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 811-21921
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OPPENHEIMER TRANSITION 2015 FUND
--------------------------------
(Exact name of registrant as specified in charter)
6803 SOUTH TUCSON WAY, CENTENNIAL, COLORADO 80112-3924
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(Address of principal executive offices) (Zip code)
Robert G. Zack, Esq.
OppenheimerFunds, Inc.
TWO WORLD FINANCIAL CENTER, NEW YORK, NEW YORK 10281-1008
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(Name and address of agent for service)
Registrant's telephone number, including area code: (303) 768-3200
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Date of fiscal year end: FEBRUARY 28
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Date of reporting period: FEBRUARY 28, 2007
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ITEM 1. REPORTS TO STOCKHOLDERS.
TOP HOLDINGS AND ALLOCATIONS
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ASSET CLASS ALLOCATION
[THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.]
Alternative Investment Funds 5.1%
Fixed Income Funds 15.1
Global Equity Funds 15.0
U.S. Equity Funds 64.8
Portfolio holdings and allocations are subject to change. Percentages are as of
February 28, 2007, and are based on the total market value of investments in
affiliated companies.
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5 | OPPENHEIMER TRANSITION 2015 FUND
FUND PERFORMANCE DISCUSSION
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HOW HAS THE FUND PERFORMED? BELOW IS A DISCUSSION BY OPPENHEIMERFUNDS, INC., OF
THE FUND'S PERFORMANCE DURING ITS FISCAL YEAR ENDED FEBRUARY 28, 2007.
MANAGEMENT DISCUSSION OF FUND PERFORMANCE. From the inception date of the Fund
on December 15, 2006, it was an up-and-down few months for stock prices, which
had been rising steadily until the period's second-to-last day, when global
equity markets tumbled in response to a nearly 9% drop in China's stock market
along with the release of weaker-than-expected U.S. economic data. On February
27, 2007, alone, the U.S. stock market, as represented by the S&P 500 Index,
lost approximately 3.5%.
The past several months were characterized by a slowly expanding U.S.
economy that grew by 2.5% during the fourth quarter of 2006--only slightly
faster than during the previous three months. Inflation remained under control,
ticking up modestly in response to rising energy costs. The price for a barrel
of oil surpassed $60 during the period, well below its summer 2006 high of
nearly $80 but also above its mid-January low approaching $50. The combination
of moderate economic growth and contained inflation enabled the Federal Reserve
Board (the Fed) to leave its benchmark federal funds interest rate at 5.25%,
where it has remained since June 2006.
Bonds began the brief period on the rise, as favorable economic data
indicated that the Fed was unlikely to lower rates in the near future. However,
increasing evidence of less-robust-than-expected economic growth helped the bond
market reverse its losses during the period's final weeks.
The Oppenheimer Transition 2015 Fund is designed for investors around 55
years old who expect to retire in their mid-60s--or within several years of
2015. Compared to the other LifeCycle funds offered by Oppenheimer--Transition
2030, Transition 2020 and Transition 2010--Transition 2015 is moderately
positioned, beginning with a larger initial equity exposure that quickly shifts
to include an increased weighting in fixed-income investments. This allocation
reflects the need for continued asset growth to carry investors toward a
retirement date that is increasingly coming into view.
Approximately 65% of the Oppenheimer Transition 2015 Fund is initially
targeted toward a diversified mix of Oppenheimer U.S. equity funds, with another
15% directed toward Oppenheimer international stock funds. On the fixed-income
side, 15% of the Fund is targeted toward the Oppenheimer Core Bond Fund, while
the remaining 5% of the portfolio is allocated to the Oppenheimer Commodity
Strategy Total Return Fund--a small but important weighting, in our view, given
commodity-oriented investments relatively limited correlation to domestic and
international stocks.
6 | OPPENHEIMER TRANSITION 2015 FUND
FUND PERFORMANCE DISCUSSION
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Over time, the Fund's actual allocations will vary from our target
weightings as market conditions change and some of the funds in the portfolio do
better than others. Accordingly, part of our investment discipline is to
regularly monitor the Fund's asset allocations and, when necessary, rebalance
the Fund's holdings to return them to our target weightings and maintain what we
believe is a suitable level of risk for our shareholders.
The Fund is designed to become progressively more conservative over time
and as our shareholders near and eventually pass their target retirement date.
Specifically, this will mean a smaller future equity weighting along with an
increasing bond allocation to provide added stability and regular income. The
Fund will remain broadly diversified, however, with ongoing exposure to domestic
stock, international stock, bond and commodity-oriented investment products from
Oppenheimer. After the Fund's transition date, it will continue to become more
conservative, seek to reduce the impact of market volatility and aim to provide
shareholders with higher levels of current income to meet their retirement
needs.
In our view, global financial markets appear to be somewhat complacent in
how they are pricing risk. In the United States, for example, equity markets
have drifted upwards for some time, but there are some causes for concern on the
horizon--such as a housing market slowdown and the threat of a further rebound
in commodity prices. In the bond market, credit spreads--representing the
premium available to an investor in lower-rated, higher-risk bonds--remain at
historically very tight levels.
The longer that investors remain complacent about risk, the greater the
odds of a market correction--although there is no guarantee that the markets
will not continue to perform well for a time. An increase in risk aversion would
likely be a negative for equities, although the portfolio's broad level of
diversification across multiple asset classes and fund types should provide a
measure of protection from sudden market changes. That's one of the major
benefits of the "life cycle" approach to investing offered by the Oppenheimer
Transition 2015 Fund--it's an effort-free way to maintain a broadly diversified
portfolio whose risk gradually decreases over time as investors near their
retirement date.
7 | OPPENHEIMER TRANSITION 2015 FUND
NOTES
Total returns include changes in share price and reinvestment of dividends and
capital gains distributions in a hypothetical investment for the periods shown.
Cumulative total returns are not annualized. The Fund's total returns shown do
not reflect the deduction of income taxes on an individual's investment. Taxes
may reduce your actual investment returns on income or gains paid by the Fund or
any gains you may realize if you sell your shares. INVESTORS SHOULD CONSIDER THE
FUND'S INVESTMENT OBJECTIVES, RISKS AND OTHER CHARGES AND EXPENSES CAREFULLY
BEFORE INVESTING. THE FUND'S PROSPECTUS CONTAINS THIS AND OTHER INFORMATION
ABOUT THE FUND, AND MAY BE OBTAINED BY ASKING YOUR FINANCIAL ADVISOR, CALLING US
AT 1.800.525.7048 OR VISITING OUR WEBSITE AT WWW.OPPENHEIMERFUNDS.COM. READ THE
PROSPECTUS CAREFULLY BEFORE INVESTING.
The Fund's investment strategy and focus can change over time. The mention of
specific fund holdings does not constitute a recommendation by OppenheimerFunds,
Inc.
CLASS A shares of the Fund were first publicly offered on 12/15/06.
CLASS B shares of the Fund were first publicly offered on 12/15/06.
CLASS C shares of the Fund were first publicly offered on 12/15/06.
CLASS N shares of the Fund were first publicly offered on 12/15/06. Class N
shares are offered only through retirement plans.
CLASS Y shares of the Fund were first publicly offered on 12/15/06. Class Y
shares are offered only to certain institutional investors under special
agreements with the Distributor.
An explanation of the calculation of performance is in the Fund's Statement of
Additional Information.
8 | OPPENHEIMER TRANSITION 2015 FUND
FUND EXPENSES
FUND EXPENSES. As a shareholder of the Fund, you incur two types of costs: (1)
transaction costs, which may include sales charges (loads) on purchase payments,
contingent deferred sales charges on redemptions; and redemption fees, if any;
and (2) ongoing costs, including management fees; distribution and service fees;
and other Fund expenses. These examples are intended to help you understand your
ongoing costs (in dollars) of investing in the Fund and to compare these costs
with the ongoing costs of investing in other mutual funds.
The examples for Actual Expenses are based on an investment of $1,000.00
invested at the beginning of the period, December 15, 2006 (commencement of
operations) and held for the period ended February 28, 2007.
The Hypothetical Examples for Comparison Purposes are based on an investment of
$1,000.00 invested on September 1, 2006 and held for the six months ended
February 28, 2007.
ACTUAL EXPENSES. The "actual" lines of the table provide information about
actual account values and actual expenses. You may use the information on this
line for the class of shares you hold, together with the amount you invested, to
estimate the expense that you paid over the period. Simply divide your account
value by $1,000.00 (for example, an $8,600.00 account value divided by $1,000.00
= 8.60), then multiply the result by the number in the "actual" line under the
heading entitled "Expenses Paid During Period" to estimate the expenses you paid
on your account during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES. The "hypothetical" lines of the
table provide information about hypothetical account values and hypothetical
expenses based on the Fund's actual expense ratio for each class of shares, and
an assumed rate of return of 5% per year before expenses, which is not the
Fund's actual return. The hypothetical account values and expenses may not be
used to estimate the actual ending account balance or expenses you paid for the
period. You may use this information to compare the ongoing costs of investing
in the Fund and other funds. To do so, compare this 5% hypothetical example for
the class of shares you hold with the 5% hypothetical examples that appear in
the shareholder reports of the other funds.
