UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act file number 811-21281
OPPENHEIMER PRINCIPAL PROTECTED MAIN STREET FUND
(Exact name of registrant as specified in charter)
6803 SOUTH TUCSON WAY, CENTENNIAL, COLORADO 80112-3924
(Address of principal executive offices)
(Zip code)
Robert G. Zack, Esq.
OppenheimerFunds, Inc.
498 Seventh Avenue, New York, New York 10018
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(Name and address of agent for service)
Registrant's telephone number, including area code: (303) 768-3200
--------------
Date of fiscal year end: August 31
Date of reporting period: June 2, 2003 - August 31, 2003
ITEM 1. REPORTS TO STOCKHOLDERS.
NOTES
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In reviewing performance and rankings, please remember that past performance
cannot guarantee future results. Investment return and principal value of an
investment in the Fund will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than the original cost. Because of ongoing
market volatility, the Fund's performance may be subject to substantial
fluctuations, and current performance may be more or less than the results
shown. For updates on the Fund's performance, visit our website at
www.oppenheimerfunds.com.
Total returns include changes in share price and reinvestment of dividends and
capital gains distributions in a hypothetical investment for the periods shown.
Cumulative total returns are not annualized. The Fund's total returns shown do
not reflect the deduction of income taxes on an individual's investment. Taxes
may reduce your actual investment returns on income or gains paid by the Fund or
any gains you may realize if you sell your shares. For more complete information
about the Fund, including charges, expenses and risks, please refer to the
prospectus. To obtain a copy, call your financial advisor, call OppenheimerFunds
Distributor, Inc. at 1.800.CALL OPP (1.800.225.5677). Read the prospectus
carefully before you invest or send money.
The Fund purchases a bank warranty to make up any shortfall between the Fund's
protected amount and the Fund's net asset value (NAV) on the maturity date
(August 5, 2010). The bank warranty is solely the obligation of the warranty
provider to the Fund, not to shareholders. To obtain a copy, free of charge, of
the most recent annual report of the "Warranty Provider," Merrill Lynch Bank
USA, call OppenheimerFunds Distributor, Inc. at 1.800.CALL OPP (1.800.225.5677).
The bank warranty does not refer to the performance of the Fund. The ability of
the Fund to protect the value of your original investment is dependent on the
ability of the bank to make a payment to the Fund on the maturity date. The
shareholder's protected amount will be reduced by any redemptions of Fund shares
or distributions taken in cash, sales charges and extraordinary fund expenses.
The principal risks of an investment in the Fund during the Protection Period
and the Post-Protection Period are those generally attributable to investing in
stocks and debt securities. Because the Fund invests in both stocks and debt
securities during the Protection Period, the Fund may underperform stock funds
when stocks are in favor and underperform bond funds when debt securities are in
favor.
Shareholders could lose money by investing in this Fund. A shareholder's
protected amount will be reduced, as more fully described in the prospectus, if
the shareholder takes any dividends or distributions in cash instead of
reinvesting them in additional shares of the Fund, redeems any shares before the
Maturity Date, if there are extraordinary expenses incurred by the Fund (as such
expenses are not covered by the Warranty Agreement), if the Fund or the Manager
fails to perform certain obligations under the Warranty Agreement, or if the
Warranty Provider fails to or is unable to meet its obligations under the
Warranty Agreement.
3 | OPPENHEIMER PRINCIPAL PROTECTED MAIN STREET FUND
NOTES Continued
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Distributions from the Fund are taxable whether or not you reinvest them in
additional shares of the Fund. The warranty provider's obligation to make
payment to the Fund is not guaranteed by any entity and the Fund is not
obligated to replace the warranty provider should it be unable to make the
payments necessary to support the protected amount. The bank warranty increases
the Fund's expenses that you pay and therefore the expenses of this Fund will be
higher than the expenses of a Fund that does not offer principal protection.
The Fund offered its shares to the public from May 30, 2003 through July 31,
2003. From August 5, 2003, and until August 5, 2010, shares of the Fund will
only be issued upon reinvestment of dividends and distributions.
An explanation of the calculation of performance is in the Fund's Statement of
Additional Information.
4 | OPPENHEIMER PRINCIPAL PROTECTED MAIN STREET FUND
STATEMENT OF INVESTMENTS August 31, 2003
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Market Value
Shares See Note 1
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Investments in Affiliated Companies Equity Funds--66.4%
Oppenheimer Main Street Fund-Class Y (Cost $170,007,943) 5,966,791 $177,512,024
Principal
Amount
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U.S. Government Obligations--33.4%
U.S. Treasury Bonds, STRIPS, 4.14%, 5/15/10 1
(Cost $89,438,225) $117,700,000 89,421,633
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Joint Repurchase Agreements--0.3%
Undivided interest of 0.15% in joint repurchase
agreement (Principal Amount/Market Value
$490,175,000, with a maturity value of
$490,229,464) with DB Alex Brown LLC, 1%, dated
8/29/03, to be repurchased at $728,081 on 9/2/03,
collateralized by U.S. Treasury Bonds,
3.875%--6.125%, 4/15/29--8/15/29, with a value of
$501,018,679 (Cost $728,000) 728,000 728,000
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Total Investments, at Value (Cost $260,174,168) 100.1% 267,661,657
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Liabilities in Excess of Other Assets (0.1) (233,189)
-----------------------------
Net Assets 100.0% $267,428,468
=============================
<FN>
Footnotes to Statement of Investments
1. Zero coupon bond reflects effective yield on the date of purchase.
</FN>
See accompanying Notes to Financial Statements.
