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 811-08297
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Oppenheimer MidCap Fund
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(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: October 31
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Date of reporting period: 10/31/2007
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ITEM 1. REPORTS TO STOCKHOLDERS.
TOP HOLDINGS AND ALLOCATIONS
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TOP TEN COMMON STOCK INDUSTRIES
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Specialty Retail 6.2%
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IT Services 5.5
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Software 5.5
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Capital Markets 5.3
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Aerospace & Defense 5.0
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Commercial Services & Supplies 4.9
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Media 4.9
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Health Care Providers & Services 4.6
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Health Care Equipment & Supplies 4.2
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Wireless Telecommunication Services 3.9
Portfolio holdings and allocations are subject to change. Percentages are as of
October 31, 2007, and are based on net assets.
TOP TEN COMMON STOCK HOLDINGS
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Covance, Inc. 3.2%
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Polo Ralph Lauren Corp., Cl. A 2.8
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Cerner Corp. 2.5
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IDEXX Laboratories, Inc. 2.5
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Crown Castle International Corp. 2.5
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Coventry Health Care, Inc. 2.3
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FactSet Research Systems, Inc. 2.2
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Las Vegas Sands Corp. 2.2
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Stericycle, Inc. 2.2
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Affiliated Managers Group, Inc. 2.2
Portfolio holdings and allocations are subject to change. Percentages are as of
October 31, 2007, and are based on net assets. For up-to-date Top 10 Fund
Holdings, please visit www.oppenheimerfunds.com.
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8 | OPPENHEIMER MIDCAP FUND
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SECTOR ALLOCATION
[THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.]
Information Technology 21.1%
Consumer Discretionary 20.1
Health Care 16.1
Industrials 14.9
Financials 11.5
Energy 6.5
Materials 4.5
Telecommunication Services 4.0
Utilities 1.3
Portfolio holdings and allocations are subject to change. Percentages are as of
October 31, 2007, and are based on the total market value of common stocks.
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9 | OPPENHEIMER MIDCAP 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 OCTOBER 31, 2007, FOLLOWED
BY A GRAPHICAL COMPARISON OF THE FUND'S PERFORMANCE TO AN APPROPRIATE
BROAD-BASED MARKET INDEX.
MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE. For the 12-month period ending
October 31, 2007, Oppenheimer MidCap Fund produced positive absolute results but
underperformed its benchmark, the S&P MidCap 400 Index. We attribute a majority
of the underperformance to an unfavorable overweight position combined with weak
stock selection in the financials sector. Unsuccessful stock selection in the
industrials and materials sectors also hurt Fund results.
In contrast, the Fund benefited from very strong stock selection in the
consumer discretionary sector, despite maintaining an underweight position in
the sector over the period. Additionally, the Fund advanced on the positive
performance generated by individual stocks in such sectors as health care,
energy and information technology.
Over the period a management change occurred. John O'Hare managed the Fund
through June 4, 2007. Effective June 5, 2007, Richard Royce was named portfolio
manager and is principally responsible for the day-to-day management of the
Fund's investments. Richard Royce joined OppenheimerFunds in May 2007. Prior to
joining OppenheimerFunds, Mr. Royce worked at JPMorgan Asset Management as a
vice president and co-portfolio manager of the America Equity Fund. During his
almost 9-year tenure at JPMorgan, Mr. Royce also worked as a technology and
media analyst. Prior to JPMorgan Asset Management, Mr. Royce worked as an
analyst at Mark Asset Management, focusing on technology and real estate.
In light of the management change, we would like to highlight our
investment process for shareholders. We follow a bottom-up, research-driven
stock selection process, meaning we emphasize company and industry analysis and
de-emphasize macroeconomic analysis. The team's investment process focuses on
identifying companies with sustainable competitive positioning and large
addressable markets, management teams committed to increasing intrinsic value
per share, and whose valuation does not reflect these factors.
On a relative basis, the Fund's weakest performing sectors were the
financials, industrials and materials. Within the financials sector,
disappointing stock selection combined with an overweight position served as the
major source of the Fund's relative underperformance. In general, the operating
environment for many financial stocks was difficult given the flat to inverted
slope of the yield curve and turmoil in the debt markets.
As a result of this tough environment, many of the Fund's financial
holdings were hurt. Top detractors included Ambac Financial Group, Inc.,
commercial real estate management and development companies Jones Lang LaSalle,
Inc. and CB Richard Ellis Group, Inc. and three
10 | OPPENHEIMER MIDCAP FUND
regional banks. We have reduced our positions in all three regional banks
because we believed that their valuations were too high relative to the risks
and growth rates seen in the market.
In terms of the industrials and materials sectors, the Fund's
underperformance can be attributed to not owning the export-oriented, cyclical
companies which outperformed during the period. As a general rule, the Fund
tends to be underweight in cyclical and commodity-oriented sectors because these
areas of the market tend to lack the fundamental growth qualities we look for
when investing. Given this, the Fund did not participate in the strong gains
posted by many companies in the industrials and materials sectors.
The Fund's best relative gains were achieved by holdings within the
consumer discretionary sector. The top performing security within the sector,
and for the Fund in general, was Las Vegas Sands Corp., a hotel, gaming and
resort development company. Concern over the company's new property in China
prevented the market from fully recognizing the value in the company's other
properties, which resulted in our view of an undervaluation in its stock price.
However, as the company's strong fundamentals became apparent to investors, its
stock price rapidly increased. Other contributors included Tiffany & Co. and
GameStop Corp. The outperformance by specialty retailer Tiffany & Co. was driven
by the successful outcome of its reorganization which resulted in better growth
in its retail operations, accelerated store openings and improved operating
margins. GameStop, one of the largest retailers of new and used video games and
hardware and entertainment software, benefited from its competitive positioning
within its marketplace which drove its stock price up.
The Fund also benefited from the strong absolute performance generated by
individual holdings within the industrials, health care, energy and information
technology sectors. In the industrials sector, Stericycle, Inc., the large
domestic medical waste treatment and disposal company, posted strong absolute
returns. Stericycle's favorable results can be attributed to its strong
management team, which led the company to post profitable financial results.
Within the health care sector, Covance, Inc., a contract resource organization
that develops and carries out preclinical and clinical trials of potential
commercial drugs for pharmaceutical companies, benefited from a trend within the
industry to outsource such work.
Despite an underweight position in the energy sector, the Fund
significantly outpaced its benchmark. We attribute the outperformance to strong
stock selection. Leading the group was Smith International, Inc., a supplier of
products and services to the oil and gas exploration and production industry. As
global demand for oil grows, energy companies have increased capital spending on
equipment supplies and services in order to uncover more reserves benefiting
companies like Smith International. In the information technology
11 | OPPENHEIMER MIDCAP FUND
FUND PERFORMANCE DISCUSSION
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sector, the top performer was Trimble Navigation Ltd. The company, which makes
navigation systems and software based on the global positioning system (GPS)
satellite network, advanced on growing demand for its products.
MID-CAP STOCKS TEND TO BE MORE SENSITIVE TO CHANGES IN EARNINGS
EXPECTATIONS, AND TEND TO HAVE LOWER TRADING VOLUMES THAN LARGE-CAP SECURITIES,
AND THEREFORE THEY MAY EXPERIENCE MORE ABRUPT AND ERRATIC PRICE MOVEMENTS.
COMPARING THE FUND'S PERFORMANCE TO THE MARKET. The graphs that follow
show the performance of a hypothetical $10,000 investment in each class of
shares of the Fund held until October 31, 2007. In the case of Class A, Class B,
Class C and Class Y shares, performance is measured from the inception of each
Class on December 1, 1997. In the case of Class N shares, performance is
measured from inception of the Class on March 1, 2001. The Fund's performance
reflects the deduction of the maximum initial sales charge on Class A shares,
the applicable contingent deferred sales charge on Class B, Class C and Class N
shares, and reinvestments of all dividends and capital gains distributions. Past
performance cannot guarantee future results.
The Fund's performance is compared to that of the S&P MidCap 400 Index and
the Russell Midcap(R) Growth Index. The S&P MidCap 400 Index is an unmanaged
index of 400 domestic stocks chosen for market size liquidity, and industry
group representation. The Russell Midcap Growth Index is an unmanaged index that
measures the performance of those Russell Midcap companies with higher
price-to-book ratios and higher forecasted growth values. The stocks are also
members of the Russell 1000 Growth Index, as ranked by total market
capitalization. Index performance reflects the reinvestment of income but does
not consider the effect of transaction costs, and none of the data in the graphs
shows the effect of taxes. The Fund's performance reflects the effects of the
Fund's business and operating expenses. While index comparisons may be useful to
provide a benchmark for the Fund's performance, it must be noted that the Fund's
investments are not limited to the investments in the index.
12 | OPPENHEIMER MIDCAP FUND
CLASS A SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer MidCap Fund (Class A)
S&P MidCap 400 Index
Russell Midcap Growth Index
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]
Oppenheimer Russell Midcap
MidCap Fund (Class A) S&P MidCap 400 Index Growth Index
12/01/1997 $ 9,425 $ 10,000 $ 10,000
01/31/1998 $ 9,519 $ 10,190 $ 9,949
04/30/1998 $ 12,271 $ 11,743 $ 11,494
07/31/1998 $ 11,744 $ 10,848 $ 10,848
10/31/1998 $ 10,207 $ 10,515 $ 10,137
01/31/1999 $ 13,390 $ 11,892 $ 12,299
04/30/1999 $ 14,636 $ 12,498 $ 12,912
07/31/1999 $ 16,382 $ 12,943 $ 13,201
10/31/1999 $ 18,760 $ 12,731 $ 13,954
01/31/2000 $ 25,875 $ 13,795 $ 18,062
04/30/2000 $ 27,564 $ 15,438 $ 19,758
07/31/2000 $ 29,716 $ 15,713 $ 18,978
10/31/2000 $ 28,697 $ 16,760 $ 19,351
01/31/2001 $ 23,903 $ 17,052 $ 16,854
04/30/2001 $ 16,901 $ 16,525 $ 13,935
07/31/2001 $ 15,618 $ 16,591 $ 12,941
10/31/2001 $ 13,608 $ 14,674 $ 11,072
01/31/2002 $ 13,910 $ 16,493 $ 12,317
04/30/2002 $ 13,419 $ 17,611 $ 11,844
07/31/2002 $ 11,201 $ 14,491 $ 9,229
10/31/2002 $ 10,786 $ 13,972 $ 9,122
01/31/2003 $ 10,182 $ 13,759 $ 9,151
04/30/2003 $ 10,871 $ 14,528 $ 9,870
07/31/2003 $ 12,617 $ 16,498 $ 11,366
10/31/2003 $ 13,183 $ 18,266 $ 12,707
01/31/2004 $ 13,230 $ 19,638 $ 13,625
04/30/2004 $ 13,608 $ 19,532 $ 13,436
07/31/2004 $ 13,400 $ 19,440 $ 13,047
10/31/2004 $ 14,193 $ 20,283 $ 13,821
01/31/2005 $ 15,155 $ 21,819 $ 14,823
04/30/2005 $ 14,664 $ 21,434 $ 14,384
07/31/2005 $ 16,637 $ 24,473 $ 16,394
10/31/2005 $ 16,571 $ 23,863 $ 16,019
01/31/2006 $ 18,033 $ 26,686 $ 18,096
04/30/2006 $ 18,411 $ 27,505 $ 18,451
07/31/2006 $ 16,608 $ 25,521 $ 16,883
10/31/2006 $ 17,618 $ 27,067 $ 18,344
01/31/2007 $ 18,203 $ 28,812 $ 19,580
04/30/2007 $ 18,496 $ 30,309 $ 20,503
07/31/2007 $ 18,533 $ 29,792 $ 20,496
10/31/2007 $ 20,053 $ 31,674 $ 21,961
AVERAGE ANNUAL TOTAL RETURNS OF CLASS A SHARES WITH SALES CHARGE OF THE FUND AT
10/31/07
1-Year 7.27% 5-Year 11.87% Since Inception (12/1/97) 7.27%
THE PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE, WHICH DOES NOT
GUARANTEE FUTURE RESULTS. THE INVESTMENT RETURN AND PRINCIPAL VALUE OF AN
INVESTMENT IN THE FUND WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN
REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT
PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE QUOTED. FOR PERFORMANCE
DATA CURRENT TO THE MOST RECENT MONTH END, VISIT US AT WWW.OPPENHEIMERFUNDS.COM,
OR CALL US AT 1.800.525.7048. FUND RETURNS INCLUDE CHANGES IN SHARE PRICE,
REINVESTED DISTRIBUTIONS, AND THE APPLICABLE SALES CHARGE: FOR CLASS A SHARES,
THE CURRENT MAXIMUM INITIAL SALES CHARGE OF 5.75%; FOR CLASS B SHARES, THE
CONTINGENT DEFERRED SALES CHARGE OF 5% (1-YEAR) AND 2% (5-YEAR); AND FOR CLASS C
AND N SHARES, THE CONTINGENT 1% DEFERRED SALES CHARGE FOR THE 1-YEAR PERIOD.