9 | OPPENHEIMER TRANSITION 2015 FUND
FUND EXPENSES
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as front-end
or contingent deferred sales charges (loads), or a $12.00 fee imposed annually
on accounts valued at less than $500.00 (subject to exceptions described in the
Statement of Additional Information). Therefore, the "hypothetical" lines of the
table are useful in comparing ongoing costs only, and will not help you
determine the relative total costs of owning different funds. In addition, if
these transactional costs were included, your costs would have been higher.
10 | OPPENHEIMER TRANSITION 2015 FUND
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ENDING EXPENSES
BEGINNING ACCOUNT PAID DURING
ACCOUNT VALUE PERIOD ENDED
VALUE 2/28/07 FEBRUARY 28, 2007 1,2
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Class A Actual $ 1,000.00 $ 1,018.00 $ 1.83
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Class A Hypothetical 1,000.00 1,020.48 4.37
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Class B Actual 1,000.00 1,017.00 3.26
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Class B Hypothetical 1,000.00 1,017.11 7.78
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Class C Actual 1,000.00 1,017.00 3.41
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Class C Hypothetical 1,000.00 1,016.76 8.13
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Class N Actual 1,000.00 1,018.00 2.36
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Class N Hypothetical 1,000.00 1,019.24 5.62
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Class Y Actual 1,000.00 1,019.00 1.16
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Class Y Hypothetical 1,000.00 1,022.07 2.76
Hypothetical assumes 5% annual return before expenses.
1. Actual expenses paid are equal to the Fund's annualized expense ratio for
that class, multiplied by the average account value over the period, multiplied
by 76/365 [to reflect the period from December 15, 2006 (commencement of
operations) to February 28, 2007].
2. Hypothetical expenses paid are equal to the Fund's annualized expense ratio
for that class, multiplied by the average account value over the period,
multiplied by 181/365 (to reflect the one-half year period).
The annualized expense ratios, excluding all underlying fund expenses, are as
follows:
CLASS EXPENSE RATIOS
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Class A 0.87%
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Class B 1.55
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Class C 1.62
- -------------------------------
Class N 1.12
- -------------------------------
Class Y 0.55
The expense ratios reflect voluntary waivers or reimbursements of expenses by
the Fund's Manager that can be terminated at any time, without advance notice.
The "Financial Highlights" tables in the Fund's financial statements, included
in this report, also show the gross expense ratios, without such waivers or
reimbursements.
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11 | OPPENHEIMER TRANSITION 2015 FUND
STATEMENT OF INVESTMENTS February 28, 2007
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VALUE
SHARES SEE NOTE 1
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INVESTMENTS IN AFFILIATED COMPANIES--97.0% 1
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ALTERNATIVE INVESTMENT FUNDS--4.9%
Oppenheimer Commodity Strategy Total Return Fund, Cl. Y 18,004 $ 119,908
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FIXED INCOME FUNDS--14.6%
Oppenheimer Core Bond Fund, Cl. Y 34,629 356,332
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GLOBAL EQUITY FUNDS--14.6%
Oppenheimer International Growth Fund, Cl. Y 8,381 236,181
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Oppenheimer Quest International Value Fund, Inc., Cl. A 5,314 118,120
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354,301
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U.S. EQUITY FUNDS--62.9%
Oppenheimer Capital Appreciation Fund, Cl. Y 2 4,867 233,336
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Oppenheimer Main Street Fund, Cl. Y 5,720 231,841
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Oppenheimer MidCap Fund, Cl. Y 2 11,787 236,101
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Oppenheimer Small- & Mid- Cap Value Fund, Cl. Y 9,265 360,392
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Oppenheimer Value Fund, Cl. Y 17,516 469,774
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1,531,444
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TOTAL INVESTMENTS, AT VALUE (COST $2,353,099) 97.0% 2,361,985
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OTHER ASSETS NET OF LIABILITIES 3.0 72,580
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NET ASSETS 100.0% $ 2,434,565
==========================
12 | OPPENHEIMER TRANSITION 2015 FUND
FOOTNOTES TO STATEMENT OF INVESTMENTS
1. Is or was an affiliate, as defined in the Investment Company Act of 1940, at
or during the period ended February 28, 2007 by virtue of the Fund owning at
least 5% of the voting securities of the issuer or as a result of the Fund and
the issuer having the same investment advisor. Transactions during the period in
which the issuer was an affiliate are as follows:
SHARES SHARES
DECEMBER 15, GROSS GROSS FEBRUARY 28,
2006 ADDITIONS REDUCTIONS 2007
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Oppenheimer Capital Appreciation Fund, Cl. Y -- 4,867 -- 4,867
Oppenheimer Commodity Strategy Total Return
Fund, Cl. Y -- 18,004 -- 18,004
Oppenheimer Core Bond Fund, Cl. Y -- 34,629 -- 34,629
Oppenheimer Institutional Money Market Fund,
Cl. E -- 1,233,024 1,233,024 --
Oppenheimer International Growth Fund, Cl. Y -- 8,381 -- 8,381
Oppenheimer Main Street Fund, Cl. Y -- 5,720 -- 5,720
Oppenheimer MidCap Fund, Cl. Y -- 11,787 -- 11,787
Oppenheimer Quest International Value Fund, Inc.,
Cl. A -- 5,314 -- 5,314
Oppenheimer Small- & Mid- Cap Value Fund, Cl. Y -- 9,265 -- 9,265
Oppenheimer Value Fund, Cl. Y -- 17,516 -- 17,516
VALUE DIVIDEND
SEE NOTE 1 INCOME
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Oppenheimer Capital Appreciation Fund, Cl. Y $ 233,336 $ --
Oppenheimer Commodity Strategy Total Return Fund, Cl. Y 119,908 --
Oppenheimer Core Bond Fund, Cl. Y 356,332 2,497
Oppenheimer Institutional Money Market Fund, Cl. E -- 831
Oppenheimer International Growth Fund, Cl. Y 236,181 --
Oppenheimer Main Street Fund, Cl. Y 231,841 --
Oppenheimer MidCap Fund, Cl. Y 236,101 --
Oppenheimer Quest International Value Fund, Inc., Cl. A 118,120 --
Oppenheimer Small- & Mid- Cap Value Fund, Cl. Y 360,392 --
Oppenheimer Value Fund, Cl. Y 469,774 --
---------------------------
$ 2,361,985 $ 3,328
===========================
2. Non-income producing security.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
13 | OPPENHEIMER TRANSITION 2015 FUND
STATEMENT OF ASSETS AND LIABILITIES February 28, 2007
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ASSETS
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Investments, at value--see accompanying statement of investments--
affiliated companies (cost $2,353,099) $ 2,361,985
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Cash 11,022
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Receivables and other assets:
Shares of beneficial interest sold 90,286
Interest and dividends 1,620
Other 223
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Total assets 2,465,136
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LIABILITIES
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Payables and other liabilities:
Legal, auditing and other professional fees 16,500
Shareholder communications 7,337
Investments purchased 5,973
Distribution and service plan fees 446
Transfer and shareholder servicing agent fees 17
Trustees' compensation 8
Other 290
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Total liabilities 30,571
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NET ASSETS $ 2,434,565
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COMPOSITION OF NET ASSETS
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Par value of shares of beneficial interest $ 239
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Additional paid-in capital 2,424,398
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Accumulated net investment income 1,042
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Net unrealized appreciation on investments 8,886
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NET ASSETS $ 2,434,565
===========
14 | OPPENHEIMER TRANSITION 2015 FUND
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NET ASSET VALUE PER SHARE
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Class A Shares:
Net asset value and redemption price per share (based on net assets of
$2,176,685 and 213,792 shares of beneficial interest outstanding) $ 10.18
Maximum offering price per share (net asset value plus sales charge of
5.75% of offering price) $ 10.80
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Class B Shares:
Net asset value, redemption price (excludes applicable contingent deferred
sales charge) and offering price per share (based on net assets of $138,731
and 13,643 shares of beneficial interest outstanding) $ 10.17
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Class C Shares:
Net asset value, redemption price (excludes applicable contingent deferred
sales charge) and offering price per share (based on net assets of $98,725
and 9,706 shares of beneficial interest outstanding) $ 10.17
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Class N Shares:
Net asset value, redemption price (excludes applicable contingent deferred
sales charge) and offering price per share (based on net assets of $19,405
and 1,907 shares of beneficial interest outstanding) $ 10.18
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Class Y Shares:
Net asset value, redemption price and offering price per share (based on net
assets of $1,019 and 100 shares of beneficial interest outstanding) $ 10.19
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
15 | OPPENHEIMER TRANSITION 2015 FUND
STATEMENT OF OPERATIONS For the Period Ended February 28, 2007 1
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INVESTMENT INCOME
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Dividends from affiliated companies $ 3,328
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Other income 11
----------
Total investment income 3,339
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EXPENSES
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Distribution and service plan fees:
Class A 412
Class B 31
Class C 123
Class N 4
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Transfer and shareholder servicing agent fees:
Class A 19
Class B 2
Class C 16
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Shareholder communications:
Class A 3,800
Class B 1,789
Class C 1,118
Class N 447
Class Y 224
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Legal, auditing and other professional fees 16,500
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Trustees' compensation 8
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Other 289
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Total expenses 24,782
Less waivers and reimbursements of expenses (22,040)
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Net expenses 2,742
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NET INVESTMENT INCOME 597
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REALIZED AND UNREALIZED GAIN
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Net change in unrealized appreciation on investments 8,886
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NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 9,483
==========
1. For the period from December 15, 2006 (commencement of operations) to
February 28, 2007.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
16 | OPPENHEIMER TRANSITION 2015 FUND
STATEMENT OF CHANGES IN NET ASSETS
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PERIOD ENDED FEBRUARY 28, 2007 1
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OPERATIONS
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Net investment income $ 597
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Net change in unrealized appreciation 8,886
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Net increase in net assets resulting from operations 9,483
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BENEFICIAL INTEREST TRANSACTIONS
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Net increase in net assets resulting from beneficial interest
transactions:
Class A 2,066,504
Class B 140,134
Class C 95,927
Class N 18,517
Class Y --
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2,321,082
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NET ASSETS
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Total increase 2,330,565
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Beginning of period 104,000 2
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End of period (including accumulated net investment income of
$1,042 for the period ended February 28, 2007) $ 2,434,565
=============
1. For the period from December 15, 2006 (commencement of operations) to
February 28, 2007.
