The Fund may amend, suspend or terminate the exchange privilege
at any time. The Fund will provide you notice whenever it is
required to do so by applicable law, but it may impose changes at
any time for emergency purposes.
o If the Transfer Agent cannot exchange all the shares you request
because of a restriction cited above, only the shares eligible
for exchange will be exchanged.
Shareholder Account Rules and Policies
More information about the Fund's policies and procedures for buying,
selling and exchanging shares is contained in the Statement of
Additional Information.
Effective September 27, 2002, a $12 annual fee will be charged on any
account valued at less than $500. See the Statement of Additional
Information for circumstances when this fee will not be charged.
The offering of shares may be suspended during any period in which the
determination of net asset value is suspended, and the offering
may be suspended by the Board of Trustees at any time the Board
believes it is in the Fund's best interest to do so.
Telephone transaction privileges for purchases, redemptions or
exchanges may be modified, suspended or terminated by the Fund at
any time. The Fund will provide you notice whenever it is
required to do so by applicable law. If an account has more than
one owner, the Fund and the Transfer Agent may rely on the
instructions of any one owner. Telephone privileges apply to each
owner of the account and the dealer representative of record for
the account unless the Transfer Agent receives cancellation
instructions from an owner of the account.
The Transfer Agent will record any telephone calls to verify data
concerning transactions and has adopted other procedures to
confirm that telephone instructions are genuine, by requiring
callers to provide tax identification numbers and other account
data or by using PINs, and by confirming such transactions in
writing. The Transfer Agent and the Fund will not be liable for
losses or expenses arising out of telephone instructions
reasonably believed to be genuine.
Redemption or transfer requests will not be honored until the Transfer
Agent receives all required documents in proper form. From time
to time, the Transfer Agent in its discretion may waive certain
of the requirements for redemptions stated in this Prospectus.
Dealers that perform account transactions for their clients by
participating in NETWORKING through the National Securities
Clearing Corporation are responsible for obtaining their clients'
permission to perform those transactions, and are responsible to
their clients who are shareholders of the Fund if the dealer
performs any transaction erroneously or improperly.
The redemption price for shares will vary from day to day because the
value of the securities in the Fund's portfolio fluctuates. The
redemption price, which is the net asset value per share, will
normally differ for each class of shares. The redemption value of
your shares may be more or less than their original cost.
Payment for redeemed shares ordinarily is made in cash. It is forwarded
by check, or through AccountLink within seven days after the
Transfer Agent receives redemption instructions in proper form.
However, under unusual circumstances determined by the Securities
and Exchange Commission, payment may be delayed or suspended. For
accounts registered in the name of a broker-dealer, payment will
normally be forwarded within three business days after
redemption.
The Transfer Agent may delay forwarding a check or processing a payment
via AccountLink for recently purchased shares, but only until the
purchase payment has cleared. That delay may be as much as 10
days from the date the shares were purchased. That delay may be
avoided if you purchase shares by Federal Funds wire or certified
check, or arrange with your bank to provide telephone or written
assurance to the Transfer Agent that your purchase payment has
cleared.
Involuntary redemptions of small accounts may be made by the Fund if
the account value has fallen below $500 for reasons other than
the fact that the market value of shares has dropped. In some
cases involuntary redemptions may be made to repay the
Distributor for losses from the cancellation of share purchase
orders.
Shares may be "redeemed in kind" under unusual circumstances (such as a
lack of liquidity in the Fund's portfolio to meet redemptions).
This means that the redemption proceeds will be paid with liquid
securities from the Fund's portfolio.
"Backup withholding" of federal income tax may be applied against
taxable dividends, distributions and redemption proceeds
(including exchanges) if you fail to furnish the Fund your
correct, certified Social Security or Employer Identification
Number when you sign your application, or if you under-report
your income to the Internal Revenue Service.
To avoid sending duplicate copies of materials to households, the Fund
will mail only one copy of each prospectus, annual and
semi-annual report and annual notice of the Fund's privacy policy
to shareholders having the same last name and address on the
Fund's records. The consolidation of these mailings, called
householding, benefits the Fund through reduced mailing expense.
If you want to receive multiple copies of these materials, you
may call the Transfer Agent at 1.800.CALL.OPP. You may also
notify the Transfer Agent in writing. Individual copies of
prospectuses, reports and privacy notices will be sent to you
commencing within 30 days after the Transfer Agent receives your
request to stop householding.
Dividends, Capital Gains and Taxes
DIVIDENDS. The Fund intends to declare dividends separately for each
class of shares from net investment income on an annual basis and to
pay them to shareholders in December on a date selected by the Board of
Trustees. Dividends and distributions paid on Class A and Class Y
shares will generally be higher than dividends for Class B, Class C and
Class N shares, which normally have higher expenses than Class A and
Class Y. The Fund has no fixed dividend rate and cannot guarantee that
it will pay any dividends or distributions.
CAPITAL GAINS. The Fund may realize capital gains on the sale of
portfolio securities. If it does, it may make distributions out of any
net short-term or long-term capital gains in December of each year. The
Fund may make supplemental distributions of dividends and capital gains
following the end of its fiscal year. There can be no assurance that
the Fund will pay any capital gains distributions in a particular year.
WHAT CHOICES DO YOU HAVE FOR RECEIVING DISTRIBUTIONS? When you open
your account, specify on your application how you want to receive your
dividends and distributions. You have four options:
Reinvest All Distributions in the Fund. You can elect to reinvest all
dividends and capital gains distributions in additional shares of
the Fund.
Reinvest Dividends or Capital Gains. You can elect to reinvest some
distributions (dividends, short-term capital gains or long-term
capital gains distributions) in the Fund while receiving the
other types of distributions by check or having them sent to your
bank account through AccountLink.
Receive All Distributions in Cash. You can elect to receive a check for
all dividends and capital gains distributions or have them sent
to your bank through AccountLink.
Reinvest Your Distributions in Another OppenheimerFunds Account. You
can reinvest all distributions in the same class of shares of
another OppenheimerFunds account you have established.
TAXES. If your shares are not held in a tax-deferred retirement
account, you should be aware of the following tax implications of
investing in the Fund. Distributions are subject to federal income tax
and may be subject to state or local taxes. Dividends paid from
short-term capital gains and net investment income are taxable as
ordinary income. Long-term capital gains are taxable as long-term
capital gains when distributed to shareholders. It does not matter how
long you have held your shares. Whether you reinvest your distributions
in additional shares or take them in cash, the tax treatment is the
same.
Every year the Fund will send you and the IRS a statement showing
the amount of any taxable distribution you received in the previous
year. Any long-term capital gains will be separately identified in the
tax information the Fund sends you after the end of the calendar year.
Avoid "Buying a Dividend." If you buy shares on or just before the
ex-dividend date or just before the Fund declares a capital gains
distribution, you will pay the full price for the shares and then
receive a portion of the price back as a taxable dividend or
capital gain.
Remember, There May be Taxes on Transactions. Because the Fund's share
prices fluctuate, 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 received when you sold them. Any capital gain is
subject to capital gains tax.
Returns of Capital Can Occur. In certain cases, distributions made by
the Fund may be considered a non-taxable return of capital to
shareholders. If that occurs, it will be identified in notices to
shareholders.
This information is only a summary of certain federal income tax
information about your investment. You should consult with your tax
advisor about the effect of an investment in the Fund on your
particular tax situation.
Financial Highlights
The Financial Highlights Table is presented to help you understand the
Fund's financial performance since its inception. Certain information
reflects financial results for a single Fund share. The total returns
in the table represent the rate that an investor would have earned (or
lost) on an investment in the Fund (assuming reinvestment of all
dividends and distributions). This information has been audited by KPMG
LLP, the Fund's independent auditors, whose report, along with the
Fund's financial statements, is included in the Statement of Additional
Information, which is available on request.
FINANCIAL HIGHLIGHTS
CLASS A YEAR ENDED JULY 31,
2002 2001 2000 1999(1)
- ------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ------------------------------------------------------------------------------------------
Net asset value, beginning of period $
8.52 $14.55 $ 11.93 $ 10.00
- ------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss
(.07) (.10) (.11) (1.05)
Net realized and unrealized gain (loss)
(2.01) (5.06) 2.91 2.98
- -------------------------------------
Total from investment operations
(2.08) (5.16) 2.80 1.93
- ------------------------------------------------------------------------------------------
Dividends and/or distributions
to shareholders:
Distributions from net realized gain
- -- (.87) (.18) --
- ------------------------------------------------------------------------------------------
Net asset value, end of period
$6.44 $8.52 $14.55 $11.93
====================================
- ------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE(2)
(24.41)% (36.60)% 23.63% 19.30%
- ------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $14,356
$12,029 $16,470 $6,059
- ------------------------------------------------------------------------------------------
Average net assets (in thousands) $15,495
$14,063 $11,973 $4,028
- ------------------------------------------------------------------------------------------
Ratios to average net assets:(3)
Net investment loss
(0.75)% (1.01)% (1.03)% (1.05)%
Expenses
2.03% 1.54% 1.91% 1.81%
Expenses, net of reduction to custodian expenses
and/or voluntary waiver of transfer agent fees
1.75% 1.54% 1.89% 1.65%
- ------------------------------------------------------------------------------------------
Portfolio turnover rate
96% 160% 258% 157%
1. For the period from December 17, 1998 (inception of
offering) to July 31, 1999.
2. Assumes an 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. Total
returns are not annualized for periods of less than one full
year.
3. Annualized for periods of less than one full year.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
19 | OPPENHEIMER TRINITY LARGE CAP GROWTH
FUND
|
FINANCIAL HIGHLIGHTS Continued
CLASS B YEAR ENDED JULY 31,
2002 2001 2000 1999(1)
- -------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- -------------------------------------------------------------------------------------------
Net asset value, beginning of period $
8.34 $14.39 $ 11.89 $ 10.48
- -------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss
(.09) (.16) (.17) (1.04)
Net realized and unrealized gain (loss)
(1.99) (5.02) 2.85 2.45
- --------------------------------------
Total from investment operations
(2.08) (5.18) 2.68 1.41
- -------------------------------------------------------------------------------------------
Dividends and/or distributions
to shareholders:
Distributions from net realized gain
- -- (.87) (.18) --
- -------------------------------------------------------------------------------------------
Net asset value, end of period
$6.26 $ 8.34 $14.39 $11.89
=====================================
- -------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE(2)
(24.94)% (37.17)% 22.70% 13.45%
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- -------------------------------------------------------------------------------------------
Net assets, end of period (in thousands)
$10,101 $8,800 $11,499 $1,764
- -------------------------------------------------------------------------------------------
Average net assets (in thousands)
$11,463 $9,945 $ 7,257 $ 722
- -------------------------------------------------------------------------------------------
Ratios to average net assets:(3)
Net investment loss
(1.52)% (1.81)% (1.81)% (1.93)%
Expenses
2.80% 2.34% 2.69% 2.92%
Expenses, net of reduction to custodian expenses
and/or voluntary waiver of transfer agent fees
2.52% 2.34% 2.67% 2.75%
- -------------------------------------------------------------------------------------------
Portfolio turnover rate
96% 160% 258% 157%
1. For the period from March 1, 1999 (inception of offering)
to July 31, 1999.
2. Assumes an 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. Total
returns are not annualized for periods of less than one full
year.
3. Annualized for periods of less than one full year.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
20 | OPPENHEIMER TRINITY LARGE CAP GROWTH
FUND
|
CLASS C YEAR ENDED JULY 31,
2002 2001 2000 1999(1)
- --------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- --------------------------------------------------------------------------------------------
Net asset value, beginning of period $
8.35 $14.39 $ 11.89 $ 10.48
- --------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss
(.05) (.14) (.19) (1.04)
Net realized and unrealized gain (loss)
(2.04) (5.03) 2.87 2.45
- ---------------------------------------
Total from investment operations
(2.09) (5.17) 2.68 1.41
- --------------------------------------------------------------------------------------------
Dividends and/or distributions
to shareholders:
Distributions from net realized gain
- -- (.87) (.18) --
- --------------------------------------------------------------------------------------------
Net asset value, end of period
$6.26 $ 8.35 $14.39 $11.89
======================================
- --------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE(2)
(25.03)% (37.10)% 22.70% 13.45%
- --------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- --------------------------------------------------------------------------------------------
Net assets, end of period (in thousands)
$4,032 $1,983 $2,241 $438
- --------------------------------------------------------------------------------------------
Average net assets (in thousands)
$3,814 $2,109 $1,566 $192
- --------------------------------------------------------------------------------------------
Ratios to average net assets:(3)
Net investment loss
(1.47)% (1.82)% (1.82)% (1.95)%
Expenses
2.79% 2.35% 2.72% 2.90%
Expenses, net of reduction to custodian expenses
and/or voluntary waiver of transfer agent fees
2.51% 2.35% 2.70% 2.73%
- --------------------------------------------------------------------------------------------
Portfolio turnover rate
96% 160% 258% 157%
1. For the period from March 1, 1999 (inception of offering)
to July 31, 1999.
2. Assumes an 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. Total
returns are not annualized for periods of less than one full
year.
3. Annualized for periods of less than one full year.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
21 | OPPENHEIMER TRINITY LARGE CAP GROWTH
FUND
|
FINANCIAL HIGHLIGHTS Continued
CLASS N YEAR ENDED JULY 31,
2002 2001(1)
- ------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ------------------------------------------------------------------------------
Net asset value, beginning of period $
8.50 $ 9.03
- ------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss
(.10) (.06)
Net realized and unrealized loss
(1.99) (.47)
- -----------------
Total from investment operations
(2.09) (.53)
- ------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Distributions from net realized
gain -- --
- ------------------------------------------------------------------------------
Net asset value, end of period
$6.41 $8.50
===================
- ------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE(2)
(24.59)% (5.87)%
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ------------------------------------------------------------------------------
Net assets, end of period (in thousands)
$201 $1
- ------------------------------------------------------------------------------
Average net assets (in thousands)
$ 87 $1
- ------------------------------------------------------------------------------
Ratios to average net assets:(3)
Net investment loss
(0.87)% (1.67)%
Expenses
2.29% 1.48%
Expenses, net of reduction to custodian expenses
and/or voluntary waiver of transfer agent fees
2.01% 1.48%
- ------------------------------------------------------------------------------
Portfolio turnover
rate 96% 160%
1. For the period from March 1, 2001 (inception of offering)
to July 31, 2001.
2. Assumes an 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. Total
returns are not annualized for periods of less than one full
year.
3. Annualized for periods of less than one full year.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
22 | OPPENHEIMER TRINITY LARGE CAP GROWTH
FUND
|
CLASS Y YEAR ENDED JULY 31,
2002 2001 2000 1999(1)
- ------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ------------------------------------------------------------------------------------------
Net asset value, beginning of period $
8.63 $14.65 $ 11.95 $ 10.00
- ------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss
(.15) (.05) (.07) (1.03)
Net realized and unrealized gain (loss)
(1.92) (5.10) 2.95 2.98
- -------------------------------------
Total from investment operations
(2.07) (5.15) 2.88 1.95
- ------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Distributions from net realized gain
- -- (.87) (.18) --
- ------------------------------------------------------------------------------------------
Net asset value, end of period
$6.56 $8.63 $14.65 $11.95
=====================================
- ------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE(2)
(23.99)% (36.26)% 24.27% 19.50%
- ------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ------------------------------------------------------------------------------------------
Net assets, end of period (in thousands)
$95 $1 $1 $1
- ------------------------------------------------------------------------------------------
Average net assets (in thousands)
$68 $1 $1 $1
- ------------------------------------------------------------------------------------------
Ratios to average net assets:(3)
Net investment loss
(0.10)% (0.48)% (0.54)% (0.72)%
Expenses
4.83% 168.30%(4) 1.45% 1.65%
Expenses, net of reduction to custodian expenses
and/or voluntary waiver of transfer agent fees
1.20% 1.10% 1.43% 1.50%
- --------------------------------------------------------------------------------------------
Portfolio turnover rate
96% 160% 258% 157%
1. For the period from December 17, 1998 (inception of
offering) to July 31, 1999.
2. Assumes an 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. Total
returns are not annualized for periods of less than one full
year.
3. Annualized for periods of less than one full year.
4. Added since July 31, 2001 to reflect expenses before
reduction to custodian
expenses and voluntary waiver of transfer agent fees.
INFORMATION AND SERVICES
For More Information on Oppenheimer Trinity Large Cap Growth FundSM
The following additional information about the Fund is available
without charge upon request:
STATEMENT OF ADDITIONAL INFORMATION
This document includes additional information about the Fund's
investment policies, risks, and operations. It is incorporated by
reference into this Prospectus (which means it is legally part of this
Prospectus).
ANNUAL AND SEMI-ANNUAL REPORTS
Additional information about the Fund's investments and performance is
available in the Fund's Annual and Semi-Annual Reports to shareholders.
The Annual Report includes a discussion of market conditions and
investment strategies that significantly affected the Fund's
performance during its last fiscal year.
How to Get More Information:
You can request the Statement of Additional Information, the Annual and
Semi-Annual Reports, the notice explaining the Fund's privacy policy
and other information about the Fund or your account:
- ------------------------------------------------------------------------------
By Telephone: Call OppenheimerFunds Services toll-free:
1.800.CALL.OPP (225.5677)
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
By Mail: Write to:
OppenheimerFunds Services
P.O. Box 5270
Denver, Colorado 80217-5270
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
On the Internet: You can send us a request by e-mail or read or
down-load documents on the OppenheimerFunds
website: HTTP://WWW.OPPENHEIMERFUNDS.COM
-------------------------------
- ------------------------------------------------------------------------------
Information about the Fund including the Statement of Additional
Information can be reviewed and copied at the SEC's Public Reference
Room in Washington, D.C. Information on the operation of the Public
Reference Room may be obtained by calling the SEC at 1.202.942.8090.
Reports and other information about the Fund are available on the EDGAR
database on the SEC's Internet website at HTTP://WWW.SEC.GOV. Copies
------------------
may be obtained after payment of a duplicating fee by electronic
request at the SEC's e-mail address: publicinfo@sec.gov or by writing
to the SEC's Public Reference Section, Washington, D.C. 20549-0102.
No one has been authorized to provide any information about the Fund or
to make any representations about the Fund other than what is contained
in this Prospectus. This Prospectus is not an offer to sell shares of
the Fund, nor a solicitation of an offer to buy shares of the Fund, to
any person in any state or other jurisdiction where it is unlawful to
make such an offer.
The Fund's shares are distributed by: [logo]
OppenheimerFunds Distributor, Inc.
The Fund's SEC File No. 811-08613
PR0775.001.0902
Printed on recycled paper
Appendix to Prospectus of
Oppenheimer Trinity Large Cap Growth Fund
Graphic material included in the Prospectus of Oppenheimer
Trinity Large Cap Growth Fund under the heading "Annual Total Returns
(Class A)(as of 12/31 each year)":
A bar chart will be included in the Prospectus of Oppenheimer
Trinity Large Cap Growth Fund (the "Fund") depicting the annual total
returns of a hypothetical investment in Class A shares of the Fund
since inception, without deducting sales charges. Set forth below are
the relevant data points that will appear in the bar chart:
Calendar Annual
Year Total
Ended Returns
12/31/99 30.83%
12/31/00 -22.99%
12/31/01 -19.50%
Oppenheimer trinity LARGE CAP
GROWTH fund
Supplement dated March 31, 2003 to the
Statement of Additional Information dated September 24,
2002, Revised January 15, 2003
The Statement of Additional Information is changed as
follows:
1. The section captioned "Board of Trustees and
Oversight Committees" on page 11 is amended as follows:
a.The second sentence of the second paragraph under
that caption is revised to read:
"The members of the Audit Committee are
Kenneth A. Randall (Chairman) and Edward
Reagan."
b. The first sentence of the third paragraph under that
caption is revised to read:
"The members of the Study Committee are Robert
G. Galli (Chairman), Elizabeth Moynihan and
Joel Motley."
2. Effective March 31, 2003, Mr. Benjamin Lipstein
retired as a Trustee. Therefore, the Statement of
Additional Information is revised by deleting the
biography for Mr. Lipstein on page 13.
3. In the Trustee compensation table on page 18, the
following footnote is added following Messrs. Yeutter,
Levy and Lipstein:
3. Effective January 1, 2003, Clayton Yeutter became
Chairman of the Board of
Trustees/Directors of the Board I
Funds upon the retirement of Leon
Levy. Effective March 31, 2003, Mr.
Lipstein retired as a Trustee.
March 31, 2003
PX0775.007
Oppenheimer Trinity Large Cap Growth FundSM
6803 S. Tucson Way, Centennial, CO 80112
1.800.225.5677
This Statement of Additional Information is not a
Prospectus. This document contains additional information
about the Fund and supplements information in the
Prospectus dated September 24, 2002. It should be read
together with the Prospectus. You can obtain the Prospectus
by writing to the Fund's Transfer Agent, OppenheimerFunds
Services, at P.O. Box 5270, Denver, Colorado 80217, or by
calling the Transfer Agent at the toll-free number shown
above, or by downloading it from the OppenheimerFunds
Internet website at www.oppenheimerfunds.com.
Contents
Page
About the Fund
Additional Information About the Fund's Investment Policies
and Risks...............................................................
2
The Fund's Investment Policies......................................
2
Other Investment Techniques and Strategies..........................
3
Other Investment Restrictions.......................................
8
How the Fund is Managed ................................................
9
Organization and History............................................
9
Board of Trustees and Oversight Committees...........................
11
Trustees and Officers...............................................
12
The Manager.........................................................
19
The Sub-Advisor.....................................................
22
Brokerage Policies of the Fund..........................................
22
Distribution and Service Plans..........................................
25
Performance of the Fund.................................................
29
About Your Account
How To Buy Shares.......................................................
34
How To Sell Shares......................................................
44
How To Exchange Shares..................................................
48
Dividends, Capital Gains and Taxes......................................
52
Additional Information About the Fund...................................
56
Financial Information About the Fund
Independent Auditors' Report............................................
58
Financial Statements....................................................
59
Appendix A: Industry Classifications....................................
A-1
Appendix B: Special Sales Charge Arrangements and Waivers...............
B-1
4
ABOUT the fund
Additional Information About the Fund's Investment Policies
and Risks
The investment objective, the principal investment
policies and the main risks of the Fund are described in
the Prospectus. This Statement of Additional Information
contains supplemental information about those policies and
risks and the types of securities that the Fund's
investment Manager, OppenheimerFunds, Inc., can select for
the Fund. Additional information is also provided about the
strategies that the Fund may use to try to achieve its
objective.
The Fund's Investment Policies. The composition of the
Fund's portfolio and the techniques and strategies that the
Fund's Sub-Advisor, Trinity Investment Management
Corporation, can use in selecting portfolio securities may
vary over time. The Fund is not required to use the
investment techniques and strategies described below at all
times in seeking its goal. It may use some of the special
investment techniques and strategies at some times or not
at all. Nonetheless, when selecting the Fund's portfolio
investments, the Fund's Sub-Advisor who is retained by the
Manager, OppenheimerFunds, Inc., typically adheres to the
following disciplined, systematic approach, which is more
fully described in the Prospectus.
Each day The New York Stock Exchange ("the Exchange")
is open for trading, the Sub-Advisor ranks nearly all of
the stocks comprising the S&P 500/Barra Growth Index
according to their appreciation potential. The S&P
500/Barra Growth Index is a subset of the Standard & Poor's
Index of 500 Stocks, consisting of approximately 100 to 200
common stocks. The Sub-Advisor determines these rankings by
dividing the S&P 500/Barra Growth Index into 11 broad
economic sectors (Appendix A) and using specially selected
valuation models.
After identifying the stocks the Sub-Advisor believes
have the greatest appreciation potential in the S&P
500/Barra Growth Index, the Sub-Advisor generally selects
the most attractive stocks for the Fund's portfolio. In
order to diversify the Fund's portfolio investments and
attempt to reduce overall portfolio risk, the Sub-Advisor
seeks to align the Fund's portfolio investments with the
sector weights of the index (see Appendix A).
In selecting stocks for the Fund's portfolio, the
portfolio management team, whose members are employed by
the Sub-Advisor, primarily uses growth-oriented investment
analyses. In using these approaches, the portfolio
management team looks for stocks that appear to have
appreciation potential by various measures.
Some of the measures used to identify growth stocks
include, among others:
o Earnings Momentum, which is based on the percentage
change in trailing four-quarter earnings per share over the
last three months.
o Growth vs. P/E, a traditional approach for
growth-stock investors, this calculation compares a
company's projected growth rate to its price/earnings or
P/E ratio using future earnings.
o EPS Acceleration, examines a firm's projected and
recent historical earnings per share and determines the
rate at which earnings growth is increasing or decreasing.
Stocks with the highest rate of increasing growth are the
most attractive under this model.
o Historical EPS Growth, actual earnings per share
growth over the trailing five years.
o Projected Long-Term EPS Growth, projections of
earnings per share growth over the foreseeable future,
generally about five years.
There is no assurance the Fund's stock selection
strategy will result in the Fund achieving its objective of
capital appreciation. Nor can there be any assurance that
the Fund's diversification strategy will actually reduce
the volatility of an investment in the Fund.
|X| Portfolio Turnover. "Portfolio turnover" describes
the rate at which the Fund trades its portfolio securities
during prior fiscal years. For example, if the Fund sold
all of its securities during the year, its portfolio
turnover rate would be 100% or more. The Fund's portfolio
turnover rate will fluctuate from year to year. The Fund is
expected to have a portfolio turnover rate of between 90 -
130% annually. Increased portfolio turnover creates higher
brokerage and transaction costs for the Fund, which may
reduce its overall performance. Additionally, the
realization of capital gains from selling portfolio
securities may result in distributions of taxable capital
gains to shareholders, since the Fund will normally
distribute all of its capital gains realized each year, to
avoid excise taxes under the Internal Revenue Code.
Other Investment Techniques and Strategies. In seeking its
objective, the Fund may from time to time use the types of
investment strategies and investments described below. It
is not required to use all of these strategies at all
times, and at times may not use them.
|X| Temporary Defensive Investments. For temporary
defensive purposes, the Fund can invest in repurchase
agreements and a variety of "money market securities."
Money market securities are high-quality, short-term debt
instruments that may be issued by the U.S. government,
corporations, banks or other entities. They may have fixed,
variable or floating interest rates. The following is a
brief description of the repurchase agreements and the
types of money market securities in which the Fund may
invest. As discussed in the Prospectus, the Fund may engage
in active and frequent trading, which will increase its
portfolio turnover. The Fund's portfolio turnover will also
be affected by the changes to the composition of the
S&P/Barra Growth Index.
o Repurchase Agreements. The Fund can acquire
securities subject to repurchase agreements. It might do so
for liquidity purposes to meet anticipated redemptions of
Fund shares, or pending the investment of the proceeds from
sales of Fund shares, or pending the settlement of
portfolio securities transactions, or for defensive
purposes.
In a repurchase transaction, the Fund buys a security
from, and simultaneously resells it to, an approved vendor
for delivery on an agreed-upon future date. The resale
price exceeds the purchase price by an amount that reflects
an agreed-upon interest rate effective for the period
during which the repurchase agreement is in effect.
Approved vendors include U.S. commercial banks, U.S.
branches of foreign banks, or broker-dealers that have been
designated as primary dealers in government securities.
They must meet credit requirements set by the Fund's Board
of Trustees from time to time.
The majority of these transactions run from day to
day, and delivery pursuant to the resale typically occurs
within one to five days of the purchase. Repurchase
agreements having a maturity beyond seven days are subject
to the Fund's limits on holding illiquid investments. The
Fund will not enter into a repurchase agreement that causes
more than 10% of its net assets to be subject to repurchase
agreements having a maturity beyond seven days. There is no
limit on the amount of the Fund's net assets that may be
subject to repurchase agreements having maturities of seven
days or less.
Repurchase agreements, considered "loans" under the
Investment Company Act of 1940 (the "Investment Company
Act"), are collateralized by the underlying security. The
Fund's repurchase agreements require that at all times
while the repurchase agreement is in effect, the
value of the collateral must equal or exceed the repurchase
price to fully collateralize the
repayment obligation. However, if the vendor fails to pay
the resale price on the delivery date, the Fund may incur
costs in disposing of the collateral and may experience
losses if there is any delay in its ability to do so. The
Sub-Advisor will monitor the vendor's creditworthiness to
confirm that the vendor is financially sound and will
monitor the collateral's value.
Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission, the Fund, along with
other affiliated entities managed by the Manager, may
transfer uninvested cash balances into one or more joint
repurchase accounts. These balances are invested in one or
more repurchase agreements, secured by U.S. government
securities. Securities pledged as collateral for repurchase
agreements are held by a custodian bank until the
agreements mature. Each joint repurchase arrangement
requires that the market value of the collateral be
sufficient to cover payments of interest and principal;
however, in the event of default by the other party to the
agreement, retention of the collateral may be subject to
legal proceedings.
o U.S. Government Securities. These include obligations
issued or guaranteed by the U.S. Treasury or other U.S.
government agencies or corporate entities referred to as
"instrumentalities" of the U.S. government. The obligations
of U.S. government agencies or instrumentalities in which
the Fund may invest may or may not be guaranteed or
supported by the "full faith and credit" of the United
States. "Full faith and credit" means generally that the
taxing power of the U.S. government is pledged to the
payment of interest and repayment of principal on a
security. If a security is not backed by the full faith and
credit of the United States, the owner of the security must
look principally to the agency issuing the obligation for
repayment. The owner might not be able to assert a claim
against the United States if the issuing agency or
instrumentality does not meet its commitment. The Fund will
invest in securities of U.S. government agencies and
instrumentalities only if the Sub-Advisor is satisfied that
the credit risk with respect to such agency or
instrumentality is minimal.
o Bank Obligations. The Fund may buy time deposits,
certificates of deposit and bankers' acceptances. They must
be :
o obligations issued or guaranteed by a domestic or
foreign bank (including a foreign branch of
a domestic bank) having total assets of at
least $1 billion,
o banker's acceptances (which may or may not be
supported by letters of credit) only if
guaranteed by a U.S. commercial bank with
total assets of at least U.S. $1 billion.
The Fund can make time deposits. These are
non-negotiable deposits in a bank for a specified period of
time. They may be subject to early withdrawal penalties.
Time deposits that are subject to early withdrawal
penalties are subject to the Fund's limits on illiquid
investments, unless the time deposit matures in seven days
or less. "Banks" include commercial banks, savings banks
and savings and loan associations.
o Commercial Paper. The Fund may invest in commercial
paper, if it is rated within the top two rating categories
of Standard & Poor's Rating Services ("Standard & Poor's")
and Moody's Investors Service, Inc., ("Moody's). If the
paper is not rated, it may be purchased if issued by a
company having a credit rating of at least "AA" by Standard
& Poor's or "Aa" by Moody's.
The Fund may buy commercial paper, including U.S.
dollar-denominated securities of foreign branches of U.S.
banks, issued by other entities if the commercial paper is
guaranteed as
to principal and interest by a bank, government or
corporation whose certificates of deposit or commercial
paper may otherwise be purchased by the Fund.
o Variable Amount Master Demand Notes. Master demand
notes are corporate obligations that permit the investment
of fluctuating amounts by the Fund at varying rates of
interest under direct arrangements between the Fund, as
lender, and the borrower. They permit daily changes in the
amounts borrowed. The Fund has the right to increase the
amount under the note at any time up to the full amount
provided by the note agreement, or to decrease the amount.
The borrower may prepay up to the full amount of the note
without penalty. These notes may or may not be backed by
bank letters of credit.
Because these notes are direct lending arrangements
between the lender and borrower, it is not expected that
there will be a trading market for them. There is no
secondary market for these notes, although they are
redeemable (and thus are immediately repayable by the
borrower) at principal amount, plus accrued interest, at
any time. Accordingly, the Fund's right to redeem such
notes is dependent upon the ability of the borrower to pay
principal and interest on demand.
The Fund has no limitations on the type of issuer
from whom these notes will be purchased. However, in
connection with such purchases and on an ongoing basis, the
Sub-Advisor will consider the earning power, cash flow and
other liquidity ratios of the issuer, and its ability to
pay principal and interest on demand, including a situation
in which all holders of such notes made demand
simultaneously. Investments in master demand notes are
subject to the limitation on investments by the Fund in
illiquid securities. Currently, the Fund does not intend
that its investments in variable amount master demand notes
will exceed 5% of its total assets.
|X| Illiquid and Restricted Securities. Under the
policies and procedures established by the Fund's Board of
Trustees, the Manager determines the liquidity of certain
of the Fund's investments. Investments may be illiquid
because of the absence of an active trading market, making
it difficult to value them or dispose of them promptly at
an acceptable price. A restricted security is one that has
a contractual restriction on its resale or which cannot be
sold publicly until it is registered under the Securities
Act of 1933. The Fund will not invest more than 10% of its
net assets in illiquid or restricted securities. The Board
can increase that limit to 15%.
The Fund has limitations that apply to purchases of
restricted securities as stated above. Those percentage
restrictions may not apply to purchases of restricted
securities that are eligible for sale to qualified
institutional purchasers under Rule 144A of the Securities
Act of 1933, if those securities have been determined to be
liquid by the Manager under Board-approved guidelines.
Those guidelines take into account the trading activity for
such securities and the availability of reliable pricing
information, among other factors. If there is a lack of
trading interest in a particular Rule 144A security, the
Fund's holdings of that security may be considered to be
illiquid.
The Fund may also acquire restricted securities
through private placements. Those securities have
contractual restrictions on their public resale. Those
restrictions might limit the Fund's ability to dispose of
the securities and might lower the amount the Fund could
realize upon the sale.
Illiquid securities include repurchase agreements
maturing in more than seven days and participation
interests that do not have puts exercisable within seven
days.
|X| Borrowing for Leverage. The Fund has the ability to
borrow from banks or affiliated investment companies on an
unsecured basis to invest the borrowed funds in portfolio
securities. This speculative technique is known as
"leverage." Under current regulatory requirements,
borrowings can be made only to the extent that the value of
the Fund's assets, less
its liabilities other than borrowings, is equal to at least
300% of all borrowings (including the proposed borrowing).
If the value of the Fund's assets fails to meet this 300%
asset coverage requirement, the Fund will reduce its bank
debt within three days to meet the requirement. To do so,
the Fund might have to sell a portion of its investments at
a disadvantageous time.
The Fund will pay interest on these loans, and that
interest expense will raise the overall expenses of the
Fund and reduce its returns. If it does borrow, its
expenses will be greater than comparable funds that do not
borrow for leverage. Additionally, the Fund's net asset
value per share might fluctuate more than that of funds
that do not borrow. Currently, the Fund does not
contemplate using this technique, but if it does so, it
will not likely do so to a substantial degree.
|X| Loans of Portfolio Securities. To raise cash for
liquidity purposes, the Fund can lend its portfolio
securities to brokers, dealers and other types of financial
institutions. These loans are limited to not more than 25%
of the value of the Fund's total assets. The Fund currently
does not intend to engage in loans of securities in the
coming year, but if it does so, such loans will not likely
exceed 5% of the Fund's total assets.
There are some risks in connection with securities
lending. The Fund might experience a delay in receiving
additional collateral to secure a loan, or a delay in
recovery of the loaned securities if the borrower defaults.
The Fund must receive collateral for a loan. Under current
applicable regulatory requirements (which are subject to
change), on each business day the loan collateral must be
at least equal to the value of the loaned securities. It
must consist of cash, bank letters of credit, securities of
the U.S. Government or its agencies or instrumentalities,
or other cash equivalents in which the Fund is permitted to
invest. To be acceptable as collateral, letters of credit
must obligate a bank to pay amounts demanded by the Fund if
the demand meets the terms of the letter. The terms of the
letter of credit and the issuing bank both must be
satisfactory to the Fund.
When it lends securities, the Fund receives amounts
equal to the dividends or interest on loaned securities. It
also receives one or more of (a) negotiated loan fees, (b)
interest on securities used as collateral, and (c) interest
on any short-term debt securities purchased with such loan
collateral. Either type of interest may be shared with the
borrower. The Fund may also pay reasonable finders',
custodian and administrative fees in connection with these
loans. The terms of the Fund's loans must meet applicable
tests under the Internal Revenue Code and must permit the
Fund to reacquire loaned securities on five days' notice or
in time to vote on any important matter.
|X| Interfund Borrowing and Lending Arrangements.
Consistent with its fundamental policies and pursuant to an
exemptive order issued by the Securities and Exchange
Commission ("SEC"), the Fund may engage in borrowing and
lending activities with other funds in the OppenheimerFunds
complex. Borrowing money from affiliated funds may afford
the Fund the flexibility to use the most cost-effective
alternative to satisfy its borrowing requirements. Lending
money to an affiliated fund may allow the Fund to obtain a
higher rate of return than it could from interest rates on
alternative short-term investments. Implementation of
interfund lending will be accomplished consistent with
applicable regulatory requirements, including the
provisions of the SEC order.
o Interfund Borrowing. The Fund will not borrow from
affiliated funds unless the terms of the borrowing
arrangement are at least as favorable as the terms the Fund
could otherwise negotiate with a third party. To assure
that the Fund will not be disadvantaged by
borrowing from an affiliated fund, certain safeguards may
be implemented. Examples of these safeguards include the
following:
o the Fund will not borrow money from affiliated funds
unless the interest rate is more favorable
than available bank loan rates;
o the Fund's borrowing from affiliated funds must be
consistent with its investment objective and
investment policies;
o the loan rates will be the average of the overnight
repurchase agreement rate available through
the OppenheimerFunds joint repurchase
agreement account and a pre-established
formula based on quotations from independent
banks to approximate the lowest interest
rate at which bank loans would be available
to the Fund;
o if the Fund has outstanding borrowings from all
sources greater than 10% of its total
assets, then the Fund must secure each
additional outstanding interfund loan by
segregating liquid assets of the Fund as
collateral;
o the Fund cannot borrow from an affiliated fund in
excess of 125% of its total redemptions for
the preceding seven days;
o each interfund loan may be repaid on any day by the
Fund; and
o the Trustees will be provided with a report of all
interfund loans and the Trustees will
monitor all such borrowings to ensure that
the Fund's participation is appropriate.
