OPPENHEIMER
Small- & Mid- Cap Value Fund
Prospectus dated February 28, 2013
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NYSE Ticker Symbols
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Class A
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QVSCX
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Class B
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QSCBX
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Class C
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QSCCX
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Class N
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QSCNX
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Class Y
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QSCYX
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Class I
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QSCIX
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Oppenheimer Small- & Mid- Cap Value Fund is a mutual fund that seeks capital appreciation. It emphasizes investments in common
stocks and other equity securities of "small- and mid- cap" companies.
This prospectus contains important information about the Fund's objective, investment policies, strategies and risks. It also
contains important information about how to buy and sell shares of the Fund and other account features. Please read this prospectus
carefully before you invest and keep it for future reference about your account.
As with all mutual funds, the Securities and Exchange Commission has not approved or disapproved the Fund's securities nor
has it determined that this prospectus is accurate or complete. It is a criminal offense to represent otherwise.
Oppenheimer Small- & Mid- Cap Value Fund
To Summary Prospectus
THE FUND SUMMARY
Investment Objective.
The Fund seeks capital appreciation.
Fees and Expenses of the Fund.
This table describes the fees and expenses that you may pay if you buy and hold or redeem shares of the Fund. You may qualify
for sales charge discounts if you (or you and your spouse) invest, or agree to invest in the future, at least $25,000 in certain
funds in the Oppenheimer family of funds. More information about these and other discounts is available from your financial
professional and in the section "About Your Account" beginning on page 11 of the prospectus and in the sections "How to Buy Shares" beginning on page 56 and "Appendix A" in the Fund's Statement of Additional Information.
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Shareholder Fees
(fees paid directly from your investment)
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Class A
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Class B
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Class C
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Class N
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Class Y
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Class I
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Maximum Sales Charge (Load) imposed on purchases (as % of offering price)
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5.75%
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None
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None
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None
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None
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None
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Maximum Deferred Sales Charge (Load) (as % of the lower of original offering price or redemption proceeds)
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None
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5%
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1%
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1%
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None
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None
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Annual Fund Operating Expenses
(expenses that you pay each year as a percentage of the value of your investment)
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Class A
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Class B
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Class C
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Class N
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Class Y
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Class I
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Management Fees
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0.68%
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0.68%
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0.68%
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0.68%
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0.68%
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0.68%
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Distribution and/or Service (12b-1) Fees
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0.25%
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1.00%
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1.00%
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0.50%
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None
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None
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Other Expenses
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0.38%
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0.69%
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0.40%
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0.41%
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0.24%
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0.06%
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Total Annual Fund Operating Expenses
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1.31%
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2.37%
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2.08%
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1.59%
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0.92%
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0.74%
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Fee Waiver and Expense Reimbursement*
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(0.05%)
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(0.28%)
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(0.02%)
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(0.04%)
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0.00%
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0.00%
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Total Annual Fund Operating Expenses After Fee Waiver and/or Expense Reimbursement
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1.26%
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2.09%
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2.06%
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1.55%
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0.92%
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0.74%
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* The Fund's transfer agent has voluntarily agreed to limit its fees for classes B, C, N and Y to 0.35% of average annual
net assets per class per fiscal year, and to 0.30% of average annual net assets per fiscal year for Class A shares. These limitations
may not be amended or withdrawn until one year from the date of this prospectus. The Manager has voluntarily agreed to waive
fees and/or reimburse expenses in an amount equal to the indirect management fees incurred through the Fund's investment in
funds managed by the Manager or its affiliates. This limit may not be amended or withdrawn until one year after the date
of this prospectus.
Example.
The following Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other
mutual funds. The Example assumes that you invest $10,000 in a class of shares of the Fund for the time periods indicated.
The Example also assumes that your investment has a 5% return each year and that the Fund's operating expenses remain the
same. Although your actual costs may be higher or lower, based on these assumptions your expenses would be as follows:
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If shares are redeemed
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If shares are not redeemed
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1 Year
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3 Years
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5 Years
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10 Years
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1 Year
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3 Years
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5 Years
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10 Years
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Class A
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$
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697
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$
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964
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$
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1,252
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$
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2,069
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$
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697
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$
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964
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$
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1,252
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$
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2,069
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Class B
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$
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714
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$
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1,021
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$
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1,454
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$
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2,197
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$
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214
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$
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721
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$
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1,254
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$
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2,197
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Class C
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$
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311
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$
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657
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$
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1,128
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$
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2,434
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$
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211
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$
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657
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$
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1,128
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$
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2,434
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Class N
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$
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259
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$
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502
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$
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869
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$
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1,901
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$
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159
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$
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502
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$
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869
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$
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1,901
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Class Y
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$
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94
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$
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295
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$
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512
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$
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1,136
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$
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94
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$
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295
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$
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512
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$
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1,136
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Class I
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$
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76
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$
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237
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$
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413
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$
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922
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$
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76
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$
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237
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$
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413
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$
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922
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Portfolio Turnover.
The Fund pays transaction costs, such as commissions, when it buys and sells securities (or "turns over" its portfolio).
A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are
held in a taxable account. These costs, which are not reflected in the annual fund operating expenses or in the Example, affect
the Fund's performance. During the most recent fiscal year, the Fund's portfolio turnover rate was 54% of the average value of its portfolio.
Principal Investment Strategies.
The Fund mainly invests in common stocks of U.S. companies that have a market capitalization up to $13 billion. That range
includes both small- and mid-cap stocks. The Fund has no fixed ratio for the percentage of small-cap and mid-cap stocks required
to be held in its portfolio. Under normal market conditions the Fund will invest at least 80% of its net assets, plus the
amount of any borrowings for investment purposes, in equity securities of small-cap and mid-cap issuers.
The Fund primarily invests in U.S. companies but may also purchase securities of issuers in any country, including developed
and emerging market countries. While the Fund has no limits on the percentage of its assets it can invest in foreign securities,
normally it does not expect to invest substantial amounts of its assets in foreign securities and generally limits investments
in emerging markets to not more than 5% of its total assets. The Fund emphasizes securities that the portfolio manager believes
are undervalued.
In selecting investments for the Fund, the portfolio manager looks for stocks of small- and mid-cap companies that he believes
have been undervalued by the market. A security may be undervalued because the market is not aware of the issuer's intrinsic
value, does not yet recognize its future potential, or the issuer may be temporarily out of favor. The Fund seeks to realize
gains in the prices of those securities when other investors recognize their real or prospective worth. The portfolio manager
uses a "bottom up" approach to select securities one at a time before considering industry trends. Those companies may have
a low ratio of their stock price to earnings, for example. The portfolio manager also analyzes factors such as a company's
book value, sales, earnings, growth potential and cash flows. After considering these criteria, the portfolio manager may
also look at broader industry and economic trends that could affect the growth potential of particular small- and mid-cap
stocks. The portfolio manager currently focuses on companies with the following characteristics, which may vary in particular
cases and may change over time:
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Favorable supply/demand conditions for key products
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Development of new products or businesses
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Competitive position in the marketplace
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Effective allocation of capital
The Fund may sell securities that the portfolio manager believes no longer meet the above criteria, but is not required to
do so.
Principal Risks.
The price of the Fund's shares can go up and down substantially. The value of the Fund's investments may change because of
broad changes in the markets in which the Fund invests or because of poor investment selection, which could cause the Fund
to underperform other funds with similar investment objectives. There is no assurance that the Fund will achieve its investment
objective. When you redeem your shares, they may be worth more or less than what you paid for them.
These risks mean that you can lose money by investing in the Fund.
Main Risks of Investing in Stock.
The value of the Fund's portfolio may be affected by changes in the stock markets. Stock markets may experience significant short-term
volatility and may fall sharply at times. Different stock markets may behave differently from each other and U.S. stock markets
may move in the opposite direction from one or more foreign stock markets.
The prices of individual stocks generally do not all move in the same direction at the same time and a variety of factors
can affect the price of a particular company's stock. These factors may include, but are not limited to: poor earnings reports,
a loss of customers, litigation against the company, general unfavorable performance of the company's sector or industry,
or changes in government regulations affecting the company or its industry.
At times, the Fund may emphasize investments in a particular industry or market sector. To the extent that it increases
its emphasis on a particular industry or sector, the value of its investments may fluctuate more in response to events (such
as changes in economic conditions, government regulations, or the availability of basic resources or supplies) that affect
that particular industry or sector more than others.
Main Risks of Value Investing.
Value investing entails the risk that if the market does not recognize that the Fund's securities are undervalued, the prices
of those securities might not appreciate as anticipated. A value approach could also result in fewer investments that increase
rapidly during times of market gains and could cause the Fund to underperform funds that use a growth or non-value approach
to investing. Value investing has gone in and out of favor during past market cycles and when value investing is out of favor
or when markets are unstable, the securities of "value" companies may underperform the securities of "growth" companies.
Main Risks of Small- and Mid-Sized Companies.
The stock prices of small- and mid-sized companies may be more volatile and their securities may be more difficult to sell
than those of larger companies. They may not have established markets, may have fewer customers and product lines, may have
unseasoned management or less management depth and may have more limited access to financial resources. Smaller companies
may not pay dividends or provide capital gains for some time, if at all.
The Fund can invest up to 5% of its total assets in securities of small, unseasoned companies.
Price Arbitrage.
Because the Fund may invest in smaller company stocks that might trade infrequently, investors might seek to trade fund shares
based on their knowledge or understanding of the value of those securities (this is sometimes referred to as "price arbitrage").
If such price arbitrage were successful, it might interfere with the efficient management of the Fund's portfolio and the
Fund may be required to sell securities at disadvantageous times or prices to satisfy the liquidity requirements created by
that activity. Successful price arbitrage might also dilute the value of fund shares held by other shareholders.
Main Risks of Foreign Investing.
Foreign securities are subject to special risks. Foreign issuers are usually not subject to the same accounting and disclosure
requirements that U.S. companies are subject to, which may make it difficult for the Fund to evaluate a foreign company's
operations or financial condition. A change in the value of a foreign currency against the U.S. dollar will result in a change
in the U.S. dollar value of securities denominated in that foreign currency and in the value of any income or distributions
the Fund may receive on those securities. The value of foreign investments may be affected by exchange control regulations,
foreign taxes, higher transaction and other costs, delays in the settlement of transactions, changes in economic or monetary
policy in the United States or abroad, expropriation or nationalization of a company's assets, or other political and economic
factors. These risks may be greater for investments in developing or emerging market countries.
Who Is the Fund Designed For?
The Fund is designed primarily for investors seeking capital appreciation over the long term. Those investors should be willing
to assume the risks of short-term share price fluctuations and losses that are typical for funds emphasizing small- and mid-cap
stock investments. Since the Fund does not seek current income and its income from investments will likely be small, it is
not designed for investors needing an assured level of current income. The Fund is not a complete investment program and may
not be appropriate for all investors. You should carefully consider your own investment goals and risk tolerance before investing
in the Fund.
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An investment in the Fund is not a deposit of any bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation
or any other government agency.
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The Fund's Past Performance.
The bar chart and table below provide some indication of the risks of investing in the Fund by showing changes in the Fund's
performance (for Class A shares) from year to year and by showing how the Fund's average annual returns for 1, 5 and 10 years compare with those of a broad
measure of market performance. The Fund's past investment performance (before and after taxes) is not necessarily an indication
of how the Fund will perform in the future. More recent performance information is available by calling the toll-free number
on the back of this prospectus and on the Fund's website:
https://www.oppenheimerfunds.com/fund/SmallMidCapValueFund
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Sales charges and taxes are not included and the returns would be lower if they were. During the period shown, the highest
return for a calendar quarter was 23.11% (2nd Qtr 09) and the lowest return was -31.17% (4th Qtr 08). For the period from January 1, 2012 through December 31, 2012 the cumulative return before sales charges and taxes was 9.48%.
The following table shows the average annual total returns for each class of the Fund's shares. After-tax returns are calculated
using the highest individual federal marginal income tax rates and do not reflect the impact of state or local taxes. Your
actual after-tax returns, depending on your individual tax situation, may differ from those shown and after-tax returns shown
are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual
retirement accounts. After-tax returns are shown for only one class and after-tax returns for other classes will vary.
Performance information for Class I shares will be provided after those shares have one full calendar year of performance.
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Average Annual Total Returns
for the periods ended December 31, 2012
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1 Year
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5 Years
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10 Years (or life of class, if less)
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Class A Shares (inception 1/3/89)
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Return Before Taxes
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3.19%
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(3.59%)
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8.42%
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Return After Taxes on Distributions
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3.16%
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(3.60%)
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7.49%
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Return After Taxes on Distributions and Sale of Fund Shares
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2.07%
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(3.02%)
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7.04%
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Class B Shares (inception 9/1/93)
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3.57%
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(3.62%)
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8.54%
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Class C Shares (inception 9/1/93)
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7.59%
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(3.19%)
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8.22%
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Class N Shares (inception 3/1/01)
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8.19%
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(2.71%)
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8.72%
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Class Y Shares (inception 10/24/05)
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9.80%
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(2.10%)
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2.84%
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Russell 2000® Index
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16.35%
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3.56%
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9.72%
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(reflects no deduction for fees, expenses or taxes)
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Russell 2500® Index
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17.88%
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4.34%
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10.49%
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(reflects no deduction for fees, expenses or taxes)
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Russell 2500® Value Index
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19.21%
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4.54%
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10.20%
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(reflects no deduction for fees, expenses or taxes)
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Investment Adviser.
OFI Global Asset Management, Inc. (the "Manager") is the Fund's investment adviser. OppenheimerFunds, Inc. (the "Sub-Adviser")
is its sub-adviser.
Portfolio Managers.
Michael S. Levine, CFA, has been portfolio manager of the Fund since February 28, 2013. Effective as of March 11, 2013, Mr.
Levine is replaced by Laton Spahr, CFA, as portfolio manager of the Fund and Eric Hewitt as co-portfolio manager of the Fund.
Purchase and Sale of Fund Shares.
You can buy most classes of Fund shares with a minimum initial investment of $1,000 and make additional investments with
as little as $50. For certain investment plans and retirement accounts, the minimum initial investment is $500 and, for some,
the minimum additional investment is $25. For certain fee based programs the minimum initial investment is $250. For Class
I shares, the minimum initial investment is $5 million per account. The Class I share minimum initial investment will be waived
for retirement plan service provider platforms.
Shares may be purchased through a financial intermediary or the Distributor and redeemed through a financial intermediary
or the Transfer Agent on days the New York Stock Exchange is open for trading. Shareholders may purchase or redeem shares
by mail, through the website at www.oppenheimerfunds.com or by calling 1.800.225.5677.
Share transactions may be paid by check, by Federal Funds wire or directly from or into your bank account.
Class B shares are no longer offered for new purchases. Any investments for existing Class B share accounts will be made in
Class A shares of Oppenheimer Money Market Fund.
Taxes.
If your shares are not held in a tax-deferred account, Fund distributions are subject to Federal income tax as ordinary income
or as capital gains and they may also be subject to state or local taxes.
Payments to Broker-Dealers and Other Financial Intermediaries.
If you purchase Fund shares through a broker-dealer or other financial intermediary (such as a bank), the Fund, the Sub-Adviser,
or their related companies may pay the intermediary for the sale of Fund shares and related services. These payments may create
a conflict of interest by influencing the broker-dealer or other intermediary and your salesperson to recommend the Fund over
another investment. Ask your salesperson or visit your financial intermediary's website for more information.
MORE ABOUT THE FUND
About the Fund's Investments
The allocation of the Fund's portfolio among different types of investments will vary over time and the Fund's portfolio might
not always include all of the different types of investments described below. The Statement of Additional Information contains additional
information about the Fund's investment policies and risks.
The Fund's Principal Investment Strategies and Risks.
The following strategies and types of investments are the ones that the Fund considers to be the most important in seeking
to achieve its investment objective and the following risks are those the Fund expects its portfolio to be subject to as a
whole.
Common Stock.
Common stock represents an ownership interest in a company. It ranks below preferred stock and debt securities in claims
for dividends and in claims for assets of the issuer in a liquidation or bankruptcy. Common stocks may be exchange-traded
or over-the-counter securities. Over-the-counter securities may be less liquid than exchange-traded securities.
Preferred Stock.
Preferred stock has a set dividend rate and ranks ahead of common stocks and behind debt securities in claims for dividends
and for assets of the issuer in a liquidation or bankruptcy. The dividends on preferred stock may be cumulative (they remain
a liability of the company until paid) or non-cumulative. The fixed dividend rate of preferred stocks may cause their prices
to behave more like those of debt securities. When interest rates rise, the value of preferred stock having a fixed dividend
rate tends to fall.
Small-Cap Investments.
The Fund may invest in small-cap companies, including "unseasoned" companies that have been in operation for less than three
years (including the operations of any predecessors). Small-cap companies may be developing new products or services that
the Fund believes have relatively favorable prospects. They may be expanding into new and growing markets that might enable
them to achieve a favorable market position. In many instances, the securities of smaller companies are traded over-the-counter
or on a regional securities exchange, where the frequency and volume of trading is substantially less than is typical for
securities of larger companies traded on national securities exchanges. Therefore, the securities of smaller companies may
be subject to wider price fluctuations and may be less liquid.
Mid-Cap Investments.
Mid-cap companies are generally companies that have completed their initial start-up cycle, and in many cases have established
markets and developed seasoned management teams. The portfolio manager searches for stocks of mid-cap companies that have
the financial stability approximating that of larger companies and the high growth potential associated with smaller companies.
The portfolio manager will not normally invest in stocks of companies in "turnaround" situations until the company's operating
characteristics have improved.
Risks of Small- and Mid-Sized Companies.
Small- and mid-sized companies may be either established or newer companies, including "unseasoned" companies that have been
in operation for less than three years. While smaller companies might offer greater opportunities for gain than larger companies,
they also may involve greater risk of loss. They may be more sensitive to changes in a company's earnings expectations and
may experience more abrupt and erratic price movements. Smaller companies' securities often trade in lower volumes and in
many instances, are traded over-the-counter or on a regional securities exchange, where the frequency and volume of trading
is substantially less than is typical for securities of larger companies traded on national securities exchanges. Therefore,
the securities of smaller companies may be subject to wider price fluctuations and it might be harder for the Fund to dispose
of its holdings at an acceptable price when it wants to sell them. Small- and mid-sized companies may not have established
markets for their products or services and may have fewer customers and product lines. They may have more limited access to
financial resources and may not have the financial strength to sustain them through business downturns or adverse market conditions.
Since small- and mid-sized companies typically reinvest a high proportion of their earnings in their business, they may not
pay dividends for some time, particularly if they are newer companies. Smaller companies may have unseasoned management or
less depth in management skill than larger, more established companies. They may be more reliant on the efforts of particular
members of their management team and management changes may pose a greater risk to the success of the business. Securities
of small, unseasoned companies may be particularly volatile, especially in the short term, and may have very limited liquidity.
It may take a substantial period of time to realize a gain on an investment in a small- or mid-sized company, if any gain
is realized at all.
Cyclical Opportunities.
At times, the Fund might seek to take advantage of short-term market movements or changes in the business cycle by investing
in companies or industries that are sensitive to those changes. For example, when the economy is expanding, companies in consumer
durables and the technology sector might benefit. There is a risk that if a cyclical event does not have the anticipated effect,
or when the issuer or industry is out of phase in the business cycle, the value of the Fund's investment could fall.
Foreign Investing.
The Fund can buy foreign securities that are listed on a domestic or foreign stock exchange, traded in domestic or foreign
over-the-counter markets, or that are represented by American Depository Receipts (ADRs). The Fund also can invest in emerging
markets, which have greater risks than developed markets. The Fund will hold foreign currency only in connection with buying
and selling foreign securities.
Special Risks of Developing and Emerging Markets.
Developing or emerging market countries generally have less developed securities markets or exchanges. Securities of issuers
in developing or emerging market countries may be more difficult to sell at an acceptable price and their prices may be more
volatile than securities of issuers in countries with more mature markets. Settlements of trades may be subject to greater
delays so that the proceeds of a sale of a security may not be received on a timely basis. The economies of developing or
emerging market countries may be more dependent on relatively few industries that may be highly vulnerable to local and global
changes. Developing or emerging market countries may have less developed legal and accounting systems, and investments in
those countries may be subject to greater risks of government restrictions, including confiscatory taxation, expropriation
or nationalization of company assets, restrictions on foreign ownership of local companies and restrictions on withdrawing
assets from the country. Their governments may also be more unstable than the governments of more developed countries. The
value of the currency of a developing or emerging market country may fluctuate more than the currencies of countries with
more mature markets. Investments in securities of issuers in developing or emerging market countries may be considered speculative.
Time-Zone Arbitrage.
The Fund may invest in securities of foreign issuers that are traded in U.S. or foreign markets. If the Fund invests a significant
amount of its assets in securities traded in foreign markets, it may be exposed to "time-zone arbitrage" attempts by investors
seeking to take advantage of differences in the values of foreign securities that might result from events that occur after
the close of the foreign securities market on which a security is traded and before the close of the New York Stock Exchange that
day, when the Fund's net asset value is calculated. If such time-zone arbitrage were successful, it might dilute the interests
of other shareholders. However, the Fund's use of "fair value pricing" under certain circumstances, to adjust the closing
market prices of foreign securities to reflect what the Sub-Adviser and the Board believe to be their fair value, may help
deter those activities.
Other Investment Strategies and Risks.
The Fund can also use the investment techniques and strategies described below. The Fund might not use all of these techniques
or strategies or might only use them from time to time.
Diversification and Concentration.
The Fund is a diversified fund. It attempts to reduce its exposure to the risks of individual securities by diversifying
its investments across a broad number of different issuers. The Fund will not concentrate more than 25% of its total assets
in issuers in any one industry. At times, however, the Fund may emphasize investments in some industries more than others.
Debt Securities.
The Fund may invest in debt securities, including: U.S. government securities and corporate bonds and debentures.
Debt securities may be subject to the following risks:
-
Interest Rate Risk.
The values of debt securities usually change when prevailing interest rates change. When interest rates rise, the values
of outstanding debt securities generally fall, and those securities may sell at a discount from their face amount. When interest
rates fall, the values of already-issued debt securities generally rise. However, when interest rates fall, the Fund's investments
in new securities may be at lower yields and may reduce the Fund's income. The values of longer-term debt securities usually
change more than the values of shorter-term debt securities when interest rates change.
"Zero-coupon" or "stripped" securities may be particularly sensitive to interest rate changes. Interest rate changes
may have different effects on the values of mortgage-related securities because of prepayment and extension risks.
-
Credit Risk.
Debt securities are also subject to credit risk. Credit risk is the risk that the issuer of a security might not make interest
and principal payments on the security as they become due. U.S. government securities generally have lower credit risks than
securities issued by private issuers or certain foreign governments. If an issuer fails to pay interest, the Fund's income
might be reduced, and if an issuer fails to repay principal, the value of the security might fall and the Fund could lose
the amount of its investment in the security. The extent of this risk varies based on the terms of the particular security
and the financial condition of the issuer. A downgrade in an issuer's credit rating or other adverse news about an issuer
can reduce the market value of that issuer's securities.
-
Prepayment Risk.
Certain fixed-income securities (in particular mortgage-related securities) are subject to the risk of unanticipated prepayment.
That is the risk that when interest rates fall, the issuer will repay the security prior to the security's expected maturity,
or with respect to certain fixed-income securities, that borrowers will repay the loans that underlie these securities more
quickly than expected, thereby causing the issuer of the security to repay the principal prior to expected maturity. The Fund
may need to reinvest the proceeds at a lower interest rate, reducing its income. Securities subject to prepayment risk generally
offer less potential for gains when prevailing interest rates fall. If the Fund buys those securities at a premium, accelerated
prepayments on those securities could cause the Fund to lose a portion of its principal investment. The impact of prepayments
on the price of a security may be difficult to predict and may increase the security's price volatility. Interest-only and
principal-only securities are especially sensitive to interest rate changes, which can affect not only their prices but can
also change the income flows and repayment assumptions about those investments.
-
Extension Risk.
If interest rates rise rapidly, repayments of principal on certain debt securities may occur at a slower rate than expected
and the expected maturity of those securities could lengthen as a result. Securities that are subject to extension risk generally
have a greater potential for loss when prevailing interest rates rise, which could cause their values to fall sharply.
Credit Quality.
The Fund may invest in securities that are rated or unrated. "Investment-grade" securities are those rated in one of the
top four rating categories by nationally recognized statistical rating organizations such as Moody's or Standard & Poor's
or unrated securities judged by the Sub-Adviser to be of comparable quality. "Lower-grade" securities are those that are rated
below those categories, which are also referred to as "junk bonds." While securities rated "Baa" by Moody's or "BBB" by Standard &
Poor's are considered "investment-grade," they may also have some speculative characteristics.
Credit ratings evaluate the expectation that scheduled interest and principal payments will be made in a timely manner. They
do not reflect any judgment of market risk. Rating agencies might not always change their credit rating of an issuer in a
timely manner to reflect events that could affect the issuer's ability to make scheduled payments on its obligations. In selecting
securities for its portfolio and evaluating their income potential and credit risk, the Fund does not rely solely on ratings
by rating organizations but evaluates business and economic factors affecting issuers as well. The ratings definitions of
the principal ratings organizations are included in Appendix B to the Fund's Statement of Additional Information.
The Fund can invest up to 5% of its total assets in below investment-grade debt securities. These debt securities are commonly
known as "junk bonds."
Investing in Small, Unseasoned Companies.
The Fund may invest in the securities of small, unseasoned companies that have been in operation for less than three years.
In addition to the risks of other small-sized issuers, the price of the securities of these companies may be particularly
volatile, especially in the short term, and may have very limited liquidity. Securities of smaller, newer companies are also
subject to greater risks of default than those of larger, more established issuers.
The Fund can invest up to 5% of its total assets in securities of small, unseasoned companies.
Derivative Investments.
The Fund can invest in "derivative" instruments. A derivative is an instrument whose value depends on (or is derived from)
the value of an underlying security, asset, interest rate, index or currency. Derivatives may allow the Fund to increase
or decrease its exposure to certain markets or risks.
The Fund may use derivatives to seek to increase its investment return or for hedging purposes. The Fund is not required to
use derivatives in seeking its investment objective or for hedging and might not do so.
Options, futures, and forward contracts are some of the derivatives that the Fund may use. The Fund may also use other
types of derivatives that are consistent with its investment strategies or for hedging purposes.
Hedging.
Hedging transactions are intended to reduce the risks of securities in the Fund's portfolio. At times, however, a hedging
instrument's value might not be correlated with the investment it is intended to hedge, and the hedge might be unsuccessful. If
the Fund uses a hedging instrument at the wrong time or judges market conditions incorrectly, the strategy could reduce its
return or create a loss.
Risks of Derivative Investments.
Derivatives may be volatile and may involve significant risks. The underlying security, obligor or other instrument on which
a derivative is based, or the derivative itself, may not perform as expected. The Fund may lose money on a derivative investment
if the issuer or counterparty fails to pay the amount due. Certain derivative investments held by the Fund may be illiquid,
making it difficult to close out an unfavorable position. Derivative transactions may require the payment of premiums and
can increase portfolio turnover. As a result, the Fund could realize little or no income or lose principal from the investment,
or a hedge might be unsuccessful. For some derivatives, it is possible for the Fund to lose more than the amount invested
in the derivative instrument. Some derivatives have the potential for unlimited loss, regardless of the size of the Fund's
initial investment.
Other Equity Securities.
In addition to common stocks, the Fund can invest in other equity or "equity equivalents" securities such as preferred stocks
or convertible securities. Preferred stocks generally pay a dividend and rank ahead of common stocks and behind debt securities
in claims for dividends and for assets of the issuer in a liquidation or bankruptcy. The dividend rate of preferred stocks
may cause their prices to behave more like those of debt securities. A convertible security is one that can be converted into
or exchanged for common stock of an issuer within a particular period of time at a specified price, upon the occurrence of
certain events or according to a price formula. Convertible securities offer the Fund the ability to participate in stock
market movements while also seeking some current income. Convertible debt securities pay interest and convertible preferred
stocks pay dividends until they mature or are converted, exchanged or redeemed. The Fund considers some convertible securities
to be "equity equivalents" because they are convertible into common stock. The credit ratings of those convertible securities
generally have less impact on the investment decision, although they are still subject to credit and interest rate risk.
Illiquid and Restricted Securities.
Investments that do not have an active trading market, or that have legal or contractual limitations on their resale, are
generally referred to as "illiquid" securities. Illiquid securities may be difficult to value or to sell promptly at an acceptable
price or may require registration under applicable securities laws before they can be sold publicly. Securities that have
limitations on their resale are referred to as "restricted securities." Certain restricted securities that are eligible for
resale to qualified institutional purchasers may not be regarded as illiquid.
The Fund will not invest more than 15% of its net assets in illiquid securities. The Sub-Adviser monitors the Fund's
holdings of illiquid securities on an ongoing basis to determine whether to sell any of those securities to maintain adequate
liquidity.
Conflicts of Interest.
The investment activities of the Manager, the Sub-Adviser and their affiliates in regard to other accounts they manage may
present conflicts of interest that could disadvantage the Fund and its shareholders. The Manager, the Sub-Adviser or their
affiliates may provide investment advisory services to other funds and accounts that have investment objectives or strategies
that differ from, or are contrary to, those of the Fund. That may result in another fund or account holding investment positions
that are adverse to the Fund's investment strategies or activities. Other funds or accounts advised by the Manager, the Sub-Adviser
or their affiliates may have conflicting interests arising from investment objectives that are similar to those of the Fund.
Those funds and accounts may engage in, and compete for, the same types of securities or other investments as the Fund or
invest in securities of the same issuers that have different, and possibly conflicting, characteristics. The trading and other
investment activities of those other funds or accounts may be carried out without regard to the investment activities of the
Fund and, as a result, the value of securities held by the Fund or the Fund's investment strategies may be adversely affected.
The Fund's investment performance will usually differ from the performance of other accounts advised by the Manager, the Sub-Adviser
or their affiliates and the Fund may experience losses during periods in which other accounts they advise achieve gains. The
Manager and the Sub-Adviser have adopted policies and procedures designed to address potential identified conflicts of interest,
however, such policies and procedures may also limit the Fund's investment activities and affect its performance.
Investments by "Funds of Funds."
Class I and Class Y shares of the Fund are offered as an investment to certain other Oppenheimer funds that act as "funds
of funds," which may invest significant portions of their assets in shares of the Fund. From time to time, those investments
may also represent a significant portion of the Fund's outstanding shares, or of its outstanding Class I and/or Y shares.
The Oppenheimer funds of funds typically use asset allocation strategies that may increase or reduce the amount of their investment
in the Fund frequently, possibly on a daily basis during volatile market conditions. If the size of those purchases or redemptions
were significant relative to the size of the Fund's assets, the Fund might be required to purchase or sell portfolio securities,
which could increase its transaction costs and reduce the performance of all of its share classes. A decline in the Fund's
assets due to large redemptions could also cause the Fund's operating expenses to increase. Further discussion of the possible
effects of frequent trading in the Fund's shares is included in the section "Limitations on Frequent Exchanges" in this prospectus.
Investments in Oppenheimer Institutional Money Market Fund.
The Fund can invest its free cash balances in Class E shares of Oppenheimer Institutional Money Market Fund to provide liquidity
or for defensive purposes. The Fund invests in Oppenheimer Institutional Money Market Fund, rather than purchasing individual
short-term investments, to seek a higher yield than it could obtain on its own. Oppenheimer Institutional Money Market Fund
is a registered open-end management investment company, regulated as a money market fund under the Investment Company Act
of 1940, and is part of the Oppenheimer family of funds. It invests in a variety of short-term, high-quality, dollar-denominated
money market instruments issued by the U.S. government, domestic and foreign corporations, other financial institutions, and
other entities. Those investments may have a higher rate of return than the investments that would be available to the Fund
directly. At the time of an investment, the Fund cannot always predict what the yield of the Oppenheimer Institutional Money
Market Fund will be because of the wide variety of instruments that fund holds in its portfolio. The return on those investments
may, in some cases, be lower than the return that would have been derived from other types of investments that would provide
liquidity. As a shareholder, the Fund will be subject to its proportional share of the expenses of Oppenheimer Institutional
Money Market Fund's Class E shares, including its advisory fee. However, the Manager will waive a portion of the Fund's advisory
fee to the extent of the Fund's share of the advisory fee paid to the Manager by Oppenheimer Institutional Money Market Fund.
Temporary Defensive and Interim Investments.
For temporary defensive purposes in times of adverse or unstable market, economic or political conditions, the Fund can invest
up to 100% of its total assets in investments that may be inconsistent with the Fund's principal investment strategies. Generally, the
Fund would invest in shares of Oppenheimer Institutional Money Market Fund or in the types of money market instruments in
which Oppenheimer Institutional Money Market Fund invests or in other short-term U.S. government securities. The Fund might
also hold these types of securities as interim investments pending the investment of proceeds from the sale of Fund shares
or the sale of Fund portfolio securities or to meet anticipated redemptions of Fund shares. To the extent the Fund invests
in these securities, it might not achieve its investment objective.
Portfolio Turnover.
A change in the securities held by the Fund is known as "portfolio turnover." The Fund may engage in active and frequent
trading to try to achieve its investment objective and may have a portfolio turnover rate of over 100% annually. Increased
portfolio turnover may result in higher brokerage fees or other transaction costs, which can reduce performance. If the Fund
realizes capital gains when it sells investments, it generally must pay those gains to shareholders, increasing its taxable
distributions. The Financial Highlights table at the end of this prospectus shows the Fund's portfolio turnover rates during
past fiscal years.
Changes To The Fund's Investment Policies.
The Fund's fundamental investment policies cannot be changed without the approval of a majority of the Fund's outstanding
voting shares; however, the Fund's Board can change non-fundamental policies without a shareholder vote. Significant policy
changes will be described in supplements to this prospectus. Shareholders will receive 60 days advance notice of any change
in the 80% investment policy described in "Principal Investment Strategies." The Fund's investment objective is a fundamental
policy. Other investment restrictions that are fundamental policies are listed in the Fund's Statement of Additional Information.
An investment policy is not fundamental unless this prospectus or the Statement of Additional Information states that it is.
Portfolio Holdings.
The Fund's portfolio holdings are included in its semi-annual and annual reports that are distributed to its shareholders
within 60 days after the close of the applicable reporting period. The Fund also discloses its portfolio holdings in its Schedule
of Investments on Form N-Q, which are public filings that are required to be made with the Securities and Exchange Commission
within 60 days after the end of the Fund's first and third fiscal quarters. Therefore, the Fund's portfolio holdings are made
publicly available no later than 60 days after the end of each of its fiscal quarters. In addition, the Fund's portfolio holdings
information, as of the end of each calendar month, may be posted and available on the Fund's website no sooner than 30 days
after the end of each calendar month.
A description of the Fund's policies and procedures with respect to the disclosure of its portfolio holdings is available
in the Fund's Statement of Additional Information.
How the Fund is Managed
THE MANAGER AND THE SUB-ADVISER.
OFI Global Asset Management, Inc., the Manager, is a wholly-owned subsidiary of OppenheimerFunds, Inc. The Manager oversees
the Fund's investments and its business operations. OppenheimerFunds, Inc., the Sub-Adviser, chooses the Fund's investments
and provides related advisory services. The Manager carries out its duties, subject to the policies established by the Fund's
Board, under an investment advisory agreement with the Fund that states the Manager's responsibilities. The agreement sets
the fees the Fund pays to the Manager and describes the expenses that the Fund is responsible to pay to conduct its business.
The Sub-Adviser has a sub-advisory agreement with the Manager and is paid by the Manager.
The Manager has been an investment adviser since 2012. The Sub-Adviser has been an investment adviser since 1960. The Manager
and the Sub-Adviser are located at Two World Financial Center, 225 Liberty Street, 11th Floor, New York, New York 10281-1008.