2. Reflects the value of the Manager's initial seed money investment on August
21, 2006.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
17 | OPPENHEIMER TRANSITION 2015 FUND
FINANCIAL HIGHLIGHTS
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CLASS A CLASS B CLASS C
PERIOD ENDED FEBRUARY 28, 2007 1 2007 1 2007 1
- -------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
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Net asset value, beginning of period $ 10.00 $10.00 $ 10.00
- -------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) 2 .01 (.01) (.01)
Net realized and unrealized gain .17 .18 .18
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Total from investment operations .18 .17 .17
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Net asset value, end of period $ 10.18 $10.17 $10.17
=======================================
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TOTAL RETURN, AT NET ASSET VALUE 3 1.80% 1.70% 1.70%
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RATIOS/SUPPLEMENTAL DATA
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Net assets, end of period (in thousands) $ 2,177 $ 139 $ 99
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Average net assets (in thousands) $ 1,362 $ 20 $ 60
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Ratios to average net assets: 4
Net investment income (loss) 0.25% (0.57)% (0.65)%
Total expenses 6.99% 5,8 52.30% 6,8 17.07% 7,8
Expenses after waivers and reduction to custodian expenses 0.87% 1.55% 1.62%
- -------------------------------------------------------------------------------------------------------
Portfolio turnover rate 0% 0% 0%
1. For the period from December 15, 2006 (commencement of operations) to
February 28, 2007.
2. Per share amounts calculated based on the average shares outstanding during
the period.
3. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Sales charges are not reflected in the
total returns. Total returns are not annualized for periods of less than one
full year. Returns do not reflect the deduction of taxes that a shareholder
would pay on fund distributions or the redemption of fund shares.
4. Annualized for periods of less than one full year.
5. Expenses including all underlying fund expenses were as follows:
Period Ended February 28, 2007 7.62%
6. Expenses including all underlying fund expenses were as follows:
Period Ended February 28, 2007 52.93%
7. Expenses including all underlying fund expenses were as follows:
Period Ended February 28, 2007 17.70%
8. The fiscal 2007 total expenses ratio is higher than the anticipated total
expense ratio of the class for future fiscal years due to the Fund's limited
operating history at February 28, 2007.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
18 | OPPENHEIMER TRANSITION 2015 FUND
CLASS N CLASS Y
PERIOD ENDED FEBRUARY 28, 2007 1 2007 1
- --------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- --------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 10.00 $ 10.00
- --------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) 2 -- 3 .01
Net realized and unrealized gain .18 .18
--------------------------
Total from investment operations .18 .19
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Net asset value, end of period $ 10.18 $ 10.19
==========================
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TOTAL RETURN, AT NET ASSET VALUE 4 1.80% 1.90%
- --------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- --------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 19 $ 1
- --------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 5 $ 1
- --------------------------------------------------------------------------------------------
Ratios to average net assets: 5
Net investment income 0.02% 0.48%
Total expenses 42.59% 6,8 110.56% 7,8
Expenses after waivers and reduction to custodian expenses 1.12% 0.55%
- --------------------------------------------------------------------------------------------
Portfolio turnover rate 0% 0%
1. For the period from December 15, 2006 (commencement of operations) to
February 28, 2007.
2. Per share amounts calculated based on the average shares outstanding during
the period.
3. Less than $0.005 per share.
4. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Sales charges are not reflected in the
total returns. Total returns are not annualized for periods of less than one
full year. Returns do not reflect the deduction of taxes that a shareholder
would pay on fund distributions or the redemption of fund shares.
5. Annualized for periods of less than one full year.
6. Expenses including all underlying fund expenses were as follows:
Period Ended February 28, 2007 43.22%
7. Expenses including all underlying fund expenses were as follows:
Period Ended February 28, 2007 111.19%
8. The fiscal 2007 total expenses ratio is higher than the anticipated total
expense ratio of the class for future fiscal years due to the Fund's limited
operating history at February 28, 2007.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
19 | OPPENHEIMER TRANSITION 2015 FUND
NOTES TO FINANCIAL STATEMENTS
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1. SIGNIFICANT ACCOUNTING POLICIES
Oppenheimer Transition 2015 Fund (the "Fund") is registered under the Investment
Company Act of 1940, as amended, as an open-end management investment company.
The Fund's investment objective is to seek total return until the target
retirement date included in its name and then seeks income and secondarily
capital growth. The Fund is a special type of mutual fund known as a "fund of
funds" because it invests in other mutual funds. The Fund normally invests in a
portfolio consisting of a target weighted allocation in Class A or Class Y
shares of other Oppenheimer funds (the "Underlying Funds"). 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, however, the institutional investor
may impose charges on those accounts. All classes of shares have identical
rights and voting privileges with respect to the Fund in general and exclusive
voting rights on matters that affect that class alone. Earnings, net assets and
net asset value per share may differ due to each class having its own expenses,
such as transfer and shareholder servicing agent fees and shareholder
communications, directly attributable to that class. Class A, B, C and N have
separate distribution and/or service plans. No such plan has been adopted for
Class Y shares. Class B shares will automatically convert to Class A shares six
years after the date of purchase.
The following is a summary of significant accounting policies consistently
followed by the Fund.
- --------------------------------------------------------------------------------
SECURITIES VALUATION. The Fund calculates the net asset value of each class of
shares based upon the net asset value of the applicable Underlying Funds. For
each Underlying Fund, the net asset value per share for a class of shares on a
"regular business day" is determined by dividing the value of the Underlying
Fund's net assets attributable to that class by the number of shares of that
class outstanding on that day. To determine net asset values, the Underlying
Fund assets are valued primarily on the basis of current market quotations. If
market quotations are not readily available or do not accurately reflect fair
value for a security (in the Manager's judgment) or if a security's value has
been materially affected by events occurring after the close of the exchange or
market on which the security is principally traded, that security may be valued
by another method that the Underlying Fund's Board of Trustees/Directors
believes accurately reflects the fair value. Because some foreign securities
trade in markets and on exchanges that operate on weekends and U.S. holidays,
the values of some of the Underlying Fund's foreign investments may change on
days when investors cannot buy or redeem Underlying Fund shares.
Short-term "money market type" debt securities with remaining maturities
of sixty days or less are valued at amortized cost (which approximates market
value).
20 | OPPENHEIMER TRANSITION 2015 FUND
- --------------------------------------------------------------------------------
INVESTMENT IN OPPENHEIMER INSTITUTIONAL MONEY MARKET FUND. The Fund is permitted
to invest daily available cash balances in an affiliated money market fund. The
Fund may invest the available cash in Class E shares of Oppenheimer
Institutional Money Market Fund ("IMMF") which seeks current income and
stability of principal. IMMF is a registered open-end management investment
company, regulated as a money market fund under the Investment Company Act of
1940, as amended. The Manager is also the investment advisor of IMMF. The Fund's
investment in IMMF is included in the Statement of Investments. As a
shareholder, the Fund is subject to its proportional share of IMMF's Class E
expenses, including its management fee. The Manager will waive fees and/or
reimburse Fund expenses in an amount equal to the indirect management fees
incurred through the Fund's investment in IMMF.
- --------------------------------------------------------------------------------
RISKS OF INVESTING IN THE UNDERLYING FUNDS. Each of the Underlying Funds in
which the Fund invests has its own investment risks, and those risks can affect
the value of the Fund's investments and therefore the value of the Fund's
shares. To the extent that the Fund invests more of its assets in one Underlying
Fund than in another, the Fund will have greater exposure to the risks of that
Underlying Fund.
- --------------------------------------------------------------------------------
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 TAX PURPOSES
------------------------------------------------------------------
$ 1,048 $ -- $ -- $ 8,886
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
21 | OPPENHEIMER TRANSITION 2015 FUND
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES Continued
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 February 28, 2007. Net assets of the Fund were unaffected by the
reclassifications.
REDUCTION TO INCREASE TO ACCUMULATED
PAID-IN CAPITAL NET INVESTMENT INCOME
-------------------------------------------------
$ 445 $ 445
No distributions were paid during the period ended February 28, 2007.