There is a risk that the Fund could have an interfund
loan called on one day's notice. In that circumstance, the
Fund might have to borrow from a bank at a higher interest
cost if money to lend were not available from another
Oppenheimer fund.
o Interfund Lending. To assure that the Fund will not
be disadvantaged by making loans to affiliated funds,
certain safeguards will be implemented. Examples of these
safeguards include the following:
o the Fund will not lend money to affiliated funds
unless the interest rate on such loan is
determined to be reasonable under the
circumstances;
o the Fund may not make interfund loans in excess of
15% of its net assets;
o an interfund loan to any one affiliated fund shall
not exceed 5% of the Fund's net assets;
o an interfund loan may not be outstanding for more
than seven days;
o each interfund loan may be called on one business
day's notice; and
o the Manager will provide the Trustees reports on all
interfund loans demonstrating that the
Fund's participation is appropriate and that
the loan is consistent with its investment
objectives and policies.
When the Fund lends assets to another affiliated
fund, the Fund is subject to the risk that the borrowing
fund fails to repay the loan.
Investment in Other Investment Companies. The Fund can also
invest in the securities of other investment companies,
which can include open-end funds, closed-end funds and unit
investment trusts, subject to the limits set forth in the
Investment Company Act that apply to those types of
investments. For example, the Fund can invest in
Exchange-Traded Funds, which are typically open-end funds
or unit investment trusts, listed on a stock exchange. The
Fund might do so as a way of gaining exposure to the
segments of the equity or fixed-income markets represented
by the Exchange-Traded Funds' portfolio, at times when the
Fund may not be able to buy those portfolio securities
directly.
Investing in another investment company may involve
the payment of substantial premiums above the value of such
investment company's portfolio securities and is subject to
limitations under the Investment Company Act. The Fund
does not intend to invest in other investment companies
unless the Manager believes that the potential benefits of
the investment justify the payment of any premiums or sales
charges. As a shareholder of an investment company, the
Fund would be subject to its ratable share of that
investment company's expenses, including its advisory and
administration expenses. The Fund does not anticipate
investing a substantial amount of its net assets in shares
of other investment companies.
Other Investment Restrictions
|X| What Are "Fundamental Policies?" Fundamental policies
are those policies that the Fund has adopted to govern its
investments that can be changed only by the vote of a
"majority" of the Fund's outstanding voting securities.
Under the Investment Company Act, a "majority" vote is
defined as the vote of the holders of the lesser of:
o 67% or more of the shares present or represented by
proxy at a shareholder meeting, if the holders
of more than 50% of the outstanding shares are
present or represented by proxy, or
o more than 50% of the outstanding shares.
The Fund's investment objective is a fundamental
policy. Other policies described in the Prospectus or this
Statement of Additional Information are "fundamental" only
if they are identified as such. The Fund's Board of
Trustees can change non-fundamental policies without
shareholder approval. However, significant changes to
investment policies will be described in supplements or
updates to the Prospectus or this Statement of Additional
Information, as appropriate. The Fund's principal
investment policies are described in the Prospectus.
|X| Does the Fund Have Additional Fundamental Policies?
The following investment restrictions are fundamental
policies of the Fund.
o The Fund cannot buy securities issued or guaranteed
by any one issuer if more than 5% of its total assets would
be invested in securities of that issuer or if it would
then own more than 10% of that issuer's voting securities.
That restriction applies to 75% of the Fund's total assets.
The limit does not apply to securities issued by the U.S.
government or any of its agencies or instrumentalities.
o The Fund cannot concentrate investments. That means
it cannot invest 25% or more of its total assets in
companies in any one industry. Obligations of the U.S.
government, its agencies and instrumentalities are not
considered to be part of an "industry" for the purposes of
this restriction.
o The Fund cannot underwrite securities of other
companies, except insofar as it might be deemed to be an
underwriter for purposes of the Securities Act of 1933 in
the resale of any securities held in its own portfolio.
o The Fund cannot invest in real estate or interests in
real estate, but may purchase readily marketable securities
of companies holding real estate or interests therein.
o The Fund cannot make loans, except to the extent
permitted under the 1940 Act, the rules or regulations
thereunder or any exemption therefrom, as such statute,
rules or regulations may be amended or interpreted from
time to time.
o The Fund may not issue "senior securities" or borrow
money, except to the extent permitted under the 1940 Act,
the rules or regulations thereunder or any exemption
therefrom, as such statute, rules or regulations may be
amended or interpreted from time to time. 1
o The Fund cannot invest in physical commodities or
commodity contracts; however, the Fund may (i) buy and sell
hedging instruments permitted by any of its other
investment policies, and (ii) buy and sell options,
futures, securities or other instruments backed by, or the
investment return from which is linked to changes in the
price of, physical commodities.
For purposes of the Fund's fundamental policy not to
concentrate its assets in any one industry, as set forth
immediately above, the Fund has adopted the industry
classifications set forth in Appendix A to this Statement
of Additional Information. These industry classifications
may be changed from time to time by the Manager.
|X| Does the Fund Have Additional Restrictions That Are
Not "Fundamental" Policies?
The Fund has a number of other investment
restrictions that are not fundamental policies, which means
that they can be changed by the Board of Trustees without
shareholder approval.
o The Fund cannot invest for the primary purpose of
acquiring control or management thereof.
o The Fund cannot purchase securities on margin;
however, the Fund may make margin deposits in connection
with any of its investments.
o The Fund cannot mortgage, hypothecate or pledge any
of its assets; escrow, collateral or margin arrangements
involved with any of its investments are not considered to
involve a mortgage, hypothecation or pledge.
o With respect to the Fund's non-fundamental policy to
invest, under normal market circumstances, at least 80% of
its assets in stocks included in the S&P 500/Barra Growth
index, the Fund will provide at least 60 days prior notice
of any change in such policy, as required by the Investment
Company Act of 1940, as amended.
How the Fund Is Managed
Organization and History. The Fund is an open-end,
diversified management investment company with an unlimited
number of authorized shares of beneficial interest. The
Fund was organized as a Massachusetts business trust in
1998. On October 12, 2001, Oppenheimer Trinity Growth Fund
reorganized into the Fund and, concurrently with the
reorganization, the Fund changed its name from "Oppenheimer
Large Cap Growth Fund" to "Oppenheimer Trinity Large Cap
Growth Fund."
The Fund is governed by a Board of Trustees, which is
responsible for protecting the interests of shareholders
under Massachusetts law. The Trustees meet periodically
throughout the year to oversee the Fund's activities,
review its performance, and review the actions of the
Manager. 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 action described in the Fund's
Declaration of Trust.
|X| Classes of Shares. The Trustees are authorized,
without shareholder approval, to create new series and
classes of shares. The Trustees may reclassify unissued
shares of the Fund into additional series or classes of
shares. The Trustees also may divide or combine the shares
of a class into a greater or lesser number of shares
without changing the proportionate beneficial interest of a
shareholder in the Fund. Shares do not have cumulative
voting rights or preemptive or subscription rights. Shares
may be voted in person or by proxy at shareholder meetings.
The Fund currently has five classes of shares: Class
A, Class B, Class C, Class N and Class Y. All classes
invest in the same investment portfolio. Only retirement
plans may purchase Class N shares. Only certain
institutional investors may elect to purchase Class Y
shares. Each class of shares:
o has its own dividends and distributions,
o pays certain expenses which may be different for the
different classes,
o may have a different net asset value,
o may have separate voting rights on matters in which
interests of one class are different from
interests of another class, and
o votes as a class on matters that affect that class
alone.
Shares are freely transferable, and each share of
each class has one vote at shareholder meetings, with
fractional shares voting proportionally on matters
submitted to the vote of shareholders. Each share of the
Fund represents an interest in the Fund proportionately
equal to the interest of each other share of the same class.
|X| Meetings of Shareholders. As a Massachusetts
business trust, the Fund is not required to hold, and does
not plan to hold, regular annual meetings of shareholders.
The Fund will hold meetings when required to do so by the
Investment Company Act or other applicable law. It will
also do so when a shareholder meeting is called by the
Trustees or upon proper request of the shareholders.
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 shareholders to vote on the removal of a Trustee
upon the written request of the record holders of 10% of
its outstanding shares. If the Trustees receive a request
from at least 10 shareholders stating that they wish to
communicate with other shareholders to request a meeting to
remove a
Trustee, the Trustees will then either make the Fund's
shareholder list available to the applicants or mail their
communication to all other shareholders at the applicants'
expense. The shareholders making the request must have been
shareholders for at least six months and must hold shares
of the Fund valued at $25,000 or more or constituting at
least 1% of the Fund's outstanding shares. The Trustees may
also take other action as permitted by the Investment
Company Act.
|X| Shareholder and Trustee Liability. The Fund's
Declaration of Trust contains an express disclaimer of
shareholder or Trustee liability for the Fund's
obligations. It also provides for indemnification and
reimbursement of expenses out of the Fund's property for
any shareholder held personally liable for its
obligations. The Declaration of Trust also states that
upon request, the Fund shall assume the defense of any
claim made against a shareholder for any act or obligation
of the Fund and shall satisfy any judgment on that claim.
Massachusetts law permits a shareholder of a business trust
(such as the Fund) to be held personally liable as a
"partner" under certain circumstances. However, the risk
that a Fund shareholder will incur financial loss from
being held liable as a "partner" of the Fund is limited to
the relatively remote circumstances in which the Fund would
be unable to meet its obligations.
The Fund's contractual arrangements state that any
person doing business with the Fund (and each shareholder
of the Fund) agrees under its Declaration of Trust to look
solely to the assets of the Fund for satisfaction of any
claim or demand that may arise out of any dealings with the
Fund. Additionally, the Trustees shall have no personal
liability to any such person, to the extent permitted by
law.
Board of Trustees and Oversight Committees. The Fund is
governed by a Board of Trustees, which is responsible for
protecting the interests of shareholders under
Massachusetts law. The Trustees meet periodically
throughout the year to oversee the Fund's activities,
review its performance, and review the actions of the
Manager. 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 action described in the Fund's
Declaration of Trust.
The Board of Trustees has an Audit Committee, a Study
Committee and a Proxy Committee. The members of the Audit
Committee are Kenneth Randall (Chairman), Benjamin Lipstein
and Edward Regan. The Audit Committee held five meetings
during the Fund's fiscal year ended July 31, 2002. The
Audit Committee provides the Board with recommendations
regarding the selection of the Fund's independent auditor.
The Audit Committee also reviews the scope and results of
audits and the audit fees charged, reviews reports from the
Fund's independent auditor concerning the Fund's internal
accounting procedures, and controls and reviews reports of
the Manager's internal auditor, among other duties as set
forth in the Committee's charter.
The members of the Study Committee are Benjamin
Lipstein (Chairman), Robert Galli and Elizabeth Moynihan.
The Study Committee held seven meetings during the Fund's
fiscal year ended July 31, 2002. The Study Committee
evaluates and reports to the Board on the Fund's
contractual arrangements, including the Investment Advisory
and Distribution Agreements, transfer and shareholder
service agreements and custodian agreements as well as the
policies and procedures adopted by the Fund to comply with
the Investment Company Act and other applicable law, among
other duties as set forth in the Committee's charter.
The members of the Proxy Committee are Edward Regan
(Chairman), Russell Reynolds and Clayton Yeutter. The
Proxy Committee held no meetings during the Fund's fiscal
year ended July 31, 2002. The Proxy Committee provides the
Board with recommendations for proxy voting and monitors
proxy voting by the Fund.
Trustees and Officers of the Fund. Except for Mr. Murphy,
each of the Trustees is an independent trustee of the Fund
("Independent Trustee"). Mr. Murphy is an "Interested
Trustee," because he is affiliated with the Manager by virtue
of his positions as an officer and director of the Manager,
and as a shareholder of its parent company.
The Fund's Trustees and officers and their positions
held with the Fund and length of service in such
position(s) and their principal occupations and business
affiliations during the past five years are listed in the
chart below. The information for the Trustees also includes
the dollar range of shares of the Fund as well as the
aggregate dollar range of shares beneficially owned in any
of the Oppenheimer funds overseen by the Trustees. All of
the Trustees are also trustees or directors of the
following publicly offered Oppenheimer funds (referred to
as "Board I Funds"):
Oppenheimer California Municipal Fund Oppenheimer International Growth Fund
Oppenheimer International Small Company
Oppenheimer Capital Appreciation Fund Fund
Oppenheimer Capital Preservation Fund Oppenheimer Money Market Fund, Inc.
Oppenheimer Developing Markets Fund Oppenheimer Multiple Strategies Fund
Oppenheimer Discovery Fund Oppenheimer Multi-Sector Income Trust
Oppenheimer Emerging Growth Fund Oppenheimer Multi-State Municipal Trust
Oppenheimer Emerging Technologies Fund Oppenheimer Municipal Bond Fund
Oppenheimer Enterprise Fund Oppenheimer AMT-Free New York Municipals
Oppenheimer Europe Fund Oppenheimer Series Fund, Inc.
Oppenheimer Global Fund Oppenheimer Trinity Core Fund
Oppenheimer Global Growth & Income Fund Oppenheimer Trinity Large Cap Growth Fund
Oppenheimer Gold & Special Minerals
Fund Oppenheimer Trinity Value Fund
Oppenheimer Growth Fund Oppenheimer U.S. Government Trust
In addition to being a trustee or director of the
Board I Funds, Mr. Galli is also a director or trustee of
10 other portfolios in the OppenheimerFunds complex.
Present or former officers, directors, trustees and
employees (and their immediate family members) of the Fund,
the Manager and its affiliates, and retirement plans
established by them for their employees are permitted to
purchase Class A shares of the Fund and the other
Oppenheimer funds at net asset value without sales charge.
The sales charges on Class A shares is waived for that
group because of the economies of sales efforts realized by
the Distributor.
Messrs. Murphy, Masterson, Molleur, Vottiero, Wixted
and Zack, and Mses. Bechtolt, Feld and Ives respectively
hold the same offices with one or more of the other Board I
Funds as with the Fund. As of August 29, 2002 the Trustees
and officers of the Fund, as a group, owned of record or
beneficially less than 1% of each class of shares of the
Fund. The foregoing statement does not reflect ownership
of shares of the Fund held of record by an employee benefit
plan for employees of the Manager, other than the shares
beneficially owned under the plan by the officers of the
Fund listed above. In addition, each Independent Trustee,
and his or her family members, do not own securities of
either the Manager, Distributor or Sub-Advisor of the Board
I Funds or any person directly or indirectly controlling,
controlled by or under common control with the Manager,
Distributor or Sub-Advisor.
|X| Affiliated Transactions and Material Business
Relationships. Mr. Reynolds has reported he has a
controlling interest in The Directorship Search Group, Inc.
("The Directorship Search Group"), a director recruiting
firm that provided consulting services to Massachusetts
Mutual Life Insurance Company (which controls the Manager)
for fees aggregating $110,000
from January 1, 2000 through December 31, 2001, an amount
representing less than 5% of the annual revenues of The
Directorship Search Group, Inc. Mr. Reynolds estimates that
The Directorship Search Group will bill Massachusetts
Mutual Life Insurance Company $150,000 for services to be
provided during the calendar year 2002.
The Independent Trustees have unanimously (except for
Mr. Reynolds, who abstained) determined that the consulting
arrangements between The Directorship Search Group, Inc.
and Massachusetts Mutual Life Insurance Company were not
material business or professional relationships that would
compromise Mr. Reynolds' status as an Independent Trustee.
Nonetheless, to assure certainty as to determinations of
the Board and the Independent Trustees as to matters upon
which the Investment Company Act or the rules thereunder
require approval by a majority of Independent Trustees, Mr.
Reynolds will not be counted for purposes of determining
whether a quorum of Independent Trustees was present or
whether a majority of Independent Trustees approved the
matter.
The address of each Trustee in the chart below is 6803
S. Tucson Way, Centennial, CO 80112-3924. Each Trustee
serves for an indefinite term, until his or her
resignation, retirement, death or removal.
- -------------------------------------------------------------------------------------
Independent Trustees
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
Name, Address, Principal Occupation(s) During Past 5 Dollar Aggregate
Dollar
Range of
Shares
Beneficially
Owned in
any of
Range of the
Age, Position(s) Shares Oppenheimer
Held with Fund Years / Other Trusteeships/Directorships BeneficiallFunds
and Length of Held by Trustee / Number of Portfolios in Owned in Overseen
Service Fund Complex Currently Overseen by Trustee the Fund by Trustee
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
As of December 31,
2001
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
Clayton K. Of Counsel (since 1993), Hogan & Hartson None $50,001-$100,000
Yeutter,
Chairman of the (a law firm). Other directorships:
Board of Trustees, Caterpillar, Inc. (since 1993) and
Trustee since 1999 Weyerhaeuser Co. (since 1999). Oversees 31
Age: 71 portfolios in the OppenheimerFunds complex.
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
Robert G. Galli, A trustee or director of other Oppenheimer None Over
Trustee since 1999 funds. Formerly Vice Chairman (October
Age: 69 1995-December 1997) of the Manager.
Oversees 41 portfolios in the
OppenheimerFunds complex. $100,000
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
Phillip A. The Director (since 1991) of the Institute None Over
Griffiths, for Advanced Study, Princeton, N.J.,
Trustee since 1999 director (since 2001) of GSI Lumonics and
Age: 63 a member of the National Academy of
Sciences (since 1979); formerly (in
descending chronological order) a director
of Bankers Trust Corporation, Provost and
Professor of Mathematics at Duke
University, a director of Research
Triangle Institute, Raleigh, N.C., and a
Professor of Mathematics at Harvard $100,000
University. Oversees 31 portfolios in the
OppenheimerFunds complex.
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
Benjamin Professor Emeritus of Marketing, Stern None Over
Lipstein, Trustee Graduate School of Business
since 1999 Administration, New York University.
Age: 79 Oversees 31 portfolios in the
OppenheimerFunds complex. $100,000
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- -------------------------------------------------------------------------------------
Joel W. Motley, Director (January 2002-present), Columbia $None2 None3
Trustee since 2002 Equity Financial Corp. (privately-held
Age: 50 financial adviser); Managing Director
(January 2002-present), Carmona Motley,
Inc. (privately-held financial adviser);
Formerly he held the following positions:
Managing Director (January 1998-December
2001), Carmona Motley Hoffman, Inc.
(privately-held financial adviser);
Managing Director (January 1992-December
1997), Carmona Motley & Co.
(privately-held financial adviser).
Oversees 31 portfolios in the
OppenheimerFunds complex.
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- -------------------------------------------------------------------------------------
Elizabeth B. Author and architectural historian; a ,000
Moynihan, trustee of the Freer Gallery of Art and
Trustee since 1999 Arthur M. Sackler Gallery (Smithsonian
Age: 72 Institute), Trustees Council of the
National Building Museum; a member of the None $50,001-$100
Trustees Council, Preservation League of
New York State. Oversees 31 portfolios in
the OppenheimerFunds complex.
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- -------------------------------------------------------------------------------------
Kenneth A. A director of Dominion Resources, Inc. None Over
Randall, Trustee (electric utility holding company) and
since 1999 Prime Retail, Inc. (real estate investment
Age: 75 trust); formerly a director of Dominion
Energy, Inc. (electric power and oil & gas
producer), President and Chief Executive
Officer of The Conference Board, Inc.
(international economic and business
research) and a director of Lumbermens
Mutual Casualty Company, American
Motorists Insurance Company and American $100,000
Manufacturers Mutual Insurance Company.
Oversees 31 portfolios in the
OppenheimerFunds complex.
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
Edward V. Regan, President, Baruch College, CUNY; a $1-$10,000$50,001-$100,000
Trustee since 1999 director of RBAsset (real estate manager);
Age: 72 a director of OffitBank; formerly Trustee,
Financial Accounting Foundation (FASB and
GASB), Senior Fellow of Jerome Levy
Economics Institute, Bard College,
Chairman of Municipal Assistance
Corporation for the City of New York, New
York State Comptroller and Trustee of New
York State and Local Retirement Fund.
Oversees 31 investment companies in the
OppenheimerFunds complex.
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
Russell S. Chairman (since 1993) of The Directorship None $10,001-$50,000
Reynolds, Jr., Search Group, Inc. (corporate governance
Trustee since 1999 consulting and executive recruiting); a
Age: 70 life trustee of International House
(non-profit educational organization), and
a trustee (since 1996) of the Greenwich
Historical Society. Oversees 31 portfolios
in the OppenheimerFunds complex.
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- -------------------------------------------------------------------------------------
Donald W. Spiro, Chairman Emeritus (since January 1991) of None Over
Vice Chairman of
the Board of the Manager. Formerly a director (January
Trustees, 1969-August 1999) of the Manager. Oversees
Trustee since 1999 31 portfolios in the OppenheimerFunds $100,000
Age: 76 complex.
- -------------------------------------------------------------------------------------
The address of Mr. Murphy in the chart below is 498
Seventh Avenue, New York, NY 10018. Mr. Murphy serves for
an indefinite term, until his resignation, death or removal.
- -------------------------------------------------------------------------------------
Interested Trustee and Officer
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
Name, Address, Principal Occupation(s) During Past 5 Dollar Aggregate
Dollar
Range of
y Shares
Range of Beneficially
Age, Position(s) Shares Owned in
Held with Fund Years / Other Trusteeships/Directorships Beneficiallany of the
and Length of Held by Trustee / Number of Portfolios in Owned in Oppenheimer
Service Fund Complex Currently Overseen by Trustee the Fund Funds
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
As of December 31,
2001
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
John V. Murphy, Chairman, Chief Executive Officer and
President and director (since June 2001) and President None Over
Trustee, (since September 2000) of the Manager; $100,000
Trustee since President and a director or trustee of
October 2001 other Oppenheimer funds; President and a
Age: 53 director (since July 2001) of Oppenheimer
Acquisition Corp. (the Manager's parent
holding company) and of Oppenheimer
Partnership Holdings, Inc. (a holding
company subsidiary of the Manager); a
director (since November 2001) of
OppenheimerFunds Distributor, Inc. (a
subsidiary of the Manager); Chairman and a
director (since July 2001) of Shareholder
Services, Inc. and of Shareholder
Financial Services, Inc. (transfer agent
subsidiaries of the Manager); President
and a director (since July 2001) of
OppenheimerFunds Legacy Program (a
charitable trust program established by
the Manager); a director of the investment
advisory subsidiaries of the Manager: OFI
Institutional Asset Management, Inc. and
Centennial Asset Management Corporation
(since November 2001), HarbourView Asset
Management Corporation and OFI Private
Investments, Inc. (since July 2001);
President (since November 1, 2001) and a
director (since July 2001) of Oppenheimer
Real Asset Management, Inc.; a director
(since November 2001) of Trinity
Investment Management Corp. and Tremont
Advisers, Inc. (Investment advisory
affiliates of the Manager); Executive Vice
President (since February 1997) of
Massachusetts Mutual Life Insurance
Company (the Manager's parent company); a
director (since June 1995) of DBL
Acquisition Corporation; formerly, Chief
Operating Officer (September 2000-June
2001) of the Manager; President and
trustee (November 1999-November 2001) of
MML Series Investment Fund and MassMutual
Institutional Funds (open-end investment
companies); a director (September
1999-August 2000) of C.M. Life Insurance
Company; President, Chief Executive
Officer and director (September
1999-August 2000) of MML Bay State Life
Insurance Company; a director (June
1989-June 1998) of Emerald Isle Bancorp
and Hibernia Savings Bank (a wholly-owned
subsidiary of Emerald Isle Bancorp).
Oversees 69 portfolios in the
OppenheimerFunds complex.
- -------------------------------------------------------------------------------------
The address of the Officers in the chart below is as
follows: Messrs. Molleur and Zack and Ms. Feld is 498
Seventh Avenue, New York, NY 10018, Messrs. Masterson,
Vottiero and Wixted and Mses. Bechtolt and Ives is 6803 S.
Tucson Way, Centennial, CO 80112-3924. Each Officer serves
for an annual term or until his or her resignation, death
or removal.
- -------------------------------------------------------------------------------------
Officers of the Fund
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
Name, Address, Age, Principal Occupation(s) During Past 5 Years
Position(s) Held with
Fund and Length of
Service
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
Brian W. Wixted, Senior Vice President and Treasurer (since March 1999) of
Treasurer, Principal the Manager; Treasurer (since March 1999) of HarbourView
Financial and Accounting Asset Management Corporation, Shareholder Services, Inc.,
Officer (since April Oppenheimer Real Asset Management Corporation,
1999) Shareholder Financial Services, Inc., Oppenheimer
Age: 42 Partnership Holdings, Inc., OFI Private Investments, Inc.
(since March 2000), OppenheimerFunds International Ltd.
and Oppenheimer Millennium Funds plc (since May 2000) and
OFI Institutional Asset Management, Inc. (since November
2000) (offshore fund management subsidiaries of the
Manager); Treasurer and Chief Financial Officer (since
May 2000) of Oppenheimer Trust Company (a trust company
subsidiary of the Manager); Assistant Treasurer (since
March 1999) of Oppenheimer Acquisition Corp. and
OppenheimerFunds Legacy Program (since April 2000);
formerly Principal and Chief Operating Officer (March
1995-March 1999), Bankers Trust Company-Mutual Fund
Services Division. An officer of 85 portfolios in the
OppenheimerFunds complex.
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
Connie Bechtolt, Assistant Vice President of the Manager (since September
Assistant Treasurer 1998); formerly Manager/Fund Accounting (September
(since October 10, 2002) 1994-September 1998) of the Manager. An officer of 72
Age: 39 portfolios in the OppenheimerFunds complex.
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
Vice President/Fund Accounting of the Manager (since
Philip Vottiero, March 2002); formerly Vice President/Corporate Accounting
Assistant Treasurer of the Manager (July 1999-March 2002) prior to which he
(since August 15, 2002) was Chief Financial Officer at Sovlink Corporation (April
Age: 39 1996-June 1999). An officer of 72 portfolios in the
OppenheimerFunds complex.
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
Robert G. Zack, Senior Vice President (since May 1985) and General
Secretary (since Counsel (since February 2002) of the Manager; General
November 1, 2001) Counsel and a director (since November 2001) of
Age: 54 OppenheimerFunds Distributor, Inc.; Senior Vice President
and General Counsel (since November 2001) of HarbourView
Asset Management Corporation; Vice President and a
director (since November 2000) of Oppenheimer Partnership
Holdings, Inc.; Senior Vice President, General Counsel
and a director (since November 2001) of Shareholder
Services, Inc., Shareholder Financial Services, Inc., OFI
Private Investments, Inc., Oppenheimer Trust Company and
OFI Institutional Asset Management, Inc.; General Counsel
(since November 2001) of Centennial Asset Management
Corporation; a director (since November 2001) of
Oppenheimer Real Asset Management, Inc.; Assistant
Secretary and a director (since November 2001) of
OppenheimerFunds International Ltd.; Vice President
(since November 2001) of OppenheimerFunds Legacy Program;
Secretary (since November 2001) of Oppenheimer
Acquisition Corp.; formerly Acting General Counsel
(November 2001-February 2002) and Associate General
Counsel (May 1981-October 2001) of the Manager; Assistant
Secretary of Shareholder Services, Inc. (May
1985-November 2001), Shareholder Financial Services, Inc.
(November 1989-November 2001); OppenheimerFunds
International Ltd. and Oppenheimer Millennium Funds plc
(October 1997-November 2001). An officer of 85 portfolios
in the OppenheimerFunds complex.
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
Philip T. Masterson, Vice President and Assistant Counsel of the Manager
Assistant Secretary (since July 1998); formerly, an associate with Davis,
(since August 15, 2002) Graham, & Stubbs LLP (January 1997-June 1998). An officer
Age: 38 of 72 portfolios in the OppenheimerFunds complex.
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
Denis R. Molleur, Vice President and Senior Counsel of the Manager (since
Assistant Secretary July 1999); formerly a Vice President and Associate
(since November 1, 2001) Counsel of the Manager (September 1995-July 1999). An
Age: 44 officer of 82 portfolios in the OppenheimerFunds complex.
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
Katherine P. Feld, Vice President and Senior Counsel (since July 1999) of
Assistant Secretary the Manager; Vice President (since June 1990) of
(since November 1, 2001) OppenheimerFunds Distributor, Inc.; Director, Vice
Age: 44 President and Secretary (since June 1999) of Centennial
Asset Management Corporation; Vice President (since 1997)
of Oppenheimer Real Asset Management, Inc.; formerly Vice
President and Associate Counsel of the Manager (June
1990-July 1999). An officer of 85 portfolios in the
OppenheimerFunds complex.
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
Kathleen T. Ives, Vice President and Assistant Counsel (since June 1998) of
Assistant Secretary the Manager; Vice President (since 1999) of
(since November 1, 2001) OppenheimerFunds Distributor, Inc.; Vice President and
Age: 36 Assistant Secretary (since 1999) of Shareholder Services,
Inc.; Assistant Secretary (since December 2001) of
OppenheimerFunds Legacy Program and Shareholder Financial
Services, Inc.; formerly Assistant Vice President and
Assistant Counsel of the Manager (August 1997-June 1998);
Assistant Counsel of the Manager (August 1994-August
1997). An officer of 85 portfolios in the
OppenheimerFunds complex.
- -------------------------------------------------------------------------------------
|X| Remuneration of Trustees. The officers of the Fund
and one of the Trustees of the Fund (Mr. Murphy) who are
affiliated with the Manager receive no salary or fee from
the Fund. The remaining Trustees of the Fund received the
compensation shown below from the Fund with respect to the
Fund's fiscal year ended July 31, 2002. The compensation
from all of the Board I Funds (including the Fund)
represents compensation received as a director, trustee or
member of a committee of the Boards during the calendar
year 2001.
- ----------------------------------------------------------------------------------
Trustee Name and Aggregate Retirement Estimated Total
Compensation
Annual From All
Retirement Oppenheimer
Benefits Paid Funds For Which
Benefits at Retirement Individual
Other Fund Accrued as from all Serves As
Position(s) Compensation Part of Fund Board I Funds Trustee/Director
(as applicable) from Fund1 Expenses (33 Funds) 2 (33 Funds)
- ----------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------
Clayton K. Yeutter $0 $145 $31,982 $71,792
Chairman and
Proxy Committee
Member
- ----------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------
Robert G. Galli $0 $224 $32,7662 $202,8864
Study Committee
Member
- ----------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------
Phillip Griffiths $0 $59 $6,803 $54,889
- ----------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------
Benjamin Lipstein $0 $0 $118,911 $150,152
Study Committee
Chairman, Audit
Committee Member
- ----------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------
Leon Levy $0 $76 $137,560 $173,700
- ----------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------
Joel W. Motley5 $0 $0 $0 $0
- ----------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------
Elizabeth B. $0 $290 $52,348 $105,760
Moynihan
Study Committee
Member
- ----------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------
Kenneth A. Randall $0 $176 $76,827 $97,012
Audit Committee
Chairman
- ----------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------
Edward V. Regan $0 $307 $42,748 $95,960
Proxy Committee
Chairman, Audit
Committee Member
- ----------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------
Russell S. $0 $190 $46,197 $71,792
Reynolds, Jr.
Proxy Committee
Member
- ----------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------
Donald Spiro $0 $71 $3,625 $64,080
- ----------------------------------------------------------------------------------
1. Aggregate compensation from the Fund includes fees
and deferred compensation, if any. No trustee fee expenses
were accrued to the Fund during its last fiscal year for
any Trustee.
2. Estimated annual retirement benefits paid at
retirement is based on a straight life payment plan
election. The amount for Mr. Galli includes $14,818 for
serving as a trustee or director of 10 Oppenheimer funds
that are not Board I Funds.
3. Effective January 1, 2002, Clayton Yeutter became
Chairman of the Board of Trustees of the Board I Fund upon
the retirement of Leon Levy.
4. Includes $97,126 for Mr. Galli for serving as trustee
or director of 10 Oppenheimer funds that are not Board I
Funds.
5. Appointed to the Board on October 10, 2002 and
therefore did not receive any compensation.
|X| Retirement Plan for Trustees. The Fund has adopted a
retirement plan that provides for payments to retired
Independent Trustees. Payments are up to 80% of the average
compensation paid during a Trustee's five years of service
in which the highest compensation was received. A Trustee
must serve as trustee for any of the Board I Funds for at
least 15 years to be eligible for the maximum payment. Each
Trustee's retirement benefits will depend on the
amount of the Trustee's future compensation and length of
service.
|X| Deferred Compensation Plan for Trustees. The Board of
Trustees has adopted a Deferred Compensation Plan for
disinterested trustees that enables them to elect to defer
receipt of all or a portion of the annual fees they are
entitled to receive from the Fund. Under the plan, the
compensation deferred by a Trustee is periodically adjusted
as though an equivalent amount had been invested in shares
of one or more Oppenheimer funds selected by the Trustee.
The amount paid to the Trustee under the plan is determined
based upon the performance of the selected funds.
Deferral of Trustees' fees under the plan will not
materially affect the Fund's assets, liabilities or net
income per share. The plan will not obligate the Fund to
retain the services of any Trustee or to pay any particular
level of compensation to any Trustee. Pursuant to an Order
issued by the Securities and Exchange Commission, the Fund
may invest in the funds selected by the Trustee under the
plan without shareholder approval for the limited purpose
of determining the value of the Trustee's deferred fee
account.
|X| Major Shareholders. As of August 29, 2002, the only
persons who owned of record or who were known by the Fund
to own of record 5% or more of the Fund's outstanding Class
A, Class B, Class C, Class N and Class Y shares were:
NFSC FEBO #EBP-389994, Double John Partnership, A
Partnership, John Walker, 8655 Camargo Rd.,
Cincinnati, OH 45243 who owned 47,318.612 Class C
shares (5.37% of the Class C shares then outstanding).
RPSS TR Medi Inc 401K Plan, Attn: Kathy Chen, 241
Lombard St., Thousand Oaks, CA 91360-5807 which owned
2,831.268 Class N shares (6.58% of the Class N shares
then outstanding).
RPSS TR IRA FBO Edward M. Braidic, 10 Baylor Blvd,
Lewisburg, PA 17837-9203 who owned 3,156.662 Class N
shares (7.33% of the Class N shares then outstanding).
RPSS TR IRA FBO Donald Sinclair, 1816 N. Fremont St.,
Chicago, IL 60614-5005 who owned 3,670.597 Class N
shares (8.53% of the Class N shares then outstanding).
RPSS TR SAR/SEP Miller Consulting Engineers FBO
Raymond T. Miller, 4 Sibelius Ct., Lake Oswego, OR
97035-1422 who owned 3,673.495 Class N shares (8.53%
of the Class N shares then outstanding).
RPSS TR ROLLOVER IRA FBO Garry J. Kroeger, 8104
Melody Ln, Dickinson, TX 77539-7404 who owned
8,605.986 Class N shares (20.00% of the Class N
shares then outstanding).
Persumma Financial Services, 275 Grove St.,
Auburndale, MA 02466-2272 which owned 9,080.253 Class
Y shares (97.92% of the Class Y shares then
outstanding).
The Manager. The Manager is wholly-owned by Oppenheimer
Acquisition Corp., a holding company controlled by
Massachusetts Mutual Life Insurance Company.
|X|
Code of Ethics. The Fund, the Manager, the
Sub-Advisor and the Distributor 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. Covered persons include
persons with knowledge of the investments and investment
intentions of the Fund and other funds advised by the
Manager. The Code of Ethics does permit personnel subject
to the Code to invest in securities, including securities
that may be purchased or held by the Fund, subject to a
number of restrictions and controls. Compliance with the
Code of Ethics is carefully monitored and enforced by the
Manager.
The Code of Ethics is an exhibit to the Fund's
registration statement filed with the Securities and
Exchange Commission and can be reviewed and copied at the
SEC's Public Reference Room in Washington, D.C. You can
obtain information about the hours of operation of the
Public Reference Room by calling the SEC at 1.202.942.8090.
The Code of Ethics can also be viewed as part of the Fund's
registration statement on the SEC's EDGAR database at the
SEC's Internet website at WWW.SEC.GOV. Copies may be
-----------
obtained, after paying a duplicating fee, by electronic
request at the following E-mail address:
publicinfo@sec.gov., or by writing to the SEC's Public
Reference Section, Washington, D.C. 20549-0102.
|X| The Investment Advisory Agreement. The Manager
provides investment advisory and management services to the
Fund under an investment advisory agreement between the
Manager and the Fund. The Manager handles the Fund's
day-to-day business, and the agreement permits the Manager
to enter into sub-advisory agreements with other registered
investment advisors to obtain specialized services for the
Fund, as long as the Fund is not obligated to pay any
additional fees for those services. The Manager has
retained the Sub-Advisor pursuant to a separate
Sub-Advisory Agreement, described below, under which the
Sub-Advisor buys and sells portfolio securities for the
Fund. The members of the portfolio management team of the
Fund are employed by the Sub-Advisor and are the persons
principally responsible for the day-to-day management of
the Fund's portfolio, as described below.
Under the investment advisory agreement, the Fund
pays the Manager an annual fee in monthly installments,
based on the average daily net assets of the Fund. That fee
is described in the prospectus.
The investment advisory agreement between the Fund
and the Manager requires the Manager, at its expense, to
provide the Fund with adequate office space, facilities and
equipment. It also requires the Manager to provide and
supervise the activities of all administrative and clerical
personnel required to provide effective administration for
the Fund. Those responsibilities include the compilation
and maintenance of records with respect to its operations,
the preparation and filing of specified reports, and
composition of proxy materials and registration statements
for continuous public sale of shares of the Fund.