5 | OPPENHEIMER PRINCIPAL PROTECTED MAIN STREET FUND
STATEMENT OF ASSETS AND LIABILITIES August 31, 2003
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Assets
Investments, at value (cost $260,174,168)--see accompanying statement $ 267,661,657
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Cash 124,248
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Receivables and other assets:
Interest 61
------------
Total assets 267,785,966
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Liabilities
Payables and other liabilities:
Warranty agreement fees 117,467
Shares of beneficial interest redeemed 89,351
Distribution and service plan fees 79,548
Registration and filing fees 21,068
Shareholder reports 17,287
Legal, auditing and other professional fees 15,000
Transfer and shareholder servicing agent fees 9,728
Trustees' compensation 5,000
Other 3,049
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Total liabilities 357,498
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Net Assets $267,428,468
============
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Composition of Net Assets
Par value of shares of beneficial interest $ 26,017
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Additional paid-in capital 260,036,361
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Accumulated net investment loss (82,173)
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Accumulated net realized loss on investment transactions (39,226)
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Net unrealized appreciation on investments 7,487,489
------------
Net Assets $267,428,468
============
6 | OPPENHEIMER PRINCIPAL PROTECTED MAIN STREET FUND
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Net Asset Value Per Share
Class A Shares:
Net asset value and redemption price per share (based on net assets of
$78,758,485 and 7,658,196 shares of beneficial interest outstanding) $10.28
Maximum offering price per share (net asset value plus sales charge of
5.75% of offering price) $10.91
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Class B Shares:
Net asset value, redemption price (excludes applicable contingent
deferred sales charge) and offering price per share (based on net
assets of $122,967,551 and 11,965,387 shares of beneficial interest
outstanding) $10.28
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Class C Shares:
Net asset value, redemption price (excludes applicable contingent
deferred sales charge) and offering price per share (based on net
assets of $60,270,884 and 5,864,659 shares of beneficial interest
outstanding) $10.28
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Class N Shares:
Net asset value, redemption price (excludes applicable contingent
deferred sales charge) and offering price per share (based on net
assets of $5,431,548 and 528,325 shares of beneficial interest
outstanding) $10.28
See accompanying Notes to Financial Statements.
7 | OPPENHEIMER PRINCIPAL PROTECTED MAIN STREET FUND
STATEMENT OF OPERATIONS For the Period Ended August 31, 2003 1
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Investment Income
Interest, including amortization of discounts $ 407,279
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Expenses
Management fees 115,988
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Distribution and service plan fees:
Class A 22,530
Class B 157,341
Class C 77,995
Class N 4,554
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Transfer and shareholder servicing agent fees:
Class A 7,071
Class B 11,262
Class C 5,509
Class N 531
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Warranty fees 117,467
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Shareholder reports 19,000
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Legal, auditing and other professional fees 15,000
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Custodian fees and expenses 5,000
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Trustees' compensation 5,000
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Other 10,004
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Total expenses 574,252
Less reimbursement of management fees (72,380)
Less voluntary reimbursement of duplicate expenses from
underlying fund (31,314)
Less voluntary reimbursement to maintain yield--Class B (32,906)
Less voluntary reimbursement to maintain yield--Class C (16,836)
-----------
Net expenses 420,816
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Net Investment Loss (13,537)
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Realized and Unrealized Gain (Loss)
Net realized loss on investments (32,352)
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Net change in unrealized appreciation on investments 7,487,489
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Net Increase in Net Assets Resulting from Operations $7,441,600
===========
<FN>
1. For the period from June 2, 2003 (commencement of operations) to August 31,
2003.
</FN>
See accompanying Notes to Financial Statements.
8 | OPPENHEIMER PRINCIPAL PROTECTED MAIN STREET FUND
STATEMENT OF CHANGES IN NET ASSETS
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Period
Ended
August 31,
2003 1
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Operations
Net investment loss $ (13,537)
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Net realized loss (32,352)
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Net change in unrealized appreciation 7,487,489
Net increase in net assets resulting from operations 7,441,600
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Beneficial Interest Transactions
Net increase in net assets resulting from beneficial interest
transactions:
Class A 76,527,144
Class B 119,572,316
Class C 58,607,625
Class N 5,279,783
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Net Assets
Total increase 267,428,468
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Beginning of period --
-------------
End of period [including accumulated net investment loss
of $82,173 for the period ended August 31, 2003] $267,428,468
=============
<FN>
1. For the period from June 2, 2003 (commencement of operations) to August 31,
2003.
</FN>
See accompanying Notes to Financial Statements.
9 | OPPENHEIMER PRINCIPAL PROTECTED MAIN STREET FUND
FINANCIAL HIGHLIGHTS
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Class A Class B
Period Period
Ended Ended
August 31, August 31,
2003 1 2003 1
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Per Share Operating Data
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Net asset value, beginning of period $10.00 $10.00
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Income (loss) from investment operations:
Net investment loss -- 2 -- 2
Net realized and unrealized gain .28 .28
----------------------
Total from investment operations .28 .28
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Net asset value, end of period $10.28 $10.28
======================
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Total Return, at Net Asset Value 3 2.80% 2.80%
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Ratios/Supplemental Data
Net assets, end of period (in thousands) $78,758 $122,968
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Average net assets (in thousands) $39,416 $ 64,461
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Ratios to average net assets: 4
Net investment income (loss) 0.35% (0.20)%
Total expenses 1.13% 5 1.88% 6
Less reimbursement of management fees during offering period (0.32)% (0.32)%
Less reimbursement to maintain yield -- (0.31)%
----------------------
Net expenses 0.81% 7 1.25% 7
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Portfolio turnover rate 12% 12%
<FN>
1. For the period from June 2, 2003 (commencement of operations) to August 31,
2003.