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 February 28, 2007 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 $ 2,353,099
============
Gross unrealized appreciation $ 14,192
Gross unrealized depreciation (5,306)
------------
Net unrealized appreciation $ 8,886
============
- --------------------------------------------------------------------------------
TRUSTEES' COMPENSATION. The Fund has adopted an unfunded retirement plan (the
"Plan") for the Fund's independent trustees. Benefits are based on years of
service and fees paid to each trustee during their period of service. The Plan
was frozen with respect to adding new participants effective December 31, 2006
(the "Freeze Date") and existing Plan Participants as of the Freeze Date will
continue to receive accrued benefits under the Plan. Active independent trustees
as of the Freeze Date have each elected a distribution method with respect to
their benefits under the Plan. During the period ended February 28, 2007, the
Fund's projected benefit obligations were increased by $6, resulting in an
accumulated liability of $6 as of February 28, 2007.
The Board of Trustees has adopted a compensation deferral 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.
For purposes of determining the amount owed to the Trustee under the plan,
deferred amounts are treated as though equal dollar amounts had been invested in
shares of the Fund or in other Oppenheimer funds selected by the Trustee. The
Fund purchases shares of the funds selected for deferral by the Trustee in
amounts equal to his or her deemed investment, resulting in a Fund asset equal
to the deferred compensation liability. Such assets are included as a component
of "Other" within the asset section of the Statement of Assets and Liabilities.
Deferral of trustees' fees under the plan will not affect the net assets of the
Fund, and will not
22 | OPPENHEIMER TRANSITION 2015 FUND
materially affect the Fund's assets, liabilities or net investment income per
share. Amounts will be deferred until distributed in accordance to the
compensation deferral 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.
- --------------------------------------------------------------------------------
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.
- --------------------------------------------------------------------------------
CUSTODIAN FEES. "Custodian fees and expenses" in the Statement of Operations may
include interest expense incurred by the Fund on any cash overdrafts of its
custodian account during the period. Such cash overdrafts may result from the
effects of failed trades in portfolio securities and from cash outflows
resulting from unanticipated shareholder redemption activity. The Fund pays
interest to its custodian on such cash overdrafts, to the extent they are not
offset by positive cash balances maintained by the Fund, at a rate equal to the
Federal Funds Rate plus 0.50%. The "Reduction to custodian expenses" line item,
if applicable, represents earnings on cash balances maintained by the Fund
during the period. Such interest expense and other custodian fees may be paid
with these earnings.
- --------------------------------------------------------------------------------
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.
- --------------------------------------------------------------------------------
INDEMNIFICATIONS. The Fund's organizational documents provide current and former
trustees and officers with a limited indemnification against liabilities arising
in connection with the performance of their duties to the Fund. In the normal
course of business, the Fund may also enter into contracts that provide general
indemnifications. The Fund's maximum exposure under these arrangements is
unknown as this would be dependent on future claims that may be made against the
Fund. The risk of material loss from such claims is considered remote.
- --------------------------------------------------------------------------------
OTHER. The preparation of financial statements in conformity with U.S. generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of income and expenses during the reporting
period. Actual results could differ from those estimates.
23 | OPPENHEIMER TRANSITION 2015 FUND
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
2. SHARES OF BENEFICIAL INTEREST
The Fund has authorized an unlimited number of $0.001 par value shares of
beneficial interest of each class. Transactions in shares of beneficial interest
were as follows:
PERIOD ENDED FEBRUARY 28, 2007 1,2
SHARES AMOUNT
- -------------------------------------------------------------------------------
CLASS A
Sold 203,792 $ 2,066,504
Redeemed -- --
----------------------
Net increase 203,792 $ 2,066,504
======================
- -------------------------------------------------------------------------------
CLASS B
Sold 13,612 $ 140,843
Redeemed (69) (709)
----------------------
Net increase 13,543 $ 140,134
======================
- -------------------------------------------------------------------------------
CLASS C
Sold 9,606 $ 95,927
Redeemed -- --
----------------------
Net increase 9,606 $ 95,927
======================
- -------------------------------------------------------------------------------
CLASS N
Sold 1,807 $ 18,517
Redeemed -- --
----------------------
Net increase 1,807 $ 18,517
======================
- -------------------------------------------------------------------------------
CLASS Y
Sold -- $ --
Redeemed -- --
----------------------
Net increase -- $ --
======================
1. For the period from December 15, 2006 (commencement of operations) to
February 28, 2007.
2. The Fund sold 10,000 shares of Class A at a value of $100,000 and 100 shares
each of Class B, Class C, Class N and Class Y at a value of $1,000,
respectively, to the Manager upon seeding of the Fund on August 21, 2006.
- --------------------------------------------------------------------------------
3. PURCHASES AND SALES OF SECURITIES
The aggregate cost of purchases and proceeds from sales of securities, other
than short-term obligations and money market funds, for the period ended
February 28, 2007, were as follows:
PURCHASES SALES
- --------------------------------------------------------------------------------
Investment securities $ 2,353,098 $ --
24 | OPPENHEIMER TRANSITION 2015 FUND
- --------------------------------------------------------------------------------
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES
MANAGEMENT FEES. Under the investment advisory agreement, the Manager does not
charge a management fee, but rather collects indirect management fees from
investments in the Underlying Funds. The weighted indirect management fees
collected from the Underlying Funds, as a percent of average daily net assets of
the Fund for the period ended February 28, 2007 were 0.54%.
- --------------------------------------------------------------------------------
TRANSFER AGENT FEES. OppenheimerFunds Services (OFS or the Transfer Agent), a
division of the Manager, acts as the transfer and shareholder servicing agent
for the Fund. The Fund pays OFS a per account fee. For the period ended February
28, 2007, the Fund paid $20 to OFS for services to the Fund.
Additionally, Class Y shares are subject to minimum fees of $10,000 per
annum 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.
- --------------------------------------------------------------------------------
OFFERING AND ORGANIZATIONAL COSTS. The Manager paid all offering and
organizational costs associated with the registration and seeding of the Fund.
- --------------------------------------------------------------------------------
DISTRIBUTION AND SERVICE PLAN (12b-1) FEES. Under its General Distributor's
Agreement with the Fund, OppenheimerFunds Distributor, Inc. (the Distributor)
acts as the Fund's principal underwriter in the continuous public offering of
the Fund's classes of shares.
- --------------------------------------------------------------------------------
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
periodically at an annual rate of up to 0.25% of the average annual net assets
of Class A shares of the Fund. The Distributor currently uses all of those fees
to pay dealers, brokers, banks and other financial institutions periodically for
providing personal services and maintenance of accounts of their customers that
hold Class A shares. Any unreimbursed expenses the Distributor incurs with
respect to Class A shares in any fiscal year cannot be recovered in subsequent
periods. Fees incurred by the Fund under the plan are detailed in the Statement
of Operations.
- --------------------------------------------------------------------------------
DISTRIBUTION AND SERVICE PLANS FOR CLASS B, CLASS C AND CLASS N SHARES. The Fund
has adopted Distribution and Service Plans for Class B, Class C and Class N
shares to compensate the Distributor for its services in connection with the
distribution of those shares and servicing accounts. Under the plans, the Fund
pays the Distributor an annual asset-based sales charge of 0.75% on Class B and
Class C shares and 0.25% on Class N shares. The Distributor also receives a
service fee of 0.25% per year under each plan. If either the Class B, Class C or
Class N plan is terminated by the Fund or by the shareholders of a class, the
Board of Trustees and its independent trustees must determine whether the
Distributor shall be entitled to payment from the Fund of all or a portion of
the service fee and/or asset-based sales charge in respect to shares sold prior
to the effective date of such termination. The Distributor determines its
uncompensated expenses under
25 | OPPENHEIMER TRANSITION 2015 FUND
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES Continued
the plan at calendar quarter ends. The Distributor's aggregate uncompensated
expenses under the plan at December 31, 2006 were zero for all classes. Fees
incurred by the Fund under the plans are detailed in the Statement of
Operations.
- --------------------------------------------------------------------------------
SALES CHARGES. Front-end sales charges and contingent deferred sales charges
(CDSC) do not represent expenses of the Fund. They are deducted from the
proceeds of sales of Fund shares prior to investment or from redemption proceeds
prior to remittance, as applicable. The sales charges retained by the
Distributor from the sale of shares and the CDSC retained by the Distributor on
the redemption of shares is shown in the following table for the period
indicated.
CLASS A CLASS B CLASS C CLASS N
CLASS A CONTINGENT CONTINGENT CONTINGENT CONTINGENT
FRONT-END DEFERRED DEFERRED DEFERRED DEFERRED
SALES CHARGES SALES CHARGES SALES CHARGES SALES CHARGES SALES CHARGES
RETAINED BY RETAINED BY RETAINED BY RETAINED BY RETAINED BY
PERIOD ENDED DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR
- -------------------------------------------------------------------------------------------------
February 28, 2007 $ 1,620 $ -- $ -- $ -- $ --
- --------------------------------------------------------------------------------
WAIVERS AND REIMBURSEMENTS OF EXPENSES. The Manager has voluntarily agreed to a
total expense limitation on the aggregate amount of combined direct
(fund-of-funds level) and indirect expense so that as a percentage of average
daily net assets they will not exceed the following annual rates: 1.50%, 2.25%,
2.25%, 1.75% and 1.25%, for Class A, Class B, Class C, Class N and Class Y,
respectively. During the period ended February 28, 2007, the Manager reimbursed
the Fund $17,338, $2,073, $1,927, $449 and $232 for the Class A, Class B, Class
C, Class N and Class Y shares, respectively. The Manager may modify or terminate
this undertaking at any time without notice to shareholders.