The Fund pays expenses not expressly assumed by the
Manager under the advisory agreement. The advisory
agreement lists examples of expenses paid by the Fund. The
major categories relate to calculation of the Fund's net
asset values per share, 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 costs. The management fees
paid by the Fund to the Manager are calculated at the rates
described in the Prospectus, which are applied to the
assets of the Fund as
a whole. The fees are allocated to each class of shares
based upon the relative proportion of the Fund's net assets
represented by that class.
- ------------------------------------------------------------------
Fiscal Year ended Management Fees Paid to OppenheimerFunds,
7/31: Inc.
- ------------------------------------------------------------------
- ------------------------------------------------------------------
2000 $155,638
- ------------------------------------------------------------------
- ------------------------------------------------------------------
2001 $195,789
- ------------------------------------------------------------------
- ------------------------------------------------------------------
2002 $231,829
- ------------------------------------------------------------------
The investment advisory agreement states that in the
absence of willful misfeasance, bad faith, gross negligence
in the performance of its duties or reckless disregard of
its obligations and duties under the investment advisory
agreement, the Manager is not liable for any loss the Fund
sustains for any investment, adoption of any investment
policy, or the purchase, sale or retention of any security.
The agreement permits the Manager to act as
investment advisor for any other person, firm or
corporation and to use the names "Oppenheimer" and
"Trinity" in connection with other investment companies for
which it may act as investment advisor or general
distributor. If the Manager shall no longer act as
investment advisor to the Fund, the Manager may withdraw
the right of the Fund to use the names "Oppenheimer" or
"Trinity" as part of its name.
|X| Annual Approval of Investment Advisory
Agreement. Each year, the Board of Trustees, including a
majority of the Independent Trustees is required to approve
the renewal of the investment advisory agreement. The
Investment Company Act requires that the Board request and
evaluate and the Manager provide such information as may be
reasonably necessary to evaluate the terms of the
investment advisory agreement. The Board employs an
independent consultant to prepare a report that provides
such information as the Board requested for this purpose.
The Board also receives information about the 12b-1
distribution fees the Fund pays. These distribution fees
are reviewed and approved at a different time of the year.
The Board reviewed the foregoing information in
arriving at its decision to renew the investment advisory
agreement. Among other factors, the Board considered:
o The nature, cost, and quality of the services
provided to the Fund and its shareholders;
o The profitability of the Fund to the Manager;
o The investment performance of the Fund in comparison
to regular market indices
o Economies of scale that may be available to the Fund
from the Manager;
o Fees paid by other mutual funds for similar services;
o The value and quality of any other benefits or
services received by the Fund from its
relationship with the Manager, and
o The direct and indirect benefits the Manager received
from its relationship with the Fund. These
included services provided by the Distributor
and the Transfer Agent, and brokerage and soft
dollar arrangements permissible under Section
28(e) of the Securities Exchange Act.
The Board considered that the Manager must be able to
pay and retain high quality personnel at competitive rates
to provide services to the Fund. The Board also considered
that maintaining the financial viability of the Manager is
important so that the Manager will be able to continue to
provide quality services to the Fund and its shareholders
in adverse times. The Board also considered the investment
performance of other mutual funds advised by the Manager.
The Board is aware that there are alternatives to the use
of the Manager.
These matters were also considered by the Independent
Trustees meeting separately from the full Board with
experienced Counsel to the Fund who assisted the Board in
its deliberations. The Fund's Counsel is independent of
the Manager within the meaning and intent of the SEC Rules
regarding the independence of counsel.
After careful deliberation, the Board of concluded
that it was in the best interest of shareholders to
continue the investment advisory agreement for another
year. In arriving at a decision, the Board did not single
out any one factor or group of factors as being more
important than other factors, but considered all factors
together. The Board judged the terms and conditions of the
investment advisory agreement, including the investment
advisory fee, in light of all of the surrounding
circumstances. The Board engages in a similar analysis and
approval process with respect to the Sub-Advisory Agreement.
The Sub-Advisor. The Sub-Advisor is a wholly-owned
subsidiary of Oppenheimer Acquisition Corp., a holding
company controlled by Massachusetts Mutual Life Insurance
Company. The Manager and the Sub-Advisor are affiliates.
The Sub-Advisory Agreement. Under the Sub-Advisory
Agreement between the Manager and the Sub-Advisor, the
Sub-Advisor shall regularly provide investment advice with
respect to the Fund and invest and reinvest cash,
securities and the property comprising the assets of the
Fund. Under the Sub-Advisory Agreement, the Sub-Advisor
agrees not to change the portfolio management team of the
Fund without the written approval of the Manager. The
Sub-Advisor also agrees to provide assistance in the
distribution and marketing of the Fund.
Under the Sub-Advisory Agreement, the Manager pays
the Sub-Advisor an annual fee in monthly installments,
based on the average daily net assets of the Fund. The fee
paid to the Sub-Advisor under the Sub-Advisory Agreement is
paid by the Manager, not by the Fund. The fee declines on
additional assets as the Fund grows: 0.25% of the first
$150 million of average annual net assets of the Fund;
0.17% of the next $350 million; and 0.14% of average annual
net assets in excess of $500 million.
The Sub-Advisory Agreement states that in the absence
of willful misfeasance, bad faith, negligence or reckless
disregard of its duties or obligations, the Sub-Advisor
shall not be liable to the Manager for any act or omission
in the course of or connected with rendering services under
the Sub-Advisory Agreement or for any losses that may be
sustained in the purchase, holding or sale of any security.
Brokerage Policies of the Fund
Brokerage Provisions of the Investment Advisory Agreement
and the Sub-Advisory Agreement. One of the duties of the
Sub-Advisor under the Sub-Advisory Agreement is to arrange
the portfolio transactions for the Fund. The Fund's
investment advisory agreement with the Manager and the
Sub-Advisory Agreement contain provisions relating to the
employment of broker-dealers to effect the Fund's portfolio
transactions. The Manager and the Sub-Advisor are
authorized to employ broker-dealers, including "affiliated"
brokers, as that term is defined in the
Investment Company Act. They may employ broker-dealers
that, in their best judgment based on all relevant factors,
will implement the policy of the Fund to obtain, at
reasonable expense, the
"best execution" of the Fund's portfolio transactions.
Among other things, "best execution" means prompt and
reliable execution at the most favorable price obtainable.
The Manager and the Sub-Advisor need not seek
competitive commission bidding. However, they are expected
to be aware of the current rates of eligible brokers and to
minimize the commissions paid to the extent consistent with
the interests and policies of the Fund as established by
its Board of Trustees.
The Manager and the Sub-Advisor may select brokers
(other than affiliates) that provide brokerage and/or
research services for the Fund and/or the other accounts
over which the Manager, the Sub-Advisor or their respective
affiliates have investment discretion. The commissions paid
to such brokers may be higher than another qualified broker
would charge, if the Manager or Sub-Advisor, as applicable,
makes a good faith determination that the commission is
fair and reasonable in relation to the services provided.
Subject to those considerations, as a factor in selecting
brokers for the Fund's portfolio transactions, the Manager
and the Sub-Advisor may also consider sales of shares of
the Fund and other investment companies for which the
Manager or an affiliate serves as investment advisor.
The Sub-Advisory Agreement permits the Sub-Advisor to
enter into "soft-dollar" arrangements through the agency of
third parties to obtain services for the Fund. Pursuant to
these arrangements, the Sub-Advisor will undertake to place
brokerage business with broker-dealers who pay third
parties that provide services. Any such "soft-dollar"
arrangements will be made in accordance with policies
adopted by the Board of the Trustees and in compliance with
applicable law.
Brokerage Practices Followed by the Manager and
Sub-Advisor. Brokerage for the Fund is allocated subject to
the provisions of the investment advisory agreement and the
Sub-Advisory Agreement and the procedures and rules
described above. Generally, the Sub-Advisor's portfolio
traders allocate brokerage based upon recommendations from
the Fund's portfolio management team. In certain instances,
the team may directly place trades and allocate brokerage.
In either case, the Sub-Advisor's executive officers
supervise the allocation of brokerage.
Transactions in securities other than those for which
an exchange is the primary market are generally done with
principals or market makers. In transactions on foreign
exchanges, the Fund may be required to pay fixed brokerage
commissions and therefore would not have the benefit of
negotiated commissions available in U.S. markets. Brokerage
commissions are paid primarily for transactions in listed
securities or for certain fixed-income agency transactions
in the secondary market. Otherwise brokerage commissions
are paid only if it appears likely that a better price or
execution can be obtained by doing so.
The Sub-Advisor serves as investment manager to a
number of clients, including other investment companies,
and may in the future act as investment manager or advisor
to others. It is the practice of the Sub-Advisor to
allocate purchase or sale transactions among the Fund and
other clients whose assets it manages in a manner it deems
equitable. In making those allocations, the Sub-Advisor
considers several main factors, including the respective
investment objectives, the relative size of portfolio
holdings of the same or comparable securities, the
availability of cash for investment, the size of investment
commitments generally held and the opinions of the persons
responsible for managing the portfolio of the Fund and
other client's accounts.
When orders to purchase or sell the same security on
identical terms are placed by more than one of the funds
and/or other advisory accounts managed by the Sub-Advisor
or its affiliates, the transactions are generally executed
as received, although a fund or advisory
account that does not direct trades to a specific broker
(these are called "free trades") usually will have its
order executed first. Orders placed by accounts that direct
trades to a specific broker will generally be executed
after the free trades. All orders placed on behalf of the
Fund are considered free trades. However, having an order
placed first in the market does not necessarily guarantee
the most favorable price. Purchases are combined where
possible for the purpose of negotiating brokerage
commissions. In some cases that practice might have a
detrimental effect on the price or volume of the security
in a particular transaction for the Fund.
Purchases of portfolio securities from underwriters
include a commission or concession paid by the issuer to
the underwriter. Purchases from dealers include a spread
between the bid and asked prices. The Fund seeks to obtain
prompt execution of these orders at the most favorable net
price.
The investment advisory agreement and the Sub-Advisory
Agreement permit the Manager and the Sub-Advisor to
allocate brokerage for research services. The research
services provided by a particular broker may be useful only
to one or more of the advisory accounts of the Sub-Advisor
and its affiliates. The investment research received for
the commissions of those other accounts may be useful both
to the Fund and one or more of the Sub-Advisor's other
accounts. Investment research may be supplied to the
Sub-Advisor by a third party at the instance of a broker
through which trades are placed.
Investment research services include information and
analysis on particular companies and industries as well as
market or economic trends and portfolio strategy, market
quotations for portfolio evaluations, information systems,
computer hardware and similar products and services. If a
research service also assists the Sub-Advisor in a
non-research capacity (such as bookkeeping or other
administrative functions), then only the percentage or
component that provides assistance to the Sub-Advisor in
the investment decision-making process may be paid in
commission dollars.
The research services provided by brokers broadens the
scope and supplements the research activities of the
Sub-Advisor. That research provides additional views and
comparisons for consideration, and helps the Sub-Advisor to
obtain market information for the valuation of securities
that are either held in the Fund's portfolio or are being
considered for purchase. The Sub-Advisor provides
information to the Manager and the Board about the
commissions paid to brokers furnishing such services,
together with the Sub-Advisor's representation that the
amount of such commissions was reasonably related to the
value or benefit of such services.
- --------------------------------------------------------------------
Fiscal Year Ended 7/31: Total Brokerage Commissions Paid by the
Fund1
- --------------------------------------------------------------------
- --------------------------------------------------------------------
2000 $58,490
- --------------------------------------------------------------------
- --------------------------------------------------------------------
2001 $43,245
- --------------------------------------------------------------------
- --------------------------------------------------------------------
2002 $52,384
- --------------------------------------------------------------------
1. Amounts do not include spreads or concessions on
principal transactions on a net trade basis.
2. In the fiscal period ended 7/31/02, the amount of
transactions directed to brokers for
research services was $3,294,812 and the
amount of the concessions paid to
broker-dealers for those services was
$3,384.
Distribution and Service Plans
The Distributor. Under its General Distributor's Agreement
with the Fund, the Distributor acts as the Fund's principal
underwriter in the continuous public offering of the Fund's
classes of shares. The Distributor bears the expenses
normally attributable to sales, including advertising and
the cost of printing and mailing prospectuses, other than
those furnished to existing shareholders. The Distributor
is not obligated to sell a specific number of shares.
The sales charges and concessions paid to, or
retained by, the Distributor from the sale of shares during
the Fund's three most recent fiscal years, and the
contingent deferred sales charges retained by the
Distributor on the redemption of shares for the most recent
fiscal year are shown in the tables below.
- -------------------------------------------
Fiscal Aggregate Class A
Front-End
Year Front-End Sales Sales Charges
Ended Charges on Retained by
7/31: Class A Shares Distributor1
- -------------------------------------------
- -------------------------------------------
2000 $97,002 $40,167
- -------------------------------------------
- -------------------------------------------
2001 $82,302 $30,621
- -------------------------------------------
- -------------------------------------------
2002 $141,710 $52,787
- -------------------------------------------
1. Includes amounts retained by a broker-dealer that is
an affiliate or a parent of the Distributor.
- -----------------------------------------------------------------------------
Fiscal Concessions on Concessions on Concessions on Concessions on
Year Class A Shares Class B Shares Class C Shares Class N Shares
Ended Advanced by Advanced by Advanced by Advanced by
7/31: Distributor1 Distributor1 Distributor1 Distributor1
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
2000 $5,583 $141,328 $8,962 N/A
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
2001 $5,084 $111,580 $11,260 None2
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
2002 $5,810 $136,636 $26,045 $2,465
- -----------------------------------------------------------------------------
1. The Distributor advances concession payments to
dealers for certain sales of Class A shares and for
sales of Class B, Class C and Class N shares from its
own resources at the time of sale.
2. The inception date of Class N shares was 3/1/01.
- -----------------------------------------------------------------------------
Fiscal Class A Class B Class C Class N
Contingent Contingent Contingent Contingent
Year Deferred Sales Deferred Sales Deferred Sales Deferred Sales
Ended Charges Charges Charges Charges
7/31 Retained by Retained by Retained by Retained by
Distributor Distributor Distributor Distributor
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
2002 $28 $39,010 $1,849 $11
- -----------------------------------------------------------------------------
Distribution and Service Plans. The Fund has adopted a
Service Plan for Class A shares and Distribution and
Service Plans for Class B, Class C and Class N shares under
Rule 12b-1 of the Investment Company Act. Under those
plans the Fund pays the Distributor for all or a portion of
its costs incurred in connection with the distribution
and/or servicing of the shares of the particular class.
Each plan has been approved by a vote of the Board of
Trustees, including a
majority of the Independent Trustees3, cast in person at a
meeting called for the purpose of voting on that plan.
Under the plans, the Manager and the Distributor may
make payments to affiliates, in their sole discretion, from
time to time, may use their own resources (at no direct
cost to the fund) to make payments to brokers, dealers or
other financial institutions for distribution and
administrative services they perform. The Manager may use
its profits from the advisory fee it receives from the
Fund. In their sole discretion, the Distributor and the
Manager may increase or decrease the amount of payments
they make from their own resources to plan recipients.
Unless a plan is terminated as described below, the
plan continues in effect from year to year but only if the
Fund's Board of Trustees and its Independent Trustees
specifically vote annually to approve its continuance.
Approval must be by a vote cast in person at a meeting
called for the purpose of voting on continuing the plan. A
plan may be terminated at any time by the vote of a
majority of the Independent Trustees or by the vote of the
holders of a "majority" (as defined in the Investment
Company Act) of the outstanding shares of that class.
The Board of Trustees and the Independent Trustees
must approve all material amendments to a plan. An
amendment to increase materially the amount of payments to
be made under a plan must be approved by shareholders of
the class affected by the amendment. Because Class B shares
of the Fund automatically convert into Class A shares after
six (6) years, the Fund must obtain the approval of both
Class A and Class B shareholders for a proposed material
amendment to the Class A Plan that would materially
increase payments under the Plan. That approval must be by
a "majority" (as defined in the Investment Company Act) of
the shares of each class, voting separately by class.
While the Plans are in effect, the Treasurer of the
Fund shall provide separate written reports on the plans to
the Board of Trustees at least quarterly for its review.
The Reports shall detail the amount of all payments made
under a plan and the purpose for which the payments were
made. Those reports are subject to the review and approval
of the Independent Trustees.
Each Plan states that while it is in effect, the
selection and nomination of those Trustees of the Fund who
are not "interested persons" of the Fund is committed to
the discretion of the Independent Trustees. This does not
prevent the involvement of others in the selection and
nomination process as long as the final decision as to
selection or nomination is approved by a majority of the
Independent Trustees.
Under the plans for a class, no payment will be made
to any recipient in any quarter in which the aggregate net
asset value of all Fund shares of that class held by the
recipient for itself and its customers does not exceed a
minimum amount, if any, that may be set from time to time
by a majority of the Independent Trustees. The Board of
Trustees has set no minimum amount of assets to qualify for
payments under the plans.
|X| Class A Service Plan Fees. . Under the Class A
service plan, the Distributor currently uses the fees it
receives from the Fund to pay brokers, dealers and other
financial institutions (they are referred to as
"recipients") for personal services and account maintenance
services they provide for their customers who hold Class A
shares. The services include, among others, answering
customer inquiries about the Fund, assisting in
establishing and maintaining accounts in the Fund, making
the Fund's investment plans available and providing other
services at the request of the Fund or the Distributor. The
Class A service plan permits reimbursements to the
Distributor at a rate of up to 0.25% of average annual net
assets of Class A shares. The Board has set the rate at
that level. While the plan permits the Board to authorize
payments to the Distributor to reimburse itself for
services under the plan, the Board has not yet done so,
except
in the case of the special arrangement described below. The
Distributor makes payments to plan recipients quarterly at
an annual rate not to exceed 0.25% of the average annual
net assets consisting of Class A shares held in the
accounts of the recipients or their customers.
With respect to purchases of Class A shares subject
to a contingent deferred sales charge by certain retirement
plans that purchased such shares prior to March 1, 2001
("grandfathered retirement accounts"), the Distributor
currently intends to pay the service fee to Recipients in
advance for the first year after the shares are purchased.
During the first year the shares are sold, the Distributor
retains the service fee to reimburse itself for the costs
of distributing the shares sold under this arrangement.
After the first year shares are outstanding, the
Distributor makes service fee payments to Recipients
quarterly on those shares. The advance payment is based on
the net asset value of shares sold. Shares purchased by
exchange do not qualify for the advance service fee
payment. If Class A shares purchased by grandfathered
retirement accounts are redeemed during the first year
after their purchase, the Recipient of the service fees on
those shares will be obligated to repay the Distributor a
pro rata portion of the advance payment of the service fee
made on those shares.
For the fiscal year ended July 31, 2002, payments
made under the Class A Plan totaled $36,152 all of which
was paid by the Distributor to recipients that included
$4,170 paid to an affiliate of the Distributor's parent
company. Any unreimbursed expenses the Distributor incurs
with respect to Class A shares in any fiscal year cannot be
recovered in subsequent years. The Distributor may not use
payments received under the Class A Plan to pay any of its
interest expenses, carrying charges, or other financial
costs, or allocation of overhead.
|X| Class B, Class C and Class N Service and Distribution
Plan Fees. Under each plan, service fees and distribution
fees are computed on the average of the net asset value of
shares in the respective class, determined as of the close
of each regular business day during the period. The Class
B, Class C and Class N plans provide for the Distributor to
be compensated at a flat rate, whether the Distributor's
distribution expenses are more or less than the amounts
paid by the Fund under the plan during the period for which
the fee is paid. The types of services that recipients
provide are similar to the services provided under the
Class A service plan, described above.
Each Plan permits the Distributor to retain both the
asset-based sales charges and the service fees or to pay
recipients the service fee on a quarterly basis, without
payment in advance. However, the Distributor currently
intends to pay the service fee to recipients in advance for
the first year after Class B, Class C and Class N shares
are purchased. After the first year Class B, Class C or
Class N shares are outstanding, after their purchase, the
Distributor makes service fee payments quarterly on those
shares. The advance payment is based on the net asset
value of shares sold. Shares purchased by exchange do not
qualify for the advance service fee payment. If Class B,
Class C or Class N shares are redeemed during the first
year after their purchase, the recipient of the service
fees on those shares will be obligated to repay the
Distributor a pro rata portion of the advance payment of
the service fee made on those shares. In cases where the
Distributor is the broker of record for Class B, Class C
and Class N shares, i.e. shareholders without the services
of a broker directly invest in the Fund, the Distributor
will retain the asset-based sales charge and service fee
for Class B, Class C and Class N shares.
The asset-based sales charge and service fees
increase Class B and Class C expenses by 1.00% and the
asset-based sales charge and service fees increases Class N
expenses by 0.50% of the net assets per year of the
respective class.
The Distributor retains the asset-based sales charge
on Class B and Class N shares. The Distributor retains the
asset-based sales charge on Class C shares during the first
year the shares are outstanding. It pays the asset-based
sales charge as an ongoing concession to the recipient on
Class C shares outstanding for a year or more. If a dealer
has a special agreement with the Distributor, the
Distributor will pay the Class B, Class C or Class N
service fee and the asset-based sales charge to the dealer
quarterly in lieu of paying the sales concessions and
service fee in advance at the time of purchase.
The asset-based sales charges on Class B, Class C and
Class N shares allow investors to buy shares without a
front-end sales charge while allowing the Distributor to
compensate dealers that sell those shares. The Fund pays
the asset-based sales charges to the Distributor for its
services rendered in distributing Class B, Class C and
Class N shares. The payments are made to the Distributor in
recognition that the Distributor:
o pays sales concessions to authorized brokers and
dealers at the time of sale and pays service fees
as described above,
o may finance payment of sales concessions and/or the
advance of the service fee payment to recipients
under the plans, or may provide such financing
from its own resources or from the resources of an
affiliate,
o employs personnel to support distribution of Class B,
Class C and Class N shares, and
o bears the costs of sales literature, advertising and
prospectuses (other than those furnished to
current shareholders) and state "blue sky"
registration fees and certain other distribution
expenses.
o may not be able to adequately compensate dealers that
sell Class B, Class C and Class N shares without
receiving payment under the plans and therefore
may not be able to offer such Classes for sale
absent the plans,
o receives payments under the plans consistent with the
service fees and asset-based sales charges paid by
other non-proprietary funds that charge 12b-1 fees,
o may use the payments under the plan to include the
Fund in various third-party distribution programs
that may increase sales of Fund shares,
o may experience increased difficulty selling the
Fund's shares if payments under the plan are
discontinued because most competitor funds have
plans that pay dealers for rendering distribution
services as much or more than the amounts
currently being paid by the Fund, and
o may not be able to continue providing, at the same or
at a lesser cost, the same quality distribution
sales efforts and services, or to obtain such
services from brokers and dealers, if the plan
payments were to be discontinued.
The Distributor's actual expenses in selling Class B,
Class C and Class N shares may be more than the payments it
receives from the contingent deferred sales charges
collected on redeemed shares and from the Fund under the
plans. If either the Class B, Class C or Class N
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.
- ---------------------------------------------------------------------------------
Distribution Fees Paid to the Distributor for the Year Ended 7/31/02
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Class: Total Amount Distributor's Distributor's
Unreimbursed
Aggregate Expenses as %
Payments Retained by Unreimbursed of Net Assets
Under Plan Distributor Expenses Under Plan of Class
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Class B Plan $114,591 $94,0511 $225,919 2.24%
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Class C Plan $38,088 $18,2322 $28,625 1.45%
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Class N Plan $432 $426 $3,927 1.95%
- ---------------------------------------------------------------------------------
1. Includes $1,677 paid to an affiliate of the
Distributor's parent company.
2. Includes $1,111 paid to an affiliate of the
Distributor's parent company.
All payments under the Class B, Class C and Class N
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.
Performance of the Fund
Explanation of Performance Terminology. The Fund uses a
variety of terms to illustrate its investment performance.
Those terms include "cumulative total return," "average
annual total return," "average annual total return at net
asset value" and "total return at net asset value." An
explanation of how total returns are calculated is set
forth below. You can obtain current performance information
by calling the Fund's Transfer Agent at 1.800.225.5567 or
by visiting the OppenheimerFunds Internet website at
www.oppenheimerfunds.com.
The Fund's illustrations of its performance data in
advertisements must comply with rules of the Securities and
Exchange Commission. Those rules describe the types of
performance data that may be used and how it is to be
calculated. In general, any advertisement by the Fund of
its performance data must include the average annual total
returns for the advertised class of shares of the Fund.
Those returns must be shown 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 (or its submission for
publication).
Use of standardized performance calculations enables
an investor to compare the Fund's performance to the
performance of other funds for the same periods. However, a
number of factors should be considered before using the
Fund's performance information as a basis for comparison
with other investments:
o Total returns measure the performance of a
hypothetical account in the Fund over various periods and
do not show the performance of each shareholder's account.
Your account's performance will vary from the model
performance data if your dividends are received in cash, or
you buy or sell shares during the period, or you bought
your shares at a different time and price than the shares
used in the model.
o An investment in the Fund is not insured by the FDIC
or any other government agency.
o
The Fund's performance returns do not reflect the
effect of taxes on dividends and capital gains
distributions.
o The principal value of the Fund's shares and total
returns are not guaranteed and normally will fluctuate on a
daily basis.
o When an investor's shares are redeemed, they may be
worth more or less than their original cost.
o Total returns for any given past period represent
historical performance information and are not, and should
not be considered, a prediction of future returns.
The performance of each class of shares is shown
separately, because the performance of each class of shares
will usually be different. That is because of the different
kinds of expenses each class bears. The total returns of
each class of shares of the Fund are affected by market
conditions, the quality of the Fund's investments, the
maturity of debt investments, the types of investments the
Fund holds, and its operating expenses that are allocated
to the particular class.
|X| Total Return Information. There are different types
of "total returns" to measure the Fund's performance. Total
return is the change in value of a hypothetical investment
in the Fund over a given period, assuming that all
dividends and capital gains distributions are reinvested in
additional shares and that the investment is redeemed at
the end of the period. Because of differences in expenses
for each class of shares, the total returns for each class
are separately measured. The cumulative total return
measures the change in value over the entire period (for
example, 10 years). An average annual total return shows
the average rate of return for each year in a period that
would produce the cumulative total return over the entire
period. However, average annual total returns do not show
actual year-by-year performance. The Fund uses standardized
calculations for its total returns as prescribed by the
SEC. The methodology is discussed below.
In calculating total returns for Class A shares, the
current maximum sales charge of 5.75% (as a percentage of
the offering price) is deducted from the initial investment
("P") (unless the return is shown without sales charge, as
described below). For Class B shares, payment of the
applicable contingent deferred sales charge is applied,
depending on the period for which the return is shown: 5.0%
in the first year, 4.0% in the second year, 3.0% in the
third and fourth years, 2.0% in the fifth year, 1.0% in the
sixth year and none thereafter. For Class C shares, the
1.0% contingent deferred sales charge is deducted for
returns for the one-year period. For Class N shares, the 1%
contingent deferred sales charge is deducted for returns
for the one year period. Class N total returns may also be
calculated for the periods prior to 3/1/01 (the inception
date for Class N shares), based on the Fund's Class A
returns, adjusted to reflect the higher Class N 12b-1 fees.
There is no sales charge on Class Y shares.
o Average Annual Total Return. The "average annual
total return" of each class is an average annual compounded
rate of return for each year in a specified number of
years. It is the rate of return based on the change in
value of a hypothetical initial investment of $1,000 ("P"
in the formula below) held for a number of years ("n" in
the formula) to achieve an Ending Redeemable Value ("ERV"
in the formula) of that investment, according to the
following formula:
ERV l/n - 1 Average Annual Total
Return
P
o
Average Annual Total Return (After Taxes on
Distributions). The "average annual total return (after
taxes on distributions)" of Class A shares is an average
annual compounded rate of return for each year in a
specified number of years, adjusted to show the effect of
federal taxes (calculated using the highest individual
marginal federal income tax rates in effect on any
reinvestment date) on any distributions made by the Fund
during the specified period. 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" in the formula) to achieve an ending value
("ATVD" in the formula) of that investment, after taking
into account the effect of taxes on Fund distributions, but
not on the redemption of Fund shares, according to the
following formula:
- 1 = Average Annual Total Return (After Taxes on
ATVD l/n Distributions)
- ---
P
o Average Annual Total Return (After Taxes on
Distributions and Redemptions). The "average annual total
return (after taxes on distributions and redemptions)" of
Class A shares is an average annual compounded rate of
return for each year in a specified number of years,
adjusted to show the effect of federal taxes (calculated
using the highest individual marginal federal income tax
rates in effect on any reinvestment date) on any
distributions made by the Fund during the specified period
and the effect of capital gains taxes or capital loss tax
benefits (each calculated using the highest federal
individual capital gains tax rate in effect on the
redemption date) resulting from the redemption of the
shares at the end of the period. 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" in the formula) to achieve an ending
value ("ATVDR" in the formula) of that investment, after
taking into account the effect of taxes on fund
distributions and on the redemption of Fund shares,
according to the following formula:
ATVDR - 1 = Average Annual Total Return (After Taxes on Distributions
- ---
l/n and Redemptions)
P
o Cumulative Total Return. The "cumulative total
return" calculation measures the change in value of a
hypothetical investment of $1,000 over an entire period of
years. Its calculation uses some of the same factors as
average annual total return, but it does not average the
rate of return on an annual basis. Cumulative total return
is determined as follows:
ERV - P = Total Return
- -----------
P
o Total Returns at Net Asset Value. From time to time
the Fund may also quote a cumulative or an average annual
total return "at net asset value" (without deducting sales
charges) for Class A, Class B, Class C or Class N shares.
There is no sales charge on Class Y 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 Fund's Total Returns for the Periods Ended 07/31/02
- ---------------------------------------------------------------
- ---------------------------------------------------------------
Class of Cumulative Average Annual Total Returns
Total Returns
(10 Years or
Shares Life of Class)
- ---------------------------------------------------------------
- ---------------------------------------------------------------
1-Year 5-Year
(or life of
class)
- ---------------------------------------------------------------
- ---------------------------------------------------------------
After Without After Without After Without
Sales Sales Sales Sales Sales Sales
Charge Charge Charge Charge Charge Charge
- ---------------------------------------------------------------
- ---------------------------------------------------------------
Class A -33.38%1 -29.31%1 -28.76% -24.41% -10.61%1 -9.13%1
- ---------------------------------------------------------------
- ---------------------------------------------------------------
Class B -36.14%1 -34.35%1 -28.69% -24.94% -12.30%1 -11.59%1
- ---------------------------------------------------------------
- ---------------------------------------------------------------
Class C -34.35%1 -34.35%1 -25.78% -25.03% -11.59%1 -11.59%1
- ---------------------------------------------------------------
- ---------------------------------------------------------------
Class N -29.72%2 -29.01%2 -25.34% -24.59% -22.04%2 -21.49%2
- ---------------------------------------------------------------
- ---------------------------------------------------------------
Class Y N/A -28.05%1 N/A -23.99% N/A -8.69%1
- ---------------------------------------------------------------
1. Inception date of Class A and Class Y: 12/17/98
2. Inception date of Class B and Class C: 3/1/99
3. Inception date of Class N: 3/01/01
----------------------------------------------------------------------
Average Annual Total Returns for Class A Shares1 (After Sales
Charge) For the Periods Ended 07/31/02
----------------------------------------------------------------------
----------------------------------------------------------------------
1-Year 5-Year
(or life of class)
----------------------------------------------------------------------
----------------------------------------------------------------------
After Taxes on Distributions -28.76% -11.49%1
----------------------------------------------------------------------
----------------------------------------------------------------------
After Taxes on Distributions -17.51% -8.45%1
and Redemption of Fund Shares
----------------------------------------------------------------------
1. Inception date of Class A: 09/01/99
Other Performance Comparisons. The Fund compares its
performance annually to that of an appropriate
broadly-based market index in its Annual Report to
shareholders. You can obtain that information by contacting
the Transfer Agent at the addresses or telephone numbers
shown on the cover of this Statement of Additional
Information. The Fund may also compare its performance to
that of other investments, including other mutual funds, or
use rankings of its performance by independent ranking
entities. Examples of these performance comparisons are set
forth below.
|X| Lipper Rankings. From time to time the Fund may
publish the ranking of the performance of its classes of
shares by Lipper, Inc. Lipper is a widely-recognized
independent mutual fund monitoring service. Lipper monitors
the performance of regulated investment companies,
including the Fund, and ranks their performance for various
periods in categories based on investment styles. Lipper
currently ranks the Fund's performance against all other
growth 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. Lipper also publishes
"peer-group" indices of the performance of all mutual funds
in a category that it monitors and averages of the
performance of the funds in particular categories.
|X| Morningstar Ratings. From time to time the Fund may
publish the star rating of the performance of its classes
of shares by Morningstar, Inc., an independent mutual fund
monitoring service. Morningstar rates mutual funds in
their specialized market sector. The Fund is rated among
the domestic stock funds category.
Morningstar proprietary star ratings reflect
historical risk-adjusted total investment return. For each
fund with at least a three-year history, Morningstar
calculates a Morningstar Rating(TM)based on a Morningstar
Risk-Adjusted Return measure that accounts for variation in
a fund's monthly performance (including the effects of
sales charges, loads, and redemption fees), placing more
emphasis on downward variations and rewarding consistent
performance. The top 10% of funds in each category
receive 5 stars, the next 22.5% receive 4 stars, the next
35% receive 3 stars, the next 22.5% receive 2 stars, and
the bottom 10% receive 1 star. (Each share class is
counted as a fraction of one fund within this scale and
rated separately, which may cause slight variations in the
distribution percentages.) The Overall Morningstar Rating
for a fund is derived from a weighted average of the
performance figures associated with its three-, five-and
ten-year (if applicable) Morningstar Rating metrics.
|X| Performance Rankings and Comparisons by Other
Entities and Publications. From time to time the Fund may
include in its advertisements and sales literature
performance information about the Fund cited in newspapers
and other periodicals such as The New York Times, The Wall
Street Journal, Barron's, or similar publications. That
information may include performance quotations from other
sources, including Lipper and Morningstar. The performance
of the Fund's classes of shares may be compared in
publications to the performance of various market indices
or other investments, and averages, performance rankings or
other benchmarks prepared by recognized mutual fund
statistical services.
Investors may also wish to compare the returns on the
Fund's share classes to the return on fixed-income
investments available from banks and thrift institutions.
Those include 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 prices are not guaranteed or insured by
the FDIC or any other agency and will fluctuate daily,
while bank depository obligations may be insured by the
FDIC and may provide fixed rates of return. Repayment of
principal and payment of interest on Treasury securities is
backed by the full faith and credit of the U.S. government.
From time to time, the Fund may publish rankings or
ratings of the Manager or Transfer Agent, and of 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 and investor services by third parties may
include comparisons of their services to those provided by
other mutual fund families selected by the rating or
ranking services. They may be based upon the opinions of
the rating or ranking service itself, using its research or
judgment, or based upon surveys of investors, brokers,
shareholders or others.
From time to time the Fund may include in its
advertisements and sales literature the total return
performance of a hypothetical investment account that
includes shares of the Fund and other Oppenheimer funds.
The combined account may be part of an illustration of an
asset allocation model or similar presentation. The account
performance may combine total return performance of the
Fund and the total return performance of other Oppenheimer
funds included in the account. Additionally, from time to
time, the Fund's advertisements and sales literature may
include, for illustrative or comparative purposes,
statistical data or other information about general or
specific market and economic conditions. That may include,
for example,
o
information about the performance of certain
securities or commodities markets or segments of
those markets,
o information about the performance of the economies of
particular countries or regions,
o the earnings of companies included in segments of
particular industries, sectors, securities
markets, countries or regions,
o the availability of different types of securities or
offerings of securities,
o information relating to the gross national or gross
domestic product of the United States or other
countries or regions,
o comparisons of various market sectors or indices to
demonstrate performance, risk, or other
characteristics of the Fund.
ABOUT your account
How to Buy Shares
Additional information is presented below about the methods
that can be used to buy shares of the Fund. Appendix B
contains more information about the special sales charge
arrangements offered by the Fund, and the circumstances in
which sales charges may be reduced or waived for certain
classes of investors.
AccountLink. When shares are purchased through
AccountLink, each purchase must be at least $50 and
---
shareholders must invest at least $500 before an Asset
Builder Plan can be established on a new account. Accounts
established prior to November 1, 2002 will remain at $25
for additional purchases. Shares will be purchased on the
regular business day the Distributor is instructed to
initiate the Automated Clearing House ("ACH") transfer to
buy the shares. Dividends will begin to accrue on shares
purchased with 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
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 three days
after the transfers are initiated. If the proceeds of the
ACH transfer are not received on a timely basis, the
Distributor reserves the right to cancel the purchase
order. The Distributor and the Fund are not responsible for
any delays in purchasing shares resulting from delays in
ACH transmissions.
Reduced Sales Charges. As discussed in the Prospectus, a
reduced sales charge rate may be obtained for Class A
shares under Right of Accumulation and Letters of Intent
because of the economies of sales efforts and reduction in
expenses realized by the Distributor, dealers and brokers
making such sales. No sales charge is imposed in certain
other circumstances described in Appendix B to this
Statement of Additional Information because the Distributor
or dealer or broker incurs little or no selling expenses.
|X| 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:
o Class A and Class B shares you purchase for your
individual accounts (including IRAs and 403(b)
plans), or for your joint accounts, or for
trust or custodial accounts on behalf of your
children who are minors, and
o 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, and
o 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.
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. The Distributor will add the value, at
current offering price, of the shares you previously
purchased and currently own to the value of current
purchases to determine the sales charge rate that applies.
The reduced sales charge will apply only to current
purchases. You must request it when you buy shares.
