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 811-10071
Oppenheimer Emerging Growth 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.
Two World Financial Center, New York, New York 10281-1008
- --------------------------------------------------------------------------------
(Name and address of agent for service)
Registrant's telephone number, including area code: (303) 768-3200
--------------
Date of fiscal year end: October 31
Date of reporting period: November 1, 2002 - October 31, 2003
ITEM 1. REPORTS TO STOCKHOLDERS.
FUND PERFORMANCE DISCUSSION
- --------------------------------------------------------------------------------
How has the Fund performed? Below is a discussion by OppenheimerFunds, Inc., of
the Fund's performance during its fiscal year ended October 31, 2003, followed
by a graphical comparison of the Fund's performance to appropriate broad-based
market indices.
Management's Discussion of Fund Performance. Over the 12-month period ended
October 31, 2003, the Fund delivered exceptionally strong performance, providing
returns that far outpaced both of its benchmarks, The Russell 2000 Index and the
Russell 2000 Growth Index. The Fund's gains were driven by the sharp upturn in
small-cap growth stock prices that began in March 2003 and continued throughout
the remainder of the period, and by a large number of exceptionally good
individual stock selections produced by our disciplined, bottom-up selection
process.
During the reporting period, our stock selection approach led us to invest
the greatest percentage of the Fund's assets in the traditional growth areas of
technology, health care and consumer discretionary. Technology stocks provided
some of the Fund's best returns, with several performers delivering substantial
gains. For example, Lexar Media, Inc., a producer of flash memory, benefited
from rapidly growing demand from consumers for digital cameras, MP3 players, and
other digital devices. Netease.com, Inc., a China-based Internet portal
provider, climbed sharply on the basis of rising revenues from advertising,
online gaming and e-mail messaging. SupportSoft, Inc. grew as a result of new
corporate customers for its software providing automated online technical
assistance. In the health care area, returns particularly benefited from
investments in specialty pharmaceutical companies, such as Martek Biosciences
Corp., developers of a group of algae-derived food additives with an excellent
safety profile that have demonstrated clear health benefits for infants; and
Taro Pharmaceutical Industries Ltd., a company with proprietary technology for
developing user-friendly topical preparations. Other health care stocks among
the Fund's top performers included eResearch Technology, Inc., providing drug
development companies with digitized test data to meet new FDA requirements; and
Pharmaceutical Resources, Inc., a generic drug maker with a host of new drug
applications under review that received approvals for generic versions of
several popular drugs. Finally, in the consumer cyclical area, the Fund's best
holdings included retailer Urban Outfitters, Inc. which expanded its target
customer base beyond young adults through its "Anthropologie" brand store chain;
and continuing education providers Corinthian Colleges, Inc., and Career
Education Corp.
Of course, not all of the Fund's holdings enhanced returns. A few
disappointments undermined performance, particularly in late-2002 before the
market started its steady climb. Among these were Action Performance Companies
Inc., an import-dependent company that was hurt by a port strike, and CTI
Molecular Imaging, Inc., a medical device
6 | OPPENHEIMER EMERGING GROWTH FUND
maker that reported weaker-than-expected earnings. Diminished confidence
regarding future growth led us to sell both positions in late 2002. The Fund's
portfolio holdings, allocations and strategies are subject to change.
Comparing the Fund's Performance to the Market. The graphs that follow show
the performance of a hypothetical $10,000 investment in each Class of shares of
the Fund held until October 31, 2003. Performance is measured from the inception
of Class A, B, C, and Y on November 1, 2000. In the case of Class N shares,
performance is measured from inception of the Class on March 1, 2001.The Fund's
performance reflects the deduction of the maximum initial sales charge on Class
A shares, the applicable contingent deferred sales charge on Class B, Class C
and Class N shares, and reinvestments of all dividends and capital gains
distributions.
The Fund's performance is compared to the performance of the Russell 2000
Index and the Russell 2000 Growth Index, unmanaged indices of small cap issuers
and small cap issuers with above-average growth characteristics, respectively.
Index performance reflects the reinvestment of dividends but does not
consider the effect of capital gains or transaction costs, and none of the data
in the graphs shows the effect of taxes. The Fund's performance reflects the
effects of Fund business and operating expenses. While index comparisons may be
useful to provide a benchmark for the Fund's performance, it must be noted that
the Fund's investments are not limited to the securities.
7 | OPPENHEIMER EMERGING GROWTH FUND
FUND PERFORMANCE DISCUSSION
- --------------------------------------------------------------------------------
Class A Shares
Comparison of Change in Value of $10,000 Hypothetical Investments in:
[LINE CHART]
Oppenheimer Emerging Russell Russell 2000
Growth Fund (Class A) 2000 Index Growth Index
11/01/2000 $9,425 $10,000 $10,000
01/31/2001 9,863 10,251 9,388
04/30/2001 8,350 9,823 8,266
07/31/2001 8,983 9,848 7,947
10/31/2001 7,990 8,730 6,850
01/31/2002 8,860 9,883 7,603
04/30/2002 7,716 10,479 7,562
07/31/2002 5,683 8,080 5,515
10/31/2002 5,522 7,720 5,373
01/31/2003 5,711 7,721 5,349
04/30/2003 6,439 8,303 5,785
07/31/2003 8,435 9,946 7,057
10/31/2003 9,740 11,068 7,874
Average Annual Total Returns of Class A Shares of the Fund at 10/31/03*
1-Year 66.23% Since Inception -0.88%
Class B Shares
Comparison of Change in Value of $10,000 Hypothetical Investments in:
[LINE CHART]
Oppenheimer Emerging Russell Russell 2000
Growth Fund (Class B) 2000 Index Growth Index
11/01/2000 $10,000 $10,000 $10,000
01/31/2001 10,439 10,251 9,388
04/30/2001 8,815 9,823 8,266
07/31/2001 9,466 9,848 7,947
10/31/2001 8,403 8,730 6,850
01/31/2002 9,296 9,883 7,603
04/30/2002 8,083 10,479 7,562
07/31/2002 5,937 8,080 5,515
10/31/2002 5,756 7,720 5,373
01/31/2003 5,937 7,721 5,349
04/30/2003 6,689 8,303 5,785
07/31/2003 8,744 9,946 7,057
10/31/2003 9,778 11,068 7,874
Average Annual Total Returns of Class B Shares of the Fund at 10/31/03*
1-Year 70.09% Since Inception -0.75%
*See Notes on page 11 for further details.