OFS has voluntarily agreed to limit transfer and shareholder servicing
agent fees for all classes to 0.35% of average annual net assets per class. This
undertaking may be amended or withdrawn at any time.
The Manager will waive fees and/or reimburse Fund expenses in an amount
equal to the indirect management fees incurred through the Fund's investment in
IMMF. During the period ended February 28, 2007, the Manager waived $21 for IMMF
management fees.
- --------------------------------------------------------------------------------
5. RECENT ACCOUNTING PRONOUNCEMENTS
In June 2006, the Financial Accounting Standards Board ("FASB") issued FASB
Interpretation No. 48 ("FIN 48"), ACCOUNTING FOR UNCERTAINTY IN INCOME TAXES.
FIN 48 clarifies the accounting for uncertainty in income taxes recognized in an
enterprise's financial statements in accordance with FASB Statement No. 109,
ACCOUNTING FOR INCOME TAXES. FIN 48 requires the evaluation of tax positions
taken in the course of preparing the Fund's tax returns to determine whether it
is "more-likely-than-not" that tax positions taken in the Fund's tax return will
be ultimately sustained. A tax liability and expense must be recorded in respect
of any tax position that, in Management's judgment, will not be fully realized.
FIN 48 is effective for
26 | OPPENHEIMER TRANSITION 2015 FUND
fiscal years beginning after December 15, 2006. As of February 28, 2007, the
Manager has evaluated the implications of FIN 48 and does not currently
anticipate a material impact to the Fund's financial statements. The Manager
will continue to monitor the Fund's tax positions prospectively for potential
future impacts.
In September 2006, the FASB issued Statement of Financial Accounting
Standards ("SFAS") No. 157, FAIR VALUE MEASUREMENTS. This standard establishes a
single authoritative definition of fair value, sets out a framework for
measuring fair value and expands disclosures about fair value measurements. SFAS
No. 157 applies to fair value measurements already required or permitted by
existing standards. SFAS No. 157 is effective for financial statements issued
for fiscal years beginning after November 15, 2007, and interim periods within
those fiscal years. As of February 28, 2007, the Manager does not believe the
adoption of SFAS No. 157 will materially impact the financial statement amounts;
however, additional disclosures may be required about the inputs used to develop
the measurements and the effect of certain of the measurements on changes in net
assets for the period.
27 | OPPENHEIMER TRANSITION 2015 FUND
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
THE BOARD OF TRUSTEES AND SHAREHOLDERS OF OPPENHEIMER TRANSITION 2015 FUND:
We have audited the accompanying statement of assets and liabilities of
Oppenheimer Transition 2015 Fund, including the statement of investments, as of
February 28, 2007, and the related statement of operations, the statement of
changes in net assets and the financial highlights for the period December 15,
2006 (commencement of operations) to February 28, 2007. 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 audit.
We conducted our audit in accordance with the standards of the Public
Company Accounting Oversight Board (United States). 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 February 28, 2007, 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
audit provides 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 Transition 2015 Fund as of February 28, 2007, the results of its
operations, the changes in its net assets and the financial highlights for the
period December 15, 2006 (commencement of operations) to February 28, 2007, in
conformity with U.S. generally accepted accounting principles.
/s/ KPMG LLP
Denver, Colorado
April 12, 2007
28 | OPPENHEIMER TRANSITION 2015 FUND
FEDERAL INCOME TAX INFORMATION Unaudited
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
In early 2007, if applicable, shareholders of record received information
regarding all dividends and distributions paid to them by the Fund during
calendar year 2006. Regulations of the U.S. Treasury Department require the Fund
to report this information to the Internal Revenue Service.
The foregoing information is presented to assist shareholders in reporting
distributions received from the Fund to the Internal Revenue Service. Because of
the complexity of the federal regulations which may affect your individual tax
return and the many variations in state and local tax regulations, we recommend
that you consult your tax advisor for specific guidance.
29 | OPPENHEIMER TRANSITION 2015 FUND
PORTFOLIO PROXY VOTING POLICIES AND PROCEDURES;
UPDATES TO STATEMENTS OF INVESTMENTS 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
1.800.525.7048, (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 is required to
file 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 Fund's voting record is
available (i) without charge, upon request, by calling the Fund toll-free at
1.800.525.7048, and (ii) in the Form N-PX filing on the SEC's website at
www.sec.gov.
The Fund files its complete schedule of portfolio holdings with the SEC
for the first quarter and the third quarter of each fiscal year on Form N-Q. The
Fund's Form N-Q filings are available on the SEC's website at
http://www.sec.gov. Those forms may be reviewed and copied at the SEC's Public
Reference Room in Washington D.C. Information on the operation of the Public
Reference Room may be obtained by calling 1-800-SEC-0330.
30 | OPPENHEIMER TRANSITION 2015 FUND
BOARD APPROVAL OF THE PORTFOLIO'S INVESTMENT
ADVISORY AGREEMENT Unaudited
- --------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
The Investment Company Act of 1940, as amended, requires that the Board request
and evaluate, and that the Manager provide, such information as may be
reasonably necessary to evaluate the terms of the Fund's investment advisory
agreement (the "Agreement").
In approving the Agreement, the Board considered information provided by
the Manager on the following factors: (i) the nature, quality and extent of the
Manager's services to be provided, (ii) the fees and expenses of the Fund,
including comparative expense information, (iii) the profitability of the
Manager and its affiliates, including an analysis of the anticipated cost of
providing services by the Manager and its affiliates, (iv) the extent to which
economies of scale may be realized as the Fund grows and whether fee levels
reflect these economies of scale for Fund investors and (v) other benefits that
the Manager may receive from its relationship with the Fund.
NATURE AND EXTENT OF SERVICES. In approving the Agreement, the Board
considered information about the nature and extent of the services to be
provided to the Fund and information regarding the Manager's key personnel who
provide such services. The Manager's duties include providing the Fund with the
services of the portfolio managers and the Manager's investment team, who
provide research, analysis and other advisory services in regard to the Fund's
investments; securities trading services; oversight of third party service
providers; monitoring compliance with applicable Fund policies and procedures
and adherence to the Fund's investment restrictions. The Manager is responsible
for providing certain administrative services to the Fund as well. Those
services include providing and supervising all administrative and clerical
personnel who are necessary in order to provide effective corporate
administration for the Fund; compiling and maintaining records with respect to
the Fund's operations; preparing and filing reports required by the Securities
and Exchange Commission; preparing periodic reports regarding the operations of
the Fund for its shareholders; preparing proxy materials for shareholder
meetings; and preparing the registration statements required by Federal and
state securities laws for the sale of the Fund's shares. The Manager also
provides the Fund with office space, facilities and equipment.
QUALITY OF SERVICES. The Board also considered the quality of the services
it expected to be provided by the Manager and the quality of the Manager's
resources that would be available to the Fund. The Board took account of the
fact that the Manager has had over forty years of experience as an investment
adviser and that its assets under management rank it among the top mutual fund
managers in the United States. The Board evaluated the Manager's administrative,
accounting, legal and compliance services, and information the Board has
received regarding the experience and professional qualifications of the
Manager's personnel and the size and functions of its staff. In its evaluation
of the quality
31 | OPPENHEIMER TRANSITION 2015 FUND
BOARD APPROVAL OF THE PORTFOLIO'S INVESTMENT
ADVISORY AGREEMENT Unaudited / Continued
- --------------------------------------------------------------------------------
of the portfolio management services to be provided, the Board considered the
experience of Rudi W. Schadt, Jerry A. Webman, and Kurt Wolfgruber, the
portfolio managers for the Fund and the experience of the portfolio managers,
and the investment performance of the investment companies in which the Fund may
invest (the "Underlying Funds"). The Board members also considered their
experiences with the Manager and its officers and other personnel through their
service on the boards of other funds advised by the Manager. The Board
considered information regarding the quality of services provided by affiliates
of the Manager, which its members have become knowledgeable about in connection
with the renewal of service agreements of other funds managed by the Manager. In
light of the foregoing, the Board concluded that the Fund would benefit from the
services to be provided under the Agreement and from the Manager's experience,
reputation, personnel, operations, and resources.
MANAGEMENT FEES AND EXPENSES. The Board reviewed the fees to be paid to
the Manager and its affiliates and the other expenses that would be borne by the
Fund. The Board also evaluated the comparability of the fees to be charged and
the services to be provided to the Fund to the fees and services for other
clients or accounts advised by the Manager. The Manager provided comparative
data in regard to the fees and anticipated expenses of the Fund and the fees and
expenses of other lifecycle funds-of-funds with a comparable target date. The
Board noted that under the Agreement, the Manager would not charge a management
fee to the Fund; however the Manager would collect indirect management fees
through the Fund's investments in the Underlying Funds. The Board took account
of the fees and expenses paid by the Underlying Funds and also noted that the
Manager would agree to voluntarily waive fees and/or reimburse the Fund for
certain expenses so that the Fund's "Total Annual Fund and Underlying Fund
Operating Expenses," as a percentage of average daily net assets, would not
exceed 1.50% for Class A, 2.25% for Class B and Class C, 1.75% for Class N, and
1.25% for Class Y shares and that the Manager may modify or terminate that
undertaking at any time without notice to shareholders.