THERE IS NO SALES CHARGE FOR CLASS Y SHARES. BECAUSE CLASS B SHARES CONVERT TO
CLASS A SHARES 72 MONTHS AFTER PURCHASE, THE "SINCE INCEPTION" RETURN FOR CLASS
B USES CLASS A PERFORMANCE FOR THE PERIOD AFTER CONVERSION. SEE PAGE 18 FOR
FURTHER INFORMATION.
13 | OPPENHEIMER MIDCAP FUND
FUND PERFORMANCE DISCUSSION
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CLASS B SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer MidCap Fund (Class B)
S&P MidCap 400 Index
Russell Midcap Growth Index
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]
Oppenheimer Russell Midcap
MidCap Fund (Class B) S&P MidCap 400 Index Growth Index
12/01/1997 $ 10,000 $ 10,000 $ 10,000
01/31/1998 $ 10,080 $ 10,190 $ 9,949
04/30/1998 $ 12,980 $ 11,743 $ 11,494
07/31/1998 $ 12,390 $ 10,848 $ 10,848
10/31/1998 $ 10,770 $ 10,515 $ 10,137
01/31/1999 $ 14,097 $ 11,892 $ 12,299
04/30/1999 $ 15,379 $ 12,498 $ 12,912
07/31/1999 $ 17,181 $ 12,943 $ 13,201
10/31/1999 $ 19,644 $ 12,731 $ 13,954
01/31/2000 $ 27,043 $ 13,795 $ 18,062
04/30/2000 $ 28,766 $ 15,438 $ 19,758
07/31/2000 $ 30,948 $ 15,713 $ 18,978
10/31/2000 $ 29,827 $ 16,760 $ 19,351
01/31/2001 $ 24,801 $ 17,052 $ 16,854
04/30/2001 $ 17,502 $ 16,525 $ 13,935
07/31/2001 $ 16,150 $ 16,591 $ 12,941
10/31/2001 $ 14,037 $ 14,674 $ 11,072
01/31/2002 $ 14,318 $ 16,493 $ 12,317
04/30/2002 $ 13,787 $ 17,611 $ 11,844
07/31/2002 $ 11,494 $ 14,491 $ 9,229
10/31/2002 $ 11,034 $ 13,972 $ 9,122
01/31/2003 $ 10,393 $ 13,759 $ 9,151
04/30/2003 $ 11,084 $ 14,528 $ 9,870
07/31/2003 $ 12,846 $ 16,498 $ 11,366
10/31/2003 $ 13,387 $ 18,266 $ 12,707
01/31/2004 $ 13,431 $ 19,638 $ 13,625
04/30/2004 $ 13,815 $ 19,532 $ 13,436
07/31/2004 $ 13,604 $ 19,440 $ 13,047
10/31/2004 $ 14,409 $ 20,283 $ 13,821
01/31/2005 $ 15,386 $ 21,819 $ 14,823
04/30/2005 $ 14,888 $ 21,434 $ 14,384
07/31/2005 $ 16,890 $ 24,473 $ 16,394
10/31/2005 $ 16,823 $ 23,863 $ 16,019
01/31/2006 $ 18,308 $ 26,686 $ 18,096
04/30/2006 $ 18,691 $ 27,505 $ 18,451
07/31/2006 $ 16,861 $ 25,521 $ 16,883
10/31/2006 $ 17,886 $ 27,067 $ 18,344
01/31/2007 $ 18,480 $ 28,812 $ 19,580
04/30/2007 $ 18,777 $ 30,309 $ 20,503
07/31/2007 $ 18,815 $ 29,792 $ 20,496
10/31/2007 $ 20,358 $ 31,674 $ 21,961
AVERAGE ANNUAL TOTAL RETURNS OF CLASS B SHARES WITH SALES CHARGE OF THE FUND AT
10/31/07
1-Year 8.05% 5-Year 12.12% Since Inception (12/1/97) 7.43%
14 | OPPENHEIMER MIDCAP FUND
CLASS C SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer MidCap Fund (Class C)
S&P MidCap 400 Index
Russell Midcap Growth Index
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]
Oppenheimer Russell Midcap
MidCap Fund (Class C) S&P MidCap 400 Index Growth Index
12/01/1997 $ 10,000 $ 10,000 $ 10,000
01/31/1998 $ 10,090 $ 10,190 $ 9,949
04/30/1998 $ 12,980 $ 11,743 $ 11,494
07/31/1998 $ 12,400 $ 10,848 $ 10,848
10/31/1998 $ 10,760 $ 10,515 $ 10,137
01/31/1999 $ 14,087 $ 11,892 $ 12,299
04/30/1999 $ 15,369 $ 12,498 $ 12,912
07/31/1999 $ 17,171 $ 12,943 $ 13,201
10/31/1999 $ 19,624 $ 12,731 $ 13,954
01/31/2000 $ 27,023 $ 13,795 $ 18,062
04/30/2000 $ 28,746 $ 15,438 $ 19,758
07/31/2000 $ 30,938 $ 15,713 $ 18,978
10/31/2000 $ 29,817 $ 16,760 $ 19,351
01/31/2001 $ 24,791 $ 17,052 $ 16,854
04/30/2001 $ 17,492 $ 16,525 $ 13,935
07/31/2001 $ 16,140 $ 16,591 $ 12,941
10/31/2001 $ 14,037 $ 14,674 $ 11,072
01/31/2002 $ 14,318 $ 16,493 $ 12,317
04/30/2002 $ 13,787 $ 17,611 $ 11,844
07/31/2002 $ 11,484 $ 14,491 $ 9,229
10/31/2002 $ 11,034 $ 13,972 $ 9,122
01/31/2003 $ 10,393 $ 13,759 $ 9,151
04/30/2003 $ 11,084 $ 14,528 $ 9,870
07/31/2003 $ 12,846 $ 16,498 $ 11,366
10/31/2003 $ 13,387 $ 18,266 $ 12,707
01/31/2004 $ 13,407 $ 19,638 $ 13,625
04/30/2004 $ 13,767 $ 19,532 $ 13,436
07/31/2004 $ 13,527 $ 19,440 $ 13,047
10/31/2004 $ 14,308 $ 20,283 $ 13,821
01/31/2005 $ 15,239 $ 21,819 $ 14,823
04/30/2005 $ 14,728 $ 21,434 $ 14,384
07/31/2005 $ 16,671 $ 24,473 $ 16,394
10/31/2005 $ 16,580 $ 23,863 $ 16,019
01/31/2006 $ 18,002 $ 26,686 $ 18,096
04/30/2006 $ 18,343 $ 27,505 $ 18,451
07/31/2006 $ 16,520 $ 25,521 $ 16,883
10/31/2006 $ 17,492 $ 27,067 $ 18,344
01/31/2007 $ 18,042 $ 28,812 $ 19,580
04/30/2007 $ 18,303 $ 30,309 $ 20,503
07/31/2007 $ 18,303 $ 29,792 $ 20,496
10/31/2007 $ 19,765 $ 31,674 $ 21,961
AVERAGE ANNUAL TOTAL RETURNS OF CLASS C SHARES WITH SALES CHARGE OF THE FUND AT
10/31/07
1-Year 11.99% 5-Year 12.37% Since Inception (12/1/97) 7.11%
THE PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE, WHICH DOES NOT
GUARANTEE FUTURE RESULTS. THE INVESTMENT RETURN AND PRINCIPAL VALUE OF AN
INVESTMENT IN THE FUND WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN
REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT
PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE QUOTED. FOR PERFORMANCE
DATA CURRENT TO THE MOST RECENT MONTH END, VISIT US AT WWW.OPPENHEIMERFUNDS.COM,
OR CALL US AT 1.800.525.7048. FUND RETURNS INCLUDE CHANGES IN SHARE PRICE,
REINVESTED DISTRIBUTIONS, AND THE APPLICABLE SALES CHARGE: FOR CLASS A SHARES,
THE CURRENT MAXIMUM INITIAL SALES CHARGE OF 5.75%; FOR CLASS B SHARES, THE
CONTINGENT DEFERRED SALES CHARGE OF 5% (1-YEAR) AND 2% (5-YEAR); AND FOR CLASS C
AND N SHARES, THE CONTINGENT 1% DEFERRED SALES CHARGE FOR THE 1-YEAR PERIOD.
THERE IS NO SALES CHARGE FOR CLASS Y SHARES. BECAUSE CLASS B SHARES CONVERT TO
CLASS A SHARES 72 MONTHS AFTER PURCHASE, THE "SINCE INCEPTION" RETURN FOR CLASS
B USES CLASS A PERFORMANCE FOR THE PERIOD AFTER CONVERSION. SEE PAGE 18 FOR
FURTHER INFORMATION.