Advisory Fees.
Under the investment advisory agreement, the Fund pays the Manager an advisory fee at an annual rate that declines on additional
assets as the Fund grows: 0.80% of the first $400 million of average annual net assets of the Fund, 0.75% of the next $400
million, 0.60% of the next $1.2 billion, 0.58% of the next $4.0 billion, and 0.56% of average annual net assets in excess
of $6.0 billion, calculated on the daily net assets of the Fund. The Fund's advisory fee for the fiscal year ended October
31, 2012 was 0.68% of average annual net assets, before any applicable waivers. Under the sub-advisory agreement, the Manager pays the Sub-Adviser
a percentage of the net investment advisory fee (after all applicable waivers) that it receives from the Fund as compensation
for the provision of the investment advisory services.
The Fund's transfer agent has voluntarily agreed to limit its fees for Classes B, C, N and Y to 0.35% of average annual
net assets per class per fiscal year, and to 0.30% of average net assets per fiscal year for Class A shares. These expense
limitations may not be amended or withdrawn until one year after the date of this prospectus.
The Manager has also voluntarily agreed to waive fees and/or reimburse Fund expenses in an amount equal to the indirect
management fees incurred through the Fund's investment in funds managed by the Manager or its affiliates. During the fiscal
year ended October 31, 2012, those indirect expenses were less than 0.01% of average daily net assets and are therefore not
shown in the fee table earlier in this prospectus.The Fund's management fee and other annual operating expenses may vary in
future years.
A discussion regarding the basis for the Board of Trustees' approval of the Fund's investment advisory arrangements with
the Manager is available in the Fund's Annual Report to shareholders for the fiscal year ended October 31, 2012.
Portfolio Managers.
The Fund's portfolio is managed by Michael S. Levine, CFA, who is primarily responsible for the day-to-day management of
the Fund's investments. Mr. Levine has been a portfolio manager of the Fund since February 28, 2013. He has been a Vice President
of the Sub-Adviser since June 1998 and a Senior Portfolio Manager of the Sub-Adviser since September 2000. He is a portfolio
manager and an officer of other portfolios in the OppenheimerFunds complex.
Effective as of March 11, 2013, Mr. Levine is replaced by Laton Spahr, CFA, and Eric Hewitt, who are primarily responsible
for the day-to-day management of the Fund's investments. Mr. Spahr was a Senior Portfolio Manager for Columbia Management
Investment Advisers, LLC from 2003 to 2013 and an Equity Analyst there from 2001 to 2002. He is a portfolio manager of other
portfolios in the OppenheimerFunds complex. Mr. Hewitt was a Customer Portfolio Manager and Product Manager for Columbia Management
Investment Advisers, LLC from 2012 to 2013. He was a Senior Equity Analyst with Diamondback/Harbor Watch Capital Management,
LLC from 2009 to 2012 and a Senior Equity Analyst and Portfolio Manager with AllianceBerstein LP from 1999 to 2009.
The Statement of Additional Information provides additional
information about portfolio manager compensation, other accounts managed and ownership of Fund shares.
MORE ABOUT YOUR ACCOUNT
About Your Account
Where Can You Buy Fund Shares?
Oppenheimer funds may be purchased either directly or through a variety of "financial intermediaries" that offer Fund shares
to their clients. Financial intermediaries include securities dealers, financial advisors, brokers, banks, trust companies,
insurance companies and the sponsors of fund "supermarkets," fee-based advisory or wrap fee programs or college and retirement
savings programs.
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WHAT CLASSES OF SHARES DOES THE FUND OFFER?
The Fund offers investors five different classes of shares. The different classes of shares represent investments in the same
portfolio of securities, but the classes are subject to different expenses and will usually have different share prices.
When you buy shares, be sure to specify the class of shares you wish to purchase. If you do not choose a class, your investment
will be made in Class A shares.
Class B shares are no longer offered for new purchases.
Class A Shares.
If you buy Class A shares, you will pay an initial sales charge on investments up to $1 million for regular accounts or lesser
amounts for certain retirement plans or if you qualify for certain fee waivers. The amount of the sales charge will vary depending
on the amount you invest. The sales charge rates for different investment amounts are listed in "About Class A Shares" below.
Class B Shares.
If you purchased Class B shares, you did not pay a sales charge at the time of purchase, but you pay an annual asset-based
sales charge (distribution fee) over a period of approximately six years. If you sell your shares within six years after buying
them, you will normally pay a contingent deferred sales charge. The amount of the contingent deferred sales charge varies
depending on how long you own your shares.
Effective after June 29, 2012, Class B shares are no longer offered for new purchases. Any investments for existing Class
B share accounts will be made in Class A Shares of Oppenheimer Money Market Fund. See "About Class B Shares" below.
Class C Shares.
If you buy Class C shares, you will pay no sales charge at the time of purchase, but you will pay an ongoing asset-based
sales charge. If you sell your shares within 12 months after buying them, you will normally pay a contingent deferred sales
charge of 1.00%, as described in "About Class C Shares" below.
Class N Shares.
Class N shares are available only through certain retirement plans. If you buy Class N shares, you will pay no sales charge
at the time of purchase, but you will pay an ongoing asset-based sales charge. If you sell your shares within 18 months after
the retirement plan's first purchase of Class N shares, you may pay a contingent deferred sales charge of 1.00%. See "About
Class N Shares" below.
Class Y Shares.
Class Y shares are offered only to certain institutional investors that have a special agreement with the Distributor and
to present or former officers, directors, trustees and employees (and their eligible family members) of the Fund, the Manager
and its affiliates, its parent company and the subsidiaries of its parent company, and retirement plans established for the
benefit of such individuals. See "About Class Y Shares" below.
Class I Shares.
Class I shares are only offered to eligible institutional investors that make a minimum initial investment of $5 million
or more per account and to retirement plan service provider platforms. See "About Class I Shares" below.
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Certain sales charge waivers may apply to purchases or redemptions of Class A, Class B, Class C or Class N shares. More information
about those waivers is available in the Fund's Statement of Additional Information, or by clicking on the hyperlink "Sales
Charges & Breakpoints" under the heading "Fund Information" on the OppenheimerFunds website at "www.oppenheimerfunds.com."
What is the Minimum Investment.
You can buy most Fund share classes with a minimum initial investment of $1,000. For Class I shares the minimum initial investment
is $5 million per account. The Class I share minimum initial investment is waived for retirement plan service provider platforms.
Reduced initial minimums are available for other share classes in certain circumstances, including under the following investment
plans:
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For most types of retirement accounts that OppenheimerFunds offers, the minimum initial investment is $500.
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For certain retirement accounts that have automatic investments through salary deduction plans, there is no minimum initial
investment.
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For an Asset Builder Plan or Automatic Exchange Plan or a government allotment plan, the minimum initial investment is $500.
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For certain fee-based programs that have an agreement with the Distributor, a minimum initial investment of $250 applies.
You can make additional investments with as little as $50. The minimum additional investment requirement does not apply to
reinvested dividends from the Fund or other Oppenheimer funds, to omnibus account purchases or to Class I shares. A reduced
additional investment minimum of $25 applies to purchases through an Asset Builder Plan, an Automatic Exchange Plan or a government
allotment plan established before November 1, 2002.
Minimum Account Balance.
A $12 annual "minimum balance fee" is assessed on Fund accounts with a value of less than $500. The fee is automatically
deducted from each applicable Fund account annually in September. See the Statement of Additional Information for information
about the circumstances under which this fee will not be assessed. Small accounts may be involuntarily redeemed by the Fund
if the value has fallen below $500 for reasons other than a decline in the market value of the shares.
The minimum account balance for Class I shares is $2.5 million. If a Class I account balance falls below $2.5 million,
the account may be involuntarily redeemed or converted into a Class Y share account. This minimum balance policy does not
apply to accounts for which the minimum initial investment is waived.
Choosing a Share Class.
Once you decide that the Fund is an appropriate investment for you, deciding which class of shares is best suited to your
needs depends on a number of factors that you should discuss with your financial advisor. The Fund's operating costs that
apply to a share class and the effect of the different types of sales charges on your investment will affect your investment
results over time. For example, expenses such as the distribution or service fees will reduce the net asset value and the
dividends on share classes that are subject to those expenses.
Two of the factors to consider are how much you plan to invest and, while future financial needs cannot be predicted with
certainty, how long you plan to hold your investment. For example, with larger purchases that qualify for a reduced initial
sales charge on Class A shares, the effect of paying an initial sales charge on purchases of Class A shares may be less over
time than the effect of the distribution fees on other share classes. If your goals and objectives change over time and you
plan to purchase additional shares, you should re-evaluate each of the factors to see if you should consider a different class
of shares.
The discussion below is not intended to be investment advice or a recommendation, because each investor's financial considerations
are different. The discussion below assumes that you will purchase only one class of shares and not a combination of shares
of different classes. These examples are based on approximations of the effects of current sales charges and expenses projected
over time, and do not detail all of the considerations in selecting a class of shares. You should analyze your options carefully
with your financial advisor before making that choice.
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Investing for the Shorter Term.
While the Fund is meant to be a long-term investment, if you have a relatively short-term investment horizon, you should
consider investing in Class C shares. That is because the effect of the initial sales charge on Class A shares may be greater
than the effect of the ongoing asset-based sales charge on Class C shares over the short-term. The Class C contingent deferred
sales charge does not apply to redemptions of shares held for more than one year.
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Investing for the Longer Term.
If you have a longer-term investment horizon, Class A shares may be more appropriate. That is because the effect of the ongoing
asset-based sales charge on Class C shares might be greater than the effect of the initial sales charge on Class A shares,
regardless of the amount of your investment.
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Amount of Your Investment.
Your choice will also depend on how much you plan to invest. If you plan to invest more than $100,000, and as your investment
horizon increases, Class C shares might not be as advantageous as Class A shares. That is because the effect of the ongoing
asset-based sales charge on Class C shares may be greater than the effect of the reduced front-end sales charge on Class A
share purchases of $100,000 or more. For an investor who is eligible to purchase Class I shares, that share class will be
the most advantageous. For other investors who invest $1 million or more, Class A shares will be the most advantageous choice
in most cases, no matter how long you intend to hold your shares.
The Distributor normally will not accept purchase orders from a single investor for more than $1 million or more of Class
C shares. Dealers or other financial intermediaries are responsible for determining the suitability of a particular share
class for an investor.
Are There Differences in Account Features That Matter to You?
Some account features may not be available for all share classes. Other features may not be advisable because of the effect
of the contingent deferred sales charge. Therefore, you should carefully review how you plan to use your investment account
before deciding which class of shares to buy.
How Do Share Classes Affect Payments to Your Financial Intermediary?
The Class B, Class C, and Class N contingent deferred sales charges and asset-based sales charges have the same purpose as
the front-end sales charge or contingent deferred sales charge on Class A shares: to compensate the Distributor for concessions
and expenses it pays to brokers, dealers and other financial intermediaries for selling Fund shares. Those financial intermediaries
may receive different compensation for selling different classes of shares. The Sub-Adviser or Distributor may also pay dealers
or other financial intermediaries additional amounts from their own resources based on the value of Fund shares held by the
intermediary for its own account or held for its customers' accounts. For more information about those payments, see "Payments
to Financial Intermediaries and Service Providers" below.
About Class A Shares.
Class A shares are sold at their offering price, which is the net asset value of the shares (described below) plus, in most
cases, an initial sales charge. The Fund receives the amount of your investment, minus the sales charge, to invest for your
account. In some cases, Class A purchases may qualify for a reduced sales charge or a sales charge waiver, as described below and
in the Statement of Additional Information.
The Class A sales charge rate varies depending on the amount of your purchase. A portion or all of the sales charge may be
retained by the Distributor or paid to your broker, dealer or other financial intermediary as a concession. The current sales
charge rates and concessions paid are shown in the table below. There is no initial sales charge on Class A purchases of $1
million or more, but a contingent deferred sales charge (described below) may apply.
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Amount of Purchase
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Front-End Sales Charge As a Percentage of Offering Price
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Front-End Sales Charge As a Percentage of Net Amount Invested
|
Concession As a Percentage of Offering Price
|
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Less than $25,000
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5.75%
|
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6.10%
|
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4.75%
|
|
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$25,000 or more but less than $50,000
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5.50%
|
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5.82%
|
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4.75%
|
|
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$50,000 or more but less than $100,000
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4.75%
|
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4.99%
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4.00%
|
|
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$100,000 or more but less than $250,000
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3.75%
|
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3.90%
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3.00%
|
|
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$250,000 or more but less than $500,000
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2.50%
|
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2.56%
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2.00%
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|
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$500,000 or more but less than $1 million
|
2.00%
|
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2.04%
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1.60%
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Due to rounding, the actual sales charge for a particular transaction may be higher or lower than the rates listed above.
Reduced Class A Sales Charges.
Under a "Right of Accumulation" or a "Letter of Intent" you may be eligible to buy Class A shares of the Fund at the reduced
sales charge rate that would apply to a larger purchase. Purchases of "qualified shares" of the Fund and certain other Oppenheimer
funds may be added to your Class A share purchases for calculating the applicable sales charge.
Class A, Class B and Class C shares of most Oppenheimer funds (including shares of the Fund), and Class A, Class B, Class
C, Class G and Class H units owned in adviser sold Section 529 plans, for which an affiliate of the Manager or the Distributor
serves as the "Program Manager" or "Program Distributor" are "qualified shares" for satisfying the terms of a Right of Accumulation
or a Letter of Intent. Purchases made by reinvestment of dividend or capital gain distributions are "qualified shares" for
satisfying the terms of a Right of Accumulation, but are not "qualified shares" for satisfying the terms of a Letter of Intent.
Purchases of Class N, Class Y or Class I shares of Oppenheimer funds, purchases under the "reinvestment privilege" described
below, and purchases of Class A shares of Oppenheimer Money Market Fund, Inc. or Oppenheimer Cash Reserves on which a sales
charge has not been paid do not count as "qualified shares" for Right of Accumulation or Letter of Intent purposes. The Fund
reserves the right to modify or to cease offering these programs at any time.
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Right of Accumulation.
To qualify for the reduced Class A sales charge that would apply to a larger purchase than you are currently making, you
can add the value of qualified shares that you and your spouse currently own, and other qualified share purchases that you
are currently making, to the value of your Class A share purchase of the Fund. The Distributor or the financial intermediary
through which you are buying shares will determine the value of the qualified shares you currently own based on the greater
of their current offering price or the amount you paid for the shares. For purposes of calculating that value, the Distributor
will only take into consideration the value of shares owned as of December 31, 2007 and any shares purchased subsequently.
The value of any shares that you have redeemed will not be counted. In totaling your holdings, you may count shares held
in:
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your individual accounts (including IRAs, 403(b) plans and eligible 529 plans),
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your joint accounts with your spouse,
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accounts you or your spouse hold as trustees or custodians on behalf of your children who are minors.
A fiduciary can apply a right of accumulation to all shares purchased for a trust, estate or other fiduciary account that
has multiple accounts (including employee benefit plans for the same employer and Single K plans for the benefit of a sole
proprietor).
If you are buying shares directly from the Fund, you must inform the Distributor of your eligibility and holdings at the time
of your purchase in order to qualify for the Right of Accumulation. If you are buying shares through a financial intermediary
you must notify the intermediary of your eligibility for the Right of Accumulation at the time of your purchase.
To count shares held in accounts at other firms, you may be requested to provide the Distributor or your current financial
intermediary with a copy of account statements showing your current qualified share holdings. Shares purchased under a Letter
of Intent may also qualify as eligible holdings under a Right of Accumulation.
-
Letter of Intent.
You may also qualify for reduced Class A sales charges by submitting a Letter of Intent to the Distributor. A Letter of Intent
is a written statement of your intention to purchase a specified value of qualified shares over a 13-month period. The total
amount of your intended purchases will determine the reduced sales charge rate that will apply to your Class A share purchases
during that period. You must notify the Distributor or your financial intermediary of any qualifying 529 plan purchases or
purchases through other financial intermediaries.
Submitting a Letter of Intent does not obligate you to purchase the specified amount of shares. If you do not complete the
anticipated purchases, you will be charged the difference between the sales charge that you paid and the sales charge that
would apply to the actual value of shares you purchased. A certain portion of your shares will be held in escrow by the Fund's
Transfer Agent for this purpose. Please refer to "How to Buy Shares – Letters of Intent" in the Fund's Statement of Additional
Information for more complete information. You may also be able to apply the Right of Accumulation to purchases you make under
a Letter of Intent.
Class A Contingent Deferred Sales Charge.
Although there is no initial sales charge on Class A purchases of shares of one or more of the Oppenheimer funds totaling
$1 million or more, those Class A shares may be subject to a 1.00% contingent deferred sales charge if they are redeemed within
an 18-month "holding period" measured from the beginning of the calendar month in which they were purchased (except for shares
purchased in certain retirement plans, as described below). The "holding period" for shares purchased after February 5, 2012
will begin on the date of purchase. That sales charge will be calculated on the lesser of the original net asset value of
the redeemed shares at the time of purchase or the aggregate net asset value of the redeemed shares at the time of redemption.
The Class A contingent deferred sales charge does not apply to shares purchased by the reinvestment of dividends or capital
gain distributions.
The Distributor pays concessions from its own resources equal to 1.00% of Class A purchases of $1 million or more (other than
purchases by certain retirement plans). The concession will not be paid on shares purchased by exchange or shares that were
previously subject to a front-end sales charge and concession.
Class A Purchases by Certain Retirement Plans.
There is no initial sales charge on purchases of Class A shares of the Fund by retirement plans that have $1 million or more
in plan assets or by certain retirement plans or platforms offered through financial intermediaries or other service providers.
In addition, there is no contingent deferred sales charge on redemptions of certain Class A retirement plan shares offered
through financial intermediaries or other service providers. There is no contingent deferred sales charge on redemptions of
Class A group retirement plan shares except for shares of certain group retirement plans that were established prior to March
1, 2001 ("grandfathered retirement plans"). Shares purchased in grandfathered retirement plans are subject to the contingent
deferred sales charge if they are redeemed within 18 months after purchase.
The Distributor does not pay a concession on Class A retirement plan purchases except on purchases by grandfathered retirement
plans and plans that have $5 million or more in plan assets. The concession for grandfathered retirement plan purchases is
0.25%. For purchases of Class A shares by retirement plans that have $5 million or more in plan assets (within the first six
months from the time the account was established), the Distributor may pay financial intermediaries concessions equal to 0.25%
of the purchase price from its own resources at the time of sale. Those payments are subject to certain exceptions described
in "Retirement Plans" in the Statement of Additional Information.
About Class B Shares.
Class B shares are sold at net asset value per share without an initial sales charge. However, if Class B shares are redeemed
within a six year "holding period" from the beginning of the calendar month in which they were purchased, a contingent deferred
sales charge will be deducted from the redemption proceeds. The "holding period" for shares purchased after February 5, 2012
will begin on the date of purchase. Class B shares are also subject to an asset-based sales charge that is calculated daily
based on an annual rate of 0.75%. The Class B contingent deferred sales charge and asset-based sales charge are paid to compensate
the Distributor for providing distribution-related services to the Fund in connection with the sale of Class B shares.
Effective after June 29, 2012, Class B shares are no longer offered for new purchases.
Dividend and/or capital gains distributions will continue to be made in Class B shares, and exchanges of Class B shares into
and from other Oppenheimer funds and certain account transfers will be permitted.
Any investments for existing Class B share accounts will be made in Class A shares of Oppenheimer Money Market Fund.
The amount of the Class B contingent deferred sales charge will depend on the number of years since you invested, according
to the following schedule:
|
Years Since Purchase Order was Accepted
|
Contingent Deferred Sales Charge on Redemptions in That Year (As % of Amount Subject to Charge)
|
|
0-1
|
5.0%
|
|
1-2
|
4.0%
|
|
2-3
|
3.0%
|
|
3-4
|
3.0%
|
|
4-5
|
2.0%
|
|
5-6
|
1.0%
|
|
More than 6
|
None
|
In the table, a "year" is a 12-month period.
Automatic Conversion of Class B Shares.
Class B shares automatically convert to Class A shares six years (72 months) after you purchase them. This conversion eliminates
the Class B asset-based sales charge, however, the shares will be subject to the ongoing Class A fees and expenses. The conversion
is based on the relative net asset value of the two classes, and no sales load or other charge is imposed. When any Class
B shares that you hold convert to Class A shares, all other Class B shares that were acquired by reinvesting dividends and
distributions on the converted shares will also convert.
Effective after June 29, 2012, Class B shares are no longer offered for new purchases, however, current Class B shares will
continue to mature and convert to Class A shares according to their established conversion schedule.
For further information on the conversion feature and its tax implications, see "Class B Conversion" in the Statement of
Additional Information.
About Class C Shares.
Class C shares are sold at net asset value per share without an initial sales charge. However, if Class C shares are redeemed
within a 12 month "holding period" from the beginning of the calendar month in which they were purchased, a contingent deferred
sales charge of 1.00% may be deducted from the redemption proceeds. The "holding period" for shares purchased after February
5, 2012 will begin on the date of purchase. Class C shares are also subject to an asset-based sales charge that is calculated
daily based on an annual rate of 0.75%. The Class C contingent deferred sales charge and asset-based sales charge are paid
to compensate the Distributor for providing distribution-related services to the Fund in connection with the sale of Class
C shares.
About Class N Shares.
Class N shares are only offered to certain retirement plans. In addition, certain plans that currently hold Class B shares
of the Fund may designate Class N shares for future plan purchases. See "Class N Share Availability" in the Statement of Additional
Information for eligibility requirements.
Class N shares are sold at net asset value without an initial sales charge. Class N shares are subject to an asset-based sales
charge that is calculated daily based on an annual rate of 0.25%. A contingent deferred sales charge of 1.00% will be imposed
on the redemption of Class N shares, if:
-
A group retirement plan is terminated, or Class N shares of all Oppenheimer funds are terminated as an investment option of
the plan, and the Class N shares are redeemed within 18 months after the plan's first purchase of Class N shares of any Oppenheimer
fund; or
-
Class N shares are redeemed within 18 months after an IRA or 403(b) account holder's first purchase of Class N shares of any
Oppenheimer fund.
Retirement plans that offer Class N shares may impose charges on plan participant accounts. For more information about buying
and selling shares through a retirement plan, see the section "Investment Plans and Services - Retirement Plans" below.
About Class Y Shares.
Class Y shares are sold at net asset value per share without a sales charge directly to institutional investors that have
special agreements with the Distributor for that purpose. They may include insurance companies, registered investment companies,
employee benefit plans and Section 529 plans, among others.
An institutional investor that buys Class Y shares for its customers' accounts may impose charges on those accounts. The procedures
for buying, selling, exchanging and transferring the Fund's other classes of shares (other than the time those orders must
be received by the Distributor or Transfer Agent at their Colorado office) and some of the special account features available
to investors buying other classes of shares do not apply to Class Y shares. Instructions for buying, selling, exchanging or
transferring Class Y shares must be submitted by the institutional investor, not by its customers for whose benefit the shares
are held.
Present and former officers, directors, trustees and employees (and their eligible family members) of the Fund, the Manager,
its affiliates, its parent company and the subsidiaries of its parent company, and retirement plans established for the benefit
of such individuals, are also permitted to purchase Class Y shares of the Fund.
About Class I Shares.
Class I shares are only available to eligible institutional investors. To be eligible to purchase Class I shares, an investor
must:
-
make a minimum initial investment of $5 million or more per account (waived for retirement plan service provider platforms);
-
trade through an omnibus, trust, or similar pooled account; and
-
be an "institutional investor" which may include corporations; trust companies; endowments and foundations; defined contribution,
defined benefit, and other employer sponsored retirement plans; retirement plan platforms; insurance companies; registered
investment advisor firms; registered investment companies; bank trusts; 529 college savings plans; and family offices.
Eligible Class I investors will not receive any commission payments, account servicing fees, recordkeeping fees, 12b-1 fees,
transfer agent fees, so called "finder's fees," administrative fees or other similar fees on Class I shares. Class I shares
are not available directly to individual investors. Individual shareholders who purchase Class I shares through retirement
plans or other intermediaries will not be eligible to hold Class I shares outside of their respective retirement plan or intermediary
platform.
Class I shares are sold at net asset value per share without a sales charge. An institutional investor that buys Class I shares
for its customers' accounts may impose charges on those accounts. The procedures for buying, selling, exchanging and transferring
the Fund's other classes of shares (other than the time those orders must be received by the Distributor or Transfer Agent
at their Colorado office), and most of the special account features available to investors buying other classes of shares,
do not apply to Class I shares.
The Fund, at its discretion, reserves the right to waive the minimum initial investment and minimum balance requirements for
investment companies advised or subadvised by the Manager or an affiliate of the Manager.
The Price of Fund Shares.
Shares may be purchased at their
offering price
which is the net asset value per share plus any initial sales charge that applies. Shares are redeemed at their net asset
value per share less any contingent deferred sales charge that applies. The net asset value that applies to a purchase or
redemption order is the next one calculated after the Distributor receives the order, in proper form as described in this
prospectus, or after any agent appointed by the Distributor receives the order in proper form as described in this prospectus.
Your financial intermediary can provide you with more information regarding the time you must submit your purchase order and
whether the intermediary is an authorized agent for the receipt of purchase and redemption orders.
Net Asset Value.
The Fund calculates the net asset value of each class of shares as of the close of the New York Stock Exchange (NYSE), on
each day the NYSE is open for trading (referred to in this prospectus as a "regular business day"). The NYSE normally closes
at 4:00 p.m., Eastern time, but may close earlier on some days.
The Fund determines the net assets of each class of shares by subtracting the class-specific expenses and the amount of the
Fund's liabilities attributable to the share class from the value of the securities and other assets attributable to the share
class. The Fund's "other assets" might include, for example, cash and interest or dividends from its portfolio securities
that have been accrued but not yet collected. The Fund's securities are valued primarily on the basis of current market quotations.
The net asset value per share for each share class is determined by dividing the net assets of the class by the number of
outstanding shares of that class.
Fair Value Pricing
.
If market quotations are not readily available or (in the Sub-Adviser's judgment) do not accurately reflect the fair value
of a security, or if after the close of the principal market on which a security held by the Fund is traded and before the
time as of which the Fund's net asset value is calculated that day, an event occurs that the Sub-Adviser learns of and believes
in the exercise of its judgment will cause a material change in the value of that security from the closing price of the security
on the principal market on which it is traded, that security may be valued by another method that the Board believes would
more accurately reflect the security's fair value.
In determining whether current market prices are readily available and reliable, the Sub-Adviser monitors the information
it receives in the ordinary course of its investment management responsibilities. It seeks to identify significant events
that it believes, in good faith, will affect the market prices of the securities held by the Fund. Those may include events
affecting specific issuers (for example, a halt in trading of the securities of an issuer on an exchange during the trading
day) or events affecting securities markets (for example, a foreign securities market closes early because of a natural disaster).
The Board has adopted valuation procedures for the Fund and has delegated the day-to-day responsibility for fair value determinations
to the Sub-Adviser's "Valuation Committee." Those determinations may include consideration of recent transactions in comparable
securities, information relating to the specific security, developments in the markets and their performance, and current
valuations of foreign or U.S. indices. Fair value determinations by the Sub-Adviser are subject to review, approval and ratification
by the Board at its next scheduled meeting after the fair valuations are determined.
The Fund's use of fair value pricing procedures involves subjective judgments and it is possible that the fair value determined
for a security may be materially different from the value that could be realized upon the sale of that security. Accordingly,
there can be no assurance that the Fund could obtain the fair value assigned to a security if it were to sell the security
at approximately the same time at which the Fund determines its net asset value per share.
Pricing Foreign Securities.
The Fund may use fair value pricing more frequently for securities primarily traded on foreign exchanges. Because many foreign
markets close hours before the Fund values its foreign portfolio holdings, significant events, including broad market movements,
may occur during that time that could potentially affect the values of foreign securities held by the Fund.
The Sub-Adviser believes that foreign securities values may be affected by volatility that occurs in U.S. markets after the
close of foreign securities markets. The Sub-Adviser's fair valuation procedures therefore include a procedure whereby foreign
securities prices may be "fair valued" to take those factors into account.
Because some foreign securities trade in markets and on exchanges that operate on weekends and U.S. holidays, the values of
some of the Fund's foreign investments may change on days when investors cannot buy or redeem Fund shares.
Contingent Deferred Sales Charge.
If you redeem shares during their applicable contingent deferred sales charge holding period, the contingent deferred sales
charge generally will be deducted from the redemption proceeds. In some circumstances you may be eligible for one of the waivers
described in "Sales Charge Waivers" below and in the "Special Sales Charge Arrangements and Waivers" Appendix to the Statement
of Additional Information. You must advise the Transfer Agent or your financial intermediary of your eligibility for a waiver
when you place your redemption request.
A contingent deferred sales charge will be based on the net asset value of the redeemed shares at the time of redemption
or
the original net asset value, whichever is lower. A contingent deferred sales charge is
not
imposed on:
-
any increase in net asset value over the initial purchase price,
-
shares purchased by the reinvestment of dividends or capital gains distributions, or
-
shares eligible for a sales charge waiver (see "Sales Charge Waivers" below).
The Fund redeems shares in the following order:
-
shares acquired by the reinvestment of dividends or capital gains distributions,
-
other shares that are not subject to the contingent deferred sales charge, and
-
shares held the longest during the holding period.
You are not charged a contingent deferred sales charge when you exchange shares of the Fund for shares of other Oppenheimer
funds. However, if you exchange your shares within the applicable holding period, your original holding period will carry
over to the shares you acquire, even if the new fund has a different holding period. The contingent deferred sales charge
applicable to the share class of the Fund you exchange into will apply to the acquired shares.
Sales Charge Waivers.
The Fund and the Distributor offer the following opportunities to purchase shares without front-end or contingent deferred
sales charges. The Fund reserves the right to amend or discontinue these programs at any time without prior notice.
-
Dividend Reinvestment.
Dividends or capital gains distributions may be reinvested in shares of the Fund, or any of the other Oppenheimer funds into
which shares of the Fund may be exchanged, without a sales charge.
-
Exchanges of Shares.
There is no sales charge on exchanges of shares except for exchanges of Class A shares of Oppenheimer Money Market Fund,
Inc. or Oppenheimer Cash Reserves on which you have not paid a sales charge.
-
Reinvestment Privilege.
There is no sales charge on reinvesting the proceeds from redemptions of Class A shares or Class B shares that occurred within
the previous six months if you paid an initial or contingent deferred sales charge on the redeemed shares. This reinvestment
privilege does not apply to reinvestment purchases made through automatic investment options. You must advise the Distributor,
the Transfer Agent or your financial intermediary that you qualify for the waiver at the time you submit your purchase order.
In addition, the "Special Sales Charge Arrangements and Waivers" Appendix to the Statement of Additional Information provides
detailed information about certain other initial sales charge and contingent deferred sales charge waivers and arrangements.
A description of those sales charge waivers and arrangements is available for viewing on the OppenheimerFunds website at www.oppenheimerfunds.com
(follow the hyperlink "Sales Charges & Breakpoints," under the heading "Fund Information") and may also be ordered by calling
1.800.225.5677.
You must advise the Distributor, the Transfer Agent or your financial intermediary that you qualify for one of those waivers
at the time you submit your purchase order or redemption request.
How to Buy, Sell and Exchange Shares
Buying Shares.
You can buy shares in several ways. The Distributor has appointed certain financial intermediaries, including brokers, dealers
and others, as servicing agents to accept purchase and redemption orders. The Distributor or servicing agent must receive
your order, in proper form, by the close of the NYSE for you to receive that day's offering price. If your order is received
on a day when the NYSE is closed or after it has closed, the order will receive the next offering price that is determined.
To be in proper form, your purchase order must comply with the procedures described below. If you submit a purchase request
without designating which Oppenheimer fund you wish to invest in, your investments will be made in Class A shares of Oppenheimer
Money Market Fund, Inc. This policy does not apply to purchases by or for certain retirement plans or accounts.
The Distributor, in its sole discretion, may reject any purchase order for the Fund's shares.
Buying Shares Through a Financial Intermediary.
You can buy shares through any servicing agent (a broker, dealer, or other financial intermediary) that has a sales agreement
with the Distributor. Your servicing agent will place your order with the Distributor on your behalf. A servicing agent may
charge a processing fee for that service. Your account information will be shared with the financial intermediary designated
as the dealer of record for the account.
Buying Shares Through the Distributor.
We recommend that you discuss your investment with a financial advisor before you make a purchase to be sure that the Fund
is appropriate for you. If you want to purchase shares directly from the Distributor, complete an OppenheimerFunds new account
application and mail it with a check payable in U.S. dollars to "OppenheimerFunds Distributor, Inc." at the address shown
on the back cover. If you do not list a dealer on your application, the Distributor is designated as the broker-dealer of
record, but solely for the purpose of acting as your agent to purchase the shares. For new investors who do not designate
a broker dealer, Class A shares (and, for eligible institutional investors, Class Y or Class I shares) are the only purchase
option. Other share classes may not be purchased by a new investor directly from the Distributor without the investor designating
another registered broker-dealer. If a current investor no longer has a broker-dealer of record for an existing account, the
Distributor is automatically designated as the broker-dealer of record, but solely for the purpose of acting as the investor's
agent to purchase the shares. For more information regarding undesignated investments, please call the Transfer Agent at the
number on the back cover of this prospectus.
-
Involuntary Redemptions.
In some circumstances, involuntary redemptions may be made to repay the Distributor for losses from the cancellation of share
purchase orders.
Identification Requirements.
Federal regulations may require the Fund to obtain your name, your date of birth (for a natural person), your residential
street address or principal place of business, and your Social Security Number, Employer Identification Number or other government-issued
identification when you open an account. Additional information may be required to open a corporate account or in certain
other circumstances. The Fund or the Transfer Agent may use this information to verify your identity. The Fund may not be
able to establish an account if the necessary information is not received. The Fund may also place limits on account transactions
while it is in the process of verifying your identity. Additionally, if the Fund is unable to verify your identity after your
account is established, the Fund may be required to redeem your shares and close your account.
Suspension of Share Offering.
The offering of Fund shares may be suspended during any period in which the determination of net asset value is suspended,
and may be suspended by the Board at any time the Board believes it is in the Fund's best interest to do so.
Selling Shares.
You can generally redeem (sell) some or all of your shares on any regular business day. You may redeem your shares by writing
a letter, by wire, by telephone or on the Internet. You can also set up an Automatic Withdrawal Plan to redeem shares on a
regular basis. The redemption of Fund shares may be suspended under certain circumstances described in the Statement of Additional
Information.
If you have questions about any of these procedures, and especially if you are redeeming shares in a special situation, such
as due to the death of the owner or from a retirement plan account, please call your financial intermediary or the Transfer
Agent for assistance.
Redemption Price.
Your shares will be redeemed at net asset value less any applicable sales charge or other fees. The net asset value used
will be the next one calculated after your order is received, in proper form, by the Transfer Agent or your authorized financial
intermediary. To be in proper form, your redemption order must comply with the procedures described below. The redemption
price for shares will change from day-to-day because the value of the securities in the Fund's portfolio and the Fund's expenses
fluctuate. The redemption price will normally differ for each class of shares. The redemption price of your shares may be
more or less than their original cost.
Redemptions "In-Kind."
Shares may be "redeemed in-kind" under certain circumstances (such as a lack of liquidity in the Fund's portfolio to meet
redemptions). That means that the redemption proceeds will be paid in securities from the Fund's portfolio on a pro-rata basis,
possibly including illiquid securities. If the Fund redeems your shares in-kind, you may bear transaction costs and will bear
market risks until such securities are converted into cash.
Redemption or transfer requests will not be honored until the Transfer Agent receives all required documents in proper form.
From time to time, the Transfer Agent, in its discretion, may waive certain of the requirements for redemptions stated in
this prospectus.