ECONOMIES OF SCALE. The Board considered the extent to which the Manager
may realize economies of scale in managing and supporting the Fund and the
Underlying Funds, and the extent to which those economies of scale would benefit
the Fund's shareholders.
BENEFITS TO THE MANAGER. The Board considered information regarding the
Manager's estimated costs in serving as the Fund's investment adviser, including
the costs associated with the personnel and systems necessary to manage the
Fund, and information regarding the Manager's potential profitability from its
relationship with the Fund. The Board considered that the Manager must be able
to pay and retain experienced professional personnel at competitive rates to
provide services to the Fund and that maintaining the
32 | OPPENHEIMER TRANSITION 2015 FUND
financial viability of the Manager is important in order for the Manager to
provide significant services to the Fund and its shareholders. In addition, the
Board considered information regarding the direct and indirect benefits the
Manager may receive as a result of its relationship with the Fund, including
compensation paid to the Manager and its affiliates for services provided to the
Fund and to the Underlying Funds.
CONCLUSIONS. These factors were also considered by the independent
Trustees meeting separately from the full Board, assisted by experienced counsel
to the Fund and the independent Trustees. Fund counsel is independent of the
Manager within the meaning and intent of the Securities and Exchange Commission
Rules.
Based on its review of the information it received and its evaluations
described above, the Board, including a majority of the independent Trustees,
concluded that the nature, extent and quality of the services to be provided to
the Fund by the Manager would be a benefit to the Fund and in the best interest
of the Fund's shareholders and that the amount and structure of the compensation
to be received by the Manager and its affiliates are reasonable in relation to
the services to be provided. Accordingly, the Board approved the Agreement for
an initial period of two years. In arriving at this decision, the Board did not
single out any factor or factors as being more important than others, but
considered all of the factors together. The Board judged the terms and
conditions of the Agreement, including the management fee, in light of all of
the surrounding circumstances.
33 | OPPENHEIMER TRANSITION 2015 FUND
TRUSTEES AND OFFICERS Unaudited
- --------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
NAME, POSITION(S) HELD PRINCIPAL OCCUPATION(S) DURING THE PAST 5 YEARS; OTHER TRUSTEESHIPS/DIRECTORSHIPS HELD; NUMBER OF
WITH THE FUND, LENGTH OF PORTFOLIOS IN THE FUND COMPLEX CURRENTLY OVERSEEN
SERVICE, AGE
INDEPENDENT TRUSTEES THE ADDRESS OF EACH TRUSTEE IN THE CHART BELOW IS 6803 S. TUCSON WAY, CENTENNIAL, COLORADO
80112-3924. EACH TRUSTEE SERVES FOR AN INDEFINITE TERM, OR UNTIL HIS OR HER RESIGNATION,
RETIREMENT, DEATH OR REMOVAL.
BRIAN F. WRUBLE, General Partner of Odyssey Partners, L.P. (hedge fund) (since September 1995); Director of Special
Chairman of the Board of Value Opportunities Fund, LLC (registered investment company) (since September 2004); Investment
Trustees (since 2007) and Advisory Board Member of Zurich Financial Services (insurance) (since October 2004); Board of
Trustee (since 2006) Governing Trustees of The Jackson Laboratory (non-profit) (since August 1990); Trustee of the
Age: 64 Institute for Advanced Study (non-profit educational institute) (since May 1992); Special Limited
Partner of Odyssey Investment Partners, LLC (private equity investment) (January 1999-September
2004) and Managing Principal (1997-December 1998); Trustee of Research Foundation of AIMR
(2000-2002) (investment research, non-profit); Governor, Jerome Levy Economics Institute of Bard
College (August 1990-September 2001) (economics research); Director of Ray & Berendtson, Inc. (May
2000-April 2002) (executive search firm). Oversees 62 portfolios in the OppenheimerFunds complex.
MATTHEW P. FINK, Trustee of the Committee for Economic Development (policy research foundation) (since 2005);
Trustee (since 2006) Director of ICI Education Foundation (education foundation) (October 1991-August 2006); President
Age: 66 of the Investment Company Institute (trade association) (October 1991-June 2004); Director of ICI
Mutual Insurance Company (insurance company) (October 1991-June 2004). Oversees 52 portfolios in
the OppenheimerFunds complex.
ROBERT G. GALLI, A trustee or director of other Oppenheimer funds. Oversees 62 portfolios in the OppenheimerFunds
Trustee (since 2006) complex.
Age: 73
PHILLIP A. GRIFFITHS, Distinguished Presidential Fellow for International Affairs (since 2002) and Member (since 1979)
Trustee (since 2006) of the National Academy of Sciences; Council on Foreign Relations (since 2002); Director of GSI
Age: 68 Lumonics Inc. (precision medical equipment supplier) (since 2001); Senior Advisor of The Andrew
W. Mellon Foundation (since 2001); Chair of Science Initiative Group (since 1999); Member of the
American Philosophical Society (since 1996); Trustee of Woodward Academy (since 1983); Foreign
Associate of Third World Academy of Sciences; Director of the Institute for Advanced Study
(1991-2004); Director of Bankers Trust New York Corporation (1994-1999); Provost at Duke
University (1983-1991). Oversees 52 portfolios in the OppenheimerFunds complex.
MARY F. MILLER, Trustee of the American Symphony Orchestra (not-for-profit) (since October 1998); and Senior Vice
Trustee (since 2006) President and General Auditor of American Express Company (financial services company) (July
Age: 64 1998-February 2003). Oversees 52 portfolios in the OppenheimerFunds complex.
JOEL W. MOTLEY, Director of Columbia Equity Financial Corp. (privately-held financial adviser) (since 2002);
Trustee (since 2006) Managing Director of Carmona Motley, Inc. (privately-held financial adviser) (since January 2002);
Age: 54 Managing Director of Carmona Motley Hoffman Inc. (privately-held financial adviser) (January
1998-December 2001); Member of the Finance and Budget Committee of the Council on Foreign
Relations, the Investment Committee of the Episcopal Church of America, the Investment Committee
and Board of Human Rights Watch and the Investment Committee of Historic Hudson Valley. Oversees
52 portfolios in the OppenheimerFunds complex.
34 | OPPENHEIMER TRANSITION 2015 FUND
KENNETH A. RANDALL, Director of Dominion Resources, Inc. (electric utility holding company) (February 1972-October
Trustee (since 2006) 2005); Former Director of Prime Retail, Inc. (real estate investment trust), Dominion Energy Inc.
Age: 79 (electric power and oil & gas producer), Lumberman's Mutual Casualty Company, American Motorists
Insurance Company and American Manufacturers Mutual Insurance Company; Former President and Chief
Executive Officer of The Conference Board, Inc. (international economic and business research).
Oversees 52 portfolios in the OppenheimerFunds complex.
RUSSELL S. REYNOLDS, JR., Chairman of The Directorship Search Group, Inc. (corporate governance consulting and executive
Trustee (since 2006) recruiting) (since 1993); Life Trustee of International House (non-profit educational
Age: 75 organization); Founder, Chairman and Chief Executive Officer of Russell Reynolds Associates, Inc.
(1969-1993); Banker at J.P. Morgan & Co. (1958-1966); 1st Lt. Strategic Air Command, U.S. Air
Force (1954-1958). Oversees 52 portfolios in the OppenheimerFunds complex.
JOSEPH M. WIKLER, Director of the following medical device companies: Medintec (since 1992) and Cathco (since 1996);
Trustee (since 2006) Director of Lakes Environmental Association (since 1996); Member of the Investment Committee of
Age: 65 the Associated Jewish Charities of Baltimore (since 1994); Director of Fortis/Hartford mutual
funds (1994-December 2001). Oversees 52 portfolios in the OppenheimerFunds complex.
PETER I. WOLD, President of Wold Oil Properties, Inc. (oil and gas exploration and production company) (since
Trustee (since 2006) 1994); Vice President, Secretary and Treasurer of Wold Trona Company, Inc. (soda ash processing
Age: 59 and production) (since 1996); Vice President of Wold Talc Company, Inc. (talc mining) (since
1999); Managing Member of Hole-in-the-Wall Ranch (cattle ranching) (since 1979); Director and
Chairman of the Denver Branch of the Federal Reserve Bank of Kansas City (1993-1999); and Director
of PacifiCorp. (electric utility) (1995-1999). Oversees 52 portfolios in the OppenheimerFunds
complex.
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INTERESTED TRUSTEE AND THE ADDRESS OF MR. MURPHY IS TWO WORLD FINANCIAL CENTER, 225 LIBERTY STREET, 11TH FLOOR, NEW YORK,
OFFICER NEW YORK 10281-1008. MR. MURPHY SERVES AS A TRUSTEE FOR AN INDEFINITE TERM, OR UNTIL HIS
RESIGNATION, RETIREMENT, DEATH OR REMOVAL AND AS AN OFFICER FOR AN INDEFINITE TERM, OR UNTIL HIS
RESIGNATION, RETIREMENT, DEATH OR REMOVAL. MR. MURPHY IS AN INTERESTED TRUSTEE DUE TO HIS
POSITIONS WITH OPPENHEIMERFUNDS, INC. AND ITS AFFILIATES.