The Oppenheimer Funds. The Oppenheimer funds are those
mutual funds for which the Distributor acts as the
distributor and currently include the following:
Oppenheimer AMT-Free New York Municipals Oppenheimer MidCap Fund
Oppenheimer Bond Fund Oppenheimer Multiple Strategies Fund
Oppenheimer California Municipal Fund Oppenheimer Municipal Bond Fund
Oppenheimer Capital Appreciation Fund Oppenheimer New Jersey Municipal Fund
Oppenheimer Capital Preservation Fund Oppenheimer Pennsylvania Municipal Fund
Oppenheimer Capital Income Fund Oppenheimer Quest Balanced Value Fund
Oppenheimer Quest Capital Value Fund,
Oppenheimer Champion Income Fund Inc.
Oppenheimer Quest Global Value Fund,
Oppenheimer Convertible Securities Fund Inc.
Oppenheimer Developing Markets Fund Oppenheimer Quest Opportunity Value Fund
Oppenheimer Disciplined Allocation Fund Oppenheimer Quest Value Fund, Inc.
Oppenheimer Discovery Fund Oppenheimer Real Asset Fund
Oppenheimer Rochester National
Oppenheimer Emerging Growth Fund Municipals
Oppenheimer Emerging Technologies Fund Oppenheimer Senior Floating Rate Fund
Oppenheimer Enterprise Fund Oppenheimer Small Cap Value Fund
Oppenheimer Europe Fund Oppenheimer Strategic Income Fund
Oppenheimer Global Fund Oppenheimer Total Return Fund, Inc.
Oppenheimer Global Growth & Income Fund Oppenheimer Trinity Core Fund
Oppenheimer Trinity Large Cap Growth
Oppenheimer Gold & Special Minerals Fund Fund
Oppenheimer Growth Fund Oppenheimer Trinity Value Fund
Oppenheimer High Yield Fund Oppenheimer U.S. Government Trust
Oppenheimer International Bond Fund Oppenheimer Value Fund
Oppenheimer International Growth Fund Limited-Term New York Municipal Fund
Oppenheimer International Small Company
Fund Rochester Fund Municipals
Oppenheimer Limited-Term Government Fund OSM1- Gartmore Millennium Growth Fund II
Oppenheimer Limited Term Municipal Fund OSM1 - Jennison Growth Fund
Oppenheimer Main Street Growth & Income OSM1 - Mercury Advisors S&P 500 Index
Fund Fund
OSM1 - Mercury Advisors Focus Growth
Oppenheimer Main Street Opportunity Fund Fund
Oppenheimer Main Street Small Cap Fund OSM1 - QM Active Balanced Fund
OSM1 - Salomon Brothers All Cap Fund
And the following money market funds:
Centennial America Fund, L. P. Centennial New York Tax Exempt Trust
Centennial California Tax Exempt Trust Centennial Tax Exempt Trust
Centennial Government Trust Oppenheimer Cash Reserves
Centennial Money Market Trust Oppenheimer Money Market Fund, Inc.
1 - "OSM" stands for Oppenheimer Select Managers
There is an initial sales charge on the purchase of
Class A shares of each of the Oppenheimer funds described
above except the money market funds and Oppenheimer Senior
Floating Rate Fund. Under certain circumstances described
in this Statement of Additional Information, redemption
proceeds of certain money market fund shares may be subject
to a contingent deferred sales charge.
Letters of Intent. Under a Letter of Intent, if you
purchase Class A shares or Class A and Class B shares of
the Fund and other Oppenheimer funds during a 13-month
period, you can reduce the sales charge rate that applies
to your purchases of Class A shares. The total amount of
your intended purchases of both Class A and Class B shares
will determine the reduced sales charge rate for the Class
A shares purchased during that period. You can include
purchases made up to 90 days before the date of the
Letter. Letters of Intent do not consider Class C or Class
N shares you purchase or may have purchased.
A Letter of Intent is an investor's statement in
writing to the Distributor of the intention to purchase
Class A shares or Class A and Class B shares of the Fund
(and other Oppenheimer funds) during a 13-month period (the
"Letter of Intent period"). At the investor's request, this
may 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 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. However, 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. That amount is
described in "Terms of Escrow," below (those terms may be
amended by the Distributor 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 a Letter of Intent. If those terms are
amended, as they may be from time to time by the Fund, the
investor agrees to be bound by the amended terms and 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 concessions previously paid to the
dealer of record for the account and the amount of sales
charge retained by the Distributor will be adjusted to the
rates applicable to actual total purchases. If total
eligible purchases during the Letter of Intent period
exceed the intended purchase amount and exceed the amount
needed to qualify for the next sales charge rate reduction
set forth in the Prospectus, the sales charges paid will be
adjusted to the lower rate. That adjustment will be made
only if and when the dealer returns to
the Distributor the excess of the amount of concessions
allowed or paid to the dealer over the amount of
concessions that apply to the actual amount of purchases.
The excess concessions 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.
The Transfer Agent will not hold shares in escrow for
purchases of shares of the Fund and other Oppenheimer funds
by OppenheimerFunds prototype 401(k) plans under a Letter
of Intent. If the intended purchase amount under a Letter
of Intent entered into by an OppenheimerFunds prototype
401(k) plan is not purchased by the plan by the end of the
Letter of Intent period, there will be no adjustment of
concessions paid to the broker-dealer or financial
institution of record for accounts held in the name of that
plan.
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.
|X| 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 offering
price adjusted for a $50,000 purchase). Any dividends and
capital gains distributions on the escrowed shares will be
credited to the investor's account.
2. If the total minimum investment specified under
the Letter is completed within the 13-month Letter of
Intent period, the escrowed shares will be promptly
released to the investor.
3. If, at the end of the 13-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. That sales charge adjustment will
apply to any shares redeemed prior to the completion of the
Letter. If the difference in sales charges is not paid
within twenty days after a request from the Distributor or
the dealer, the Distributor will, within sixty days of the
expiration of the Letter, redeem the number of escrowed
shares necessary to realize such difference in sales
charges. Full and fractional shares remaining after such
redemption will be released from escrow. If a request is
received to redeem escrowed shares prior to the payment of
such additional sales charge, the sales charge will be
withheld from the redemption proceeds.
4. By signing the Letter, the investor irrevocably
constitutes and appoints the Transfer Agent as
attorney-in-fact to surrender for redemption any or all
escrowed shares.
5. The shares eligible for purchase under the Letter (or
the holding of which may be counted toward completion of a
Letter) include:
(a)
Class A shares sold with a front-end sales charge
or subject to a Class A contingent deferred
sales charge,
(b) Class B shares of other Oppenheimer funds acquired
subject to a contingent deferred sales charge,
and
(c) Class A or Class B shares acquired by exchange of
either (1) 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 (2) 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. As explained in the Prospectus, you
must initially establish your account with $500.
Subsequently, you can establish an Asset Builder Plan to
automatically purchase additional shares directly from a
bank account for as little as $50. For those accounts
established prior to November 1, 2002 and which have
previously established Asset Builder Plans, additional
purchases will remain at $25. Shares purchased by Asset
Builder Plan payments from bank accounts are subject to the
redemption restrictions for recent purchases described in
the Prospectus. Asset Builder Plans are available only if
your bank is an ACH member. Asset Builder Plans may not be
used to buy shares for OppenheimerFunds employer-sponsored
qualified retirement accounts. Asset Builder Plans also
enable shareholders of Oppenheimer Cash Reserves to use
their fund account to make monthly automatic purchases of
shares of up to four other Oppenheimer funds.
If you make payments from your bank account to
purchase shares of the Fund, your bank account will be
debited automatically. Normally the debit will be made two
business days prior to the investment dates you selected on
your application. Neither the Distributor, the Transfer
Agent nor the Fund shall be responsible for any delays in
purchasing shares that result from delays in ACH
transmissions.
Before you establish Asset Builder payments, you
should obtain a prospectus of the selected fund(s) from
your financial advisor (or the Distributor) and request an
application from the Distributor. Complete the application
and return it. You may change the amount of your Asset
Builder payment or you can terminate these automatic
investments at any time by writing to the Transfer Agent.
The Transfer Agent requires a reasonable period
(approximately 10 days) after receipt of your instructions
to implement them. The Fund reserves the right to amend,
suspend or discontinue offering Asset Builder plans at any
time without prior notice.
Retirement Plans. Certain types of retirement plans are
entitled to purchase shares of the Fund without sales
charge or at reduced sales charge rates, as described in
Appendix B to this Statement of Additional Information.
Certain special sales charge arrangements described in that
Appendix apply to retirement plans whose records are
maintained on a daily valuation basis by Merrill Lynch
Pierce Fenner & Smith, Inc. ("Merrill Lynch") or an
independent record keeper that has a contract or special
arrangement with Merrill Lynch. If on the date the plan
sponsor signed the Merrill Lynch record keeping service
agreement the plan has less than $3 million in assets
(other than assets invested in money market funds) invested
in applicable investments, then the retirement plan may
purchase only Class B shares of the Oppenheimer funds. Any
retirement plans in that category that currently invest in
Class B shares of the Fund will have
their Class B shares converted to Class A shares of the
Fund when the plan's applicable
investments reach $5 million. OppenheimerFunds has entered
into arrangements with certain record keepers whereby the
Transfer Agent compensates the record keeper for its record
keeping and account servicing functions that it performs on
behalf of the participant level accounts of a retirement
plan. While such compensation may act to reduce the record
keeping fees charged by the retirement plan's record
keeper, that compensation arrangement may be terminated at
any time, potentially affecting the record keeping fees
charged by the retirement plan's record keeper.
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 values 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.
Classes of Shares. Each class of shares of the Fund
represents an interest in the same portfolio of investments
of the Fund. However, each class has different shareholder
privileges and features. The net income attributable to
Class B, Class C or Class N shares and the dividends
payable on Class B, Class C or Class N shares will be
reduced by incremental expenses borne solely by that class.
Those expenses include the asset-based sales charges to
which Class B, Class C and Class N shares are subject.
The availability of different classes of shares
permits an investor to choose the method of purchasing
shares that is more appropriate for the investor. That may
depend on the amount of the purchase, the length of time
the investor expects to hold shares, and other relevant
circumstances. Class A shares normally are sold subject to
an initial sales charge. While Class B, Class C and Class N
shares have no initial sales charge, the purpose of the
deferred sales charge and asset-based sales charge on Class
B, Class C and Class N shares is the same as that of the
initial sales charge on Class A shares - to compensate the
Distributor and brokers, dealers and financial institutions
that sell shares of the Fund. A salesperson who is
entitled to receive compensation from his or her firm for
selling Fund shares may receive different levels of
compensation for selling one class of shares rather than
another.
The Distributor will not accept any order in the
amount of $500,000 or more for Class B shares or $1 million
or more for Class C shares on behalf of a single investor
(not including dealer "street name" or omnibus accounts).
That is because generally it will be more advantageous for
that investor to purchase Class A shares of the Fund.
|X| Class A Shares Subject to a Contingent Deferred Sales
Charge. For purchases of Class A shares at net asset value
whether or not subject to a contingent deferred sales
charge as
described in the Prospectus, no sales concessions will be
paid to the broker-dealer of record, as described in the
Prospectus, on sales of Class A shares purchased with the
redemption proceeds of shares of another mutual fund
offered as an investment option in a retirement plan in
which Oppenheimer funds are also offered as investment
options under a special arrangement with the Distributor,
if the purchase occurs more than 30 days after the
Oppenheimer funds are added as an investment option under
that plan. Additionally, that concession will not be paid
on purchases of Class A shares by a retirement plan made
with the redemption proceeds of Class N shares of one or
more Oppenheimer funds held by the plan for more than 18
months.
|X| Class B Conversion. Under current
interpretations of applicable federal income tax law by the
Internal Revenue Service, the conversion of Class B shares
to Class A shares after six years is not treated as a
taxable event for the shareholder. If those laws or the IRS
interpretation of those laws should change, the automatic
conversion feature may be suspended. In that event, no
further conversions of Class B shares would occur while
that suspension remained in effect. Although Class B
shares could then be exchanged for Class A shares on the
basis of relative net asset value of the two classes,
without the imposition of a sales charge or fee, such
exchange could constitute a taxable event for the
shareholder, and absent such exchange, Class B shares might
continue to be subject to the asset-based sales charge for
longer than six years.
|X| Availability of Class N Shares. In addition to
the description of the types of retirement plans which may
purchase Class N shares contained in the prospectus, Class
N shares also are offered to the following:
o to all rollover IRAs (including SEP IRAs and SIMPLE
IRAs),
o to all rollover contributions made to Individual
401(k) plans, Profit-Sharing Plans and Money
Purchase Pension Plans,
o to all direct rollovers from
OppenheimerFunds-sponsored Pinnacle and
Ascender retirement plans,
o to all trustee-to-trustee IRA transfers,
o to all 90-24 type 403(b) transfers,
o to Group Retirement Plans (as defined in Appendix B
to this Statement of Additional Information)
which have entered into a special agreement
with the Distributor for that purpose,
o to Retirement Plans qualified under Sections 401(a)
or 401(k) of the Internal Revenue Code, the
recordkeeper or the plan sponsor for which has
entered into a special agreement with the
Distributor,
o to Retirement Plans of a plan sponsor where the
aggregate assets of all such plans invested in
the Oppenheimer funds is $500,000 or more,
o to OppenheimerFunds-sponsored Ascender 401(k) plans
that pay for the purchase with the redemption
proceeds of Class A shares of one or more
Oppenheimer funds.
o to certain customers of broker-dealers and financial
advisors that are identified in a special
agreement between the broker-dealer or
financial advisor and the Distributor for that
purpose.
The sales concession and the advance of the service
fee, as described in the Prospectus, will not be paid to
dealers of record on sales of Class N shares on:
o purchases of Class N shares in amounts of $500,000 or
more by a retirement plan that pays for the
purchase with the redemption proceeds of Class
A shares of one or more Oppenheimer funds
(other than rollovers from an OppenheimerFunds-
o sponsored Pinnacle or Ascender 401(k) plan to any IRA
invested in the Oppenheimer funds),
o purchases of Class N shares in amounts of $500,000 or
more by a retirement plan that pays for the
purchase with the redemption proceeds of Class
C shares of one or more Oppenheimer funds held
by the plan for more than one year (other than
rollovers from an OppenheimerFunds-sponsored
Pinnacle or Ascender 401(k) plan to any IRA
invested in the Oppenheimer funds), and
o
on purchases of Class N shares by an
OppenheimerFunds-sponsored Pinnacle or Ascender
401(k) plan made with the redemption proceeds
of Class A shares of one or more Oppenheimer
funds.
No sales concessions will be paid to the
broker-dealer of record, as described in the Prospectus, on
sales of Class N shares purchased with the redemption
proceeds of shares of another mutual fund offered as an
investment option in a retirement plan in which Oppenheimer
funds are also offered as investment options under a
special arrangement with the Distributor, if the purchase
occurs more than 30 days after the Oppenheimer funds are
added as an investment option under that plan.
|X| Allocation of Expenses. The Fund pays expenses
related to its daily operations, such as custodian fees,
Trustees' fees, transfer agency fees, legal fees and
auditing costs. Those expenses are paid out of the Fund's
assets and are not paid directly by shareholders.
However, those expenses reduce the net asset values of
shares, and therefore are indirectly borne by shareholders
through their investment.
The methodology for calculating the net asset value,
dividends and distributions of the Fund's share classes
recognizes two types of expenses. General expenses that do
not pertain specifically to any one class are allocated pro
rata to the shares of all classes. The allocation is based
on the percentage of the Fund's total assets that is
represented by the assets of each class, and then equally
to each outstanding share within a given class. Such
general expenses include management fees, legal,
bookkeeping and audit fees, printing and mailing costs of
shareholder reports, Prospectuses, Statements of Additional
Information and other materials for current shareholders,
fees to unaffiliated Trustees, custodian expenses, share
issuance costs, organization and start-up costs, interest,
taxes and brokerage commissions, and non-recurring
expenses, such as litigation costs.
Other expenses that are directly attributable to a
particular class are allocated equally to each outstanding
share within that class. Examples of such expenses include
distribution and service plan (12b-1) fees, transfer and
shareholder servicing agent fees and expenses, and
shareholder meeting expenses (to the extent that such
expenses pertain only to a specific class).
Account Fees. As stated in the Prospectus, a $12 annual fee
is assessed on any account valued at less than $500. This
fee will not be assessed on the following accounts:
o Accounts that have balances below $500 due to the
automatic conversion of shares from Class B to Class
A shares;
o Accounts with an active Asset Builder Plan, payroll
deduction plan or a military allotment plan;
o OppenheimerFunds-sponsored group retirement accounts
that are making continuing purchases;
o Certain accounts held by broker-dealers through the
National Securities Clearing Corporation; and
o Accounts that fall below the $500 threshold due
solely to market fluctuations within the 12-month
period preceding the date the fee is deducted.
The fee is automatically deducted from qualifying
accounts annually on or about the second to last business
day of September. This annual fee is waived for any
shareholders who elect to access their account documents
through electronic document delivery rather than in paper
copy and who elect to utilize the Internet or PhoneLink as
their primary source for their
general servicing needs. To sign up to access account
documents electronically via eDocs Direct, please visit the
Service Center on our website at WWW.OPPENHEIMERFUNDS.COM
------------------------
or call 1.888.470.0862 for instructions.
Determination of Net Asset Values Per Share. The net asset
values per share of each class of shares of the Fund are
determined as of the close of business of the Exchange on
each day that the Exchange is open. The calculation is done
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 Exchange normally closes at 4:00 P.M.,
Eastern time, but may close earlier on some other days (for
example, in case of weather emergencies or on days falling
before a U.S. holiday). All references to time in this
Statement of Additional Information mean "Eastern time."
The Exchange's most recent annual announcement (which is
subject to change) states that it will close on New Year's
Day, Presidents' Day, Martin Luther King, Jr. Day, Good
Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day and Christmas Day. It may also close on
other days.
Dealers other than Exchange members may conduct
trading in certain securities on days on which the Exchange
is closed (including weekends and holidays) or after 4:00
P.M. on a regular business day. Because the Fund's net
asset values will not be calculated on those days, the
Fund's net asset values per share may be significantly
affected on such days when shareholders may not purchase or
redeem shares. Additionally, trading on European and Asian
stock exchanges and over-the-counter markets normally is
completed before the close of The New York Stock Exchange.
Changes in the values of securities traded on foreign
exchanges or markets as a result of events that occur after
the prices of those securities are determined, but before
the close of The Exchange, will not be reflected in the
Fund's calculation of its net asset values that day unless
the Manager determines that the event is likely to effect a
material change in the value of the security. The Manager,
or an internal valuation committee established by the
Manager, as applicable, may establish a valuation, under
procedures established by the Board and subject to the
approval, ratification and confirmation by the Board at its
next ensuing meeting.
|X| Securities Valuation. The Fund's Board of
Trustees has established procedures for the valuation of
the Fund's securities. In general those procedures are as
follows:
o Equity securities traded on a U.S. securities
exchange or on Nasdaq(R)are valued as follows:
(1) if last sale information is regularly reported, they
are valued at the last reported sale price
on the principal exchange on which they are
traded or on Nasdaq, as applicable, on that
day, or
(2) if last sale information is not available on a
valuation date, they are valued at the last
reported sale price preceding the valuation
date if it is within the spread of the
closing "bid" and "asked" prices on the
valuation date or, if not, at the closing
"bid" price on the valuation date.
o Equity securities traded on a foreign securities
exchange generally are valued in one of the following ways:
(1) at the last sale price available to the pricing
service approved by the Board of Trustees,
or
(2) at the last sale price obtained by the Manager from
the report of the principal exchange on
which the security is traded at its last
trading session on or immediately before the
valuation date, or
(3) at the mean between the "bid" and "asked" prices
obtained from the principal exchange on
which the security is traded or, on the
basis of reasonable inquiry, from two market
makers in the security.
o Long-term debt securities having a remaining maturity
in excess of 60 days are valued based on the mean
between the "bid" and "asked" 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.
o The following securities are valued at the mean
between the "bid" and "asked" 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:
(1) debt instruments that have a maturity of more than
397 days when issued,
(2) debt instruments that had a maturity of 397 days or
less when issued and have a remaining
maturity of more than 60 days, and
(3) non-money market debt instruments that had a maturity
of 397 days or less when issued and which
have a remaining maturity of 60 days or less.
o The following securities are valued at cost, adjusted
for amortization of premiums and accretion of discounts:
(1) money market debt securities held by a non-money
market fund that had a maturity of less than
397 days when issued that have a remaining
maturity of 60 days or less, and
(2) debt instruments held by a money market fund that
have a remaining maturity of 397 days or
less.
o 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, a security may be priced at the mean between
the "bid" and "asked" prices provided by a single active
market maker (which in certain cases may be the "bid" price
if no "asked" price is available).
In the case of U.S. government securities,
mortgage-backed securities, corporate bonds and foreign
government securities, when last sale information is not
generally available, the Manager may use pricing services
approved by the Board of Trustees. The pricing service may
use "matrix" comparisons to the prices for comparable
instruments on the basis of quality, yield and maturity.
Other special factors may be involved (such as the
tax-exempt status of the interest paid by municipal
securities). The Manager will monitor the accuracy of the
pricing services. That monitoring may include comparing
prices used for portfolio valuation to actual sales prices
of selected securities.
The closing prices in the London foreign exchange
market on a particular business day that are provided to
the Manager by a bank, dealer or pricing service that the
Manager has determined to be reliable are used to value
foreign currency, including forward contracts, and to
convert to U.S. dollars securities that are denominated in
foreign currency.
Puts, calls, and futures are valued at the last sale
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, they shall be valued at the last sale
price on the preceding trading day if it is within the
spread of the closing "bid" and "asked" prices on the
principal exchange or on Nasdaq on the valuation date. If
not, the value shall be the closing bid price on the
principal exchange or on Nasdaq on the valuation date.
If the put, call or future is not traded on an exchange or
on Nasdaq, it shall be valued by the mean between "bid" and
"asked" prices obtained by the Manager from two active
market makers. In certain cases that may be at the "bid"
price if no "asked" price is available.
When the Fund writes an option, an amount equal to
the premium received is included in the Fund's Statement of
Assets and Liabilities as an asset. An equivalent credit is
included in the liability section. The credit is adjusted
("marked-to-market") to reflect the current market value of
the option. In determining the Fund's gain on investments,
if a call or put written by the Fund is exercised, the
proceeds are increased by the premium received. If a call
or put written by the Fund expires, the Fund has a gain in
the amount of the premium. If the Fund enters into a
closing purchase transaction, it will have a gain or loss,
depending on whether the premium received was more or less
than the cost of the closing transaction. If the Fund
exercises a put it holds, the amount the Fund receives on
its sale of the underlying investment is reduced by the
amount of premium paid by the Fund.
How to Sell Shares
The information below supplements the terms and conditions
for redeeming shares set forth in the Prospectus.
Reinvestment Privilege. Within six months of a redemption,
a shareholder may reinvest all or part of the redemption
proceeds of:
o Class A shares purchased subject to an initial sales
charge or Class A shares on which a contingent
deferred sales charge was paid, or
o Class B shares that were subject to the Class B
contingent deferred sales charge when redeemed.
The reinvestment may be made without sales charge
only in Class A shares of the Fund or any of the other
Oppenheimer funds into which shares of the Fund are
exchangeable as described in "How to Exchange Shares"
below. Reinvestment will be at the net asset value next
computed after the Transfer Agent receives the reinvestment
order. The shareholder must ask the Transfer Agent for
that privilege at the time of reinvestment. This privilege
does not apply to Class C, Class N or Class Y shares. The
Fund may amend, suspend or cease offering this reinvestment
privilege at any time as to shares redeemed after the date
of such amendment, suspension or cessation.
Any capital gain that was realized when the shares
were redeemed is taxable, and reinvestment will not alter
any capital gains tax payable on that gain. If there has
been a capital loss on the redemption, some or all of the
loss may not be tax deductible, depending on the timing and
amount of the reinvestment. Under the Internal Revenue
Code, if the redemption proceeds of Fund shares on which a
sales charge was paid are reinvested 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.
Payments "In Kind". The Prospectus states that payment for
shares tendered for redemption is ordinarily made in cash.
However, under certain circumstances, 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
liquid securities from the portfolio of the Fund, in lieu
of cash.
The Fund has elected to be governed by Rule 18f-1
under the Investment Company Act. Under that rule, 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 Fund will value securities used to pay
redemptions in kind using the same method the Fund uses to
value its portfolio securities described above under
"Determination of Net Asset Values Per Share." That
valuation will be made as of the time the redemption price
is determined.
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 $500 or such lesser amount as the
Board may fix. The Board will not cause the involuntary
redemption of shares in an account if the aggregate net
asset value of such shares has fallen below the stated
minimum solely as a result of market fluctuations. If the
Board exercises this right, it may also fix the
requirements for any notice to be given to the shareholders
in question (not less than 30 days). The Board may
alternatively set requirements for the shareholder to
increase the investment, or set other terms and conditions
so that the shares would not be involuntarily redeemed.
Transfers of Shares. A transfer of shares to a different
registration is not an event that triggers the payment of
sales charges. Therefore, shares are not subject to the
payment of a contingent deferred sales charge of any class
at the time of transfer to the name of another person or
entity. It does not matter whether the transfer occurs by
absolute assignment, gift or bequest, as long as it does
not involve, directly or indirectly, a public sale of the
shares. When shares subject to a contingent deferred sales
charge are transferred, the transferred shares will remain
subject to the contingent deferred sales charge. It will be
calculated as if the transferee shareholder had acquired
the transferred shares in the same manner and at the same
time as the transferring shareholder.
If less than all shares held in an account are
transferred, and some but not all shares in the account
would be subject to a contingent deferred sales charge if
redeemed at the time of transfer, the priorities described
in the Prospectus under "How to Buy Shares" for the
imposition of the Class B, Class C and Class N contingent
deferred sales charge will be followed in determining the
order in which shares are transferred.
Distributions From Retirement Plans. Requests for
distributions from OppenheimerFunds-sponsored IRAs,
SEP-IRAs, SIMPLE IRAs, 403(b)(7) custodial plans, 401(k)
plans or pension or profit-sharing plans should be
addressed to "Trustee, OppenheimerFunds Retirement Plans,"
c/o the Transfer Agent at its address listed in "How To
Sell Shares" in the Prospectus or on the back cover of this
Statement of Additional Information. The request must:
(1) state the reason for the distribution;
(2) state the owner's awareness of tax penalties if the
distribution is premature; and
(3) conform to the requirements of the plan and the
Fund's other redemption requirements.
Participants (other than self-employed plan sponsors)
in OppenheimerFunds-sponsored pension or profit-sharing
plans with shares of the Fund held in the name of the plan
or its fiduciary may not directly request redemption of
their accounts. The plan administrator or fiduciary must
sign the request.
Distributions from pension and profit sharing plans
are subject to special requirements under the Internal
Revenue Code and certain documents (available from the
Transfer Agent) must be completed and submitted to the
Transfer Agent before the distribution may be made.
Distributions from retirement plans are subject to
withholding requirements under the Internal Revenue Code,
and IRS Form W-4P (available from the Transfer Agent) must
be submitted to the Transfer Agent with the distribution
request, or the distribution may be delayed. Unless the
shareholder has provided the Transfer Agent with a
certified tax identification number, the Internal Revenue
Code requires that tax be withheld from any distribution
even if the shareholder elects not to have tax withheld.
The Fund, the Manager, the Distributor, and the Transfer
Agent
assume no responsibility to determine whether a
distribution satisfies the conditions of applicable tax
laws and will not be responsible for any tax penalties
assessed in connection with a distribution.
Special Arrangements for Repurchase of Shares from Dealers
and Brokers. The Distributor is the Fund's agent to
repurchase its shares from authorized dealers or brokers on
behalf of their customers. Shareholders should contact
their broker or dealer to arrange this type of redemption.
The repurchase price per share will be the net asset value
next computed after the Distributor receives an order
placed by the dealer or broker. However, if the Distributor
receives a repurchase order from a dealer or broker after
the close of the Exchangeon a regular business day, it will
be processed at that day's net asset value if the order was
received by the dealer or broker from its customers prior
to the time the Exchange closes. Normally, the Exchange
closes at 4:00 P.M., but may do so earlier on some days.
Additionally, the order must have been transmitted to and
received by the Distributor prior to its close of business
that day (normally 5:00 P.M.).
Ordinarily, for accounts redeemed by a broker-dealer
under this procedure, payment will be made within three
business days after the shares have been redeemed upon the
Distributor's receipt of the required redemption documents
in proper form. The signature(s) of the registered owners
on the redemption documents must be guaranteed as described
in the Prospectus.
Automatic Withdrawal and Exchange Plans. Investors owning
shares of the Fund valued at $5,000 or more can authorize
the Transfer Agent to redeem shares (having a value of at
least $50) automatically on a monthly, quarterly,
semi-annual or annual basis under an Automatic Withdrawal
Plan. Shares will be redeemed three business days prior to
the date requested by the shareholder for receipt of the
payment. Automatic withdrawals of up to $1,500 per month
may be requested by telephone if payments are to be made by
check payable to all shareholders of record. Payments must
also be sent to the address of record for the account and
the address must not have been changed within the prior 30
days. Required minimum distributions from
OppenheimerFunds-sponsored retirement plans may not be
arranged on this basis.
Payments are normally made by check, but shareholders
having AccountLink privileges (see "How To Buy Shares") may
arrange to have Automatic Withdrawal Plan payments
transferred to the bank account designated on the account
application or by signature-guaranteed instructions sent to
the Transfer Agent. Shares are normally redeemed pursuant
to an Automatic Withdrawal Plan three business days before
the payment transmittal date you select in the
account application. If a contingent deferred sales charge
applies to the redemption, the amount of the check or
payment will be reduced accordingly.
The Fund cannot guarantee receipt of a payment on the
date requested. The Fund reserves the right to amend,
suspend or discontinue offering these 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,
Class C and Class N shareholders should not establish
automatic withdrawal plans, because of the potential
imposition of the contingent deferred sales charge on such
withdrawals (except where the Class B, Class C or Class N
contingent deferred sales charge is waived as described in
Appendix B to this Statement of Additional Information).
By requesting an Automatic Withdrawal or Exchange
Plan, the shareholder agrees to the terms and conditions
that apply to such plans, as stated below. These
provisions may be
amended from time to time by the Fund and/or the
Distributor. When adopted, any amendments will
automatically apply to existing Plans.
|X| Automatic Exchange Plans. Shareholders can
authorize the Transfer Agent to exchange a pre-determined
amount of shares of the Fund for shares (of the same class)
of other Oppenheimer funds automatically on a monthly,
quarterly, semi-annual or annual basis under an Automatic
Exchange Plan. The minimum amount that may be exchanged to
each other fund account is $50. Instructions should be
provided on the OppenheimerFunds Application or
signature-guaranteed instructions. Exchanges made under
these plans are subject to the restrictions that apply to
exchanges as set forth in "How to Exchange Shares" in the
Prospectus and below in this Statement of Additional
Information.
|X| Automatic Withdrawal Plans. Fund shares will be
redeemed as necessary to meet withdrawal payments. Shares
acquired without a sales charge will be redeemed first.
Shares acquired with reinvested dividends and capital gains
distributions will be redeemed next, followed by shares
acquired with a sales charge, to the extent necessary to
make withdrawal payments. Depending upon the amount
withdrawn, the investor's principal may be depleted.
Payments made under these plans should not be considered as
a yield or income on your investment.
The Transfer Agent will administer the investor's
Automatic Withdrawal Plan as agent for the shareholder(s)
(the "Planholder") who executed the Plan authorization and
application submitted to the Transfer Agent. Neither the
Fund nor the Transfer Agent shall incur any liability to
the Planholder for any action taken or not taken by the
Transfer Agent in good faith to administer the Plan. Share
certificates will not be issued for shares of the Fund
purchased for and held under the Plan, but the Transfer
Agent will credit all such shares to the account of the
Planholder on the records of the Fund. Any share
certificates held by a Planholder may be surrendered
unendorsed to the Transfer Agent with the Plan application
so that the shares represented by the certificate may be
held under the Plan.
For accounts subject to Automatic Withdrawal Plans,
distributions of capital gains must be reinvested in shares
of the Fund, which will be done at net asset value without
a sales charge. Dividends on shares held in the account may
be paid in cash or reinvested.
Shares will be redeemed to make withdrawal payments
at the net asset value per share determined on the
redemption date. Checks or AccountLink payments
representing the proceeds of Plan withdrawals will normally
be transmitted three business days prior to the date
selected for receipt of the payment, according to the
choice specified in writing by the Planholder. Receipt of
payment on the date selected cannot be guaranteed.
The amount and the interval of disbursement payments
and the address to which checks are to be mailed or
AccountLink payments are to be sent may be changed at any
time by the Planholder by writing to the Transfer Agent.
The Planholder should allow at least two weeks' time after
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 to redeem all, or any
part of, the shares held under the Plan. That notice must
be in proper form in accordance with the requirements of
the then-current Prospectus of the Fund. In that case, the
Transfer Agent will redeem the number of shares requested
at the net asset value per share in effect and will mail a
check for the proceeds to the Planholder.
The Planholder may terminate a Plan at any time by
writing to the Transfer Agent. The Fund may also give
directions to the Transfer Agent to terminate a Plan. The
Transfer Agent will also terminate a Plan upon its receipt
of evidence satisfactory to it that the Planholder has died
or is legally incapacitated. Upon termination of a Plan by
the Transfer Agent or the Fund, shares that have not been
redeemed will be held in uncertificated form in the name of
the Planholder. The account will continue as a
dividend-reinvestment, uncertificated account unless and
until proper instructions are received from the Planholder,
his or her executor or guardian, or another authorized
person.
To use shares held under the Plan as collateral for a
debt, the Planholder may request issuance of a portion of
the shares in certificated form. Upon written request from
the Planholder, the Transfer Agent will determine the
number of shares for which a certificate may be issued
without causing the withdrawal checks to stop. However,
should such uncertificated shares become exhausted, Plan
withdrawals will terminate.
If the Transfer Agent ceases to act as transfer agent
for the Fund, the Planholder will be deemed to have
appointed any successor transfer agent to act as agent in
administering the Plan.
How to Exchange Shares
As stated in the Prospectus, shares of a particular class
of Oppenheimer funds having more than one class of shares
may be exchanged only for shares of the same class of other
Oppenheimer funds. Shares of Oppenheimer funds that have a
single class without a class designation are deemed "Class
A" shares for this purpose. You can obtain a current list
showing which funds offer which classes of shares by
calling the Distributor.
o
All of the Oppenheimer funds currently offer Class A, B,
C, N and Y shares with the following exceptions:
The following funds only offer Class A shares:
Centennial America Fund, L.P. Centennial New York Tax Exempt
Trust
Centennial California Tax Exempt Trust Centennial Tax Exempt Trust
Centennial Government Trust Oppenheimer Money Market Fund, Inc.
Centennial Money Market Trust
The following funds do not offer Class N shares:
Oppenheimer California Municipal Fund Oppenheimer Pennsylvania Municipal
Fund
Oppenheimer Limited Term Municipal Fund Oppenheimer Rochester National
Municipals
Oppenheimer Municipal Bond Fund Oppenheimer Senior Floating Rate
Fund
Oppenheimer New Jersey Municipal Fund Limited Term New York Municipal
Fund
Oppenheimer AMT-Free New York Rochester Fund Municipals
Municipals
The following funds do not offer Class Y shares:
Oppenheimer California Municipal Fund Oppenheimer Limited Term Municipal
Fund
Oppenheimer Capital Income Fund Oppenheimer Multiple Strategies Fund
Oppenheimer Cash Reserves Oppenheimer New Jersey Municipal
Fund
Oppenheimer Champion Income Fund Oppenheimer AMT-Free New York
Municipals
Oppenheimer Convertible Securities Fund Oppenheimer Pennsylvania Municipal
Fund
Oppenheimer Disciplined Allocation Fund Oppenheimer Quest Capital Value
Fund, Inc.
Oppenheimer Developing Markets Fund Oppenheimer Quest Global Value
Fund, Inc.
Oppenheimer Gold & Special Minerals Oppenheimer Rochester National
Fund Municipals
Oppenheimer International Bond Fund Oppenheimer Senior Floating Rate
Fund
Oppenheimer International Growth Fund Oppenheimer Small Cap Value Fund
Oppenheimer International Small Limited Term New York Municipal Fund
Company Fund
o Class Y shares of Oppenheimer Real Asset Fund may not
be exchanged for shares of any other fund.
o Class B, Class C and Class N shares of Oppenheimer
Cash Reserves are generally available only by
exchange from the same class of shares of other
Oppenheimer funds or through
OppenheimerFunds-sponsored 401(k) plans.
o Class M shares of Oppenheimer Convertible Securities
Fund may be exchanged only for Class A shares of
other Oppenheimer funds. They may not be acquired by
exchange of shares of any class of any other
Oppenheimer funds except Class A shares of
Oppenheimer Money Market Fund or Oppenheimer Cash
Reserves acquired by exchange of Class M shares.
o Class X shares of Limited Term New York Municipal
Fund may be exchanged only for Class B shares of
other Oppenheimer funds and no exchanges may be made
to Class X shares.
o Shares of Oppenheimer Capital Preservation Fund may
not be exchanged for shares of Oppenheimer Money
Market Fund, Inc., Oppenheimer Cash Reserves or
Oppenheimer Limited-Term Government Fund. Only
participants in certain retirement plans may purchase
shares of Oppenheimer Capital Preservation Fund, and
only those participants may exchange shares of other
Oppenheimer funds for shares of Oppenheimer Capital
Preservation Fund.
o Class A shares of Oppenheimer Senior Floating Rate
Fund are not available by exchange of shares of
Oppenheimer Money Market Fund or Class A shares of
Oppenheimer Cash Reserves.
o Shares of Oppenheimer Select Managers Mercury
Advisors S&P Index Fund and Oppenheimer Select
Managers QM Active Balanced Fund are only available
to
retirement plans and are available only by exchange
from the same class of shares of other Oppenheimer
funds held by retirement plans.
o Class A shares of Oppenheimer funds may be exchanged
at net asset value for shares of any money market
fund offered by the Distributor. Shares of any money
market fund purchased without a sales charge may be
exchanged for shares of Oppenheimer funds offered
with a sales charge upon payment of the sales charge.