8 | OPPENHEIMER EMERGING GROWTH FUND
Class C Shares
Comparison of Change in Value of $10,000 Hypothetical Investments in:
[LINE CHART]
Oppenheimer Emerging Russell 2000 Russell 2000
Growth Fund (Class C) Index Growth Index
11/01/2000 $10,000 $10,000 $10,000
01/31/2001 10,448 10,251 9,388
04/30/2001 8,823 9,823 8,266
07/31/2001 9,475 9,848 7,947
10/31/2001 8,412 8,730 6,850
01/31/2002 9,295 9,883 7,603
04/30/2002 8,091 10,479 7,562
07/31/2002 5,946 8,080 5,515
10/31/2002 5,765 7,720 5,373
01/31/2003 5,946 7,721 5,349
04/30/2003 6,698 8,303 5,785
07/31/2003 8,753 9,946 7,057
10/31/2003 10,087 11,068 7,874
Average Annual Total Returns of Class C Shares of the Fund at 10/31/03*
1-Year 73.96% Since Inception 0.29%
Class N Shares
Comparison of Change in Value of $10,000 Hypothetical Investments in:
[LINE CHART]
Oppenheimer Emerging Growth Russell Russell 2000
Growth Fund (Class N) 2000 Index Growth Index
03/01/2001 $10,000 $10,000 $10,000
04/30/2001 10,652 10,255 10,204
07/31/2001 11,449 10,281 9,810
10/31/2001 10,181 9,114 8,455
01/31/2002 11,268 10,317 9,385
04/30/2002 9,807 10,940 9,334
07/31/2002 7,222 8,435 6,807
10/31/2002 7,017 8,060 6,632
01/31/2003 7,246 8,061 6,602
04/30/2003 8,164 8,668 7,141
07/31/2003 10,676 10,384 8,711
10/31/2003 12,331 11,555 9,719
Average Annual Total Returns of Class N Shares of the Fund at 10/31/03*
1-Year 74.73% Since Inception 8.17%
The performance information for both indices in the graphs begins on 10/31/00
for Class A, Class B, Class C and Class Y, and on 2/28/01 for Class N.
Past performance cannot guarantee future results. Graphs are not drawn to same
scale.
9 | OPPENHEIMER EMERGING GROWTH FUND
FUND PERFORMANCE DISCUSSION
- --------------------------------------------------------------------------------
Class Y Shares
Comparison of Change in Value of $10,000 Hypothetical Investments in:
[LINE CHART]
Oppenheimer Emerging Russell Russell 2000
Growth Fund (Class Y) 2000 Index Growth Index
11/01/2000 $10,000 $10,000 $10,000
01/31/2001 10,468 10,251 9,388
04/30/2001 8,862 9,823 8,266
07/31/2001 9,545 9,848 7,947
10/31/2001 8,501 8,730 6,850
01/31/2002 9,424 9,883 7,603
04/30/2002 8,220 10,479 7,562
07/31/2002 6,062 8,080 5,515
10/31/2002 5,901 7,720 5,373
01/31/2003 6,112 7,721 5,349
04/30/2003 6,905 8,303 5,785
07/31/2003 9,053 9,946 7,057
10/31/2003 10,468 11,068 7,874
Average Annual Total Returns of Class Y Shares of the Fund at 10/31/03*
1-Year 77.38% Since Inception 1.54%
*See Notes on page 11 for further details.
The performance information for both indices in the graphs begins on 10/31/00
for Class A, Class B, Class C and Class Y, and on 2/28/01 for Class N.
Past performance cannot guarantee future results. Graphs are not drawn to same
scale.
10 | OPPENHEIMER EMERGING GROWTH FUND
NOTES
- --------------------------------------------------------------------------------
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 and the ending account values in the graphs include changes in
share price and reinvestment of dividends and capital gains distributions in a
hypothetical investment for the periods shown. 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) or visit the
OppenheimerFunds website at www.oppenheimerfunds.com. Read the prospectus
carefully before you invest or send money.
Class A shares of the Fund were first publicly offered on 11/1/00. Unless
otherwise noted, Class A returns include the current maximum initial sales
charge of 5.75%.
Class B shares of the Fund were first publicly offered on 11/1/00. Unless
otherwise noted, Class B returns include the applicable contingent deferred
sales charge of 5% (1-year) and 3% (since inception). Class B shares are subject
to an annual 0.75% asset-based sales charge.
Class C shares of the Fund were first publicly offered on 11/1/00. Unless
otherwise noted, Class C returns include the contingent deferred sales charge of
1% for the one-year period. Class C shares are subject to an annual 0.75%
asset-based sales charge.
Class N shares of the Fund were first publicly offered on 3/1/01. Class N shares
are offered only through retirement plans. Unless otherwise noted, Class N
returns include the contingent deferred sales charge of 1% for the one-year
period. Class N shares are subject to an annual 0.25% asset-based sales charge.
Class Y shares of the Fund were first publicly offered on 11/1/00. Class Y
shares are offered only to certain institutional investors under special
agreement with the Distributor.
An explanation of the calculation of performance is in the Fund's Statement of
Additional Information.
11 | OPPENHEIMER EMERGING GROWTH FUND
STATEMENT OF INVESTMENTS October 31, 2003
- --------------------------------------------------------------------------------
Market Value
Shares See Note 1
- ---------------------------------------------------
Common Stocks--98.8%
- ---------------------------------------------------
Consumer Discretionary--14.6%
- ---------------------------------------------------
Hotels, Restaurants & Leisure--3.2%
Alliance Gaming Corp. 1 37,200 $ 902,100
- ---------------------------------------------------
Ruby Tuesday, Inc. 22,100 604,435
- ---------------------------------------------------
Scientific Games
Corp., Cl. A 1 75,000 997,500
- ---------------------------------------------------
Station Casinos, Inc. 23,400 696,150
-----------
3,200,185
- ---------------------------------------------------
Household Durables--0.3%
Tripath
Technology, Inc. 1 48,300 241,983
- ---------------------------------------------------
Internet & Catalog Retail--1.0%
RedEnvelope, Inc. 1 76,000 1,013,840
- ---------------------------------------------------
Leisure Equipment & Products--1.1%
Marvel
Enterprises, Inc. 1 35,500 1,045,475
- ---------------------------------------------------
Media--1.5%
Radio One, Inc. 1 27,300 437,619
- ---------------------------------------------------
Sonic Solutions, Inc. 1 61,100 1,087,580
-----------
1,525,199
- ---------------------------------------------------
Multiline Retail--1.0%
Fred's, Inc. 26,200 987,216
- ---------------------------------------------------
Specialty Retail--5.8%
bebe stores, Inc. 1 30,000 837,000
- ---------------------------------------------------
Finish Line, Inc.