2. Less than $0.005 per share.
3. Assumes an investment on the business day before the first day of the fiscal
period (or commencement of operations), 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. Returns do not reflect the deduction of
taxes that a shareholder would pay on Fund distributions or the redemption of
Fund shares.
4. Annualized for periods of less than one full year.
5. Expenses paid before voluntary reimbursement of underlying fund expenses was
1.38%.
6. Expenses paid before voluntary reimbursement of underlying fund expenses was
2.13%.
7. For this period reduction to custodian expenses was zero.
</FN>
See accompanying Notes to Financial Statements.
10 | OPPENHEIMER PRINCIPAL PROTECTED MAIN STREET FUND
Class C Class N
Period Period
Ended Ended
August 31, August 31,
2003 1 2003 1
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Per Share Operating Data
Net asset value, beginning of period $ 10.00 $ 10.00
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Income (loss) from investment operations:
Net investment loss -- 2 -- 2
Net realized and unrealized gain .28 .28
-------------------
Total from investment operations .28 .28
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Net asset value, end of period $10.28 $10.28
======================
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Total Return, at Net Asset Value 3 2.80% 2.80%
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Ratios/Supplemental Data
Net assets, end of period (in thousands) $60,271 $5,432
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Average net assets (in thousands) $31,946 $3,713
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Ratios to average net assets: 4
Net investment income (loss) (0.20)% 0.06%
Total expenses 1.88% 5 1.38% 6
Less reimbursement of management fees during offering period (0.32)% (0.32)%
Less reimbursement to maintain yield (0.32)% --
----------------------
Net expenses 1.24% 7 1.06% 7
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Portfolio turnover rate 12% 12%
<FN>
1. For the period from June 2, 2003 (commencement of operations) to August 31,
2003.
2. Less than $0.005 per share.
3. Assumes an investment on the business day before the first day of the fiscal
period (or commencement of operations), 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. Returns do not reflect the deduction of
taxes that a shareholder would pay on Fund distributions or the redemption of
Fund shares.
4. Annualized for periods of less than one full year.
5. Expenses paid before voluntary reimbursement of underlying fund expenses was
2.13%.
6. Expenses paid before voluntary reimbursement of underlying fund expenses was
1.63%.
7. For this period reduction to custodian expenses was zero.
</FN>
See accompanying Notes to Financial Statements.
11 | OPPENHEIMER PRINCIPAL PROTECTED MAIN STREET FUND
NOTES TO FINANCIAL STATEMENTS
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1. Significant Accounting Policies
Oppenheimer Principal Protected Main Street Fund (the Fund), a series of
Oppenheimer Principal Protected Trust, is registered under the Investment
Company Act of 1940, as amended, as an open-end management investment company.
The Fund seeks capital preservation in order to have a net asset value on the
Maturity Date at least equal to your original investment (the Warranty Amount)
(net of any sales charges and less your share of extraordinary expenses and the
proportional reduction of dividends paid in cash and redemption of the Fund
shares). The Fund's investment advisor is OppenheimerFunds, Inc. (the Manager).
Shares of the Fund were offered during the Offering Period (June 2, 2003 to
July 31, 2003). Shares are not offered during the Warranty Period (August 5,
2003 to August 5, 2010) to the Maturity Date (August 5, 2010) except in
connection with reinvestment of dividends and distributions. During the Warranty
Period, the Fund will seek capital preservation, and secondarily high total
return by allocating its assets between Oppenheimer Main Street Fund and certain
U.S. government securities.
The Fund offers Class A, Class B, Class C and Class N 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. 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. Class B shares will automatically
convert to Class A shares 88 months after the date of purchase.
The following is a summary of significant accounting policies consistently
followed by the Fund.
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Warranty Agreement. The Fund has entered into a Financial Warranty Agreement
with Merrill Lynch Bank USA (the Warranty Provider) to try to make sure that on
the Maturity Date each shareholder's account will be no less than the value of
that shareholder's account on the second business day after the end of the
Offering Period. This value will include net income, if any, earned by the Fund
during the offering period and reduced by adjustments permitted under the
Warranty Agreement, sales charges, applicable share of extraordinary expenses
and proportionately reduced for dividends and distributions paid in cash and
redemptions of Fund shares. To avoid a reduced warranty amount, shareholders
must reinvest all dividends and distributions received from the Fund to purchase
additional shares of the Fund and must not redeem any shares of the Fund during
the Warranty Period. If the value of the Fund's assets on the Maturity Date is
insufficient to result in the value of each shareholder's account being at least
equal to the shareholder's Warranty Amount, the Warranty Provider will pay the
Fund an amount equal to his or her Warranty Amount.
12 | OPPENHEIMER PRINCIPAL PROTECTED MAIN STREET FUND
The Financial Warranty is solely the obligation of the Warranty Provider. It
is possible that the financial position of the Warranty Provider may deteriorate
and it would be unable to satisfy its obligations under the Financial Warranty.
The Fund's assets and the obligations of the Warranty Provider under the
Warranty Agreement are not guaranteed by Merrill Lynch & Co., Inc., the United
States Government, the Manager, or any other entity or person.
The Warranty Agreement requires the Manager to comply with certain agreed
upon investment parameters in an attempt to limit the Fund's risk. If the Fund
fails to comply with the agreed-upon investment parameters or otherwise fails to
comply with certain requirements set forth in the Warranty Agreement, the
Warranty Provider may terminate its Financial Warranty in certain limited
circumstances. The Warranty Provider may monitor the Fund's compliance with the
Warranty Agreement solely to protect the interests of the Warranty Provider and
not the Fund's shareholders.