15 | OPPENHEIMER MIDCAP FUND
FUND PERFORMANCE DISCUSSION
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CLASS N SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer MidCap Fund (Class N)
S&P MidCap 400 Index
Russell Midcap Growth Index
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]
Oppenheimer Russell Midcap
MidCap Fund (Class N) S&P MidCap 400 Index Growth Index
03/01/2001 $ 10,000 $ 10,000 $ 10,000
04/30/2001 $ 9,161 $ 10,278 $ 9,997
07/31/2001 $ 8,465 $ 10,319 $ 9,284
10/31/2001 $ 7,370 $ 9,126 $ 7,944
01/31/2002 $ 7,528 $ 10,258 $ 8,837
04/30/2002 $ 7,257 $ 10,953 $ 8,497
07/31/2002 $ 6,054 $ 9,013 $ 6,621
10/31/2002 $ 5,824 $ 8,690 $ 6,544
01/31/2003 $ 5,496 $ 8,557 $ 6,565
04/30/2003 $ 5,865 $ 9,036 $ 7,081
07/31/2003 $ 6,801 $ 10,261 $ 8,154
10/31/2003 $ 7,098 $ 11,361 $ 9,116
01/31/2004 $ 7,119 $ 12,214 $ 9,775
04/30/2004 $ 7,323 $ 12,148 $ 9,639
07/31/2004 $ 7,201 $ 12,090 $ 9,360
10/31/2004 $ 7,625 $ 12,615 $ 9,915
01/31/2005 $ 8,137 $ 13,570 $ 10,634
04/30/2005 $ 7,871 $ 13,331 $ 10,319
07/31/2005 $ 8,925 $ 15,221 $ 11,761
10/31/2005 $ 8,884 $ 14,841 $ 11,492
01/31/2006 $ 9,662 $ 16,597 $ 12,982
04/30/2006 $ 9,862 $ 17,107 $ 13,237
07/31/2006 $ 8,889 $ 15,873 $ 12,112
10/31/2006 $ 9,422 $ 16,834 $ 13,160
01/31/2007 $ 9,734 $ 17,920 $ 14,047
04/30/2007 $ 9,882 $ 18,850 $ 14,709
07/31/2007 $ 9,898 $ 18,529 $ 14,704
10/31/2007 $ 10,706 $ 19,699 $ 15,755
AVERAGE ANNUAL TOTAL RETURNS OF CLASS N SHARES WITH SALES CHARGE OF THE FUND AT
10/31/07
1-Year 12.63% 5-Year 12.95% Since Inception (3/1/01) 1.03%
16 | OPPENHEIMER MIDCAP FUND
CLASS Y SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer MidCap Fund (Class Y)
S&P MidCap 400 Index
Russell Midcap Growth Index
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]
Oppenheimer Russell Midcap
MidCap Fund (Class Y) S&P MidCap 400 Index Growth Index
12/01/1997 $ 10,000 $ 10,000 $ 10,000
01/31/1998 $ 10,110 $ 10,190 $ 9,949
04/30/1998 $ 13,040 $ 11,743 $ 11,494
07/31/1998 $ 12,500 $ 10,848 $ 10,848
10/31/1998 $ 10,880 $ 10,515 $ 10,137
01/31/1999 $ 14,297 $ 11,892 $ 12,299
04/30/1999 $ 15,639 $ 12,498 $ 12,912
07/31/1999 $ 17,521 $ 12,943 $ 13,201
10/31/1999 $ 20,095 $ 12,731 $ 13,954
01/31/2000 $ 27,744 $ 13,795 $ 18,062
04/30/2000 $ 29,596 $ 15,438 $ 19,758
07/31/2000 $ 31,949 $ 15,713 $ 18,978
10/31/2000 $ 30,898 $ 16,760 $ 19,351
01/31/2001 $ 25,771 $ 17,052 $ 16,854
04/30/2001 $ 18,232 $ 16,525 $ 13,935
07/31/2001 $ 16,861 $ 16,591 $ 12,941
10/31/2001 $ 14,708 $ 14,674 $ 11,072
01/31/2002 $ 15,048 $ 16,493 $ 12,317
04/30/2002 $ 14,538 $ 17,611 $ 11,844
07/31/2002 $ 12,155 $ 14,491 $ 9,229
10/31/2002 $ 11,724 $ 13,972 $ 9,122
01/31/2003 $ 11,094 $ 13,759 $ 9,151
04/30/2003 $ 11,844 $ 14,528 $ 9,870
07/31/2003 $ 13,757 $ 16,498 $ 11,366
10/31/2003 $ 14,368 $ 18,266 $ 12,707
01/31/2004 $ 14,438 $ 19,638 $ 13,625
04/30/2004 $ 14,868 $ 19,532 $ 13,436
07/31/2004 $ 14,648 $ 19,440 $ 13,047
10/31/2004 $ 15,529 $ 20,283 $ 13,821
01/31/2005 $ 16,600 $ 21,819 $ 14,823
04/30/2005 $ 16,080 $ 21,434 $ 14,384
07/31/2005 $ 18,272 $ 24,473 $ 16,394
10/31/2005 $ 18,212 $ 23,863 $ 16,019
01/31/2006 $ 19,844 $ 26,686 $ 18,096
04/30/2006 $ 20,285 $ 27,505 $ 18,451
07/31/2006 $ 18,312 $ 25,521 $ 16,883
10/31/2006 $ 19,444 $ 27,067 $ 18,344
01/31/2007 $ 20,115 $ 28,812 $ 19,580
04/30/2007 $ 20,465 $ 30,309 $ 20,503
07/31/2007 $ 20,525 $ 29,792 $ 20,496
10/31/2007 $ 22,237 $ 31,674 $ 21,961
AVERAGE ANNUAL TOTAL RETURNS OF CLASS Y SHARES OF THE FUND AT 10/31/07
1-Year 14.37% 5-Year 13.66% Since Inception (12/1/97) 8.39%
THE PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE, WHICH DOES NOT
GUARANTEE FUTURE RESULTS. THE INVESTMENT RETURN AND PRINCIPAL VALUE OF AN
INVESTMENT IN THE FUND WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN
REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT
PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE QUOTED. FOR PERFORMANCE
DATA CURRENT TO THE MOST RECENT MONTH END, VISIT US AT WWW.OPPENHEIMERFUNDS.COM,
OR CALL US AT 1.800.525.7048. FUND RETURNS INCLUDE CHANGES IN SHARE PRICE,
REINVESTED DISTRIBUTIONS, AND THE APPLICABLE SALES CHARGE: FOR CLASS A SHARES,
THE CURRENT MAXIMUM INITIAL SALES CHARGE OF 5.75%; FOR CLASS B SHARES, THE
CONTINGENT DEFERRED SALES CHARGE OF 5% (1-YEAR) AND 2% (5-YEAR); AND FOR CLASS C
AND N SHARES, THE CONTINGENT 1% DEFERRED SALES CHARGE FOR THE 1-YEAR PERIOD.
THERE IS NO SALES CHARGE FOR CLASS Y SHARES. BECAUSE CLASS B SHARES CONVERT TO
CLASS A SHARES 72 MONTHS AFTER PURCHASE, THE "SINCE INCEPTION" RETURN FOR CLASS
B USES CLASS A PERFORMANCE FOR THE PERIOD AFTER CONVERSION. SEE PAGE 18 FOR
FURTHER INFORMATION.
17 | OPPENHEIMER MIDCAP FUND
NOTES
- --------------------------------------------------------------------------------
Total returns and the ending account values in the graphs include changes in
share price and reinvestment of dividends and capital gains distributions in a
hypothetical investment for the periods shown. The Fund's total returns shown do
not reflect the deduction of income taxes on an individual's investment. Taxes
may reduce your actual investment returns on income or gains paid by the Fund or
any gains you may realize if you sell your shares.
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 12/1/97. Unless
otherwise noted, Class A returns include the current maximum initial sales
charge of 5.75%.
CLASS B shares of the Fund were first publicly offered on 12/1/97. Unless
otherwise noted, Class B returns include the applicable contingent deferred
sales charge of 5% (1-year) and 2% (5-year). Class B shares are subject to an
annual 0.75% asset-based sales charge. Because Class B shares convert to Class A
shares 72 months after purchase, the "since inception" return for Class B uses
Class A performance for the period after conversion.
CLASS C shares of the Fund were first publicly offered on 12/1/97. Unless
otherwise noted, Class C returns include the contingent deferred sales charge of
1% for the 1-year period. Class C shares are subject to an annual 0.75%
asset-based sales charge.
CLASS N shares of the Fund were first publicly offered on 3/1/01. Class N shares
are offered only through retirement plans. Unless otherwise noted, Class N
returns include the contingent deferred sales charge of 1% for the 1-year
period. Class N shares are subject to an annual 0.25% asset-based sales charge.
18 | OPPENHEIMER MIDCAP FUND
NOTES
- --------------------------------------------------------------------------------
CLASS Y shares of the Fund were first publicly offered on 12/1/97. Class Y
shares are offered only to certain institutional investors under special
agreement with the Distributor.
An explanation of the calculation of performance is in the Fund's Statement of
Additional Information.
19 | OPPENHEIMER MIDCAP 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 are based on an investment of $1,000.00 invested at the beginning
of the period and held for the entire 6-month period ended October 31, 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.
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"
20 | OPPENHEIMER MIDCAP FUND
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.
- --------------------------------------------------------------------------------
BEGINNING ENDING EXPENSES
ACCOUNT ACCOUNT PAID DURING
VALUE VALUE 6 MONTHS ENDED
5/1/07 10/31/07 OCTOBER 31, 2007
- ------------------------------------------------------------------------------
Class A Actual $ 1,000.00 $ 1,084.20 $ 6.85
- ------------------------------------------------------------------------------
Class A Hypothetical 1,000.00 1,018.65 6.64
- ------------------------------------------------------------------------------
Class B Actual 1,000.00 1,080.40 10.54
- ------------------------------------------------------------------------------
Class B Hypothetical 1,000.00 1,015.12 10.21
- ------------------------------------------------------------------------------
Class C Actual 1,000.00 1,079.90 10.80
- ------------------------------------------------------------------------------
Class C Hypothetical 1,000.00 1,014.87 10.46
- ------------------------------------------------------------------------------
Class N Actual 1,000.00 1,083.40 8.01
- ------------------------------------------------------------------------------
Class N Hypothetical 1,000.00 1,017.54 7.76
- ------------------------------------------------------------------------------
Class Y Actual 1,000.00 1,086.60 4.74
- ------------------------------------------------------------------------------
Class Y Hypothetical 1,000.00 1,020.67 4.59
Hypothetical assumes 5% annual return before expenses.
Expenses are equal to the Fund's annualized expense ratio for that class,
multiplied by the average account value over the period, multiplied by 184/365
(to reflect the one-half year period). Those annualized expense ratios,
excluding indirect expenses from affiliated fund, based on the 6-month period
ended October 31, 2007 are as follows:
CLASS EXPENSE RATIOS
- -----------------------------
Class A 1.30%
- -----------------------------
Class B 2.00
- -----------------------------
Class C 2.05
- -----------------------------
Class N 1.52
- -----------------------------
Class Y 0.90
The expense ratios reflect reduction to custodian expenses and voluntary waivers
or reimbursements by the Fund's Manager and Transfer Agent 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 and reduction
to custodian expenses, if applicable.