Options for Receiving Redemption Proceeds:
-
By Check.
The Fund will normally send redemption proceeds by check to the address on your account statement.
-
By AccountLink.
If you have linked your Fund account to your bank account with AccountLink (described below), you may have redemption proceeds
transferred directly into your account. Normally the transfer to your bank is initiated on the bank business day after the
redemption. You will not receive dividends on the proceeds of redeemed shares while they are waiting to be transferred.
-
By Wire.
You can arrange to have redemption proceeds sent by Federal Funds wire to an account at a bank that is a member of the Federal
Reserve wire system. The redemption proceeds will normally be transmitted on the next bank business day after the shares are
redeemed. You will not receive dividends on the proceeds of redeemed shares while they are waiting to be transmitted.
Payment Delays.
Payment for redeemed shares is usually made within seven days after the Transfer Agent receives redemption instructions in
proper form. For accounts registered in the name of a broker-dealer, payment will normally be forwarded to the broker-dealer within
three business days. The Transfer Agent may delay processing redemption payments for recently purchased shares until the purchase
payment has cleared. That delay may be as much as five business days from the date the shares were purchased. That delay may
be avoided if you purchase shares by Federal Funds wire or certified check. Under unusual circumstances, the right to redeem
shares or the payment of redemption proceeds may be delayed or suspended as permitted under the Investment Company Act of
1940.
The Oppenheimer Exchange Privilege.
You can exchange all or part of your Fund shares for shares of the same class of other Oppenheimer funds that offer the exchange
privilege. For example, you can exchange Class A shares of the Fund only for Class A shares of another fund. You can obtain
a list of the Oppenheimer funds that are currently available for exchanges by calling a service representative at the telephone
number on the back of this prospectus. The funds available for exchange can change from time to time. The Fund may amend,
suspend or terminate the exchange privilege at any time. You will receive 60 days' notice of any material change in the exchange
privilege unless applicable law allows otherwise.
The OppenheimerFunds exchange privilege affords investors the ability to switch their investments among Oppenheimer funds
if their investment needs change. However, there are limits on that privilege. Frequent purchases, redemptions and exchanges
of Fund shares may interfere with the Sub-Adviser's ability to manage the Fund's investments efficiently, increase its transaction
and administrative costs and/or affect its performance, depending on various factors, such as the size of the Fund, the nature
of its investments, the amount of Fund assets a portfolio manager maintains in cash or cash equivalents, the aggregate dollar
amount and the number and frequency of trades.
If large dollar amounts are involved in exchange or redemption transactions, the Fund might be required to sell portfolio
securities at unfavorable times to meet those transaction requests, and the Fund's brokerage or administrative expenses might
be increased. Therefore, the Sub-Adviser and the Fund's Board have adopted the following policies and procedures to detect
and prevent frequent and/or excessive exchanges or purchase and redemption activity, while addressing the needs of investors
who seek liquidity in their investment and the ability to exchange shares as their investment needs change. There is no guarantee
that those policies and procedures, described below, will be sufficient to identify and deter all excessive short-term trading.
Limitations on Frequent Exchanges
30-Day Hold.
If a direct shareholder exchanges shares of another Oppenheimer fund account for shares of the Fund, his or her Fund account
will be "blocked" from exchanges into any other fund for a period of 30 calendar days from the date of the exchange, subject
to certain exceptions described below. Likewise, if a Fund shareholder exchanges Fund shares for shares of another eligible
Oppenheimer fund, that fund account will be "blocked" from further exchanges for 30 calendar days, subject to the exception
described below. The block will apply to the full account balance and not just to the amount exchanged into the account. For
example, if a shareholder exchanged $2,000 from one fund into another fund in which the shareholder already owned shares worth
$10,000, then, following the exchange and assuming no exception applied, the full account balance ($12,000 in this example)
would be blocked from exchanges into another fund for a period of 30 calendar days. A shareholder whose account is registered
on the Fund's books showing the name, address and tax ID number of the beneficial owner is a "direct shareholder."
Exceptions to 30-Day Hold
-
Exchanges Into Money Market Funds.
A direct shareholder will be permitted to exchange shares of a stock or bond fund for shares of an eligible money market
fund any time, even if the shareholder has exchanged shares into the stock or bond fund during the prior 30 days. Exchanges
from that money market fund into another fund will be monitored for excessive activity and the Transfer Agent may limit or
refuse any exchange order from a money market fund in its discretion pursuant to the exchange policy of that fund.
-
Dividend Reinvestments and Share Conversions.
The reinvestment of dividends or distributions from one fund to purchase shares of another fund and the conversion of shares
from one share class to another class within the same fund will not be considered exchanges for purposes of imposing the 30-day
limit.
-
Asset Allocation Programs.
Investment programs by Oppenheimer "funds of funds" that entail rebalancing investments in underlying Oppenheimer funds will
not be subject to these limits. However, third-party asset allocation and rebalancing programs will be subject to the 30-day
limit described above. Asset allocation firms that want to exchange shares held in accounts on behalf of their customers must
identify themselves to the Transfer Agent and execute an acknowledgement and agreement to abide by these policies with respect
to their customers' accounts. "On-demand" exchanges outside the parameters of portfolio rebalancing programs will also be
subject to the 30-day limit.
-
Automatic Exchange Plans.
Accounts that receive exchange proceeds through automatic or systematic exchange plans that are established through the Transfer
Agent will not be subject to the 30-day block as a result of those automatic or systematic exchanges but may be blocked from
exchanges, under the 30-day limit, if they receive proceeds from other exchanges.
-
Redemptions of Shares.
These exchange policy limits do not apply to redemptions of shares. Shareholders are permitted to redeem their shares on
any regular business day, subject to the terms of this prospectus.
Limitations on Exchanges in Omnibus Accounts.
If you hold your Fund shares through a financial advisor or other firm such as a broker-dealer, a bank, an insurance company
separate account, an investment adviser, an administrator or a trustee of a retirement plan that holds your shares in an account
under its name (these are sometimes referred to as "omnibus" or "street name" accounts), that financial intermediary may impose
its own restrictions or limitations to discourage short-term or excessive trading. You should consult your financial intermediary
to find out what trading restrictions, including limitations on exchanges, may apply. The Fund, the Distributor, the Manager
and the Transfer Agent encourage those financial intermediaries to apply the Fund's policies to their customers who invest
indirectly in the Fund. However, the Transfer Agent may not be able to detect excessive short-term trading activity in accounts
maintained in "omnibus" or "street name" form where the underlying beneficial owners are not identified. The Transfer Agent
will attempt to monitor overall purchase and redemption activity in those accounts to seek to identify patterns that may suggest
excessive trading by the underlying owners. If evidence of possible excessive trading activity is observed by the Transfer
Agent, the financial intermediary that is the registered owner will be asked to review the account activity, and to confirm
to the Transfer Agent and the Fund that appropriate action has been taken to curtail any excessive trading activity.
Other Limitations on Exchanges.
There are a number of other special conditions and limitations that apply to certain types of exchanges. Those conditions
and circumstances are described in the section "How to Exchange Shares" in the Statement of Additional Information. For information
about sales charges that may apply to exchanges of shares see the sections "Contingent Deferred Sales Charge" and "Sales Charge
Waivers" in this prospectus.
Requirements for Exchanges of Shares.
To exchange shares of the Fund, you must meet several conditions. The Fund may amend the following requirements at any time:
-
Shares of the fund selected for exchange must be available for sale in your state of residence.
-
The selected fund must offer the exchange privilege.
-
You must meet the minimum purchase requirements for the selected fund.
-
Generally, exchanges may be made only between identically registered accounts, unless all account owners send written exchange
instructions with a signature guarantee.
-
Before exchanging into a fund, you should obtain its prospectus and should read it carefully.
Timing of Exchange Transactions.
Exchanged shares are normally redeemed from one fund and the proceeds are reinvested in the fund selected for exchange on
the same regular business day on which the Transfer Agent or its agent (such as a financial intermediary holding the investor's
shares in an "omnibus" or "street name" account) receives an exchange request that conforms to these policies. The request
must be received by the close of the NYSE that day in order to receive that day's net asset value on the exchanged shares.
For requests received after the close of the NYSE the shares being exchanged will be valued at the next net asset value calculated
after the request is received. The Transfer Agent may delay transmitting the proceeds from an exchange for up to five business
days, however, if it determines, in its discretion, that an earlier transmittal of the redemption proceeds would be detrimental
to either the fund from which shares are being exchanged or the fund into which the exchange is being made. The exchange proceeds
will be invested in the new fund at the next net asset value calculated after the proceeds are received. In the event that
a delay in the reinvestment of proceeds occurs, the Transfer Agent will notify you or your financial intermediary.
Taxes on Exchanges.
For tax purposes, an exchange of shares of the Fund is considered a sale of those shares and a purchase of the shares of
the fund into which you are exchanging. Therefore, an exchange may result in a capital gain or loss for tax purposes.
Other Limits on Share Transactions.
The Fund may impose other limits on transactions that it believes would be disruptive and may refuse any purchase or exchange
order.
-
Right to Refuse Purchase and Exchange Orders.
The Distributor and/or the Transfer Agent may refuse any purchase or exchange order in their discretion and are not obligated
to provide notice before rejecting an order.
-
Right to Terminate or Suspend Account Privileges.
The Transfer Agent may, in its discretion, limit or terminate trading activity by any person, group or account that it believes
would be disruptive, even if the activity has not exceeded the policies outlined in this prospectus. As part of the Transfer
Agent's procedures to detect and deter excessive trading activity, the Transfer Agent may review and consider the history
of frequent trading activity in all accounts in the Oppenheimer funds known to be under common ownership or control. The Transfer
Agent may send a written warning to a shareholder that the Transfer Agent believes may be engaging in disruptive or excessive
trading activity; however, the Transfer Agent reserves the right to suspend or terminate the ability to purchase or exchange
shares, with or without warning, for any account that the Transfer Agent determines, in the exercise of its discretion, has
engaged in such trading activity.
Submitting Share Transaction Requests.
Share transactions may be requested by telephone or internet, in writing, through your financial intermediary, or by establishing
one of the Investor Services plans described below. Certain transactions may also be submitted by fax. If an account has more
than one owner, the Fund and the Transfer Agent may rely on instructions from any one owner or from the financial intermediary's
representative of record for the account, unless that authority has been revoked. Class Y and Class I share transactions
may only be submitted in writing, by fax, by phone through a service representative, or through an investor's designated financial
intermediary.
Internet and Telephone Transaction Requests.
Purchase, redemption and exchange requests may be submitted on the OppenheimerFunds website, www.oppenheimerfunds.com. Those
requests may also be made by calling the telephone number on the back cover and either speaking to a service representative
or accessing PhoneLink, the OppenheimerFunds automated telephone system that enables shareholders to perform certain account
transactions automatically using a touch-tone phone.
You will need to obtain a user I.D. and password to execute transactions through PhoneLink or on the internet. Some internet
and telephone transactions require the Oppenheimer AccountLink feature, described below, that links your Fund account with
an account at a U.S. bank or other financial institution. The Transfer Agent will record any telephone calls to verify data
concerning transactions.
The following policies apply to internet and telephone transactions:
-
Purchases
through AccountLink that are submitted through PhoneLink or on the internet are limited to $100,000.
-
Purchases
through AccountLink that are submitted by calling a service representative are limited to $250,000.
-
Redemptions
that are submitted by telephone or on the internet and request the proceeds to be paid by check, must be made payable to
all owners of record of the shares and must be sent to the address on the account statement. Telephone or internet redemptions
paid by check may not exceed $100,000 in any seven-day period. This service is not available within 15 days of changing the
address on an account.
-
Redemptions
by telephone or on the internet that are sent to your bank account through AccountLink are not subject to any dollar limits.
-
Exchanges
submitted by telephone or on the internet may be made only between accounts that are registered with the same name(s) and
address.
-
Shares for which share certificates have been issued may not be redeemed or exchanged by telephone or on the internet.
-
Shares held in an OppenheimerFunds-sponsored qualified retirement plan account may not be redeemed or exchanged by telephone
or on the internet.
The Transfer Agent has adopted procedures to confirm that telephone and internet instructions are genuine. Callers are required
to provide service representatives with tax identification numbers and other account data and PhoneLink and internet users
are required to use PIN numbers. The Transfer Agent will also send you written confirmations of share transactions. The Transfer
Agent and the Fund will not be liable for losses or expenses that occur from telephone or internet instructions reasonably
believed to be genuine.
Telephone or internet transaction privileges may be modified, suspended or terminated by the Fund at any time. The Fund will
provide you notice of such changes whenever it is required to do so by applicable law.
Purchases and Redemptions by Federal Funds Wire.
Shares purchased through the Distributor may be paid for by Federal Funds wire. Redemption proceeds may also be transmitted
by wire. The minimum wire purchase or redemption is $2,500. There is a $10 fee for each wire redemption request. Before sending
a wire purchase, call the Distributor's Wire Department at 1.800.225.5677 to notify the Distributor of the wire and to receive
further instructions. To set up wire redemptions on your account or to arrange for a wire redemption, call the Transfer Agent
at the telephone number on the back of this prospectus for information.
Written Transaction Requests.
You can send purchase, exchange or redemption requests to the Transfer Agent at the address on the back cover. Your request
must include:
-
For existing accounts, the Fund account number (from your account statement);
-
For new accounts, a completed account application;
-
For purchases, a check payable to the Fund or to OppenheimerFunds Distributor, Inc.;
-
For redemptions, any special payment instructions;
-
For redemptions or exchanges, the dollar amount or number of shares to be redeemed or exchanged;
-
For redemptions or exchanges, any share certificates that have been issued (exchanges or redemptions of shares for which certificates
have been issued cannot be processed until the Transfer Agent receives the certificates);
-
For individuals, the names and signatures of all registered owners exactly as they appear in the account registration;
-
For corporations, partnerships or other businesses or as a fiduciary, the name of the entity as it appears in the account
registration and the names and titles of any individuals signing on its behalf; and
-
Other documents requested by the Transfer Agent to assure that the person purchasing, redeeming or exchanging shares is properly
identified and has proper authorization to carry out the transaction.
Certain Requests Require a Signature Guarantee.
To protect you and the Fund from fraud, certain redemption requests must be in writing and must include a signature guarantee.
A notary public seal will not be accepted for these requests (other situations might also require a signature guarantee):
-
You wish to redeem more than $100,000 and receive a check;
-
The redemption check is not payable to all shareholders listed on the account statement;
-
The redemption check is not sent to the address of record on your account statement;
-
Shares are being transferred to a Fund account with a different owner or name; or
-
Shares are being redeemed by someone (such as an Executor) other than the owners.
Where Can You Have Your Signature Guaranteed?
The Transfer Agent will accept a signature guarantee from a number of financial institutions, including:
-
a U.S. bank, trust company, credit union or savings association,
-
a foreign bank that has a U.S. correspondent bank,
-
a U.S. registered dealer or broker in securities, municipal securities or government securities, or
-
a U.S. national securities exchange, a registered securities association or a clearing agency.
Fax Requests.
You may send requests for certain types of account transactions to the Transfer Agent by fax. Please call the number on the
back of this prospectus for information about which transactions may be handled this way. Transaction requests submitted by
fax are subject to the same rules and restrictions as the written, telephone and internet requests described in this prospectus.
However, requests that require a signature guarantee may not be submitted by fax.
Submitting Transaction Requests Through Your Financial Intermediary.
You can submit purchase, redemption or exchange requests through any broker, dealer or other financial intermediary that
has a special agreement with the Distributor. The broker, dealer or other intermediary will place the order with the Distributor
on your behalf. A broker or dealer may charge a processing fee for that service. If your shares are held in the name of your
financial intermediary, you must redeem them through that intermediary.
Intermediaries that perform account transactions for their clients by participating in "Networking" through the National Securities
Clearing Corporation are responsible for obtaining their clients' permission to perform those transactions, and are responsible
to their clients who are shareholders of the Fund if the intermediary performs any transaction erroneously or improperly.
Client Account Exchanges by Financial Intermediaries.
The Fund and the Transfer Agent permit brokers, dealers and other financial intermediaries to submit exchange requests on
behalf of their customers, unless that authority has been revoked. The Fund or the Transfer Agent may limit or refuse exchange
requests submitted by such financial intermediaries if, in the Transfer Agent's judgment, exercised in its discretion, the
exchanges would be disruptive to any of the funds involved in the transaction.
Investment Plans and Services
AccountLink.
You can use our AccountLink feature to link your Fund account with an account at a U.S. bank or other financial institution
that is an Automated Clearing House (ACH) member. AccountLink lets you:
-
transmit funds electronically to purchase shares by internet, by telephone or automatically through an Asset Builder Plan.
The purchase payment will be debited from your bank account.
-
have the Transfer Agent
send redemption proceeds
or
dividends and distributions
directly to your bank account.
AccountLink privileges should be requested on your account application or on your broker-dealer's settlement instructions
if you buy your shares through a broker-dealer. For an established account, you can request AccountLink privileges by sending
signature-guaranteed instructions and proper documentation to the Transfer Agent. AccountLink privileges will apply to each
shareholder listed in the registration on the account as well as to the financial intermediary's representative of record
unless and until the Transfer Agent terminates or receives written instructions terminating or changing those privileges.
After you establish AccountLink for your account, any change you make to your bank account information must be made by signature-guaranteed
instructions to the Transfer Agent signed by all shareholders on the account. Please call the Transfer Agent for more information.
Asset Builder Plans.
Under an Asset Builder Plan, you may purchase shares of the Fund automatically. An Asset Builder Plan is available only if
you have established AccountLink with a bank or other financial institution. Payments to purchase Fund shares will be debited
from your linked account.
To establish an Asset Builder Plan at the time you initially purchase Fund shares, complete the "Asset Builder Plan" information
on the account application. To add an Asset Builder Plan to an existing account, use the Asset Builder Enrollment Form. You
may change the amount of your Asset Builder payment or you can terminate your automatic investments at any time by writing
to the Transfer Agent. The Transfer Agent may require a reasonable period after receipt of your instructions to implement any
requested changes. For more details, see the account application, the Asset Builder Enrollment Form and the Statement of Additional
Information. Those documents are available by contacting the Distributor or may be downloaded from our website at www.oppenheimerfunds.com.
The Fund reserves the right to amend, suspend or discontinue offering Asset Builder Plans at any time without prior notice.
Automatic Redemption and Exchange Plans.
The Fund has several plans that enable you to redeem shares automatically or exchange them for shares of another Oppenheimer
fund on a regular basis. Please call the Transfer Agent or consult the Statement of Additional Information for details.
Retirement Plans.
The Distributor offers a number of different retirement plans that individuals and employers can use. The procedures for
buying, selling, exchanging and transferring shares, and the account features applicable to share classes offered to individual
retirement plans and other account types, generally do not apply to shares offered through a group retirement plan. Purchase,
redemption, exchange and transfer requests for a group retirement plan must generally be submitted by the plan administrator,
not by plan participants. However, the time that transaction requests must be received in order to purchase, redeem or exchange
shares at the net asset value calculated on any business day is the same for all share classes and plan types. The types of
retirement plans that the Distributor offers include:
-
Individual Retirement Accounts (IRAs).
These include traditional IRAs, Roth IRAs and rollover IRAs.
-
SIMPLE IRAs.
These are Savings Incentive Match Plan for Employees IRAs for small business owners or self-employed individuals.
-
SEP-IRAs.
These are Simplified Employee Pension Plan IRAs for small business owners or self-employed individuals.
-
403(b)(7) Custodial Plans.
These are tax-deferred plans for employees of eligible tax-exempt organizations, such as schools, hospitals and charitable
organizations.
-
401(k) Plans.
These are special retirement plans for employees of businesses. "Single K" plans are 401(k) plans for self-employed individuals.
-
Pension and Profit-Sharing Plans.
These plans are designed for businesses and self-employed individuals.
Retirement plans that hold shares of Oppenheimer funds in an omnibus account for the benefit of plan participants (other than
OppenheimerFunds-sponsored Single DB Plus plans) are not permitted to make initial purchases of Class A shares that would
be subject to a contingent deferred sales charge.
Effective July 1, 2008, Class B shares were no longer offered to new qualified retirement plans or to non-qualified deferred
compensation plans. Effective July 1, 2011, Class B shares held in those plans were converted to Class A shares, or to another
share class selected by the plan sponsor. Existing OppenheimerFunds Single K plans are not currently affected by that change.
Effective after June 29, 2012, Class B shares are no longer offered for any new purchases. Any investments for existing Class
B share retirement accounts received after June 29, 2012 will be made in Class A shares of Oppenheimer Money Market Fund.
Class I shares are only available to plans that make an initial investment of $5 million or more (per account) or to
retirement plan service provider platforms.
Retirement Plan Accounts.
To open an OppenheimerFunds retirement plan account, please call the Distributor for retirement plan documents, which include
applications and important plan information.
Less Paper, Less Waste.
To avoid sending duplicate copies of Fund materials to households, the Fund will mail only one copy of each prospectus, annual
and semi-annual report and annual notice of the Fund's privacy policy to shareholders having the same last name and address
on the Fund's records. The consolidation of these mailings, called "householding," benefits the Fund through lower printing
costs and reduced mailing expense.
If you prefer to receive multiple copies of these materials, you may call the Transfer Agent at the number on the back of
this prospectus or you may notify the Transfer Agent in writing. Multiple copies of prospectuses, reports and privacy notices
will be sent to you commencing within 30 days after the Transfer Agent receives your request to stop householding.
You may also choose to receive your account documents electronically via eDocs Direct. Visit our website at www.oppenheimerfunds.com
and click the hyperlink "Sign Up for Electronic Document Delivery" under the heading "I want to..." in the left hand column,
or call 1.888.470.0862 for information and instructions.
DISTRIBUTION AND SERVICE (12b-1) PLANS
Distribution and Service Plan for Class A Shares.
The Fund has adopted a Distribution and Service Plan for Class A shares. The plan provides for the Fund to pay the Distributor
an asset-based sales charge calculated at an annual rate of 0.25% of the daily net assets of Class A. However, the Fund's
Board has currently set that rate at zero. The Fund pays a service fee under the plan calculated at an annual rate of 0.25%
of the Class A daily net assets. The Distributor currently uses all of the Class A service fees to pay brokers, dealers, banks
and other financial intermediaries for providing personal service and maintaining the accounts of their customers that hold
Class A shares. Because the service fee is paid out of the Fund's assets on an ongoing basis, over time it will increase the
cost of your investment.
Distribution and Service Plans for Class B, Class C and Class N Shares.
The Fund has adopted Distribution and Service Plans for Class B, Class C and Class N shares to pay the Distributor for distributing
those share classes, maintaining accounts and providing shareholder services. Under the plans, the Fund pays the Distributor
an asset-based sales charge for Class B and Class C shares calculated at an annual rate of 0.75% of the daily net assets of
those classes and for Class N shares calculated at 0.25% of the daily net assets of that class. The Fund also pays a service
fee under the plans at an annual rate of 0.25% of the daily net assets of Class B, Class C and Class N shares. Altogether,
these fees increase the Class B and Class C shares annual expenses by 1.00% and increase the Class N shares annual expenses
by 0.50%, calculated on the daily net assets of the applicable class. Because these fees are paid out of the Fund's assets
on an ongoing basis, over time they will increase the cost of your investment and may cost you more than other types of sales
charges.
Use of Plan Fees:
The Distributor uses the service fees to compensate brokers, dealers, banks and other financial intermediaries for maintaining
accounts and providing personal services to Class B, Class C or Class N shareholders in the applicable share class. The Distributor
normally pays intermediaries the 0.25% service fee in advance for the first year after shares are purchased and then pays
that fee periodically.
Class B Shares:
The Distributor currently pays a sales concession of 3.75% of the purchase price of Class B shares to dealers from its own
resources at the time of sale. Including the advance of the service fee, the total amount paid by the Distributor to the dealer
at the time of sale of Class B shares is therefore 4.00% of the purchase price. The Distributor normally retains the Class
B shares asset-based sales charge. However, for ongoing purchases of Class B shares by OppenheimerFunds Single K plans, the
Distributor may pay the intermediary the asset-based sales charge and service fee during the first year after purchase instead
of paying a sales concession and the first year's service fees at the time of purchase. See the Statement of Additional Information
for exceptions.
Effective after June 29, 2012, Class B shares are no longer offered for new purchases. Any investments for existing Class
B share accounts will be made in Class A shares of Oppenheimer Money Market Fund. No sales concessions will be paid on those
purchases, however a concession may be paid if the acquired Oppenheimer Money Market Fund shares are exchanged for shares
of another Oppenheimer fund.
Class C Shares:
At the time of a Class C share purchase, the Distributor generally pays financial intermediaries a sales concession of 0.75%
of the purchase price from its own resources. Therefore, the total amount, including the advance of the service fee, that
the Distributor pays the intermediary at the time of a Class C share purchase is 1.00% of the purchase price. The Distributor
normally retains the asset-based sales charge on Class C share purchases during the first year and then pays that fee to the intermediary
as an ongoing concession. For Class C share purchases in certain omnibus group retirement plans, the Distributor pays the intermediary
the asset-based sales charge during the first year instead of paying a sales concession at the time of purchase. The Distributor
pays the service fees it receives on those shares to the intermediary for providing shareholder services to those accounts.
See the Statement of Additional Information for exceptions to these arrangements.
Class N Shares:
At the time of a Class N share purchase, the Distributor generally pays financial intermediaries a sales concession of 0.75%
of the purchase price from its own resources. Therefore, the total amount, including the advance of the service fee, that
the Distributor pays the intermediary at the time of a Class N share purchase is 1.00% of the purchase price. The Distributor
normally retains the asset-based sales charge on Class N shares. For Class N shares purchased in certain omnibus group retirement
plans the Distributor may pay the intermediary the asset-based sales charge and service fee during the first year instead
of paying a sales concession and the first year's service fees at the time of purchase. See the Statement of Additional Information
for exceptions to these arrangements.
Payments to Financial Intermediaries and Service Providers.
The Sub-Adviser and the Distributor, in their discretion, may also make payments to brokers, dealers and other financial
intermediaries or to service providers for distribution and/or shareholder servicing activities. Those payments are made out
of the Sub-Adviser's and/or the Distributor's own resources and/or assets, including from the revenues or profits derived
from the advisory fees the Sub-Adviser receives from the Fund. Those cash payments, which may be substantial, are paid to
many firms having business relationships with the Sub-Adviser and Distributor and are in addition to any distribution fees,
servicing fees, or transfer agency fees paid directly or indirectly by the Fund to these financial intermediaries and any
commissions the Distributor pays to these firms out of the sales charges paid by investors. The Fund does not pay any commission
payments, account servicing fees, recordkeeping fees, 12b-1 fees, transfer agent fees, so called "finders fees," administrative
fees or other similar fees with respect to Class I shares and the Sub-Adviser and the Distributor do not normally make payments
out of their own resources and/or assets, with respect to that share class. Payments by the Sub-Adviser or Distributor from
their own resources are not reflected in the tables in the "Fees and Expenses of the Fund" section of this prospectus because
they are not paid by the Fund.
The financial intermediaries that may receive those payments include firms that offer and sell Fund shares to their clients,
or provide shareholder services to the Fund, or both, and receive compensation for those activities. The financial intermediaries
that may receive payments include your securities broker, dealer or financial advisor, sponsors of fund "supermarkets," sponsors
of fee-based advisory or wrap fee programs, sponsors of college and retirement savings programs, banks, trust companies and
other intermediaries offering products that hold Fund shares, and insurance companies that offer variable annuity or variable
life insurance products.
In general, these payments to financial intermediaries can be categorized as "distribution-related" or "servicing" payments.
Payments for distribution-related expenses, such as marketing or promotional expenses, are often referred to as "revenue sharing."
Revenue sharing payments may be made on the basis of the sales of shares attributable to that intermediary, the average net
assets of the Fund and other Oppenheimer funds attributable to the accounts of that intermediary and its clients, negotiated
lump sum payments for distribution services provided, or similar fees. In some circumstances, revenue sharing payments may
create an incentive for a financial intermediary or its representatives to recommend or offer shares of the Fund or other
Oppenheimer funds to its customers. These payments also may give an intermediary an incentive to cooperate with the Distributor's
marketing efforts. A revenue sharing payment may, for example, qualify the Fund for preferred status with the intermediary
receiving the payment or provide representatives of the Distributor with access to representatives of the intermediary's sales
force, in some cases on a preferential basis over funds of competitors. Additionally, as firm support, the Sub-Adviser or
Distributor may reimburse expenses related to educational seminars and "due diligence" or training meetings (to the extent
permitted by applicable laws or the rules of the Financial Industry Regulatory Authority ("FINRA")) designed to increase sales
representatives' awareness about Oppenheimer funds, including travel and lodging expenditures. However, the Sub-Adviser does
not consider a financial intermediary's sale of shares of the Fund or other Oppenheimer funds when selecting brokers or dealers
to effect portfolio transactions for the funds.
Various factors are used to determine whether to make revenue sharing payments. Possible considerations include, without
limitation, the types of services provided by the intermediary, sales of Fund shares, the redemption rates on accounts of
clients of the intermediary or overall asset levels of Oppenheimer funds held for or by clients of the intermediary, the willingness
of the intermediary to allow the Distributor to provide educational and training support for the intermediary's sales personnel
relating to the Oppenheimer funds, the availability of the Oppenheimer funds on the intermediary's sales system, as well as
the overall quality of the services provided by the intermediary and the Sub-Adviser or Distributor's relationship with the
intermediary. The Sub-Adviser and Distributor have adopted guidelines for assessing and implementing each prospective revenue
sharing arrangement. To the extent that financial intermediaries receiving distribution-related payments from the Sub-Adviser
or Distributor sell more shares of the Oppenheimer funds or retain more shares of the funds in their client accounts, the
Sub-Adviser and Distributor benefit from the incremental management and other fees they receive with respect to those assets.
Payments may also be made by the Sub-Adviser, the Distributor or the Transfer Agent to financial intermediaries to compensate
or reimburse them for administrative or other client services provided, such as sub-transfer agency services for shareholders
or retirement plan participants, omnibus accounting or sub-accounting, participation in networking arrangements, account set-up,
recordkeeping and other shareholder services. Payments may also be made for administrative services related to the distribution
of Fund shares through the intermediary. Firms that may receive servicing fees include retirement plan administrators, qualified
tuition program sponsors, banks and trust companies, and insurance companies that offer variable annuity or variable life
insurance products, and others. These fees may be used by the service provider to offset or reduce fees that would otherwise
be paid directly to them by certain account holders, such as retirement plans.
The Statement of Additional Information contains more information about revenue sharing and service payments made by the
Sub-Adviser or the Distributor. Your broker, dealer or other financial intermediary may charge you fees or commissions in
addition to those disclosed in this prospectus.
You should ask your financial intermediary for details about any such payments it receives from the Sub-Adviser or the Distributor
and their affiliates, or any other fees or expenses it charges.
Dividends, Capital Gains and Taxes
Dividends and Distributions.
The Fund intends to declare and pay dividends annually from its net investment income. The Fund may also realize capital
gains on the sale of portfolio securities, in which case it may make distributions out of any net short-term or long-term
capital gains annually. The Fund may also make supplemental distributions of dividends and capital gains following the end
of its fiscal year. The Fund has no fixed dividend rate and cannot guarantee that it will pay any dividends or capital gains
distributions in a particular year.
Dividends and distributions are paid separately for each share class. The dividend distributions paid on Class A, Class
Y and Class I shares will generally be higher than those on Class B, Class C and Class N shares, since those classes normally
have higher expenses than Class A, Class Y and Class I.
Options for Receiving Dividends and Distributions.
When you open your Fund account, you can specify on your application how you want to receive distributions of dividends and
capital gains. To change that option, you must notify the Transfer Agent. There are four payment options available:
-
Reinvest All Distributions in the Fund.
You can elect to reinvest all dividends and capital gains distributions in additional shares of the Fund.
-
Reinvest Only Dividends or Capital Gains.
You can elect to reinvest some types of distributions in the Fund while receiving the other types of distributions by check
or having them sent to your bank account through AccountLink. Different treatment is available for distributions of dividends,
short-term capital gains and long-term capital gains.
-
Receive All Distributions in Cash.
You can elect to receive all dividends and capital gains distributions by check or have them sent to your bank through AccountLink.
-
Reinvest Your Distributions in Another Oppenheimer Fund.
You can reinvest all of your dividends and capital gains distributions in another Oppenheimer fund that is available for
exchanges. You must have an existing account in the same share class in the selected fund.
Taxes.
If your shares are not held in a tax-deferred retirement account, you should be aware of the following tax consequences of
investing in the Fund. Fund distributions, whether taken in cash or reinvested in additional shares of the Fund or another
Oppenheimer fund, are subject to Federal income tax and may be subject to state or local taxes. Distributions paid from short-term
capital gains and net investment income are taxable as ordinary income (except as discussed below) and distributions from
net long-term capital gains are taxable as long-term capital gains no matter how long you have held your shares. After 2012,
the maximum rate for individuals and certain other non-corporate taxpayers, applicable to long-term capital gains, is either
15% or 20%, depending on whether income exceeds certain threshold amounts.
Certain dividends (including certain dividends from foreign corporations) may be taxable at the lower rate applicable to long-term
capital gains. In the case of certain corporations, some dividends may be eligible for the dividends-received deduction. To
the extent the Fund's distributions are paid from these types of dividends, and provided certain other fund and shareholder
level requirements are satisfied, the Fund's individual and non-corporate shareholders may be eligible to claim the reduced
tax rate for the distributions and the Fund's corporate shareholders may be eligible to claim the dividends-received deduction.
The Fund may be subject to foreign income taxes on income or gains from foreign securities. If, at the end of the Fund's fiscal
year more than 50% of the Fund's assets are invested in foreign securities, the Fund may make an election which would generally
allow shareholders to take a credit or deduction for such foreign taxes on their Federal income tax returns, subject to applicable
limitations. If the Fund makes this election, shareholders must include in their income their share of the foreign taxes paid
by the Fund.
After the end of each calendar year the Fund will send you and the Internal Revenue Service statements showing the amount
of any taxable distributions you received in the previous year and will separately identify any portion of these distributions
that qualify for taxation as long-term capital gains or for any other special tax treatment.
The Fund has qualified and intends to qualify each year to be taxed as a regulated investment company under the Internal Revenue
Code by satisfying certain income, asset diversification and income distribution requirements, but reserves the right not
to so qualify. In each year that it qualifies as a regulated investment company, the Fund will not be subject to federal income
taxes on its income that it distributes to shareholders.
If you are neither a resident nor a citizen of the United States, or if you are a foreign entity, the Fund's ordinary income
dividends (which include distributions of net short-term capital gains) generally will be subject to a 30% U.S. withholding
tax, unless a lower rate applies under an income tax treaty. For taxable years of the Fund beginning before 2014, certain
distributions that may be reported by the Fund as arising from Qualified Interest Income and Qualified Short-term Capital
Gains (if applicable) and paid to a foreign shareholder may be eligible for an exemption from U.S. withholding tax. To the
extent the Fund's distributions are derived from ordinary dividends, they will not be eligible for this exemption. In addition,
under legislation known as "FATCA" (the Foreign Account Tax Compliance Act), the Fund will be required to withhold 30% of
the ordinary dividends it pays after December 31, 2013, and the gross proceeds of share redemptions and certain capital gains
it pays after December 31, 2016, to shareholders that fail to meet prescribed information reporting or certification requirements.
Backup Withholding.
Unless an exception applies, the Fund may be required to withhold U.S. federal income tax on distributions and redemption
proceeds payable to you if you fail to provide the Fund with your correct social security number or taxpayer identification
number or fail to make required certifications, or if you have been notified by the IRS that you are subject to backup withholding.
Any amounts withheld may be credited against U.S. federal income tax liability.
Avoid "Buying a Distribution."