JOHN V. MURPHY, Chairman, Chief Executive Officer and Director of the Manager (since 2001); President of the
President and Principal Manager (September 2000-March 2007); President and a director or trustee of other Oppenheimer
Executive Officer and funds; President and Director of Oppenheimer Acquisition Corp. ("OAC") (the Manager's parent
Trustee (since 2006) holding company) and of Oppenheimer Partnership Holdings, Inc. (holding company subsidiary of the
Age: 57 Manager) (since July 2001); Director of OppenheimerFunds Distributor, Inc. (subsidiary of the
Manager) (since November 2001); Chairman and Director of Shareholder Services, Inc. and of
Shareholder Financial Services, Inc. (transfer agent subsidiaries of the Manager) (since July
2001); President and Director of OppenheimerFunds Legacy Program (charitable trust program
established by the Manager) (since July 2001); Director of the following investment advisory sub-
sidiaries of the Manager: OFI Institutional Asset Management, Inc., Centennial Asset Management
Corporation, Trinity Investment Management Corporation and Tremont Capital Management, Inc. (since
November 2001), HarbourView Asset Management Corporation and OFI Private Investments, Inc. (since
July 2001); President (since November 1, 2001) and Director (since July 2001) of Oppenheimer Real
Asset Management, Inc.; Executive Vice President of Massachusetts Mutual Life Insurance Company
(OAC's parent company) (since February 1997); Director of DLB Acquisition Corporation (holding
company parent
35 | OPPENHEIMER TRANSITION 2015 FUND
TRUSTEES AND OFFICERS Unaudited / Continued
- --------------------------------------------------------------------------------
JOHN V. MURPHY, of Babson Capital Management LLC) (since June 1995); Member of the Investment Company Institute's
(Continued) Board of Governors (since October 3, 2003); Chief Operating Officer of the Manager (September
2000-June 2001); President and Trustee of MML Series Investment Fund and MassMutual Select Funds
(open-end investment companies) (November 1999-November 2001); Director of C.M. Life Insurance
Company (September 1999-August 2000); President, Chief Executive Officer and Director of MML Bay
State Life Insurance Company (September 1999-August 2000); Director of Emerald Isle Bancorp and
Hibernia Savings Bank (wholly-owned subsidiary of Emerald Isle Bancorp) (June 1989-June 1998).
Oversees 99 portfolios in the OppenheimerFunds complex.
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OTHER OFFICERS OF THE FUND THE ADDRESSES OF THE OFFICERS IN THE CHART BELOW ARE AS FOLLOWS: FOR MESSRS. SCHADT, WEBMAN,
WOLFGRUBER, ZACK, GILLESPIE AND MS. BLOOMBERG, TWO WORLD FINANCIAL CENTER, 225 LIBERTY STREET, NEW
YORK, NEW YORK 10281-1008, FOR MESSRS. VANDEHEY, WIXTED, PETERSEN, SZILAGYI AND MS. IVES, 6803 S.
TUCSON WAY, CENTENNIAL, COLORADO 80112-3924. EACH OFFICER SERVES FOR AN INDEFINITE TERM OR UNTIL
HIS OR HER RESIGNATION, RETIREMENT, DEATH OR REMOVAL.
RUDI W. SCHADT, Vice President, Director of Research in Product Design and Risk Management of the Manager. Prior to
Vice President and joining the Manager in February 2002 he was a Director and Senior Quantitative Analyst (2000-2001)
Portfolio Manager at UBS Asset Management prior to which he was an Associate Director of Research (since June 1999)
(since 2006) and Senior Researcher and Portfolio Manager (from June 1997) at State Street Global Advisors. An
Age: 49 officer of 11 portfolios in the OppenheimerFunds complex.
DR. JERRY A. WEBMAN, Chief economist of the Manager (since 2006); Senior Vice President (since February 1996) and Senior
Vice President and Investment Officer and Director (since 1997) of the Manager's Fixed Income Investments; Senior Vice
Portfolio Manager President (since May 1999) of HarbourView Asset Management Corporation. An officer of 8 portfolios
(since 2006) in the OppenheimerFunds complex.
Age: 57
KURT WOLFGRUBER, President (since March 2007) and Chief Investment Officer and Director (since July 2003) of the
Vice President and Manager; Executive Vice President of the Manager (March 2003-March 2007); Director of HarbourView
Portfolio Manager Asset Management Corporation and of OFI Institutional Asset Management, Inc. (since June 2003) and
(since 2006) of Tremont Capital Management, Inc. (since October 2001). An officer of 8 portfolios in the
Age: 56 OppenheimerFunds complex.
MARK S. VANDEHEY, Senior Vice President and Chief Compliance Officer of the Manager (since March 2004); Vice
Vice President and Chief President of OppenheimerFunds Distributor, Inc., Centennial Asset Management Corporation and
Compliance Officer Shareholder Services, Inc. (since June 1983). Former Vice President and Director of Internal Audit
(since 2006) of the Manager (1997-February 2004). An officer of 99 portfolios in the OppenheimerFunds complex.
Age: 56
BRIAN W. WIXTED, Senior Vice President and Treasurer of the Manager (since March 1999); Treasurer of the following:
Treasurer and Principal HarbourView Asset Management Corporation, Shareholder Financial Services, Inc., Shareholder
Financial & Accounting Services, Inc., Oppenheimer Real Asset Management Corporation, and Oppenheimer Partnership
Officer (since 2006) Holdings, Inc. (since March 1999), OFI Private Investments, Inc. (since March 2000),
Age: 47 OppenheimerFunds International Ltd. (since May 2000), OppenheimerFunds plc (since May 2000), OFI
Institutional Asset Management, Inc. (since November 2000), and OppenheimerFunds Legacy Program
(charitable trust program established by the Manager) (since June 2003); Treasurer and Chief
Financial Officer of OFI Trust Company (trust company subsidiary of the Manager) (since May 2000);
Assistant Treasurer of the following: OAC (since March 1999), Centennial Asset Management
Corporation (March 1999-October 2003) and OppenheimerFunds Legacy Program (April 2000-June 2003);
Principal and Chief Operating Officer of Bankers Trust Company-Mutual Fund Services Division (March
1995-March 1999). An officer of 99 portfolios in the OppenheimerFunds complex.
36 | OPPENHEIMER TRANSITION 2015 FUND
BRIAN S. PETERSEN, Vice President of the Manager (since February 2007); Assistant Vice President of the Manager
Assistant Treasurer (August 2002-February 2007); Manager/Financial Product Accounting of the Manager (November
(since 2006) 1998-July 2002). An officer of 99 portfolios in the OppenheimerFunds complex.
Age: 36
BRIAN C. SZILAGYI, Assistant Vice President of the Manager (since July 2004); Director of Financial Reporting and
Assistant Treasurer Compliance of First Data Corporation (April 2003-July 2004); Manager of Compliance of Berger
(since 2006) Financial Group LLC (May 2001-March 2003); Director of Mutual Fund Operations at American Data
Age: 37 Services, Inc. (September 2000-May 2001). An officer of 99 portfolios in the OppenheimerFunds
complex.
ROBERT G. ZACK, Executive Vice President (since January 2004) and General Counsel (since March 2002) of the
Secretary (since 2006) Manager; General Counsel and Director of the Distributor (since December 2001); General Counsel of
Age: 58 Centennial Asset Management Corporation (since December 2001); Senior Vice President and General
Counsel of Harbour-View Asset Management Corporation (since December 2001); Secretary and General
Counsel of OAC (since November 2001); Assistant Secretary (since September 1997) and Director
(since November 2001) of OppenheimerFunds International Ltd. and OppenheimerFunds plc; Vice
President and Director of Oppenheimer Partnership Holdings, Inc. (since December 2002); Director of
Oppenheimer Real Asset Management, Inc. (since November 2001); Senior Vice President, General
Counsel and Director of Shareholder Financial Services, Inc. and Shareholder Services, Inc. (since
December 2001); Senior Vice President, General Counsel and Director of OFI Private Investments,
Inc. and OFI Trust Company (since November 2001); Vice President of OppenheimerFunds Legacy Program
(since June 2003); Senior Vice President and General Counsel of OFI Institutional Asset Management,
Inc. (since November 2001); Director of OppenheimerFunds (Asia) Limited (since December 2003);
Senior Vice President (May 1985-December 2003), Acting General Counsel (November 2001-February
2002) and Associate General Counsel (May 1981-October 2001) of the Manager; Assistant Secretary of
the following: Shareholder Services, Inc. (May 1985-November 2001), Shareholder Financial Services,
Inc. (November 1989-November 2001), and OppenheimerFunds International Ltd. (September
1997-November 2001). An officer of 99 portfolios in the OppenheimerFunds complex.