- --------------------------------------------------------------------------------
21 | OPPENHEIMER MIDCAP FUND
STATEMENT OF INVESTMENTS October 31, 2007
- --------------------------------------------------------------------------------
SHARES VALUE
- --------------------------------------------------------------------------------
COMMON STOCKS--99.0%
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY--19.8%
- --------------------------------------------------------------------------------
DIVERSIFIED CONSUMER SERVICES--1.1%
ITT Educational Services, Inc. 1 84,200 $ 10,709,398
- --------------------------------------------------------------------------------
HOTELS, RESTAURANTS & LEISURE--2.2%
Las Vegas Sands Corp. 1 168,800 22,463,904
- --------------------------------------------------------------------------------
HOUSEHOLD DURABLES--0.7%
Harman International Industries, Inc. 87,100 7,333,820
- --------------------------------------------------------------------------------
INTERNET & CATALOG RETAIL--2.0%
Liberty Media Holding Corp.-Interactive,
Series A 1 967,600 20,542,148
- --------------------------------------------------------------------------------
MEDIA--4.9%
Cablevision Systems Corp.
New York Group, Cl. A 1 522,700 15,330,791
- --------------------------------------------------------------------------------
Focus Media Holding Ltd., ADR 1 266,800 16,541,600
- --------------------------------------------------------------------------------
Liberty Global, Inc.,
Series C 1 478,800 17,562,384
----------------
49,434,775
- --------------------------------------------------------------------------------
SPECIALTY RETAIL--6.1%
Abercrombie & Fitch Co., Cl. A 126,000 9,979,200
- --------------------------------------------------------------------------------
CarMax, Inc. 1 490,000 10,226,300
- --------------------------------------------------------------------------------
GameStop Corp., Cl. A 1 252,600 14,958,972
- --------------------------------------------------------------------------------
Guess?, Inc. 166,100 8,535,879
- --------------------------------------------------------------------------------
Tiffany & Co. 343,900 18,632,502
----------------
62,332,853
- --------------------------------------------------------------------------------
TEXTILES, APPAREL & LUXURY GOODS--2.8%
Polo Ralph Lauren Corp., Cl. A 405,000 27,864,000
- --------------------------------------------------------------------------------
ENERGY--6.5%
- --------------------------------------------------------------------------------
ENERGY EQUIPMENT & SERVICES--2.9%
Cameron International Corp. 1 132,500 12,900,200
- --------------------------------------------------------------------------------
Smith International, Inc. 245,800 16,235,090
----------------
29,135,290
SHARES VALUE
- --------------------------------------------------------------------------------
OIL, GAS & CONSUMABLE FUELS--3.6%
Murphy Oil Corp. 245,200 $ 18,054,076
- --------------------------------------------------------------------------------
Range Resources Corp. 405,700 18,228,101
----------------
36,282,177
- --------------------------------------------------------------------------------
FINANCIALS--11.4%
- --------------------------------------------------------------------------------
CAPITAL MARKETS--5.3%
Affiliated Managers
Group, Inc. 1 167,300 22,008,315
- --------------------------------------------------------------------------------
Fortress Investment
Group LLC, Cl. A 641,190 14,138,240
- --------------------------------------------------------------------------------
MF Global Ltd. 1 251,200 7,425,472
- --------------------------------------------------------------------------------
Schwab (Charles) Corp. 419,600 9,751,504
----------------
53,323,531
- --------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES--0.8%
CME Group, Inc. 11,700 7,795,125
- --------------------------------------------------------------------------------
INSURANCE--1.2%
Ambac Financial Group, Inc. 215,200 7,925,816
- --------------------------------------------------------------------------------
Philadelphia Consolidated
Holding Co. 1 99,100 4,043,280
----------------
11,969,096
- --------------------------------------------------------------------------------
REAL ESTATE INVESTMENT TRUSTS--1.7%
Boston Properties, Inc. 162,500 17,605,250
- --------------------------------------------------------------------------------
REAL ESTATE MANAGEMENT & DEVELOPMENT--2.4%
CB Richard Ellis Group, Inc., Cl. A 1 310,000 7,557,800
- --------------------------------------------------------------------------------
Jones Lang LaSalle, Inc. 180,800 17,235,664
----------------
24,793,464
- --------------------------------------------------------------------------------
HEALTH CARE--16.0%
- --------------------------------------------------------------------------------
HEALTH CARE EQUIPMENT & SUPPLIES--4.2%
Bard (C.R.), Inc. 201,200 16,822,332
- --------------------------------------------------------------------------------
IDEXX Laboratories, Inc. 1 209,100 25,464,198
----------------
42,286,530
- --------------------------------------------------------------------------------
HEALTH CARE PROVIDERS & SERVICES--4.6%
Coventry Health Care, Inc. 1 387,525 23,371,633
22 | OPPENHEIMER MIDCAP FUND
SHARES VALUE
- --------------------------------------------------------------------------------
HEALTH CARE PROVIDERS & SERVICES Continued
Schein (Henry), Inc. 1 248,900 $ 14,909,110
- --------------------------------------------------------------------------------
VCA Antech, Inc. 1 183,500 8,450,175
----------------
46,730,918
- --------------------------------------------------------------------------------
HEALTH CARE TECHNOLOGY--2.5%
Cerner Corp. 1 431,300 25,688,228
- --------------------------------------------------------------------------------
LIFE SCIENCES TOOLS & SERVICES--3.2%
Covance, Inc. 1 389,500 32,133,750
- --------------------------------------------------------------------------------
PHARMACEUTICALS--1.5%
Shire Pharmaceuticals
Group plc, ADR 198,600 14,924,790
- --------------------------------------------------------------------------------
INDUSTRIALS--14.8%
- --------------------------------------------------------------------------------
AEROSPACE & DEFENSE--5.0%
Alliant Techsystems, Inc. 1 51,300 5,663,007
- --------------------------------------------------------------------------------
Precision Castparts Corp. 56,500 8,464,265
- --------------------------------------------------------------------------------
Rockwell Collins, Inc. 293,200 21,934,292
- --------------------------------------------------------------------------------
Spirit Aerosystems
Holdings, Inc., Cl. A 1 403,500 14,009,520
----------------
50,071,084
- --------------------------------------------------------------------------------
AIR FREIGHT & LOGISTICS--1.7%
C.H. Robinson Worldwide, Inc. 184,900 9,230,208
- --------------------------------------------------------------------------------
Expeditors International
of Washington, Inc. 152,600 7,729,190
----------------
16,959,398
- --------------------------------------------------------------------------------
COMMERCIAL SERVICES & SUPPLIES--4.9%
FTI Consulting, Inc. 1 95,200 5,169,360
- --------------------------------------------------------------------------------
IHS, Inc., Cl. A 1 192,600 12,143,430
- --------------------------------------------------------------------------------
Robert Half International, Inc. 338,500 10,185,465
- --------------------------------------------------------------------------------
Stericycle, Inc. 1 384,200 22,410,386
----------------
49,908,641
- --------------------------------------------------------------------------------
MACHINERY--1.4%
Oshkosh Truck Corp. 264,800 14,352,160
- --------------------------------------------------------------------------------
TRADING COMPANIES & DISTRIBUTORS--1.8%
Fastenal Co. 407,500 18,125,600
SHARES VALUE
- --------------------------------------------------------------------------------
INFORMATION TECHNOLOGY--20.8%
- --------------------------------------------------------------------------------
COMMUNICATIONS EQUIPMENT--1.4%
F5 Networks, Inc. 1 218,100 $ 7,858,143
- --------------------------------------------------------------------------------
Research in Motion Ltd. 1 51,600 6,424,716
----------------
14,282,859
- --------------------------------------------------------------------------------
COMPUTERS & PERIPHERALS--1.4%
Network Appliance, Inc. 1 455,100 14,331,099
- --------------------------------------------------------------------------------
ELECTRONIC EQUIPMENT & INSTRUMENTS--3.3%
Amphenol Corp., Cl. A 345,100 15,277,577
- --------------------------------------------------------------------------------
Trimble Navigation Ltd. 1 435,300 18,152,010
----------------
33,429,587
- --------------------------------------------------------------------------------
INTERNET SOFTWARE & SERVICES--0.0%
Digital River, Inc. 1 4,300 228,158
- --------------------------------------------------------------------------------
IT SERVICES--5.5%
Affiliated Computer
Services, Inc., Cl. A 1 350,800 17,771,528
- --------------------------------------------------------------------------------
Cognizant Technology
Solutions Corp. 1 487,400 20,207,604
- --------------------------------------------------------------------------------
SAIC, Inc. 1 903,000 17,798,130
----------------
55,777,262
- --------------------------------------------------------------------------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT--3.7%
FormFactor, Inc. 1 314,300 12,292,273
- --------------------------------------------------------------------------------
Microchip Technology, Inc. 462,200 15,331,174
- --------------------------------------------------------------------------------
Varian Semiconductor Equipment Associates, Inc. 1 204,850 9,427,197
----------------
37,050,644
- --------------------------------------------------------------------------------
SOFTWARE--5.5%
Amdocs Ltd. 1 354,000 12,177,600
- --------------------------------------------------------------------------------
Ansys, Inc. 1 258,100 10,016,861
- --------------------------------------------------------------------------------
Autodesk, Inc. 1 222,800 10,894,920
- --------------------------------------------------------------------------------
FactSet Research Systems, Inc. 320,450 22,598,134
----------------
55,687,515
23 | OPPENHEIMER MIDCAP FUND
STATEMENT OF INVESTMENTS Continued
- --------------------------------------------------------------------------------
SHARES VALUE
- --------------------------------------------------------------------------------
MATERIALS--4.5%
- --------------------------------------------------------------------------------
CHEMICALS--1.0%
Ecolab, Inc. 215,400 $ 10,160,418
- --------------------------------------------------------------------------------
CONSTRUCTION MATERIALS--1.1%
Vulcan Materials Co. 124,400 10,637,444
- --------------------------------------------------------------------------------
METALS & MINING--2.4%
Allegheny Technologies, Inc. 113,900 11,637,163
- --------------------------------------------------------------------------------
Titanium Metals Corp. 1 372,800 13,122,560
----------------
24,759,723
- --------------------------------------------------------------------------------
TELECOMMUNICATION SERVICES--3.9%
- --------------------------------------------------------------------------------
WIRELESS TELECOMMUNICATION SERVICES--3.9%
Crown Castle International Corp. 1 611,700 25,122,519
- --------------------------------------------------------------------------------
NII Holdings, Inc. 1 254,800 14,778,400
----------------
39,900,919
SHARES VALUE
- --------------------------------------------------------------------------------
UTILITIES--1.3%
- --------------------------------------------------------------------------------
GAS UTILITIES--1.3%
Questar Corp. 221,600 $ 12,648,927
----------------
Total Common Stocks
(Cost $858,591,026) 1,001,660,485
- --------------------------------------------------------------------------------
INVESTMENTS IN AFFILIATED COMPANIES--0.3%
- --------------------------------------------------------------------------------
Oppenheimer Institutional Money Market Fund,
Cl. E, 5.20% 2,3
(Cost $3,338,314) 3,338,314 3,338,314
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE
(COST $861,929,340) 99.3% 1,004,998,799
- --------------------------------------------------------------------------------