If you buy shares of the Fund before it makes a distribution, the distribution will generally be taxable to you even though
it may actually be a return of a portion of your investment. You should consider whether you should purchase shares on or
just before the ex-dividend date.
Remember, There May be Taxes on Transactions.
Because the prices of the Fund's shares fluctuate, you may have a capital gain or capital loss when you sell the shares or
exchange them for shares of a different fund. The amount of such gain or loss is generally an amount equal to the difference
between the price you paid for the shares and the amount received. Your ability to utilize capital losses may be subject to
applicable limitations.
Returns of Capital Can Occur.
In certain cases, distributions made by the Fund may be considered a return of capital to shareholders, which is generally
non-taxable. The Fund will notify you if this occurs. In such a case, you would need to reduce the cost of your shares for
tax purposes, which could result in a higher taxable capital gain (or lower capital loss) on a subsequent sale or exchange
of the shares. Any such distribution in excess of your cost basis in your shares will be treated as capital gain.
Cost Basis Reporting.
The Fund is required to report to the Internal Revenue Service ("IRS"), and furnish to Fund shareholders, detailed "cost
basis" and "holding period" information for Fund shares acquired on or after January 1, 2012 ("covered shares") that are redeemed
on or after that date. These requirements do not apply to investments through a tax-deferred arrangement, such as a 401(k)
plan or an individual retirement plan. If you redeem covered shares during any year, the Fund will report the following information
to the IRS and to you on Form 1099-B: (i) the "cost basis" of such shares, (ii) the gross proceeds you received on the redemption
and (iii) the "holding period" for the redeemed shares.
The default method for calculating the cost basis of covered shares is based on the average cost of all Fund shares you purchased
on or after January 1, 2012 and prior to a particular redemption. If you and your financial or tax advisor determine another
calculation method may be more beneficial for your individual tax situation, you may be able to elect another IRS-accepted
method via the OppenheimerFunds website, www.oppenheimerfunds.com, or by notifying the Fund's Transfer Agent in writing.
You should contact your financial or tax advisor about the application of the cost basis reporting rules to you, particularly
whether you should elect a cost basis calculation method or use the default average basis.
This information is only a summary of certain Federal income tax information about your investment.
You are encouraged to consult your tax advisor about the effect of an investment in the Fund on your particular tax situation
and about any changes to the applicable law that may occur from time to time. Additional information about the tax effects
of investing in the Fund is contained in the Statement of Additional Information.
Financial Highlights
The Financial Highlights Table is presented to help you understand the Fund's financial performance for the past five fiscal
years. Certain information reflects financial results for a single Fund share. The total returns in the table represent the
rate that an investor would have earned (or lost) on an investment in the Fund (assuming reinvestment of all dividends and
distributions). This information has been audited by KPMG LLP, the Fund's independent registered public accounting firm. KPMG's report,
along with the Fund's financial statements, are included in the annual report, which is available upon request.
Financial Highlights Tables
|
|
October 31,
|
|
October 29,
|
|
October 31,
|
|
|
Class A Year Ended
|
2012
|
|
2011
|
|
2010
1
|
|
2009
|
|
2008
|
|
|
Per Share Operating Data
|
|
|
|
|
|
|
|
|
|
|
|
Net asset value, beginning of period
|
$30.05
|
|
$29.44
|
|
$24.35
|
|
$19.90
|
|
$42.78
|
|
|
Income (loss) from investment operations:
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income (loss)
2
|
.07
|
|
.03
|
|
(.03)
|
|
.03
|
|
.02
|
|
|
Net realized and unrealized gain (loss)
|
1.21
|
|
.58
|
|
5.12
|
|
4.43
|
|
(19.19)
|
|
|
Total from investment operations
|
1.28
|
|
.61
|
|
5.09
|
|
4.46
|
|
(19.17)
|
|
|
Dividends and/or distributions to shareholders:
|
|
|
|
|
|
|
|
|
|
|
|
Distributions from net realized gain
|
--
|
|
--
|
|
--
|
|
--
|
|
(3.71)
|
|
|
Tax return of capital distribution
|
--
|
|
--
|
|
--
|
|
(.01)
|
|
--
|
|
|
Total dividends and/or distributions to shareholders
|
--
|
|
--
|
|
--
|
|
(.01)
|
|
(3.71)
|
|
|
Net asset value, end of period
|
$31.33
|
|
$30.05
|
|
$29.44
|
|
$24.35
|
|
$19.90
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Return, at Net Asset Value
3
|
4.26%
|
|
2.07%
|
|
20.90%
|
|
22.43%
|
|
(48.93)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratios/Supplemental Data
|
|
|
|
|
|
|
|
|
|
|
|
Net assets, end of period (in thousands)
|
$938,427
|
|
$1,250,055
|
|
$1,573,085
|
|
$1,604,830
|
|
$1,476,752
|
|
|
Average net assets (in thousands)
|
$1,099,549
|
|
$1,527,052
|
|
$1,642,391
|
|
$1,421,837
|
|
$2,688,839
|
|
|
Ratios to average net assets:
4
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income (loss)
|
0.24%
|
|
0.11%
|
|
(0.13)%
|
|
0.13%
|
|
0.06%
|
|
|
Total expenses
5
|
1.31%
|
|
1.26%
|
|
1.29%
|
|
1.46%
|
|
1.16%
|
|
|
Expenses after payments, waivers and/or reimbursements and reduction to custodian expenses
|
1.26%
|
|
1.25%
|
|
1.28%
|
|
1.32%
|
|
1.16%
|
|
|
Portfolio turnover rate
|
54%
|
|
89%
|
|
71%
|
|
99%
|
|
94%
|
|
|
1
. October 29, 2010 represents the last business day of the Fund's 2010 fiscal year.
|
|
|
|
2.
Per share amounts calculated based on the average shares outstanding during the period.
|
|
|
|
3.
Assumes an initial 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.
|
|
|
|
4.
Annualized for periods less than one full year.
|
|
|
|
5.
Total expenses including indirect expenses from affiliated fund were as follows:
|
|
|
|
Year Ended October 31, 2012
|
1.31%
|
|
|
Year Ended October 31, 2011
|
1.27%
|
|
|
Year Ended October 29, 2010
|
1.29%
|
|
|
Year Ended October 31, 2009
|
1.47%
|
|
|
Year Ended October 31, 2008
|
1.16%
|
|
|
|
October 31,
|
|
October 29,
|
|
October 31,
|
|
|
Class B Year Ended
|
2012
|
|
2011
|
|
2010
1
|
|
2009
|
|
2008
|
|
|
Per Share Operating Data
|
|
|
|
|
|
|
|
|
|
|
|
Net asset value, beginning of period
|
$25.60
|
|
$25.29
|
|
$21.08
|
|
$17.37
|
|
$38.10
|
|
|
Income (loss) from investment operations:
|
|
|
|
|
|
|
|
|
|
|
|
Net investment loss
2
|
(.15)
|
|
(.20)
|
|
(.22)
|
|
(.12)
|
|
(.22)
|
|
|
Net realized and unrealized gain (loss)
|
1.03
|
|
.51
|
|
4.43
|
|
3.84
|
|
(16.80)
|
|
|
Total from investment operations
|
.88
|
|
.31
|
|
4.21
|
|
3.72
|
|
(17.02)
|
|
|
Dividends and/or distributions to shareholders:
|
|
|
|
|
|
|
|
|
|
|
|
Distributions from net realized gain
|
--
|
|
--
|
|
--
|
|
--
|
|
(3.71)
|
|
|
Tax return of capital distribution
|
--
|
|
--
|
|
--
|
|
(.01)
|
|
--
|
|
|
Total dividends and/or distributions to shareholders
|
--
|
|
--
|
|
--
|
|
(.01)
|
|
(3.71)
|
|
|
Net asset value, end of period
|
$26.48
|
|
$25.60
|
|
$25.29
|
|
$21.08
|
|
$17.37
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Return, at Net Asset Value
3
|
3.44%
|
|
1.23%
|
|
19.97%
|
|
21.44%
|
|
(49.34)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratios/Supplemental Data
|
|
|
|
|
|
|
|
|
|
|
|
Net assets, end of period (in thousands)
|
$ 53,204
|
|
$ 85,100
|
|
$123,847
|
|
$135,576
|
|
$132,365
|
|
|
Average net assets (in thousands)
|
$67,022
|
|
$113,687
|
|
$131,255
|
|
$123,578
|
|
$256,533
|
|
|
Ratios to average net assets:
4
|
|
|
|
|
|
|
|
|
|
|
|
Net investment loss
|
(0.57)%
|
|
(0.71)%
|
|
(0.91)%
|
|
(0.67)%
|
|
(0.75)%
|
|
|
Total expenses
5
|
2.37%
|
|
2.30%
|
|
2.31%
|
|
2.49%
|
|
1.96%
|
|
|
Expenses after payments, waivers and/or reimbursements and reduction to custodian expenses
|
2.09%
|
|
2.08%
|
|
2.07%
|
|
2.13%
|
|
1.96%
|
|
|
Portfolio turnover rate
|
54%
|
|
89%
|
|
71%
|
|
99%
|
|
94%
|
|
|
1.
October 29, 2010 represents the last business day of the Fund's 2010 fiscal year.
|
|
|
|
2.
Per share amounts calculated based on the average shares outstanding during the period.
|
|
|
|
3.
Assumes an initial 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.
|
|
|
|
4.
Annualized for periods less than one full year.
|
|
|
|
5.
Total expenses including indirect expenses from affiliated fund were as follows:
|
|
|
|
Year Ended October 31, 2012
|
2.37%
|
|
|
Year Ended October 31, 2011
|
2.31%
|
|
|
Year Ended October 29, 2010
|
2.31%
|
|
|
Year Ended October 31, 2009
|
2.50%
|
|
|
Year Ended October 31, 2008
|
1.96%
|
|
|
|
October 31,
|
|
October 29,
|
|
October 31,
|
|
|
Class C Year Ended
|
2012
|
|
2011
|
|
2010
1
|
|
2009
|
|
2008
|
|
|
Per Share Operating Data
|
|
|
|
|
|
|
|
|
|
|
|
Net asset value, beginning of period
|
$25.64
|
|
$25.32
|
|
$21.10
|
|
$17.38
|
|
$38.10
|
|
|
Income (loss) from investment operations:
|
|
|
|
|
|
|
|
|
|
|
|
Net investment loss
2
|
(.14)
|
|
(.18)
|
|
(.21)
|
|
(.11)
|
|
(.20)
|
|
|
Net realized and unrealized gain (loss)
|
1.02
|
|
.50
|
|
4.43
|
|
3.84
|
|
(16.81)
|
|
|
Total from investment operations
|
.88
|
|
.32
|
|
4.22
|
|
3.73
|
|
(17.01)
|
|
|
Dividends and/or distributions to shareholders:
|
|
|
|
|
|
|
|
|
|
|
|
Distributions from net realized gain
|
--
|
|
--
|
|
--
|
|
--
|
|
(3.71)
|
|
|
Tax return of capital distribution
|
--
|
|
--
|
|
--
|
|
(.01)
|
|
--
|
|
|
Total dividends and/or distributions to shareholders
|
--
|
|
--
|
|
--
|
|
(.01)
|
|
(3.71)
|
|
|
Net asset value, end of period
|
$26.52
|
|
$25.64
|
|
$25.32
|
|
$21.10
|
|
$17.38
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Return, at Net Asset Value
3
|
3.43%
|
|
1.26%
|
|
20.00%
|
|
21.48%
|
|
(49.30)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratios/Supplemental Data
|
|
|
|
|
|
|
|
|
|
|
|
Net assets, end of period (in thousands)
|
$234,237
|
|
$285,735
|
|
$334,710
|
|
$322,950
|
|
$318,189
|
|
|
Average net assets (in thousands)
|
$258,974
|
|
$336,244
|
|
$336,938
|
|
$291,243
|
|
$598,093
|
|
|
Ratios to average net assets:
4
|
|
|
|
|
|
|
|
|
|
|
|
Net investment loss
|
(0.56)%
|
|
(0.67)%
|
|
(0.89)%
|
|
(0.62)%
|
|
(0.70)%
|
|
|
Total expenses
5
|
2.08%
|
|
2.03%
|
|
2.07%
|
|
2.24%
|
|
1.91%
|
|
|
Expenses after payments, waivers and/or reimbursements and reduction to custodian expenses
|
2.06%
|
|
2.02%
|
|
2.04%
|
|
2.08%
|
|
1.91%
|
|
|
Portfolio turnover rate
|
54%
|
|
89%
|
|
71%
|
|
99%
|
|
94%
|
|
|
1.
October 29, 2010 represents the last business day of the Fund's 2010 fiscal year.
|
|
|
|
2.
Per share amounts calculated based on the average shares outstanding during the period.
|
|
|
|
3.
Assumes an initial 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.
|
|
|
|
4.
Annualized for periods less than one full year.
|
|
|
|
5.
Total expenses including indirect expenses from affiliated fund were as follows:
|
|
|
|
Year Ended October 31, 2012
|
2.08%
|
|
|
Year Ended October 31, 2011
|
2.04%
|
|
|
Year Ended October 29, 2010
|
2.07%
|
|
|
Year Ended October 31, 2009
|
2.25%
|
|
|
Year Ended October 31, 2008
|
1.91%
|
|
|
|
October 31,
|
|
October 29,
|
|
October 31,
|
|
|
Class N Year Ended
|
2012
|
|
2011
|
|
2010
1
|
|
2009
|
|
2008
|
|
|
Per Share Operating Data
|
|
|
|
|
|
|
|
|
|
|
|
Net asset value, beginning of period
|
$28.94
|
|
$28.44
|
|
$23.58
|
|
$19.31
|
|
$41.75
|
|
|
Income (loss) from investment operations:
|
|
|
|
|
|
|
|
|
|
|
|
Net investment loss
2
|
(.02)
|
|
(.05)
|
|
(.10)
|
|
(.02)
|
|
(.09)
|
|
|
Net realized and unrealized gain (loss)
|
1.17
|
|
.55
|
|
4.96
|
|
4.30
|
|
(18.64)
|
|
|
Total from investment operations
|
1.15
|
|
.50
|
|
4.86
|
|
4.28
|
|
(18.73)
|
|
|
Dividends and/or distributions to shareholders:
|
|
|
|
|
|
|
|
|
|
|
|
Distributions from net realized gain
|
--
|
|
--
|
|
--
|
|
--
|
|
(3.71)
|
|
|
Tax return of capital distribution
|
--
|
|
--
|
|
--
|
|
(.01)
|
|
--
|
|
|
Total dividends and/or distributions to shareholders
|
--
|
|
--
|
|
--
|
|
(.01)
|
|
(3.71)
|
|
|
Net asset value, end of period
|
$30.09
|
|
$28.94
|
|
$28.44
|
|
$23.58
|
|
$19.31
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Return, at Net Asset Value
3
|
3.97%
|
|
1.76%
|
|
20.61%
|
|
22.19%
|
|
(49.10)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratios/Supplemental Data
|
|
|
|
|
|
|
|
|
|
|
|
Net assets, end of period (in thousands)
|
$132,365
|
|
$176,002
|
|
$224,132
|
|
$218,401
|
|
$187,639
|
|
|
Average net assets (in thousands)
|
$154,101
|
|
$213,872
|
|
$227,923
|
|
$192,372
|
|
$320,483
|
|
|
Ratios to average net assets:
4
|
|
|
|
|
|
|
|
|
|
|
|
Net investment loss
|
(0.05)%
|
|
(0.17)%
|
|
(0.38)%
|
|
(0.09)%
|
|
(0.29)%
|
|
|
Total expenses
5
|
1.59%
|
|
1.54%
|
|
1.62%
|
|
1.86%
|
|
1.56%
|
|
|
Expenses after payments, waivers and/or reimbursements and reduction to custodian expenses
|
1.55%
|
|
1.53%
|
|
1.52%
|
|
1.54%
|
|
1.50%
|
|
|
Portfolio turnover rate
|
54%
|
|
89%
|
|
71%
|
|
99%
|
|
94%
|
|
|
1.
October 29, 2010 represents the last business day of the Fund's 2010 fiscal year.
|
|
|
|
2.
Per share amounts calculated based on the average shares outstanding during the period.
|
|
|
|
3.
Assumes an initial 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.
|
|
|
|
4.
Annualized for periods less than one full year.
|
|
|
|
5.
Total expenses including indirect expenses from affiliated fund were as follows:
|
|
|
|
Year Ended October 31, 2012
|
1.59%
|
|
|
Year Ended October 31, 2011
|
1.55%
|
|
|
Year Ended October 29, 2010
|
1.62%
|
|
|
Year Ended October 31, 2009
|
1.87%
|
|
|
Year Ended October 31, 2008
|
1.56%
|
|
|
|
October 31,
|
|
October 29,
|
|
October 31,
|
|
|
Class Y Year Ended
|
2012
|
|
2011
|
|
2010
1
|
|
2009
|
|
2008
|
|
|
Per Share Operating Data
|
|
|
|
|
|
|
|
|
|
|
|
Net asset value, beginning of period
|
$30.78
|
|
$30.08
|
|
$24.79
|
|
$20.18
|
|
$43.17
|
|
|
Income (loss) from investment operations:
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income
2
|
.19
|
|
.12
|
|
.06
|
|
.12
|
|
.14
|
|
|
Net realized and unrealized gain (loss)
|
1.23
|
|
.58
|
|
5.23
|
|
4.50
|
|
(19.42)
|
|
|
Total from investment operations
|
1.42
|
|
.70
|
|
5.29
|
|
4.62
|
|
(19.28)
|
|
|
Dividends and/or distributions to shareholders:
|
|
|
|
|
|
|
|
|
|
|
|
Distributions from net realized gain
|
--
|
|
--
|
|
--
|
|
--
|
|
(3.71)
|
|
|
Tax return of capital distribution
|
--
|
|
--
|
|
--
|
|
(.01)
|
|
--
|
|
|
Total dividends and/or distributions to shareholders
|
--
|
|
--
|
|
--
|
|
(.01)
|
|
(3.71)
|
|
|
Net asset value, end of period
|
$32.20
|
|
$30.78
|
|
$30.08
|
|
$24.79
|
|
$20.18
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Return, at Net Asset Value
3
|
4.62%
|
|
2.33%
|
|
21.34%
|
|
22.91%
|
|
(48.73)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratios/Supplemental Data
|
|
|
|
|
|
|
|
|
|
|
|
Net assets, end of period (in thousands)
|
$63,259
|
|
$100,231
|
|
$101,045
|
|
$76,153
|
|
$72,540
|
|
|
Average net assets (in thousands)
|
$85,178
|
|
$102,025
|
|
$120,886
|
|
$76,732
|
|
$93,084
|
|
|
Ratios to average net assets:
4
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income
|
0.60%
|
|
0.35%
|
|
0.21%
|
|
0.57%
|
|
0.43%
|
|
|
Total expenses
5
|
0.92%
|
|
1.00%
|
|
0.91%
|
|
0.93%
|
|
0.76%
|
|
|
Expenses after payments, waivers and/or reimbursements and reduction to custodian expenses
|
0.92%
|
|
0.99%
|
|
0.90%
|
|
0.92%
|
|
0.76%
|
|
|
Portfolio turnover rate
|
54%
|
|
89%
|
|
71%
|
|
99%
|
|
94%
|
|
|
1.
October 29, 2010 represents the last business day of the Fund's 2010 fiscal year.
|
|
|
|
2.
Per share amounts calculated based on the average shares outstanding during the period.
|
|
|
|
3.
Assumes an initial 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.
|
|
|
|
4.
Annualized for periods less than one full year.
|
|
|
|
5.
Total expenses including indirect expenses from affiliated fund were as follows:
|
|
|
|
Year Ended October 31, 2012
|
0.92%
|
|
|
Year Ended October 31, 2011
|
1.01%
|
|
|
Year Ended October 29, 2010
|
0.91%
|
|
|
Year Ended October 31, 2009
|
0.94%
|
|
|
Year Ended October 31, 2008
|
0.76%
|
|
|
|
October 31,
|
|
|
Class I Year Ended
|
2012
1
|
|
|
Per Share Operating Data
|
|
|
|
Net asset value, beginning of period
|
$32.90
|
|
|
Income (loss) from investment operations:
|
|
|
|
Net investment income
2
|
.21
|
|
|
Net realized and unrealized loss
|
(1.23)
|
|
|
Total from investment operations
|
(1.02)
|
|
|
Dividends and/or distributions to shareholders:
|
|
|
|
Distributions from net realized gain
|
--
|
|
|
Tax return of capital distribution
|
--
|
|
|
Total dividends and/or distributions to shareholders
|
--
|
|
|
Net asset value, end of period
|
$31.88
|
|
|
|
|
|
|
Total Return, at Net Asset Value
3
|
(3.07)%
|
|
|
|
|
|
|
Ratios/Supplemental Data
|
|
|
|
Net assets, end of period (in thousands)
|
$10
|
|
|
Average net assets (in thousands)
|
$422
|
|
|
Ratios to average net assets:
4
|
|
|
|
Net investment income
|
0.99%
|
|
|
Total expenses
5
|
0.74%
|
|
|
Expenses after payments, waivers and/or reimbursements and reduction to custodian expenses
|
0.74%
|
|
|
Portfolio turnover rate
|
54%
|
|
|
1.
For the period from February 28, 2012 (inception of offering) to October 31, 2012.
|
|
|
|
2.
Per share amounts calculated based on the average shares outstanding during the period.
|
|
|
|
3.
Assumes an initial 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.
|
|
|
|
4.
Annualized for periods less than one full year.
|
|
|
|
5.
Total expenses including indirect expenses from affiliated fund were as follows:
|
|
|
|
Period Ended October 31, 2012
|
0.74%
|
|
INFORMATION AND SERVICES
STATEMENT OF ADDITIONAL INFORMATION AND
ANNUAL AND SEMI-ANNUAL REPORTS.
The Fund's Statement of Additional Information and Annual and Semi-Annual Reports to shareholders provide additional information
about the Fund's investments. The Annual Report includes a discussion of the market conditions and investment strategies that
significantly affected the Fund's performance during its last fiscal year. The Fund's Statement of Additional Information
and audited financial statements included in its most recent Annual Report dated October 31, 2012, including the notes thereto and report of the independent registered public accounting firm thereon, are incorporated by
reference into (are legally considered part of) this prospectus.
How to Request More Information
You can request the above documents, the notice explaining the Fund's privacy policy, and other information about the Fund,
without charge, by:
|
Telephone:
|
Call OppenheimerFunds Services toll-free:
1.800.CALL OPP (1.800.225.5677)
|
|
Mail:
|
Use the following address for regular mail:
OppenheimerFunds Services
P.O. Box 5270
Denver, Colorado 80217-5270
|
|
|
Use the following address for courier or express mail:
OppenheimerFunds Services
12100 East Iliff Avenue
Suite 300
Aurora, Colorado 80014
|
|
Internet:
|
You may request documents, and read or download certain documents at www.oppenheimerfunds.com
|
Information about the Fund including the Statement of Additional Information can be reviewed and copied at the SEC's Public
Reference Room in Washington, D.C. Information on the operation of the Public Reference Room may be obtained by calling the
SEC at 1.202.551.8090. Reports and other information about the Fund are available on the EDGAR database on the SEC's website
at
www.sec.gov
. Copies may be obtained after payment of a duplicating fee by electronic request at the SEC's e-mail address: publicinfo@sec.gov
or by writing to the SEC's Public Reference Section, Washington, D.C. 20549-1520.
No one has been authorized to provide any information about the Fund or to make any representations about the Fund other than
what is contained in this prospectus. This prospectus is not an offer to sell shares of the Fund, nor a solicitation of an
offer to buy shares of the Fund, to any person in any state or other jurisdiction where it is unlawful to make such an offer.
|
The Fund's SEC File No.: 811-5225
SP0251.001.0313
|
Oppenheimer Small- & Mid- Cap Value Fund
A series of Oppenheimer Quest for Value Funds
|
NYSE Ticker Symbols
|
|
Class A
|
QVSCX
|
|
Class B
|
QSCBX
|
|
Class C
|
QSCCX
|
|
Class N
|
QSCNX
|
|
Class Y
|
QSCYX
|
|
Class I
|
QSCIX
|
February 28, 2013
Statement of Additional Information
This document contains additional information about the Fund and supplements information in the Fund's prospectus dated February
28, 2013 (the "Prospectus").
This Statement of Additional Information ("SAI") is not a prospectus. It should be read together with the Prospectus. The
Fund's financial statements are incorporated by reference into this SAI from its most recent Annual Report. The Fund's Prospectus
and most recent Annual Report may be obtained by writing to OppenheimerFunds Services, at P.O. Box 5270, Denver, Colorado
80217, or by calling OppenheimerFunds Services at the toll-free number shown below, or by downloading it from the OppenheimerFunds
website at www.oppenheimerfunds.com.
Oppenheimer Small- & Mid- Cap Value Fund
6803 South Tucson Way, Centennial, Colorado 80112-3924
1.800.CALL OPP (225.5677)
To Summary Prospectus
Additional Information About the Fund's Investment Policies and Risks
OFI Global Asset Management, Inc. ("OFI Global"), the Fund's investment adviser, has retained OppenheimerFunds, Inc. (the
"Sub-Adviser") to choose the Fund's investments and provide related advisory services to the Fund. The portfolio manager(s),
who is responsible for the day-to-day management of the Fund's portfolio, is employed by the Sub-Adviser unless indicated
otherwise. In this Statement of Additional Information ("SAI"), references to the "Manager" mean OFI Global and the Sub-Adviser
unless the context indicates otherwise or unless otherwise specified.
The investment objective, the principal investment policies and the principal risks of the Fund are described in the Prospectus.
This SAI contains supplemental information about those policies and risks and the types of securities that the Fund's Sub-Adviser
can select for the Fund. Additional information is also provided about the strategies that the Fund may use to try to achieve
its investment objective.
The composition of the Fund's portfolio and the techniques and strategies that the Fund uses in selecting portfolio securities
may vary over time. The Fund is not required to use all of the investment techniques and strategies described below in seeking
its investment objective. It may use some of the investment techniques and strategies only at some times or it may not use
them at all.
The Fund's Main Investment Policies
Investments in Equity Securities.
The Fund emphasizes investments in equity securities of small- and mid- cap companies. Equity securities include common stocks,
preferred stocks, rights and warrants, and securities convertible into common stock. The Fund's investments primarily include
stocks of companies having a market capitalization up to $13 billion that includes both small-cap stocks (stocks of issuers
that have a market capitalization under $3 billion) and mid-cap stocks (stocks of issuers having a capitalization between
$3 billion and $13 billion). The Fund has no fixed ratio for small-cap and mid-cap stocks in its portfolio, and while its
focus is on stocks of U.S. companies, it may invest in stocks of small- and mid-cap foreign issuers as well. The Fund can
purchase securities of issuers having a larger market capitalization. The Fund is not required to sell securities of an issuer
it holds if the issuer's capitalization exceeds $13 billion.
Current income is not a criterion used to select equity securities, as the Fund does not seek income as part of its goal.
However, certain debt securities can be selected for the Fund's portfolio for liquidity needs or for defensive purposes (including
debt securities that the Sub-Adviser believes might offer some opportunities for capital appreciation when stocks are disfavored).
At times, in the Sub-Adviser's view, the market may favor or disfavor securities of issuers of a particular capitalization
range. Therefore, the Fund may change the proportion of its equity investments in securities of different capitalization ranges,
based upon the Sub-Adviser's judgment of where the best market opportunities are to seek the Fund's objective.
Securities of newer, small- and mid-cap companies might offer greater opportunities for capital appreciation than securities
of larger, more established companies. However, these securities also involve greater risks than securities of larger companies.
Securities of small- and mid- capitalization issuers may be subject to greater price volatility in general than securities
of large-cap companies. Therefore, to the degree that the Fund has investments in smaller and mid- size capitalization companies
at times of market volatility, the Fund's share price may fluctuate more than that of funds focusing on larger-capitalization
issuers.
Value Investing.
A value investing approach seeks stocks and other equity securities that appear to be temporarily undervalued by various
measures such as price/earnings ratios. Value investing looks for securities with low prices in relation to their real worth
or future prospects in the hope that the prices will rise when other investors realize the intrinsic value of the securities.
Value investing uses research into an issuer's underlying financial condition and prospects to identify potential investments.
Some of the criteria that may be used are:
-
Price/earnings ratio
, which is a stock's price divided by its earnings (or its long-term earnings potential) per share. A stock that has a price/earnings
ratio lower than its historical range, or lower than the market as a whole or than similar companies, may offer an attractive
investment opportunity.
-
Price/book value ratio
, which is the stock price divided by the book value per share of the company.
-
Dividend yield
, which is measured by dividing the annual dividend by the stock price per share.
-
Asset valuation
, which compares the stock price to the value of the company's underlying assets, including their projected value in the marketplace,
their liquidation value and their intellectual property value.
Preferred Stock.
Preferred stock are equity securities that have a dividend rate payable from the company's earnings. Their stated dividend
rate causes preferred stock to have some characteristics of debt securities. If interest rates rise, the fixed dividend on
preferred stock may be less attractive and the price of those securities will likely decline. If interest rates fall their
price will likely increase.
Preferred stock dividends may be cumulative or non-cumulative, participating, or auction rate. "Cumulative" dividend provisions
require that all, or a portion of, any unpaid dividends must be paid before the issuer can pay dividends on its common stock.
"Participating" preferred stock may be entitled to a larger dividend than the stated dividend in certain cases. "Auction rate"
preferred stock has a dividend rate that is set by a Dutch auction process.
Preferred stock may have mandatory sinking fund provisions, as well as provisions for their call or redemption prior to maturity
which can have a negative effect on their prices when interest rates fall.
Preferred stock do not constitute a liability of the issuer and therefore do not offer the same degree of capital protection
or assured income as debt securities. Preferred stock generally rank ahead of common stock and behind debt securities in claims
for dividends and for assets of the issuer in a liquidation or bankruptcy.
Convertible Securities.
Convertible securities are debt securities or preferred stocks that are convertible into the issuer's common stock or other
equity securities. While many convertible securities are considered to be mainly debt securities, certain convertible securities
are regarded more as "equity equivalents" because of their conversion feature. The market value of a convertible security
reflects both its "investment value," which is its expected income potential, and its "conversion value," which is its anticipated
market value if it were converted. If its investment value exceeds its conversion value, the security will generally behave
more like a debt security, and the security's price will likely increase when interest rates fall and decrease when interest
rates rise. If its conversion value exceeds its investment value, the security will generally behave more like an equity security.
In that case, its price will tend to fluctuate with the price of the underlying common stock or other security.
Convertible debt securities, like other debt securities, are subject to credit risk and interest rate risk. Convertible securities
rank senior to common stock in a corporation's capital structure and therefore are subject to less risk than common stock
in case of an issuer's bankruptcy or liquidation.
For convertible securities that are considered to be "equity equivalents," their credit quality generally has less impact
on the security's value than in the case of non-convertible debt securities. To determine whether convertible securities should
be regarded as "equity equivalents," the Sub-Adviser may consider a number of factors, including:
-
whether the convertible security can be exchanged for a fixed number of shares of common stock of the issuer or is subject
to a "cap" or a conversion formula or other type of limit;
-
whether the convertible security can be exchanged at a time determined by the investor rather than by the issuer;
-
whether the issuer of the convertible securities has restated its earnings per share on a fully diluted basis (that is, as
if all of the issuer's convertible securities were converted into common stock); and
-
the extent to which the convertible security may participate in any appreciation in the price of the issuer's common stock.
Special Risks of Lower-Grade Securities.
The Fund can invest up to 5% of its total assets in lower-grade securities. Lower-grade securities (commonly known as "junk
bonds") are rated less than "BBB" by Standard & Poor's Rating Services ("Standard & Poor's") or less than "Baa" by Moody's
Investors Service, Inc. ("Moody's"), or have a comparable rating from another rating organization. If unrated, a security
is considered to be below investment-grade if the Manager deems it to be of comparable quality to securities rated less than
investment-grade. The Fund does not intend to invest in securities that are in default.
High-yield, lower-grade securities, whether rated or unrated, often have speculative characteristics and special risks that
make them riskier investments than investment-grade securities. They may be subject to greater market fluctuations and risk
of loss of income and principal than lower yielding, investment-grade securities. There may be less of a market for them and
therefore they may be harder to sell at an acceptable price. There is a relatively greater possibility that the issuer's earnings
may be insufficient to make the payments of interest due on the bonds. The issuer's low creditworthiness may increase the
potential for its insolvency.
These risks mean that the Fund may not achieve the expected income from lower-grade securities, and that the Fund's net asset
value per share may be affected by declines in value of these securities. However, the Fund's limitations on investments in
these types of securities may reduce some of the risk, as will the Fund's policy of diversifying its investments.
U.S. Government Securities.
Securities issued by the U.S. Treasury are backed by the full faith and credit of the U.S. government and are subject to
relatively little credit risk. Obligations of U.S. government agencies or instrumentalities (including mortgage-backed securities)
may be guaranteed or supported by the "full faith and credit" of the United States or may be backed by the right of the issuer
to borrow from the U.S. Treasury or by the discretionary authority of the U.S. government to purchase the agencies' or instrumentalities'
obligations. Others are supported only by the credit of the agency or instrumentality. "Full faith and credit" means that
the taxing power of the U.S. government is pledged to the payment of interest and repayment of principal on a security. If
a security is not backed by the full faith and credit of the United States, the owner of the security must look principally
to the agency or instrumentality issuing the obligation for repayment.
Money Market Instruments.
The following is a brief description of the types of money market securities the Fund can invest in. Money market securities
are high-quality, short-term debt instruments that may be issued by the U.S. government, corporations, banks or other entities.
They may have fixed, variable or floating interest rates.
Bank Obligations.
Bank obligations include time deposits, certificates of deposit, bankers' acceptances and other bank obligations that are
fully insured by the Federal Deposit Insurance Corporation ("FDIC"). The FDIC currently insures the deposits of member banks
up to $250,000 per account. Bank obligations also include obligations issued or guaranteed by a domestic bank (including a
foreign branch of a domestic bank) having total assets of at least U.S. $1 billion, or obligations of a foreign bank with
total assets of at least U.S. $1 billion. Those banks may include commercial banks, savings banks, and savings and loan associations
that may or may not be members of the FDIC.
Time deposits are non-negotiable deposits in a bank for a specified period of time at a stated interest rate. Time deposits
may be subject to withdrawal notices and penalties.
Bankers' acceptances are marketable short-term credit instruments used to finance the import, export, transfer or storage
of goods. They are deemed "accepted" when a bank guarantees their payment at maturity.
Bank obligations may have a limited market and may be deemed "illiquid" unless the obligation, including principal amount
plus accrued interest, is payable within seven days after demand. Time deposits that are subject to withdrawal notices and
penalties, other than those maturing in seven days or less, are also considered illiquid investments.
Commercial Paper.
The Fund can invest in commercial paper if it is rated within the top two rating categories of Standard & Poor's and Moody's.
If the paper is not rated, it may be purchased if issued by a company having a credit rating of at least "AA" by Standard
& Poor's or "Aa" by Moody's.
The Fund can buy commercial paper, including U.S. dollar-denominated securities of foreign branches of U.S. banks, issued
by other entities if the commercial paper is guaranteed as to principal and interest by a bank, government or corporation
whose certificates of deposit or commercial paper may otherwise be purchased by the Fund.
Variable Amount Master Demand Notes.
Master demand notes are direct arrangements of obligations, between a lender and a corporate borrower, that permit the investment
of fluctuating amounts of money at varying rates of interest. They permit daily changes in the amounts borrowed. The lender
has the right to increase or decrease the amount it lends under the note at any time, up to the full amount provided by the
note agreement. The borrower may prepay up to the full amount of the note without penalty. These notes may or may not be backed
by bank letters of credit.