The fee paid to the Warranty Provider is an annual fee of 0.60% of the
average daily net assets of the Fund. For the fiscal year ended August 31, 2003,
the amount accrued for Warranty Agreement fees was $117,467.
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Securities Valuation. The allocation of the Fund's assets between the debt
portfolio and the equity portfolio will vary over time based upon the Warranty
Formula. The formula is intended to allow the Fund to have a net asset value on
the Maturity Date at least equal to the Warranty Amount.
During the Warranty Period, the Fund will invest a portion of its assets, and
in certain circumstances, the Fund may invest all of its assets, in U.S.
government securities having maturity approximately equal to the period
remaining in the Warranty Period. Long-term and short-term "non-money market"
debt securities are valued by a portfolio pricing service approved by the Board
of Trustees.
The Fund invests the equity portfolio in Class Y shares of Oppenheimer Main
Street Fund (the Underlying Fund). The net asset value of the Underlying Fund is
determined as of the close of The New York Exchange, on each day the Exchange is
open for trading. 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.
- --------------------------------------------------------------------------------
Joint Repurchase Agreements. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission, the Fund, along with other affiliated funds
advised by the Manager, may transfer uninvested cash balances into joint trading
accounts on a daily basis. Secured by U.S. government securities, these balances
are invested in one or more repurchase agreements. 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. In the
event of default by the other party to the agreement, retention of the
collateral may be subject to legal proceedings.
13 | OPPENHEIMER PRINCIPAL PROTECTED MAIN STREET FUND
NOTES TO FINANCIAL STATEMENTS Continued
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- --------------------------------------------------------------------------------
1. Significant Accounting Policies Continued
Allocation of Income, Expenses, Gains and Losses. Income, expenses (other than
those attributable to a specific class), gains and losses are allocated on a
daily basis 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 comply with provisions of the Internal
Revenue Code applicable to regulated investment companies and to distribute
substantially all of its investment company 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.
The tax components of capital shown in the table below represent distribution
requirements the Fund must satisfy under the income tax regulations, losses the
Fund may be able to offset against income and gains realized in future years and
unrealized appreciation or depreciation of investment for federal income tax
purposes.
Net Unrealized
Appreciation
Undistributed Undistributed Accumulated Based on Cost of
Net Investment Long-Term Loss Securities for Federal
Income Gain Carryforward Income Tax Purposes
-----------------------------------------------------------------
$136,858 $-- $-- $7,430,521
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. Accordingly, the
following amounts have been reclassified for August 31, 2003. Net assets of the
Fund were unaffected by the reclassifications.
To To Net
Ordinary Capital Tax Return Investment
Loss Loss 1 of Capital Loss
-----------------------------------------------------
$68,636 $6,874 $-- $--
1. $6,874 was distributed in connection with Fund share redemptions.
No distributions were paid during the period ended August 31, 2003.
The aggregate cost of investments and the composition of unrealized
appreciation and depreciation of investments for federal income tax purposes as
of August 31, 2003 are noted below. The primary difference between book and tax
appreciation or depreciation of investments, if applicable, is attributable to
the tax deferral of losses or tax realization of financial statement unrealized
gain or loss.
14 | OPPENHEIMER PRINCIPAL PROTECTED MAIN STREET FUND
Federal tax cost $260,231,136
============
Gross unrealized appreciation $ 7,504,081
Gross unrealized depreciation (73,560)
------------
Net unrealized appreciation $ 7,430,521
============
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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. Income and capital gain distributions, if
any, are declared and paid annually.
- --------------------------------------------------------------------------------
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.
- --------------------------------------------------------------------------------
Expense Offset Arrangement. The reduction of custodian fees represents earnings
on cash balances maintained by the Fund.
- --------------------------------------------------------------------------------
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.
- --------------------------------------------------------------------------------
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:
Period Ended August 31, 2003 1
Shares Amount
- ------------------------------------------------------------------------------------
Class A
Sold 7,734,040 $ 77,290,054 2
Redeemed (75,844) (762,910)
---------------------------
Net increase 7,658,196 $ 76,527,144
===========================
- ------------------------------------------------------------------------------------
Class B
Sold 12,010,627 $120,027,161 2
Redeemed (45,240) (454,845)
---------------------------
Net increase 11,965,387 $119,572,316
===========================
15 | OPPENHEIMER PRINCIPAL PROTECTED MAIN STREET FUND
NOTES TO FINANCIAL STATEMENTS Continued
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- --------------------------------------------------------------------------------
2. Shares of Beneficial Interest Continued
Period Ended August 31, 2003 1
Shares Amount
- ------------------------------------------------------------------------------------
Class C
Sold 5,882,060 $58,782,614 2
Redeemed (17,401) (174,989)
---------------------------
Net increase 5,864,659 $58,607,625
===========================
- ------------------------------------------------------------------------------------
Class N
Sold 528,325 $ 5,279,783 2
Redeemed -- --
---------------------------
Net increase 528,325 $ 5,279,783
===========================
1. For the period from June 2, 2003 (commencement of operations) to August 31,
2003.
2. Costs incurred by the Fund for obtaining the Warranty Agreement for the
benefit of share purchases during the Offering Period were $171,068, and are
included in Paid-in Capital.
- --------------------------------------------------------------------------------
3. Purchases and Sales of Securities
The aggregate cost of purchases and proceeds from sales of securities, other
than short-term obligations, for the period ended August 31, 2003, were
$275,194,144 and $15,988,521, respectively.