OTHER ASSETS NET OF LIABILITIES 0.7 7,375,845
----------------------------
NET ASSETS 100.0% $ 1,012,374,644
============================
FOOTNOTES TO STATEMENT OF INVESTMENTS
1. Non-income producing security.
2. Is or was an affiliate, as defined in the Investment Company Act of 1940, at
or during the period ended October 31, 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 GROSS GROSS SHARES
OCTOBER 31, 2006 ADDITIONS REDUCTIONS OCTOBER 31, 2007
- -----------------------------------------------------------------------------------------------
Oppenheimer Institutional
Money Market Fund, Cl. E 15,374,147 523,127,842 535,163,675 3,338,314
DIVIDEND
VALUE INCOME
- -----------------------------------------------------------------------------------------------
Oppenheimer Institutional
Money Market Fund, Cl. E $ 3,338,314 $ 901,182
3. Rate shown is the 7-day yield as of October 31, 2007.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
24 | OPPENHEIMER MIDCAP FUND
STATEMENT OF ASSETS AND LIABILITIES October 31, 2007
- --------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------
ASSETS
- ------------------------------------------------------------------------------------------------------------
Investments, at value--see accompanying statement of investments:
Unaffiliated companies (cost $858,591,026) $ 1,001,660,485
Affiliated companies (cost $3,338,314) 3,338,314
----------------
1,004,998,799
- ------------------------------------------------------------------------------------------------------------
Cash 1,272,833
- ------------------------------------------------------------------------------------------------------------
Receivables and other assets:
Investments sold 12,583,366
Shares of beneficial interest sold 598,783
Dividends 106,346
Other 17,569
----------------
Total assets 1,019,577,696
- ------------------------------------------------------------------------------------------------------------
LIABILITIES
- ------------------------------------------------------------------------------------------------------------
Payables and other liabilities:
Investments purchased 5,187,093
Shares of beneficial interest redeemed 1,223,709
Shareholder communications 229,179
Transfer and shareholder servicing agent fees 190,353
Distribution and service plan fees 178,524
Trustees' compensation 165,960
Other 28,234
----------------
Total liabilities 7,203,052
- ------------------------------------------------------------------------------------------------------------
NET ASSETS $ 1,012,374,644
================
- ------------------------------------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS
- ------------------------------------------------------------------------------------------------------------
Paid-in capital $ 1,595,656,428
- ------------------------------------------------------------------------------------------------------------
Accumulated net investment loss (172,304)
- ------------------------------------------------------------------------------------------------------------
Accumulated net realized loss on investments (726,178,939)
- ------------------------------------------------------------------------------------------------------------
Net unrealized appreciation on investments 143,069,459
----------------
NET ASSETS $ 1,012,374,644
================
25 | OPPENHEIMER MIDCAP FUND
STATEMENT OF ASSETS AND LIABILITIES Continued
- --------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE
- -----------------------------------------------------------------------------------------------
Class A Shares:
Net asset value and redemption price per share (based on net assets of
$618,566,419 and 29,103,501 shares of beneficial interest outstanding) $ 21.25
Maximum offering price per share (net asset value plus sales charge of 5.75% of
offering price) $ 22.55
- -----------------------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales
charge) and offering price per share (based on net assets of $177,264,414 and
8,975,452 shares of beneficial interest outstanding) $ 19.75
- -----------------------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales
charge) and offering price per share (based on net assets of $135,580,982 and
6,867,150 shares of beneficial interest outstanding) $ 19.74
- -----------------------------------------------------------------------------------------------
Class N Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales
charge) and offering price per share (based on net assets of $37,721,598 and
1,803,498 shares of beneficial interest outstanding) $ 20.92
- -----------------------------------------------------------------------------------------------
Class Y Shares:
Net asset value, redemption price and offering price per share (based on net
assets of $43,241,231 and 1,947,230 shares of beneficial interest outstanding) $ 22.21
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
26 | OPPENHEIMER MIDCAP FUND
STATEMENT OF OPERATIONS For the Year Ended October 31, 2007
- --------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
INVESTMENT INCOME
- ----------------------------------------------------------------------------------------
Dividends:
Unaffiliated companies $ 5,387,482
Affiliated companies 901,182
- ----------------------------------------------------------------------------------------
Interest 75,598
- ----------------------------------------------------------------------------------------
Other income 84,471
-------------
Total investment income 6,448,733
- ----------------------------------------------------------------------------------------
EXPENSES
- ----------------------------------------------------------------------------------------
Management fees 7,392,339
- ----------------------------------------------------------------------------------------
Distribution and service plan fees:
Class A 1,639,385
Class B 1,977,150
Class C 1,363,556
Class N 188,191
- ----------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees:
Class A 2,646,386
Class B 569,085
Class C 489,199
Class N 145,310
Class Y 84,194
- ----------------------------------------------------------------------------------------
Shareholder communications:
Class A 327,387
Class B 127,504
Class C 50,086
Class N 5,867
Class Y 127
- ----------------------------------------------------------------------------------------
Trustees' compensation 46,152
- ----------------------------------------------------------------------------------------
Custodian fees and expenses 7,077
- ----------------------------------------------------------------------------------------
Administration service fees 1,500
- ----------------------------------------------------------------------------------------
Other 62,030
-------------
Total expenses 17,122,525
Less reduction to custodian expenses (1,360)
Less waivers and reimbursements of expenses (346,421)
-------------
Net expenses 16,774,744
- ----------------------------------------------------------------------------------------
NET INVESTMENT LOSS (10,326,011)
- ----------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
- ----------------------------------------------------------------------------------------
Net realized gain on investments from unaffiliated companies 240,973,815
- ----------------------------------------------------------------------------------------
Net change in unrealized appreciation on investments (95,104,245)
- ----------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $135,543,559
=============
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
27 | OPPENHEIMER MIDCAP FUND
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
YEAR ENDED OCTOBER 31, 2007 2006
- -------------------------------------------------------------------------------------------------------------------
OPERATIONS
- -------------------------------------------------------------------------------------------------------------------
Net investment loss $ (10,326,011) $ (10,976,062)
- -------------------------------------------------------------------------------------------------------------------
Net realized gain 240,973,815 98,157,780
- -------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation (95,104,245) (20,813,201)
--------------------------------
Net increase in net assets resulting from operations 135,543,559 66,368,517
- -------------------------------------------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS
- -------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from beneficial
interest transactions:
Class A (154,257,177) 32,109,669
Class B (82,302,757) (92,141,117)
Class C (25,256,563) (296,334)
Class N (5,519,524) 1,542,223
Class Y (457,498) (536,366)
--------------------------------
(267,793,519) (59,321,925)
- -------------------------------------------------------------------------------------------------------------------
NET ASSETS
- -------------------------------------------------------------------------------------------------------------------
Total increase (decrease) (132,249,960) 7,046,592
- -------------------------------------------------------------------------------------------------------------------
Beginning of period 1,144,624,604 1,137,578,012
--------------------------------
End of period (including accumulated net investment loss of
$172,304 and $154,224, respectively) $1,012,374,644 $1,144,624,604
================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
28 | OPPENHEIMER MIDCAP FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
CLASS A YEAR ENDED OCTOBER 31, 2007 2006 2005 2004 2003
- ----------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ----------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 18.67 $ 17.56 $ 15.04 $ 13.97 $ 11.43
- ----------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss (.14) 1 (.12) 1 (.15) 1 (.17) (.12)
Net realized and unrealized gain 2.72 1.23 2.67 1.24 2.66
----------------------------------------------------------------
Total from investment operations 2.58 1.11 2.52 1.07 2.54
- ----------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 21.25 $ 18.67 $ 17.56 $ 15.04 $ 13.97
================================================================
- ----------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 13.82% 6.32% 16.76% 7.66% 22.22%
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ----------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 618,567 $ 687,642 $ 618,270 $ 504,292 $ 430,514
- ----------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 681,071 $ 696,033 $ 570,513 $ 457,926 $ 366,050
- ----------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment loss (0.73)% (0.65)% (0.94)% (1.05)% (1.01)%
Total expenses 1.37% 4 1.32% 4 1.39% 1.42% 1.61%
Expenses after payments, waivers and/or
reimbursements and reduction to custodian
expenses 1.32% 1.30% 1.35% 1.33% 1.32%
- ----------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 96% 63% 39% 114% 76%
1. Per share amounts calculated based on the average shares outstanding during
the period.
2. 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 less than one full
year. Returns do not reflect the deduction of taxes that a shareholder would pay
on fund distributions or the redemption of fund shares.
3. Annualized for periods less than one full year.
4. Total expenses including indirect expenses from affiliated fund were as
follows:
Year Ended October 31, 2007 1.37%
Year Ended October 31, 2006 1.32%
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
29 | OPPENHEIMER MIDCAP FUND
FINANCIAL HIGHLIGHTS Continued
- --------------------------------------------------------------------------------
CLASS B YEAR ENDED OCTOBER 31, 2007 2006 2005 2004 2003
- ----------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ----------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 17.47 $ 16.56 $ 14.29 $ 13.37 $ 11.02
- ----------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss (.26) 1 (.25) 1 (.27) 1 (.30) (.23)
Net realized and unrealized gain 2.54 1.16 2.54 1.22 2.58
----------------------------------------------------------------
Total from investment operations 2.28 .91 2.27 .92 2.35
- ----------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 19.75 $ 17.47 $ 16.56 $ 14.29 $ 13.37
================================================================
- ----------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 13.05% 5.49% 15.89% 6.88% 21.33%
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ----------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 177,264 $ 235,821 $ 310,352 $ 312,315 $ 327,880
- ----------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 198,207 $ 283,459 $ 319,953 $ 316,748 $ 291,209
- ----------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment loss (1.44)% (1.40)% (1.71)% (1.83)% (1.75)%
Total expenses 2.04% 4 2.08% 4 2.26% 2.30% 2.51%
Expenses after payments, waivers and/or
reimbursements and reduction to custodian
expenses 2.03% 2.07% 2.14% 2.12% 2.06%
- ----------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 96% 63% 39% 114% 76%
1. Per share amounts calculated based on the average shares outstanding during
the period.
2. 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 less than one full
year. Returns do not reflect the deduction of taxes that a shareholder would pay
on fund distributions or the redemption of fund shares.
3. Annualized for periods less than one full year.
4. Total expenses including indirect expenses from affiliated fund were as
follows:
Year Ended October 31, 2007 2.04%
Year Ended October 31, 2006 2.08%
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
30 | OPPENHEIMER MIDCAP FUND
CLASS C YEAR ENDED OCTOBER 31, 2007 2006 2005 2004 2003
- ----------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ----------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 17.47 $ 16.56 $ 14.29 $ 13.37 $ 11.02
- ----------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss (.27) 1 (.24) 1 (.26) 1 (.25) (.20)
Net realized and unrealized gain 2.54 1.15 2.53 1.17 2.55
----------------------------------------------------------------
Total from investment operations 2.27 .91 2.27 .92 2.35
- ----------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 19.74 $ 17.47 $ 16.56 $ 14.29 $ 13.37
================================================================
- ----------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 12.99% 5.49% 15.89% 6.88% 21.33%
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ----------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 135,581 $ 144,184 $ 137,308 $ 110,018 $ 103,271
- ----------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 136,508 $ 149,438 $ 126,925 $ 105,285 $ 87,528
- ----------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment loss (1.48)% (1.39)% (1.68)% (1.81)% (1.77)%
Total expenses 2.08% 4 2.06% 4 2.17% 2.26% 2.49%
Expenses after payments, waivers and/or
reimbursements and reduction to custodian
expenses 2.07% 2.04% 2.10% 2.10% 2.08%
- ----------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 96% 63% 39% 114% 76%
1. Per share amounts calculated based on the average shares outstanding during
the period.