These notes are direct lending arrangements between the lender and borrower and there is no secondary market for them. The
principal plus accrued interest is redeemable at any time, however. This right to redeem the notes depends on the ability
of the borrower to make the specified payments on demand. The Sub-Adviser will consider the earning power, cash flow and other
liquidity ratios of an issuer, and its ability to pay principal and interest on demand, including a situation in which all
holders of such notes made demand simultaneously. Investments in master demand notes are subject to the limitation on investments in
illiquid securities.
The Fund does not currently intend to invest more than 5% of its total assets in variable amount master demand notes. The
Fund has no limitations on the type of issuer from whom these notes will be purchased.
Foreign Securities.
Foreign securities include equity and debt securities of issuers organized under the laws of countries other than the United
States and debt securities issued or guaranteed by foreign governmental or by supra-national entities. They may also include
securities of companies (including those that are located in the U.S. or organized under U.S. law) that derive a significant
portion of their revenue or profits from foreign businesses, investments or sales, or that have a significant portion of their
assets abroad. Securities denominated in foreign currencies issued by U.S. companies may also be considered to be "foreign
securities." Securities of foreign issuers that are represented by American Depository Receipts or that are listed on a U.S.
securities exchange or traded in the U.S. over-the-counter markets may not be considered "foreign securities" because they
are not subject to many of the special considerations and risks that apply to foreign securities held and traded abroad. Foreign
securities may be traded on foreign securities exchanges or in foreign over-the-counter markets.
Investing in foreign securities offers potential benefits that are not available from investing only in the securities of
U.S. issuers. Those benefits include the opportunity to invest in a wider range of issuers, in countries with economic policies
or business cycles that differ from those in the U.S. and in markets that often do not move parallel to U.S. markets. Because
of these features, foreign investments may reduce portfolio volatility.
The percentage of assets allocated to foreign securities may vary over time depending on a number of factors including the
relative yields of foreign and U.S. securities, the economies of foreign countries, the condition of foreign financial markets,
the interest rate climate in particular foreign countries, and the relationship of foreign currencies to the U.S. dollar.
The Sub-Adviser may analyze fundamental economic criteria, for example: relative inflation levels and trends, growth rate
forecasts, balance of payments status, interest rates, market conditions, currency values, trade barriers, social and political
factors, and economic policies.
The Fund will hold foreign currency only in connection with the purchase or sale of foreign securities.
Risks of Foreign Investing.
Investments in foreign securities present special risks and considerations not usually associated with investments in U.S.
securities. Those may include:
-
a lack of public information about foreign issuers;
-
lower trading volume and less liquidity in foreign securities markets than in U.S. markets;
-
greater price volatility in foreign markets than in U.S. markets;
-
less government regulation of foreign issuers, exchanges and brokers than in the U.S.;
-
a lack of uniform accounting, auditing and financial reporting standards in foreign countries compared to those applicable
to U.S. issuers;
-
fluctuations in the value of foreign investments due to changes in currency rates;
-
the expense of currency exchange transactions;
-
greater difficulties in pricing securities in foreign markets;
-
foreign government restrictions on investments by U.S. and other non-local entities;
-
higher brokerage commission rates than in the U.S.;
-
increased risks of delays in clearance and settlement of portfolio transactions;
-
unfavorable differences between the U.S. economy and some foreign economies;
-
greater difficulty in commencing and pursuing lawsuits or other legal remedies;
-
less regulation of foreign banks and securities depositories;
-
increased risks of loss of certificates for portfolio securities;
-
government restrictions on the repatriation of profits or capital or other currency control regulations;
-
the possibility in some countries of expropriation, confiscatory taxation, political, financial or social instability or adverse
diplomatic developments; and
-
the reduction of income by foreign taxes.
Foreign securities are often denominated in currencies other than the U.S. dollar, which means that changes in the currency
exchange rate will affect the value of those securities. Generally, when the U.S. dollar increases in value against a foreign
currency, a security denominated in that currency is worth less in U.S. dollars and when the U.S. dollar decreases in value
against a foreign currency, a security denominated in that currency is worth more in U.S. dollars.
In the past, government policies have discouraged investments in certain foreign countries through economic sanctions, trade
restrictions, taxation or other government actions. It is possible that such policies could be implemented in the future.
Special Risks of Developing and Emerging Markets.
Emerging and developing markets may offer special opportunities for investing but also have greater risks than more mature
foreign markets. Emerging and developing market countries may be subject to greater political, social and economic instability;
have high inflation rates; experience unfavorable diplomatic developments; have less liquid securities markets with greater
price volatility; have additional delays in the settlement of securities transactions; impose exchange controls; impose differential
taxes on foreign investors; have a higher possibility of confiscatory taxes or the expropriation of assets; impose restrictions
on direct investments or investments in issuers in particular industries; and lack developed legal or regulatory systems.
The Manager will consider these factors when evaluating securities in these markets. The Fund currently limits these investments
to not more than 5% of its total assets.
Passive Foreign Investment Companies.
Under U.S. tax laws, passive foreign investment companies ("PFICs") are those foreign corporations which generate primarily
"passive" income. Passive income is defined as any income that is considered foreign personal holding company income under
the Internal Revenue Code. For federal tax purposes, a foreign corporation is deemed to be a PFIC if 75% or more of its gross
income during a fiscal year is passive income or if 50% or more of its assets are assets that produce, or are held to produce,
passive income.
Foreign mutual funds are generally deemed to be PFICs, since nearly all of the income of a mutual fund is passive income.
Foreign mutual funds investments may be used to gain exposure to the securities of companies in countries that limit or prohibit
direct foreign investment; however investments in foreign mutual funds by the Fund are subject to limits under the Investment
Company Act of 1940.
Other types of foreign corporations may also be considered PFICs if their percentage of passive income or passive assets exceeds
the limits described above. Federal tax laws impose severe tax penalties for failure to properly report investment income
from PFICs. Although every effort is made to ensure compliance with federal tax reporting requirements for these investments,
foreign corporations that are PFICs for federal tax purposes may not always be recognized as such.
Additional risks of investing in other investment companies are described under "Investments in Other Investment Companies."
Portfolio Turnover.
"Portfolio turnover" describes the rate at which the Fund traded its portfolio securities during its last fiscal year. For
example, if a fund sold all of its securities during the year, its portfolio turnover rate would have been 100%. The Fund's
portfolio turnover rate will fluctuate from year to year.
Increased portfolio turnover creates higher brokerage and transaction costs for the Fund, which could reduce its overall performance.
Additionally, the realization of capital gains from selling portfolio securities may result in distributions of taxable capital
gains to shareholders, since the Fund will normally distribute all of its capital gains realized each year, to avoid excise
taxes under the Internal Revenue Code.
Other Investments and Investment Strategies
Debt Securities.
Although the Fund invests mainly in equity securities, it can also invest in bonds, debentures and other debt securities.
It is not anticipated that a significant amount of the Fund's assets will be invested in debt securities. In general, debt
securities are subject to the following risks:
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Credit Risk.
Credit risk is the risk that the issuer of a security might not make interest or principal payments on the security as they
become due. If the issuer fails to pay interest, the Fund's income might be reduced, and if the issuer fails to pay interest
or repay principal, the value of the security might fall. A downgrade in an issuer's credit rating or other adverse credit
information about an issuer can reduce the market value of the issuer's securities.
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Interest Rate Risk.
Interest rate risk refers to the fluctuations in value of a debt security resulting from the relationship between price and
yield. An increase in general interest rates will tend to reduce the market value of already-issued debt securities and a
decline in general interest rates will tend to increase their value. Debt securities with longer maturities are usually subject
to greater fluctuations in value from interest rate changes than obligations having shorter maturities. Variable rate debt
securities pay interest based on an interest rate benchmark. When the benchmark rate changes, the interest payments on those
securities may be reset at a higher or lower rate. Except for investments in variable rate debt securities, fluctuations in
general interest rates do not affect the amount of interest income received. Fluctuations in the market valuations of debt
securities may, however, affect the value of Fund assets.
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Prepayment Risk.
Certain fixed-income securities (in particular mortgage-related securities) are subject to the risk of unanticipated prepayment.
That is the risk that when interest rates fall, the issuer will repay the security prior to the security's expected maturity,
or with respect to certain fixed-income securities, that borrowers will prepay the loans that underlie these securities more
quickly than expected, thereby causing the issuer of the security to repay the principal prior to the security's expected
maturity. The Fund may need to reinvest the proceeds at a lower interest rate, reducing its income. Securities subject to
prepayment risk generally offer less potential for gains when prevailing interest rates fall. If the Fund buys those securities
at a premium, accelerated prepayments on those securities could cause it to lose a portion of its principal investment represented
by the premium. The impact of prepayments on the price of a security may be difficult to predict and may increase the security's
price volatility. Interest-only and principal-only securities are especially sensitive to interest rate changes, which can
affect not only their prices but can also change the income flows and prepayment assumptions about those investments.
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Extension Risk.
If interest rates rise rapidly, repayments of principal on certain debt securities may occur at a slower rate than expected
and the expected maturity of those securities could lengthen as a result. Those securities generally have a greater potential
for loss when prevailing interest rates rise, which could cause their value to fall sharply.
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Event Risk.
If an issuer of debt securities is the subject of a buyout, debt restructuring, merger or recapitalization that increases
its debt load, it could interfere with its ability to make timely payments of interest and principal and cause the value of
its debt securities to fall.
Foreign Debt Securities.
Foreign debt securities include securities issued by foreign governments and companies as well as by "supra-national" entities
or their agencies or instrumentalities. Investment in the debt securities of a foreign government or its agencies and instrumentalities
("foreign sovereign debt") may involve a high degree of risk. Foreign sovereign debt obligations may or may not be supported
by the full faith and credit of the foreign government. Because of political or economic constraints, the government entity
that issued the debt security may not be willing or able to pay interest or repay principle when due. In such a situation,
it may request rescheduling the debt or extending further loans to the entity. If a foreign government entity defaults on
a debt obligation, there may be few or no legal remedies available for collecting the amounts due.
Investing in Small, Unseasoned Companies.
These are companies that have typically been in operation for less than three years, including the operations of any predecessors.
Because small, unseasoned companies may be less secure financially, they may rely on borrowing to a greater extent. In that
case, they may be more susceptible to adverse changes in interest rates than larger, more established companies. Small, unseasoned
companies may also offer fewer products and rely on fewer key personnel. Market or economic developments may have a significant
impact on these companies and on the value of their securities. These companies may have a limited trading market and the
prices of their securities may be volatile, which could make them difficult to sell in a short period of time at a reasonable
price. If other investors that own the security are trading it at the same time, it may have a more significant effect on
the security's price than that trading activity would have on the security price of a larger company. These securities may
be considered speculative and could increase overall portfolio risks.
Investing in Special Situations.
At times, the Fund may seek to benefit from what the portfolio manager considers to be "special situations," such as mergers,
reorganizations, restructurings or other unusual events, that are expected to affect a particular issuer. There is a risk
that the expected change or event might not occur, which could cause the price of the security to fall, perhaps sharply. In
that case, the investment might not produce the expected gains or might cause a loss. This is an aggressive investment technique
that may be considered speculative.
When-Issued and Delayed-Delivery Transactions.
"When-issued" and "delayed-delivery" are terms that refer to securities whose documentation are available, and for which
a market exists, but which are not available for immediate delivery to a purchaser. When-issued and delayed-delivery securities
are purchased at a price that is fixed at the time of the transaction with payment and delivery of the security made at a
later date. During the period between purchase and settlement, the buyer makes no payment to the issuer (or seller) of the
security and no interest accrues to the buyer from the investment. Purchases on that basis are made when it is anticipated
that the price at the time of the transaction is lower than the price will be at the time of delivery.
The securities are subject to change in value from market fluctuations during the period until settlement and the value of
the security on the delivery date may be more or less than the purchase price. If the value of the security declines below
the purchase price, the transaction may lose money.
The buyer relies on the other party to complete the when-issued or delayed-delivery transactions. The buyer will bear the
risk that a security purchased on a when-issued or delayed-delivery basis may not be issued or may not be delivered as agreed.
A failure to do so may cause the loss of an opportunity to obtain the security at an advantageous price or yield.
When-issued and delayed-delivery transactions can be used as a defensive technique to hedge against anticipated changes in
interest rates and prices. For instance, if rising interest rates or falling prices are anticipated, a portfolio security
may be sold on a delayed-delivery basis to attempt to limit exposure to those occurrences. In periods of falling interest
rates and rising prices, a purchase of securities on a when-issued or delayed-delivery basis may be used to obtain the benefit
of currently higher cash yields.
The Fund engages in when-issued and delayed-delivery transactions for the purpose of acquiring or selling securities consistent
with its investment objective and policies or for delivery pursuant to options contracts it has entered into, and not for
the purpose of investment leverage. Although the Fund will enter into delayed-delivery or when-issued purchase transactions
to acquire securities, it can dispose of a commitment prior to settlement. If it chooses to dispose of the right to acquire
a when-issued security prior to its acquisition or to dispose of its right to receive delivery, it may incur a gain or loss.
At the time of the commitment to purchase or sell a security on a when-issued or delayed-delivery basis, the Fund records
the transaction on its books and reflects the value of the security purchased in determining its net asset value. It also
identifies liquid assets on its books at least equal to the amount of the purchase commitment until it pays for the investment.
In a sale transaction, it records the proceeds to be received.
The Fund will not enter into when-issued commitments if more than 15% of the Fund's net assets would be committed under these
transactions.
Rights and Warrants.
Rights and warrants may be purchased directly or may be acquired as part of other securities. Warrants are options to purchase
equity securities at a specific price during a specific period of time. The price of a warrant does not necessarily move parallel
to the price of the underlying security and is generally more volatile than the price of the underlying security. Rights are
similar to warrants, but normally have a shorter duration. The market for rights or warrants may be very limited and it may
be difficult to sell them promptly at an acceptable price. Rights and warrants have no voting rights, receive no dividends
and have no rights with respect to the assets of the issuer.
The Fund can invest up to 5% of its total assets in rights and warrants.
Repurchase Agreements.
The Fund may acquire securities subject to repurchase agreements. Repurchase agreements may be acquired for temporary defensive
purposes, to maintain liquidity to meet anticipated share redemptions, pending the investment of the proceeds from sales of
shares, or pending the settlement of portfolio securities transactions. In a repurchase transaction, the purchaser buys a
security from, and simultaneously resells it to, an approved institution for delivery on an agreed-upon future date. The resale
price exceeds the purchase price by an amount that reflects an agreed-upon interest rate effective for the period during which
the repurchase agreement is in effect. Approved institutions include U.S. commercial banks, U.S. branches of foreign banks,
or broker-dealers that have been designated as primary dealers in government securities. Institutions must meet credit requirements
set by the Sub-Adviser from time to time.
The majority of repurchase transactions run from day to day and delivery pursuant to the resale typically occurs within one
to five days of the purchase. Repurchase agreements that have a maturity beyond seven days are subject to limits on illiquid
investments. There is no limit on the amount of assets that may be subject to repurchase agreements having maturities of seven
days or less.
Repurchase agreements are considered "loans" under the Investment Company Act and are collateralized by the underlying security.
Repurchase agreements require that at all times while the repurchase agreement is in effect, the value of the collateral must
equal or exceed the repurchase price to fully collateralize the repayment obligation. However, if the institution fails to
pay the repurchase price on the delivery date, there may be costs incurred in disposing of the collateral and losses if there
is a delay in the ability to do so. The Sub-Adviser will monitor the institution's creditworthiness to confirm that it is
financially sound and will continuously monitor the collateral's value.
Pursuant to an Exemptive Order issued by the Securities and Exchange Commission (the "SEC"), the Fund, along with the affiliated
entities managed by the Manager, may transfer uninvested cash balances into one or more joint repurchase agreement accounts.
These balances are invested in one or more repurchase agreements secured by U.S. government securities. Securities that are
pledged as collateral for repurchase agreements are held by a custodian bank until the agreements mature. Each joint repurchase
arrangement requires that the market value of the collateral be sufficient to cover payments of interest and principal; however,
in the event of default by the other party to the agreement, retention or sale of the collateral may be subject to legal proceedings.
Reverse Repurchase Agreements.
The Fund may engage in reverse repurchase agreements. A reverse repurchase agreement is the sale of a debt obligation to
a party for a specified price, with the simultaneous agreement to repurchase it from that party on a future date at a higher
price. These transactions involve the risk that the market value of the securities sold under a reverse repurchase agreement
could decline below the price that the Fund is required to repurchase them. The Fund will identify liquid assets on its books
to cover its obligations under reverse repurchase agreements until payment is made to the other party.
Illiquid and Restricted Securities.
Generally, an illiquid asset is an asset that cannot be sold or disposed of in the ordinary course of business within seven
days at approximately the price at which it has been valued. Under the policies and procedures established by the Board, the
Sub-Adviser determines the liquidity of portfolio investments. The Sub-Adviser monitors holdings of illiquid and restricted
securities on an ongoing basis to determine whether to sell any holdings to maintain adequate liquidity. Among the types of
illiquid securities are repurchase agreements maturing in more than seven days. Liquidity may dissipate at anytime and there
can be no assurance that the Sub-Adviser's liquidity determinations will be correct or that a reduction in liquidity will
not occur between the time such determination is made and an event prompting the Fund to sell a security.
Restricted securities acquired through private placements have contractual restrictions on their public resale that might
limit the ability to value or to dispose of the securities and might lower the price that could be realized on a sale. To
sell a restricted security that is not registered under applicable securities laws, the securities might need to be registered.
The expense of registering restricted securities may be negotiated with the issuer at the time of purchase. If the securities
must be registered in order to be sold, a significant period may elapse between the time the decision is made to sell the
security and the time the security is registered. There is a risk of downward price fluctuation during that period.
Limitations that apply to purchases of restricted securities do not limit purchases of restricted securities that are eligible
for sale to qualified institutional buyers under Rule 144A of the Securities Act of 1933, if those securities have been determined
to be liquid by the Sub-Adviser under Board-approved guidelines. Those guidelines take into account the trading activity for
the securities and the availability of reliable pricing information, among other factors. If there is a lack of trading interest
in a particular Rule 144A security, holdings of that security may be considered to be illiquid.
Loan Participation Interests.
The Fund may invest in loan participation interests, subject to the Fund's limitation on investments in illiquid investments.
A participation interest is an undivided interest in a loan made by the issuing financial institution in the proportion that
the buyer's participation interest bears to the total principal amount of the loan. No more than 5% of the Fund's net assets
can be invested in participation interests of the same borrower. The issuing financial institution may have no obligation
to the Fund other than to pay the Fund the proportionate amount of the principal and interest payments it receives.
Participation interests are primarily dependent upon the creditworthiness of the borrowing corporation, which is obligated
to make payments of principal and interest on the loan. There is a risk that a borrower may have difficulty making payments.
If a borrower fails to pay scheduled interest or principal payments, the Fund could experience a reduction in its income.
The value of that participation interest might also decline, which could affect the net asset value of the Fund's shares.
If the issuing financial institution fails to perform its obligations under the participation agreement, the Fund might incur
costs and delays in realizing payment and suffer a loss of principal and/or interest.
Loans of Portfolio Securities.
Securities lending pursuant to a Securities Lending Agency Agreement (the "Securities Lending Agreement") with Goldman Sachs
Bank USA, doing business as Goldman Sachs Agency Lending ("Goldman Sachs"), may be used to attempt to increase income. Loans
of portfolio securities must comply with all applicable regulations and with the Fund's Securities Lending Procedures adopted
by the Board. The terms of any loans must also meet applicable tests under the Internal Revenue Code.
There are certain risks in connection with securities lending, including possible delays in receiving additional collateral
to secure a loan, or a delay or expenses in recovery of the loaned securities. Goldman Sachs has agreed, in general, to guarantee
the obligations of borrowers to return loaned securities and to be responsible for certain expenses relating to securities
lending. Under the Securities Lending Agreement, the Fund's securities lending procedures and applicable regulatory requirements
(which are subject to change), the Fund must receive collateral from the borrower consisting of cash, bank letters of credit
or securities of the U.S. government (or its agencies or instrumentalities). On each business day, the amount of collateral
that the Fund has received must at least equal the value of the loaned securities. If the Fund receives cash collateral from
the borrower, the Sub-Adviser, in its capacity as the Fund's collateral administrator, may invest that cash in certain high
quality, short-term investments, including in money market funds advised by the Manager. The Fund will be subject to its proportional
share of the expenses of such money market funds, including the advisory fee payable to the Manager or its affiliate as adviser
to such funds. The Sub-Adviser may charge a collateral administration fee of 0.08% on the value of cash collateral invested
in other securities. All of the Fund's collateral investments must comply with its securities lending procedures. The Fund
will be responsible for the risks associated with the investment of cash collateral, including the risk that the Fund may
lose money on the investment or may fail to earn sufficient income to meet its obligations to the borrower.
The terms of the loans must permit the Fund to recall loaned securities on five business days' notice and the Fund will seek
to recall loaned securities in time to vote on any matters that the Sub-Adviser determines would have a material effect on
the Fund's investment. The Securities Lending Agreement may be terminated by either Goldman Sachs or the Fund on 30 days'
written notice.
The Fund limits loans of portfolio securities to not more than 25% of its net assets.
Borrowing and Leverage.
The Fund has the ability to borrow money, to the extent permitted under the Investment Company Act, the rules or regulations
thereunder or any exemption from the Act that applies to the Fund, as such statute, rules or regulations may be amended or
interpreted from time to time. Currently, under the Investment Company Act, a mutual fund may borrow only from banks (for
other than emergency purposes) and only to the extent that the value of the Fund's assets, less its liabilities other than
borrowings, is equal to at least 300% of all borrowings including the proposed borrowing, except that it may also borrow up
to 5% of its total assets for temporary or emergency purposes from any lender. Under the Investment Company Act, there is
a rebuttable presumption that a loan is temporary if it is repaid within 60 days and not extended or renewed.
When the Fund borrows, it segregates or identifies securities on its books equal to 300% of the amount borrowed to cover its
obligation to repay the loan. If the value of the Fund's assets fail to meet this 300% asset coverage requirement, it will
reduce its borrowings within three days to meet the requirement. To do so, the Fund might have to sell a portion of its investments
at a disadvantageous time.
When the Fund invests borrowed money in portfolio securities, it is using a speculative investment technique known as "leverage."
If the Fund does borrow, its expenses may be greater than comparable funds that do not borrow. The Fund will pay interest
on loans, and that interest expense may raise the overall expenses of the Fund and reduce its returns. In the case of borrowing
for leverage, the interest paid on a loan might be more (or less) than the yield on the securities purchased with the loan
proceeds. Additionally, the use of leverage may make the Fund's share prices more sensitive to interest rate changes and thus
might cause the Fund's net asset value per share to fluctuate more than that of funds that do not borrow.
Derivatives and Hedging.
Derivative instruments may be used for liquidity, for hedging purposes, to seek income or for other investment purposes.
Some of the types of derivative instruments and hedging strategies the Fund may use are:
Although the Fund can use hedging instruments, it is not obligated to use them in seeking its objective. It does not currently
contemplate using them to any significant degree. To attempt to protect against declines in the market value of the Fund's
portfolio, to permit the Fund to retain unrealized gains in the value of portfolio securities that have appreciated, or to
facilitate selling securities for investment reasons, the Fund could:
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buy puts on such futures or on securities, or
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write covered calls on securities or futures.
The Fund can use hedging to establish a position in the securities market as a temporary substitute for purchasing particular
securities. In that case the Fund would normally seek to purchase the securities and then terminate that hedging position.
The Fund might also use this type of hedge to attempt to protect against the possibility that its portfolio securities would
not be fully included in a rise in value of the market. To do so, the Fund could:
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buy calls on such futures or on securities.
The Fund's strategy of hedging with futures and options on futures will be incidental to the Fund's activities in the underlying
cash market. The particular hedging instruments the Fund can use are described below. The Fund may employ new hedging instruments
and strategies when they are developed, if those investment methods are consistent with the Fund's investment objective and
are permissible under applicable regulations governing the Fund.
Futures.
The Fund can buy and sell futures contracts that relate to (1) broadly-based stock indices ("stock index futures"), (2) foreign
currencies ("forward contracts"), (3) an individual stock ("single stock futures"), or (4) commodities ("commodity futures").
No money is paid or received by the Fund on the purchase or sale of a future. Upon entering into a futures transaction, the
Fund will be required to deposit an initial margin payment with the futures commission merchant (the "futures broker"). Initial
margin payments will be deposited with the Fund's custodian bank in an account registered in the futures broker's name. However,
the futures broker can gain access to that account only under specified conditions. As the future is marked to market (that
is, its value on the Fund's books is changed) to reflect changes in its market value, subsequent margin payments, called variation
margin, will be paid to or by the futures broker daily.
At any time prior to expiration of the future, the Fund may elect to close out its position by taking an opposite position,
at which time a final determination of variation margin is made and any additional cash must be paid by or released to the
Fund. Any loss or gain on the future is then realized by the Fund for tax purposes. All futures transactions (except forward
contracts) are effected through a clearinghouse associated with the exchange on which the contracts are traded.
Stock Index Futures.
A broadly-based stock index is used as the basis for trading stock index futures. In some cases an index may be based on
stocks of issuers in a particular industry or group of industries. The buyer or seller of a stock index future is obligated
to pay cash to settle the transaction, based on the fluctuation of the index's value in response to the changes in the relative
values of the underlying stocks that are included in the index over the term of the contract. A stock index cannot be purchased
or sold directly.
Forward Contracts.
Forward contracts are foreign currency exchange contracts that are used to buy or sell foreign currency for future delivery
at a fixed price. They are discussed below in the section "Buying and Selling Options on Foreign Currencies."
Single Stock Futures.
A single stock future obligates the seller to deliver (and the purchaser to take) cash or a specified equity security of
an issuer to settle the futures transaction. Either party may also enter into an offsetting contract to close out the position.
Single stock futures trade on a very limited number of exchanges, and contracts are typically not transferable between the
exchanges.
Commodity Futures.
Commodity futures may be based upon commodities within five main commodity groups: (1) energy, which includes crude oil,
natural gas, gasoline and heating oil; (2) livestock, which includes cattle and hogs; (3) agriculture, which includes wheat,
corn, soybeans, cotton, coffee, sugar and cocoa; (4) industrial metals, which includes aluminum, copper, lead, nickel, tin
and zinc; and (5) precious metals, which include gold, platinum and silver. The Fund can purchase and sell commodity futures
contracts, options on futures contracts and options and futures on commodity indices with respect to these five main commodity
groups and the individual commodities within each group, as well as other types of commodities.
Put and Call Options.
Put options (sometimes referred to as "puts") give the holder the right to sell an asset for an agreed-upon price. Call
options (sometimes referred to as "calls") give the holder the right to buy an asset at an agreed-upon price.
The Fund can buy and sell exchange-traded and over-the-counter put and call options, including options on broadly-based indices,
securities, foreign currencies and stock index futures. The Trustees have adopted a non-fundamental policy that the Fund may
write covered call options or write covered put options with respect to not more than 25% of the value of its net assets.
Similarly, the Fund may purchase call or put options only if, after the purchase, the value of all call and put options held
by the Fund will not exceed 5% of the Fund's total assets.
Selling Covered Call Options.
If the Fund sells ("writes") a call option, it must be "covered." That means that while the call option is outstanding,
the Fund must either own the security subject to the call, or, for certain types of call options, identify liquid assets on
its books that would enable it to fulfill its obligations if the option were exercised.
A call option on a security is an agreement by the seller to sell an underlying security to the call purchaser at a fixed
price (the "exercise price") regardless of changes in the market price of that security during a call period. Call options
are sold for a cash payment (a premium). The exercise price is usually higher than the price of the security at the time the
call is sold. The seller bears the risk that the price of the underlying security may increase during the call period, requiring
it to sell the security for less than the market value at the time. That risk may be offset to some extent by the premium
the seller receives. If the market value of the security does not rise above the exercise price during the call period, the
call generally will not be exercised. In that case the seller realizes a profit from the cash premium it received. Any such
profits earned by the Fund are considered short-term capital gains for federal income tax purposes and are taxable as ordinary
income when distributed to shareholders.
A call on a securities index is also sold for a cash premium. If the buyer exercises an index call option, the seller is required
to pay an amount equal to the difference between the market value of the index and the exercise price, multiplied by a specified
factor. If the value of the underlying index does not rise above the call price, it is unlikely that the call will be exercised.
In that case the seller would keep the cash premium without being obligated to make any payments to the purchaser of the call.
The Fund's custodian bank, or a securities depository acting for the custodian bank, may act through the Options Clearing
Corporation as the escrow agent for securities that are subject to a call option the Fund has sold. The Options Clearing Corporation will
only release those securities when the call option expires or when the Fund enters into a closing transaction. No margin is
required for those transactions.
When the Fund sells an over-the-counter ("OTC") call option, it will typically enter into an arrangement with a securities
dealer which will establish a formula price at which the Fund will have the absolute right to repurchase that OTC option.
The formula price will generally be based on a multiple of the premium received for the option, plus the amount by which the
option is exercisable below the market price of the underlying security (that is, the amount that the option is "in the money").
When the Fund writes an OTC option, it will treat as illiquid (for purposes of its restriction on holding illiquid securities)
the mark-to-market value of any OTC option it holds, unless the option is subject to a buy-back agreement by the executing
broker.
To terminate its obligation on an OTC call it has written, the Fund can purchase a corresponding call in a "closing purchase
transaction." If the Fund cannot effect a closing purchase transaction due to the lack of a market, it will have to hold the
callable securities until the call expires or is exercised. The Fund will realize a profit or loss, depending upon whether
the premium received on the call is more or less than the amount of the option transaction costs and the price of the call
the Fund purchases to close out the transaction. The Fund may realize a profit if the call expires unexercised, because the
Fund will retain both the underlying security and the premium it received when it wrote the call. Any such profits are considered
short-term capital gains for federal income tax purposes and are taxable as ordinary income when distributed by the Fund.
A call on a futures contract may be sold without owning the futures contract or securities deliverable under the contract.
To do so, at the time the call must be covered by identifying an equivalent dollar amount of liquid assets. If the value of
the segregated assets drops below 100% of the current value of the future, additional liquid assets must be identified. Because
of this requirement, in no circumstances would an exercise notice as to that future require delivery on a futures contract.
It would simply create a short futures position, which is permitted by applicable hedging policies.
Selling Put Options
.
A put option on a security or a securities index gives the purchaser the right, during the option period, to sell the underlying
investment to the seller at the exercise price. When selling (writing) a put option on a security, the option must be covered
by the Fund by identifying liquid assets with a value equal to or greater than the exercise price of the put option, to secure
the obligation. In this case the Fund forgoes the opportunity to invest, sell or write calls against the identified assets.
The seller of a put is obligated to buy the underlying investment at the exercise price even if the market value of the investment
falls below that price. If the price of the underlying investment remains higher than the exercise price, it is unlikely that
a put option would be exercised. If a put option is not exercised, the seller would realize a gain of the amount of the premium
received less the transaction costs incurred. If the put is exercised, the exercise price will usually exceed the market value
of the underlying investment at that time. In that case, the seller could incur a loss. If the underlying investment is resold
at that time, the loss would be equal to the exercise price and any transaction costs minus the amount of the premium received
and the amount the seller received from the resale of the underlying investment. Settlement of a put on an index is in cash
rather than by delivery of the underlying investment. Any profits earned by the Fund from writing put options are considered
short-term capital gains for federal income tax purposes, and are taxable as ordinary income when distributed to shareholders.
Purchasing Put Options.
A put on a security or securities index may be purchased by the Fund to attempt to protect against a decline (below the exercise
price) in the value of the underlying investment. The purchaser pays a premium for the right to sell the underlying investment
at a fixed exercise price during the put period. If the market price of the underlying investment remains above or equal to
the exercise price, the put will generally not be exercised or resold and will become worthless on the expiration date. In
that case the purchaser will have lost the amount it paid as a premium and not realize any benefit from the right to sell
the underlying investment. If the purchaser resells a put prior to its expiration date, it may or may not realize a profit
on that sale.
A put may also be purchased on an investment the buyer does not own. That would permit the purchaser to resell the put or
to buy the underlying investment and sell it at the exercise price. If the market price of the underlying investment remains
above or equal to the exercise price, the put would generally not be exercised and would become worthless on its expiration
date.
Settlement of a put on a securities index is in cash rather than by delivery of the underlying investment. Gain or loss on
the transaction would depend on the changes to the prices of the securities that make up the index.
Purchasing Call Options
.
A call option may be purchased by the Fund to seek to benefit from an anticipated rise in a particular security or in a securities
index. The purchaser pays a premium for a call option. The purchaser then has the right to buy the underlying investment during
the call period at a fixed exercise price. The purchaser benefits only if, during the call period, the market price of the
underlying investment rises above the exercise price plus the transaction costs and the premium paid for the call or if the
call option is resold at a profit. If the purchaser does not exercise the call option or resell it (whether or not at a profit),
the option becomes worthless on its expiration date. In that case the purchaser will have lost the amount it paid as a premium
and not realized any gain on the transaction.
Settlement of a call on an index is in cash rather than by delivery of the underlying investment. Gain or loss on the transaction
would depend on changes to the prices of the securities that make up the index.
Buying and Selling Options on Foreign Currencies
.
Put and call options on foreign currencies include puts and calls that trade on a securities or commodities exchange or in
the over-the-counter markets or that are quoted by major recognized dealers in such options.
If the value of a foreign currency rises against the U.S. dollar, the cost of securities denominated in that currency increases.
The increased cost of those securities may be partially offset by purchasing calls or selling puts on the foreign currency.
If the value of a foreign currency against the U.S. dollar falls, the dollar value of portfolio securities denominated in
that currency would decline. That decline might be partially offset by selling calls or purchasing puts on the foreign currency.
If the currency rate fluctuates in an adverse direction from the option position, however, the option premium payments and
transaction costs would have been incurred without a corresponding benefit.
A call on a foreign currency could be sold to provide a hedge against a decline in the U.S. dollar value of a security denominated
in that currency or in a different currency (known as a "crosshedging" strategy). A call on a foreign currency is "covered"
if the Fund owns the underlying foreign currency covered by the call or has an absolute and immediate right to acquire that
foreign currency without additional cash consideration upon conversion or exchange of other foreign currency held in its portfolio.
The Fund may also cover the option by maintaining identified cash, U.S. government securities or other liquid, high-grade
debt securities in an amount equal to the exercise price of the option.
Foreign Currency Forward Contracts.
Foreign currency futures contracts are known as "forward contracts." They are used to buy or sell foreign currency for future
delivery at a fixed price. They are used to "lock in" the U.S. dollar price of a security denominated in a foreign currency
that the Fund has bought or sold, or to protect against possible losses from changes in the relative value of the U.S. dollar
against a foreign currency. Although forward contracts may reduce the risk of loss from a decline in the value of the hedged
currency, at the same time they limit any potential gain if the value of the hedged currency increases. Forward contracts
are traded in the inter-bank market conducted directly among currency traders (usually large commercial banks) and their customers.
Forward Contract Strategies.
Under a forward contract, the Fund agrees to purchase or sell a specific currency at a future date, which may be any fixed
number of days from the date of the contract agreed upon by the parties. The transaction price is set at the time the contract
is entered into. The costs of engaging in forward contracts varies depending on factors such as the currencies involved, the
length of the contract period and the market conditions then prevailing.
A forward contract might be used to provide for the purchase or sale of the amount of foreign currency involved in the purchase
or sale of a security denominated in a foreign currency, or for dividend or interest payments that may be received in a foreign
currency. This is called a "transaction hedge." The transaction hedge will protect against a loss from an adverse change in
the currency exchange rates during the period between the date on which a security is purchased or sold or on which a payment
is declared, and the date on which the payments are made or received. The use of forward contracts does not eliminate the
risk of fluctuations in the prices of the underlying securities, but it does fix a rate of exchange in advance.