- --------------------------------------------------------------------------------
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 at an
annual rate of 0.50% of the average annual net assets of the Fund, reduced by
the amount of advisory fees paid to the Manager by Oppenheimer Main Street Fund
relating to the Fund's assets invested in Oppenheimer Main Street Fund, but not
below zero. That fee will apply during the Warranty Period and the Post-Warranty
Period. If during the Warranty Period 100% of the Fund's assets are completely
and irreversibly invested in the debt portfolio, the management fee will be at
an annual rate of 0.25% of the average annual net assets of the Fund, and if
that occurs the Manager will further reduce its management fee to the extent
necessary so that total annual operating expenses of the Fund (other than
Extraordinary Expenses such as litigation costs) do not exceed 1.30% for Class A
shares, 2.05% for Class B shares, 2.05% for Class C shares and 1.55% for Class N
shares. However, if this reduction in the management fee is not sufficient to
reduce total annual operating expenses to these limits, the Manager is not
required to subsidize Fund expenses to assure that expenses do not exceed those
limits. Furthermore, if expenses exceed these expense limits, the Warranty
Amount will be reduced by any expenses that exceed those limits. In addition,
during the Warranty Period the Manager has voluntarily agreed to reduce the
management fee payable by the Fund by 0.00833% per month in any month following
a month where the Fund's average daily equity allocation was less than 10%.
Those voluntary undertakings may be amended or eliminated at any time.
16 | OPPENHEIMER PRINCIPAL PROTECTED MAIN STREET FUND
The Manager has voluntarily undertaken to reimburse the Fund for expenses
equal to the Underlying Fund expenses, other than Underlying Fund management
fees, paid by the Fund as a shareholder of the Underlying Fund. That expense
reimbursement will fluctuate as the Fund's allocation between the Underlying
Fund and the debt portfolio changes. This voluntary undertaking may be amended
or eliminated at any time.
The Manager waived or reimbursed most Fund expenses, other than 12b-1
expenses, incurred during the Offering Period. In addition, during the Offering
Period, the Manager reimbursed the Fund an amount equal to expenses to maintain
a yield of not less than zero, for all share classes. These voluntary
undertakings were ended on August 4, 2003.
- --------------------------------------------------------------------------------
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 per account fee. For the period ended August 31, 2003, the Fund paid
$14,646 to OFS for services to the Fund.
OFS has voluntarily agreed to limit transfer and shareholder servicing agent
fees for all classes, up to an annual rate of 0.35% of average net assets per
class. This undertaking may be amended or withdrawn at any time.
- --------------------------------------------------------------------------------
Offering and Organizational Costs. The Manager paid all offering and
organizational costs associated with the registration and seeding of the 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
Period Ended Shares Distributor Distributor 1 Distributor 1 Distributor 1 Distributor 1
- -------------------------------------------------------------------------------------------------------------
August 31, 2003 $1,964,635 $171,994 $-- $48,744 $7,167 $37
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
Period Ended Distributor Distributor Distributor Distributor
- ------------------------------------------------------------------------------
August 31, 2003 $-- $16,217 $759 $--
- --------------------------------------------------------------------------------
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 period ended August 31, 2003, expense under
the Class A Plan totaled $22,530, all of
17 | OPPENHEIMER PRINCIPAL PROTECTED MAIN STREET FUND
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
4. Fees and Other Transactions with Affiliates Continued
which were paid by the Distributor to recipients, none of which was 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 period ended August 31,
2003, were as follows:
Distributor's
Distributor's Aggregate
Aggregate Unreimbursed
Unreimbursed Expenses as %
Total Expenses Amount Retained Expenses of Net Assets
Under Plan by Distributor Under Plan of Class
- ----------------------------------------------------------------------------
Class B Plan $157,341 $77,151 $2,295,608 1.87%
Class C Plan 77,995 37,759 444,020 0.74
Class N Plan 4,554 1,137 133,382 2.46
- --------------------------------------------------------------------------------
5. Borrowing and Lending Arrangements
The Fund entered into an "interfund borrowing and lending arrangement" with
other funds in the Oppenheimer funds complex, to allow funds to borrow for
liquidity purposes. The arrangement was initiated pursuant to exemptive relief
granted by the Securities and Exchange Commission to allow these affiliated
funds to lend money to, and borrow money from, each other, in an attempt to
reduce borrowing costs below those of bank loan facilities. Under the
arrangement the Fund may lend money to other Oppenheimer funds and may borrow
from other Oppenheimer funds at a rate set by the Fund's Board of Trustees,
based upon a recommendation by the Manager. The Fund's borrowings, if any, are
subject to asset coverage requirements under the Investment Company Act and the
provisions of the SEC order and other applicable regulations. If the Fund
borrows money, there is a risk that the loan could be called on one day's
notice, in which case the Fund might have to borrow from a bank at higher rates
if a loan were not available from another Oppenheimer fund. If the Fund lends
money to another fund, it will be subject to the risk that the other fund might
not repay the loan in a timely manner, or at all.
The Fund had no interfund borrowings or loans outstanding during the period
ended or at August 31, 2003.
18 | OPPENHEIMER PRINCIPAL PROTECTED MAIN STREET FUND
INDEPENDENT AUDITORS' REPORT
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
To the Board of Trustees and Shareholders of
Oppenheimer Principal Protected Main Street Fund:
We have audited the accompanying statement of assets and liabilities of
Oppenheimer Principal Protected Main Street Fund, a series of Oppenheimer
Principal Protected Trust, including the statement of investments, as of August
31, 2003, and the related statement of operations from June 2, 2003 to August
31, 2003, the statement of changes in net assets from June 2, 2003 to August 31,
2003, and the financial highlights from June 2, 2003 to August 31, 2003. 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 audit 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, 2003, by correspondence with the custodian and
brokers; where replies were not received from brokers, we performed other
auditing procedures. 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 audit provided 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 Principal Protected Main Street Fund as of August 31, 2003, the
results of its operations from June 2, 2003 to August 31, 2003, the changes in
its net assets from June 2, 2003 to August 31, 2003, and the financial
highlights from June 2, 2003 to August 31, 2003, in conformity with accounting
principles generally accepted in the United States of America.