2. 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 less than one full
year. Returns do not reflect the deduction of taxes that a shareholder would pay
on fund distributions or the redemption of fund shares.
3. Annualized for periods less than one full year.
4. Total expenses including indirect expenses from affiliated fund were as
follows:
Year Ended October 31, 2007 2.08%
Year Ended October 31, 2006 2.06%
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
31 | OPPENHEIMER MIDCAP FUND
FINANCIAL HIGHLIGHTS Continued
- --------------------------------------------------------------------------------
CLASS N YEAR ENDED OCTOBER 31, 2007 2006 2005 2004 2003
- ----------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ----------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 18.41 $ 17.36 $ 14.90 $ 13.87 $ 11.38
- ----------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss (.19) 1 (.16) 1 (.19) 1 (.18) (.17)
Net realized and unrealized gain 2.70 1.21 2.65 1.21 2.66
--------------------------------------------------------------
Total from investment operations 2.51 1.05 2.46 1.03 2.49
- ----------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 20.92 $ 18.41 $ 17.36 $ 14.90 $ 13.87
==============================================================
- ----------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 13.63% 6.05% 16.51% 7.43% 21.88%
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ----------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 37,722 $ 38,500 $ 34,879 $ 22,488 $ 16,606
- ----------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 37,676 $ 38,644 $ 29,445 $ 18,969 $ 11,846
- ----------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment loss (0.96)% (0.89)% (1.15)% (1.28)% (1.34)%
Total expenses 1.59% 4 1.60% 4 1.67% 1.80% 1.86%
Expenses after payments, waivers and/or
reimbursements and reduction to custodian
expenses 1.55% 1.53% 1.55% 1.57% 1.64%
- ----------------------------------------------------------------------------------------------------------
Portfolio turnover rate 96% 63% 39% 114% 76%
1. Per share amounts calculated based on the average shares outstanding during
the period.
2. 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 less than one full
year. Returns do not reflect the deduction of taxes that a shareholder would pay
on fund distributions or the redemption of fund shares.
3. Annualized for periods less than one full year.
4. Total expenses including indirect expenses from affiliated fund were as
follows:
Year Ended October 31, 2007 1.59%
Year Ended October 31, 2006 1.60%
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
32 | OPPENHEIMER MIDCAP FUND
CLASS Y YEAR ENDED OCTOBER 31, 2007 2006 2005 2004 2003
- -----------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- -----------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 19.42 $ 18.19 $ 15.51 $ 14.35 $ 11.71
- -----------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss (.07) 1 (.04) 1 (.08) 1 (.13) (.19)
Net realized and unrealized gain 2.86 1.27 2.76 1.29 2.83
---------------------------------------------------------------------------
Total from investment operations 2.79 1.23 2.68 1.16 2.64
- -----------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 22.21 $ 19.42 $ 18.19 $ 15.51 $ 14.35
===========================================================================
- -----------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 14.37% 6.76% 17.28% 8.08% 22.55%
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- -----------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 43,241 $ 38,478 $ 36,769 $ 23,785 $ 17,171
- -----------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 38,230 $ 42,277 $ 31,030 $ 19,540 $ 11,928
- -----------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment loss (0.33)% (0.21)% (0.49)% (0.69)% (0.80)%
Total expenses 0.91% 4,5,6,7 0.86% 4,5 0.89% 7 0.98% 7 1.11% 6,7
- -----------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 96% 63% 39% 114% 76%
1. Per share amounts calculated based on the average shares outstanding during
the period.
2. 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 less than one full
year. Returns do not reflect the deduction of taxes that a shareholder would pay
on fund distributions or the redemption of fund shares.
3. Annualized for periods less than one full year.
4. Total expenses including indirect expenses from affiliated fund were as
follows:
Year Ended October 31, 2007 0.91%
Year Ended October 31, 2006 0.86%
5. Voluntary waiver or reimbursement of indirect management fees less than
0.005%.
6. Voluntary waiver of transfer agent fees less than 0.005%.
7. Reduction to custodian expenses less than 0.005%.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
33 | OPPENHEIMER MIDCAP FUND
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
Oppenheimer MidCap Fund (the Fund) is registered under the Investment Company
Act of 1940, as amended, as an open-end management investment company. The
Fund's investment objective is to seek capital appreciation. The Fund's
investment advisor is OppenheimerFunds, Inc. (the Manager).
The Fund offers Class A, Class B, Class C, Class N and Class Y shares.
Class A shares are sold at their offering price, which is normally net asset
value plus a front-end sales charge. Class B, Class C and Class N shares are
sold without a front-end sales charge but may be subject to a contingent
deferred sales charge (CDSC). Class N shares are sold only through retirement
plans. Retirement plans that offer Class N shares may impose charges on those
accounts. Class Y shares are sold to certain institutional investors without
either a front-end sales charge or a CDSC, 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 its shares as
of the close of the New York Stock Exchange (the "Exchange"), normally 4:00 P.M.
Eastern time, on each day the Exchange is open for business. Securities may be
valued primarily using dealer-supplied valuations or a portfolio pricing service
authorized by the Board of Trustees. Securities listed or traded on National
Stock Exchanges or other domestic exchanges are valued based on the last sale
price of the security traded on that exchange prior to the time when the Fund's
assets are valued. Securities traded on NASDAQ(R) are valued based on the
closing price provided by NASDAQ prior to the time when the Fund's assets are
valued. In the absence of a sale, the security is valued at the last sale price
on the prior trading day, if it is within the spread of the closing "bid" and
"asked" prices, and if not, at the closing bid price. Securities traded on
foreign exchanges are valued based on the last sale price on the principal
exchange on which the security is traded, as identified by the portfolio pricing
service, prior to the time when the Fund's assets are valued. In the absence of
a sale, the security is valued at the official closing price on the principal
exchange. Corporate, government and municipal debt instruments having a
remaining maturity in excess of sixty days and all mortgage-backed securities
will be valued at the mean between the "bid" and "asked" prices. Futures
contracts traded on a commodities or futures exchange will be valued at the
final settlement price or official closing price on the principal exchange as
reported by such principal exchange at its trading session ending at, or most
recently prior to, the time when the Fund's assets are
34 | OPPENHEIMER MIDCAP FUND
valued. Options are valued daily based upon the last sale price on the principal
exchange on which the option is traded. Securities (including restricted
securities) for which market quotations are not readily available are valued at
their fair value. Foreign and domestic securities whose values have been
materially affected by what the Manager identifies as a significant event
occurring before the Fund's assets are valued but after the close of their
respective exchanges will be fair valued. Fair value is determined in good faith
using consistently applied procedures under the supervision of the Board of
Trustees. Investments in open-end registered investment companies (including
affiliated funds) are valued at that fund's net asset value. Short-term "money
market type" debt securities with remaining maturities of sixty days or less are
valued at amortized cost (which approximates market value).
- --------------------------------------------------------------------------------
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, if applicable.
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.
- --------------------------------------------------------------------------------
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
35 | OPPENHEIMER MIDCAP FUND
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES Continued
able to offset against income and gains realized in future years and unrealized
appreciation or depreciation of securities and other investments for federal
income tax purposes.
NET UNREALIZED
APPRECIATION
BASED ON COST OF
SECURITIES AND
UNDISTRIBUTED UNDISTRIBUTED ACCUMULATED OTHER INVESTMENTS
NET INVESTMENT LONG-TERM LOSS FOR FEDERAL INCOME
INCOME GAIN CARRYFORWARD 1,2,3 TAX PURPOSES
------------------------------------------------------------------------
$-- $-- $725,704,087 $142,594,606
1. As of October 31, 2007, the Fund had $725,704,087 of net capital loss
carryforwards available to offset future realized capital gains, if any, and
thereby reduce future taxable gain distributions. As of October 31, 2007,
details of the capital loss carryforwards were as follows:
EXPIRING
----------------------------
2009 $ 420,157,455
2010 237,910,335
2011 67,636,297
-------------
Total $ 725,704,087
=============
2. During the fiscal year ended October 31, 2007, the Fund utilized $241,392,441
of capital loss carryforward to offset capital gains realized in that fiscal
year.
3. During the fiscal year ended October 31, 2006, the Fund utilized $98,062,815
of capital loss carryforward to offset capital gains realized in that fiscal
year.
Net investment income (loss) and net realized gain (loss) may differ for
financial statement and tax purposes. The character of dividends and
distributions made during the fiscal year from net investment income or net
realized gains may differ from their ultimate characterization for federal
income tax purposes. Also, due to timing of dividends and distributions, the
fiscal year in which amounts are distributed may differ from the fiscal year in
which the income or net realized gain was recorded by the Fund. Accordingly, the
following amounts have been reclassified for October 31, 2007. Net assets of the
Fund were unaffected by the reclassifications.
REDUCTION TO INCREASE TO
ACCUMULATED ACCUMULATED NET
REDUCTION TO NET INVESTMENT REALIZED LOSS
PAID-IN CAPITAL LOSS ON INVESTMENTS
--------------------------------------------------
$10,047,271 $10,307,931 $260,660
No distributions were paid during the years ended October 31, 2007 and October
31, 2006.
The aggregate cost of securities and other investments and the composition of
unrealized appreciation and depreciation of securities and other investments for
federal income tax purposes as of October 31, 2007 are noted below. The primary
difference between book and tax appreciation or depreciation of securities and
other investments, if applicable,
36 | OPPENHEIMER MIDCAP FUND
is attributable to the tax deferral of losses or tax realization of financial
statement unrealized gain or loss.
Federal tax cost of securities $ 862,404,193
=============
Gross unrealized appreciation $ 171,762,530
Gross unrealized depreciation (29,167,924)
-------------
Net unrealized appreciation $ 142,594,606
=============
- --------------------------------------------------------------------------------
TRUSTEES' COMPENSATION. The Fund has adopted an unfunded retirement plan for the
Fund's independent trustees. Benefits are based on years of service and fees
paid to each trustee during the years of service. During the year ended October
31, 2007, the Fund's projected benefit obligations were increased by $16,886 and
payments of $6,859 were made to retired trustees, resulting in an accumulated
liability of $154,778 as of October 31, 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 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.
37 | OPPENHEIMER MIDCAP FUND
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES Continued
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.