(The), Cl. A 1 28,800 881,856
- ---------------------------------------------------
Hot Topic, Inc. 1 26,050 747,896
- ---------------------------------------------------
Jo-Ann Stores, Inc.,
Cl. A 1 21,200 636,212
- ---------------------------------------------------
Pacific Sunwear
of California, Inc. 1 31,250 721,563
- ---------------------------------------------------
Select Comfort Corp. 1 23,300 729,290
- ---------------------------------------------------
Urban Outfitters, Inc. 1 35,800 1,194,288
-----------
5,748,105
- ---------------------------------------------------
Textiles, Apparel & Luxury Goods--0.7%
Authentidate
Holding Corp. 1 62,200 716,482
- ---------------------------------------------------
Consumer Staples--1.5%
- ---------------------------------------------------
Food & Staples Retailing--0.7%
Central European
Distribution Corp. 1 17,500 657,825
- ---------------------------------------------------
Food Products--0.8%
Stake Technology Ltd. 1 84,700 812,273
Market Value
Shares See Note 1
- ---------------------------------------------------
Energy--2.0%
- ---------------------------------------------------
Energy Equipment & Services--1.4%
Patterson-UTI
Energy, Inc. 1 23,800 $ 680,442
- ---------------------------------------------------
Rowan Cos., Inc. 1 28,300 677,785
-----------
1,358,227
- ---------------------------------------------------
Oil & Gas--0.6%
Brigham
Exploration Co. 1 97,400 652,580
- ---------------------------------------------------
Financials--3.1%
- ---------------------------------------------------
Capital Markets--0.6%
National Financial
Partners Corp. 1 21,600 585,360
- ---------------------------------------------------
Commercial Banks--0.5%
UCBH Holdings, Inc. 14,300 510,653
- ---------------------------------------------------
Diversified Financial Services--1.5%
CapitalSource, Inc. 1 22,000 478,500
- ---------------------------------------------------
Investors Financial
Services Corp. 18,000 635,940
- ---------------------------------------------------
Raymond James
Financial, Inc. 9,600 391,584
-----------
1,506,024
- ---------------------------------------------------
Real Estate--0.5%
Newcastle
Investment Corp. 18,700 437,580
- ---------------------------------------------------
Health Care--17.9%
- ---------------------------------------------------
Biotechnology--3.9%
Digene Corp. 1 22,800 802,560
- ---------------------------------------------------
Gen-Probe, Inc. 1 53,400 1,429,518
- ---------------------------------------------------
Martek Biosciences
Corp. 1 24,900 1,205,409
- ---------------------------------------------------
Nuerocrine
Biosciences, Inc. 1 8,700 407,421
-----------
3,844,908
- ---------------------------------------------------
Health Care Equipment & Supplies--2.4%
Advanced
Neuromodulation
Systems, Inc. 1 19,350 793,350
- ---------------------------------------------------
Inamed Corp. 1 11,600 1,001,892
- ---------------------------------------------------
VISX, Inc. 1 24,000 582,240
-----------
2,377,482
12 | OPPENHEIMER EMERGING GROWTH FUND
Market Value
Shares See Note 1
- ---------------------------------------------------
Health Care Providers & Services--2.4%
Bio-Imaging
Technologies, Inc. 1,2 123,800 $ 631,009
- ---------------------------------------------------
eResearch
Technology, Inc. 1 30,100 1,384,299
- ---------------------------------------------------
VistaCare, Inc., Cl. A 1 11,500 396,865
-----------
2,412,173
- ---------------------------------------------------
Pharmaceuticals--9.2%
Able Laboratories, Inc. 1 21,800 421,612
- ---------------------------------------------------
Acusphere, Inc. 1 9,400 90,240
- ---------------------------------------------------
Angiotech
Pharmaceuticals, Inc. 1 35,500 1,623,415
- ---------------------------------------------------
Columbia
Laboratories, Inc. 1 39,600 418,968
- ---------------------------------------------------
Connetics Corp. 1 44,700 800,577
- ---------------------------------------------------
Discovery
Laboratories, Inc. 1 34,000 246,160
- ---------------------------------------------------
DOV Pharmaceutical,
Inc. 1,2 28,500 349,125
- ---------------------------------------------------
Eon Labs, Inc. 1 6,800 286,348
- ---------------------------------------------------
Flamel Techologies
SA, Sponsored ADR 1 40,000 1,010,000
- ---------------------------------------------------
MGI Pharma, Inc. 1 25,600 961,536
- ---------------------------------------------------
Penwest
Pharmaceuticals Co. 1 25,000 409,500
- ---------------------------------------------------
Penwest
Pharmaceuticals Co. 1 20,000 303,456
- ---------------------------------------------------
Pharmaceutical
Resources, Inc. 1 14,400 1,040,832
- ---------------------------------------------------
Pozen, Inc. 1 34,400 431,032
- ---------------------------------------------------
Taro Pharmaceutical
Industries Ltd. 1 11,300 726,025
-----------
9,118,826
- ---------------------------------------------------
Industrials--10.2%
- ---------------------------------------------------
Aerospace & Defense--0.3%
Cubic Corp. 11,200 318,080
- ---------------------------------------------------
Airlines--1.7%
AirTran Holdings, Inc. 1 58,200 943,422
- ---------------------------------------------------
Frontier Airlines, Inc. 1 44,500 715,115
-----------
1,658,537
Market Value
Shares See Note 1
- ---------------------------------------------------
Commercial Services & Supplies--7.7%
- ---------------------------------------------------
Bennett
Environmental, Inc. 1 38,500 $ 720,720
- ---------------------------------------------------
Career Education
Corp. 1 20,400 1,092,420
- ---------------------------------------------------
Corinthian
Colleges, Inc. 1 15,900 984,528
- ---------------------------------------------------
Corporate Executive
Board Co. 1 7,200 367,272
- ---------------------------------------------------
Education
Management Corp. 1 8,200 518,076
- ---------------------------------------------------
Exult, Inc. 1 106,800 846,924
- ---------------------------------------------------
Gevity HR, Inc. 29,200 441,504
- ---------------------------------------------------
Monster
Worldwide, Inc. 1 38,800 988,236
- ---------------------------------------------------
Navigant
Consulting, Inc. 1 30,000 492,900
- ---------------------------------------------------
Stericycle, Inc. 1 14,400 664,992
- ---------------------------------------------------
Sylvan Learning
Systems, Inc. 1 18,400 520,720
-----------
7,638,292
- ---------------------------------------------------
Machinery--0.2%
Ceradyne, Inc. 1 5,800 240,932
- ---------------------------------------------------
Road & Rail--0.3%
Pacer International,
Inc. 1 14,700 303,114
- ---------------------------------------------------
Information Technology--48.5%
- ---------------------------------------------------
Communications Equipment--9.0%
ADTRAN, Inc. 20,200 1,374,204
- ---------------------------------------------------
Audiocodes Ltd. 1 66,800 572,476
- ---------------------------------------------------
Emulex Corp. 1 28,800 815,616
- ---------------------------------------------------
IxiA 1 78,400 940,800
- ---------------------------------------------------
McDATA Corp., Cl. B 1 57,700 589,694
- ---------------------------------------------------
NetScreen
Technologies, Inc. 1 27,900 742,698
- ---------------------------------------------------
Packeteer, Inc. 1 47,600 832,048
- ---------------------------------------------------
Performance