Deloitte & Touche LLP
Denver, Colorado
September 22, 2003
19 | OPPENHEIMER PRINCIPAL PROTECTED MAIN STREET FUND
FEDERAL INCOME TAX INFORMATION Unaudited
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
In early 2004, if applicable, shareholders of record will receive information
regarding all dividends and distributions paid to them by the Fund during
calendar year 2003. Regulations of the U.S. Treasury Department require the
Fund to report this information to the Internal Revenue Service.
The foregoing information is presented to assist shareholders in reporting
distributions received from the Fund to the Internal Revenue Service. Because
of the complexity of the federal regulations which may affect your individual
tax return and the many variations in state and local tax regulations, we
recommend that you consult your tax advisor for specific guidance.
- --------------------------------------------------------------------------------
PORTFOLIO PROXY VOTING
POLICIES AND PROCEDURES Unaudited
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
The Fund has adopted Portfolio Proxy Voting Policies and Procedures under which
the Fund votes proxies relating to securities ("portfolio proxies") held by the
Fund. A description of the Fund's Portfolio Proxy Voting Policies and
Procedures is available (i) without charge, upon request, by calling the Fund
toll-free at 1.800.225.5677, (ii) on the Fund's website at
www.oppenheimerfunds.com, and (iii) on the SEC's website at www.sec.gov. In
addition, the Fund will be required to file new Form N-PX, with its complete
proxy voting record for the 12 months ended June 30th, no later than August
31st of each year. The first such filing is due no later than August 31, 2004,
for the twelve months ended June 30, 2004. Once filed, the Fund's Form N-PX
filing will be available (i) without charge, upon request, by calling the Fund
toll-free at 1.800.225.5677, and (ii) on the SEC's website at www.sec.gov.
20 | OPPENHEIMER PRINCIPAL PROTECTED MAIN STREET FUND
TRUSTEES AND OFFICERS Unaudited
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------
Name, Position(s) Held with Principal Occupation(s) During Past 5 Years; Other
Fund, Length of Service, Age Trusteeships/Directorships Held by Trustee; Number of
Portfolios in Fund Complex Currently Overseen by
Trustee
INDEPENDENT The address of each Trustee in the chart below is 6803
TRUSTEES S. Tucson Way, Centennial, CO 80112-3924. Each Trustee
serves for an indefinite term, until his or her
resignation, retirement, death or removal.
James C. Swain, Formerly, Chief Executive Officer (until August 27,
Chairman and Trustee 2002) of the Board II Funds, Vice Chairman (until
(since 2003) January 2, 2002) of OppenheimerFunds, Inc. (the
Age: 69 Manager) and President and a director (until 1997) of
Centennial Asset Management Corporation (a wholly-owned
investment advisory subsidiary of the Manager).
Oversees 43 portfolios in the OppenheimerFunds complex.
William L. Armstrong, Chairman of the following private mortgage banking
Vice Chairman and Trustee companies: Cherry Creek Mortgage Company (since 1991),
(since 2003) Centennial State Mortgage Company (since 1994), The El
Age: 66 Paso Mortgage Company (since 1993), Transland Financial
Services, Inc. (since 1997); Chairman of the following
private companies: Great Frontier Insurance (insurance
agency) (since 1995), Ambassador Media Corporation and
Broadway Ventures (since 1984); a director of the
following public companies: Helmerich & Payne, Inc.
(oil and gas drilling/production company) (since 1992)
and UNUMProvident (insurance company) (since 1991). Mr.
Armstrong is also a Director/Trustee of Campus Crusade
for Christ and the Bradley Foundation. Formerly a
director of the following: Storage Technology
Corporation (a publicly-held computer equipment
company) (1991-February 2003), and International Family
Entertainment (television channel) (1992-1997),
Frontier Real Estate, Inc. (residential real estate
brokerage) (1994-1999), and Frontier Title (title
insurance agency) (1995-June 1999); a U.S. Senator
(January 1979-January 1991). Oversees 43 portfolios in
the OppenheimerFunds complex.
Robert G. Avis, Formerly, Director and President of A.G. Edwards
Trustee (since 2003) Capital, Inc. (General Partner of private equity funds)
Age: 72 (until February 2001); Chairman, President and Chief
Executive Officer of A.G. Edwards Capital, Inc. (until
March 2000); Vice Chairman and Director of A.G.
Edwards, Inc. and Vice Chairman of A.G. Edwards & Sons,
Inc. (its brokerage company subsidiary) (until March
1999); Chairman of A.G. Edwards Trust Company and
A.G.E. Asset Management (investment advisor) (until
March 1999); and a Director (until March 2000) of A.G.
Edwards & Sons and A.G. Edwards Trust Company. Oversees
43 portfolios in the OppenheimerFunds complex.