- --------------------------------------------------------------------------------
2. SHARES OF BENEFICIAL INTEREST
The Fund has authorized an unlimited number of no par value shares of beneficial
interest of each class. Transactions in shares of beneficial interest were as
follows:
YEAR ENDED OCTOBER 31, 2007 YEAR ENDED OCTOBER 31, 2006
SHARES AMOUNT SHARES AMOUNT
- -----------------------------------------------------------------------------------------
CLASS A
Sold 7,000,880 $ 137,080,894 12,456,104 $ 232,902,655
Redeemed (14,734,745) (291,338,071) (10,828,490) (200,792,986)
-------------------------------------------------------------
Net increase (decrease) (7,733,865) $(154,257,177) 1,627,614 $ 32,109,669
=============================================================
- -----------------------------------------------------------------------------------------
CLASS B
Sold 1,079,220 $ 19,814,182 2,421,700 $ 42,440,670
Redeemed (5,603,021) (102,116,939) (7,667,035) (134,581,787)
-------------------------------------------------------------
Net decrease (4,523,801) $ (82,302,757) (5,245,335) $ (92,141,117)
=============================================================
- -----------------------------------------------------------------------------------------
CLASS C
Sold 1,160,849 $ 21,285,139 2,268,226 $ 39,902,362
Redeemed (2,546,706) (46,541,702) (2,308,632) (40,198,696)
-------------------------------------------------------------
Net decrease (1,385,857) $ (25,256,563) (40,406) $ (296,334)
=============================================================
- -----------------------------------------------------------------------------------------
CLASS N
Sold 597,494 $ 11,527,630 1,048,416 $ 19,390,271
Redeemed (884,873) (17,047,154) (966,459) (17,848,048)
-------------------------------------------------------------
Net increase (decrease) (287,379) $ (5,519,524) 81,957 $ 1,542,223
=============================================================
- -----------------------------------------------------------------------------------------
CLASS Y
Sold 544,006 $ 11,273,918 715,427 $ 13,998,045
Redeemed (577,616) (11,731,416) (755,584) (14,534,411)
-------------------------------------------------------------
Net decrease (33,610) $ (457,498) (40,157) $ (536,366)
=============================================================
38 | OPPENHEIMER MIDCAP FUND
- --------------------------------------------------------------------------------
3. PURCHASES AND SALES OF SECURITIES
The aggregate cost of purchases and proceeds from sales of securities, other
than short-term obligations and investments in IMMF, for the year ended October
31, 2007, were as follows:
PURCHASES SALES
- -------------------------------------------------------------------
Investment securities $1,026,799,032 $1,302,918,720
- --------------------------------------------------------------------------------
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES
MANAGEMENT FEES. Management fees paid to the Manager were in accordance with the
investment advisory agreement with the Fund which provides for a fee at an
annual rate of average net assets as shown in the following table:
FEE SCHEDULE
----------------------------------------------
Up to $200 million 0.75%
Next $200 million 0.72
Next $200 million 0.69
Next $200 million 0.66
Next $700 million 0.60
Next $1.0 billion 0.58
Over $2.5 billion 0.56
- --------------------------------------------------------------------------------
ADMINISTRATION SERVICE FEES. The Fund pays the Manager a fee of $1,500 per year
for preparing and filing the Fund's tax returns.
- --------------------------------------------------------------------------------
TRANSFER AGENT FEES. OppenheimerFunds Services (OFS), a division of the Manager,
acts as the transfer and shareholder servicing agent for the Fund. The Fund pays
OFS a per account fee. For the year ended October 31, 2007, the Fund paid
$3,688,659 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.
- --------------------------------------------------------------------------------
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.
39 | OPPENHEIMER MIDCAP FUND
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES Continued
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 the plan at calendar quarter ends. The
Distributor's aggregate uncompensated expenses under the plan at September 30,
2007 for Class B, Class C and Class N shares were $16,964,500, $5,260,405 and
$753,805, respectively. 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
YEAR ENDED DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR
- -------------------------------------------------------------------------------------------------
October 31, 2007 $350,447 $7,932 $352,344 $10,029 $1,883
- --------------------------------------------------------------------------------
WAIVERS AND REIMBURSEMENTS OF EXPENSES. 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. During the year ended October 31, 2007, OFS
waived $294,192, $3,486, $17,536 and $14,250 for Class A, Class B, Class C and
Class N shares, respectively. 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 year ended October 31, 2007, the Manager waived $16,957 for
IMMF management fees.
40 | OPPENHEIMER MIDCAP FUND
- --------------------------------------------------------------------------------
5. RECENT ACCOUNTING PRONOUNCEMENT
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 fiscal years beginning after December 15, 2006. As of
October 31, 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, ("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 October 31, 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.
- --------------------------------------------------------------------------------
6. SUBSEQUENT EVENT
On November 19, 2007, the Fund's Board of Trustees voted to freeze participation
in the retirement plan for the Board's independent trustees by not adding new
participants to the plan after December 31, 2007. Active independent trustees
who have accrued benefits under the plan prior to the freeze date will elect a
distribution method with respect to their benefits. Benefits already accrued
under the plan for Trustees who were participants prior to that freeze date are
not affected.
41 | OPPENHEIMER MIDCAP FUND
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
- --------------------------------------------------------------------------------
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THE BOARD OF TRUSTEES AND SHAREHOLDERS OF OPPENHEIMER MIDCAP FUND:
We have audited the accompanying statement of assets and liabilities of
Oppenheimer MidCap Fund, including the statement of investments, as of October
31, 2007, and the related statement of operations for the year then ended, the
statements of changes in net assets for each of the years in the two-year period
then ended, and the financial highlights for each of the years in the five-year
period then ended. These financial statements and financial highlights are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with 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 October 31, 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
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
Oppenheimer MidCap Fund as of October 31, 2007, the results of its operations
for the year then ended, the changes in its net assets for each of the years in
the two-year period then ended, and the financial highlights for each of the
years in the five-year period then ended, in conformity with U.S. generally
accepted accounting principles.
KPMG LLP
Denver, Colorado
December 13, 2007
42 | OPPENHEIMER MIDCAP FUND
FEDERAL INCOME TAX INFORMATION Unaudited
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
In early 2008, if applicable, shareholders of record will receive information
regarding all dividends and distributions paid to them by the Fund during
calendar year 2007. 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.
43 | OPPENHEIMER MIDCAP 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.
44 | OPPENHEIMER MIDCAP FUND
BOARD APPROVAL OF THE FUND'S INVESTMENT
ADVISORY AGREEMENT Unaudited
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Each year, the Board of Trustees (the "Board"), including a majority of the
independent Trustees, is required to determine whether to renew the Fund's
investment advisory agreement (the "Agreement"). 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 Agreement. The Board employs an independent consultant to prepare a
report that provides information, including comparative information, that the
Board requests for that purpose. In addition, the Board receives information
throughout the year regarding Fund services, fees, expenses and performance.
The Manager and the independent consultant provided information to the
Board on the following factors: (i) the nature, quality and extent of the
Manager's services, (ii) the investment performance of the Fund and the Manager,
(iii) the fees and expenses of the Fund, including comparative expense
information, (iv) the profitability of the Manager and its affiliates, including
an analysis of the cost of providing services by the Manager and its affiliates,
(v) the extent to which economies of scale are realized as the Fund grows and
whether fee levels reflect these economies of scale for Fund investors and (vi)
other benefits to the Manager from its relationship with the Fund. The Board was
aware that there are alternatives to retaining the Manager.
NATURE AND EXTENT OF SERVICES. The Board considered information about the
nature and extent of the services 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 manager 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
provided and the quality of the Manager's resources that are available to the
Fund. The Board took account of the fact that the Manager has had over forty
years of experience as an invest-
45 | OPPENHEIMER MIDCAP FUND
BOARD APPROVAL OF THE FUND'S INVESTMENT
ADVISORY AGREEMENT Unaudited
- --------------------------------------------------------------------------------
ment 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 of the portfolio management services provided, the
Board considered the experience of Richard Royce, the portfolio manager for the
Fund, and the Manager's Growth investment team and analysts. The Board members
also considered their experiences with the Manager and its officers and other
personnel through their service on the Boards of the Fund and 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 the Fund's service
agreements. In light of the foregoing, the Board concluded that the Fund
benefits from the services provided under the Agreement and from the Manager's
experience, reputation, personnel, operations, and resources.
INVESTMENT PERFORMANCE OF THE MANAGER AND THE FUND. During the year, the
Manager provided information on the investment performance of the Fund and the
Manager at each Board meeting, including comparative performance information.
The Board also reviewed information, prepared by the Manager and by the
independent consultant, comparing the Fund's historical performance to relevant
market indices and to the performance of other retail front-end load and no-load
mid-cap growth funds advised by the Manager and by other investment advisers.
The Board noted that the Fund's one-year, three-year, and five-year performance
were below its peer group median. The Board also noted the recent changes of the
Fund's portfolio manager and to the Manager's Growth investment team and
analysts.
MANAGEMENT FEES AND EXPENSES. The Board reviewed the fees paid to the
Manager and its affiliates and the other expenses borne by the Fund. The Board
also considered the comparability of the fees charged and the services provided
to the Fund to the fees and services for other clients or accounts advised by
the Manager. The independent consultant provided comparative data in regard to
the fees and expenses of the Fund, other mid-cap growth funds and other funds
with comparable asset levels and distribution features. The Board noted that the
Fund's contractual and actual management fees are lower than its peer group
median although its total expenses are higher than its peer group median.
ECONOMIES OF SCALE. The Board reviewed the extent to which the Manager may
realize economies of scale in managing and supporting the Fund, the extent to
which those economies of scale benefit the Fund's shareholders and the current
level of Fund assets in relation to the Fund's breakpoint schedule for its
management fees. The Board also noted
46 | OPPENHEIMER MIDCAP FUND
the Fund's breakpoints, which are intended to share economies of scale that may
exist as the Fund grows with its shareholders.
BENEFITS TO THE MANAGER. The Board considered information regarding the
Manager's 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 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 financial viability of the Manager is
important in order for the Manager to continue to provide significant services
to the Fund and its shareholders. In addition to considering the profits
realized by the Manager, the Board considered information regarding the direct
and indirect benefits the Manager receives as a result of its relationship with
the Fund, including compensation paid to the Manager's affiliates for services
provided and research provided to the Manager in connection with permissible
brokerage arrangements (soft dollar arrangements).
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 provided to the
Fund by the Manager are a benefit to the Fund and in the best interest of the
Fund's shareholders and that the amount and structure of the compensation
received by the Manager and its affiliates are reasonable in relation to the
services provided. Accordingly, the Board elected to continue the Agreement for
another year. 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.
47 | OPPENHEIMER MIDCAP FUND
TRUSTEES AND OFFICERS Unaudited
- --------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
NAME, POSITION(S) HELD WITH THE PRINCIPAL OCCUPATION(S) DURING THE PAST 5 YEARS; OTHER TRUSTEESHIPS/DIRECTORSHIPS HELD; NUMBER
FUND, LENGTH OF SERVICE, AGE OF PORTFOLIOS IN THE FUND COMPLEX CURRENTLY OVERSEEN
INDEPENDENT THE ADDRESS OF EACH TRUSTEE IN THE CHART BELOW IS 6803 S. TUCSON WAY, CENTENNIAL, COLORADO
TRUSTEES 80112-3924. EACH TRUSTEE SERVES FOR AN INDEFINITE TERM OR UNTIL HIS OR HER RESIGNATION,
RETIREMENT, DEATH OR REMOVAL.