They may also be used to purchase shares of
Oppenheimer funds subject to an early withdrawal
charge or contingent deferred sales charge.
o Shares of Oppenheimer Money Market Fund, Inc.
purchased with the redemption proceeds of shares of
other mutual funds (other than funds managed by the
Manager or its subsidiaries) redeemed within the 30
days prior to that purchase may subsequently be
exchanged for shares of other Oppenheimer funds
without being subject to an initial sales charge or
contingent deferred sales charge. To qualify for that
privilege, the investor or the investor's dealer must
notify the Distributor of eligibility for this
privilege at the time the shares of Oppenheimer Money
Market Fund, Inc. are purchased. If requested, they
must supply proof of entitlement to this privilege.
o Shares of the Fund acquired by reinvestment of
dividends or distributions from any of the other
Oppenheimer funds or from any unit investment trust
for which reinvestment arrangements have been made
with the Distributor may be exchanged at net asset
value for shares of any of the Oppenheimer funds.
The Fund may amend, suspend or terminate the exchange
privilege at any time. Although the Fund may impose these
changes at any time, it will provide you with notice of
those changes whenever it is required to do so by
applicable law. It may be required to provide 60 days'
notice prior to materially amending or terminating the
exchange privilege. That 60 day notice is not required in
extraordinary circumstances.
|X| How Exchanges Affect Contingent Deferred Sales
Charges. No contingent deferred sales charge is imposed on
exchanges of shares of any class purchased subject to a
contingent deferred sales charge, with the following
exceptions:
o When Class A shares of any Oppenheimer fund (other
than Rochester National Municipals and Rochester Fund
Municipals) acquired by exchange of Class A shares of any
Oppenheimer fund purchased subject to a Class A contingent
deferred sales charge are redeemed within 18 months
measured from the beginning 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.
o When Class A shares of Rochester National Municipals
and Rochester Fund Municipals acquired by exchange of Class
A shares of any Oppenheimer fund purchased subject to a
Class A contingent deferred sales charge are redeemed
within 24 months of the beginning 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.
o If any Class A shares of another Oppenheimer fund
that are exchanged for Class A shares of Oppenheimer Senior
Floating Rate Fund are subject to the Class A contingent
deferred sales charge of the other Oppenheimer fund at the
time of exchange, the holding period for that Class A
contingent deferred sales charge will carry over to the
Class A shares of Oppenheimer Senior Floating Rate Fund
acquired in the exchange. The Class A shares of
Oppenheimer Senior Floating Rate Fund acquired in that
exchange will be subject to the Class A Early Withdrawal
Charge of Oppenheimer Senior Floating Rate Fund if they are
repurchased before the expiration of the holding period.
o When Class A shares of Oppenheimer Cash Reserves and
Oppenheimer Money Market Fund, Inc. acquired by exchange of
Class A shares of any Oppenheimer fund purchased subject to
a Class A contingent deferred sales charge are redeemed
within the Class A holding period of the fund from which
the shares were exchanged, the Class A contingent deferred
sales charge of the fund from which the shares were
exchanged is imposed on the redeemed shares.
o With respect to Class B shares, the Class B
contingent deferred sales charge is imposed on Class B
shares acquired by exchange if they are redeemed within six
years of the initial purchase of the exchanged Class B
shares.
o With respect to Class C 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.
o With respect to Class N shares, a 1% contingent
deferred sales charge will be imposed if the retirement
plan (not including IRAs and 403(b) plans) is terminated or
Class N shares of all Oppenheimer funds are terminated as
an investment option of the plan and Class N shares are
redeemed within 18 months after the plan's first purchase
of Class N shares of any Oppenheimer fund or with respect
to an individual retirement plan or 403(b) plan, Class N
shares are redeemed within 18 months of the plan's first
purchase of Class N shares of any Oppenheimer fund.
o When Class B, Class C or Class N 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, Class C or Class N contingent deferred sales
charge will be followed in determining the order in which
the shares are exchanged. Before exchanging shares,
shareholders should take into account how the exchange may
affect any contingent deferred sales charge that might be
imposed in the subsequent redemption of remaining shares.
Shareholders owning shares of more than one class
must specify which class of shares they wish to exchange.
|X| Limits on Multiple Exchange Orders. The Fund
reserves the right to reject telephone or written exchange
requests submitted in bulk by anyone on behalf of more than
one account. The Fund may accept requests for exchanges of
up to 50 accounts per day from representatives of
authorized dealers that qualify for this privilege.
|X| Telephone Exchange Requests. When exchanging
shares by telephone, a shareholder must have an existing
account in the fund to which the exchange is to be made.
Otherwise, the investors must obtain a prospectus of that
fund before the exchange request may be submitted. If all
telephone lines are busy (which might occur, for example,
during periods of substantial market fluctuations),
shareholders might not be able to request exchanges by
telephone and would have to submit written exchange
requests.
|X|
Processing Exchange Requests. Shares to be exchanged
are redeemed on the regular business day the Transfer Agent
receives an exchange request in proper form (the
"Redemption Date"). Normally, shares of the fund to be
acquired are purchased on the Redemption Date, but such
purchases may be delayed by either fund up to five business
days if it determines that it would be disadvantaged by an
immediate transfer of the redemption proceeds. The Fund
reserves the right, in its discretion, to refuse any
exchange request that may disadvantage it. For example, if
the receipt of multiple exchange requests from a dealer
might require the disposition of portfolio securities at a
time or at a price that might be disadvantageous to the
Fund, the Fund may refuse the request.
When you exchange some or all of your shares from one
fund to another, any special account feature such as an
Asset Builder Plan or Automatic Withdrawal Plan, will be
switched to the new fund account unless you tell the
Transfer Agent not to do so. However, special redemption
and exchange features such as Automatic Exchange Plans and
Automatic Withdrawal Plans cannot be switched to an account
in Oppenheimer Senior Floating Rate Fund.
In connection with any exchange request, the number
of shares exchanged may be less than the number requested
if the exchange or the number requested would include
shares subject to a restriction cited in the Prospectus or
this Statement of Additional Information, or would include
shares covered by a share certificate that is not tendered
with the request. In those cases, only the shares
available for exchange without restriction will be
exchanged.
The different Oppenheimer funds available for
exchange have different investment objectives, policies and
risks. A shareholder should assure that the fund selected
is appropriate for his or her investment and should be
aware of the tax consequences of an exchange. For federal
income tax purposes, an exchange transaction is treated as
a redemption of shares of one fund and a purchase of shares
of another. "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. The Fund has no fixed dividend
rate and there can be no assurance as to the payment of any
dividends or the realization of any capital gains. The
dividends and distributions paid by a class of shares will
vary from time to time depending on market conditions, the
composition of the Fund's portfolio, and expenses borne by
the Fund or borne separately by a class. Dividends are
calculated in the same manner, at the same time, and on the
same day for each class of shares. However, dividends on
Class B, Class C and Class N shares are expected to be
lower than dividends on Class A and Class Y shares. That is
because of the effect of the asset-based sales charge on
Class B, Class C and Class N shares.. Those dividends will
also differ in amount as a consequence of any difference in
the net asset values of the different classes of shares.
Dividends, distributions and proceeds of the
redemption of Fund shares represented by checks returned to
the Transfer Agent by the Postal Service as undeliverable
will be invested in shares of Oppenheimer Money Market
Fund, Inc. Reinvestment will be made as promptly as
possible after the return of such checks to the Transfer
Agent, to enable the investor to earn a return on otherwise
idle funds. Unclaimed accounts may be subject to state
escheatment laws,
and the Fund and the Transfer Agent will not be liable to
shareholders or their representatives for compliance with
those laws in good faith.
Tax Status of the Fund's Dividends, Distributions and
Redemptions of Shares. The federal tax treatment of the
Fund's dividends and capital gains distributions is briefly
highlighted in the Prospectus. The following is only a
summary of certain additional tax considerations generally
affecting the Fund and its shareholders.
The tax discussion in the Prospectus and this
Statement of Additional Information is based on tax law in
effect on the date of the Prospectus and this Statement of
Additional Information. Those laws and regulations may be
changed by legislative, judicial, or administrative action,
sometimes with retroactive effect. State and local tax
treatment of ordinary income dividends and capital gain
dividends from regulated investment companies may differ
from the treatment under the Internal Revenue Code
described below. Potential purchasers of shares of the Fund
are urged to consult their tax advisers with specific
reference to their own tax circumstances as well as the
consequences of federal, state and local tax rules
affecting an investment in the Fund.
|X| Qualification as a Regulated Investment Company. The
Fund has elected to be taxed as a regulated investment
company under Subchapter M of the Internal Revenue Code of
1986, as amended. As a regulated investment company, the
Fund is not subject to federal income tax on the portion of
its net investment income (that is, taxable interest,
dividends, and other taxable ordinary income, net of
expenses) and capital gain net income (that is, the excess
of net long-term capital gains over net short-term capital
losses) that it distributes to shareholders. That
qualification enables the Fund to "pass through" its income
and realized capital gains to shareholders without having
to pay tax on them. This avoids a "double tax" on that
income and capital gains, since shareholders normally will
be taxed on the dividends and capital gains they receive
from the Fund (unless their Fund shares are held in a
retirement account or the shareholder is otherwise exempt
from tax).
The Internal Revenue Code contains a number of
complex tests relating to qualification that the Fund might
not meet in a particular year. If it did not qualify as a
regulated investment
company, the Fund would be treated for tax purposes as an
ordinary corporation and would receive no tax deduction for
payments made to shareholders.
To qualify as a regulated investment company, the
Fund must distribute at least 90% of its investment company
taxable income (in brief, net investment income and the
excess of net short-term capital gain over net long-term
capital loss) for the taxable year. The Fund must also
satisfy certain other requirements of the Internal Revenue
Code, some of which are described below. Distributions by
the Fund made during the taxable year or, under specified
circumstances, within 12 months after the close of the
taxable year, will be considered distributions of income
and gains for the taxable year and will therefore count
toward satisfaction of the above-mentioned requirement.
To qualify as a regulated investment company, the
Fund must derive at least 90% of its gross income from
dividends, interest, certain payments with respect to
securities loans, gains from the sale or other disposition
of stock or securities or foreign currencies (to the extent
such currency gains are directly related to the regulated
investment company's principal business of investing in
stock or securities) and certain other income.
In addition to satisfying the requirements described
above, the Fund must satisfy an asset diversification test
in order to qualify as a regulated investment company.
Under that test, at the
close of each quarter of the Fund's taxable year, at least
50% of the value of the Fund's assets must consist of cash
and cash items (including receivables), U.S. government
securities, securities of other regulated investment
companies, and securities of other issuers. As to each of
those issuers, the Fund must not have invested more than 5%
of the value of the Fund's total assets in securities of
each such issuer and the Fund must not hold more than 10%
of the outstanding voting securities of each such issuer.
No more than 25% of the value of its total assets may be
invested in the securities of any one issuer (other than
U.S. government securities and securities of other
regulated investment
companies), or in two or more issuers which the Fund
controls and which are engaged in the same or similar
trades or businesses. For purposes of this test,
obligations issued or guaranteed by certain agencies or
instrumentalities of the U.S. government are treated as
U.S. government securities.
|X| Excise Tax on Regulated Investment Companies. Under
the Internal Revenue Code, by December 31 each year, the
Fund must distribute 98% of its taxable investment income
earned from January 1 through December 31 of that year and
98% of its capital gains realized in the period from
November 1 of the prior year through October 31 of the
current year. If it does not, the Fund must pay an excise
tax on the amounts not distributed. It is presently
anticipated that the Fund will meet those requirements. To
meet this requirement, in certain circumstances the Fund
might be required to liquidate portfolio investments to
make sufficient distributions to avoid excise tax
liability. However, the Board of Trustees and the Manager
might determine in a particular year that it would be in
the best interests of shareholders for the Fund not to make
such distributions at the required levels and to pay the
excise tax on the undistributed amounts. That would reduce
the amount of income or capital gains available for
distribution to shareholders.
|X| Taxation of Fund Distributions. The Fund anticipates
distributing substantially all of its investment company
taxable income for each taxable year. Those distributions
will be taxable to shareholders as ordinary income and
treated as dividends for federal income tax purposes.
Special provisions of the Internal Revenue Code
govern the eligibility of the Fund's dividends for the
dividends-received deduction for corporate shareholders.
Long-term capital gains distributions are not eligible for
the deduction. The amount of dividends paid by the Fund
that may qualify for the deduction is limited to the
aggregate amount of qualifying dividends that the Fund
derives from portfolio investments that the Fund has held
for a minimum period,
usually 46 days. A corporate shareholder will not be
eligible for the deduction on dividends paid on Fund shares
held for 45 days or less. To the extent the Fund's
dividends are derived from gross income from option
premiums, interest income or short-term gains from the sale
of securities or dividends from foreign corporations, those
dividends will not qualify for the deduction.
The Fund may either retain or distribute to
shareholders its net capital gain for each taxable year.
The Fund currently intends to distribute any such amounts.
If net long term capital gains are distributed and
designated as a capital gain distribution, it will be
taxable to shareholders as a long-term capital gain and
will be properly identified in reports sent to shareholders
in January of each year. Such treatment will apply no
matter how long the shareholder has held his or her shares
or whether that gain was recognized by the Fund before the
shareholder acquired his or her shares.
If the Fund elects to retain its net capital gain,
the Fund will be subject to tax on it at the 35% corporate
tax rate. If the Fund elects to retain its net capital
gain, the Fund will provide to shareholders of record on
the last day of its taxable year information regarding
their pro rata share of the gain and tax paid. As a result,
each shareholder will be required to report his or her pro
rata share of such gain on their tax return as long-term
capital gain, will receive a refundable tax
credit for his/her pro rata share of tax paid by the Fund
on the gain, and will increase the tax basis for his/her
shares by an amount equal to the deemed distribution less
the tax credit.
Investment income that may be received by the Fund
from sources within foreign countries may be subject to
foreign taxes withheld at the source. The United States
has entered into tax treaties with many foreign countries
which entitle the Fund to a reduced rate of, or exemption
from, taxes on such income.
Distributions by the Fund that do not constitute
ordinary income dividends or capital gain distributions
will be treated as a return of capital to the extent of the
shareholder's tax basis in their shares. Any excess will be
treated as gain from the sale of those shares, as discussed
below. Shareholders will be advised annually as to the U.S.
federal income tax consequences of distributions made (or
deemed made) during the year. If prior distributions made
by the Fund must be re-characterized as a non-taxable
return of capital at the end of the fiscal year as a result
of the effect of the Fund's investment policies, they will
be identified as such in notices sent to shareholders.
Distributions by the Fund will be treated in the
manner described above regardless of whether the
distributions are paid in cash or reinvested in additional
shares of the Fund (or of another fund). Shareholders
receiving a distribution in the form of additional shares
will be treated as receiving a distribution in an amount
equal to the fair market value of the shares received,
determined as of the reinvestment date.
The Fund will be required in certain cases to
withhold 30% (29% for payments after December 31, 2003) of
ordinary income dividends, capital gains distributions and
the proceeds of the redemption of shares, paid to any
shareholder (1) who has failed to provide a correct
-------
taxpayer identification number or to properly certify that
number when required, (2) who is subject to backup
withholding for failure to report the receipt of interest
or dividend income properly, or (3) who has failed to
certify to the Fund that the shareholder is not subject to
backup withholding or is an "exempt recipient" (such as a
corporation). All income and any tax withheld by the Fund
is remitted
by the Fund to the U.S. Treasury and is identified in
reports mailed to shareholders in January of each year.
|X| Tax Effects of Redemptions of Shares. If a
shareholder redeems all or a portion of his/her shares, the
-
shareholder will recognize a gain or loss on the redeemed
shares in an amount equal to the difference between the
proceeds of the redeemed shares and the shareholder's
adjusted tax basis in the shares. All or a portion of any
loss recognized in that manner may be disallowed if the
shareholder purchases other shares of the Fund within 30
days before or after the redemption.
In general, any gain or loss arising from the
redemption of shares of the Fund will be considered capital
gain or loss, if the shares were held as a capital asset.
It will be long-term capital gain or loss if the shares
were held for more than one year. However, any capital
loss arising from the redemption of shares held for six
months or less will be treated as a long-term capital loss
to the extent of the amount of capital gain dividends
received on those shares. Special holding period rules
under the Internal Revenue Code apply in this case to
determine the holding period of shares and there are limits
on the deductibility of capital losses in any year.
|X| Foreign Shareholders. Under U.S. tax law, taxation
of a shareholder who is a foreign person (to include, but
not limited to, a nonresident alien individual, a foreign
trust, a
foreign estate, a foreign corporation, or a foreign
partnership) primarily depends on whether the foreign
person's income from the Fund is effectively connected with
the conduct of a U.S. trade or business. Typically,
ordinary income dividends paid from a mutual fund are not
considered "effectively connected" income.
Ordinary income dividends that are paid by the Fund
(and are deemed not "effectively connected income") to
foreign persons will be subject to a U.S. tax withheld by
the Fund at a rate of 30%, provided the Fund obtains a
properly completed and signed Certificate of Foreign
Status. The
tax rate may be reduced if the foreign person's country of
residence has a tax treaty with the U.S. allowing for a
reduced tax rate on ordinary income dividends paid by the
Fund. All income and any tax withheld by the Fund is
remitted by the Fund to the U.S. Treasury and is identified
in reports mailed to shareholders in March of each year.
If the ordinary income dividends from the Fund are
---
effectively connected with the conduct of a U.S. trade or
business, then the foreign person may claim an exemption
from the U.S. tax described above provided the Fund obtains
a properly completed and signed Certificate of Foreign
Status.
If the foreign person fails to provide a
certification of his/her foreign status, the Fund will be
required to withhold U.S. tax at a rate of 30% (29% for
payments after December 31, 2003) on ordinary income
dividends, capital gains distributions and the proceeds of
the redemption of shares, paid to any foreign person. All
income and any tax withheld (in this situation) by the Fund
is remitted by the Fund to the U.S. Treasury and is
identified in reports mailed to shareholders in January of
each year.
The tax consequences to foreign persons entitled to
claim the benefits of an applicable tax treaty may be
different from those described herein. Foreign
shareholders are urged to consult their own tax advisors or
the U.S. Internal Revenue Service with respect to the
particular tax consequences to them of an investment in the
Fund, including the applicability of the U.S. withholding
taxes described above.
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 above. Reinvestment will
be made without sales charge at the net asset value per
share in effect at the close of business on the payable
date of the dividend or distribution. To elect this option,
the shareholder must notify the Transfer Agent in writing
and must have an existing account in the fund selected for
reinvestment. Otherwise the shareholder first must obtain a
prospectus for that fund and an application from the
Distributor to establish an account. Dividends and/or
distributions from shares of certain other Oppenheimer
funds (other than Oppenheimer Cash Reserves) may be
invested in shares of this Fund on the same basis.
Additional Information About the Fund
The Distributor. The Fund's shares are sold through
dealers, brokers and other financial institutions that have
a sales agreement with OppenheimerFunds Distributor, Inc.,
a subsidiary of the Manager that acts as the Fund's
Distributor. The Distributor also distributes shares of
the other Oppenheimer funds and is sub-distributor for
funds managed by a subsidiary of the Manager.
The Transfer Agent. OppenheimerFunds Services, the Fund's
Transfer Agent, is a division of the Manager. It is
responsible for maintaining the Fund's shareholder registry
and shareholder
accounting records, and for paying dividends and
distributions to shareholders. It also handles shareholder
servicing and administrative functions. It serves as the
Transfer Agent for an annual per account fee. It also acts
as shareholder servicing agent for the other Oppenheimer
funds. Shareholders should direct inquiries about their
accounts to the Transfer Agent at the address and toll-free
numbers shown on the back cover.
The Custodian. Citibank, N.A. is 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 is 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. The Fund's cash balances with the
custodian in excess of $100,000 are not protected by
federal deposit insurance. Those uninsured balances at
times may be substantial.
Independent Auditors. KPMG LLP is the independent auditor
of the Fund. The firm audits the Fund's financial
statements and performs other related audit services. KPMG
LLP also acts as auditor for certain other funds advised by
the Manager and its affiliates.
INDEPENDENT AUDITORS' REPORT
- --------------------------------------------------------------------------------
THE BOARD OF TRUSTEES AND SHAREHOLDERS OF
OPPENHEIMER TRINITY LARGE CAP GROWTH FUND:
We have audited the accompanying statement of assets and
liabilities of
Oppenheimer Trinity Large Cap Growth Fund (formerly
Oppenheimer Large Cap
Growth Fund), including the statement of investments, as of
July 31, 2002, and
the related statement of operations for the year then ended,
the statements of
changes in net assets for each of the two years in the
period then ended, and
the financial highlights for each of the three years in the
period then ended,
and the period from December 17, 1998 (inception of
offering) to July 31, 1999.
These financial statements and financial highlights are the
responsibility of
the Fund's management. Our responsibility is to express an
opinion on these
financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with auditing
standards generally
accepted in the United States of America. Those standards
require that we plan
and perform the audit to obtain reasonable assurance about
whether the
financial statements and financial highlights are free of
material
misstatement. An audit includes examining, on a test basis,
evidence supporting
the amounts and disclosures in the financial statements. Our
procedures
included confirmation of securities owned as of July 31,
2002, by
correspondence with the custodian and brokers or by other
appropriate auditing
procedures where replies from brokers were not received. An
audit also includes
assessing the accounting principles used and significant
estimates made by
management, as well as evaluating the overall financial
statement presentation.
We believe that our audits provide a reasonable basis for
our opinion.
In our opinion, the financial statements and financial
highlights referred to
above present fairly, in all material respects, the
financial position of
Oppenheimer Trinity Large Cap Growth Fund as of July 31,
2002, 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 three years in the period then ended, and the
period from December
17, 1998 (inception of offering) to July 31, 1999, in
conformity with
accounting principles generally accepted in the United
States of America.
KPMG LLP
Denver, Colorado
August 21, 2002
STATEMENT OF INVESTMENTS July 31, 2002
MARKET VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
COMMON STOCKS--98.2%
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY--16.2%
- --------------------------------------------------------------------------------
HOTELS, RESTAURANTS & LEISURE--2.0%
Darden Restaurants, Inc.
25,000 $ 580,500
- --------------------------------------------------------------------------------
HOUSEHOLD DURABLES--0.8%
Maytag Corp.
6,800 225,284
- --------------------------------------------------------------------------------
MEDIA--0.7%
Interpublic Group of Cos., Inc.
8,900 186,099
- --------------------------------------------------------------------------------
MULTILINE RETAIL--2.7%
Target Corp.
3,500 116,725
- --------------------------------------------------------------------------------
Wal-Mart Stores, Inc.
13,600 668,848
- -----------
785,573
- --------------------------------------------------------------------------------
SPECIALTY RETAIL--10.0%
AutoZone, Inc.(1)
4,100 302,375
- --------------------------------------------------------------------------------
Best Buy Co., Inc.(1)
12,300 404,670
- --------------------------------------------------------------------------------
Home Depot, Inc.
27,900 861,552
- --------------------------------------------------------------------------------
Lowe's Cos., Inc.
19,600 741,860
- --------------------------------------------------------------------------------
Staples, Inc.(1)
34,600 577,474
- -----------
2,887,931
- --------------------------------------------------------------------------------
CONSUMER STAPLES--19.9%
- --------------------------------------------------------------------------------
BEVERAGES--7.5%
Brown-Forman Corp., Cl. B
1,900 128,782
- --------------------------------------------------------------------------------
Coca-Cola Co. (The)
13,600 679,184
- --------------------------------------------------------------------------------
PepsiCo, Inc.
31,100 1,335,434
- -----------
2,143,400
- --------------------------------------------------------------------------------
FOOD & DRUG RETAILING--0.6%
Walgreen Co.
5,200 183,716
- --------------------------------------------------------------------------------
FOOD PRODUCTS--1.7%
Hershey Foods Corp.
2,200 172,612
- --------------------------------------------------------------------------------
Sara Lee Corp.
16,900 316,706
- -----------
489,318
- --------------------------------------------------------------------------------
HOUSEHOLD PRODUCTS--3.8%
Colgate-Palmolive Co.
13,500 693,225
- --------------------------------------------------------------------------------
Kimberly-Clark Corp.
1,800 109,890
- --------------------------------------------------------------------------------
Procter & Gamble Corp. (The)
3,300 293,667
- -----------
1,096,782
- --------------------------------------------------------------------------------
PERSONAL PRODUCTS--5.6%
Avon Products, Inc.
11,900 550,494
- --------------------------------------------------------------------------------
Gillette Co.
31,800 1,045,584
- -----------
1,596,078
12 | OPPENHEIMER TRINITY LARGE CAP GROWTH
FUND
|
MARKET VALUE
SHARES SEE NOTE 1
- -------------------------------------------------------------------------------
TOBACCO--0.7%
Philip Morris Cos., Inc.
4,500 $ 207,225
- -------------------------------------------------------------------------------
ENERGY--0.4%
- -------------------------------------------------------------------------------
OIL & GAS--0.4%
Anadarko Petroleum Corp.
3,000 130,500
- -------------------------------------------------------------------------------
FINANCIALS--3.6%
- -------------------------------------------------------------------------------
BANKS--0.7%
Synovus Financial Corp.
8,300 199,200
- -------------------------------------------------------------------------------
DIVERSIFIED FINANCIALS--2.9%
MBNA Corp.
27,400 531,286
- -------------------------------------------------------------------------------
State Street Corp.
7,000 297,500
- -----------
828,786
- -------------------------------------------------------------------------------
HEALTH CARE--23.5%
- -------------------------------------------------------------------------------
BIOTECHNOLOGY--2.0%
Wyeth
14,800 590,520
- -------------------------------------------------------------------------------
HEALTH CARE PROVIDERS & SERVICES--2.2%
UnitedHealth Group, Inc.
7,100 622,386
- -------------------------------------------------------------------------------
PHARMACEUTICALS--19.3%
Abbott Laboratories
9,800 405,818
- -------------------------------------------------------------------------------
Bristol-Myers Squibb Co.
19,400 454,542
- -------------------------------------------------------------------------------
Forest Laboratories, Inc.(1)
5,100 395,097
- -------------------------------------------------------------------------------
Johnson & Johnson
24,600 1,303,800
- -------------------------------------------------------------------------------
Merck & Co., Inc.
8,000 396,800
- -------------------------------------------------------------------------------
Pfizer, Inc.
70,100 2,267,735
- -------------------------------------------------------------------------------
Schering-Plough Corp.
13,400 341,700
- -----------
5,565,492
- -------------------------------------------------------------------------------
INDUSTRIALS--14.6%
- -------------------------------------------------------------------------------
AEROSPACE & DEFENSE--0.6%
Boeing Co.
3,900 161,928
- -------------------------------------------------------------------------------
BUILDING PRODUCTS--0.6%
American Standard Cos., Inc.(1)
2,600 185,926
- -------------------------------------------------------------------------------
COMMERCIAL SERVICES & SUPPLIES--2.1%
Automatic Data Processing, Inc.
9,600 357,984
- -------------------------------------------------------------------------------
Concord EFS, Inc.(1)
5,600 109,200
- -------------------------------------------------------------------------------
DST Systems, Inc.(1)
3,800 128,060
- -----------
595,244
- -------------------------------------------------------------------------------
INDUSTRIAL CONGLOMERATES--10.3%
3M Co.
5,500 692,065
- -------------------------------------------------------------------------------
General Electric Co.
70,600 2,273,320
- -----------
2,965,385
- -------------------------------------------------------------------------------
MACHINERY--1.0%
Danaher Corp.
4,600 285,430
13 | OPPENHEIMER TRINITY LARGE CAP GROWTH
FUND
|
STATEMENT OF INVESTMENTS Continued
MARKET VALUE
SHARES SEE NOTE 1
- -----------------------------------------------------------------------------
INFORMATION TECHNOLOGY--20.0%
- -----------------------------------------------------------------------------
COMMUNICATIONS EQUIPMENT--2.7%
Cisco Systems, Inc.(1)
58,700 $ 774,253
- -----------------------------------------------------------------------------
COMPUTERS & PERIPHERALS--4.6%
Dell Computer Corp.(1)
18,100 451,233
- -----------------------------------------------------------------------------
International Business Machines Corp.
11,000 774,400
- -----------------------------------------------------------------------------
Lexmark International, Inc., Cl. A(1)
2,400 117,312
- -----------
1,342,945
- -----------------------------------------------------------------------------
IT CONSULTING & SERVICES--1.7%
Electronic Data Systems Corp.
9,300 341,961
- -----------------------------------------------------------------------------
Unisys Corp.(1)
19,800 148,896
- -----------
490,857
- -----------------------------------------------------------------------------
SEMICONDUCTOR EQUIPMENT & PRODUCTS--4.3%
Intel Corp.
51,400 965,806
- -----------------------------------------------------------------------------
NVIDIA Corp.(1)
7,500 83,025
- -----------------------------------------------------------------------------
QLogic Corp.(1)
4,400 179,300
- -----------
1,228,131
- -----------------------------------------------------------------------------
SOFTWARE--6.7%
Microsoft Corp.(1)
35,600 1,708,088
- -----------------------------------------------------------------------------
Oracle Corp.(1)
21,800 218,196
- -----------
1,926,284
- -----------
Total Common Stocks (Cost
$35,949,963) 28,275,173
PRINCIPAL
AMOUNT
- -----------------------------------------------------------------------------
JOINT REPURCHASE AGREEMENTS--1.9%
- -----------------------------------------------------------------------------
Undivided interest of 0.25% in joint repurchase
agreement with Banc One Capital Markets, Inc.,
1.77%, dated 7/31/02, to be repurchased at
$212,462,446 on 8/1/02, collateralized by U.S.
Treasury Bonds, 7.50%, 11/15/16, with a value of
$110,819,035, U.S. Treasury Nts., 3.625%-6.50%,
8/31/03-2/15/10, with a value of $71,070,747 and
U.S.Treasury Bills, 12/26/02, with a value of
$34,953,398 (Cost $537,000)
$537,000 537,000
- -----------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE (COST $36,486,963)
100.1% 28,812,173
- -----------------------------------------------------------------------------
LIABILITIES IN EXCESS OF OTHER ASSETS
(0.1) (26,942)
- --------------------
NET ASSETS
100.0% $28,785,231
====================
FOOTNOTE TO STATEMENT OF INVESTMENTS
1. Non-income producing security.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
14 | OPPENHEIMER TRINITY LARGE CAP GROWTH
FUND
|
STATEMENT OF ASSETS AND LIABILITIES July 31, 2002
- -------------------------------------------------------------------------------
ASSETS
Investments, at value (cost $36,486,963)
--see accompanying
statement $ 28,812,173
- -------------------------------------------------------------------------------
Cash
21,557
- -------------------------------------------------------------------------------
Receivables and other assets:
Investments
sold
668,552
Shares of beneficial interest
sold 57,172
Interest and
dividends
19,382
Other
1,138
- -------------
Total
assets
29,579,974
- -------------------------------------------------------------------------------
LIABILITIES
Payables and other liabilities:
Investments
purchased
687,215
Shares of beneficial interest
redeemed 34,059
Shareholder
reports
18,168
Transfer and shareholder servicing agent
fees 16,969
Distribution and service plan
fees 5,723
Trustees'
compensation
4,195
Other
28,414
- -------------
Total
liabilities
794,743
- -------------------------------------------------------------------------------
NET
ASSETS
$28,785,231
===========
- -------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS
Par value of shares of beneficial
interest $ 4,533
- -------------------------------------------------------------------------------
Additional paid-in
capital 47,925,396
- -------------------------------------------------------------------------------
Accumulated net investment
loss (4,090)
- -------------------------------------------------------------------------------
Accumulated net realized loss on investment
transactions (11,465,818)
- -------------------------------------------------------------------------------
Net unrealized depreciation on
investments (7,674,790)
- -----------
NET
ASSETS
$28,785,231
===========
15 | OPPENHEIMER TRINITY LARGE CAP GROWTH
FUND
|
STATEMENT OF ASSETS AND LIABILITIES Continued
- -------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE
Class A Shares:
Net asset value and redemption price per share
(based on net assets of $14,356,104 and 2,229,330
shares of beneficial interest
outstanding) $6.44
Maximum offering price per share (net asset value
plus sales charge of 5.75% of offering
price) $6.83
- -------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes
applicable contingent deferred sales charge) and
offering price per share (based on net assets of
$10,100,997 and 1,613,651 shares of beneficial
interest
outstanding)
$6.26
- -------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes
applicable contingent deferred sales charge) and
offering price per share (based on net assets of
$4,031,660 and 643,932 shares of beneficial
interest
outstanding)
$6.26
- -------------------------------------------------------------------------------
Class N Shares:
Net asset value, redemption price (excludes
applicable contingent deferred sales charge) and
offering price per share (based on net assets of
$201,495 and 31,452 shares of beneficial interest
outstanding)
$6.41
- -------------------------------------------------------------------------------
Class Y Shares:
Net asset value, redemption price and offering
price per share (based on net assets of $94,975
and 14,476 shares of beneficial interest
outstanding)
$6.56
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
16 | OPPENHEIMER TRINITY LARGE CAP GROWTH
FUND
|
STATEMENT OF OPERATIONS For the Year Ended July 31, 2002
- -------------------------------------------------------------------------------
INVESTMENT INCOME
Dividends (net of foreign withholding taxes of
$4,319) $ 302,388
- -------------------------------------------------------------------------------
Interest
9,168
- -----------
Total investment
income 311,556
- -------------------------------------------------------------------------------
EXPENSES
Management
fees
231,829
- -------------------------------------------------------------------------------
Distribution and service plan fees:
Class
A
36,152
Class
B
114,591
Class
C
38,088
Class
N
432
- -------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees:
Class
A
113,310
Class
B
83,581
Class
C
27,478
Class
N
626
Class
Y
2,559
- -------------------------------------------------------------------------------
Shareholder
reports
63,342
- -------------------------------------------------------------------------------
Legal, auditing and other professional
fees 15,258
- -------------------------------------------------------------------------------
Custodian fees and
expenses 62
- -------------------------------------------------------------------------------
Other
21,383
- -------------
Total
expenses
748,691
Less voluntary waiver of transfer and shareholder
servicing agent fees -- Classes A, B, C and
N (86,926)
Less voluntary waiver of transfer and
shareholder servicing agent fees -- Class
Y (2,466)
Less reduction to custodian
expenses (62)
- -----------
Net
expenses
659,237
- -------------------------------------------------------------------------------
NET INVESTMENT
LOSS
(347,681)
- -------------------------------------------------------------------------------
REALIZED AND UNREALIZED LOSS
Net realized loss on
investments (4,180,725)
- -------------------------------------------------------------------------------
Net change in unrealized depreciation on
investments (4,530,887)
- -----------
Net realized and unrealized
loss (8,711,612)
- -------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS RESULTING FROM
OPERATIONS $(9,059,293)
===========
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
17 | OPPENHEIMER TRINITY LARGE CAP GROWTH
FUND
|
STATEMENTS OF CHANGES IN NET ASSETS
YEAR ENDED JULY
31,
2002 2001
- -------------------------------------------------------------------------------------
OPERATIONS
Net investment loss $
(347,681) $ (361,517)
- -------------------------------------------------------------------------------------
Net realized loss
(4,180,725) (7,264,828)
- -------------------------------------------------------------------------------------
Net change in unrealized depreciation
(4,530,887) (4,815,463)
- ----------------------------
Net decrease in net assets resulting from operations
(9,059,293) (12,441,808)
- -------------------------------------------------------------------------------------
DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS
Distributions from net realized gain:
Class
A
- -- (1,113,608)
Class
B
- -- (764,903)
Class
C
- -- (157,763)
Class
N
- -- --
Class
Y
- -- (87)
- -------------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS
Net increase in net assets resulting from beneficial
interest transactions:
Class A
6,840,815 3,370,419
Class B
4,657,802 2,823,569
Class C
3,184,637 885,361
Class N
234,202 1,000
Class Y
113,887 --
- -------------------------------------------------------------------------------------
NET ASSETS
Total increase (decrease)
5,972,050 (7,397,820)
- -------------------------------------------------------------------------------------
Beginning of period
22,813,181 30,211,001
- ----------------------------
End of period [including accumulated net investment
loss of $4,090 and $2,552, respectively]
$28,785,231 $22,813,181
============================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
18 | OPPENHEIMER TRINITY LARGE CAP GROWTH
FUND
|
FINANCIAL HIGHLIGHTS
CLASS A YEAR ENDED JULY 31,
2002 2001 2000 1999(1)
- ------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ------------------------------------------------------------------------------------------
Net asset value, beginning of period $
8.52 $14.55 $ 11.93 $ 10.00
- ------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss
(.07) (.10) (.11) (1.05)
Net realized and unrealized gain (loss)
(2.01) (5.06) 2.91 2.98
- -------------------------------------
Total from investment operations
(2.08) (5.16) 2.80 1.93
- ------------------------------------------------------------------------------------------
Dividends and/or distributions
to shareholders:
Distributions from net realized gain
- -- (.87) (.18) --
- ------------------------------------------------------------------------------------------
Net asset value, end of period
$6.44 $8.52 $14.55 $11.93
====================================
- ------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE(2)
(24.41)% (36.60)% 23.63% 19.30%
- ------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $14,356
$12,029 $16,470 $6,059
- ------------------------------------------------------------------------------------------
Average net assets (in thousands) $15,495
$14,063 $11,973 $4,028
- ------------------------------------------------------------------------------------------
Ratios to average net assets:(3)
Net investment loss
(0.75)% (1.01)% (1.03)% (1.05)%
Expenses
2.03% 1.54% 1.91% 1.81%
Expenses, net of reduction to custodian expenses
and/or voluntary waiver of transfer agent fees
1.75% 1.54% 1.89% 1.65%
- ------------------------------------------------------------------------------------------
Portfolio turnover rate
96% 160% 258% 157%
1. For the period from December 17, 1998 (inception of
offering) to July 31, 1999.