Technologies, Inc. 1 108,000 1,122,120
- ---------------------------------------------------
REMEC, Inc. 1 69,000 761,070
- ---------------------------------------------------
UTStarcom, Inc. 1 36,500 1,149,750
-----------
8,900,476
13 | OPPENHEIMER EMERGING GROWTH FUND
STATEMENT OF INVESTMENTS Continued
- --------------------------------------------------------------------------------
Market Value
Shares See Note 1
- ---------------------------------------------------
Computers & Peripherals--4.8%
Advanced Digital
Information Corp. 1 38,500 $ 625,625
- ---------------------------------------------------
ATI Technologies, Inc. 1 37,600 538,056
- ---------------------------------------------------
Dot Hill Systems Corp. 1 24,400 327,204
- ---------------------------------------------------
Lexar Media, Inc. 1 45,200 1,035,532
- ---------------------------------------------------
Maxtor Corp. 1 69,400 948,698
- ---------------------------------------------------
Network Engines, Inc. 1 49,700 488,004
- ---------------------------------------------------
Western Digital Corp. 1 60,000 807,000
-----------
4,770,119
- ---------------------------------------------------
Electronic Equipment & Instruments--5.1%
Bell Microproducts,
Inc. 1 120,300 1,015,332
- ---------------------------------------------------
Brightpoint, Inc. 1 67,550 1,935,308
- ---------------------------------------------------
Innovex, Inc. 1 51,400 580,820
- ---------------------------------------------------
TTM Technologies,
Inc. 1 48,400 779,240
- ---------------------------------------------------
Vishay
Intertechnology, Inc. 1 38,500 721,875
-----------
5,032,575
- ---------------------------------------------------
Internet Software & Services--11.5%
Digital River, Inc. 1 31,500 862,470
- ---------------------------------------------------
Digitas, Inc. 1 46,000 400,200
- ---------------------------------------------------
eCollege.com, Inc. 1 85,400 1,852,326
- ---------------------------------------------------
Lionbridge
Technologies, Inc. 1 66,800 603,204
- ---------------------------------------------------
MicroStrategy, Inc.,
Cl. A 1 21,200 1,166,000
- ---------------------------------------------------
National Information
Consortium, Inc. 1 111,700 578,606
- ---------------------------------------------------
Netease.com, Inc.,
ADR1 12,600 572,040
- ---------------------------------------------------
Openwave
Systems, Inc. 1 35,633 465,011
- ---------------------------------------------------
SINA Corp. 1 20,900 807,367
- ---------------------------------------------------
SupportSoft, Inc. 1 121,600 1,457,984
- ---------------------------------------------------
United Online, Inc. 1 69,900 2,012,421
- ---------------------------------------------------
VeriSign, Inc. 1 37,400 593,538
-----------
11,371,167
Market Value
Shares See Note 1
- ---------------------------------------------------
IT Services--1.3%
Cognizant Technology
Solutions Corp. 1 19,800 $ 898,722
- ---------------------------------------------------
Mediware
Information
Systems, Inc. 1 28,800 424,800
-----------
1,323,522
- ---------------------------------------------------
Office Electronics--1.7%
Metrologic
Instruments, Inc. 1 46,400 1,087,152
- ---------------------------------------------------
Zebra Technologies
Corp., Cl. A 1 11,000 626,450
-----------
1,713,602
- ---------------------------------------------------
Semiconductors & Semiconductor Equipment--8.4%
AMIS Holdings, Inc. 1 16,300 328,445
- ---------------------------------------------------
FEI Co. 1 23,800 565,250
- ---------------------------------------------------
Integrated Circuit
Systems, Inc. 1 14,900 500,193
- ---------------------------------------------------
Kopin Corp. 1 59,200 433,936
- ---------------------------------------------------
LTX Corp. 1 30,000 428,700
- ---------------------------------------------------
MEMC Electronic
Materials, Inc. 1 42,900 480,480
- ---------------------------------------------------
Microsemi Corp. 1 37,900 784,530
- ---------------------------------------------------
O2Micro
International Ltd. 1 28,800 613,728
- ---------------------------------------------------
OmniVision
Technologies, Inc. 1 21,200 1,204,160
- ---------------------------------------------------
ON Semiconductor
Corp. 1 100,000 430,000
- ---------------------------------------------------
Power Integrations,
Inc. 1 32,500 1,131,650
- ---------------------------------------------------
Skyworks Solutions,
Inc. 1 13,700 117,546
- ---------------------------------------------------
Standard
Microsystems Corp. 1 25,000 750,000
- ---------------------------------------------------
Vitesse
Semiconductor Corp. 1 80,900 569,536
-----------
8,338,154
14 | OPPENHEIMER EMERGING GROWTH FUND
Market Value
Shares See Note 1
- ---------------------------------------------------
Software--6.7%
Activision, Inc. 1 56,000 $ 845,040
- ---------------------------------------------------
Altiris, Inc. 1 21,400 735,732
- ---------------------------------------------------
BEA Systems, Inc. 1 30,000 417,000
- ---------------------------------------------------
FileNet Corp. 1 47,500 1,269,200
- ---------------------------------------------------
Inet Technologies, Inc. 1 33,600 451,920
- ---------------------------------------------------
Macromedia, Inc. 1 32,200 615,342
- ---------------------------------------------------
Magma Design
Automation, Inc. 1 43,100 1,044,313
- ---------------------------------------------------
Micromuse, Inc. 1 68,500 551,425
- ---------------------------------------------------
Take-Two Interactive
Software, Inc. 1 16,800 664,440
-----------
6,594,412
- ---------------------------------------------------
Materials--0.4%
- ---------------------------------------------------
Metals & Mining--0.4%
GrafTech
International Ltd. 1 40,100 416,639
- ---------------------------------------------------
Telecommunication Services--0.6%
- ---------------------------------------------------
Diversified Telecommunication Services--0.6%
PTEK Holdings, Inc. 1 63,900 556,569
-----------
Total Common Stocks
(Cost $77,034,527) 97,928,586
Units
- ---------------------------------------------------
Rights, Warrants and Certificates--0.0%
- ---------------------------------------------------
Discovery Laboratories,
Inc. Wts., Exp. 9/20/10 1,2 6,800 31,199
- ---------------------------------------------------
Penwest
Pharmaceuticals Co.
Wts., Exp. 11/5/03 1 20,000 821
-----------
Total Rights, Warrants
and Certificates (Cost $0) 32,020
Principal Market Value
Amount See Note 1
- ---------------------------------------------------
Joint Repurchase Agreements--0.4%
Undivided interest of 0.28% in joint
repurchase agreement (Principal Amount/
Market Value $149,808,000, with a
maturity value of $149,820,109) with
Banc One Capital Markets, Inc., 0.97%,
dated 10/31/03, to be repurchased at
$426,034 on 11/3/03, collateralized by
U.S. Treasury Bonds, 3.625%--9%,
3/31/04--8/15/23, with a value of
$152,949,680
(Cost $426,000) $426,000 $ 426,000
- ---------------------------------------------------
Total Investments,
at Value
(Cost $77,460,527) 99.2% 98,386,606
- ---------------------------------------------------
Other Assets
Net of Liabilities 0.8 754,675
---------------------
Net Assets 100.0% $99,141,281
=====================
Footnotes to Statement of Investments
1. Non-income producing security.
2. Identifies issues considered to be illiquid or restricted.
See Note 5 of Notes to Financial Statements.
See accompanying Notes to Financial Statements.