THOMAS W. COURTNEY, Principal of Courtney Associates, Inc. (venture capital firm) (since 1982); General Partner of
Chairman of the Board Trivest Venture Fund (private venture capital fund); President of Investment Counseling
of Trustees (since 2001), Federated Investors, Inc. (1973-1982); Trustee of the following open-end investment companies:
Trustee (since 1997) Cash Assets Trust (1984), Premier VIT (formerly PIMCO Advisors VIT), Tax Free Trust of Arizona
Age: 74 (since 1984) and four funds for the Hawaiian Tax Free Trust. Oversees 10 portfolios in the
OppenheimerFunds complex.
DAVID K. DOWNES, President, Chief Executive Officer and Board Member of CRAFund Advisors, Inc. (investment
Trustee (since 2005) management company) (since January 2004); President of The Community Reinvestment Act Qualified
Age: 67 Investment Fund (investment management company) (since January 2004); Independent Chairman of
the Board of Trustees of Quaker Investment Trust (registered investment company) (since January
2004); Director of Internet Capital Group (information technology company) (since October
2003); Chief Operating Officer and Chief Financial Officer of Lincoln National Investment
Companies, Inc. (subsidiary of Lincoln National Corporation, a publicly traded company) and
Delaware Investments U.S., Inc. (investment management subsidiary of Lincoln National
Corporation) (1993-2003); President, Chief Executive Officer and Trustee of Delaware Investment
Family of Funds (1993-2003); President and Board Member of Lincoln National Convertible
Securities Funds, Inc. and the Lincoln National Income Funds, TDC (1993-2003); Chairman and
Chief Executive Officer of Retirement Financial Services, Inc. (registered transfer agent and
investment adviser and subsidiary of Delaware Investments U.S., Inc.) (1993-2003); President and
Chief Executive Officer of Delaware Service Company, Inc. (1995-2003); Chief Administrative
Officer, Chief Financial Officer, Vice Chairman and Director of Equitable Capital Management
Corporation (investment subsidiary of Equitable Life Assurance Society) (1985-1992); Corporate
Controller of Merrill Lynch & Company (financial services holding company) (1977-1985); held
the following positions at the Colonial Penn Group, Inc. (insurance company): Corporate Budget
Director (1974-1977), Assistant Treasurer (1972-1974) and Director of Corporate Taxes
(1969-1972); held the following positions at Price Waterhouse & Company (financial services
firm): Tax Manager (1967-1969), Tax Senior (1965-1967) and Staff Accountant (1963-1965); United
States Marine Corps (1957-1959). Oversees 63 portfolios in the OppenheimerFunds complex.
ROBERT G. GALLI, A director or trustee of other Oppenheimer funds. Oversees 63 portfolios in the OppenheimerFunds
Trustee (since 1998) complex.
Age: 74
LACY B. HERRMANN, Founder and Chairman Emeritus of Aquila Group of Funds (open-end investment company) (since
Trustee (since 1997) December 2004); Chairman of Aquila Management Corporation and Aquila Investment Management LLC
Age: 78 (since August 1984); Chief Executive Officer and President of Aquila Management Corporation
(August 1984-December 1994); Vice President, Director and Secretary of Aquila Distributors, Inc.
(distributor of Aquila Management Corporation); Treasurer of Aquila Distributors, Inc.;
President and Chairman of the Board of Trustees of Capital Cash Management Trust ("CCMT");
President and Director of STCM Management Company, Inc. (sponsor and adviser to CCMT); Chairman,
48 | OPPENHEIMER MIDCAP FUND
LACY B. HERRMANN, President and Director of InCap Management Corporation; Sub-Advisor and Administrator of Prime
Continued Cash Fund & Short Term Asset Reserves; Director of OCC Cash Reserves, Inc. (open-end investment
company) (June 2003-December 2004); Trustee of Premier VIT (formerly PIMCO Advisors VIT)
(investment company) (since 1994); Trustee of OCC Accumulation Trust (open-end investment
company) (until December 2004); Trustee Emeritus of Brown University (since June 1983). Oversees
10 portfolios in the OppenheimerFunds complex.
BRIAN F. WRUBLE, General Partner of Odyssey Partners, L.P. (hedge fund) (since September 1995); Director of
Trustee (since 2001) Special Value Opportunities Fund, LLC (registered investment company) (since September 2004);
Age: 64 Member of Zurich Financial Services Investment Advisory Board (insurance) (since October 2004);
Chairman (since August 2007) and Trustee (since August 1991) of the Board of Governing Trustees
of The Jackson Laboratory (non-profit); Trustee of the 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); 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 63 portfolios in the
OppenheimerFunds complex.
- ----------------------------------------------------------------------------------------------------------------------------------
INTERESTED TRUSTEE MR. MURPHY IS AN "INTERESTED TRUSTEE" BECAUSE HE IS AFFILIATED WITH THE MANAGER BY VIRTUE OF HIS
AND OFFICER POSITIONS AS AN OFFICER AND DIRECTOR OF THE MANAGER, AND AS A SHAREHOLDER OF ITS PARENT
COMPANY. THE ADDRESS OF MR. MURPHY IS TWO WORLD FINANCIAL CENTER, 225 LIBERTY STREET, 11TH
FLOOR, NEW YORK, 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.
JOHN V. MURPHY, Chairman, Chief Executive Officer and Director of the Manager (since June 2001); President of
Trustee (since 2005) and the Manager (September 2000-March 2007); President and director or trustee of other Oppenheimer
President and Principal funds; President and Director of Oppenheimer Acquisition Corp. ("OAC") (the Manager's parent
Executive Officer holding company) and of Oppenheimer Partnership Holdings, Inc. (holding company subsidiary of
(since 2001) the Manager) (since July 2001); Director of OppenheimerFunds Distributor, Inc. (subsidiary of
Age: 58 the Manager) (November 2001-December 2006); 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
subsidiaries 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 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 of Babson Capital Management LLC) (since June
1995); Chairman (since October 2007) and Member of the Investment Company Institute's Board of
Governors (since October 2003). Oversees 102 portfolios in the OppenheimerFunds complex.
49 | OPPENHEIMER MIDCAP FUND
TRUSTEES AND OFFICERS Unaudited / Continued
- --------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
OTHER OFFICERS THE ADDRESSES OF THE OFFICERS IN THE CHART BELOW ARE AS FOLLOWS: FOR MESSRS. ROYCE, ZACK,
OF THE FUND 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.
RICHARD ROYCE, Prior to joining the Manager in 2007, Vice President, co-portfolio manager and technology and
Vice President and Portfolio media analyst at JP Morgan Asset Management (November 1998-April 2007). Prior to that time, an
Manager (since 2007) investment analyst at Mark Asset Management. A portfolio manager and officer of 2 portfolios in
Age: 42 the OppenheimerFunds complex.
MARK S. VANDEHEY, Senior Vice President and Chief Compliance Officer of the Manager (since March 2004); Chief
Vice President and Compliance Officer of the Manager, OppenheimerFunds Distributor, Inc., Centennial Asset
Chief Compliance Officer Management and Shareholder Services, Inc. (since March 2004); Vice President of OppenheimerFunds
(since 2004) Distributor, Inc., Centennial Asset Management Corporation and Shareholder Services, Inc. (since
Age: 57 June 1983). Former Vice President and Director of Internal Audit of the Manager (1997-February
2004). An officer of 102 portfolios in the OppenheimerFunds complex.
BRIAN W. WIXTED, Senior Vice President and Treasurer of the Manager (since March 1999); Treasurer of the
Treasurer and Principal following: HarbourView Asset Management Corporation, Shareholder Financial Services, Inc.,
Financial & Accounting Shareholder Services, Inc., Oppenheimer Real Asset Management, Inc. and Oppenheimer Partnership
Officer (since 1999) Holdings, Inc. (since March 1999), OFI Private Investments, Inc. (since March 2000),
Age: 48 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). An officer of 102 portfolios in the OppenheimerFunds complex.
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 2004) 1998-July 2002). An officer of 102 portfolios in the OppenheimerFunds complex.
Age: 37
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 2005) Financial Group LLC (May 2001-March 2003). An officer of 102 portfolios in the OppenheimerFunds
Age: 37 complex.
50 | OPPENHEIMER MIDCAP FUND
ROBERT G. ZACK, Executive Vice President (since January 2004) and General Counsel (since March 2002) of the
Secretary (since 2001) Manager; General Counsel and Director of the Distributor (since December 2001); General Counsel
Age: 59 of Centennial Asset Management Corporation (since December 2001); Senior Vice President and
General Counsel of HarbourView 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
International Distributor Limited (since December 2003); Senior Vice President (May
1985-December 2003). An officer of 102 portfolios in the OppenheimerFunds complex.
LISA I. BLOOMBERG, Vice President and Associate Counsel of the Manager (since May 2004); First Vice President
Assistant Secretary (April 2001-April 2004), Associate General Counsel (December 2000-April 2004). An officer of
(since 2004) 102 portfolios in the OppenheimerFunds complex.
Age: 39
PHILLIP S. GILLESPIE, Senior Vice President and Deputy General Counsel of the Manager (since September 2004); First
Assistant Secretary Vice President (2000-September 2004), Director (2000-September 2004) and Vice President
(since 2004) (1998-2000) of Merrill Lynch Investment Management. An officer of 102 portfolios in the
Age: 43 OppenheimerFunds complex.
KATHLEEN T. IVES, Vice President (since June 1998) and Senior Counsel and Assistant Secretary (since October 2003)
Assistant Secretary of the Manager; Vice President (since 1999) and Assistant Secretary (since October 2003) of the
(since 2001) Distributor; Assistant Secretary of Centennial Asset Management Corporation (since October
Age: 42 2003); 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 102 portfolios in the OppenheimerFunds complex.
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.
51 | OPPENHEIMER MIDCAP 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 David Downes, a
member of the Board's Audit Committee, is an audit committee financial expert
and that Mr. Downes is "independent" for purposes of this Item 3.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
(a) Audit Fees
The principal accountant for the audit of the registrant's annual financial
statements billed $20,000 in fiscal 2007 and $17,000 in fiscal 2006.
(b) Audit-Related 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 $256,236 in fiscal 2007 and $216,204 in fiscal 2006 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: internal control reviews.
(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 to the registrant 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 $256,236 in fiscal 2007 and $216,204 in
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 AUDIT COMMITTEE PROVISIONS WITH RESPECT TO NOMINATIONS OF
DIRECTORS/TRUSTEES TO THE RESPECTIVE BOARDS
1. The Fund's Audit 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 10/31/2007, 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 MidCap Fund
By: /s/ John V. Murphy
---------------------------
John V. Murphy
Principal Executive Officer
Date: 12/11/2007
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: 12/11/2007
By: /s/ Brian W. Wixted
---------------------------
Brian W. Wixted
Principal Financial Officer
Date: 12/11/2007