If it is anticipated that a foreign currency might suffer a substantial decline against the U.S. dollar, forward contracts
to sell the foreign currency could be used to lock in the U.S. dollar value of portfolio positions. This is called a "position
hedge." To try to protect against a substantial decline of the U.S. dollar against a foreign currency, a forward contract
to buy that foreign currency for a fixed dollar amount could be used. Alternatively, the Fund could enter into a forward contract
to sell a different foreign currency the Fund believes will fall whenever there is a decline in the U.S. dollar value of the
currency in which portfolio securities are denominated.
In some cases, at or before the maturity of a forward contract, the Fund might sell a portfolio security and use the sale
proceeds to make delivery of the currency. If the market value of the security is less than the amount of foreign currency
the Fund is obligated to deliver, the Fund might have to purchase additional foreign currency on the "spot" (that is, cash)
market to settle the security trade. If the market value of the security exceeds the amount of foreign currency the Fund is
obligated to deliver, the Fund might have to sell some of the foreign currency on the spot market. There would be additional
transaction costs for the spot market transactions in those cases.
Alternatively, the contractual obligation to deliver the currency may be offset by purchasing a second contract to obtain,
on the same maturity date, the same amount of the currency as the currency obligation. Similarly, a forward contract purchase
obligation may be closed out by entering into a second contract to sell the same amount of the same currency on the maturity
date of the first contract. The gain or loss would be realized as a result of entering into such an offsetting forward contract
under either circumstance. The gain or loss will depend on the extent to which the exchange rate or rates between the currencies
involved moved between the execution dates of the first contract and the offsetting contract.
Forward Contract Limitations.
The Fund will not enter into forward contracts or maintain a net exposure to such contracts if the consummation of the contracts
would obligate the Fund to deliver an amount of foreign currency in excess of the value of the Fund's portfolio securities
or other assets denominated in that currency (or another currency that is the subject of the hedge). However, the Fund can
maintain a net exposure to forward contracts in excess of the value of the Fund's portfolio securities or other assets denominated
in foreign currencies if the excess amount is "covered" by liquid securities denominated in any currency. As one alternative,
the Fund could purchase a call option permitting the Fund to purchase the amount of foreign currency being hedged by a forward
sale contract at a price no higher than the forward contract price. As another alternative, the Fund could purchase a put
option permitting the Fund to sell the amount of foreign currency subject to a forward purchase contract at a price as high
or higher than the forward contract price. The Fund could also cover its short positions by identifying assets on its books
equal to the aggregate amount of the Fund's commitment under forward contracts or the excess amount of those obligations.
Forward Contract Risks.
The projection of short-term currency market movements is extremely difficult, and the successful execution of a short-term
hedging strategy is highly uncertain. The precise matching of the amounts under forward contracts and the value of the securities
involved generally will not be possible because the future value of securities denominated in foreign currencies will change
as a consequence of market movements between the date a forward contract is entered into and the date it is sold. Forward
contracts involve the risk that anticipated currency movements will not be accurately predicted, causing losses on those contracts
and additional transaction costs. The use of forward contracts might reduce performance if there are unanticipated changes
in currency prices.
Forward Contract Costs.
Because forward contracts are usually entered into on a principal basis, no brokerage fees or commissions are involved. Foreign
exchange dealers do realize a profit based on the difference between the prices at which they buy and sell various currencies.
Thus, a dealer might offer to sell a foreign currency at one rate, while offering a lower rate for purchasing that currency.
Because these contracts are not traded on an exchange, the credit and performance risk of the counterparty must also be evaluated.
Risks of Hedging with Options and Futures.
The use of hedging instruments requires special skills and knowledge of investment techniques that are different than what
is required for normal portfolio management. If the Fund uses a hedging instrument at the wrong time or if market conditions
are judged incorrectly, hedging strategies may reduce the Fund's return. The Fund could also experience losses if the prices
of its futures and options positions were not correlated with its other investments. The Fund's option activities may affect
its costs.
The Fund's option activities could affect its portfolio turnover rate and brokerage commissions. The exercise of calls written
by the Fund might cause the Fund to sell related portfolio securities, thus increasing its turnover rate. The exercise by
the Fund of puts on securities will cause the sale of underlying investments, increasing portfolio turnover. Although the
decision whether to exercise a put it holds is within the Fund's control, holding a put might cause the Fund to sell the related
investments for reasons that would not exist in the absence of the put.
The Fund could pay a brokerage commission each time it buys a call or put, sells a call or put, or buys or sells an underlying
investment in connection with the exercise of a call or put. Those commissions could be higher on a relative basis than the
commissions for direct purchases or sales of the underlying investments. Premiums paid for options are small in relation to
the market value of the underlying investments. Consequently, put and call options offer large amounts of leverage. The leverage
offered by trading in options could result in the Fund's net asset value being more sensitive to changes in the value of the
underlying investment.
If a covered call written by the Fund is exercised on an investment that has increased in value, the Fund will be required
to sell the investment at the call price. It will not be able to realize any profit if the investment has increased in value
above the call price.
An option position may be closed out only on a market that provides secondary trading for options of the same series, and
there is no assurance that a liquid secondary market will exist for any particular option. The Fund might experience losses
if it could not close out a position because of an illiquid market for the future or option.
There is a risk in using short hedging by selling futures or purchasing puts on broadly-based indices or futures to attempt
to protect against declines in the value of the Fund's portfolio securities. The risk is that the prices of the futures or
the applicable index will correlate imperfectly with the behavior of the cash prices of the Fund's securities. For example,
it is possible that while the Fund has used hedging instruments in a short hedge, the market may advance and the value of
the securities held in the Fund's portfolio might decline. If that occurred, the Fund would lose money on the hedging instruments
and also experience a decline in the value of its portfolio securities. However, while this could occur for a very brief period
or to a very small degree, over time the value of a diversified portfolio of securities will tend to move in the same direction
as the indices upon which the hedging instruments are based.
The risk of imperfect correlation increases as the composition of the Fund's portfolio diverges from the securities included
in the applicable index. To compensate for the imperfect correlation of movements in the price of the portfolio securities
being hedged and movements in the price of the hedging instruments, the Fund might use hedging instruments in a greater dollar
amount than the dollar amount of portfolio securities being hedged. It might do so if the historical volatility of the prices
of the portfolio securities being hedged is more than the historical volatility of the applicable index.
The ordinary spreads between prices in the cash and futures markets are subject to distortions, due to differences in the
nature of those markets. First, all participants in the futures market are subject to margin deposit and maintenance requirements.
Rather than meeting additional margin deposit requirements, investors may close futures contracts through offsetting transactions
which could distort the normal relationship between the cash and futures markets. Second, the liquidity of the futures market
depends on participants entering into offsetting transactions rather than making or taking delivery. To the extent participants
decide to make or take delivery, liquidity in the futures market could be reduced, thus producing distortion. Third, from
the point of view of speculators, the deposit requirements in the futures market are less onerous than margin requirements
in the securities markets. Therefore, increased participation by speculators in the futures market may cause temporary price
distortions.
The Fund can use hedging instruments to establish a position in the securities markets as a temporary substitute for the purchase
of individual securities (long hedging) by buying futures and/or calls on such futures, broadly-based indices or on securities.
It is possible that when the Fund does so the market might decline. If the Fund then concludes not to invest in securities
because of concerns that the market might decline further or for other reasons, the Fund will realize a loss on the hedging
instruments that is not offset by a reduction in the price of the securities purchased.
Regulatory Aspects of Derivatives and Hedging Instruments.
As a result of recent amendments to rules under the Commodity Exchange Act ("CEA") by the Commodity Futures Trading Commission
("CFTC"), the Manager must either operate within certain guidelines and restrictions with respect to the Fund's use of futures,
options on such futures, commodity options and certain swaps, or be subject to registration with the CFTC as a "commodity
pool operator" ("CPO") with respect to the Fund, and, upon the finalization of additional CFTC rules, be required to operate
the Fund in compliance with certain disclosure, reporting, and recordkeeping requirements.
Previously, the CFTC permitted unlimited futures transactions and options thereon, so long as a fund had claimed an exclusion
from registration as a CPO, and swap contracts were not formerly regulated by the CFTC. Under the amended rules, the investment
adviser of a registered investment company may claim an exemption from registration as a CPO only if the registered investment
company that it advises uses futures contracts, options on such futures, commodity options and certain swaps solely for "bona
fide hedging purposes," or limits its use of such instruments for non-bona fide hedging purposes to certain de minimis amounts.
While the Manager will be registered as a CPO under the CEA, the Manager currently intends to limit the Fund's use of futures,
options on such futures, commodity options and certain swaps in order to permit the Fund to continue to claim an exemption
under the CFTC rules. As such, with respect to the management of the Fund, the Manager will not be subject to the disclosure,
reporting and recordkeeping requirements under the CFTC rules.
Tax Aspects of Certain Derivatives and Hedging Instruments.
Futures contracts, non-equity options and certain foreign currency exchange contracts are treated as "Section 1256 contracts"
under the Internal Revenue Code. In general, gains or losses relating to Section 1256 contracts are characterized as 60% long-term
and 40% short-term capital gains or losses under the Internal Revenue Code. However, foreign currency gains or losses arising
from Section 1256 contracts that are forward contracts generally are treated as ordinary income or loss. In addition, Section
1256 contracts held by the Fund at the end of each taxable year are "marked-to-market," and unrealized gains or losses are
treated as though they were realized. These contracts also may be marked-to-market for purposes of determining the excise
tax potentially applicable to the Fund and for other purposes under rules prescribed pursuant to the Internal Revenue Code.
An election can be made by the Fund to exempt those transactions from this mark-to-market treatment.
Certain forward contracts may result in "straddles" for federal income tax purposes. The straddle rules may affect the character
and timing of gains (or losses) recognized on those positions. Generally, a loss sustained on the disposition of a position
making up a straddle is allowed only to the extent that the loss exceeds any unrecognized gain in the offsetting positions.
Disallowed loss is generally allowed at the point where there is no unrecognized gain in the offsetting positions making up
the straddle, or the offsetting position is disposed of.
Under the Internal Revenue Code, the following gains or losses are treated as ordinary income or loss:
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gains or losses attributable to fluctuations in exchange rates that occur between the time interest or other receivables are accrued
or expenses or other liabilities denominated in a foreign currency are accrued and the time the Fund actually collects such
receivables or pays such liabilities, and
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gains or losses attributable to fluctuations in the value of a foreign currency between the date of acquisition of a debt
security denominated in a foreign currency or foreign currency forward contracts and the date of disposition.
Currency gains and losses are offset against market gains and losses on each trade before determining a net "Section 988"
gain or loss under the Internal Revenue Code for that trade, which may increase or decrease the amount of investment income
available for distribution to its shareholders.
Asset Coverage for Certain Investments and Trading Practices
. The Fund will segregate with its custodian or otherwise designate on its books and records liquid assets in an amount the
Fund believes to be adequate to ensure that it has sufficient liquid assets to meet its obligations under its derivatives
contracts, or the Fund may engage in other measures to "cover" its obligations with respect to such transactions. Depending
upon the contractual terms of the derivatives instrument, the customary settlement practice associated with the derivative
instrument and the instrument's liquidity, among other things, the amounts that are segregated or designated may be based
on the notional (or contract) amount of the derivative or on the daily mark-to-market obligation under the derivatives contract.
These amounts may be reduced by amounts on deposit with the applicable broker or counterparty to the derivatives transaction.
With respect to less liquid derivative instruments (or in other situations in which the Manager believes it necessary), the
Fund may segregate amounts in addition to the amounts described above. By segregating or designating liquid assets equal to
only the mark-to-market obligation under a derivatives contract, the Fund will have the ability to utilize these instruments
to a greater extent than if the Fund segregated or designated liquid assets equal to the full market value of the underlying
asset or the notional (or contract) amount of the instrument.
In certain circumstances, the Fund may enter into an offsetting position rather than segregating or designating liquid assets
(e.g., the Fund may "cover" a written put option with a purchased put option with the same or higher exercise price). Although
the Manager will attempt to ensure that the Fund has sufficient liquid assets to meet its obligations under its derivative
contracts, it is possible that the Fund's liquid assets may be insufficient to support such obligations under its derivatives
positions.
Segregating or designating a large percentage of the Fund's liquid assets could impede the Manager's ability to manage the
Fund's portfolio. The Fund may modify its asset segregation policies from time to time.
Investments in Other Investment Companies.
The Fund may invest in the securities of other investment companies. Investments in the securities of other investment companies
can include open-end funds, closed-end funds, business development companies and unit investment trusts. Exchange-traded funds,
which are typically open-end funds or unit investment trusts, are listed on a stock exchange. These investments may provide
a way to gain exposure to segments of the equity or fixed-income markets represented by the exchange-traded fund's portfolio
at times when it is not possible to buy those portfolio securities directly.
Investing in another investment company may involve paying a substantial premium above the value of that investment company's
portfolio securities. The Fund does not intend to invest in other investment companies unless the Sub-Adviser believes that
the potential benefits of an investment justify the expenses. As a shareholder of an investment company, the Fund would be
subject to its ratable share of that company's expenses, including its advisory and administration expenses. Investments
in other investment companies are subject to limits set forth in the Investment Company Act of 1940.
Temporary Defensive and Interim Investments.
In times of unstable or adverse market, economic or political conditions, or if the Sub-Adviser believes it is otherwise
appropriate to reduce holdings in the Fund's principal investments, the Fund can invest in other types of securities for defensive
purposes. It can also purchase these types of securities for liquidity purposes to meet cash needs due to the redemption of shares,
or to hold while waiting to reinvest cash received from the sale of other portfolio securities.
These temporary defensive investments can include: (i) obligations issued or guaranteed by the U.S. Government, its agencies
or instrumentalities; (ii) commercial paper rated in the top two rating categories of an established nationally recognized
statistical rating organization; (iii) certificates of deposit or bankers' acceptances of domestic banks with assets of $1
billion or more; (iv) any of the foregoing securities that mature in one year or less (generally known as "cash equivalents");
(v) other short-term corporate debt obligations rated investment grade (rated at least Baa by Moody's Investors Service, Inc.
or at least BBB by Standard & Poor's Corporation, or a comparable rating by another nationally recognized statistical rating
organization); (vi) repurchase agreements; and (vii) shares of Oppenheimer Institutional Money Market Fund.
Investment Restrictions
Fundamental Policies.
The Fund has adopted policies and restrictions to govern its investments. Under the Investment Company Act, fundamental policies
are those policies that can be changed only by the vote of a "majority" of the Fund's outstanding voting securities, which
is defined as the vote of the holders of the lesser of:
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67% or more of the shares present or represented by proxy at a shareholder meeting, if the holders of more than 50% of the
outstanding shares are present or represented by proxy; or
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more than 50% of the outstanding shares.
The Fund's investment objective is a fundamental policy. Other policies described in the Prospectus or this SAI are "fundamental"
only if they are identified as such. The Fund's Board of Trustees can change non-fundamental policies without shareholder
approval. However, significant changes to investment policies will be described in supplements or updates to the Prospectus
or this SAI, as appropriate. The Fund's most significant investment policies are described in the Prospectus.
Other Fundamental Investment Restrictions.
The following investment restrictions are fundamental policies of the Fund.
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The Fund cannot buy securities or other instruments issued or guaranteed by any one issuer if more than 5% of its total assets
would be invested in securities or other instruments of that issuer or if it would then own more than 10% of that issuer's
voting securities. This limitation applies to 75% of the Fund's total assets. The limit does not apply to securities issued
or guaranteed by the U.S. Government or any of its agencies or instrumentalities or securities of other investment companies.
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The Fund cannot invest 25% or more of its total assets in any one industry. That limit does not apply to securities issued
or guaranteed by the U.S. Government or its agencies and instrumentalities or securities issued by investment companies.
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The Fund may not borrow money, except to the extent permitted under the Investment Company Act, the rules or regulations thereunder
or any exemption therefrom that is applicable to the Fund, as such statute, rules or regulations may be amended or interpreted
from time to time.
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The Fund cannot invest in real estate, physical commodities or commodity contracts, except to the extent permitted under the
Investment Company Act, the rules or regulations thereunder or any exemption therefrom, as such statute, rules or regulations
may be amended or interpreted from time to time.
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The Fund may not underwrite securities issued by others, except to the extent that a Fund may be considered an underwriter
within the meaning of the Securities Act of 1933, as amended, when reselling securities held in its own portfolio.
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The Fund cannot issue senior securities, except to the extent permitted under the Investment Company Act, the rules or regulations
thereunder or any exemption therefrom, as such statute, rules or regulations may be amended or interpreted from time to time.
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The Fund cannot make loans, except to the extent permitted under the Investment Company Act, the rules or regulations thereunder
or any exemption therefrom that is applicable to the Fund, as such statute, rules or regulations may be amended or interpreted
from time to time.
Non-Fundamental Restrictions.
The Fund has the following additional operating policies that are not "fundamental" and can be changed by the Board without
shareholder approval.
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The Fund cannot make short sales or purchase securities on margin. However, the Fund can make short-term borrowings when necessary
for the clearance of purchases of portfolio securities. Collateral arrangements in connection with futures and options transactions
are not deemed to be margin transactions under this restriction.
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The Fund cannot invest in interests in oil, gas or other mineral exploration or development programs or leases.
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The Fund cannot invest in the securities of other registered investment companies or registered unit investment trusts in
reliance on sub-paragraph (F) or (G) of section 12(d)(1) of the Investment Company Act.
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With respect to the Fund's non-fundamental policy to invest, under normal circumstances, at least 80% of its net assets (plus
the amount of any borrowings used for investment purposes) in equity securities of small- and mid-cap domestic and foreign
issuers, the Fund will provide shareholders at least 60 days' prior notice of any change in such policy as required by the
Investment Company Act.
Unless the Prospectus or this SAI states that a percentage restriction applies on an ongoing basis, it applies only at the
time the Fund makes an investment. That means the Fund is not required to sell securities to meet the percentage limits if
the value of the investment increases in proportion to the size of the Fund. Percentage limits on borrowing and investments
in illiquid securities apply on an ongoing basis.
For purposes of the Fund's policy not to concentrate its investments, described above, the Fund has adopted an industry classification
that is not a fundamental policy.
Disclosure of Portfolio Holdings
While recognizing the importance of providing Fund shareholders with information about their Fund's investments and providing
portfolio information to a variety of third parties to assist with the management, distribution and administrative processes,
the need for transparency must be balanced against the risk that third parties who gain access to the Fund's portfolio holdings
information could attempt to use that information to trade ahead of or against the Fund, which could negatively affect the
prices the Fund is able to obtain in portfolio transactions or the availability of the securities that a portfolio manager
is trading on the Fund's behalf.
The Fund, the Manager/Sub-Adviser, the Distributor and the Transfer Agent have therefore adopted policies and procedures regarding
the dissemination of information about the Fund's portfolio holdings by employees, officers and directors or trustees of the
Fund, the Manager, the Distributor and the Transfer Agent. These policies are designed to assure that non-public information
about the Fund's portfolio securities holdings is distributed only for a legitimate business purpose, and is done in a manner
that (a) conforms to applicable laws and regulations and (b) is designed to prevent that information from being used in a
way that could negatively affect the Fund's investment program or enable third parties to use that information in a manner
that is harmful to the Fund. It is a violation of the Code of Ethics for any covered person to release holdings in contravention
of the portfolio holdings disclosure policies and procedures adopted by the Fund.
Portfolio Holdings Disclosure Policies.
The Fund, the Manager/Sub-Adviser, the Distributor and the Transfer Agent and their affiliates and subsidiaries, employees,
officers, and directors or trustees, shall neither solicit nor accept any compensation or other consideration (including any
agreement to maintain assets in the Fund or in other investment companies or accounts managed by the Manager or any affiliated
person of the Manager) in connection with the disclosure of the Fund's non-public portfolio holdings. The receipt of investment
advisory fees or other fees and compensation paid to the Manager/Sub-Adviser and its subsidiaries pursuant to agreements approved
by the Fund's Board shall not be deemed to be "compensation" or "consideration" for these purposes. Until publicly disclosed,
the Fund's portfolio holdings are proprietary, confidential business information. After they are publicly disclosed, the Fund's
portfolio holdings may be released in accordance with the Fund's, the Manager's/Sub-Adviser's, the Distributor's and the Transfer
Agent's policies and procedures regarding dissemination of information about the Fund's portfolio holdings.
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Public Disclosure.
The Fund's portfolio holdings are made publicly available no later than 60 days after the close of each of the Fund's fiscal
quarters in its annual and semi-annual reports to shareholders and in its Schedule of Investments on Form N-Q. Those documents
are publicly available at the SEC. In addition, the Fund's portfolio holdings information, as of the end of each calendar
month, may be posted and available on the Fund's website (at www.oppenheimerfunds.com) no sooner than 30 days after the end
of each calendar month. The top 20 month-end securities holdings, listed by security or by issuer, may be posted on the OppenheimerFunds
website with a 15-day delay. The Fund may delay posting its holdings, post a smaller list of holdings (e.g., the top 10 or
top 15 portfolio holdings), or may not post any holdings, if the Manager/Sub-Adviser believes that would be in the best interests
of the Fund and its shareholders. Other general information about the Fund's portfolio investments, such as portfolio composition
by asset class, industry, country, currency, credit rating or maturity, may also be publicly disclosed 15 days after the end
of each calendar month.
The Fund's portfolio holdings information (which may include information on the Fund's entire portfolio of individual securities
therein) positions may be released to the following categories of individuals or entities on an ongoing basis, provided that
such individual or entity either (1) has signed an agreement to keep such information confidential and will not use such information
in any way that is detrimental to the Manager, its affiliates and the Fund or (2) as a member of the Fund's Board, or as an
employee, officer or director of the Manager, the Sub-Adviser, the Distributor, or the Transfer Agent, or of their legal counsel,
is subject to fiduciary obligations (a) not to disclose such information except in compliance with the Fund's policies and
procedures and (b) not to trade for his or her personal account on the basis of such information.
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Employees of the Fund's Manager, the Sub-Adviser, Distributor and Transfer Agent who need to have access to such information
(as determined by senior officers of such entities);
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The Fund's independent registered public accounting firm;
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Members of the Fund's Board and the Board's legal counsel;
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The Fund's custodian bank;
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A proxy voting service designated by the Fund and its Board;
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Rating/ranking organizations (such as Lipper, Inc. and Morningstar, Inc.);
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Portfolio pricing services retained by the Manager/Sub-Adviser to provide portfolio security prices;
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Insurance companies that have separate accounts invested in Oppenheimer Variable Account Funds or Panorama Series Fund (to
prepare their financial statements and analysis);
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Brokers and dealers for purposes of providing portfolio analytic services;
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Brokers and dealers in connection with portfolio transactions (purchases and sales); and
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Brokers and dealers to obtain bids or bid and asked prices (if securities held by the Fund are not priced by the Fund's regular
pricing services).
Month-end lists of the Fund's complete portfolio holdings may be disclosed for legitimate business reasons, no sooner than
5 days after the relevant month end, pursuant to special requests and under limited circumstances discussed below, provided
that:
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The third-party recipient must first submit a request for release of Fund portfolio holdings, explaining the business reason
for the request;
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Senior officers in the Manager's/Sub-Adviser's Investment Operations and Legal departments must approve the completed request
for release of Fund portfolio holdings; and
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Before receiving the data, the third-party recipient must sign a portfolio holdings non-disclosure agreement, agreeing to
keep confidential the information that is not publicly available regarding the Fund's holdings and agreeing not to use such
information in any way that is detrimental to the Manager, its affiliates and the Fund.
Portfolio holdings information (which may include information on the Fund's entire portfolio or individual securities therein)
may be provided by senior officers of the Manager/Sub-Adviser or attorneys on the legal staff of the Manager, Distributor,
or Transfer Agent, in the following circumstances:
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Response to legal process in litigation matters, such as responses to subpoenas or in class action matters where the Fund
may be part of the plaintiff class (and seeks recovery for losses on a security) or a defendant;
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Response to regulatory requests for information (from the SEC, the Financial Industry Regulatory Authority ("FINRA"), state
securities regulators, and/or foreign securities authorities, including without limitation requests for information in inspections
or for position reporting purposes);
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To potential sub-advisers of portfolios (pursuant to confidentiality agreements);
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To consultants for retirement plans for plan sponsors/discussions at due diligence meetings (pursuant to confidentiality agreements);
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Investment bankers in connection with merger discussions (pursuant to confidentiality agreements).
Portfolio managers and analysts may, subject to the Manager's/Sub-Adviser's policies on communications with the press and
other media, discuss portfolio information in interviews with members of the media, or in due diligence or similar meetings
with clients or prospective purchasers of Fund shares or their financial representatives.
The Fund's shareholders may, under unusual circumstances (such as a lack of liquidity in the Fund's portfolio to meet redemptions),
receive redemption proceeds of their Fund shares paid as pro rata shares of securities held in the Fund's portfolio. In such
circumstances, disclosure of the Fund's portfolio holdings may be made to such shareholders.
Any permitted release of otherwise non-public portfolio holdings information must be in accordance with the then-current policy
on approved methods for communicating confidential information.
The Chief Compliance Officer (the "CCO") of the Fund and the Manager/Sub-Adviser, Distributor, and Transfer Agent shall oversee
the compliance by the Manager/Sub-Adviser, Distributor, Transfer Agent, and their personnel with applicable policies and procedures.
At least annually the CCO reports to the Fund's Board any material violation of these policies and procedures during the previous
period and makes recommendations to the Board as to any amendments that the CCO believes are necessary and desirable to carry
out or improve these policies and procedures.
The Sub-Adviser and the Fund have entered into ongoing arrangements to make available information about the Fund's portfolio
holdings. One or more of the Oppenheimer funds may currently disclose portfolio holdings information based on ongoing arrangements
to the following parties:
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13D Research
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FTN Financial
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Petercam Group
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1st Discount Brokerage
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Furey Research Partners
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Pipeline Trading Systems LLC
|
|
ABG Sundal Collier
|
Gabelli & Co.
|
Piper Jaffray Corp.
|
|
Access342
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GARP Research & Securities Co.
|
Pivotal Research
|
|
ACP Securities
|
Gary Shillings
|
Portales Partners
|
|
Altus Investment Management
|
Gleacher & Company
|
R. Seelaus & Co. Inc.
|
|
Amba Research
|
Investment Company Institute
|
R.V. Kuhns & Associates, Inc.
|
|
Arbor Research & Trading
|
Global Hunter Securities
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Ramirez & Co. Inc.
|
|
Avondale Partners
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Goldman, Sachs & Co.
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RBC Capital Markets
|
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B. Riley & Co.
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Greenstreet Advisers
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Red Capital Markets
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Baird & Co., Inc.
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Griffin Securities
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Redburn Partners
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Banco Itau
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Guggenheim Capital Markets
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Renaissance Macro Research
|
|
Bank of America Securities LLC
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Hapoalim Securities Bank USA
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Rice Financial Products Co.
|
|
Barclays Capital
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Hedgeye Risk Management
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Risk Metrics Group
|
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BarraOne
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Height Analytics
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Robert W. Baird & Co.
|
|
Barrington Research Associates
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Herbert J. Sims & Co, Inc.
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Rocaton Investment Advisors, LLC
|
|
BB&T Capital Markets
|
Hewitt Financial Services LLC
|
Rochdale Securities Corp.
|
|
Belle Haven Investments, Inc.
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Howard Weil Inc.
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Rodman & Renshaw, Inc.
|
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Belton Enclave
|
HSBC Securities
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Rogerscasey, LLC
|
|
Bergen Capital
|
India Infoline
|
Roosevelt & Cross
|
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Blackrock, Inc.
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Investec
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Royal Bank of Scotland
|
|
Bloomberg L.P.
|
Inves1
|
Russell/Mellon Analytical Solutions
|
|
Blue Fin Research Group
|
ISI Group, Inc.
|
Samsung Securities Inc.
|
|
BMO Capital Markets
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ITG - Majestic Research
|
Samuel A. Ramirez & Co. Inc.
|
|
Branch Bank & Trust Capital Markets
|
Janco Partners
|
Sander Morris Harris
|
|
Brean, Murray, Carret & Co.
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Janney Montgomery Scott LLC
|
Sandler O'Neill
|
|
Brown Brothers Harriman & Co.
|
Jefferies & Company
|
Sanford C. Bernstein & Co.
|
|
BTG, plc.
|
Jennifer Black & Associates
|
Scotia Capital Markets
|
|
Buckingham Research
|
JMP Securities
|
Seattle Northwest Securities
|
|
CA Cheuvreux
|
Johnson Rice & Co.
|
Sector & Sovereign LLC
|
|
Cabrera Capital Markets
|
JNK Securities Corp.
|
Securevest Financial
|
|
Callan Associates, Inc.
|
JP Morgan Chase Securities
|
SG Cowen
|
|
Calyon Securities Inc.
|
Kaufman Brothers
|
Sidoti & Co. LLC
|
|
Cambridge
|
Keefe, Bruyette & Woods, Inc.
|
Siebert Brandford Shank & Co.
|
|
Canaccord Adams, Inc.
|
KeyBanc Capital Markets
|
Signal Hill Capital
|
|
Canaccord Genuity
|
Lazard Capital Markets
|
Simmons & Company
|
|
Capital One Southcoast
|
LCG Associates, Inc.
|
Societe Generale Group
|
|
Capstone LLC
|
Lebenthal & Co. LLC
|
Soleil Securities Corp.
|
|
Caris & Co.
|
Leerink Swann
|
Southwest Securties (SWS) Group, Inc.
|
|
Charter Equity Research
|
Liberium Capital
|
Standard Chartered Bank
|
|
China International Capital Corporation Limited
|
Lipper Inc.
|
State Street Bank & Trust Company
|
|
Cirrus Research
|
Longbow Research
|
Stephens, Inc.
|
|
Citigroup Global Markets
|
Loop Capital Markets
|
Sterne Agee & Leach Group
|
|
CL King & Associates
|
Louise Yamada Technical Research
|
Stifel Nicolaus & Co.
|
|
Cleveland Research Company
|
M&T Securities
|
Stone & Youngberg
|
|
CLSA Credit Agricole Securities
|
Macquarie Securities Inc.
|
Strategas Research
|
|
Collins Stewart Securities Inc.
|
Madison Williams and Company LLC
|
SunGuard Capital Corp.
|
|
Consumer Edge
|
Main First Bank AG
|
SunTrust Robinson Humphrey
|
|
Cornerstone Analytics
|
Maxim Group LLC
|
Susquehanna Financial Group
|
|
Cowen and Company, LLC
|
Mediobanca Securities USA LLC
|
SWS Group, Inc.
|
|
Craig-Hallum Capital Group
|
Medley Global Advisors
|
TD Asset Management Inc.
|
|
Credit Suisse Corp.
|
Merlin Securities
|
Telsey Advisory Group
|
|
Credit Suisse Securities LLC
|
Merrill Lynch & Company, Inc.
|
The Juda Group
|
|
Crews & Associates
|
Merriman, Curhan & Ford
|
The Lynde and Harry Bradley Foundation, Inc.
|
|
Cross Current Research
|
Merrion Stockbrokers Ltd.
|
The Yieldbook Inc.
|
|
CRT Capital Group
|
Mesirow Financial
|
Think Equity Partners
|
|
D.A. Davidson & Company
|
MF Global Securities, Ltd.
|
Thomas Weisel
|
|
Dahlman Rose & Co.
|
Mirae Asset Financial Group
|
Thomson Reuters
|
|
Daiwa Securities
|
Mitsubishi UFJ Securities Inc.
|
Ticonderoga Securities
|
|
Davenport & Co.
|
Mizuho Securities USA, Inc.
|
Towers Watson
|
|
DeMarche Associates, Inc.
|
MKM Partners
|
Troika Dialog
|
|
Desert Mountain Properties LP
|
Monness, Crespi, Hardt & Co.
|
Tudor, Pickering & Co. Securities, Inc.
|
|
Detwiler Fenton & Co.
|
Morgan Joseph TriArtisan LLC
|
UBS AG
|
|
Deutsche Bank Securities Inc.
|
Morgan Keegan & Company
|
US Bancorp
|
|
Discern Investment Analytics Inc.
|
Morgan Stanley Smith Barney LLC
|
Vermilion Capital
|
|
Dougherty & Co.
|
Morningstar, Inc.
|
Vertical Research Partners
|
|
Dowling & Partners Securities, LLC
|
Motilal Oswal Securities Ltd.
|
Vestmark, Inc.
|
|
Drexel Hamilton
|
MR Beal & Co.
|
Vining & Sparks
|
|
du Pasquier & Co.
|
M & T Securities
|
Vontobel Securities Ltd.
|
|
EFG Hermes
|
Multi-Bank Securities
|
Wachovia Securities Inc.
|
|
Emmet & Co., Inc.
|
Murphy & Durieu
|
Washington Analysis
|
|
Empirical Research Partners
|
Natexis Bleichroeder
|
Wedbush Morgan Securities
|
|
Encima Global
|
National Bank Financial
|
Wedge Securities LLC
|
|
Equity Research Associates
|
Ned Davis Research Group
|
Weeden Leuthold
|
|
Evaluation Associates LLC
|
Needham & Co., Inc.
|
Wells Fargo Securities
|
|
Evercore Partners Inc.
|
Noble Financial
|
WH Mell & Associates
|
|
FactSet Research Systems Inc.
|
Northcoast Research
|
William Blair & Co.
|
|
Feltl and Company
|
NY State Nurses Pension Fund
|
Wilshire Associates Inc.
|
|
Fidelity Brokerage Services
|
Nomura Securities International
|
WJB Capital
|
|
Fidelity Strategic Advisers
|
Oddo Securities Corporation
|
Wolfe Trahan Research
|
|
Fig Partners
|
Oppenheimer & Co. Inc.
|
Wunderlich Securities
|
|
First Analysis Securities Corp
|
Oscar Gruss & Sons
|
Zelman & Associates
|
|
FMS Bonds, Inc.
|
OTA-Off the Record Research
|
Ziegler Capital Markets Group
|
|
Fox-Pitt Kelton Inc.
|
OTR Global
|
|
|
Friedman, Billings, Ramsey & Co., Inc.
|
Pacific Crest Securities
|
|
|
|
|
|
How the Fund is Managed
Organization and History.
The Fund, a series of Oppenheimer Quest for Value Funds (referred to as the "Trust"), is an open-end, diversified management
investment company with an unlimited number of authorized shares of beneficial interest. The Fund was organized as a Massachusetts
business trust in April 1987. Prior to June 2005, the Fund's name was "Oppenheimer Small Cap Value Fund." Prior to March 2001,
the Fund's name was "Oppenheimer Quest Small Cap Fund." Prior to May 2000, the Fund's name was "Oppenheimer Quest Small Cap
Value Fund."
Classes of Shares.
The Fund's Board of Trustees (the "Board") is authorized, without shareholder approval, to:
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create new series and classes of shares;
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reclassify unissued shares into additional series and classes; and
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divide or combine the shares of a class into a greater or lesser number of shares without changing the proportionate beneficial
interest of a shareholder in the Fund.
The Fund currently has six classes of shares: Class A, Class B, Class C, Class N, Class Y and Class I. All classes invest
in the same investment portfolio. Only certain retirement plans may purchase Class N shares. Each class of shares:
-
has its own dividends and distributions;
-
pays certain expenses which may be different for the different classes;
-
will generally have a different net asset value;
-
will generally have separate voting rights on matters in which interests of one class are different from interests of another
class; and
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votes as a class on matters that affect that class alone.
Each share of each class:
-
represents an interest in the Fund proportionately equal to the interest of each other share of the same class;
-
has one vote at shareholder meetings, with fractional shares voting proportionally;
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may be voted in person or by proxy at shareholder meetings; and
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does not have cumulative voting rights, preemptive rights or subscription rights.
Class B Share Availability.
Effective after June 29, 2012, Class B shares are no longer offered for new purchases. See the Prospectus section "More About
Your Account" for details.