15 | OPPENHEIMER EMERGING GROWTH FUND
STATEMENT OF ASSETS AND LIABILITIES October 31, 2003
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Assets
- --------------------------------------------------------------------------------
Investments, at value (cost $77,460,527)--see accompanying statement $ 98,386,606
- -----------------------------------------------------------------------------------
Cash 6,705
- -----------------------------------------------------------------------------------
Receivables and other assets:
Investments sold 3,076,833
Shares of beneficial interest sold 1,194,063
Interest and dividends 3,386
Other 314
--------------
Total assets 102,667,907
- -----------------------------------------------------------------------------------
Liabilities
- -----------------------------------------------------------------------------------
Payables and other liabilities:
Investments purchased 3,188,395
Shares of beneficial interest redeemed 248,166
Shareholder reports 23,646
Transfer and shareholder servicing agent fees 21,120
Distribution and service plan fees 18,538
Trustees' compensation 1,726
Other 25,035
------------
Total liabilities 3,526,626
- -----------------------------------------------------------------------------------
Net Assets $ 99,141,281
=============
- -----------------------------------------------------------------------------------
Composition of Net Assets
- -----------------------------------------------------------------------------------
Paid-in capital $ 87,825,290
- -----------------------------------------------------------------------------------
Accumulated investment loss (1,695)
- -----------------------------------------------------------------------------------
Accumulated net realized loss on investment transactions (9,608,393)
- -----------------------------------------------------------------------------------
Net unrealized appreciation on investments 20,926,079
------------
Net Assets $ 99,141,281
=============
16 | OPPENHEIMER EMERGING GROWTH FUND
- --------------------------------------------------------------------------------
Net Asset Value Per Share
- --------------------------------------------------------------------------------
Class A Shares:
Net asset value and redemption price per share (based on net assets of
$59,396,398 and 5,766,332 shares of beneficial interest outstanding) $10.30
Maximum offering price per share (net asset value plus sales charge of
5.75% of offering price) $10.93
- --------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes applicable contingent
deferred sales charge) and offering price per share (based on net
assets of $20,519,828 and 2,041,758 shares of beneficial interest
outstanding) $10.05
- --------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes applicable contingent
deferred sales charge) and offering price per share (based on net
assets of $13,887,172 and 1,380,244 shares of beneficial interest
outstanding) $10.06
- --------------------------------------------------------------------------------
Class N Shares:
Net asset value, redemption price (excludes applicable contingent
deferred sales charge) and offering price per share (based on net
assets of $2,424,566 and 237,526 shares of beneficial interest
outstanding) $10.21
- --------------------------------------------------------------------------------
Class Y Shares:
Net asset value, redemption price and offering price per share (based
on net assets of $2,913,317 and 279,342 shares of beneficial interest
outstanding) $10.43
See accompanying Notes to Financial Statements.
17 | OPPENHEIMER EMERGING GROWTH FUND
STATEMENT OF OPERATIONS For the Year Ended October 31, 2003
- --------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
Investment Income
- -----------------------------------------------------------------------------------
Dividends (net of foreign withholding taxes of $621) $ 96,654
- -----------------------------------------------------------------------------------
Interest 20,022
------------
Total investment income 116,676
- -----------------------------------------------------------------------------------
Expenses
- -----------------------------------------------------------------------------------
Management fees 479,700
- -----------------------------------------------------------------------------------
Distribution and service plan fees:
Class A 66,802
Class B 105,056
Class C 66,240
Class N 5,598
- -----------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees:
Class A 107,197
Class B 71,554
Class C 33,491
Class N 5,469
Class Y 46
- -----------------------------------------------------------------------------------
Shareholder reports 52,953
- -----------------------------------------------------------------------------------
Custodian fees and expenses 5,510
- -----------------------------------------------------------------------------------
Trustees' compensation 2,365
- -----------------------------------------------------------------------------------
Other 15,612
------------
Total expenses 1,017,593
Less reduction to custodian expenses (268)
Less voluntary waiver of transfer and shareholder servicing
agent fees--Class A (12,869)
Less voluntary waiver of transfer and shareholder servicing
agent fees--Class B (40,654)
Less voluntary waiver of transfer and shareholder servicing
agent fees--Class C (11,916)
Less voluntary waiver of transfer and shareholder servicing
agent fees--Class N (1,619)
------------
Net expenses 950,267
- -----------------------------------------------------------------------------------
Net Investment Loss (833,591)
- -----------------------------------------------------------------------------------
Realized and Unrealized Gain
- -----------------------------------------------------------------------------------
Net realized gain on investments 5,534,053
- -----------------------------------------------------------------------------------
Net change in unrealized appreciation on investments 23,236,139
- -----------------------------------------------------------------------------------
Net Increase in Net Assets Resulting from Operations $27,936,601
============
See accompanying Notes to Financial Statements.
18 | OPPENHEIMER EMERGING GROWTH FUND
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
Year Ended October 31, 2003 2002
- -----------------------------------------------------------------------------------
Operations
- -----------------------------------------------------------------------------------
Net investment loss $ (833,591) $ (564,932)
- -----------------------------------------------------------------------------------
Net realized gain (loss) 5,534,053 (10,327,183)
- -----------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) 23,236,139 (4,009,696)
--------------------------
Net increase (decrease) in net assets resulting
from operations 27,936,601 (14,901,811)
- -----------------------------------------------------------------------------------
Beneficial Interest Transactions
- -----------------------------------------------------------------------------------
Net increase in net assets resulting from beneficial interest transactions:
Class A 23,540,294 9,052,385
Class B 8,157,568 5,795,703
Class C 5,135,955 3,538,108
Class N 1,182,442 794,048
Class Y 1,354,893 675,716
- -----------------------------------------------------------------------------------
Net Assets
- -----------------------------------------------------------------------------------
Total increase 67,307,753 4,954,149
- -----------------------------------------------------------------------------------
Beginning of period 31,833,528 26,879,379
--------------------------
End of period [including accumulated net investment
loss of $1,695 and $830, respectively] $99,141,281 $31,833,528
==========================
See accompanying Notes to Financial Statements.
19 | OPPENHEIMER EMERGING GROWTH FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Class A Year Ended October 31, 2003 2002 2001 1
- --------------------------------------------------------------------------------------
Per Share Operating Data
- --------------------------------------------------------------------------------------
Net asset value, beginning of period $ 5.84 $8.45 $10.00
- --------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss (.08) (.10) (.03)
Net realized and unrealized gain (loss) 4.54 (2.51) (1.49)
----------------------------
Total from investment operations 4.46 (2.61) (1.52)
- --------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income -- -- (.03)
- --------------------------------------------------------------------------------------
Net asset value, end of period $10.30 $5.84 $ 8.45
============================
- --------------------------------------------------------------------------------------
Total Return, at Net Asset Value 2 76.37% (30.89)% (15.22)%
- --------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------
Ratios/Supplemental Data
- --------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $59,396 $19,310 $20,392
- --------------------------------------------------------------------------------------
Average net assets (in thousands) $28,386 $24,497 $16,941
- --------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment loss (1.48)% (1.35)% (0.57)%
Total expenses 1.77% 1.85% 1.58%
Expenses after expense reimbursement or fee waiver and
reduction to custodian expenses 1.72% 1.78% N/A 4
- --------------------------------------------------------------------------------------
Portfolio turnover rate 204% 263% 214%
<FN>
1. For the period from November 1, 2000 (commencement of operations) to October
31, 2001.
2. 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
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.
3. Annualized for periods of less than one full year.
4. Reduction to custodian expenses less than 0.01%.
</FN>
See accompanying Notes to Financial Statements.