2. Assumes an 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. Total
returns are not annualized for periods of less than one full
year.
3. Annualized for periods of less than one full year.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
19 | OPPENHEIMER TRINITY LARGE CAP GROWTH
FUND
|
FINANCIAL HIGHLIGHTS Continued
CLASS B YEAR ENDED JULY 31,
2002 2001 2000 1999(1)
- -------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- -------------------------------------------------------------------------------------------
Net asset value, beginning of period $
8.34 $14.39 $ 11.89 $ 10.48
- -------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss
(.09) (.16) (.17) (1.04)
Net realized and unrealized gain (loss)
(1.99) (5.02) 2.85 2.45
- --------------------------------------
Total from investment operations
(2.08) (5.18) 2.68 1.41
- -------------------------------------------------------------------------------------------
Dividends and/or distributions
to shareholders:
Distributions from net realized gain
- -- (.87) (.18) --
- -------------------------------------------------------------------------------------------
Net asset value, end of period
$6.26 $ 8.34 $14.39 $11.89
=====================================
- -------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE(2)
(24.94)% (37.17)% 22.70% 13.45%
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- -------------------------------------------------------------------------------------------
Net assets, end of period (in thousands)
$10,101 $8,800 $11,499 $1,764
- -------------------------------------------------------------------------------------------
Average net assets (in thousands)
$11,463 $9,945 $ 7,257 $ 722
- -------------------------------------------------------------------------------------------
Ratios to average net assets:(3)
Net investment loss
(1.52)% (1.81)% (1.81)% (1.93)%
Expenses
2.80% 2.34% 2.69% 2.92%
Expenses, net of reduction to custodian expenses
and/or voluntary waiver of transfer agent fees
2.52% 2.34% 2.67% 2.75%
- -------------------------------------------------------------------------------------------
Portfolio turnover rate
96% 160% 258% 157%
1. For the period from March 1, 1999 (inception of offering)
to July 31, 1999.
2. Assumes an 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. Total
returns are not annualized for periods of less than one full
year.
3. Annualized for periods of less than one full year.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
20 | OPPENHEIMER TRINITY LARGE CAP GROWTH
FUND
|
CLASS C YEAR ENDED JULY 31,
2002 2001 2000 1999(1)
- --------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- --------------------------------------------------------------------------------------------
Net asset value, beginning of period $
8.35 $14.39 $ 11.89 $ 10.48
- --------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss
(.05) (.14) (.19) (1.04)
Net realized and unrealized gain (loss)
(2.04) (5.03) 2.87 2.45
- ---------------------------------------
Total from investment operations
(2.09) (5.17) 2.68 1.41
- --------------------------------------------------------------------------------------------
Dividends and/or distributions
to shareholders:
Distributions from net realized gain
- -- (.87) (.18) --
- --------------------------------------------------------------------------------------------
Net asset value, end of period
$6.26 $ 8.35 $14.39 $11.89
======================================
- --------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE(2)
(25.03)% (37.10)% 22.70% 13.45%
- --------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- --------------------------------------------------------------------------------------------
Net assets, end of period (in thousands)
$4,032 $1,983 $2,241 $438
- --------------------------------------------------------------------------------------------
Average net assets (in thousands)
$3,814 $2,109 $1,566 $192
- --------------------------------------------------------------------------------------------
Ratios to average net assets:(3)
Net investment loss
(1.47)% (1.82)% (1.82)% (1.95)%
Expenses
2.79% 2.35% 2.72% 2.90%
Expenses, net of reduction to custodian expenses
and/or voluntary waiver of transfer agent fees
2.51% 2.35% 2.70% 2.73%
- --------------------------------------------------------------------------------------------
Portfolio turnover rate
96% 160% 258% 157%
1. For the period from March 1, 1999 (inception of offering)
to July 31, 1999.
2. Assumes an 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. Total
returns are not annualized for periods of less than one full
year.
3. Annualized for periods of less than one full year.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
21 | OPPENHEIMER TRINITY LARGE CAP GROWTH
FUND
|
FINANCIAL HIGHLIGHTS Continued
CLASS N YEAR ENDED JULY 31,
2002 2001(1)
- ------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ------------------------------------------------------------------------------
Net asset value, beginning of period $
8.50 $ 9.03
- ------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss
(.10) (.06)
Net realized and unrealized loss
(1.99) (.47)
- -----------------
Total from investment operations
(2.09) (.53)
- ------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Distributions from net realized
gain -- --
- ------------------------------------------------------------------------------
Net asset value, end of period
$6.41 $8.50
===================
- ------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE(2)
(24.59)% (5.87)%
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ------------------------------------------------------------------------------
Net assets, end of period (in thousands)
$201 $1
- ------------------------------------------------------------------------------
Average net assets (in thousands)
$ 87 $1
- ------------------------------------------------------------------------------
Ratios to average net assets:(3)
Net investment loss
(0.87)% (1.67)%
Expenses
2.29% 1.48%
Expenses, net of reduction to custodian expenses
and/or voluntary waiver of transfer agent fees
2.01% 1.48%
- ------------------------------------------------------------------------------
Portfolio turnover
rate 96% 160%
1. For the period from March 1, 2001 (inception of offering)
to July 31, 2001.
2. Assumes an 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. Total
returns are not annualized for periods of less than one full
year.
3. Annualized for periods of less than one full year.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
22 | OPPENHEIMER TRINITY LARGE CAP GROWTH
FUND
|
CLASS Y YEAR ENDED JULY 31,
2002 2001 2000 1999(1)
- ------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ------------------------------------------------------------------------------------------
Net asset value, beginning of period $
8.63 $14.65 $ 11.95 $ 10.00
- ------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss
(.15) (.05) (.07) (1.03)
Net realized and unrealized gain (loss)
(1.92) (5.10) 2.95 2.98
- -------------------------------------
Total from investment operations
(2.07) (5.15) 2.88 1.95
- ------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Distributions from net realized gain
- -- (.87) (.18) --
- ------------------------------------------------------------------------------------------
Net asset value, end of period
$6.56 $8.63 $14.65 $11.95
=====================================
- ------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE(2)
(23.99)% (36.26)% 24.27% 19.50%
- ------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ------------------------------------------------------------------------------------------
Net assets, end of period (in thousands)
$95 $1 $1 $1
- ------------------------------------------------------------------------------------------
Average net assets (in thousands)
$68 $1 $1 $1
- ------------------------------------------------------------------------------------------
Ratios to average net assets:(3)
Net investment loss
(0.10)% (0.48)% (0.54)% (0.72)%
Expenses
4.83% 168.30%(4) 1.45% 1.65%
Expenses, net of reduction to custodian expenses
and/or voluntary waiver of transfer agent fees
1.20% 1.10% 1.43% 1.50%
- --------------------------------------------------------------------------------------------
Portfolio turnover rate
96% 160% 258% 157%
1. For the period from December 17, 1998 (inception of
offering) to July 31, 1999.
2. Assumes an 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. Total
returns are not annualized for periods of less than one full
year.
3. Annualized for periods of less than one full year.
4. Added since July 31, 2001 to reflect expenses before
reduction to custodian
expenses and voluntary waiver of transfer agent fees.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
23 | OPPENHEIMER TRINITY LARGE CAP GROWTH
FUND
|
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
Oppenheimer Trinity Large Cap Growth Fund (the Fund), is
registered under the
Investment Company Act of 1940, as amended, as an open-end
management
investment company. The Fund's investment objective is to
seek capital
appreciation. The Fund's investment advisor is
OppenheimerFunds, Inc. (the
Manager).
The Fund offers Class A, Class B, Class C, Class N and
Class Y shares. Class
A shares are sold at their offering price, which is normally
net asset value
plus a front-end sales charge. Class B, Class C and Class N
shares are sold
without a front-end sales charge but may be subject to a
contingent deferred
sales charge (CDSC). Class N shares are sold only through
retirement plans.
Retirement plans that offer Class N shares may impose
charges on those
accounts. Class Y shares are sold to certain institutional
investors without
either a front-end sales charge or a CDSC. All classes of
shares have identical
rights and voting privileges. Earnings, net assets and net
asset value per
share may differ by minor amounts due to each class having
its own expenses
directly attributable to that class. Classes A, B, C and N
have separate
distribution and/or service plans. No such plan has been
adopted for Class Y
shares. Class B shares will automatically convert to Class A
shares six years
after the date of purchase.
The following is a summary of significant accounting
policies consistently
followed by the Fund.
- --------------------------------------------------------------------------------
SECURITIES VALUATION. Securities listed or traded on
National Stock Exchanges
or other domestic or foreign exchanges are valued based on
the last sale price
of the security traded on that exchange prior to the time
when the Fund's
assets are valued. In the absence of a sale, the security is
valued at the last
sale price on the prior trading day, if it is within the
spread of the closing
bid and asked prices, and if not, at the closing bid price.
Securities
(including restricted securities) for which quotations are
not readily
available are valued primarily using dealer-supplied
valuations, a portfolio
pricing service authorized by the Board of Trustees, or at
their fair value.
Fair value is determined in good faith under consistently
applied procedures
under the supervision of the Board of Trustees. Short-term
"money market type"
debt securities with remaining maturities of sixty days or
less are valued at
amortized cost (which approximates market value).
- --------------------------------------------------------------------------------
JOINT REPURCHASE AGREEMENTS. The Fund, along with other
affiliated funds
managed by the Manager, may transfer uninvested cash
balances into one or more
joint repurchase agreement accounts. These balances are
invested in one or more
repurchase agreements, secured by U.S. government
securities. Securities
pledged as collateral for repurchase agreements are held by
a custodian bank
until the agreements mature. Each agreement requires that
the market value of
the collateral be sufficient to cover payments of interest
and principal;
however, in the event of default by the other party to the
agreement, retention
of the collateral may be subject to legal proceedings.
24 | OPPENHEIMER TRINITY LARGE CAP GROWTH
FUND
|
- --------------------------------------------------------------------------------
ALLOCATION OF INCOME, EXPENSES, GAINS AND LOSSES. Income,
expenses (other than
those attributable to a specific class), gains and losses
are allocated daily
to each class of shares based upon the relative proportion
of net assets
represented by such class. Operating expenses directly
attributable to a
specific class are charged against the operations of that
class.
- --------------------------------------------------------------------------------
FEDERAL TAXES. The Fund intends to continue to comply with
provisions of the
Internal Revenue Code applicable to regulated investment
companies and to
distribute all of its taxable income, including any net
realized gain on
investments not offset by capital loss carryforwards, if
any, to shareholders.
Therefore, no federal income or excise tax provision is
required.
As of July 31, 2002, the Fund had approximately
$1,856,000 of post-October
losses available to offset future capital gains, if any.
Such losses, if
unutilized, will expire in 2011.
As of July 31, 2002, the Fund had available for federal
income tax purposes an
unused capital loss carryforward as follows:
EXPIRING
------------------------
2009 $ 2,474,360
2010 7,389,585
-----------
Total $9,863,945(1)
===========
1. Includes $272,681 of the $2,775,589 unused capital loss
carryforward
acquired in the October 12, 2001 merger with Oppenheimer
Trinity Growth Fund
which is no longer subject to limitation under IRS sections
382 or 384.
- --------------------------------------------------------------------------------
TRUSTEES' COMPENSATION. The Fund has adopted an unfunded
retirement plan for
the Fund's independent trustees. Benefits are based on years
of service and
fees paid to each trustee during the years of service.
During the year ended
July 31, 2002, the Fund's projected benefit obligations were
increased by
$1,538 resulting in an accumulated liability of $4,093 as of
July 31, 2002.
The Board of Trustees has adopted a deferred compensation
plan for
independent trustees that enables trustees to elect to defer
receipt of all or
a portion of annual compensation they are entitled to
receive from the Fund.
Under the plan, the compensation deferred is periodically
adjusted as though an
equivalent amount had been invested for the Board of
Trustees in shares of one
or more Oppenheimer funds selected by the trustee. The
amount paid to the Board
of Trustees under the plan will be determined based upon the
performance of the
selected funds. Deferral of trustees' fees under the plan
will not affect the
net assets of the Fund, and will not materially affect the
Fund's assets,
liabilities or net investment income per share.
- --------------------------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. Dividends and
distributions to
shareholders, which are determined in accordance with income
tax regulations,
are recorded on the ex-dividend date.
25 | OPPENHEIMER TRINITY LARGE CAP GROWTH
FUND
|
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES Continued
CLASSIFICATION OF DIVIDENDS AND DISTRIBUTIONS TO
SHAREHOLDERS. Net investment
income (loss) and net realized gain (loss) may differ for
financial statement
and tax purposes. The character of dividends and
distributions made during the
fiscal year from net investment income or net realized gains
may differ from
their ultimate characterization for federal income tax
purposes. Also, due to
timing of dividends and distributions, the fiscal year in
which amounts are
distributed may differ from the fiscal year in which the
income or net realized
gain was recorded by the Fund.
The Fund adjusts the classification of distributions to
shareholders to
reflect the differences between financial statement amounts
and distributions
determined in accordance with income tax regulations.
Accordingly, during the
year ended July 31, 2002, amounts have been reclassified to
reflect a decrease
in paid-in capital of $346,143. Accumulated net investment
loss was decreased
by the same amount. Net assets of the Fund were unaffected
by the
reclassifications.
The tax character of distributions paid during the years
ended July 31, 2002
and July 31, 2001 was as follows:
YEAR
ENDED YEAR ENDED
JULY 31,
2002 JULY 31, 2001
- ---------------------------------------------------------------
Distributions paid from:
Ordinary income
$-- $ 2,036,361
Long-term capital gain
- -- --
Return of capital
- -- --
- -------------------------------
Total
$-- $2,036,361
===============================
As of July 31, 2002, the components of distributable
earnings on a tax basis
were as follows:
Accumulated net investment loss
$ (4,090)
Accumulated net realized loss
(11,465,818)
Net unrealized depreciation
(7,674,790)
- ----------
Total
$(19,144,698)
============
- --------------------------------------------------------------------------------
INVESTMENT INCOME. Dividend income is recorded on the
ex-dividend date or upon
ex-dividend notification in the case of certain foreign
dividends where the
ex-dividend date may have passed. Non-cash dividends
included in dividend
income, if any, are recorded at the fair market value of the
securities
received. Interest income, which includes accretion of
discount and
amortization of premium, is accrued as earned.
- --------------------------------------------------------------------------------
SECURITY TRANSACTIONS. Security transactions are recorded on
the trade date.
Realized gains and losses on securities sold are determined
on the basis of
identified cost.
- --------------------------------------------------------------------------------
OTHER. The preparation of financial statements in conformity
with accounting
principles generally accepted in the United States of
America 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.
26 | OPPENHEIMER TRINITY LARGE CAP GROWTH
FUND
|
- --------------------------------------------------------------------------------
2. SHARES OF BENEFICIAL INTEREST
The Fund has authorized an unlimited number of $0.001 par
value shares of
beneficial interest of each class. Transactions in shares of
beneficial
interest were as follows:
YEAR ENDED JULY 31, 2002
YEAR ENDED JULY 31, 2001(1)
SHARES
AMOUNT SHARES AMOUNT
- -------------------------------------------------------------------------------------
CLASS A
Sold 1,220,919 $
9,861,258 697,345 $ 7,533,879
Dividends and/or
distributions reinvested --
- -- 93,390 985,266
Acquisition - Note 6 488,341
3,716,273 -- --
Redeemed (892,005) (6,736,716)
(510,448) (5,148,726)
- ------------------------------------------------------
Net increase 817,255
$6,840,815 280,287 $3,370,419
======================================================
- -------------------------------------------------------------------------------------
CLASS B
Sold 949,955 $
7,487,395 503,033 $ 5,175,934
Dividends and/or
distributions reinvested --
- -- 65,880 683,837
Acquisition - Note 6 327,908
2,439,639 -- --
Redeemed (718,719) (5,269,232)
(313,665) (3,036,202)
- ------------------------------------------------------
Net increase 559,144
$4,657,802 255,248 $2,823,569
======================================================
- -------------------------------------------------------------------------------------
CLASS C
Sold 557,904 $
4,306,057 285,030 $ 2,995,301
Dividends and/or
distributions reinvested --
- -- 15,056 156,434
Acquisition - Note 6 129,384
962,619 -- --
Redeemed (280,869) (2,084,039)
(218,252) (2,266,374)
- ------------------------------------------------------
Net increase 406,419
$3,184,637 81,834 $ 885,361
======================================================
- -------------------------------------------------------------------------------------
CLASS N
Sold 34,570 $
256,789 111 $ 1,000
Dividends and/or
distributions reinvested --
- -- -- --
Acquisition - Note 6 115
875 -- --
Redeemed (3,344)
(23,462) -- --
- ------------------------------------------------------
Net increase 31,341 $
234,202 111 $ 1,000
======================================================
- -------------------------------------------------------------------------------------
CLASS Y
Sold 9,810 $
77,807 -- $ --
Dividends and/or
distributions reinvested --
- -- -- --
Acquisition - Note 6 7,350
56,743 -- --
Redeemed (2,784)
(20,663) -- --
- ------------------------------------------------------
Net increase 14,376 $
113,887 -- $ --
======================================================
1. For the year ended July 31, 2001, for Class A, B, C and Y
shares and for the
period from March 1, 2001 (inception of offering) to July
31, 2001, for Class N
shares.
27 | OPPENHEIMER TRINITY LARGE CAP GROWTH
FUND
|
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
3. PURCHASES AND SALES OF SECURITIES
The aggregate cost of purchases and proceeds from sales of
securities, other
than short-term obligations, for the year ended July 31,
2002, were $34,968,964
and $28,712,162, respectively.
As of July 31, 2002, unrealized appreciation (depreciation)
based on cost of
securities for federal income tax purposes of $36,505,418
was composed of:
Gross unrealized appreciation $
583,959
Gross unrealized depreciation
(8,277,204)
- -----------
Net unrealized depreciation
$(7,693,245)
===========
The difference between book-basis and tax-basis unrealized
appreciation and
depreciation, if applicable, is attributable primarily to the
tax deferral of
losses on wash sales, or return of capital dividends, and the
realization for
tax purposes of unrealized gain (loss) on certain futures
contracts, investments
in passive foreign investment companies, and forward foreign
currency exchange
contracts.
- --------------------------------------------------------------------------------
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES
MANAGEMENT FEES. Management fees paid to the Manager were in
accordance with
the investment advisory agreement with the Fund which
provides for a fee of
0.75% of the first $200 million of average annual net
assets, 0.72% of the next
$200 million, 0.69% of the next $200 million, 0.66% of the
next $200 million,
and 0.60% of average annual net assets over $800 million.
The Fund's management
fee for the year ended July 31, 2002 was an annualized rate
of 0.75%.
- --------------------------------------------------------------------------------
TRANSFER AGENT FEES. OppenheimerFunds Services (OFS), a
division of the
Manager, acts as the transfer and shareholder servicing
agent for the Fund. The
Fund pays OFS $19.75 per account fee.
Additionally, Class Y shares are subject to minimum fees
of $5,000 for
assets of less than $10 million and $10,000 for assets of
$10 million or more.
The Class Y shares are subject to the minimum fees in the
event that the per
account fee does not equal or exceed the applicable minimum
fees. OFS may
voluntarily waive the minimum fees.
OFS has voluntarily agreed to limit transfer and
shareholder servicing agent
fees up to an annual rate of 0.25% of average net assets of
Class Y shares and
for all other classes, up to an annual rate of 0.35% of
average net assets of
each class. This undertaking may be amended or withdrawn at
any time.
- --------------------------------------------------------------------------------
SUB-ADVISOR FEES. The Manager pays Trinity Investment
Management Corporation
(the Sub-Advisor) based on the fee schedule set forth in the
Prospectus. For
the year ended July 31, 2002, the Manager paid $82,998 to
the Sub-Advisor.
28 | OPPENHEIMER TRINITY LARGE CAP GROWTH
FUND
|
- --------------------------------------------------------------------------------
DISTRIBUTION AND SERVICE PLAN (12B-1) FEES. Under its
General Distributor's
Agreement with the Manager, OppenheimerFunds Distributor,
Inc. (the
Distributor) acts as the Fund's principal underwriter in the
continuous public
offering of the different classes of shares of the Fund.
The compensation paid to (or retained by) the Distributor
from the sale of
shares or on the redemption of shares is shown in the table
below for the
period indicated.
AGGREGATE CLASS A
CONCESSIONS CONCESSIONS CONCESSIONS
CONCESSIONS
FRONT-END FRONT-END ON CLASS
A ON CLASS B ON CLASS C ON CLASS N
SALES CHARGES SALES CHARGES
SHARES SHARES SHARES SHARES
ON CLASS A RETAINED BY ADVANCED
BY ADVANCED BY ADVANCED BY ADVANCED BY
YEAR ENDED SHARES DISTRIBUTOR
DISTRIBUTOR(1) DISTRIBUTOR(1) DISTRIBUTOR(1)
DISTRIBUTOR(1)
- -----------------------------------------------------------------------------------------------------------------
July 31, 2002 $141,710 $52,787
$5,810 $136,636 $26,045 $2,465
1. The Distributor advances concession payments to dealers
for certain sales of
Class A shares and for sales of Class B, Class C and Class N
shares from its
own resources at the time of sale.
CLASS
A CLASS B CLASS C CLASS N
CONTINGENT CONTINGENT CONTINGENT
CONTINGENT
DEFERRED DEFERRED DEFERRED DEFERRED
SALES
CHARGES SALES CHARGES SALES CHARGES SALES CHARGES
RETAINED
BY RETAINED BY RETAINED BY RETAINED BY
YEAR ENDED
DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR
DISTRIBUTOR
- -----------------------------------------------------------------------------------------------------------------
July 31, 2002
$28 $39,010 $1,849 $11
- -----------------------------------------------------------------------------------------------------------------
SERVICE PLAN FOR CLASS A SHARES. The Fund has adopted a
Service Plan for Class
A Shares. It reimburses the Distributor for a portion of its
costs incurred for
services provided to accounts that hold Class A shares.
Reimbursement is made
quarterly at an annual rate of up to 0.25% of the average
annual net assets of
Class A shares of the Fund. For the year ended July 31, 2002
, payments under
the Class A Plan totaled $36,152, all of which were paid by
the Distributor to
recipients, and included $4,170 paid to an affiliate of the
Manager. Any
unreimbursed expenses the Distributor incurs with respect to
Class A shares in
any fiscal year cannot be recovered in subsequent years.
- --------------------------------------------------------------------------------
DISTRIBUTION AND SERVICE PLANS FOR CLASS B, CLASS C AND
CLASS N SHARES. The
Fund has adopted Distribution and Service Plans for Class B,
Class C and Class
N shares. Under the plans, the Fund pays the Distributor an
annual asset-based
sales charge of 0.75% per year on Class B shares and on
Class C shares and the
Fund pays the Distributor an annual asset-based sales charge
of 0.25% per year
on Class N shares. The Distributor also receives a service
fee of 0.25% per
year under each plan.
DISTRIBUTOR'S
DISTRIBUTOR'S AGGREGATE
AGGREGATE UNREIMBURSED
UNREIMBURSED EXPENSES AS %
TOTAL PAYMENTS AMOUNT
RETAINED EXPENSES OF NET ASSETS
UNDER PLAN BY
DISTRIBUTOR UNDER PLAN OF CLASS
- ----------------------------------------------------------------------------------------------
Class B Plan $114,591
$94,051 $225,919 2.24%
Class C Plan 38,088
18,232 58,625 1.45
Class N Plan 432
426 3,927 1.95
29 | OPPENHEIMER TRINITY LARGE CAP GROWTH
FUND
|
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
5. BANK BORROWINGS
The Fund may borrow from a bank for temporary or emergency
purposes including,
without limitation, funding of shareholder redemptions
provided asset coverage
for borrowings exceeds 300%. The Fund has entered into an
agreement which
enables it to participate with other Oppenheimer funds in an
unsecured line of
credit with a bank, which permits borrowings up to $400
million, collectively.
Interest is charged to each fund, based on its borrowings,
at a rate equal to
the Federal Funds Rate plus 0.45%. Borrowings are payable
within 30 days after
such loan is executed. The Fund also pays a commitment fee
equal to its pro
rata share of the average unutilized amount of the credit
facility at a rate of
0.08% per annum.
The Fund had no borrowings outstanding during the year
ended or at July 31,
2002.
- --------------------------------------------------------------------------------
6. ACQUISITION OF OPPENHEIMER TRINITY GROWTH FUND
On October 12, 2001, the Fund acquired all of the net assets
of Oppenheimer
Trinity Growth Fund, pursuant to an Agreement and Plan of
Reorganization
approved by the Oppenheimer Trinity Growth Fund shareholders
on April 12, 2001.
The Fund issued (at an exchange ratio of 0.929111 for Class
A, 0.934499 for
Class B, 0.933942 for Class C, 0.927699 for Class N and
0.922201 for Class Y of
the Fund, to one share of Oppenheimer Trinity Large Cap
Growth Fund) 488,341;
327,908; 129,384; 115 and 7,350 shares of beneficial
interest for Class A ,
Class B, Class C, Class N and Class Y, respectively, valued
at $3,716,273;
$2,439,639; $962,619; $875 and $56,743 in exchange for the
net assets,
resulting in combined Class A net assets of $14,652,007,
Class B net assets of
$10,711,439, Class C net assets of $2,969,374, Class N net
assets of $22,045
and Class Y net assets of $61,005 on October 12, 2001. The
net assets acquired
included net unrealized depreciation of $1,140,630,
undistributed realized
losses of $2,775,589 and unused capital loss carryforward of
$2,775,589. The
exchange qualified as a tax-free reorganization for federal
income tax
purposes.
STATEMENT OF INVESTMENTS January
31, 2003 / Unaudited
Market Value
Shares See Note 1
- --------------------------------------------------------------------------------
Common Stocks--98.9%
- --------------------------------------------------------------------------------
Consumer Discretionary--14.8%
- --------------------------------------------------------------------------------
Household Durables--1.6%
Newell Rubbermaid, Inc.
18,900 $ 526,365
- --------------------------------------------------------------------------------
Media--0.7%
McGraw-Hill Cos., Inc. (The)
3,900 230,958
- --------------------------------------------------------------------------------
Multiline Retail--9.1%
Kohl's Corp. 1
14,100 738,417
- --------------------------------------------------------------------------------
Target Corp.
28,700 809,627
- --------------------------------------------------------------------------------
Wal-Mart Stores, Inc.
30,300 1,448,340
- ----------
2,996,384
- --------------------------------------------------------------------------------
Specialty Retail--3.4%
AutoZone, Inc. 1
6,200 407,402
- --------------------------------------------------------------------------------
Limited Brands, Inc.
16,800 211,512
- --------------------------------------------------------------------------------
Lowe's Cos., Inc.
15,100 516,118
- ----------
1,135,032
- --------------------------------------------------------------------------------
Consumer Staples--15.0%
- --------------------------------------------------------------------------------
Beverages--8.0%
Anheuser-Busch Cos., Inc.
26,200 1,243,714
- --------------------------------------------------------------------------------
Coca-Cola Co. (The)
13,500 546,210
- --------------------------------------------------------------------------------
Pepsi Bottling Group, Inc. (The)
22,100 560,235
- --------------------------------------------------------------------------------
PepsiCo, Inc.
7,200 291,456
- ----------
2,641,615
- --------------------------------------------------------------------------------
Food Products--0.5%
Heinz (H.J.) Co.
5,500 177,705
- --------------------------------------------------------------------------------
Household Products--6.5%
Kimberly-Clark Corp.
5,600 259,392
- --------------------------------------------------------------------------------
Procter & Gamble Corp. (The)
22,300 1,908,211
- ----------
2,167,603
- --------------------------------------------------------------------------------
Energy--0.4%
- --------------------------------------------------------------------------------
Oil & Gas--0.4%
Anadarko Petroleum Corp.
3,000 138,330
- --------------------------------------------------------------------------------
Financials--8.0%
- --------------------------------------------------------------------------------
Banks--2.0%
Fifth Third Bancorp
3,400 181,390
- --------------------------------------------------------------------------------
North Fork Bancorporation, Inc.
3,400 110,262
- --------------------------------------------------------------------------------
Synovus Financial Corp.
19,800 382,734
- ----------
674,386
- --------------------------------------------------------------------------------
Diversified Financials--4.4%
American Express Co.
8,900 316,217
9 | OPPENHEIMER TRINITY LARGE CAP GROWTH FUND
STATEMENT OF INVESTMENTS Unaudited / Continued
Market Value
Shares See Note 1
- --------------------------------------------------------------------------------
Diversified Financials Continued
Fannie Mae
9,300 $ 601,710
- --------------------------------------------------------------------------------
MBNA Corp.
31,400 528,462
- ----------
1,446,389
- --------------------------------------------------------------------------------
Insurance--1.6%
Progressive Corp.
10,800 522,072
- --------------------------------------------------------------------------------
Health
Care--27.6%
- --------------------------------------------------------------------------------
Biotechnology--1.9%
Amgen, Inc. 1
12,300 626,808
- --------------------------------------------------------------------------------
Health Care Equipment &
Supplies--2.0%
Applera Corp./Applied Biosystems Group
37,800 663,390
- --------------------------------------------------------------------------------
Health Care Providers &
Services--6.0%
Cardinal Health, Inc.
21,200 1,236,596
- --------------------------------------------------------------------------------
UnitedHealth Group, Inc.
8,700 764,730
- ----------
2,001,326
- --------------------------------------------------------------------------------
Pharmaceuticals--17.7%
Abbott Laboratories
9,800 373,576
- --------------------------------------------------------------------------------
Bristol-Myers Squibb Co.
19,400 457,646
- --------------------------------------------------------------------------------
Forest Laboratories, Inc. 1
12,800 662,400
- --------------------------------------------------------------------------------
Johnson & Johnson
24,600 1,318,806
- --------------------------------------------------------------------------------
Merck & Co., Inc.
14,900 825,311
- --------------------------------------------------------------------------------
Pfizer, Inc.
73,000 2,216,280
- ----------
5,854,019
- --------------------------------------------------------------------------------
Industrials--9.6%
- --------------------------------------------------------------------------------
Building
Products--1.1%
American Standard Cos., Inc. 1
5,300 353,298
- --------------------------------------------------------------------------------
Commercial Services &
Supplies--1.6%
Automatic Data Processing, Inc.
9,600 332,832
- --------------------------------------------------------------------------------
Concord EFS, Inc. 1
5,600 82,096
- --------------------------------------------------------------------------------
DST Systems, Inc. 1
3,800 125,096
- ----------
540,024
- --------------------------------------------------------------------------------
Electrical
Equipment--0.7%
Emerson Electric Co.
4,800 225,264
- --------------------------------------------------------------------------------
Industrial
Conglomerates--6.2%
3M Co.
5,500 685,025
- --------------------------------------------------------------------------------
General Electric Co.
59,000 1,365,260
- ----------
2,050,285
- --------------------------------------------------------------------------------
Information
Technology--20.9%
- --------------------------------------------------------------------------------
Communications
Equipment--2.9%
Cisco Systems, Inc. 1
72,100 963,977
10 | OPPENHEIMER TRINITY LARGE CAP GROWTH FUND
Market Value
Shares See Note 1
- --------------------------------------------------------------------------------
Computers & Peripherals--4.7%
Dell Computer Corp. 1
18,600 $ 443,796
- --------------------------------------------------------------------------------
International Business Machines Corp.
12,500 977,875
- --------------------------------------------------------------------------------
Lexmark International, Inc., Cl. A 1
2,400 145,296
- -----------
1,566,967
- --------------------------------------------------------------------------------
IT Consulting &
Services--1.0%
Electronic Data Systems Corp.
9,300 157,635
- --------------------------------------------------------------------------------
Unisys Corp. 1
19,800 184,536
- -----------
342,171
- --------------------------------------------------------------------------------
Semiconductor Equipment &
Products--3.8%
Applied Materials, Inc. 1
9,600 114,912
- --------------------------------------------------------------------------------
Intel Corp.
63,700 997,542
- --------------------------------------------------------------------------------
QLogic Corp. 1
4,400 146,432
- -----------
1,258,886
- --------------------------------------------------------------------------------
Software--8.5%
Intuit, Inc. 1
2,300 101,430
- --------------------------------------------------------------------------------
Microsoft Corp. 1
48,400 2,297,064
- --------------------------------------------------------------------------------
Oracle Corp. 1
33,900 407,817
- -----------
2,806,311
- --------------------------------------------------------------------------------
Telecommunication
Services--2.6%
- --------------------------------------------------------------------------------
Diversified Telecommunication
Services--1.3%
Verizon Communications, Inc.
11,100 424,908
- --------------------------------------------------------------------------------
Wireless Telecommunication
Services--1.3%
Nextel Communications, Inc., Cl. A 1
35,900 453,058
- -----------
Total Common Stocks (Cost
$40,420,983) 32,787,531
11 | OPPENHEIMER TRINITY LARGE CAP GROWTH FUND
STATEMENT OF INVESTMENTS Unaudited / Continued
Principal Market Value
Amount See Note 1
- -------------------------------------------------------------------------------------------------------
Joint Repurchase Agreements--1.3%
Undivided interest of 0.09% in joint repurchase agreement
(Market Value
$461,812,000) with Banc One Capital Markets, Inc., 1.26%,
dated 1/31/03,
to be repurchased at $425,045 on 2/3/03, collateralized by
U.S. Treasury
Nts., 5.50%--6.75%, 5/31/03--5/15/05, with a value of
$109,835,250, U.S.
Treasury Bonds, 2.125%--9.375%, 5/31/04--2/15/06, with a
value of
$352,849,233 and U.S. Treasury Bills, 2/20/03, with a value
of $8,743,488
(Cost
$425,000)
$425,000 $ 425,000
- -------------------------------------------------------------------------------------------------------
Total Investments, at Value (Cost
$40,845,983) 100.2%
33,212,531
- -------------------------------------------------------------------------------------------------------
Liabilities in Excess of Other
Assets
(0.2) (75,847)
- -----------------------
Net
Assets
100.0% $33,136,684
=======================
Footnotes to Statement of Investments
1. Non-income producing security.
See accompanying Notes to Financial Statements.
12 | OPPENHEIMER TRINITY LARGE CAP GROWTH FUND
STATEMENT OF ASSETS AND LIABILITIES Unaudited
January 31, 2003
- -----------------------------------------------------------------------------------
Assets
Investments, at value (cost $40,845,983)--see accompanying
statement $33,212,531
- -----------------------------------------------------------------------------------
Cash
16,903
- -----------------------------------------------------------------------------------
Receivables and other assets:
Shares of beneficial interest
sold 74,827
Interest and
dividends
37,715
Other
1,587
- ------------
Total
assets
33,343,563
- -----------------------------------------------------------------------------------
Liabilities
Payables and other liabilities:
Shares of beneficial interest
redeemed 167,036
Transfer and shareholder servicing agent
fees 20,037
Distribution and service plan
fees 7,063
Trustees'
compensation
4,882
Other
7,861
- ------------
Total
liabilities
206,879
- -----------------------------------------------------------------------------------
Net
Assets
$33,136,684
============
- -----------------------------------------------------------------------------------
Composition of Net Assets
Par value of shares of beneficial
interest $ 5,494
- -----------------------------------------------------------------------------------
Additional paid-in
capital 54,316,516
- -----------------------------------------------------------------------------------
Accumulated net investment
loss (103,757)
- -----------------------------------------------------------------------------------
Accumulated net realized loss on investment
transactions (13,448,117)
- -----------------------------------------------------------------------------------
Net unrealized depreciation on
investments (7,633,452)
- ------------
Net
Assets
$33,136,684
============
13 | OPPENHEIMER TRINITY LARGE CAP GROWTH FUND
STATEMENT OF ASSETS AND LIABILITIES Unaudited / Continued
- ---------------------------------------------------------------------------------------
Net Asset Value Per Share
Class A Shares:
Net asset value and redemption price per share (based on net
assets of
$16,441,870 and 2,682,279 shares of beneficial interest
outstanding) $6.13
Maximum offering price per share (net asset value plus sales
charge of
5.75% of offering
price)
$6.50
- ---------------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes applicable
contingent deferred
sales charge) and offering price per share (based on net
assets of $11,964,947
and 2,016,849 shares of beneficial interest
outstanding) $5.93
- ---------------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes applicable
contingent deferred
sales charge) and offering price per share (based on net
assets of $4,278,579
and 721,142 shares of beneficial interest
outstanding) $5.93
- ---------------------------------------------------------------------------------------
Class N Shares:
Net asset value, redemption price (excludes applicable
contingent deferred
sales charge) and offering price per share (based on net
assets of $352,026
and 57,831 shares of beneficial interest
outstanding) $6.09
- ---------------------------------------------------------------------------------------
Class Y Shares:
Net asset value, redemption price and offering price per
share (based on
net assets of $99,262 and 15,845 shares of beneficial
interest outstanding) $6.26
See accompanying Notes to Financial Statements.