George C. Bowen, Formerly (until April 1999): Senior Vice President
Trustee (since 2003) (from September 1987) and Treasurer (from March 1985)
Age: 66 of the Manager; Vice President (from June 1983) and
Treasurer (since March 1985) of OppenheimerFunds
Distributor, Inc. (a subsidiary of the Manager); Senior
Vice President (since February 1992), Treasurer (since
July 1991) Assistant Secretary and a director (since
December 1991) of Centennial Asset Management
Corporation; Vice President (since October 1989) and
Treasurer (since April 1986) of HarbourView Asset
Management Corporation (an investment advisory
subsidiary of the Manager); President, Treasurer and a
director (June 1989-January 1990) of Centennial Capital
Corporation (an investment advisory subsidiary of the
Manager); Vice President and Treasurer (since August
1978) and Secretary (since April 1981) of Shareholder
Services, Inc. (a transfer agent subsidiary of the
Manager); Vice President, Treasurer and Secretary
(since November 1989) of Shareholder Financial
Services, Inc. (a transfer agent subsidiary of the
Manager); Assistant Treasurer (since March 1998) of
Oppenheimer Acquisition Corp. (the Manager's parent
corporation); Treasurer (since November 1989) of
Oppenheimer Partnership Holdings, Inc. (a holding
company subsidiary of the Manager); Vice President and
Treasurer (since July
21 | OPPENHEIMER PRINCIPAL PROTECTED MAIN STREET FUND
TRUSTEES AND OFFICERS Unaudited / Continued
- --------------------------------------------------------------------------------
George C. Bowen, 1996) of Oppenheimer Real Asset Management, Inc. (an
Continued investment advisory subsidiary of the Manager); Chief
Executive Officer and director (since March 1996) of
MultiSource Services, Inc. (a broker-dealer subsidiary
of the Manager); Treasurer (since October 1997) of
OppenheimerFunds International Ltd. and
OppenheimerFunds plc (offshore fund management
subsidiaries of the Manager). Oversees 43 portfolios in
the OppenheimerFunds complex.
Edward L. Cameron, A member of The Life Guard of Mount Vernon, George
Trustee (since 2003) Washington's home (since June 2000). Formerly (March
Age: 65 2001 - May 2002) Director of Genetic ID, Inc. and its
subsidiaries (a privately held biotech company); a
partner with PricewaterhouseCoopers LLP (from
1974-1999) (an accounting firm) and Chairman (from
1994-1998), Price Waterhouse LLP Global Investment
Management Industry Services Group. Oversees 43
portfolios in the OppenheimerFunds complex.
Jon S. Fossel, Chairman and Director (since 1998) of Rocky Mountain
Trustee (since 2003) Elk Foundation (a not-for-profit foundation); and a
Age: 61 director (since October 1999) of P.R. Pharmaceuticals
(a privately held company) and UNUMProvident (an
insurance company) (since June 1, 2002). Formerly
Chairman and a director (until October 1996) and
President and Chief Executive Officer (until October
1995) of the Manager; President, Chief Executive
Officer and a director of Oppenheimer Acquisition
Corp., Shareholders Services Inc. and Shareholder
Financials Services, Inc. (until October 1995).
Oversees 43 portfolios in the OppenheimerFunds complex.
Sam Freedman, Director of Colorado Uplift (a non-profit charity)
Trustee (since 2003) (since September 1984). Formerly (until October 1994)
Age: 62 Mr. Freedman held several positions in subsidiary or
affiliated companies of the Manager. Oversees 43
portfolios in the OppenheimerFunds complex.
Beverly L. Hamilton, Trustee (since 1996) of MassMutual Institutional Funds
Trustee (since 2003) and of MML Series Investment Fund (open-end investment
Age: 56 companies); Director of MML Services (since April 1987)
and America Funds Emerging Markets Growth Fund (since
October 1991) (both are investment companies), The
California Endowment (a philanthropy organization)
(since April 2002), and Community Hospital of Monterey
Peninsula, (since February 2002); a trustee (since
February 2000) of Monterey International Studies (an
educational organization), and an advisor to Unilever
(Holland)'s pension fund and to Credit Suisse First
Boston's Sprout venture capital unit. Mrs. Hamilton
also is a member of the investment committees of the
Rockefeller Foundation, the University of Michigan and
Hartford Hospital. Formerly, President (February
1991-April 2000) ARCO Investment Management Company.
Oversees 44 portfolios in the OppenheimerFunds complex.
Robert J. Malone, Chairman and CEO (since August 2003) of Steele Street
Trustee (since 2003) Bank (a commercial bank entity), Director (since 2001)
Age: 59 of Jones Knowledge, Inc. (a privately held company),
U.S. Exploration, Inc., (since 1997), Colorado UpLIFT
(a non-profit organization) (since 1986) and a trustee
of the Gallagher Family Foundation (non-profit
organization) (since 2000). Formerly, Chairman of U.S.
Bank (a subsidiary of U.S. Bancorp and formerly
Colorado National Bank) (July 1996-April 1, 1999) and
a director of Commercial Assets, Inc. (a REIT)
(1993-2000). Oversees 44 portfolios in the
OppenheimerFunds complex.
22 | OPPENHEIMER PRINCIPAL PROTECTED MAIN STREET FUND
F. William Marshall, Jr., Trustee (since 1996) of MassMutual Institutional Funds
Trustee (since 2003) and of MML Series Investment Fund (open-end investment
Age: 61 companies); Trustee (since 1987), Chairman of the Board
(since 2003) and Chairman of the investment committee
(since 1994) for the Worcester Polytech Institute;
President and Treasurer (since January 1999) of the SIS
Fund (a private not for profit charitable fund);
Trustee (since 1995) of the Springfield Library and
Museum Association; Trustee (since 1996) of the
Community Music School of Springfield. Formerly, member
of the investment committee of the Community Foundation
of Western Massachusetts (1998 - 2003); Chairman
(January 1999-July 1999) of SIS & Family Bank, F.S.B.
(formerly SIS Bank); President, Chief Executive Officer
and Director (May 1993-December 1998) of SIS Bankcorp,
Inc. and SIS Bank (formerly Springfield Institution for
Savings) and Executive Vice President (January
1999-July 1999) of Peoples Heritage Financial Group,
Inc. Oversees 43 portfolios in the OppenheimerFunds
complex.