20 | OPPENHEIMER EMERGING GROWTH FUND
Class B Year Ended October 31, 2003 2002 2001 1
- --------------------------------------------------------------------------------------
Per Share Operating Data
- --------------------------------------------------------------------------------------
Net asset value, beginning of period $ 5.74 $8.38 $10.00
- --------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss (.09) (.12) (.07)
Net realized and unrealized gain (loss) 4.40 (2.52) (1.52)
----------------------------
Total from investment operations 4.31 (2.64) (1.59)
- --------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income -- -- (.03)
- --------------------------------------------------------------------------------------
Net asset value, end of period $10.05 $5.74 $ 8.38
============================
- --------------------------------------------------------------------------------------
Total Return, at Net Asset Value 2 75.09% (31.50)% (15.96)%
- --------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------
Ratios/Supplemental Data
- --------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $20,520 $6,395 $3,866
- --------------------------------------------------------------------------------------
Average net assets (in thousands) $10,544 $6,979 $2,256
- --------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment loss (2.20)% (2.22)% (1.78)%
Total expenses 2.83% 2.74% 2.47%
Expenses after expense reimbursement or fee waiver and
reduction to custodian expenses 2.44% 2.67% N/A 4
- --------------------------------------------------------------------------------------
Portfolio turnover rate 204% 263% 214%
<FN>
1. For the period from November 1, 2000 (commencement of operations) to
October 31, 2001.
2. 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.
3. Annualized for periods of less than one full year.
4. Reduction to custodian expenses less than 0.01%.
</FN>
See accompanying Notes to Financial Statements.
21 | OPPENHEIMER EMERGING GROWTH FUND
FINANCIAL HIGHLIGHTS Continued
- --------------------------------------------------------------------------------
Class C Year Ended October 31, 2003 2002 2001 1
- --------------------------------------------------------------------------------------
Per Share Operating Data
- --------------------------------------------------------------------------------------
Net asset value, beginning of period $ 5.75 $8.39 $10.00
- --------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss (.11) (.08) (.04)
Net realized and unrealized gain (loss) 4.42 (2.56) (1.54)
----------------------------
Total from investment operations 4.31 (2.64) (1.58)
- --------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income -- -- (.03)
- --------------------------------------------------------------------------------------
Net asset value, end of period $10.06 $5.75 $ 8.39
============================
- --------------------------------------------------------------------------------------
Total Return, at Net Asset Value 2 74.96% (31.47)% (15.88)%
- --------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------
Ratios/Supplemental Data
- --------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $13,887 $4,877 $2,356
- --------------------------------------------------------------------------------------
Average net assets (in thousands) $ 6,649 $3,061 $1,022
- --------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment loss (2.22)% (2.25)% (1.76)%
Total expenses 2.65% 2.72% 2.46%
Expenses after expense reimbursement or fee waiver and
reduction to custodian expenses 2.47% 2.65% N/A 4
- --------------------------------------------------------------------------------------
Portfolio turnover rate 204% 263% 214%
<FN>
1. For the period from November 1, 2000 (commencement of operations) to October
31, 2001.
2. 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.
3. Annualized for periods of less than one full year.
4. Reduction to custodian expenses less than 0.01%.
See accompanying Notes to Financial Statements.
</FN>
22 | OPPENHEIMER EMERGING GROWTH FUND
Class N Year Ended October 31, 2003 2002 2001 1
- --------------------------------------------------------------------------------------
Per Share Operating Data
- --------------------------------------------------------------------------------------
Net asset value, beginning of period $ 5.81 $8.43 $8.28
- --------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss (.10) (.08) (.05)
Net realized and unrealized gain (loss) 4.50 (2.54) .20
----------------------------
Total from investment operations 4.40 (2.62) .15
- --------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income -- -- --
- --------------------------------------------------------------------------------------
Net asset value, end of period $10.21 $5.81 $8.43
============================
- --------------------------------------------------------------------------------------
Total Return, at Net Asset Value 2 75.73% (31.08)% 1.81%
- --------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------
Ratios/Supplemental Data
- --------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $2,425 $594 $34
- --------------------------------------------------------------------------------------
Average net assets (in thousands) $1,125 $412 $16
- --------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment loss (1.76)% (1.63)% (1.69)%
Total expenses 2.14% 2.18% 2.03%
Expenses after expense reimbursement or fee waiver and
reduction to custodian expenses 2.00% 2.11% N/A 4
- --------------------------------------------------------------------------------------
Portfolio turnover rate 204% 263% 214%
<FN>
1. For the period from March 1, 2001 (inception of offering) to October 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. 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.
3. Annualized for periods of less than one full year.
4. Reduction to custodian expenses less than 0.01%.
</FN>
See accompanying Notes to Financial Statements.
23 | OPPENHEIMER EMERGING GROWTH FUND
FINANCIAL HIGHLIGHTS Continued
- --------------------------------------------------------------------------------
Class Y Year Ended October 31, 2003 2002 2001 1
- --------------------------------------------------------------------------------------
Per Share Operating Data
- --------------------------------------------------------------------------------------
Net asset value, beginning of period $ 5.88 $8.47 $10.00
- --------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) (.09) (.08) .02
Net realized and unrealized gain (loss) 4.64 (2.51) (1.51)
----------------------------
Total from investment operations 4.55 (2.59) (1.49)
- --------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income -- -- (.04)
- --------------------------------------------------------------------------------------
Net asset value, end of period $10.43 $5.88 $ 8.47
============================
- --------------------------------------------------------------------------------------
Total Return, at Net Asset Value 2 77.38% (30.58)% (14.99)%
- --------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------
Ratios/Supplemental Data
- --------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $2,913 $657 $232
- --------------------------------------------------------------------------------------
Average net assets (in thousands) $1,449 $532 $ 30
- --------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment loss (0.92)% (0.84)% (0.97)%
Total expenses 1.15% 1.48% 3.87%
Expenses after expense reimbursement or fee waiver and
reduction to custodian expenses N/A 4 1.29% 1.28%
- --------------------------------------------------------------------------------------
Portfolio turnover rate 204% 263% 214%
<FN>
1. For the period from November 1, 2000 (commencement of operations) to October
31, 2001.
2. 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.
3. Annualized for periods of less than one full year.
4. Reduction to custodian expenses less than 0.01%.
</FN>
See accompanying Notes to Financial Statements.
24 | OPPENHEIMER EMERGING GROWTH FUND
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. Significant Accounting Policies
Oppenheimer Emerging Growth Fund (the Fund) is an open-end management investment
company registered under the Investment Company Act of 1940, as amended. 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 Fund assesses a 2% fee on the proceeds of fund shares that are
redeemed (either by selling or exchanging to another Oppenheimer fund) within 30
days of their purchase. The fee, which is retained by the Fund, is accounted for
as an addition to paid-in capital.
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. Securities traded on NASDAQ are valued based on the closing price
provided by NASDAQ 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
using 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 Fund's accounting records 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.
25 | OPPENHEIMER EMERGING GROWTH FUND
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
1. Significant Accounting Policies Continued
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.
- --------------------------------------------------------------------------------
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.
- --------------------------------------------------------------------------------
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 securities and other investments for
federal income tax purposes.