Class N Share Availability.
The types of retirement plans which may purchase Class N shares are:
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Omnibus group retirement plans, including plans under Section 401(a), 401(k), 403(b) (other than plans for public school employees)
and 457 of the Internal Revenue Code;
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Rollover contributions and trustee-to-trustee transfers made to Single K plans (401(k) plans for self-employed individuals),
IRAs (including SEP IRAs and SIMPLE IRAs), Profit-Sharing Plans and Money Purchase Pension Plans;
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Rollover contributions, contract exchanges and plan to plan transfers made to 403(b) Plans;
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"Grouped Plans" that have entered into a special agreement with the Distributor;
"Grouped Plans" include any qualified or non-qualified retirement plan or account or deferred compensation plan for employees
or other organized groups of persons, where all eligible members of the group purchase shares of an Oppenheimer fund or funds
through a single investment dealer, broker or other financial institution if the group or the dealer, broker or other financial
has made special arrangements with the Distributor. They may include 457 plans, IRAs and 403(b) plans (other than plans for
public school employees).
Class Y Share Availability.
Class Y shares are offered to fee-based clients of dealers that have a special agreement with the Distributor to offer these
shares, and to certain institutional investors who have a special agreement with the Distributor. Class Y shares are also
offered to present or former officers, directors, trustees and employees (and their eligible family members) of the Fund,
the Manager and its affiliates, its parent company and the subsidiaries of its parent company, and retirement plans established
for the benefit of such individuals.
Voluntary Conversion to Class Y Shares
. For shareholders who currently hold other classes of Fund shares, but are authorized to purchase Class Y shares, those shareholders
can convert their eligible existing shares to Class Y shares of the Fund either through their dealer who has a special agreement
with the Distributor or by submitting written instructions to the Transfer Agent. Shares that are subject to a contingent
deferred sales charge ("CDSC") are not eligible to convert to Class Y shares until the applicable CDSC period has expired.
Under current interpretations of applicable federal income tax law by the Internal Revenue Service (the "IRS"), this voluntary
conversion to Class Y shares is not treated as a taxable event. If those laws or the IRS interpretation of those laws should
change, this voluntary conversion feature may be suspended.
Class I Share Availability.
Class I shares are not available directly to individual investors. They are only available to eligible institutional investors.
To be eligible to purchase Class I shares, an investor must:
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make a minimum initial investment of $5 million or more per account (waived for retirement plan service provider platforms);
-
trade through an omnibus, trust, or similar pooled account; and
-
be an "institutional investor" which may include corporations; trust companies; endowments and foundations; defined contribution,
defined benefit, and other employer sponsored retirement plans; retirement plan platforms; insurance companies; registered
investment advisor firms; registered investment companies; bank trusts; 529 college savings plans; and family offices.
No commission payments, account servicing fees, recordkeeping fees, 12b-1 fees, transfer agent fees, so called "finder's fees,"
administrative fees or other similar fees will be paid with respect to Class I shares. The Fund, at its discretion, reserves
the right to waive the minimum initial investment and minimum balance requirements for investment companies advised or subadvised
by the Manager or an affiliate of the Manager.
Voluntary Conversion to Class I Shares.
Shareholders who currently hold other classes of Fund shares but are eligible to purchase Class I shares can convert their
eligible existing shares to Class I shares of the Fund either through their financial intermediary or by submitting an application
to the Transfer Agent. Shares of another share class that are subject to a contingent deferred sales charge, commission payments,
account servicing fees, recordkeeping fees, 12b-1 fees, transfer agent fees, so called "finders fees," administrative fees
or other similar fees are not eligible to convert to Class I shares. Under current interpretations of applicable federal income
tax law by the Internal Revenue Service, this voluntary conversion to Class I shares is not treated as a taxable event. If
those laws or the IRS interpretation of those laws should change, this voluntary conversion feature may be suspended.
Involuntary Conversion of Class I Shares
. If a Class I share account balance falls below $2.5 million, the investor will be notified that the account is below the
required minimum balance. If the account remains below $2.5 million for more than six consecutive months after such notification,
the account may be involuntarily redeemed or converted into a Class Y share account. This policy does not apply to accounts
for which the minimum initial investment is waived.
Individual shareholders who purchase Class I shares through retirement plans or other intermediaries will not be eligible
to hold Class I shares outside of their respective retirement plan or intermediary platform.
Shareholder Meetings.
As a Massachusetts business trust, the Fund is not required to hold regular annual meetings of shareholders and does not
plan to do so. The Fund may hold shareholder meetings from time to time, however, on important matters or when required to
do so by the Investment Company Act, or other applicable law.
Shareholders have the right, upon a vote or declaration in writing of two-thirds of the outstanding shares of the Fund, to
remove a Trustee or to take other action described in the Fund's Declaration of Trust. The Trustees will call a meeting of
shareholders to vote on the removal of a Trustee upon the written request of the record holders of 10% of its outstanding
shares.
If the Trustees receive a request from at least 10 shareholders stating that they wish to communicate with other shareholders
to request a meeting to remove a Trustee, the Trustees will then either make the Fund's shareholder list available to the
applicants or mail their communication to all other shareholders at the applicants' expense. The shareholders making the request
must have been shareholders for at least six months and must hold shares of the Fund valued at $25,000 or more or constituting
at least 1% of the Fund's outstanding shares. The Trustees may also take other action as permitted by the Investment Company
Act.
Shareholder and Trustee Liability.
The Fund's Declaration of Trust contains an express disclaimer of shareholder and Trustee liability for the Fund's obligations.
It also provides for indemnification and reimbursement of expenses out of the Fund's property for any shareholder held personally
liable for its obligations. The Declaration of Trust also states that, upon request, the Fund shall assume the defense of
any claim made against a shareholder for any act or obligation of the Fund and shall satisfy any judgment on that claim. The
Fund's contractual arrangements state that any person doing business with the Fund (and each shareholder of the Fund) agrees
under its Declaration of Trust to look solely to the assets of the Fund for satisfaction of any claim or demand that may arise
out of any dealings with the Fund. Additionally, the Trustees shall have no personal liability to any such person, to the
extent permitted by law. Although Massachusetts law permits a shareholder of a business trust (such as the Fund) to be held
personally liable as a "partner" under certain circumstances, the risk that a Fund shareholder will incur financial loss from
being held liable as a "partner" of the Fund is limited to the relatively remote circumstances in which the Fund would be
unable to meet its obligations.
Board of Trustees and Oversight Committees
The Fund is governed by a Board of Trustees, which is responsible for protecting the interests of shareholders under Massachusetts
and Federal law. The Board is led by Brian F. Wruble, an independent trustee, who is not an "interested person" of the Fund,
as that term is defined in the Investment Company Act of 1940. The Board meets periodically throughout the year to oversee
the Fund's activities, review its performance, oversee the potential conflicts that could affect the Fund, and review the
actions of the Manager and Sub-Adviser. The Board has an Audit Committee, a Regulatory & Oversight Committee and a Governance
Committee. Each Committee is comprised solely of Trustees who are not "interested persons" under the Investment Company Act
(the "Independent Trustees").
The Board is assisted in its oversight by an Advisory Board, which is comprised of Joanne Pace and Edmund P. Giambastiani.
The Advisory Board assists the Board in a non-voting capacity in its oversight of the Fund. Ms. Pace and Mr. Giambastiani
are also Independent Trustees of certain Funds, identified below. For purposes of the following disclosure, Ms. Pace and Mr.
Giambastiani are listed among other Independent Trustees but are identified as a Trustee/Advisory Board Member.
During the Fund's fiscal year ended October 31, 2012, the Audit Committee held 4 meetings, the Regulatory & Oversight Committee
held 6 meetings and the Governance Committee held 4 meetings.
The members of the Audit Committee are David K. Downes (Chairman), Phillip A. Griffiths, Mary F. Miller, Joanne Pace, Joseph
M. Wikler, Peter I. Wold and Brian F. Wruble. The Audit Committee selects an independent registered public accounting firm
(also referred to as the "Independent Auditors"). Other main functions of the Audit Committee outlined in the Audit Committee
Charter, include, but are not limited to: (i) reviewing the scope and results of financial statement audits and the audit
fees charged; (ii) reviewing reports from the Fund's Independent Auditors regarding the Fund's internal accounting procedures
and controls; (iii) reviewing reports from the Manager's Internal Audit Department; (iv) maintaining a separate line of communication
between the Fund's Independent Auditors and the Independent Trustees/Directors; (v) reviewing the independence of the Fund's
Independent Auditors; and (vi) approving in advance the provision of any audit or non-audit services by the Fund's Independent
Auditors, including tax services, that are not prohibited by the Sarbanes-Oxley Act, to the Fund, the Manager and certain
affiliates of the Manager. The Audit Committee also reviews reports concerning the valuation of certain investments.
The members of the Regulatory & Oversight Committee are Matthew P. Fink (Chairman), David K. Downes, Phillip A. Griffiths,
Joel W. Motley, Joanne Pace, Mary Ann Tynan, Joseph M. Wikler and Brian F. Wruble. The Regulatory & Oversight Committee evaluates
and reports to the Board on the Fund's contractual arrangements, including the Investment Advisory and Distribution Agreements,
Transfer Agency and Shareholder Service Agreements and custodian agreements as well as the policies and procedures adopted
by the Fund to comply with the Investment Company Act and other applicable law. The Regulatory & Oversight Committee also
reviews reports from the Manager's Risk Management Department and Chief Compliance Officer among other duties as set forth
in the Regulatory & Oversight Committee's Charter. These reports, and others concerning investment, operational and other
risks to the Funds are shared with, and discussed by, the full Board.
The members of the Governance Committee are Joel W. Motley (Chairman), Matthew P. Fink, Mary F. Miller, Mary Ann Tynan and
Peter I. Wold. The Governance Committee reviews the Fund's governance guidelines, the adequacy of the Fund's Codes of Ethics,
and develops qualification criteria for Board members consistent with the Fund's governance guidelines, provides the Board
with recommendations for voting portfolio securities held by the Fund, monitors the Fund's proxy voting, and coordinates with
organizations representing the independent directors of mutual funds among other duties set forth in the Governance Committee's
Charter.
The Governance Committee's functions also include the nomination of Trustees/Directors, including Independent Trustees/Directors,
for election to the Board. The full Board elects new Trustees/Directors except for those instances when a shareholder vote
is required.
The Governance Committee will consider nominees recommended by Independent Trustees/Directors or recommended by any other
Board members including Board members affiliated with the Fund's Manager. The Governance Committee may consider the advice
and recommendation of the Manager and its affiliates in selecting nominees, but need not do so. Upon Board approval, the Governance
Committee may retain an executive search firm to assist in screening potential candidates and may also use the services of
legal, financial, or other external counsel that it deems necessary or desirable in the screening process. To date, the Governance
Committee has been able to identify from its own resources an ample number of qualified candidates. However, under the current
policy of the Board, if the Board determines that a vacancy exists or is likely to exist, the Governance Committee will include
candidates recommended by the Fund's shareholders in its consideration of nominees.
Shareholders wishing to submit a nominee for election to the Board may do so by mailing their submission to the offices of
OppenheimerFunds, Inc., Two World Financial Center, 225 Liberty Street, 11th Floor, New York, New York 10281-1008, to the
attention of the Board of Trustees/Directors of the applicable Fund, c/o the Secretary of the Fund. Submissions should, at
a minimum, be accompanied by the following: (1) the name, address, and business, educational, and/or other pertinent background
of the person being recommended; (2) a statement concerning whether the person is an "interested person" as defined in the
Investment Company Act; (3) any other information that the Fund would be required to include in a proxy statement concerning
the person if he or she was nominated; and (4) 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. Shareholders should note that a person who owns
securities issued by Massachusetts Mutual Life Insurance Company (the parent company of the Sub-Adviser) would be deemed an
"interested person" under the Investment Company Act. 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."
The Governance Committee has not established specific qualifications that it believes must be met by a nominee. In evaluating
nominees, the Governance 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; and whether the individual would be deemed
an "audit committee financial expert" within the meaning of applicable SEC rules. The Governance Committee also considers
whether the individual's background, skills, and experience will complement, and add to the diversity of, the background,
skills, and experience of other Trustees/Directors, and will contribute to the Board's deliberations. There is no difference
in the manner in which the Governance Committee evaluates a nominee based on whether the nominee is recommended by a shareholder.
Candidates are expected to provide a mix of attributes, experience, perspective and skills necessary to effectively advance
the interests of shareholders.
Below is a brief discussion of the specific experience, qualifications, attributes or skills of each Board member that led
the Board to conclude that he or she should serve as a Trustee/Director of the Fund.
Each independent trustee/director has served on the Board for the number of years listed below, during the course of which
he or she has become familiar with the Fund's (and other Oppenheimer funds') financial, accounting, regulatory and investment
matters and has contributed to the Board's deliberations. Each Trustee's/Director's outside professional experience is outlined
in the table of Biographical Information, below.
Trustees and Officers of the Fund
Except for Mr. Glavin, each of the Trustees is an Independent Trustee. All of the Trustees are also Trustees of the following
Oppenheimer funds (referred to as "New York Board Funds"), with the exception of Ms. Pace and Mr. Giambastiani, who are each a
Trustee of some of the following funds, and an advisory board member of the others, as further described below:
|
Limited Term New York Municipal Fund
|
Oppenheimer Multi-State Municipal Trust
|
|
Oppenheimer AMT-Free Municipals
|
Oppenheimer Portfolio Series
|
|
Oppenheimer California Municipal Fund
|
Oppenheimer Real Estate Fund
|
|
Oppenheimer Capital Appreciation Fund
|
Oppenheimer Rising Dividends Fund
|
|
Oppenheimer Developing Markets Fund
|
Oppenheimer Rochester AMT-Free New York Municipal Fund
|
|
Oppenheimer Discovery Fund
|
Oppenheimer Rochester Arizona Municipal Fund
|
|
Oppenheimer Diversified Alternatives Fund
|
Oppenheimer Rochester Intermediate Term Municipal Fund
|
|
Oppenheimer Equity Income Fund, Inc.
|
Oppenheimer Rochester Limited Term Municipal Fund
|
|
Oppenheimer Flexible Strategies Fund
|
Oppenheimer Rochester Maryland Municipal Fund
|
|
Oppenheimer Global Allocation Fund
|
Oppenheimer Rochester Massachusetts Municipal Fund
|
|
Oppenheimer Global Fund
|
Oppenheimer Rochester Michigan Municipal Fund
|
|
Oppenheimer Global Multi Strategies Fund
|
Oppenheimer Rochester Minnesota Municipal Fund
|
|
Oppenheimer Global Opportunities Fund
|
Oppenheimer Rochester North Carolina Municipal Fund
|
|
Oppenheimer Global Value Fund
|
Oppenheimer Rochester Ohio Municipal Fund
|
|
Oppenheimer Gold & Special Minerals Fund
|
Oppenheimer Rochester Short Term Municipal Fund
|
|
Oppenheimer Institutional Money Market Fund
|
Oppenheimer Rochester Virginia Municipal Fund
|
|
Oppenheimer International Diversified Fund
|
Oppenheimer Select Value Fund
|
|
Oppenheimer International Growth Fund
|
Oppenheimer Series Fund, Inc.
|
|
Oppenheimer International Small Company Fund
|
Oppenheimer Small- & Mid-Cap Growth Fund
|
|
Oppenheimer International Value Fund
|
Oppenheimer Small- & Mid-Cap Value Fund
|
|
Oppenheimer Limited Term California Municipal Fund
|
Oppenheimer U.S. Government Trust
|
|
Oppenheimer Master International Value Fund, LLC
|
Rochester Fund Municipals
|
|
Oppenheimer Money Market Fund, Inc.
|
|
Messrs. Edwards, Glavin, Gabinet, Kennedy, Legg, O'Donnell, Petersen, Vandehey and Wixted and Mss. Bloomberg, Bullington,
Kantesaria, LaFond and Nasta who are officers of the Fund, hold the same offices with one or more of the other New York Board Funds.
Present or former officers, directors, trustees and employees (and their immediate family members) of the Fund, the Manager
and its affiliates, and retirement plans established by them for their employees are permitted to purchase Class A shares
of the Fund and the other Oppenheimer funds at net asset value without sales charge. The sales charge on Class A shares is
waived for that group because of the reduced sales efforts realized by the Distributor. Present or former officers, directors,
trustees and employees (and their eligible family members) of the Fund, the Manager and its affiliates, its parent company
and the subsidiaries of its parent company, and retirement plans established for the benefit of such individuals, are also
permitted to purchase Class Y shares of the Fund and other Oppenheimer funds that offer Class Y shares.
As of February 1, 2013, the Trustees/Directors and officers of the Fund, as a group, owned less than 1% of any class of shares
of the Fund beneficially or of record.
The foregoing statement does not reflect ownership of shares held of record by an employee benefit plan for employees of the
Manager, Sub-Adviser and its subsidiaries, other than the shares beneficially owned under that plan by the officers of the
Fund. In addition, none of the Independent Trustees/Directors (nor any of their immediate family members) owns securities
of either the Manager, Sub-Adviser or the Distributor or of any entity directly or indirectly controlling, controlled by or
under common control with the Manager or the Distributor.
Biographical Information.
The Trustees and officers, their positions with the Fund, length of service in such position(s) and principal occupations
and business affiliations during at least the past five years are listed in the charts below. The address of each Independent
Trustee in the chart below is 6803 S. Tucson Way, Centennial, Colorado 80112-3924. Each Trustee serves for an indefinite term,
or until his or her resignation, retirement, death or removal.
|
Each Independent Trustee has served the Fund in the following capacities from the following dates:
|
|
|
Position(s)
|
Length of Service
|
|
Brian F. Wruble
|
Board Chairman
|
Since 2009
|
|
|
Trustee
|
Since 2001
|
|
David K. Downes
|
Trustee
|
Since 2005
|
|
Matthew P. Fink
|
Trustee
|
Since 2009
|
|
Edmund P. Giambastiani, Jr.
|
Trustee
|
Since 2013
|
|
Phillip A. Griffiths
|
Trustee
|
Since 2009
|
|
Mary F. Miller
|
Trustee
|
Since 2009
|
|
Joel W. Motley
|
Trustee
|
Since 2009
|
|
Joanne Pace
|
Trustee
|
Since 2012
|
|
Mary Ann Tynan
|
Trustee
|
Since 2009
|
|
Joseph M. Wikler
|
Trustee
|
Since 2009
|
|
Peter I. Wold
|
Trustee
|
Since 2009
|
|
Independent Trustees
|
|
|
|
Name, Age, Position(s)
|
Principal Occupation(s) During the Past 5 Years; Other Trusteeship/Directorships Held
|
Portfolios Overseen in Fund Complex
|
|
Brian F. Wruble
(69)
Chairman of the Board, Trustee
|
Director of Community Foundation of the Florida Keys (non-profit) (since July 2012); Chairman Emeritus and Non-Voting Trustee
of The Jackson Laboratory (non-profit) (since August 2011); Director of Special Value Opportunities Fund, LLC (registered
investment company) (affiliate of the Sub-Adviser's parent company) (since September 2004); Member of Zurich Insurance Group's
Investment Management Advisory Council (insurance) (since 2004); Treasurer (since 2007) and Trustee of the Institute for Advanced
Study (non-profit educational institute) (since May 1992); Chairman (August 2007-August 2011) and Trustee (since August 1991)
of the Board of Trustees of The Jackson Laboratory (non-profit); General Partner of Odyssey Partners, L.P. (hedge fund) (September
1995-December 2007); Special Limited Partner of Odyssey Investment Partners, LLC (private equity investment) (January 1999-September
2004). Mr. Wruble has served on the Boards of certain Oppenheimer funds since April 2001, during which time he has become
familiar with the Fund's (and other Oppenheimer funds') financial, accounting, regulatory and investment matters and has contributed
to the Boards' deliberations.
|
50
|
|
David K. Downes
(73)
Trustee
|
Director of THL Credit Inc. (since June 2009); Independent Chairman GSK Employee Benefit Trust (since April 2006); Trustee
of Employee Trusts (since January 2006); Chief Executive Officer and Board Member of Community Capital Management (investment
management company) (since January 2004); President of The Community Reinvestment Act Qualified Investment Fund (investment
management company) (since 2004); Director of Internet Capital Group (information technology company) (since October 2003);
Director of Correctnet (January 2006-2007); Independent Chairman of the Board of Trustees of Quaker Investment Trust (registered
investment company) (2004-2007); 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). Mr. Downes has served on the Boards of certain Oppenheimer funds since December 2005, during which
time he has become familiar with the Fund's (and other Oppenheimer funds') financial, accounting, regulatory and investment
matters and has contributed to the Boards' deliberations.
|
50
|
|
Matthew P. Fink
(72)
Trustee
|
Trustee of the Committee for Economic Development (policy research foundation) (2005-2011); Director of ICI Education Foundation
(education foundation) (October 1991-August 2006); President of the Investment Company Institute (trade association) (October
1991-June 2004); Director of ICI Mutual Insurance Company (insurance company) (October 1991-June 2004); Author of
The
Rise of Mutual Funds: An Insider's View
published by Oxford University Press (second edition 2010). Mr. Fink has served on the Boards of certain Oppenheimer funds
since January 2005, during which time he has become familiar with the Fund's (and other Oppenheimer funds') financial, accounting,
regulatory and investment matters and has contributed to the Boards' deliberations.
|
50
|
|
Edmund P. Giambastiani, Jr.
(64)
Trustee/Advisory Board Member*
|
Advisory Board Member of the Maxwell School of Citizenship and Public Affairs of Syracuse University (since April 2012); Director
of Mercury Federal Systems Inc. (information technology) (August 2011-February 2013); Trustee of the U.S. Naval Academy Foundation
(since November 2010); Advisory Board Member of the Massachusetts Institute of Technology Lincoln Laboratory (federally-funded
research development center) (since May 2010); Director of The Boeing Company (aerospace and defense) (since October 2009);
Trustee of MITRE Corporation (federally-funded research development center) (since September 2008); Independent Director of
QinetiQ Group Plc (defense technology and security) (February 2008-August 2011); Director of Monster Worldwide, Inc. (on-line
career services) (since January 2008, Lead Director since June 2011); Chairman of Alenia North America, Inc. (military and
defense products) (January 2008-October 2009); Director of SRA International, Inc. (information technology and services) (January
2008-July 2011); President of Giambastiani Group LLC (national security and energy consulting) (since October 2007); United
States Navy, career nuclear submarine officer (June 1970-October 2007), Vice Chairman of the Joint Chiefs of Staff (2005-October
2007), NATO Supreme Allied Commander Transformation (2003-2005), Commander, U.S. Joint Forces Command (2002-2005). Since his
retirement from the U.S. Navy in October 2007, Admiral Giambastiani has also served on numerous U.S. Government advisory boards,
investigations and task forces for the Secretaries of Defense, State and Interior and the Central Intelligence Agency. Mr.
Giambastiani has served on the Boards of certain Oppenheimer funds since February 2013, during which time he has become familiar
with the Fund's (and other Oppenheimer funds') financial, accounting, regulatory and investment matters and has contributed
to the Boards' deliberations.
|
50
|
|
Phillip A. Griffiths
(74)
Trustee
|
Fellow of the Carnegie Corporation (since 2007); Member of the National Academy of Sciences (since 1979); Council on Foreign
Relations (since 2002); Foreign Associate of Third World Academy of Sciences (since 2002); Chair of Science Initiative Group
(since 1999); Member of the American Philosophical Society (since 1996); Trustee of Woodward Academy (since 1983); Director
of GSI Lumonics Inc. (precision technology products company) (2001-2010); Senior Advisor of The Andrew W. Mellon Foundation
(2001-2010); Distinguished Presidential Fellow for International Affairs of the National Academy of Science (2002-2010); Director
of the Institute for Advanced Study (1991-2004); Director of Bankers Trust New York Corporation (1994-1999); Provost at Duke
University (1983-1991). Mr. Griffiths has served on the Boards of certain Oppenheimer funds since June 1999, during which
time he has become familiar with the Fund's (and other Oppenheimer funds') financial, accounting, regulatory and investment
matters and has contributed to the Boards' deliberations.
|
50
|
|
Mary F. Miller
(70)
Trustee
|
Trustee of International House (not-for-profit) (since June 2007); Trustee of the American Symphony Orchestra (not-for-profit)
(October 1998-November 2011); and Senior Vice President and General Auditor of American Express Company (financial services
company) (July 1998-February 2003). Ms. Miller has served on the Boards of certain Oppenheimer funds since August 2004, during
which time she has become familiar with the Fund's (and other Oppenheimer funds') financial, accounting, regulatory and investment
matters and has contributed to the Boards' deliberations.
|
50
|
|
Joel W. Motley
(60)
Trustee
|
Member of the Vestry of Trinity Wall Street (since April 2012); Director of Southern Africa Legal Services Foundation (since
March 2012); Board Member of Pulitzer Center for Crisis Reporting (non-profit journalism) (since March 2011); Managing Director
of Public Capital Advisors, LLC (privately-held financial advisor) (since January 2006); Managing Director of Carmona Motley,
Inc. (privately-held financial advisor) (since January 2002); Director of Columbia Equity Financial Corp. (privately-held
financial advisor) (2002-2007); Managing Director of Carmona Motley Hoffman Inc. (privately-held financial advisor) (January
1998-December 2001); Member of the Finance and Budget Committee of the Council on Foreign Relations, Chairman of the Investment
Committee of the Episcopal Church of America, Member of the Investment Committee and Board of Human Rights Watch and Member
of the Investment Committee and Board of Historic Hudson Valley. Mr. Motley has served on the Boards of certain Oppenheimer
funds since October 2002, during which time he has become familiar with the Fund's (and other Oppenheimer funds') financial,
accounting, regulatory and investment matters and has contributed to the Boards' deliberations.
|
50
|
|
Joanne Pace
(54)
Trustee/Advisory Board Member**
|
Board Director of Horizon Blue Cross Blue Shield of New Jersey (since November 2012); Advisory Board Director of The Alberleen
Group LLC (since March, 2012); Advisory Board Director of The Agile Trading Group LLC (since March, 2012); Advisory Council
Member of 100 Women in Hedge Funds (non-profit) (since December, 2012); Advisory Council Member of Morgan Stanley Children's
Hospital (non-profit) (since May, 2012); Board Director of The Komera Project (non-profit) (since April, 2012); New York Advisory
Board Director of Peace First (non-profit) (since March, 2010); Senior Advisor of SECOR Asset Management, LP (2010-2011);
Managing Director and Chief Operating Officer of Morgan Stanley Investment Management (2006-2010); Partner and Chief Operating
Officer of FrontPoint Partners, LLC (hedge fund) (2005-2006); held the following positions at Credit Suisse: Managing Director
(2003-2005); Global Head of Human Resources and member of Executive Board and Operating Committee (2004-2005), Global Head
of Operations and Product Control (2003-2004); held the following positions at Morgan Stanley: Managing Director (1997-2003),
Controller and Principal Accounting Officer (1999-2003); Chief Financial Officer (temporary assignment) for the Oversight
Committee, Long Term Capital Management (1998-1999). Lead Independent Director and Chair of the Audit and Nominating Committee
of The Global Chartist Fund, LLC of Oppenheimer Asset Management (2011-2012); Board Director of Managed Funds Association
(2008-2010); Board Director of Morgan Stanley Foundation (2007-2010) and Investment Committee Chair (2008-2010). Ms. Pace
has served on the Boards of certain Oppenheimer funds since November 2012, during which time she has become familiar with
the Fund's (and other Oppenheimer funds') financial, accounting, regulatory and investment matters and has contributed to
the Boards' deliberations.
|
50
|
|
Mary Ann Tynan
(67)
Trustee
|
Director and Secretary of the Appalachian Mountain Club (non-profit outdoor organization) (since January 2012); Director of
Opera House Arts (non-profit arts organization) (since October 2011); Independent Director of the ICI Board of Governors (since
October 2011); Vice Chair of Board of Trustees of Brigham and Women's/Faulkner Hospitals (non-profit hospital) (since 2000);
Chair of Board of Directors of Faulkner Hospital (non-profit hospital) (since 1990); Member of Audit and Compliance Committee
of Partners Health Care System (non-profit) (since 2004); Board of Trustees of Middlesex School (educational institution)
(since 1994); Board of Directors of Idealswork, Inc. (financial services provider) (since 2003); Partner, Senior Vice President
and Director of Regulatory Affairs of Wellington Management Company, LLP (global investment manager) (1976-2002); Vice President
and Corporate Secretary, John Hancock Advisers, Inc. (mutual fund investment adviser) (1970-1976). Ms. Tynan has served on
the Boards of certain Oppenheimer funds since October 2008, during which time she has become familiar with the Fund's (and
other Oppenheimer funds') financial, accounting, regulatory and investment matters and has contributed to the Boards' deliberations.
|
50
|
|
Joseph M. Wikler
(71)
Trustee
|
Director of C-TASC (bio-statistics services) (2007-2012); Director of the following medical device companies: Medintec (1992-2011)
and Cathco (1996-2011); Member of the Investment Committee of the Associated Jewish Charities of Baltimore (since 1994); Director
of Lakes Environmental Association (environmental protection organization) (1996-2008); Director of Fortis/Hartford mutual
funds (1994-December 2001). Mr. Wikler has served on the Boards of certain Oppenheimer funds since August 2005, during which
time he has become familiar with the Fund's (and other Oppenheimer funds') financial, accounting, regulatory and investment
matters and has contributed to the Boards' deliberations.
|
50
|
|
Peter I. Wold
(65)
Trustee
|
Director of Arch Coal, Inc. (since 2010); Director and Chairman of Wyoming Enhanced Oil Recovery Institute Commission (enhanced
oil recovery study) (since 2004); President of Wold Oil Properties, Inc. (oil and gas exploration and production company)
(since 1994); Vice President of American Talc Company, Inc. (talc mining and milling) (since 1999); Managing Member of Hole-in-the-Wall
Ranch (cattle ranching) (since 1979); Director and Chairman of the Denver Branch of the Federal Reserve Bank of Kansas City
(1993-1999); and Director of PacifiCorp. (electric utility) (1995-1999). Mr. Wold has served on the Boards of certain Oppenheimer
funds since August 2005, during which time he has become familiar with the Fund's (and other Oppenheimer funds') financial,
accounting, regulatory and investment matters and has contributed to the Boards' deliberations.
|
50
|
* As of the date of this SAI, Mr. Giambastiani serves as a Trustee/Director to the following Funds: Oppenheimer Diversified
Alternatives Fund, Oppenheimer Equity Income Fund, Inc., Oppenheimer International Value Fund, Oppenheimer Rochester Limited
Term Municipal Fund, Oppenheimer Limited Term New York Municipal Fund, Oppenheimer Master International Value Fund, LLC, Oppenheimer
Global Allocation Fund, Oppenheimer Flexible Strategies Fund, Oppenheimer Small- & Mid-Cap Value Fund, Oppenheimer Rising
Dividends Fund and Rochester Fund Municipals. As of the same date, Mr. Giambastiani serves as an Advisory Board Member to
the remaining New York Board Funds listed earlier in this section.
** As of the date of this SAI, Ms. Pace serves as a Trustee/Director to the following Funds: Oppenheimer Diversified Alternatives
Fund, Oppenheimer Equity Income Fund, Inc., Oppenheimer International Value Fund, Oppenheimer Rochester Limited Term Municipal
Fund, Oppenheimer Limited Term New York Municipal Fund, Oppenheimer Master International Value Fund, LLC, Oppenheimer Global
Allocation Fund, Oppenheimer Flexible Strategies Fund, Oppenheimer Small- & Mid-Cap Value Fund, Oppenheimer Rising Dividends
Fund and Rochester Fund Municipals. As of the same date, Ms. Pace serves as an Advisory Board Member to the remaining New
York Board Funds listed earlier in this section.
Mr. Glavin has served as an Interested Trustee of the Fund since December 2009. Mr. Glavin is an "Interested Trustee" because
he is affiliated with the Manager and the Sub-Adviser by virtue of his positions as an officer and director of the Manager
and a director of the Sub-Adviser, and as a shareholder of the Sub-Adviser's parent company. Both as a Trustee and as an officer,
he serves for an indefinite term, or until his resignation, retirement, death or removal. Mr. Glavin's address is Two World
Financial Center, 225 Liberty Street, 11th Floor, New York, New York 10281-1008.
|
Interested Trustee and Officer
|
|
|
Name, Age, Position(s)
|
Principal Occupation(s) During the Past 5
Years; Other Trusteeships/Directorships Held
|
Portfolios Overseen
in Fund Complex
|
|
William F. Glavin, Jr.