LISA I. BLOOMBERG, Vice President and Associate Counsel of the Manager (since May 2004); First Vice President (April
Assistant Secretary 2001-April 2004), Associate General Counsel (December 2000-April 2004), Corporate Vice President
(since 2006) (May 1999-April 2001) and Assistant General Counsel (May 1999-December 2000) of UBS Financial
Age: 39 Services Inc. (formerly, PaineWebber Incorporated). An officer of 99 portfolios in the
OppenheimerFunds complex.
KATHLEEN T. IVES, Vice President (since June 1998) and Senior Counsel and Assistant Secretary (since October 2003) of
Assistant Secretary the Manager; Vice President (since 1999) and Assistant Secretary (since October 2003) of the
(since 2006) Distributor; Assistant Secretary of Centennial Asset Management Corporation (since October 2003);
Age: 41 Vice President and Assistant Secretary of Shareholder Services, Inc. (since 1999); Assistant
Secretary of OppenheimerFunds Legacy Program and Shareholder Financial Services, Inc. (since
December 2001); Assistant Counsel of the Manager (August 1994-October 2003). An officer of 99
portfolios in the OppenheimerFunds complex.
PHILLIP S. GILLESPIE, Senior Vice President and Deputy General Counsel of the Manager (since September 2004); First Vice
Assistant Secretary President (2001-September 2004); Director (2000-September 2004) and Vice President (1998-2000) of
(since 2006) Merrill Lynch Investment Management. An officer of 99 portfolios in the OppenheimerFunds complex.
Age: 43
THE FUND'S STATEMENT OF ADDITIONAL INFORMATION CONTAINS ADDITIONAL INFORMATION
ABOUT THE FUND'S TRUSTEES AND OFFICERS AND IS AVAILABLE WITHOUT CHARGE UPON
REQUEST, BY CALLING 1.800.525.7048.
37 | OPPENHEIMER TRANSITION 2015 FUND
ITEM 2. CODE OF ETHICS.
The registrant has adopted a code of ethics that applies to the registrant's
principal executive officer, principal financial officer, principal accounting
officer or controller or persons performing similar functions.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
The Board of Trustees of the registrant has determined that the registrant does
not have an audit committee financial expert serving on its Audit Committee. In
this regard, no member of the Audit Committee was identified as having all of
the technical attributes identified in Instruction 2(b) to Item 3 of Form N-CSR
to qualify as an "audit committee financial expert," whether through the type of
specialized education or experience described in that Instruction. The Board has
concluded that while the members of the Audit Committee collectively have the
necessary attributes and experience required to serve effectively as an Audit
Committee, no single member possesses all of the required technical attributes
through the particular methods of education or experience set forth in the
Instructions to be designated as an audit committee financial expert.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
(a) Audit Fees
The principal accountant for the audit of the registrant's annual financial
statements billed $16,500 in fiscal 2007 and no such fees in fiscal 2006.
(b) Audit-Related Fees
The principal accountant for the audit of the registrant's annual financial
statements billed $1,750 in fiscal 2007 and no such fees in fiscal 2006.
The principal accountant for the audit of the registrant's annual financial
statements billed no such fees during the last two fiscal years to the
registrant's investment adviser or any entity controlling, controlled by, or
under common control with the adviser that provides ongoing services to the
registrant.
Such services include: Seed balance sheet audit.
(c) Tax Fees
The principal accountant for the audit of the registrant's annual financial
statements billed no such fees to the registrant during the last two fiscal
years.
The principal accountant for the audit of the registrant's annual financial
statements billed no such fees during the last two fiscal years to the
registrant's investment adviser or any entity controlling, controlled by, or
under common control with the adviser that provides ongoing services to the
registrant.
(d) All Other Fees
The principal accountant for the audit of the registrant's annual financial
statements billed no such fees during the last two fiscal years.
The principal accountant for the audit of the registrant's annual financial
statements billed no such fees during the last two fiscal years to the
registrant's investment adviser or any entity controlling, controlled by, or
under common control with the adviser that provides ongoing services to the
registrant.
(e) (1) During its regularly scheduled periodic meetings, the registrant's
audit committee will pre-approve all audit, audit-related, tax and
other services to be provided by the principal accountants of the
registrant.
The audit committee has delegated pre-approval authority to its
Chairman for any subsequent new engagements that arise between
regularly scheduled meeting dates provided that any fees such
pre-approved are presented to the audit committee at its next regularly
scheduled meeting.
Under applicable laws, pre-approval of non-audit services maybe waived
provided that: 1) the aggregate amount of all such services provided
constitutes no more than five percent of the total amount of fees paid
by the registrant to it principal accountant during the fiscal year in
which services are provided 2) such services were not recognized by the
registrant at the time of engagement as non-audit services and 3) such
services are promptly brought to the attention of the audit committee
of the registrant and approved prior to the completion of the audit.
(2) 100%
(f) Not applicable as less than 50%.
(g) The principal accountant for the audit of the registrant's annual
financial statements billed $1,750 in fiscal 2007 and no such fees
during fiscal 2006 to the registrant and the registrant's investment
adviser or any entity controlling, controlled by, or under common
control with the adviser that provides ongoing services to the
registrant related to non-audit fees. Those billings did not include
any prohibited non-audit services as defined by the Securities Exchange
Act of 1934.
(h) No such services were rendered.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS
Not applicable.
ITEM 6. SCHEDULE OF INVESTMENTS.
Not applicable.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not applicable.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
THE FUND'S GOVERNANCE COMMITTEE PROVISIONS WITH RESPECT TO NOMINATIONS OF
DIRECTORS/TRUSTEES TO THE RESPECTIVE BOARDS
1. The Fund's Governance Committee (the "Committee") will evaluate potential
Board candidates to assess their qualifications. The Committee shall have
the authority, upon approval of the Board, to retain an executive search
firm to assist in this effort. The Committee may consider recommendations
by business and personal contacts of current Board members and by
executive search firms which the Committee may engage from time to time
and may also consider shareholder recommendations. The Committee may
consider the advice and recommendation of the Funds' investment manager
and its affiliates in making the selection.
2. The Committee shall screen candidates for Board membership. The Committee
has not established specific qualifications that it believes must be met
by a trustee nominee. In evaluating trustee nominees, the Committee
considers, among other things, an individual's background, skills, and
experience; whether the individual is an "interested person" as defined
in the Investment Company Act of 1940; and whether the individual would
be deemed an "audit committee financial expert" within the meaning of
applicable SEC rules. The Committee also considers whether the
individual's background, skills, and experience will complement the
background, skills, and experience of other nominees and will contribute
to the Board. There are no differences in the manner in which the
Committee evaluates nominees for trustees based on whether the nominee is
recommended by a shareholder.
3. The Committee may consider nominations from shareholders for the Board at
such times as the Committee meets to consider new nominees for the Board.
The Committee shall have the sole discretion to determine the candidates
to present to the Board and, in such cases where required, to
shareholders. Recommendations for trustee nominees should, at a minimum,
be accompanied by the following:
o the name, address, and business, educational, and/or other pertinent
background of the person being recommended;
o a statement concerning whether the person is an "interested person" as
defined in the Investment Company Act of 1940;
o any other information that the Funds would be required to include in a
proxy statement concerning the person if he or she was nominated; and
o the name and address of the person submitting the recommendation and,
if that person is a shareholder, the period for which that person held
Fund shares.
The recommendation also can include any additional information which the
person submitting it believes would assist the Committee in evaluating
the recommendation.
4. Shareholders should note that a person who owns securities issued by
Massachusetts Mutual Life Insurance Company (the parent company of the
Funds' investment adviser) would be deemed an "interested person" under
the Investment Company Act of 1940. In addition, certain other
relationships with Massachusetts Mutual Life Insurance Company or its
subsidiaries, with registered broker-dealers, or with the Funds' outside
legal counsel may cause a person to be deemed an "interested person."
5. Before the Committee decides to nominate an individual as a trustee,
Committee members and other directors customarily interview the
individual in person. In addition, the individual customarily is asked to
complete a detailed questionnaire which is designed to elicit information
which must be disclosed under SEC and stock exchange rules and to
determine whether the individual is subject to any statutory
disqualification from serving as a trustee of a registered investment
company.
ITEM 11. CONTROLS AND PROCEDURES.
Based on their evaluation of the registrant's disclosure controls and procedures
(as defined in rule 30a-3(c) under the Investment Company Act of 1940 (17 CFR
270.30a-3(c)) as of February 28, 2007, the registrant's principal executive
officer and principal financial officer found the registrant's disclosure
controls and procedures to provide reasonable assurances that information
required to be disclosed by the 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.
There have been no changes in the registrant's internal controls over financial
reporting that occurred during the registrant's second fiscal quarter of the
period covered by this report that have materially affected, or are reasonably
likely to materially affect, the registrant's internal control over financial
reporting.
ITEM 12. EXHIBITS.
(a) (1) Exhibit attached hereto.
(2) Exhibits attached hereto.
(3) Not applicable.
(b) Exhibit attached hereto.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
Oppenheimer Transition 2015 Fund
By: /s/John V. Murphy
---------------------------
John V. Murphy
Principal Executive Officer
Date: April 10, 2007
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By: /s/John V. Murphy
---------------------------
John V. Murphy
Principal Executive Officer
Date: April 10, 2007
By: /s/Brian W. Wixted
---------------------------
Brian W. Wixted
Principal Financial Officer
Date: April 10, 2007