Net Unrealized
Appreciation
Based on Cost of
Securities and
Undistributed Undistributed Accumulated Other Investments
Net Investment Long-Term Loss for Federal Income
Income Gain Carryforward 1,2 Tax Purposes
-------------------------------------------------------------------
$-- $-- $9,570,101 $20,887,787
1. As of October 31, 2003, the Fund had $9,570,101 of net capital loss
carryforwards available to offset future realized capital gains, if any, and
thereby reduce future taxable gain distributions. As of October 31, 2003,
details of the capital loss carryforward were as follows:
Expiring
----------------------
2010 9,570,101
2. During the fiscal year October 31, 2003, the Fund utilized $5,140,037 of
capital loss carryforward to offset capital gains realized in that fiscal year.
During the fiscal year October 31, 2002, the Fund did not utilize any capital
loss carryforwards.
26 | OPPENHEIMER EMERGING GROWTH FUND
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 October 31, 2003. Net assets of the
Fund were unaffected by the reclassifications.
From To (From) Net
Ordinary Capital Gain Tax Return Investment
Loss (Loss) of Capital Loss
------------------------------------------------------
$832,726 $-- $-- $839,268
No distributions were paid during the years ended October 31, 2003 and October
31, 2002.
The aggregate cost of securities and other investments and the composition of
unrealized appreciation and depreciation of securities and other investments for
federal income tax purposes as of October 31, 2003 are noted below. The primary
difference between book and tax appreciation or depreciation of securities and
other investments, if applicable, is attributable to the tax deferral of losses
or tax realization of financial statement unrealized gain or loss.
Federal tax cost of securities
and other investments $77,498,819
===========
Gross unrealized appreciation $22,398,904
Gross unrealized depreciation (1,511,117)
-----------
Net unrealized appreciation $20,887,787
===========
- --------------------------------------------------------------------------------
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 October
31, 2003, the Fund's projected benefit obligations were increased by $923 and
payments of $59 were made to retired trustees, resulting in an accumulated
liability of $1,694 as of October 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 the annual compensation they are entitled to receive from the Fund.
Under the plan, deferred amounts are treated as though equal dollar amounts had
been invested in shares of the Fund or are invested in other Oppenheimer funds
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. Amounts will be deferred
until distributed in accordance to the Plan.
- --------------------------------------------------------------------------------
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.
27 | OPPENHEIMER EMERGING GROWTH FUND
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. Significant Accounting Policies Continued
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 no par value shares of beneficial
interest of each class. Transactions in shares of beneficial interest were as
follows:
Year Ended October 31, 2003 Year Ended October 31, 2002
Shares Amount Shares Amount
- -----------------------------------------------------------------------------------
Class A
Sold 6,075,182 $51,242,510 3,152,945 $26,194,011
Redeemed (3,613,483) (27,702,216) (2,260,696) (17,141,626)
-------------------------------------------------------
Net increase 2,461,699 $23,540,294 892,249 $ 9,052,385
=======================================================
- -----------------------------------------------------------------------------------
Class B
Sold 1,756,252 $14,456,517 1,439,747 $11,365,085
Redeemed (828,442) (6,298,949) (787,181) (5,569,382)
-------------------------------------------------------
Net increase 927,810 $ 8,157,568 652,566 $ 5,795,703
=======================================================
- -----------------------------------------------------------------------------------
Class C
Sold 1,820,923 $15,186,788 1,063,885 $ 7,600,986
Redeemed (1,289,240) (10,050,833) (496,262) (4,062,878)
-------------------------------------------------------
Net increase 531,683 $ 5,135,955 567,623 $ 3,538,108
=======================================================
- -----------------------------------------------------------------------------------
Class N
Sold 264,715 $ 2,110,308 196,949 $ 1,522,929
Redeemed (129,515) (927,866) (98,624) (728,881)
-------------------------------------------------------
Net increase 135,200 $ 1,182,442 98,325 $ 794,048
=======================================================
28 | OPPENHEIMER EMERGING GROWTH FUND
Year Ended October 31, 2003 Year Ended October 31, 2002
Shares Amount Shares Amount
- -----------------------------------------------------------------------------------
Class Y
Sold 274,183 $ 2,217,398 129,755 $ 1,009,456
Redeemed (106,636) (862,505) (45,335) (333,740)
-------------------------------------------------------
Net increase 167,547 $ 1,354,893 84,420 $ 675,716
=======================================================
- --------------------------------------------------------------------------------
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 October 31, 2003, were
$138,540,850 and $99,572,605, 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 1.00% of the first $500 million of average annual net assets;
0.90% of the next $500 million; and 0.85% of average annual net assets over $1
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 per account fee. For the year ended October 31, 2003, the Fund paid
$145,703 to OFS for services to the Fund.
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
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
- -----------------------------------------------------------------------------------------------------
October 31, 2003 $314,446 $84,802 $8,149 $186,107 $54,496 $8,598
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.
29 | OPPENHEIMER EMERGING GROWTH FUND
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
4. Fees and Other Transactions with Affiliates Continued
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
- --------------------------------------------------------------------------------
October 31, 2003 $-- $25,525 $1,327 $5,266
- --------------------------------------------------------------------------------
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 October 31, 2003, expense under
the Class A Plan totaled $66,802, all of which were paid by the Distributor to
recipients, which included $95 retained by the Distributor and $5,250 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 year ended October 31, 2003,
were as follows:
Distributor's
Distributor's Aggregate
Aggregate Uncompensated
Uncompensated Expenses as %
Total Expenses Amount Retained Expenses of Net Assets
Under Plan by Distributor Under Plan of Class
- --------------------------------------------------------------------------------
Class B Plan $105,056 $75,815 $243,456 1.19%
Class C Plan 66,240 27,667 90,836 0.65
Class N Plan 5,598 4,436 15,443 0.64
- --------------------------------------------------------------------------------
5. Illiquid or Restricted Securities
As of October 31, 2003, investments in securities included issues that are
illiquid or restricted. Restricted securities are purchased in private placement
transactions, are not registered under the Securities Act of 1933, may have
contractual restrictions on resale, and are valued under methods approved by the
Board of Trustees as reflecting fair value. A security may also be considered
illiquid if it lacks a readily available market or if its valuation has not
changed for a certain period of time. The Fund intends to invest no more than
15% of its net assets (determined at the time of purchase and reviewed
periodically) in illiquid or restricted securities. Certain restricted
securities, eligible for resale to qualified
30 | OPPENHEIMER EMERGING GROWTH FUND
institutional investors, are not subject to that limitation. The aggregate value
of illiquid or restricted securities subject to this limitation as of October
31, 2003 was $1,011,333, which represents 1.02% of the Fund's net assets, all of
which was considered restricted. Information concerning restricted securities is
as follows:
Unrealized
Acquisition Valuation as of Appreciation
Security Dates Cost October 31, 2003 (Depreciation)
- ----------------------------------------------------------------------------------------
Stocks and/or Warrants
Bio-Imaging Technologies, Inc. 9/12/03 $758,275 $631,009 $(127,266)
Discovery Laboratories, Inc. Wts.,
Exp. 9/20/10 6/18/03 -- 31,199 31,199
DOV Pharmaceutical, Inc. 9/19/03 514,391 349,125 (165,266)
- --------------------------------------------------------------------------------
6. 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 year
ended or at October 31, 2003.