14 | OPPENHEIMER TRINITY LARGE CAP GROWTH FUND
STATEMENT OF OPERATIONS Unaudited
For the Six Months Ended January 31, 2003
- --------------------------------------------------------------------------------
Investment Income
Dividends
$ 218,484
- --------------------------------------------------------------------------------
Interest
7,219
- ------------
Total investment
income 225,703
- --------------------------------------------------------------------------------
Expenses
Management
fees
123,515
- --------------------------------------------------------------------------------
Distribution and service plan fees:
Class
A
19,197
Class
B
58,033
Class
C
22,379
Class
N
769
- --------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees:
Class
A
50,007
Class
B
48,621
Class
C
17,737
Class
N
1,247
- --------------------------------------------------------------------------------
Shareholder
reports
33,489
- --------------------------------------------------------------------------------
Trustees'
compensation
1,012
- --------------------------------------------------------------------------------
Custodian fees and
expenses 42
- --------------------------------------------------------------------------------
Other
7,595
- ------------
Total
expenses
383,643
Less reduction to custodian
expenses (17)
Less voluntary waiver of transfer and shareholder
servicing agent fees--Classes A, B, C and
N (58,256)
- ------------
Net
expenses
325,370
- --------------------------------------------------------------------------------
Net Investment
Loss
(99,667)
- --------------------------------------------------------------------------------
Realized and Unrealized Gain (Loss)
Net realized loss on
investments (1,982,299)
- --------------------------------------------------------------------------------
Net change in unrealized appreciation on
investments 41,338
- ------------
Net realized and unrealized
loss (1,940,961)
- --------------------------------------------------------------------------------
Net Decrease in Net Assets Resulting from
Operations $(2,040,628)
============
See accompanying Notes to Financial Statements.
15 | OPPENHEIMER TRINITY LARGE CAP GROWTH FUND
STATEMENTS OF CHANGES IN NET ASSETS
Six
Months Year
Ended Ended
January
31, 2003 July 31,
(Unaudited) 2002
- -----------------------------------------------------------------------------------
Operations
Net investment loss $
(99,667) $ (347,681)
- -----------------------------------------------------------------------------------
Net realized loss
(1,982,299) (4,180,725)
- -----------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation)
41,338 (4,530,887)
- --------------------------
Net decrease in net assets resulting from operations
(2,040,628) (9,059,293)
- -----------------------------------------------------------------------------------
Beneficial Interest Transactions
Net increase in net assets resulting from beneficial
interest transactions:
Class A
3,074,973 6,840,815
Class B
2,584,569 4,657,802
Class C
558,325 3,184,637
Class N
166,768 234,202
Class
Y
7,446 113,887
- -----------------------------------------------------------------------------------
Net Assets
Total increase
4,351,453 5,972,050
- -----------------------------------------------------------------------------------
Beginning of period
28,785,231 22,813,181
- --------------------------
End of period [including accumulated net investment
loss of $103,757 and $4,090, respectively]
$33,136,684 $28,785,231
==========================
See accompanying Notes to Financial Statements.
16 | OPPENHEIMER TRINITY LARGE CAP GROWTH FUND
FINANCIAL HIGHLIGHTS
Six
Months Year
Ended Ended
January 31,
2003 July 31,
(Unaudited) 2002 2001 2000 1999 1
- ----------------------------------------------------------------------------------------------------
Per Share Operating Data
Net asset value, beginning of period
$6.44 $8.52 $14.55 $11.93 $10.00
- ----------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss
(.02) (.07) (.10) (.11) (1.05)
Net realized and unrealized gain (loss)
(.29) (2.01) (5.06) 2.91 2.98
- ----------------------------------------------
Total from investment operations
(.31) (2.08) (5.16) 2.80 1.93
- ----------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Distributions from net realized gain
- -- -- (.87) (.18) --
- ----------------------------------------------------------------------------------------------------
Net asset value, end of period
$6.13 $6.44 $ 8.52 $14.55 $11.93
==============================================
- ----------------------------------------------------------------------------------------------------
Total Return, at Net Asset Value 2
(4.81)% (24.41)% (36.60)% 23.63% 19.30%
- ----------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
Net assets, end of period (in thousands) $16,442
$14,356 $12,029 $16,470 $6,059
- ----------------------------------------------------------------------------------------------------
Average net assets (in thousands) $16,341
$15,495 $14,063 $11,973 $4,028
- ----------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment loss
(0.17)% (0.75)% (1.01)% (1.03)% (1.05)%
Expenses
1.85% 2.03% 1.54% 1.91% 1.81%
Expenses, net of reduction to custodian expenses
and/or voluntary waiver of transfer agent fees
1.50% 1.75% 1.54% 1.89% 1.65%
- ----------------------------------------------------------------------------------------------------
Portfolio turnover rate
67% 96% 160% 258% 157%
1. For the period from December 17, 1998 (inception of
offering) to July 31,
1999.
2. Assumes an 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. Total
returns are not annualized for periods of less than one full
year.
3. Annualized for periods of less than one full year.
See accompanying Notes to Financial Statements.
17 | OPPENHEIMER TRINITY LARGE CAP GROWTH FUND
FINANCIAL HIGHLIGHTS Continued
Six
Months Year
Ended Ended
January 31,
2003 July 31,
Class B
(Unaudited) 2002 2001 2000 1999 1
- ----------------------------------------------------------------------------------------------------
Per Share Operating Data
Net asset value, beginning of period
$6.26 $8.34 $14.39 $11.89 $10.48
- ----------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss
(.02) (.09) (.16) (.17) (1.04)
Net realized and unrealized gain (loss)
(.31) (1.99) (5.02) 2.85 2.45
- ----------------------------------------------
Total from investment operations
(.33) (2.08) (5.18) 2.68 1.41
- ----------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Distributions from net realized gain
- -- -- (.87) (.18) --
- ----------------------------------------------------------------------------------------------------
Net asset value, end of period
$5.93 $6.26 $8.34 $14.39 $11.89
==============================================
- ----------------------------------------------------------------------------------------------------
Total Return, at Net Asset Value 2
(5.27)% (24.94)% (37.17)% 22.70% 13.45%
- ----------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
Net assets, end of period (in thousands) $11,965
$10,101 $8,800 $11,499 $1,764
- ----------------------------------------------------------------------------------------------------
Average net assets (in thousands) $11,522
$11,463 $9,945 $ 7,257 $ 722
- ----------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment loss
(1.05)% (1.52)% (1.81)% (1.81)% (1.93)%
Expenses
2.85% 2.80% 2.34% 2.69% 2.92%
Expenses, net of reduction to custodian expenses
and/or voluntary waiver of transfer agent fees
2.50% 2.52% 2.34% 2.67% 2.75%
- ----------------------------------------------------------------------------------------------------
Portfolio turnover rate
67% 96% 160% 258% 157%
1. For the period from March 1, 1999 (inception of offering)
to July 31, 1999.
2. Assumes an 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. Total
returns are not annualized for periods of less than one full
year.
3. Annualized for periods of less than one full year.
See accompanying Notes to Financial Statements.
18 | OPPENHEIMER TRINITY LARGE CAP GROWTH FUND
Six
Months Year
Ended Ended
January 31,
2003 July 31,
Class C
(Unaudited) 2002 2001 2000 1999 1
- ----------------------------------------------------------------------------------------------------
Per Share Operating Data
Net asset value, beginning of period $
6.26 $ 8.35 $14.39 $ 11.89 $ 10.48
- ----------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss
(.03) (.05) (.14) (.19) (1.04)
Net realized and unrealized gain (loss)
(.30) (2.04) (5.03) 2.87 2.45
- ----------------------------------------------
Total from investment operations
(.33) (2.09) (5.17) 2.68 1.41
- ----------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Distributions from net realized gain
- -- -- (.87) (.18) --
- ----------------------------------------------------------------------------------------------------
Net asset value, end of period
$5.93 $ 6.26 $ 8.35 $14.39 $11.89
==============================================
- ----------------------------------------------------------------------------------------------------
Total Return, at Net Asset Value 2
(5.27)% (25.03)% (37.10)% 22.70% 13.45%
- ----------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
Net assets, end of period (in thousands)
$4,279 $4,032 $1,983 $2,241 $438
- ----------------------------------------------------------------------------------------------------
Average net assets (in thousands)
$4,441 $3,814 $2,109 $1,566 $192
- ----------------------------------------------------------------------------------------------------
Ratios to average net assets:3
Net investment loss
(1.03)% (1.47)% (1.82)% (1.82)% (1.95)%
Expenses
2.80% 2.79% 2.35% 2.72% 2.90%
Expenses, net of reduction to custodian expenses
and/or voluntary waiver of transfer agent fees
2.45% 2.51% 2.35% 2.70% 2.73%
- ----------------------------------------------------------------------------------------------------
Portfolio turnover rate
67% 96% 160% 258% 157%
1. For the period from March 1, 1999 (inception of offering)
to July 31, 1999.
2. Assumes an 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. Total
returns are not annualized for periods of less than one full
year.
3. Annualized for periods of less than one full year.
See accompanying Notes to Financial Statements.
19 | OPPENHEIMER TRINITY LARGE CAP GROWTH FUND
FINANCIAL HIGHLIGHTS Continued
Six Months Year
Ended Ended
January
31, 2003 July 31,
Class N
(Unaudited) 2002 2001 1
- -------------------------------------------------------------------------------------------
Per Share Operating Data
Net asset value, beginning of
period $6.41 $8.50 $9.03
- -------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment
loss (.04)
(.10) (.06)
Net realized and unrealized
loss (.28) (1.99) (.47)
- ---------------------------
Total from investment
operations (.32) (2.09)
(.53)
- -------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Distributions from net realized
gain -- -- --
- -------------------------------------------------------------------------------------------
Net asset value, end of
period $6.09 $6.41
$8.50
===========================
- -------------------------------------------------------------------------------------------
Total Return, at Net Asset Value
2 (4.99)% (24.59)% (5.87)%
- -------------------------------------------------------------------------------------------
Ratios/Supplemental Data
Net assets, end of period (in
thousands) $352 $201 $1
- -------------------------------------------------------------------------------------------
Average net assets (in
thousands) $306 $
87 $1
- -------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment
loss (0.54)%
(0.87)% (1.67)%
Expenses
2.32% 2.29% 1.48%
Expenses, net of reduction to custodian expenses
and/or voluntary waiver of transfer agent
fees 1.97% 2.01% 1.48%
- -------------------------------------------------------------------------------------------
Portfolio turnover
rate 67%
96% 160%
1. For the period from March 1, 2001 (inception of offering)
to July 31, 2001.
2. Assumes an 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. Total
returns are not annualized for periods of less than one full
year.
3. Annualized for periods of less than one full year.
See accompanying Notes to Financial Statements.
20 | OPPENHEIMER TRINITY LARGE CAP GROWTH FUND
Six
Months Year
Ended Ended
January 31,
2003 July 31,
Class Y
(Unaudited) 2002 2001 2000 1999 1
- ----------------------------------------------------------------------------------------------------
Per Share Operating Data
Net asset value, beginning of period
$6.56 $8.63 $14.65 $11.95 $10.00
- ----------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss
- -- (.15) (.05) (.07) (1.03)
Net realized and unrealized gain (loss)
(.30) (1.92) (5.10) 2.95 2.98
- ----------------------------------------------
Total from investment operations
(.30) (2.07) (5.15) 2.88 1.95
- ----------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Distributions from net realized gain
- -- -- (.87) (.18) --
- ----------------------------------------------------------------------------------------------------
Net asset value, end of period
$6.26 $6.56 $ 8.63 $14.65 $11.95
==============================================
- ----------------------------------------------------------------------------------------------------
Total Return, at Net Asset Value 2
(4.57)% (23.99)% (36.26)% 24.27% 19.50%
- ----------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
Net assets, end of period (in thousands)
$99 $95 $1 $1 $1
- ----------------------------------------------------------------------------------------------------
Average net assets (in thousands)
$83 $68 $1 $1 $1
- ----------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment loss
0.37% (0.10)% (0.48)% (0.54)% (0.72)%
Expenses
1.01% 4.83% 168.30% 4 1.45% 1.65%
Expenses, net of reduction to custodian expenses
and/or voluntary waiver of transfer agent fees
1.01% 1.20% 1.10% 1.43% 1.50%
- ----------------------------------------------------------------------------------------------------
Portfolio turnover rate
67% 96% 160% 258% 157%
1. For the period from December 17, 1998 (inception of
offering) to July 31,
1999.
2. Assumes an 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. Total
returns are not annualized for periods of less than one full
year.
3. Annualized for periods of less than one full year.
4. Added since July 31, 2001 to reflect expenses before
reduction to custodian
expenses and voluntary waiver of transfer agent fees.
See accompanying Notes to Financial Statements.
21 | OPPENHEIMER TRINITY LARGE CAP GROWTH FUND
NOTES TO FINANCIAL STATEMENTS Unaudited
- --------------------------------------------------------------------------------
1. Significant Accounting Policies
Oppenheimer Trinity Large Cap Growth Fund (the Fund), is
registered under the
Investment Company Act of 1940, as amended, as an open-end
management investment
company. The Fund's investment objective is to seek capital
appreciation. The
Fund's investment advisor is OppenheimerFunds, Inc. (the
Manager). The Manager
has entered into a sub-advisory agreement with Trinity
Investment Management
Corporation.
The Fund offers Class A, Class B, Class C, Class N and
Class Y shares.
Class A shares are sold at their offering price, which is
normally net asset
value plus a front-end sales charge. Class B, Class C and
Class N shares are
sold without a front-end sales charge but may be subject to a
contingent
deferred sales charge (CDSC). Class N shares are sold only
through retirement
plans. Retirement plans that offer Class N shares may impose
charges on those
accounts. Class Y shares are sold to certain institutional
investors without
either a front-end sales charge or a CDSC. All classes of
shares have identical
rights and voting privileges. Earnings, net assets and net
asset value per share
may differ by minor amounts due to each class having its own
expenses directly
attributable to that class. Classes A, B, C and N have
separate distribution
and/or service plans. No such plan has been adopted for Class
Y shares. Class B
shares will automatically convert to Class A shares six years
after the date of
purchase.
The following is a summary of significant accounting
policies consistently
followed by the Fund.
- --------------------------------------------------------------------------------
Securities Valuation. Securities listed or traded on National
Stock Exchanges or
other domestic or foreign exchanges are valued based on the
last sale price of
the security traded on that exchange prior to the time when
the Fund's assets
are valued. In the absence of a sale, the security is valued
at the last sale
price on the prior trading day, if it is within the spread of
the closing bid
and asked prices, and if not, at the closing bid price.
Securities (including
restricted securities) for which quotations are not readily
available are valued
primarily using dealer-supplied valuations, a portfolio
pricing service
authorized by the Board of Trustees, or at their fair value.
Fair value is
determined in good faith under consistently applied
procedures under the
supervision of the Board of Trustees. Short-term "money
market type" debt
securities with remaining maturities of sixty days or less
are valued at
amortized cost (which approximates market value).
- --------------------------------------------------------------------------------
Joint Repurchase Agreements. The Fund, along with other
affiliated funds of the
Manager, may transfer uninvested cash balances into one or
more joint repurchase
agreement accounts. These balances are invested in one or
more repurchase
agreements, secured by U.S. government securities. Securities
pledged as
collateral for repurchase agreements are held by a custodian
bank until the
agreements mature. Each agreement requires that the market
value of the
collateral be sufficient to cover payments of interest and
principal; however,
in the event of default by the other party to the agreement,
retention of the
collateral may be subject to legal proceedings.
22 | OPPENHEIMER TRINITY LARGE CAP GROWTH FUND
- --------------------------------------------------------------------------------
Allocation of Income, Expenses, Gains and Losses. Income,
expenses (other than
those attributable to a specific class), gains and losses are
allocated daily to
each class of shares based upon the relative proportion of
net assets
represented by such class. Operating expenses directly
attributable to a
specific class are charged against the operations of that
class.
- --------------------------------------------------------------------------------
Federal Taxes. The Fund intends to continue to comply with
provisions of the
Internal Revenue Code applicable to regulated investment
companies and to
distribute all of its taxable income, including any net
realized gain on
investments not offset by capital loss carryforwards, if any,
to shareholders.
Therefore, no federal income or excise tax provision is
required.
As of January 31, 2003, the Fund had available for
federal income tax
purposes an estimated unused capital loss carryforward of
$13,702,341. This
estimated capital loss carryforward represents carryforward
as of the end of the
last fiscal year, increased for losses deferred under tax
accounting rules to
the current fiscal year and increased or decreased by capital
losses or gains
realized in the first six months of the current fiscal year.
As of July 31, 2002, the Fund had available for federal
income tax purposes
unused capital loss carryforwards as follows:
Expiring
----------------------
2009 $2,474,360
2010 7,389,585
----------
$9,863,945 1
==========
1. Includes $272,681 of the $2,775,589 unused capital loss
carryforward acquired
in the October 12, 2001 merger with Oppenheimer Trinity
Growth Fund which is no
longer subject to limitation under IRS sections 382 or 384.
- --------------------------------------------------------------------------------
Trustees' Compensation. The Fund has adopted an unfunded
retirement plan for the
Fund's independent trustees. Benefits are based on years of
service and fees
paid to each trustee during the years of service. During the
six months ended
January 31, 2003, the Fund's projected benefit obligations
were increased by
$351, resulting in an accumulated liability of $4,444 as of
January 31, 2003.
The Board of Trustees has adopted a deferred
compensation plan for
independent trustees that enables trustees to elect to defer
receipt of all or a
portion of annual compensation they are entitled to receive
from the Fund. Under
the plan, the compensation deferred is periodically adjusted
as though an
equivalent amount had been invested for the Board of Trustees
in shares of one
or more Oppenheimer funds selected by the trustee. The amount
paid to the Board
of Trustees under the plan will be determined based upon the
performance of the
selected funds. Deferral of trustees' fees under the plan
will not affect the
net assets of the Fund, and will not materially affect the
Fund's assets,
liabilities or net investment income per share.
23 | OPPENHEIMER TRINITY LARGE CAP GROWTH FUND
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
1. Significant Accounting Policies Continued
Dividends and Distributions to Shareholders. Dividends and
distributions to
shareholders, which are determined in accordance with income
tax regulations,
are recorded on the ex-dividend date.
- --------------------------------------------------------------------------------
Classification of Dividends and Distributions to
Shareholders. Net investment
income (loss) and net realized gain (loss) may differ for
financial statement
and tax purposes. The character of dividends and
distributions made during the
fiscal year from net investment income or net realized gains
may differ from
their ultimate characterization for federal income tax
purposes. Also, due to
timing of dividends and distributions, the fiscal year in
which amounts are
distributed may differ from the fiscal year in which the
income or net realized
gain was recorded by the Fund.
No distributions were paid during the six months ended
January 31, 2003 and
the year ended July 31, 2002.
- --------------------------------------------------------------------------------
Investment Income. Dividend income is recorded on the
ex-dividend date or upon
ex-dividend notification in the case of certain foreign
dividends where the
ex-dividend date may have passed. Non-cash dividends included
in dividend
income, if any, are recorded at the fair market value of the
securities
received. Interest income, which includes accretion of
discount and amortization
of premium, is accrued as earned.
- --------------------------------------------------------------------------------
Security Transactions. Security transactions are recorded on
the trade date.
Realized gains and losses on securities sold are determined
on the basis of
identified cost.
- --------------------------------------------------------------------------------
Other. The preparation of financial statements in conformity
with accounting
principles generally accepted in the United States of America
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.
24 | OPPENHEIMER TRINITY LARGE CAP GROWTH FUND
- --------------------------------------------------------------------------------
2. Shares of Beneficial Interest
The Fund has authorized an unlimited number of $0.001 par
value shares of
beneficial interest of each class. Transactions in shares of
beneficial interest
were as follows:
Six Months Ended January 31, 2003
Year Ended July 31, 2002
Shares Amount
Shares Amount
- -----------------------------------------------------------------------------------
Class A
Sold 1,157,867 $7,513,713
1,220,919 $9,861,258
Acquisition--Note 6 -- --
488,341 3,716,273
Redeemed (704,918) (4,438,740)
(892,005) (6,736,716)
- ------------------------------------------------------
Net increase 452,949 $3,074,973
817,255 $6,840,815
======================================================
- -----------------------------------------------------------------------------------
Class B
Sold 780,765 $4,885,783
949,955 $7,487,395
Acquisition--Note 6 -- --
327,908 2,439,639
Redeemed (377,567) (2,301,214)
(718,719) (5,269,232)
- ------------------------------------------------------
Net increase 403,198 $2,584,569
559,144 $4,657,802
======================================================
- -----------------------------------------------------------------------------------
Class C
Sold 439,175 $2,759,304
557,904 $4,306,057
Acquisition--Note 6 -- --
129,384 962,619
Redeemed (361,965) (2,200,979)
(280,869) (2,084,039)
- ------------------------------------------------------
Net increase 77,210 $ 558,325
406,419 $3,184,637
======================================================
- -----------------------------------------------------------------------------------
Class N
Sold 29,890 $ 188,715
34,570 $ 256,789
Acquisition--Note 6 --
- -- 115 875
Redeemed (3,511) (21,947)
(3,344) (23,462)
- ------------------------------------------------------
Net increase 26,379 $ 166,768
31,341 $ 234,202
======================================================
- -----------------------------------------------------------------------------------
Class Y
Sold 10,957 $ 70,477
9,810 $ 77,807
Acquisition--Note 6 -- --
7,350 56,743
Redeemed (9,588) (63,031)
(2,784) (20,663)
- ------------------------------------------------------
Net increase 1,369 $ 7,446
14,376 $ 113,887
======================================================
- --------------------------------------------------------------------------------
3. Purchases and Sales of Securities
The aggregate cost of purchases and proceeds from sales of
securities, other
than short-term obligations, for the six months ended January
31, 2003, were
$27,900,519 and $21,427,277, respectively.
25 | OPPENHEIMER TRINITY LARGE CAP GROWTH FUND
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
4. Fees and Other Transactions with Affiliates
Management Fees. Management fees paid to the Manager were in
accordance with the
investment advisory agreement with the Fund which provides
for a fee of 0.75% of
the first $200 million of average annual net assets, 0.72% of
the next $200
million, 0.69% of the next $200 million, 0.66% of the next
$200 million, and
0.60% of average annual net assets over $800 million.
- --------------------------------------------------------------------------------
Sub-Advisor Fees. The Manager pays Trinity Investment
Management Corporation
(the Sub-Advisor) based on the fee schedule set forth in the
Prospectus. For the
six months ended January 31, 2003, the Manager paid $41,311
to the Sub-Advisor
for services to the Fund.
- --------------------------------------------------------------------------------
Transfer Agent Fees. OppenheimerFunds Services (OFS), a
division of the Manager,
acts as the transfer and shareholder servicing agent for the
Fund. The Fund pays
OFS a $19.75 per account fee.
Additionally, Class Y shares are subject to minimum fees
of $5,000 for
assets of less than $10 million and $10,000 for assets of $10
million or more.
The Class Y shares are subject to the minimum fees in the
event that the per
account fee does not equal or exceed the applicable minimum
fees. OFS may
voluntarily waive the minimum fees.
OFS has voluntarily agreed to limit transfer and
shareholder servicing
agent fees up to an annual rate of 0.35% of average annual
net assets for all
classes. This undertaking may be amended or withdrawn at any
time.
- --------------------------------------------------------------------------------
Distribution and Service Plan (12b-1) Fees. Under its General
Distributor's
Agreement with the Manager, OppenheimerFunds Distributor,
Inc. (the Distributor)
acts as the Fund's principal underwriter in the continuous
public offering of
the different classes of shares of the Fund.
The compensation paid to (or retained by) the Distributor
from the sale of
shares or on the redemption of shares is shown in the table
below for the period
indicated.
Aggregate Class A
Concessions Concessions Concessions Concessions
Front-End Front-End on Class
A on Class B on Class C on Class N
Sales Charges Sales Charges
Shares Shares Shares Shares
Six Months on Class A Retained by Advanced
by Advanced by Advanced by Advanced by
Ended Shares Distributor Distributor 1
Distributor 1 Distributor 1 Distributor 1
- ----------------------------------------------------------------------------------------------------------
January 31, 2003 $59,465 $22,941
$2,190 $60,532 $8,684 $1,514
1. The Distributor advances concession payments to dealers
for certain sales of
Class A shares and for sales of Class B, Class C and Class N
shares from its own
resources at the time of sale.
Class A Class B
Class C Class N
Contingent Contingent
Contingent Contingent
Deferred Deferred
Deferred Deferred
Sales Charges Sales Charges Sales
Charges Sales Charges
Retained by Retained by
Retained by Retained by
Six Months Ended Distributor Distributor
Distributor Distributor
- ----------------------------------------------------------------------------------
January 31, 2003 $582
$18,937 $627 $126
26 | OPPENHEIMER TRINITY LARGE CAP GROWTH FUND
- --------------------------------------------------------------------------------
Service Plan for Class A Shares. The Fund has adopted a
Service Plan for Class A
Shares. It reimburses the Distributor for a portion of its
costs incurred for
services provided to accounts that hold Class A shares.
Reimbursement is made
quarterly at an annual rate of up to 0.25% of the average
annual net assets of
Class A shares of the Fund. For the six months ended January
31, 2003, payments
under the Class A Plan totaled $19,197, all of which were
paid by the
Distributor to recipients, and included $1,993 paid to an
affiliate of the
Manager. Any unreimbursed expenses the Distributor incurs
with respect to Class
A shares in any fiscal year cannot be recovered in subsequent
years.
- --------------------------------------------------------------------------------
Distribution and Service Plans for Class B, Class C and Class
N Shares. The Fund
has adopted Distribution and Service Plans for Class B, Class
C and Class N
shares. Under the plans, the Fund pays the Distributor an
annual asset-based
sales charge of 0.75% per year on Class B shares and on Class
C shares and the
Fund pays the Distributor an annual asset-based sales charge
of 0.25% per year
on Class N shares. The Distributor also receives a service
fee of 0.25% per year
under each plan.
Distribution fees paid to the Distributor for the six months
ended January 31,
2003, were as follows:
Distributor's
Distributor's Aggregate
Aggregate Unreimbursed
Unreimbursed Expenses as %
Total Payments Amount Retained
Expenses of Net Assets
Under Plan by Distributor
Under Plan of Class
- -----------------------------------------------------------------------------------
Class B Plan $58,033 $47,281
$234,336 1.96%
Class C Plan 22,379 10,961
62,667 1.46
Class N Plan 769 728
5,640 1.60
- --------------------------------------------------------------------------------
5. Bank Borrowings
The Fund had the ability to borrow from a bank for temporary
or emergency
purposes provided asset coverage for borrowings exceeded
300%. The Fund and
other Oppenheimer funds participated in a $400 million
unsecured line of credit
with a bank. Under that unsecured line of credit, interest
was charged to each
fund, based on its borrowings, at a rate equal to the Federal
Funds Rate plus
0.45%. Under that credit facility, the Fund paid a commitment
fee equal to its
pro rata share of the average unutilized amount of the credit
facility at a rate
of 0.08% per annum. The credit facility was terminated on
November 12, 2002.
The Fund had no borrowings through November 12, 2002.
27 | OPPENHEIMER TRINITY LARGE CAP GROWTH FUND
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
6. Acquisition of Oppenheimer Trinity Growth Fund
On October 12, 2001, the Fund acquired all of the net assets
of Oppenheimer
Trinity Growth Fund, pursuant to an Agreement and Plan of
Reorganization
approved by the Oppenheimer Trinity Growth Fund shareholders
on April 12, 2001.
The Fund issued (at an exchange ratio of 0.929111 for Class
A, 0.934499 for
Class B, 0.933942 for Class C, 0.927699 for Class N and
0.922201 for Class Y of
the Fund, to one share of Oppenheimer Trinity Large Cap
Growth Fund) 488,341;
327,908; 129,384; 115 and 7,350 shares of beneficial interest
for Class A, Class
B, Class C, Class N and Class Y, respectively, valued at
$3,716,273; $2,439,639;
$962,619; $875 and $56,743 in exchange for the net assets,
resulting in combined
Class A net assets of $14,652,007, Class B net assets of
$10,711,439, Class C
net assets of $2,969,374, Class N net assets of $22,045 and
Class Y net assets
of $61,005 on October 12, 2001. The net assets acquired
included net unrealized
depreciation of $1,140,630, undistributed realized losses of
$2,775,589 and
unused capital loss carryforward of $2,775,589. The exchange
qualified as a
tax-free reorganization for federal income tax purposes.
A-1
Appendix A
S&P 500/Barra Growth Index
-
11 Economic Sectors, 34 Industry Groups
---------------------------------------
Basic Materials Miscellaneous
Chemicals Miscellaneous
Forest Products
Metals
Consumer Staples Technology
Food/Bev/Tobacco Computer Hardware
Household Products Computer Software
Food & Drug Retail Electronics
Health Care Consumer Cyclicals
Drugs Retail/Merchandise
Hospital/Hospital Supply Entertainment
Building Materials
Lodging & Restaurant
Publishing
Transportation Consumer Durables
Automotive Retail/Clothing
Transportation
Auto Parts
Capital Goods Finance
Electric Equipment Consumer Finance
Aerospace Money Center Banks
Machinery Insurance
Regional Banks
Energy Utilities
Integrated Oils Telephones
Oil Production/Services Electric Utilities
Gas & Water
B-12
Appendix B
OppenheimerFunds Special Sales Charge Arrangements and
- -------------------------------------------------------
Waivers
- -------
In certain cases, the initial sales charge that applies to
purchases of Class A shares4 of the Oppenheimer funds or
the contingent deferred sales charge that may apply to
Class A, Class B or Class C shares may be waived.5 That is
because of the economies of sales efforts realized by
OppenheimerFunds Distributor, Inc., (referred to in this
document as the "Distributor"), or by dealers or other
financial institutions that offer those shares to certain
classes of investors.
Not all waivers apply to all funds. For example, waivers
relating to Retirement Plans do not apply to Oppenheimer
municipal funds, because shares of those funds are not
available for purchase by or on behalf of retirement plans.
Other waivers apply only to shareholders of certain funds.
For the purposes of some of the waivers described below and
in the Prospectus and Statement of Additional Information
of the applicable Oppenheimer funds, the term "Retirement
Plan" refers to the following types of plans:
1) plans qualified under Sections 401(a) or 401(k)
of the Internal Revenue Code,
2) non-qualified deferred compensation plans,
3) employee benefit plans6
4) Group Retirement Plans7
5) 403(b)(7) custodial plan accounts
6) Individual Retirement Accounts ("IRAs"),
including traditional IRAs, Roth IRAs,
SEP-IRAs, SARSEPs or SIMPLE plans
The interpretation of these provisions as to the
applicability of a special arrangement or waiver in a
particular case is in the sole discretion of the
Distributor or the transfer agent (referred to in this
document as the "Transfer Agent") of the particular
Oppenheimer fund. These waivers and special arrangements
may be amended or terminated at any time by a particular
fund, the Distributor, and/or OppenheimerFunds, Inc.
(referred to in this document as the "Manager").
Waivers that apply at the time shares are redeemed must be
requested by the shareholder and/or dealer in the
redemption request.
I.
Applicability of Class A Contingent Deferred Sales Charges
in Certain Cases
- ------------------------------------------------------------
Purchases of Class A Shares of Oppenheimer Funds That Are
Not Subject to Initial Sales Charge but May Be Subject to
the Class A Contingent Deferred Sales Charge (unless a
waiver applies).
There is no initial sales charge on purchases of
Class A shares of any of the Oppenheimer funds in the cases
listed below. However, these purchases may be subject to
the Class A contingent deferred sales charge if redeemed
within 18 months (24 months in the case of Oppenheimer
Rochester National Municipals and Rochester Fund
Municipals) of the beginning of the calendar month of their
purchase, as described in the Prospectus (unless a waiver
described elsewhere in this Appendix applies to the
redemption). Additionally, on shares purchased under these
waivers that are subject to the Class A contingent deferred
sales charge, the Distributor will pay the applicable
concession described in the Prospectus under "Class A
Contingent Deferred Sales Charge."8 This waiver provision
applies to:
|_| Purchases of Class A shares aggregating $1 million or
more.
|_| Purchases of Class A shares by a Retirement Plan that
was permitted to purchase such shares at net asset
value but subject to a contingent deferred sales
charge prior to March 1, 2001. That included plans
(other than IRA or 403(b)(7) Custodial Plans)
that: 1) bought shares costing $500,000 or more,
2) had at the time of purchase 100 or more
eligible employees or total plan assets of
$500,000 or more, or 3) certified to the
Distributor that it projects to have annual plan
purchases of $200,000 or more.
|_| Purchases by an OppenheimerFunds-sponsored Rollover
IRA, if the purchases are made:
1) through a broker, dealer, bank or registered
investment adviser that has made special
arrangements with the Distributor for those
purchases, or
2) by a direct rollover of a distribution from a
qualified Retirement Plan if the administrator
of that Plan has made special arrangements with
the Distributor for those purchases.
|_| Purchases of Class A shares by Retirement Plans that
have any of the following record-keeping
arrangements:
1) The record keeping is performed by Merrill
Lynch Pierce Fenner & Smith, Inc. ("Merrill
Lynch") on a daily valuation basis for the
Retirement Plan. On the date the plan sponsor
signs the record-keeping service agreement with
Merrill Lynch, the Plan must have $3 million or
more of its assets invested in (a) mutual
funds, other than those advised or managed by
Merrill Lynch Investment Management, L.P.
("MLIM"), that are made available under a
Service Agreement between Merrill Lynch and the
mutual fund's principal underwriter or
distributor, and (b) funds advised or managed
by MLIM (the funds described in (a) and (b) are
referred to as "Applicable Investments").
2) The record keeping for the Retirement Plan is
performed on a daily valuation basis by a
record keeper whose services are provided under
a contract or arrangement between the
Retirement Plan and Merrill Lynch. On the date
the plan sponsor signs the record keeping
service agreement with Merrill Lynch, the Plan
must have $3 million or more of its assets
(excluding assets invested in money market
funds) invested in Applicable Investments.
3) The record keeping for a Retirement Plan is
handled under a service agreement with Merrill
Lynch and on the date the plan sponsor signs
that agreement, the Plan has 500 or more
eligible employees (as determined by the
Merrill Lynch plan conversion manager).
II.
Waivers of Class A Sales Charges of Oppenheimer Funds
- ------------------------------------------------------------
A. Waivers of Initial and Contingent Deferred Sales Charges
for Certain Purchasers.
Class A shares purchased by the following investors are not
subject to any Class A sales charges (and no concessions
are paid by the Distributor on such purchases):
|_| The Manager or its affiliates.
|_| Present or former officers, directors, trustees and
employees (and their "immediate families") of the
Fund, the Manager and its affiliates, and
retirement plans established by them for their
employees. The term "immediate family" refers to
one's spouse, children, grandchildren,
grandparents, parents, parents-in-law, brothers
and sisters, sons- and daughters-in-law, a
sibling's spouse, a spouse's siblings, aunts,
uncles, nieces and nephews; relatives by virtue of
a remarriage (step-children, step-parents, etc.)
are included.
|_| Registered management investment companies, or
separate accounts of insurance companies having an
agreement with the Manager or the Distributor for
that purpose.
|_| Dealers or brokers that have a sales agreement with
the Distributor, if they purchase shares for their
own accounts or for retirement plans for their
employees.
|_| Employees and registered representatives (and their
spouses) of dealers or brokers described above or
financial institutions that have entered into
sales arrangements with such dealers or brokers
(and which are identified as such to the
Distributor) or with the Distributor. The
purchaser must certify to the Distributor at the
time of purchase that the purchase is for the
purchaser's own account (or for the benefit of
such employee's spouse or minor children).
|_| Dealers, brokers, banks or registered investment
advisors that have entered into an agreement with
the Distributor providing specifically for the use
of shares of the Fund in particular investment
products made available to their clients. Those
clients may be charged a transaction fee by their
dealer, broker, bank or advisor for the purchase
or sale of Fund shares.
|_| Investment advisors and financial planners who have
entered into an agreement for this purpose with
the Distributor and who charge an advisory,
consulting or other fee for their services and buy
shares for their own accounts or the accounts of
their clients.
|_| "Rabbi trusts" that buy shares for their own
accounts, if the purchases are made through a
broker or agent or other financial intermediary
that has made special arrangements with the
Distributor for those purchases.
|_| Clients of investment advisors or financial planners
(that have entered into an agreement for this
purpose with the Distributor) who buy shares for
their own accounts may also purchase shares
without sales charge but only if their accounts
are linked to a master account of their investment
advisor or financial planner on the books and
records of the broker, agent or financial
intermediary with which the Distributor has made
such special arrangements . Each of these
investors may be charged a fee by the broker,
agent or financial intermediary for purchasing
shares.
|_| 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.
|_| Accounts for which Oppenheimer Capital (or its
successor) is the investment advisor (the
Distributor must be advised of this arrangement)
and persons who are directors or trustees of the
company or trust which is the beneficial owner of
such accounts.
|_| A unit investment trust that has entered into an
appropriate agreement with the Distributor.
|_| Dealers, brokers, banks, or registered investment
advisers that have entered into an agreement with
the Distributor to sell shares to defined
contribution employee retirement plans for which
the dealer, broker or investment adviser provides
administration services.
|-|
Retirement Plans and deferred compensation plans and
trusts used to fund those plans (including, for
example, plans qualified or created under sections
401(a), 401(k), 403(b) or 457 of the Internal
Revenue Code), in each case if those purchases are
made through a broker, agent or other financial
intermediary that has made special arrangements
with the Distributor for those purchases.
|_| A TRAC-2000 401(k) plan (sponsored by the former
Quest for Value Advisors) whose Class B or Class C
shares of a Former Quest for Value Fund were
exchanged for Class A shares of that Fund due to
the termination of the Class B and Class C
TRAC-2000 program on November 24, 1995.
|_| A qualified Retirement Plan that had agreed with the
former Quest for Value Advisors to purchase shares
of any of the Former Quest for Value Funds at net
asset value, with such shares to be held through
DCXchange, a sub-transfer agency mutual fund
clearinghouse, if that arrangement was consummated
and share purchases commenced by December 31, 1996.