- ----------------------------------------------------------------------------------------
INTERESTED TRUSTEE The address of Mr. Murphy in the chart below is 498
AND OFFICER Seventh Avenue, New York, NY 10018. Mr. Murphy serves
for an indefinite term, until his resignation, death or
removal.
John V. Murphy, Chairman, Chief Executive Officer and director (since
President and Trustee June 2001) and President (since September 2000) of the
(since 2003) Manager; President and a director or trustee of other
Age: 54 Oppenheimer funds; President and a director (since July
2001) of Oppenheimer Acquisition Corp. and of
Oppenheimer Partnership Holdings, Inc.; a director
(since November 2001) of OppenheimerFunds Distributor,
Inc.; Chairman and a director (since July 2001) of
Shareholder Services, Inc. and of Shareholder Financial
Services, Inc.; President and a director (since July
2001) of OppenheimerFunds Legacy Program (a charitable
trust program established by the Manager); a director
of the following investment advisory subsidiaries of
OppenheimerFunds, Inc.: 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 DLB Acquisition Corporation (a
holding company that owns shares of David L. Babson &
Company, Inc.); 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 75 portfolios in the OppenheimerFunds complex.
23 | OPPENHEIMER PRINCIPAL PROTECTED MAIN STREET FUND
TRUSTEES AND OFFICERS Unaudited / Continued
- --------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
OFFICERS The address of the Officers in the chart below is as
follows: for Messrs. Manioudakis, Winston and Zack, 498
Seventh Avenue, New York, NY 10018, for Mr. Wixted,
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.
Angelo Manioudakis, Senior Vice President of the Manager (since April
Vice President (since 2003) 2002); an officer of 12 portfolios in the
Age: 36 OppenheimerFunds complex; formerly Executive Director
and portfolio manager for Miller, Anderson & Sherrerd,
a division of Morgan Stanley Investment Management
(August 1993-April 2002).
Kenneth Winston, Senior Vice President and Director of Risk Management,
Vice President (since 2003) Quantitative Research and Product Design of the Manager
Age: 50 (since May 2001); an officer of 1 portfolio in the
OppenheimerFunds complex; formerly a Managing Partner
at Richards & Tierney, Inc. (March 1994 - May 2001).
Brian W. Wixted, Senior Vice President and Treasurer (since March 1999)
Treasurer (since 2003) of the Manager; Treasurer (since March 1999) of
Age: 43 HarbourView Asset Management Corporation, Shareholder
Services, Inc., Oppenheimer Real Asset Management
Corporation, Shareholder Financial Services, Inc.,
Oppenheimer Partnership Holdings, Inc., OFI Private
Investments, Inc. (since March 2000), OppenheimerFunds
International Ltd. and OppenheimerFunds plc (offshore
fund management subsidiaries of the Manager) (since May
2000) and OFI Institutional Asset Management, Inc.
(since November 2000); 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 91 portfolios in
the OppenheimerFunds complex.
Robert G. Zack, Senior Vice President (since May 1985) and General
Vice President & Secretary Counsel (since February 2002) of the Manager; General
(since 2003) Counsel and a director (since November 2001) of
Age: 55 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 OppenheimerFunds plc (October
1997-November 2001). An officer of 91 portfolios in the
OppenheimerFunds complex.
The Fund's Statement of Additional Information contains additional information
about the Fund's Trustees and is available without charge upon request.
24 | OPPENHEIMER PRINCIPAL PROTECTED MAIN STREET FUND
ITEM 2. CODE OF ETHICS
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT
The Board of Trustees of the Fund has determined that Edward L. Cameron, the
Chairman of the Board's Audit Committee, and George C. Bowen, a member of the
Board's Audit Committee, possess the technical attributes identified in
Instruction 2(b) of Item 3 to Form N-CSR to qualify as "audit committee
financial experts," and has designated Messrs. Cameron and Bowen as the Audit
Committee's financial experts. Messrs. Cameron and Bowen are "independent"
Trustees pursuant to paragraph (a)(2) of Item 3 to Form N-CSR.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES - NOT REQUIRED
ITEM 5. NOT APPLICABLE
ITEM 6. RESERVED
ITEM 7. NOT APPLICABLE
ITEM 8. RESERVED
ITEM 9. CONTROLS AND PROCEDURES
(a) Based on their evaluation of registrant's disclosure controls and
procedures (as defined in rule 30a-2(c) under the Investment Company
Act of 1940 (17 CFR 270.30a-2(c)) as of August 31, 2003, registrant's
principal executive officer and principal financial officer found
registrant's disclosure controls and procedures to be appropriately
designed to ensure that information required to be disclosed by
registrant in the reports that it files under the Securities Exchange
Act of 1934 (a) is accumulated and communicated to registrant's
management, including its principal executive officer and principal
financial officer, to allow timely decisions regarding required
disclosure, and (b) is recorded, processed, summarized and reported,
within the time periods specified in the rules and forms adopted by the
U.S. Securities and Exchange Commission.
(b) There have been no significant changes in registrant's internal
controls or in other factors that could significantly affect
registrant's internal controls subsequent to the date of the most
recent evaluation as indicated, including no significant deficiencies
or material weaknesses that required corrective action.
ITEM 10. EXHIBITS.
(A) EXHIBIT ATTACHED HERETO. (ATTACH CODE OF ETHICS AS EXHIBIT)
(B) EXHIBITS ATTACHED HERETO. (ATTACH CERTIFICATIONS AS EXHIBITS)