31 | OPPENHEIMER EMERGING GROWTH FUND
INDEPENDENT AUDITORS' REPORT
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
The Board of Trustees and Shareholders of
Oppenheimer Emerging Growth Fund:
We have audited the accompanying statement of assets and liabilities of
Oppenheimer Emerging Growth Fund, including the statement of investments, as of
October 31, 2003, and the related statement of operations for the year then
ended, and 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 two years in
the period then ended and the period from November 1, 2000 (commencement of
operations) to October 31, 2001. 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 October 31, 2003, 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 Emerging Growth Fund as of October 31, 2003, 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 two years in the period then ended and the period from November 1, 2000
(commencement of operations) to October 31, 2001, in conformity with accounting
principles generally accepted in the United States of America.
KPMG LLP
Denver, Colorado
November 21, 2003
32 | OPPENHEIMER EMERGING GROWTH 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.
A portion, if any, of the dividends paid by the Fund during the fiscal year
ended October 31, 2003 which are not designated as capital gain distributions
are eligible for lower individual income tax rates to the extent that the Fund
has received qualified dividend income as stipulated by recent tax legislation.
$97,275 of the Fund's fiscal year taxable income may be eligible for the lower
individual income tax rates. In early 2004, shareholders of record will receive
information regarding the percentage of distributions that are eligible for
lower individual income tax rates.
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.
33 | OPPENHEIMER EMERGING GROWTH FUND
TRUSTEES AND OFFICERS Unaudited
- --------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
Name, Position(s) Held with Principal Occupation(s) During Past 5 Years; Other Trusteeships/Directorships Held
Fund, Length of Service, Age by Trustee; Number of Portfolios in Fund Complex Currently Overseen by Trustee
INDEPENDENT The address of each Trustee in the chart below is 6803 S. Tucson Way,
TRUSTEES Centennial, CO 80112-3924. Each Trustee serves for an indefinite term, until his
or her resignation, retirement, death or removal. Mr. Motley was elected as
Trustee to the Board I funds effective October 10, 2002 and did not hold shares
of Board I funds during the calendar year ended December 31, 2002.
Clayton K. Yeutter, Of Counsel (since 1993), Hogan & Hartson (a law firm). Other directorships:
Chairman of the Board Weyerhaeuser Corp. (since 1999) and Danielson Holding Corp. (since 2002);
of Trustees (since 2003), formerly a director of Caterpillar, Inc. (1993-December 2002). Oversees 25
Trustee (since 2000) portfolios in the OppenheimerFunds complex.
Age: 72
Robert G. Galli, A trustee or director of other Oppenheimer funds. Oversees 35 portfolios in the
Trustee (since 2000) OppenheimerFunds complex.
Age: 70
Phillip A. Griffiths, A director (since 1991) of the Institute for Advanced Study, Princeton, N.J., a
Trustee (since 2000) director (since 2001) of GSI Lumonics, a trustee (since 1983) of Woodward
Age: 65 Academy, a Senior Advisor (since 2001) of The Andrew W. Mellon Foundation. A
member of: the National Academy of Sciences (since 1979), American Academy of
Arts and Sciences (since 1995), American Philosophical Society (since 1996) and
Council on Foreign Relations (since 2002). Formerly a director of Bankers Trust
New York Corporation (1994-1999). Oversees 25 portfolios in the OppenheimerFunds
complex.
Joel W. Motley, Director (since 2002) Columbia Equity Financial Corp. (privately-held financial
Trustee (since 2002) adviser); Managing Director (since 2002) Carmona Motley, Inc. (privately-held
Age: 51 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 25 portfolios in the
OppenheimerFunds complex.
Kenneth A. Randall, A director of Dominion Resources, Inc. (electric utility holding company) and
Trustee (since 2000) Prime Retail, Inc. (real estate investment trust); formerly a director of
Age: 76 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 25 portfolios in the OppenheimerFunds complex.
Edward V. Regan, President, Baruch College, CUNY; a director of RBAsset (real estate manager); a
Trustee (since 2000) director of OffitBank; formerly Trustee, Financial Accounting Foundation (FASB
Age: 73 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 25 investment companies in the OppenheimerFunds complex.
34 | OPPENHEIMER EMERGING GROWTH FUND
Russell S. Reynolds, Jr., Chairman (since 1993) of The Directorship Search Group, Inc. (corporate
Trustee (since 2000) governance consulting and executive recruiting); a life trustee of International
Age: 71 House (non-profit educational organization), and a trustee (since 1996) of the
Greenwich Historical Society. Oversees 25 portfolios in the OppenheimerFunds
complex.
Donald W. Spiro, Chairman Emeritus (since January 1991) of the Manager. Formerly a director
Vice Chairman of (January 1969-August 1999) of the Manager. Oversees 25 portfolios in the
the Board of Trustees, OppenheimerFunds complex.
Trustee (since 2000)
Age: 77
- ------------------------------------------------------------------------------------------------------------------------------
INTERESTED TRUSTEE The address of Mr. Murphy in the chart below is Two World Financial Center, 225
AND OFFICER Liberty St., New York, NY 10281-1008. Mr. Murphy serves for an indefinite term,
until his resignation, death or removal.
John V. Murphy, Chairman, Chief Executive Officer and director (since June 2001) and President
President and Trustee, (since September 2000) of the Manager; President and a director or trustee of
Trustee (since 2001) other Oppenheimer funds; President and a director (since July 2001) of
Age: 54 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 DLB Acquisition Corporation (a holding company that owns the 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 72 portfolios as
Trustee/Officer and 10 portfolios as Officer in the OppenheimerFunds complex.
35 | OPPENHEIMER EMERGING GROWTH FUND
TRUSTEES AND OFFICERS Unaudited / Continued
- --------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
OFFICERS The address of the Officers in the chart below is as follows: for Ms. Granger
and Mr. Zack, Two World Financial Center, 225 Liberty St., New York, NY
10281-1008, 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.
Laura Granger, Vice President of the Manager (since October 2000); an officer of 3 portfolios
Vice President and Portfolio in the OppenheimerFunds complex; formerly a portfolio manager at Fortis Advisors
Manager (since 2000) (July 1998-October 2000) prior to which she was portfolio manager at General
Age: 42 Motors Investment Management (July 1993-July 1998).
Brian W. Wixted, Senior Vice President and Treasurer (since March 1999) of the Manager; Treasurer
Treasurer (since 2000) (since March 1999) of HarbourView Asset Management Corporation, Shareholder
Age: 44 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 (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 82 portfolios in the OppenheimerFunds complex.
Robert G. Zack, Senior Vice President (since May 1985) and General Counsel (since February 2002)
Secretary (since 2001) of the Manager; General 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 82 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.
36 | OPPENHEIMER EMERGING GROWTH FUND
ITEM 2. CODE OF ETHICS
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT
The Board of Trustees of the Fund has determined that Edward
V. Regan, the Chairman of the Board's Audit Committee, possesses the technical
attributes identified in Instruction 2(b) of Item 3 to Form N-CSR to qualify as
an "audit committee financial expert," and has designated Mr. Regan as the Audit
Committee's financial expert. Mr. Regan is an "independent" Trustee 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 October 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)