B. Waivers of Initial and Contingent Deferred Sales Charges
in Certain Transactions.
Class A shares issued or purchased in the following
transactions are not subject to sales charges (and no
concessions are paid by the Distributor on such purchases):
|_| Shares issued in plans of reorganization, such as
mergers, asset acquisitions and exchange offers,
to which the Fund is a party.
|_| Shares purchased by the reinvestment of dividends or
other distributions reinvested from the Fund or
other Oppenheimer funds (other than Oppenheimer
Cash Reserves) or unit investment trusts for which
reinvestment arrangements have been made with the
Distributor.
|_| Shares purchased through a broker-dealer that has
entered into a special agreement with the
Distributor to allow the broker's customers to
purchase and pay for shares of Oppenheimer funds
using the proceeds of shares redeemed in the prior
30 days from a mutual fund (other than a fund
managed by the Manager or any of its subsidiaries)
on which an initial sales charge or contingent
deferred sales charge was paid. This waiver also
applies to shares purchased by exchange of shares
of Oppenheimer Money Market Fund, Inc. that were
purchased and paid for in this manner. This waiver
must be requested when the purchase order is
placed for shares of the Fund, and the Distributor
may require evidence of qualification for this
waiver.
|_| Shares purchased with the proceeds of maturing
principal units of any Qualified Unit Investment
Liquid Trust Series.
|_| Shares purchased by the reinvestment of loan
repayments by a participant in a Retirement Plan
for which the Manager or an affiliate acts as
sponsor.
C. Waivers of the Class A Contingent Deferred Sales Charge
for Certain Redemptions.
The Class A contingent deferred sales charge is also waived
if shares that would otherwise be subject to the contingent
deferred sales charge are redeemed in the following cases:
|_| To make Automatic Withdrawal Plan payments that are
limited annually to no more than 12% of the
account value adjusted annually.
|_| Involuntary redemptions of shares by operation of law
or involuntary redemptions of small accounts
(please refer to "Shareholder Account Rules and
Policies," in the applicable fund Prospectus).
|_| For distributions from Retirement Plans, deferred
compensation plans or other employee benefit plans
for any of the following purposes:
1) Following the death or disability (as defined
in the Internal Revenue Code) of the
participant or beneficiary. The death or
disability must occur after the participant's
account was established.
2) To return excess contributions.
3) To return contributions made due to a mistake
of fact.
4) Hardship withdrawals, as defined in the plan.9
5) Under a Qualified Domestic Relations Order, as
defined in the Internal Revenue Code, or, in
the case of an IRA, a divorce or separation
agreement described in Section 71(b) of the
Internal Revenue Code.
6) To meet the minimum distribution requirements
of the Internal Revenue Code.
7) To make "substantially equal periodic payments"
as described in Section 72(t) of the Internal
Revenue Code.
8) For loans to participants or beneficiaries.
9) Separation from service.10
10) Participant-directed redemptions to
purchase shares of a mutual fund (other than a
fund managed by the Manager or a subsidiary of
the Manager) if the plan has made special
arrangements with the Distributor.
11) Plan termination or "in-service
distributions," if the redemption proceeds are
rolled over directly to an
OppenheimerFunds-sponsored IRA.
|_| For distributions from 401(k) plans sponsored by
broker-dealers that have entered into a special
agreement with the Distributor allowing this
waiver.
|_| For distributions from retirement plans that have $10
million or more in plan assets and that have
entered into a special agreement with the
Distributor.
|_| For distributions from retirement plans which are
part of a retirement plan product or platform
offered by certain banks, broker-dealers,
financial advisors, insurance companies or record
keepers which have entered into a special
agreement with the Distributor.
III. Waivers of Class B, Class C and Class N Sales Charges
of Oppenheimer Funds
- --------------------------------------------------------------
The Class B, Class C and Class N contingent deferred sales
charges will not be applied to shares purchased in certain
types of transactions or redeemed in certain circumstances
described below.
A. Waivers for Redemptions in Certain Cases.
The Class B, Class C and Class N contingent deferred sales
charges will be waived for redemptions of shares in the
following cases:
|_| Shares redeemed involuntarily, as described in
"Shareholder Account Rules and Policies," in the
applicable Prospectus.
|_| Redemptions from accounts other than Retirement Plans
following the death or disability of the last
surviving shareholder. The death or disability
must have occurred after the account was
established, and for disability you must provide
evidence of a determination of disability by the
Social Security Administration.
|_| The contingent deferred sales charges are generally
not waived following the death or disability of a
grantor or trustee for a trust account. The
contingent deferred sales charges will only be
waived in the limited case of the death of the
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.
|_| Distributions from accounts for which the
broker-dealer of record has entered into a special
agreement with the Distributor allowing this
waiver.
|_| Redemptions of Class B shares held by Retirement
Plans whose records are maintained on a daily
valuation basis by Merrill Lynch or an independent
record keeper under a contract with Merrill Lynch.
|-|
Redemptions of Class C shares of Oppenheimer U.S.
Government Trust from accounts of clients of
financial institutions that have entered into a
special arrangement with the Distributor for this
purpose.
|_| Redemptions requested in writing by a Retirement Plan
sponsor of Class C shares of an Oppenheimer fund
in amounts of $500,000 or more and made more than
12 months after the Retirement Plan's first
purchase of Class C shares, if the redemption
proceeds are invested in Class N shares of one or
more Oppenheimer funds.
|_| Distributions11 from Retirement Plans or other
employee benefit plans for any of the following
purposes:
1) Following the death or disability (as defined
in the Internal Revenue Code) of the
participant or beneficiary. The death or
disability must occur after the participant's
account was established in an Oppenheimer fund.
2) To return excess contributions made to a
participant's account.
3) To return contributions made due to a mistake
of fact.
4) To make hardship withdrawals, as defined in the
plan.12
5) To make distributions required under a
Qualified Domestic Relations Order or, in the
case of an IRA, a divorce or separation
agreement described in Section 71(b) of the
Internal Revenue Code.
6) To meet the minimum distribution requirements
of the Internal Revenue Code.
7) To make "substantially equal periodic payments"
as described in Section 72(t) of the Internal
Revenue Code.
8) For loans to participants or beneficiaries.13
9) On account of the participant's separation from
service.14
10) Participant-directed redemptions to
purchase shares of a mutual fund (other than a
fund managed by the Manager or a subsidiary of
the Manager) offered as an investment option in
a Retirement Plan if the plan has made special
arrangements with the Distributor.
11) Distributions made on account of a plan
termination or "in-service" distributions, if
the redemption proceeds are rolled over
directly to an OppenheimerFunds-sponsored IRA.
12) For distributions from a participant's
account under an Automatic Withdrawal Plan
after the participant reaches age 59 1/2, as long
as the aggregate value of the distributions
does not exceed 10% of the account's value,
adjusted annually.
13) Redemptions of Class B shares under an
Automatic Withdrawal Plan for an account other
than a Retirement Plan, if the aggregate value
of the redeemed shares does not exceed 10% of
the account's value, adjusted annually.
14) For distributions from 401(k) plans
sponsored by broker-dealers that have entered
into a special arrangement with the Distributor
allowing this waiver.
|_| Redemptions of Class B shares or Class C shares under
an Automatic Withdrawal Plan from an account other
than a Retirement Plan if the aggregate value of
the redeemed shares does not exceed 10% of the
account's value annually.
B. Waivers for Shares Sold or Issued in Certain
Transactions.
The contingent deferred sales charge is also waived on
Class B and Class C shares sold or issued in the following
cases:
|_| Shares sold to the Manager or its affiliates.
|_| Shares sold to registered management investment
companies or separate accounts of insurance
companies having an agreement with the Manager or
the Distributor for that purpose.
|_| Shares issued in plans of reorganization to which the
Fund is a party.
|_| Shares sold to present or former officers, directors,
trustees or employees (and their "immediate
families" as defined above in Section I.A.) of the
Fund, the Manager and its affiliates and
retirement plans established by them for their
employees.
IV. Special Sales Charge Arrangements for Shareholders of
Certain Oppenheimer Funds Who Were Shareholders of
Former Quest for Value Funds
- ------------------------------------------------------------
The initial and contingent deferred sales charge rates and
waivers for Class A, Class B and Class C shares described
in the Prospectus or Statement of Additional Information of
the Oppenheimer funds are modified as described below for
certain persons who were shareholders of the former Quest
for Value Funds. To be eligible, those persons must have
been shareholders on November 24, 1995, when
OppenheimerFunds, Inc. became the investment advisor to
those former Quest for Value Funds. Those funds include:
Oppenheimer Quest Value Fund, Inc. Oppenheimer
Small Cap Value Fund
Oppenheimer Quest Balanced Value Fund Oppenheimer
Quest Global Value Fund, Inc.
Oppenheimer Quest Opportunity Value Fund
These arrangements also apply to shareholders of the
following funds when they merged (were reorganized) into
various Oppenheimer funds on November 24, 1995:
Quest for Value U.S. Government Income Fund Quest for
Value New York Tax-Exempt Fund
Quest for Value Investment Quality Income Fund Quest
for Value National Tax-Exempt Fund
Quest for Value Global Income Fund Quest for Value
California Tax-Exempt Fund
All of the funds listed above are referred to in this
Appendix as the "Former Quest for Value Funds." The
waivers of initial and contingent deferred sales charges
described in this Appendix apply to shares of an
Oppenheimer fund that are either:
|_| acquired by such shareholder pursuant to an exchange
of shares of an Oppenheimer fund that was one of
the Former Quest for Value Funds, or
|_| purchased by such shareholder by exchange of shares
of another Oppenheimer fund that were acquired
pursuant to the merger of any of the Former Quest
for Value Funds into that other Oppenheimer fund
on November 24, 1995.
A. Reductions or Waivers of Class A Sales Charges.
|X| Reduced Class A Initial Sales Charge Rates for
Certain Former Quest for Value Funds Shareholders.
Purchases by Groups and Associations. The following table
sets forth the initial sales charge rates for Class A
shares purchased by members of "Associations" formed for
any purpose other than the purchase of securities. The
rates in the table apply if that Association purchased
shares of any of the Former Quest for Value Funds or
received a proposal to purchase such shares from OCC
Distributors prior to November 24, 1995.
- --------------------------------------------------------------------------------
Initial Sales Initial Sales Charge Concession as
Number of Eligible Charge as a % of as a % of Net Amount % of Offering
Employees or Members Offering Price Invested Price
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
9 or Fewer 2.50% 2.56% 2.00%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
At least 10 but not 2.00% 2.04% 1.60%
more than 49
- --------------------------------------------------------------------------------
- ------------------------------------------------------------
For purchases by Associations having 50 or more
eligible employees or members, there is no initial sales
charge on purchases of Class A shares, but those shares are
subject to the Class A contingent deferred sales charge
described in the applicable fund's Prospectus.
Purchases made under this arrangement qualify for the
lower of either the sales charge rate in the table based on
the number of members of an Association, or the sales
charge rate that applies under the Right of Accumulation
described in the applicable fund's Prospectus and Statement
of Additional Information. Individuals who qualify under
this arrangement for reduced sales charge rates as members
of Associations also may purchase shares for their
individual or custodial accounts at these reduced sales
charge rates, upon request to the Distributor.
|X| Waiver of Class A Sales Charges for Certain
Shareholders. Class A shares purchased by the following
investors are not subject to any Class A initial or
contingent deferred sales charges:
o Shareholders who were shareholders of the AMA Family
of Funds on February 28, 1991 and who acquired
shares of any of the Former Quest for Value
Funds by merger of a portfolio of the AMA
Family of Funds.
o Shareholders who acquired shares of any Former Quest
for Value Fund by merger of any of the
portfolios of the Unified Funds.
|X| Waiver of Class A Contingent Deferred Sales Charge in
Certain Transactions. The Class A contingent deferred
sales charge will not apply to redemptions of Class A
shares purchased by the following investors who were
shareholders of any Former Quest for Value Fund:
Investors who purchased Class A shares from a dealer
that is or was not permitted to receive a sales load or
redemption fee imposed on a shareholder with whom that
dealer has a fiduciary relationship, under the Employee
Retirement Income Security Act of 1974 and regulations
adopted under that law.
B. Class A, Class B and Class C Contingent Deferred Sales
Charge Waivers.
|X| Waivers for Redemptions of Shares Purchased Prior to
March 6, 1995. In the following cases, the contingent
deferred sales charge will be waived for redemptions of
Class A, Class B or Class C shares of an Oppenheimer fund.
The shares must have been acquired by the merger of a
Former Quest for Value Fund into the fund or by exchange
from an Oppenheimer fund that was a Former Quest for Value
Fund or into which such fund merged. Those shares must have
been purchased prior to March 6, 1995 in connection with:
o withdrawals under an automatic withdrawal plan
holding only either Class B or Class C shares
if the annual withdrawal does not exceed 10% of
the initial value of the account value,
adjusted annually, and
o liquidation of a shareholder's account if the
aggregate net asset value of shares held in the
account is less than the required minimum value
of such accounts.
|X| Waivers for Redemptions of Shares Purchased on or
After March 6, 1995 but Prior to November 24, 1995. In the
following cases, the contingent deferred sales charge will
be waived for redemptions of Class A, Class B or Class C
shares of an Oppenheimer fund. The shares must have been
acquired by the merger of a Former Quest for Value Fund
into the fund or by exchange from an Oppenheimer fund that
was a Former Quest For Value Fund or into which such Former
Quest for Value Fund merged. Those shares must have been
purchased on or after March 6, 1995, but prior to November
24, 1995:
o redemptions following the death or disability of the
shareholder(s) (as evidenced by a determination
of total disability by the U.S. Social Security
Administration);
o withdrawals under an automatic withdrawal plan (but
only for Class B or Class C shares) where the
annual withdrawals do not exceed 10% of the
initial value of the account value; adjusted
annually, and
o liquidation of a shareholder's account if the
aggregate net asset value of shares held in the
account is less than the required minimum
account value.
A shareholder's account will be credited with the
amount of any contingent deferred sales charge paid on the
redemption of any Class A, Class B or Class C shares of the
Oppenheimer fund described in this section if the proceeds
are invested in the same Class of shares in that fund or
another Oppenheimer fund within 90 days after redemption.
V. Special Sales Charge Arrangements for Shareholders of
Certain Oppenheimer Funds Who Were Shareholders of
Connecticut Mutual Investment Accounts, Inc.
- ---------------------------------------------------------
The initial and contingent deferred sale charge rates and
waivers for Class A and Class B shares described in the
respective Prospectus (or this Appendix) of the following
Oppenheimer funds (each is referred to as a "Fund" in this
section):
Oppenheimer U. S. Government Trust,
Oppenheimer Bond Fund,
Oppenheimer Value Fund and
Oppenheimer Disciplined Allocation Fund
are modified as described below for those Fund shareholders
who were shareholders of the following funds (referred to
as the "Former Connecticut Mutual Funds") on March 1, 1996,
when OppenheimerFunds, Inc. became the investment adviser
to the Former Connecticut Mutual Funds:
Connecticut Mutual Liquid Account Connecticut
Mutual Total Return Account
Connecticut Mutual Government Securities Account CMIA
LifeSpan Capital Appreciation Account
Connecticut Mutual Income Account CMIA LifeSpan
Balanced Account
Connecticut Mutual Growth Account CMIA Diversified
Income Account
A. Prior Class A CDSC and Class A Sales Charge Waivers.
|X| Class A Contingent Deferred Sales Charge. Certain
shareholders of a Fund and the other Former Connecticut
Mutual Funds are entitled to continue to make additional
purchases of Class A shares at net asset value without a
Class A initial sales charge, but subject to the Class A
contingent deferred sales charge that was in effect prior
to March 18, 1996 (the "prior Class A CDSC"). Under the
prior Class A CDSC, if any of those shares are redeemed
within one year of purchase, they will be assessed a 1%
contingent deferred sales charge on an amount equal to the
current market value or the original purchase price of the
shares sold, whichever is smaller (in such redemptions, any
shares not subject to the prior Class A CDSC will be
redeemed first).
Those shareholders who are eligible for the prior
Class A CDSC are:
1) persons whose purchases of Class A shares of a
Fund and other Former Connecticut Mutual Funds
were $500,000 prior to March 18, 1996, as a
result of direct purchases or purchases
pursuant to the Fund's policies on Combined
Purchases or Rights of Accumulation, who still
hold those shares in that Fund or other Former
Connecticut Mutual Funds, and
2) persons whose intended purchases under a
Statement of Intention entered into prior to
March 18, 1996, with the former general
distributor of the Former Connecticut Mutual
Funds to purchase shares valued at $500,000 or
more over a 13-month period entitled those
persons to purchase shares at net asset value
without being subject to the Class A initial
sales charge
Any of the Class A shares of a Fund and the other
Former Connecticut Mutual Funds that were purchased at net
asset value prior to March 18, 1996, remain subject to the
prior Class A CDSC, or if any
additional shares are purchased by those shareholders at
net asset value pursuant to this arrangement they will be
subject to the prior Class A CDSC.
|X| Class A Sales Charge Waivers. Additional Class A
shares of a Fund may be purchased without a sales charge,
by a person who was in one (or more) of the categories
below and acquired Class A shares prior to March 18, 1996,
and still holds Class A shares:
1) any purchaser, provided the total initial
amount invested in the Fund or any one or more
of the Former Connecticut Mutual Funds totaled
$500,000 or more, including investments made
pursuant to the Combined Purchases, Statement
of Intention and Rights of Accumulation
features available at the time of the initial
purchase and such investment is still held in
one or more of the Former Connecticut Mutual
Funds or a Fund into which such Fund merged;
2) any participant in a qualified plan, provided
that the total initial amount invested by the
plan in the Fund or any one or more of the
Former Connecticut Mutual Funds totaled
$500,000 or more;
3) Directors of the Fund or any one or more of the
Former Connecticut Mutual Funds and members of
their immediate families;
4) employee benefit plans sponsored by Connecticut
Mutual Financial Services, L.L.C. ("CMFS"), the
prior distributor of the Former Connecticut
Mutual Funds, and its affiliated companies;
5) one or more members of a group of at least
1,000 persons (and persons who are retirees
from such group) engaged in a common business,
profession, civic or charitable endeavor or
other activity, and the spouses and minor
dependent children of such persons, pursuant to
a marketing program between CMFS and such
group; and
6) an institution acting as a fiduciary on behalf
of an individual or individuals, if such
institution was directly compensated by the
individual(s) for recommending the purchase of
the shares of the Fund or any one or more of
the Former Connecticut Mutual Funds, provided
the institution had an agreement with CMFS.
Purchases of Class A shares made pursuant to (1) and
(2) above may be subject to the Class A CDSC of the Former
Connecticut Mutual Funds described above.
Additionally, Class A shares of a Fund may be
purchased without a sales charge by any holder of a
variable annuity contract issued in New York State by
Connecticut Mutual Life Insurance Company through the
Panorama Separate Account which is beyond the applicable
surrender charge period and which was used to fund a
qualified plan, if that holder exchanges the variable
annuity contract proceeds to buy Class A shares of the Fund.
B. Class A and Class B Contingent Deferred Sales Charge
Waivers.
In addition to the waivers set forth in the Prospectus and
in this Appendix, above, the contingent deferred sales
charge will be waived for redemptions of Class A and Class
B shares of a Fund and exchanges of Class A or Class B
shares of a Fund into Class A or Class B shares of a Former
Connecticut Mutual Fund provided that the Class A or Class
B shares of the Fund to be redeemed or exchanged were (i)
acquired prior to March 18, 1996 or (ii) were acquired by
exchange from an Oppenheimer fund that was a Former
Connecticut Mutual Fund. Additionally, the shares of such
Former Connecticut Mutual Fund must have been purchased
prior to March 18, 1996:
1) by the estate of a deceased shareholder;
2) upon the disability of a shareholder, as defined in
Section 72(m)(7) of the Internal Revenue Code;
3) for retirement distributions (or loans) to
participants or beneficiaries from retirement plans
qualified under Sections 401(a) or 403(b)(7)of the
Code, or from IRAs, deferred compensation plans
created under Section 457 of the Code, or other
employee benefit plans;
4) as tax-free returns of excess contributions to such
retirement or employee benefit plans;
5) in whole or in part, in connection with shares sold
to any state, county, or city, or any
instrumentality, department, authority, or agency
thereof, that is prohibited by applicable investment
laws from paying a sales charge or concession in
connection with the purchase of shares of any
registered investment management company;
6) in connection with the redemption of shares of the
Fund due to a combination with another investment
company by virtue of a merger, acquisition or similar
reorganization transaction;
7) in connection with the Fund's right to involuntarily
redeem or liquidate the Fund;
8) in connection with automatic redemptions of Class A
shares and Class B shares in certain retirement plan
accounts pursuant to an Automatic Withdrawal Plan but
limited to no more than 12% of the original value
annually; or
9) as involuntary redemptions of shares by operation of
law, or under procedures set forth in the Fund's
Articles of Incorporation, or as adopted by the Board
of Directors of the Fund.
VI. Special Reduced Sales Charge for Former Shareholders
of Advance America Funds, Inc.
- ------------------------------------------------------------
Shareholders of Oppenheimer Municipal Bond Fund,
Oppenheimer U.S. Government Trust, Oppenheimer Strategic
Income Fund and Oppenheimer Capital Income Fund who
acquired (and still hold) shares of those funds as a result
of the reorganization of series of Advance America Funds,
Inc. into those Oppenheimer funds on October 18, 1991, and
who held shares of Advance America Funds, Inc. on March 30,
1990, may purchase Class A shares of those four Oppenheimer
funds at a maximum sales charge rate of 4.50%.
VII. Sales Charge Waivers on Purchases of Class M Shares
of Oppenheimer Convertible Securities Fund
- ------------------------------------------------------------
Oppenheimer Convertible Securities Fund (referred to as the
"Fund" in this section) may sell Class M shares at net
asset value without any initial sales charge to the classes
of investors listed below who, prior to March 11, 1996,
owned shares of the Fund's then-existing Class A and were
permitted to purchase those shares at net asset value
without sales charge:
|_| the Manager and its affiliates,
|_| present or former officers, directors, trustees and
employees (and their "immediate families" as
defined in the Fund's Statement of Additional
Information) of the Fund, the Manager and its
affiliates, and retirement plans established by
them or the prior investment advisor of the Fund
for their employees,
|_| registered management investment companies or
separate accounts of insurance companies that had
an agreement with the Fund's prior investment
advisor or distributor for that purpose,
|_| dealers or brokers that have a sales agreement with
the Distributor, if they purchase shares for their
own accounts or for retirement plans for their
employees,
|_| employees and registered representatives (and their
spouses) of dealers or brokers described in the
preceding section or financial institutions that
have entered into sales arrangements with those
dealers or brokers (and whose identity is made
known to the Distributor) or with the Distributor,
but only if the purchaser certifies to the
Distributor at the time of purchase that the
purchaser meets these qualifications,
|_| dealers, brokers, or registered investment advisors
that had entered into an agreement with the
Distributor or the prior distributor of the Fund
specifically providing for the use of Class M
shares of the Fund in specific investment products
made available to their clients, and
|_| dealers, brokers or registered investment advisors
that had entered into an agreement with the
Distributor or prior distributor of the Fund's
shares to sell shares to defined contribution
employee retirement plans for which the dealer,
broker, or investment advisor provides
administrative services.
|X|
Oppenheimer Trinity Large Cap Growth FundSM
Internet Website:
WWW.OPPENHEIMERFUNDS.COM
------------------------
Investment Advisor
OppenheimerFunds, Inc.
498 Seventh Avenue
New York, New York 10018
Sub-Advisor
Trinity Investment Management Corporation
301 North Spring Street
Bellefonte, Pennsylvania 16823
Distributor
OppenheimerFunds Distributor, Inc.
498 Seventh Avenue
New York, New York 10018
Transfer Agent
OppenheimerFunds Services
P.O. Box 5270
Denver, Colorado 80217
1.800.CALL.OPP (225.5677)
Custodian Bank
Citibank, N.A.
399 Park Avenue
New York, New York 10043
Independent Auditors
KPMG LLP
707 Seventeenth Street
Denver, Colorado 80202
Legal Counsel
Mayer, Brown, Rowe & Maw
1675 Broadway
New York, New York 10019
1234
PX0775.004.0902 (Rev. 0103)
- --------
1 Currently, under the 1940 Act, a mutual fund may borrow
only from banks and the maximum amount it may borrow is up
to one-third of its total assets (including the amount
borrowed). In addition, the Fund may borrow from affiliated
funds as described above. A fund may borrow up to 5% of its
total assets for temporary purposes from any person. Under
the 1940 Act, there is a rebuttable presumption that a loan
is temporary if it is repaid within 60 days and not
extended or renewed.
2 Mr. Motley was elected as Trustee to the Board I Funds
effective October 10, 2002.
3 In accordance with Rule 12b-1 of the Investment Company
Act, the term "Independent Trustees" in this Statement of
Additional Information refers to those Trustees who are not
"interested persons" of the Fund and who do not have any
direct or indirect financial interest in the operation of
the distribution plan or any agreement under the plan.
4 Certain waivers also apply to Class M shares of
Oppenheimer Convertible Securities Fund.
5 In the case of Oppenheimer Senior Floating Rate Fund, a
continuously-offered closed-end fund, references to
contingent deferred sales charges mean the Fund's Early
Withdrawal Charges and references to "redemptions" mean
"repurchases" of shares.
6 An "employee benefit plan" means any plan or arrangement,
whether or not it is "qualified" under the Internal Revenue
Code, under which Class N shares of an Oppenheimer fund or
funds are purchased by a fiduciary or other administrator
for the account of participants who are employees of a
single employer or of affiliated employers. These may
include, for example, medical savings accounts, payroll
deduction plans or similar plans. The fund accounts must be
registered in the name of the fiduciary or administrator
purchasing the shares for the benefit of participants in
the plan.
7 The term "Group Retirement Plan" means any qualified or
non-qualified retirement plan for employees of a
corporation or sole proprietorship, members and employees
of a partnership or association or other organized group of
persons (the members of which may include other groups), if
the group has made special arrangements with the
Distributor and all members of the group participating in
(or who are eligible to participate in) the plan purchase
shares of an Oppenheimer fund or funds through a single
investment dealer, broker or other financial institution
designated by the group. Such plans include 457 plans,
SEP-IRAs, SARSEPs, SIMPLE plans and 403(b) plans other than
plans for public school employees. The term "Group
Retirement Plan" also includes qualified retirement plans
and non-qualified deferred compensation plans and IRAs that
purchase shares of an Oppenheimer fund or funds through a
single investment dealer, broker or other financial
institution that has made special arrangements with the
Distributor.
8 However, that concession will not be paid on purchases of
shares in amounts of $1 million or more (including any
right of accumulation) by a Retirement Plan that pays for
the purchase with the redemption proceeds of Class C shares
of one or more Oppenheimer funds held by the Plan for more
than one year.
9 This provision does not apply to IRAs.
10 This provision does not apply to 403(b)(7) custodial
plans if the participant is less than age 55, nor to IRAs.
11 The distribution must be requested prior to Plan
termination or the elimination of the Oppenheimer funds as
an investment option under the Plan.
12 This provision does not apply to IRAs.
13 This provision does not apply to loans from 403(b)(7)
custodial plans and loans from the
OppenheimerFunds-sponsored Single K retirement plan.
14 This provision does not apply to 403(b)(7) custodial
plans if the participant is less than age 55, nor to IRAs.
OPPENHEIMER GROWTH FUND
FORM N-14
PART C
OTHER INFORMATION
Item 15. Indemnification
- -------------------------
Reference is made to the provisions of Article
Seventh of Registrant's Amended and Restated Declaration of
Trust filed by cross-reference to Exhibit 16 (1) to this
Registration Statement, incorporated herein by reference.
Insofar as indemnification for liabilities arising
under the Securities Act of 1933 may be permitted to
trustees, officers and controlling persons of Registrant
pursuant to the foregoing provisions or otherwise,
Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is
against public policy as expressed in the Securities Act of
1933 and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other
than the payment by Registrant of expenses incurred or paid
by a trustee, officer or controlling person of Registrant
in the successful defense of any action, suit or
proceeding) is asserted by such trustee, officer or
controlling person, Registrant will, unless in the opinion
of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against
public policy as expressed in the Securities Act of 1933
and will be governed by the final adjudication of such
issue.
Item 16. Exhibits
- ------------------
(1) (i) Amended and Restated Declaration of Trust
dated August 5, 2002: Previously filed with
Registrant's Post-Effective Amendment No. 59,
8/22/02, and incorporated herein by reference.
(ii) By-Laws as amended through December 14, 2000:
Previously filed with Registrant's Post-Effective
Amendment No. 58, 12/19/01, and incorporated herein by
reference.
(i) Specimen Class A Share Certificate: Previously filed
with Registrant's Post-Effective Amendment No. 58,
12/19/01, and incorporated herein by reference.
(ii) Specimen Class B Share Certificate: Previously
filed with Registrant's Post-Effective Amendment No. 58,
12/19/01, and incorporated herein by reference.
(iii) Specimen Class C Share Certificate: Previously
filed with Registrant's Post-Effective Amendment No. 58,
12/19/01, and incorporated herein by reference.
(iv) Specimen Class N Share Certificate: Previously
filed with Registrant's Post-Effective Amendment No. 58,
12/19/01, and incorporated herein by reference.
(v) Specimen Class Y Share Certificate: Previously
filed with Registrant's Post-Effective Amendment No. 58,
12/19/01, and incorporated herein by reference.
(d) (i) Amended and Restated Investment Advisory
Agreement dated 1/1/00: Previously filed with Registrant's
Post-Effective Amendment No. 57, 12/27/00, and incorporated
herein by reference.
(e) (i) General Distributor's Agreement dated December
10, 1992: Previously filed with Registrant's Post-Effective
Amendment No. 41, 7/30/93, and incorporated herein by
reference.
(ii) Form of Dealer Agreement of OppenheimerFunds
Distributor, Inc.: Previously filed with Post-Effective
Amendment No. 45 to the Registration Statement of
Oppenheimer High Yield Fund (Reg. No. 2-62076), 10/26/01,
and incorporated herein by reference.
(iii) Form of Broker Agreement of OppenheimerFunds
Distributor, Inc.: Previously filed with Post-Effective
Amendment No. 45 to the Registration Statement of
Oppenheimer High Yield Fund (Reg. No. 2-62076), 10/26/01,
and incorporated herein by reference.
(iv) Form of Agency Agreement of OppenheimerFunds
Distributor, Inc.: Previously filed with Post-Effective
Amendment No. 45 to the Registration Statement of
Oppenheimer High Yield Fund (Reg. No. 2-62076), 10/26/01,
and incorporated herein by reference.
(v) Form of Trust Company Fund/SERV Purchase
Agreement of OppenheimerFunds Distributor, Inc.: Previously
filed with Post-Effective Amendment No. 45 to the
Registration Statement of Oppenheimer High Yield Fund (Reg.
No. 2-62076), 10/26/01, and incorporated herein by
reference.
(vi) Form of Trust Company Agency Agreement of
OppenheimerFunds Distributor, Inc.: Previously filed with
Post-Effective Amendment No. 45 to the Registration
Statement of Oppenheimer High Yield Fund (Reg. No.
2-62076), 10/26/01, and incorporated herein by reference.
(f) (i) Amended and Restated Retirement Plan for
Non-Interested Trustees or Directors dated 8/9/01:
Previously filed with Post-Effective Amendment No. 34 to
the Registration Statement of Oppenheimer Gold & Special
Minerals Fund (Reg. No. . 2-82590), 10/25/01, and
incorporated herein by reference.
(ii) Form of Deferred Compensation Plan for
Disinterested Trustees/Directors: Filed with Post-Effective
Amendment No. 26 to the Registration Statement of
Oppenheimer Gold & Special Minerals Fund (Reg. No.
2-82590), 10/28/98, and incorporated herein by reference.
(g) (i) Custodian Agreement with The Bank of New York
dated August 5, 1992: Previously filed with Registrant's
Post-Effective Amendment No. 44, 3/31/94, and incorporated
herein by reference.
(ii) Amended and Restated Foreign Custody Manager
Agreement dated 4/3/01: Previously filed with
Post-Effective Amendment No. 34 to the Registration
Statement of Oppenheimer Gold & Special Minerals Fund (Reg.
No. 2-82590), 10/25/01, and incorporated herein by
reference.
(iii) Amendment dated 4/3/01 to Custody Agreement
dated 11/12/92: Previously filed with Post-Effective
Amendment No. 34 to the Registration Statement of
Oppenheimer Gold & Special Minerals Fund (Reg. No.
2-82590), 10/25/01, and incorporated herein by reference.
(h) Not applicable.
(i) Opinion and Consent of Counsel dated 10/4/85:
Previously filed with Registrant's Post-Effective Amendment
No. 30, 10/28/88, refiled with Registrant's Post-Effective
Amendment No. 45, 8/22/94, pursuant to Item 102 of
Regulation S-T, and incorporated herein by reference.
(j) Consent of Independent Auditors Consent: Filed
herewith.
(k) Not applicable.
(l) Investment Letter from OppenheimerFunds, Inc. to
Registrant dated 1/4/73: Previously filed with
Registrant's Post-Effective Amendment No. 53,
10/23/98, and incorporated herein by reference.
(m) (i) Amended and Restated Distribution and Service
Plan and Agreement for Class A shares dated April 11, 2002:
Filed herewith.
(ii) Amended and Restated Distribution and Service Plan
and Agreement for Class B shares dated August 5, 2002:
Filed herewith.
(iii) Amended and Restated Distribution and Service
Plan and Agreement for Class C shares dated February 12,
1998: Previously filed with Registrant's Post-Effective
Amendment No. 53, 10/23/98, and incorporated herein by
reference.
(iv) Distribution and Service Plan and Agreement for
Class N shares dated October 12, 2000: Filed herewith.
(n) Oppenheimer Multiple Class Plan under Rule 18f-3
March 18, 1996 and updated through 8/21/01: Previously
filed with Post-Effective Amendment No. 20 to the
Registration Statement of Oppenheimer Cash Reserves (Reg.
No. 33-23223), 9/27/01, and incorporated herein by
reference.
(o) (i) Powers of Attorney for all Trustees/Directors and
Officers except for Joel W. Motley and John Murphy
(including Certified Board Resolutions): Previously filed
with Pre-Effective Amendment No. 1 to the Registration
Statement of Oppenheimer Emerging Growth Fund (Reg. No.
333-44176), 10/5/00, and incorporated herein by reference.
(ii) Power of Attorney for John Murphy (including
Certified Board Resolution): Previously filed with
Post-Effective Amendment No. 45 to the Registration
Statement of Oppenheimer U.S. Government Trust (Reg. No.
2-76645), 10/22/01, and incorporated herein by reference.
(iii) Power of Attorney for Joel W. Motley (including
Certified Board Resolution): Previously filed with
Post-Effective Amendment No. 8 to the Registration
Statement of Oppenheimer International Small Company Fund
(Reg. 333-31537), 10/21/02, and incorporated herein by
reference.
(p) Amended and Restated Code of Ethics of the
Oppenheimer Funds dated March 1, 2000 under Rule 17j-1 of
the Investment Company Act of 1940: Previously filed with
the Initial Registration Statement of Oppenheimer Emerging
Growth Fund (Reg. No. 333-44176), 8/21/00, and incorporated
herein by reference.
Item 17. Undertakings
- ----------------------
(1) N/A.
(2) N/A.
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 6th day of June, 2003.
OPPENHEIMER GROWTH FUND
By: /s/ John V. Murphy*
- ----------------------------------------------
John V. Murphy, President,
Principal Executive Officer &
Trustee
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed below by the
following persons in the capacities on the dates indicated:
Signatures Title
- ---------- -----
Date
- ----
/s/ Clayton K. Yeutter* Chairman of the
- ---------------------------- Board of Trustees
June 6, 2003
Clayton K. Yeutter
/s/ Donald W. Spiro* Vice Chairman of the
June 6, 2003
- ------------------------- Board and Trustee
Donald W. Spiro
/s/ John V. Murphy* President, Principal
- -------------------------- Executive Officer
June 6, 2003
John V. Murphy & Trustee
/s/ Brian W. Wixted* Treasurer, Principal
June 6, 2003
- ------------------------- Financial and
Brian W. Wixted Accounting Officer
/s/ Robert G. Galli* Trustee
June 6, 2003
- -----------------------
Robert G. Galli
/s/ Phillip A. Griffiths* Trustee
June 6, 2003
- ---------------------------
Phillip A. Griffiths
/s/ Joel W. Motley* Trustee
June 6, 2003
- ------------------------
Joel W. Motley
/s/ Elizabeth B. Moynihan* Trustee
June 6, 2003
- --------------------------------
Elizabeth B. Moynihan
/s/ Kenneth A. Randall* Trustee
June 6, 2003
- ----------------------------
Kenneth A. Randall
/s/ Edward V. Regan* Trustee
June 6, 2003
- -------------------------
Edward V. Regan
/s/ Russell S. Reynolds, Jr.* Trustee
June 6, 2003
- ---------------------------------
Russell S. Reynolds, Jr.
*By: /s/ Robert G. Zack
- -----------------------------------------
Robert G. Zack, Attorney-in-Fact
OPPENHEIMER GROWTH FUND
EXHIBIT INDEX
-------------
Exhibit No. Description
- ----------- -----------
14 Consent of Independent Auditors
16(11)(i) Form of Opinion and Consent of Counsel to
Oppenheimer Trinity Large Cap Growth Fund
16 (11)(ii) Form of Opinion and Consent of Counsel to
Oppenheimer Growth Fund
16 (12) Form of Tax Opinion Relating to the
Reorganization
Oppenheimer Growth Fund (OPSBX) Inactive
Filed: 6 Jun 03, 12:00am