(54) Trustee, President and Principal Executive Officer
|
Director, Chief Executive Officer and President of the Manager (since January 2013); Chairman of the Sub-Adviser (December
2009-December 2012); Chief Executive Officer (January 2009-December 2012) and Director of the Sub-Adviser (since January 2009);
President of the Sub-Adviser (May 2009-December 2012); Management Director (since June 2009), President (since December 2009)
and Chief Executive Officer (since January 2011) of Oppenheimer Acquisition Corp. ("OAC") (the Sub-Adviser's parent holding
company); Director of Oppenheimer Real Asset Management, Inc. (since March 2010); Executive Vice President (March 2006 - February
2009) and Chief Operating Officer (July 2007 - February 2009) of Massachusetts Mutual Life Insurance Company (OAC's parent
company); Director (May 2004 - March 2006) and Chief Operating Officer and Chief Compliance Officer (May 2004 - January 2005),
President (January 2005 - March 2006) and Chief Executive Officer (June 2005 - March 2006) of Babson Capital Management LLC;
Director (March 2005 - March 2006), President (May 2003 - March 2006) and Chief Compliance Officer (July 2005 - March 2006)
of Babson Capital Securities, Inc. (a broker-dealer); President (May 2003 - March 2006) of Babson Investment Company, Inc.;
Director (May 2004 - August 2006) of Babson Capital Europe Limited; Director (May 2004 - October 2006) of Babson Capital Guernsey
Limited; Director (May 2004 - March 2006) of Babson Capital Management LLC; Non-Executive Director (March 2005 - March 2007)
of Baring Asset Management Limited; Director (February 2005 - June 2006) Baring Pension Trustees Limited; Director and Treasurer
(December 2003 - November 2006) of Charter Oak Capital Management, Inc.; Director (May 2006 - September 2006) of C.M. Benefit
Insurance Company; Director (May 2008 - June 2009) and Executive Vice President (June 2007 - July 2009) of C.M. Life Insurance
Company; President (March 2006 - May 2007) of MassMutual Assignment Company; Director (January 2005 - December 2006), Deputy
Chairman (March 2005 - December 2006) and President (February 2005 - March 2005) of MassMutual Holdings (Bermuda) Limited;
Director (May 2008 - June 2009) and Executive Vice President (June 2007 - July 2009) of MML Bay State Life Insurance Company;
Chief Executive Officer and President (April 2007 - January 2009) of MML Distributors, LLC.; and Chairman (March 2006 -December
2008) and Chief Executive Officer (May 2007 - December 2008) of MML Investors Services, Inc. Mr. Glavin has served on the
Board since December 2009, during which time he has become familiar with the Fund's (and other Oppenheimer funds') financial,
accounting, regulatory and investment matters and has contributed to the Boards' deliberations.
|
86
|
The addresses of the officers in the charts below are as follows: for Messrs. Edwards, Gabinet, Glavin and Mss. Bloomberg,
Kantesaria and Nasta, Two World Financial Center, 225 Liberty Street, New York, New York 10281, for Messrs. Kennedy, Legg,
O'Donnell, Petersen, Vandehey and Wixted and Mss. Bullington and LaFond, 6803 S. Tucson Way, Centennial, Colorado 80112. Each
officer serves for an indefinite term or until his or her resignation, retirement, death or removal.
|
Each of the officers has served the Fund in the following capacities from the following dates:
|
|
|
Position(s)
|
Length of Service
|
|
William F. Glavin, Jr.
|
President and Principal Executive Officer
|
Since 2009
|
|
Christina M. Nasta
|
Vice President and Chief Business Officer
|
Since 2011
|
|
Mark S. Vandehey
|
Vice President and Chief Compliance Officer
|
Since 2004
|
|
Brian W. Wixted
|
Treasurer and Principal Financial &
Accounting Officer
|
Since 1999
|
|
Brian S. Petersen
|
Assistant Treasurer
|
Since 2004
|
|
Stephanie J. Bullington
|
Assistant Treasurer
|
Since 2008
|
|
James A. Kennedy
|
Assistant Treasurer
|
Since 2011
|
|
Mathew O'Donnell
|
Assistant Treasurer
|
Since 2012
|
|
Arthur S. Gabinet
|
Secretary and Chief Legal Officer
|
Since 2011
|
|
Lisa I. Bloomberg
|
Assistant Secretary
|
Since 2004
|
|
Taylor V. Edwards
|
Assistant Secretary
|
Since 2008
|
|
Randy G. Legg
|
Assistant Secretary
|
Since 2008
|
|
Amee Kantesaria
|
Assistant Secretary
|
Since 2012
|
|
Gloria J. LaFond
|
Blue Sky Officer
|
Since 2011
|
|
Other Officers of the Fund
|
|
|
|
Name, Age, Position(s)
|
Principal Occupation(s) During the Past 5 Years
|
Portfolios Overseen
in Fund Complex
|
|
Mark S. Vandehey
(62)
Vice President and Chief Compliance Officer
|
Senior Vice President and Chief Compliance Officer of the Manager (since January 2013); Chief Compliance Officer of OFI SteelPath,
Inc. (since January 2013); Senior Vice President of the Sub-Adviser (March 2004-December 2012); Chief Compliance Officer of
the Sub-Adviser, OppenheimerFunds Distributor, Inc., OFI Trust Company, OFI Institutional Asset Management , Inc., Oppenheimer
Real Asset Management, Inc., OFI Private Investments, Inc., Harborview Asset Management Corporation, Trinity Investment Management
Corporation, and Shareholder Services, Inc. (since March 2004); Vice President of OppenheimerFunds Distributor, Inc., Centennial
Asset Management Corporation and Shareholder Services, Inc. (June 1983-December 2012).
|
86
|
|
Christina M. Nasta
(39)
Vice President and Chief Business Officer
|
Senior Vice President of OppenheimerFunds Distributor, Inc. (since January 2013); Senior Vice President of the Sub-Adviser
(July 2010-December 2012); Vice President of the Sub-Adviser (January 2003-July 2010); Vice President of OppenheimerFunds
Distributor, Inc. (January 2003-July 2010).
|
86
|
|
Brian W. Wixted
(53)
Treasurer and Principal Financial & Accounting Officer
|
Senior Vice President of the Manager (since January 2013); Treasurer of the Sub-Adviser, HarbourView Asset Management Corporation,
Shareholder Financial Services, Inc., Shareholder Services, Inc., and Oppenheimer Real Asset Management, Inc. (March 1999-June
2008), OFI Private Investments, Inc. (March 2000-June 2008), OppenheimerFunds International Ltd. and OppenheimerFunds plc
(since May 2000), OFI Institutional Asset Management, Inc. (November 2000-June 2008), and OppenheimerFunds Legacy Program
(charitable trust program established by the Sub-Adviser) (June 2003-December 2011); Treasurer and Chief Financial Officer
of OFI Trust Company (since May 2000); Assistant Treasurer of Oppenheimer Acquisition Corporation (March 1999-June 2008).
|
86
|
|
Brian S. Petersen
(42)
Assistant Treasurer
|
Vice President of the Manager (since January 2013); Vice President of the Sub-Adviser (February 2007-December 2012); Assistant
Vice President of the Sub-Adviser (August 2002-February 2007).
|
86
|
|
Stephanie J. Bullington
(35)
Assistant Treasurer
|
Vice President of the Manager (since January 2013); Vice President of the Sub-Adviser (January 2010-December 2012); Assistant
Vice President of the Sub-Adviser (October 2005-January 2010).
|
86
|
|
James A. Kennedy
(54)
Assistant Treasurer
|
Senior Vice President of the Manager (since January 2013); Senior Vice President of the Sub-Adviser (September 2006-December
2012.)
|
86
|
|
Mathew O'Donnell
(45)
Assistant Treasurer
|
Vice President of the Manager (since January 2013); Vice President of the Sub-Adviser (January 2008-December 2012); Accounting
Policy Director of the Sub-Adviser (May 2007-March 2012).
|
86
|
|
Arthur S. Gabinet
(55)
Secretary and Chief Legal Officer
|
Executive Vice President, Secretary and General Counsel of the Manager (since January 2013); General Counsel OFI SteelPath,
Inc. (since January 2013); Executive Vice President (May 2010-December 2012) and General Counsel (since January 2011) of the
Sub-Adviser; General Counsel of the Distributor (since January 2011); General Counsel of Centennial Asset Management Corporation
(January 2011-December 2012); Executive Vice President (January 2011-December 2012) and General Counsel of HarbourView Asset
Management Corporation (since January 2011); Assistant Secretary (since January 2011) and Director (since January 2011) of
OppenheimerFunds International Ltd. and OppenheimerFunds plc; Director of Oppenheimer Real Asset Management, Inc. (January
2011-December 2012) and General Counsel (since January 2011); Executive Vice President (January 2011-December 2011) and General
Counsel of Shareholder Financial Services, Inc. and Shareholder Services, Inc. (since January 2011); Executive Vice President
(January 2011-December 2012) and General Counsel of OFI Private Investments Inc. (since January 2011); Vice President of OppenheimerFunds
Legacy Program (January 2011-December 2011); Executive Vice President (January 2011-December 2012) and General Counsel of
OFI Institutional Asset Management, Inc. (since January 2011); General Counsel, Asset Management of the Sub-Adviser (May 2010-December
2010); Principal, The Vanguard Group (November 2005-April 2010); District Administrator, U.S. Securities and Exchange Commission
(January 2003-October 2005).
|
86
|
|
Lisa I. Bloomberg
(45)
Assistant Secretary
|
Senior Vice President and Deputy General Counsel of the Manager (since January 2013); Senior Vice President (February 2010-December
2012) and Deputy General Counsel (May 2008-December 2012) of the Sub-Adviser; Vice President (May 2004-January 2010) and Associate
Counsel of the Sub-Adviser (May 2004-May 2008).
|
86
|
|
Randy G. Legg
(47)
Assistant Secretary
|
Vice President and Senior Counsel of the Manager (since January 2013); Vice President (June 2005-December 2012) and Senior
Counsel (March 2011-December 2012) of the Sub-Adviser; Associate Counsel (January 2007-March 2011) of the Sub-Adviser.
|
86
|
|
Taylor V. Edwards
(45)
Assistant Secretary
|
Vice President and Senior Counsel of the Manager (since January 2013); Vice President (February 2007-December 2012) and Senior
Counsel (February 2012-December 2012) of the Sub-Adviser; Associate Counsel (May 2009-January 2012); Assistant Vice President
(January 2006-January 2007) and Assistant Counsel (January 2006-April 2009) of the Sub-Adviser.
|
86
|
|
Amee Kantesaria
(32)
Assistant Secretary
|
Vice President and Assistant Counsel of the Manager (since January 2013); Vice President (May 2009-December 2012) and Assistant
Counsel (December 2006-December 2012) of the Sub-Adviser; Assistant Vice President (December 2006-May 2009) of the Sub-Adviser;
Assistant Secretary (since January 2011) of the Sub-Adviser and Oppenheimer Acquisition Corp.
|
86
|
|
Gloria J. LaFond
(67)
Blue Sky Officer
|
Assistant Vice President of the Manager (since January 2013); Assistant Vice President (January 2006-December 2012) of the
Sub-Adviser.
|
86
|
Trustees Share Ownership.
The chart below shows information about each Trustee's beneficial share ownership in the Fund and in all of the registered
investment companies that the Trustee oversees in the Oppenheimer family of funds ("Supervised Funds").
|
As of December 31, 2012
|
|
|
Independent Trustees
|
Dollar Range of Shares Beneficially Owned in the Fund
|
Aggregate Dollar Range of Shares Beneficially Owned in Supervised Funds
|
|
Brian Wruble
|
$1-$10,0000
|
Over $100,000
|
|
David K. Downes
|
None
|
Over $100,000
|
|
Matthew P. Fink
|
None
|
Over $100,000
|
|
Edmund P. Giambastiani, Jr.
1
|
None
|
None
|
|
Phillip A. Griffiths
|
None
|
Over $100,000
|
|
Mary F. Miller
|
None
|
Over $100,000
|
|
Joel W. Motley
|
None
|
Over $100,000
|
|
Joanne Pace
2
|
None
|
None
|
|
Mary Ann Tynan
|
None
|
Over $100,000
|
|
Joseph M. Wikler
|
None
|
Over $100,000
|
|
Peter I. Wold
|
None
|
Over $100,000
|
|
Interested Trustee
|
|
|
|
William F. Glavin, Jr.
|
$10,0001-$50,000
|
Over $100,000
|
1
Effective February 1, 2013, as previously described above, Mr. Giambastiani became an Independent Trustee/Director/Advisory
Board Member of the New York Board Funds.
2
Effective November 1, 2012, as previously described above, Ms. Pace became an Independent Trustee/Director/Advisory Board
Member of the New York Board Funds.
Remuneration of the Officers and Trustees.
The officers of the Fund, who are associated with the Manager, receive no salary or fee from the Fund. The Independent Trustees'
total compensation from the Fund and fund complex represents compensation for serving as a Trustee and member of a committee
(if applicable) of the Boards of the Fund and other funds in the OppenheimerFunds complex during the calendar year ended December
31, 2012.
|
Name and Other Fund Position(s) (as applicable)
|
Aggregate Compensation From the Fund
1
|
Total Compensation From the Fund and Fund Complex
|
|
|
Fiscal Year Ended October 31, 2012
|
Year Ended December 31, 2012
|
|
Brian F. Wruble
|
$4,060
|
$305,750
|
|
Chairman of the Board, Audit Committee Member and Regulatory & Oversight Committee Member
2
|
|
|
|
David Downes
|
$3,437
|
$260,750
|
|
Audit Committee Chairman and Regulatory & Oversight Committee Member
|
|
|
|
Matthew P. Fink
|
$3,437
3
|
$260,750
|
|
Regulatory & Oversight Committee Chairman and Governance Committee Member
|
|
|
|
Edmund P. Giambastiani
4
|
$0
|
$0
|
|
Phillip A. Griffiths
|
$3,786
|
$284,100
|
|
Audit Committee Member and Regulatory & Oversight Committee Member
|
|
|
|
Mary F. Miller
|
$3,221
5
|
$242,500
|
|
Audit Committee Member and Governance Committee Member
|
|
|
|
Joel W. Motley
|
$3,437
6
|
$260,750
|
|
Governance Committee Chairman and Regulatory & Oversight Committee Member
|
|
|
|
Joanne Pace
|
$134
|
$36,467
|
|
Audit Committee Member and Regulatory & Oversight Committee Member
7
|
|
|
|
Mary Ann Tynan
|
$3,221
8
|
$187,500
|
|
Regulatory & Oversight Committee Member and Governance Committee Member
|
|
|
|
Joseph M. Wikler
|
$3,221
9
|
$242,500
|
|
Audit Committee Member and Regulatory & Oversight Committee Member
|
|
|
|
Peter I. Wold
|
$3,221
10
|
$187,500
|
|
Audit Committee Member and Governance Committee Member
|
|
|
1."Aggregate Compensation From the Fund" includes fees and amounts deferred under the "Compensation Deferral Plan" (described
below), if any.
2. Effective October 1, 2012, Mr. Wruble became a member of the Audit Committee and Regulatory & Oversight Committee.
3. Includes $1,399 deferred by Mr. Fink under the Compensation Deferral Plan.
4. Mr. Giambastiani became an Independent Trustee/Advisory Board Member on February 1, 2013, and therefore did not receive
any compensation in 2012.
5. Includes $1,288 deferred by Ms. Miller under the Compensation Deferral Plan.
6. Includes $344 deferred by Mr. Motley under the Compensation Deferral Plan.
7. Effective November 1, 2012, Ms. Pace became an Independent Trustee/Advisory Board Member and member of the Audit Committee
and Regulatory & Oversight Committee.
8. Includes $1,311 deferred by Ms. Tynan under the Compensation Deferral Plan.
9. Includes $1,611 deferred by Mr. Wikler under the Compensation Deferral Plan.
10. Includes $3,221 deferred by Mr. Wold under the Compensation Deferral Plan.
Compensation Deferral Plan.
The Board of Trustees has adopted a Compensation Deferral Plan for Independent Trustees that enables them to elect to defer
receipt of all or a portion of the annual fees they are entitled to receive from certain Funds. Under the plan, the compensation
deferred by a Trustee is periodically adjusted as though an equivalent amount had been invested in shares of one or more Oppenheimer
funds selected by the Trustee. The amount paid to the Trustee under the plan will be determined based on the amount of compensation
deferred and the performance of the selected funds.
Deferral of the Trustees' fees under the plan will not materially affect a Fund's assets, liabilities or net income per share.
The plan will not obligate a fund to retain the services of any Trustee or to pay any particular level of compensation to
any Trustee. Pursuant to an Order issued by the SEC, a fund may invest in the funds selected by the Trustee under the plan
without shareholder approval for the limited purpose of determining the value of the Trustee's deferred compensation account.
Major Shareholders.
As of February 1, 2013, the only persons or entities who owned of record, or who were known by the Fund to own beneficially,
5% or more of any class of the Fund's outstanding shares were:
|
Name
|
Address
|
% Owned
|
Share Class
|
|
Pershing LLC
|
1 Pershing Plaza
Jersey City, NJ 07399-0001
|
6.34%
|
A
|
|
National Financial Services LLC for
Exclusive Benefit of Customers
Attn: Mutual Funds
|
200 Liberty Street
One World Financial Center, 5th floor
New York, NY 10281-1003
|
6.04%
|
A
|
|
Pershing LLC
|
1 Pershing Plaza
Jersey City, NJ 07399-0001
|
8.58%
|
B
|
|
MLPF&S for the Sole Benefit
of its Customers
Attn: Fund Admn/#97HX8
|
4800 Deer Lake Dr. E., Fl. 3
Jacksonville, FL 32246-6484
|
15.67%
|
C
|
|
Morgan Stanley & Co.
Attn: Mutual Funds Operations
|
Harborside Financial Center Plaza II,
3rd Floor
Jersey City, NJ 07311
|
6.35%
|
C
|
|
Pershing LLC
|
1 Pershing Plaza
Jersey City, NJ 07399-0001
|
5.89%
|
C
|
|
National Financial Services LLC
for Exclusive Benefit of Customers
Attn: Mutual Funds
|
200 Liberty Street
One World Financial Center, 5th Floor
New York, NY 10281-1003
|
5.71%
|
C
|
|
First Clearing LLC
Special Custody Account for
the Exclusive Benefit of Customer
|
2801 Market Street
St. Louis, MO 63103
|
5.18%
|
C
|
|
Hartford Life Insurance Co.
Separate Account 457
Attn: UIT Operations
|
P.O. Box 2999
Hartford, CT 06104-2999
|
11.33%
|
N
|
|
MLPF&S for the Sole Benefit
of its Customers
Attn: Fund Admn
|
4800 Deer Lake Dr. E., Fl. 3
Jacksonville, FL 32246-6484
|
10.16%
|
N
|
|
AUL American Group Ret. Annuity
Attn: Separate Accounts
|
P.O. Box 368
Indianapolis, IN 46206-0368
|
5.78%
|
N
|
|
Hartford Securities Dist. Co. Inc.
FBO PRG
Attn: UIT Operations
|
P.O. Box 2999
Hartford, CT 06104-2999
|
5.34%
|
N
|
|
Taynik & Co.
C/O Investors Bank & Trust
|
1200 Crown Colony Drive
Quincy, MA 02169-0938
|
24.49%
|
Y
|
|
MLPF&S for the Sole Benefit
of its Customers
Attn: Fund Admn/#97FJ0
|
4800 Deer Lake Dr. E., Fl. 3
Jacksonville, FL 32246-6484
|
24.24%
|
Y
|
|
Morgan Stanley & Co.
Attn: Mutual Funds Operations
|
Harborside Financial Center Plaza II,
3rd Floor
Jersey City, NJ 07311
|
12.00%
|
Y
|
|
First Clearing LLC
Special Custody Account for
the Exclusive Benefit of Customer
|
2801 Market Street
St. Louis, MO 63103
|
11.95%
|
Y
|
|
OFI Trust Company TR
Deferred Compensation Plan
Attn: Patricia Casey
|
OFI Trust Co.
2 World Financial
225 Liberty Street
New York, NY 10281-1008
|
6.22%
|
Y
|
|
Oppenheimerfunds, Inc.
c/o Kristie Feinberg Bldg. 2
|
6803 S. Tucson way
Centennial, Co 80112-3924
|
67.88%
|
I
|
|
ING Life Ins & Annuity Comp.
Attn: Fund Operations
|
1 Orange Way
Windsor, CT 06095-4773
|
32.11%
|
I
|
The Manager and the Sub-Adviser
The Manager is a wholly-owned subsidiary of OppenheimerFunds, Inc., the Sub-Adviser. The Sub-Adviser is wholly-owned by Oppenheimer
Acquisition Corp., a holding company primarily owned by Massachusetts Mutual Life Insurance Company, a global, diversified
insurance and financial services company.
Code of Ethics.
The Fund, the Manager, the Sub-Adviser and the Distributor have a Code of Ethics. It is designed to detect and prevent improper
personal trading by portfolio managers and certain other employees ("covered persons") that could compete with or take advantage
of the Fund's portfolio transactions. Covered persons include persons with knowledge of the investments and investment intentions
of the Fund and/or other funds advised by the Manager. The Code of Ethics does permit personnel subject to the Code to invest
in securities, including securities that may be purchased or held by the Fund, subject to a number of restrictions and controls.
Compliance with the Code of Ethics is carefully monitored and enforced by the Manager, the Sub-Adviser and the Distributor.
The Code of Ethics is an exhibit to the Fund's registration statement filed with the SEC. It can be viewed as part of the
Fund's registration statement on the SEC's EDGAR database at the SEC's website at
www.sec.gov
and can be reviewed and copied at the SEC's Public Reference Room in Washington, D.C.
Portfolio Proxy Voting.
The Fund has adopted Portfolio Proxy Voting Policies and Procedures, which include Proxy Voting Guidelines, under which the
Fund votes proxies relating to securities held by the Fund ("portfolio proxies"). The Manager generally undertakes to vote
portfolio proxies with a view to enhancing the value of the company's stock held by the Fund. The Fund has retained an independent,
third party proxy voting agent to vote portfolio proxies in accordance with the Fund's Proxy Voting Guidelines and to maintain
records of such portfolio proxy voting. The Manager's internal Proxy Voting Committee is responsible for monitoring the third
party proxy voting agent.
The Portfolio Proxy Voting Policies and Procedures include provisions to address conflicts of interest that may arise between
the Fund and the Manager or the Manager's affiliates or business relationships. Such a conflict of interest may arise, for
example, where the Manager or an affiliate of the Manager manages or administers the assets of a pension plan or other investment
account of the portfolio company soliciting the proxy or seeks to serve in that capacity. The Manager and its affiliates generally
seek to avoid such material conflicts of interest by maintaining separate investment decision making processes to prevent
the sharing of business objectives with respect to proposed or actual actions regarding portfolio proxy voting decisions.
Additionally, the Manager employs the following procedures, as long as OFI determines that the course of action is consistent
with the best interests of the Fund and its shareholders:
If the proposal that gives rise to the conflict is specifically addressed in the Proxy Voting Guidelines, the Manager will
vote the portfolio proxy in accordance with the Proxy Voting Guidelines.
-
If such proposal is not specifically addressed in the Proxy Voting Guidelines, or if the Proxy Voting Guidelines provide discretion
to the Manager on how to vote (i.e., on a case-by-case basis), the Manager will vote in accordance with the third-party proxy
voting agent's general recommended guidelines on the proposal provided that the Manager has reasonably determined that there
is no conflict of interest on the part of the proxy voting agent.
-
With respect to such proposal where a portfolio manager has requested that the Manager vote (i) in a manner inconsistent with
the Proxy Voting Guidelines, or (ii) if such proposal is not specifically addressed in the Proxy Voting Guidelines, in a manner
inconsistent with the third-party proxy voting agent's general recommended guidelines, the Proxy Voting Committee may determine
that such a request is in the best interests of the Fund (and, if applicable, its shareholders) and does not pose an actual
material conflict of interest. In making its determination, the Proxy Voting Committee may consider, among other things, whether
the portfolio manager is aware of the business relationship with the company, and/or is sufficiently independent from the
business relationship, and to the Proxy Voting Committee's knowledge, whether the Manager has been contacted or influenced
by the company in connection with the proposal.
If none of the previous procedures provides an appropriate voting recommendation, the Proxy Voting Committee may: (i) determine
how to vote on the proposal; (ii) recommend that the Manager retain an independent fiduciary to advise the Manager on how
to vote the proposal; or (iii) determine that voting on the particular proposal is impracticable and/or is outweighed by the
cost of voting and direct the Manager to abstain from voting.
The Proxy Voting Guidelines' provisions with respect to certain routine and non-routine proxy proposals are summarized below:
-
The Fund evaluates director nominees on a case-by-case basis, examining the following factors, among others: composition of
the board and key board committees, experience and qualifications, attendance at board meetings, corporate governance provisions
and takeover activity, long-term company performance, the nominee's investment in the company, and whether the company or
nominee is targeted in connection with public "vote no" campaigns.
-
The Fund generally supports proposals requiring the position of chairman to be filled by an independent director unless there
are compelling reasons to recommend against the proposal such as a counterbalancing governance structure.
-
The Fund generally supports proposals asking that a majority of directors be independent. The Fund generally supports proposals
asking that a board audit, compensation, and/or nominating committee be composed exclusively of independent directors.
-
The Fund generally votes against shareholder proposals to require a company to nominate more candidates than the number of
open board seats.
-
The Fund generally supports shareholder proposals to reduce a super-majority vote requirement, and opposes management proposals
to add a super-majority vote requirement.
-
The Fund generally supports proposals to allow shareholders the ability to call special meetings.
-
The Fund generally votes for proposals that remove restrictions on or provide the right of shareholders to act by written
consent independently of management taking into account the company's specific governance provisions including right to call
special meetings, poison pills, vote standards, etc. on a case-by-case basis.
-
The Fund generally votes against proposals to create a new class of stock with superior voting rights.
-
The Fund generally votes against proposals to classify a board.
-
The Fund generally supports proposals to eliminate cumulative voting.
-
The Fund generally votes against proposals to establish a new board committee.
-
The Fund generally votes on management proposals seeking approval to exchange/reprice options on a case-by-case basis.
-
The Fund votes on qualified employee stock purchase plans on a case-by-case basis. The Fund generally supports non-qualified
employee stock purchase plans that feature broad-based participation, limits on employee contribution, company matching up
to 25%, and no discount on the stock price on the date of purchase.
-
The Fund generally supports transfer stock option ("TSO") programs, if executive officers and non-employee directors are excluded
from participating, if stock options are purchased from third-party financial institutions at a discount to their fair value
using option pricing models, and if there is a two-year minimum holding period for sale proceeds. The Fund generally votes
against equity plan proposals if the details of ongoing TSO programs are not provided to shareholders.
-
The Fund generally supports proposals to require majority voting for the election of directors.
-
The Fund generally supports proposals seeking additional disclosure of executive and director pay information.
-
The Fund generally supports proposals seeking disclosure regarding the company's, board's or committee's use of compensation
consultants.
-
The Fund generally supports "pay-for-performance" and "pay-for-superior-performance standard" proposals that align a significant
portion of total compensation of senior executives to company performance, and generally supports an annual frequency for
advisory votes on executive compensation.
-
The Fund generally supports having shareholder votes on poison pills.
-
The Fund generally supports proposals calling for companies to adopt a policy of not providing tax gross-up payments.
-
The Fund votes case-by-case on bonus banking/bonus banking "plus" proposals.
-
The Fund generally supports proposals calling for companies to adopt a policy of obtaining shareholder approval for golden
coffins/executive death benefits. This would not apply to any benefit programs or equity plan proposals for which the broad-based
employee population is eligible.
-
The Fund generally supports proposals to eliminate accelerated vesting of unvested equity awards to senior executives in the
event of change in control (except for pro rata vesting considering the time elapsed and attainment of any related performance
goals between the award date and the change in control).
-
In the case of social, political and environmental responsibility issues, the Fund will generally abstain where there could
be a detrimental impact on share value or where the perceived value if the proposal was adopted is unclear or unsubstantiated.
-
The Fund generally supports proposals that would clearly have a discernible positive impact on short- or long-term share value,
or that would have a presently indiscernible impact on short- or long-term share value but promotes general long-term interests
of the company and its shareholders.
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 Form N-PX filing is available (i) without charge, upon request, by calling the Fund
toll-free at 1.800.525.7048 and (ii) on the SEC's website at www.sec.gov.
The Investment Advisory Agreement.
The Manager provides investment advisory and management services to the Fund under an investment advisory agreement between
the Manager and the Fund. The Manager has retained the Sub-Adviser pursuant to a separate sub-advisory agreement, described
below, under which the Sub-Adviser chooses the Fund's investments and provides related advisory services to the Fund. Prior
to January 1, 2013, OppenheimerFunds, Inc. was the Manager of the Fund.
The advisory agreement requires the Manager, at its expense, to provide the Fund with adequate office space, facilities and
equipment. It also requires the Manager to provide and supervise the activities of all administrative and clerical personnel
required to provide effective administration for the Fund. Those responsibilities include the compilation and maintenance
of records with respect to its operations, the preparation and filing of specified reports, and composition of proxy materials
and registration statements for continuous public sale of shares of the Fund.
The Fund pays expenses not expressly assumed by the Manager under the advisory agreement. The advisory agreement lists examples
of expenses paid by the Fund. The major categories relate to interest, taxes, brokerage commissions, fees to certain Board
members, legal and audit expenses, custodian and transfer agent expenses, share issuance costs, certain printing and registration
costs and non-recurring expenses, including litigation costs. The management fees paid by the Fund to the Manager are calculated
at the rates described in the Prospectus, which are applied to the assets of the Fund as a whole. The fees are allocated to
each class of shares based upon the relative proportion of the Fund's net assets represented by that class. The management
fees paid by the Fund to the Manager during its last three fiscal years were:
|
Fiscal Year Ended 10/31:
|
Management Fee Paid to the Manager
|
|
2010
|
$16,064,441
|
|
2011
|
$15,099,118
|
|
2012
|
$11,404,936
|
The investment advisory agreement states that in the absence of willful misfeasance, bad faith, gross negligence in the performance
of its duties or reckless disregard of its obligations and duties under the investment advisory agreement, the Manager is
not liable for any loss the Fund sustains in connection with matters to which the agreement relates.
The agreement permits the Manager to act as an investment adviser for any other person, firm or corporation and to use the
name "Oppenheimer" in connection with other investment companies for which it may act as investment adviser or general distributor.
If the Manager shall no longer act as investment adviser to the Fund, the Manager may withdraw the right of the Fund to use
the name "Oppenheimer" as part of its name.
The Sub-Advisory Agreement.
Under the sub-advisory agreement between the Manager and the Sub-Adviser, the Sub-Adviser shall regularly provide investment
advice with respect to the Fund and invest and reinvest cash, securities, commodity interests and the property comprising
the assets of the Fund. The Sub-Adviser selects securities and/or commodity interests for the Fund's portfolio and provides
related advisory services. The portfolio manager(s) of the Fund is employed by the Sub-Adviser and is principally responsible
for the provision of advisory services to the Fund's portfolio. Other members of the Sub-Adviser's investment teams provide
the portfolio manager(s) with counsel and support in managing the Fund's portfolio.
Under the sub-advisory agreement, the Manager pays the Sub-Adviser a percentage of the net investment advisory fee (after
all applicable waivers) that it receives from the Fund as compensation for the provision of investment advisory services.
The fee paid to the Sub-Adviser under the sub-advisory agreement is paid by the Manager, not by the Fund.
The sub-advisory agreement states that in the absence of willful misfeasance, bad faith, negligence or reckless disregard
of its duties or obligations, the Sub-Adviser shall not be liable to the Manager for any act or omission in the course of
or connected with rendering services under the Sub-Advisory Agreement or for any losses that may be sustained in the purchase,
holding or sale of any security.
Pending Litigation.
Since 2009, a number of class action lawsuits have been pending in federal courts against the Sub-Adviser, the Distributor
and certain Oppenheimer mutual funds (but not including the Fund) advised by the Sub-Adviser and distributed by the Distributor
(the "Defendant Funds"). Several of these lawsuits also name as defendants certain officers and current and former trustees
of the respective Defendant Funds. The lawsuits raise claims under federal securities law and allege, among other things,
that the disclosure documents of the respective Defendant Fund contained misrepresentations and omissions and that the respective
Defendant Fund's investment policies were not followed. The plaintiffs in these actions seek unspecified damages, equitable
relief and awards of attorneys' fees and litigation expenses. The Defendant Funds' Boards of Trustees have also engaged counsel
to represent the Funds and the present and former Independent Trustees named in those suits.
Other class action and individual lawsuits have been filed since 2008 in various state and federal courts against the Sub-Adviser
and certain of its affiliates by investors seeking to recover investments they allegedly lost as a result of the "Ponzi" scheme
run by Bernard L. Madoff and his firm, Bernard L. Madoff Investment Securities, LLC ("BLMIS"). Plaintiffs in these suits allege
that they suffered losses as a result of their investments in several funds managed by an affiliate of the Sub-Adviser and
assert a variety of claims, including breach of fiduciary duty, fraud, negligent misrepresentation, unjust enrichment, and
violation of federal and state securities laws and regulations, among others. They seek unspecified damages, equitable relief
and awards of attorneys' fees and litigation expenses. Neither the Distributor, nor any of the Oppenheimer mutual funds, their
independent trustees or directors are named as defendants in these lawsuits. None of the Oppenheimer mutual funds invested
in any funds or accounts managed by Madoff or BLMIS. On February 28, 2011, a stipulation of partial settlement of three groups
of consolidated putative class action lawsuits relating to these matters was filed in the U.S. District Court for the Southern
District of New York. On August 19, 2011, the court entered an order and final judgment approving the settlement as fair,
reasonable and adequate. In September 2011, certain parties filed notices of appeal from the court's order approving the settlement.
The aforementioned settlement does not resolve other outstanding lawsuits against the Sub-Adviser and its affiliates relating
to BLMIS.
On April 16, 2010, a lawsuit was filed in New York state court against the Sub-Adviser, an affiliate of the Sub-Adviser and
AAArdvark IV Funding Limited ("AAArdvark IV"), an entity advised by the Sub-Adviser's affiliate, in connection with investments
made by the plaintiffs in AAArdvark IV. Plaintiffs allege breach of contract against the defendants and seek compensatory
damages, costs and disbursements, including attorney fees. On July 15, 2011, a lawsuit was filed in New York state court against
the Sub-Adviser, an affiliate of the Sub-Adviser and AAArdvark Funding Limited ("AAArdvark I"), an entity advised by the Sub-Adviser's
affiliate, in connection with investments made by the plaintiffs in AAArdvark I. The complaint alleges breach of contract
against the defendants and seeks compensatory damages, costs and disbursements, including attorney fees. On November 9, 2011,
a lawsuit was filed in New York state court against the Sub-Adviser, an affiliate of the Sub-Adviser and AAArdvark XS Funding
Limited ("AAArdvark XS"), an entity advised by the Sub-Adviser's affiliate, in connection with investments made by the plaintiffs
in AAArdvark XS. The complaint alleges breach of contract against the defendants and seeks compensatory damages, costs and
disbursements, including attorney fees.
The Sub-Adviser believes the lawsuits and appeals described above are without legal merit and, with the exception of actions
it has settled, is defending against them vigorously. While it is premature to render any opinion as to the outcome in these
lawsuits, or whether any costs that the Defendant Funds may bear in defending the suits might not be reimbursed by insurance,
the Sub-Adviser believes that these suits should not impair the ability of the Sub-Adviser or the Distributor to perform their
respective duties to the Fund, and that the outcome of all of the suits together should not have any material effect on the
operations of any of the Oppenheimer mutual funds.
Portfolio Manager.
The Fund is managed by Michael S. Levine, CFA (the "Portfolio Manager") who is responsible for the day-to-day management
of the Fund's investments.
-
Other Accounts Managed.
In addition to managing the Fund's investment portfolio, Mr. Levine also manages other investment portfolios and accounts
on behalf of the Sub-Adviser or its affiliates. The following table provides information regarding those other portfolios
and accounts as of January 31, 2013. No portfolio or account has an advisory fee based on performance.
|
Portfolio Manager
|
Registered Investment Companies Managed
|
Total Assets in Registered Investment Companies Managed
1
|
Other Pooled Investment Vehicles Managed
|
Total Assets in Other Pooled Investment Vehicles Managed
2
|
Other Accounts Managed
|
Total Assets in Other Accounts Managed
2,3
|
|
|
Michael S. Levine, CFA
|
8
|
$8.16
|
0
|
$0
|
1
|
$167.19
|
|
1. In billions.
2. In millions.
3. Does not include personal accounts of the portfolio manager and his/her family, which are subject to the Code of Ethics.
As indicated above, a portfolio manager may also manage other funds and accounts. At different times, a portfolio manager
may manage other funds or accounts with investment objectives and strategies similar to, or different from, those of the Fund. At
times, those responsibilities could potentially conflict with the interests of the Fund. That may occur whether the investment
objectives and strategies of the other funds and accounts are the same as, or different from, the Fund's investment objectives
and strategies. For example, a portfolio manager may need to allocate investment opportunities between the Fund and another
fund or account having similar objectives or strategies, or may need to execute transactions for another fund or account that
could have a negative impact on the value of securities held by the Fund. Not all funds and accounts advised by the Sub-Adviser
have the same management fee. If the management fee structure of another fund or account is more advantageous to the Sub-Adviser
than the fee structure of the Fund, the Sub-Adviser could have an incentive to favor the other fund or account. However, the
Sub-Adviser's compliance procedures and Code of Ethics recognize the Sub-Adviser's obligation to treat all of its clients,
including the Fund, fairly and equitably, and are designed to preclude a portfolio manager from favoring one client over another.
It is possible, of course, that those compliance procedures and the Code of Ethics may not always be adequate to do so.
Compensation of Portfolio Managers.
Portfolio managers are employed and compensated by the Sub-Adviser or an affiliate, not by the Fund. Under the compensation
program for portfolio managers and portfolio analysts, compensation is based primarily on the relative investment performance
results of the funds or accounts they manage, rather than on the financial success of the Sub-Adviser. This is intended to
align the interests of the portfolio managers and analysts with the success of the funds and accounts of their shareholders.
The compensation structure is designed to attract and retain highly qualified investment management professionals and to reward
individual and team contributions toward creating shareholder value. A portfolio manager's compensation is not directly based
on the total value of assets they manage; however, higher total compensation potential is likely to align with greater assets
under management. The compensation structure is intended to be internally and externally equitable and serve to reduce potential
conflicts of interest arising from a portfolio manager's responsibilities managing different funds or accounts.
Portfolio manager compensation generally consists of three components: a base salary, an annual bonus, and eligibility to
participate in long-term awards. In general, the average proportion of total compensation among these three components is
as follows: base salary is 15%, annual bonus is 65%, and long-term awards are 20%.
The base pay component for each portfolio manager is reviewed regularly to ensure that it reflects the performance of the
individual, is commensurate with the requirements of the particular portfolio, reflects any specific competence or specialty
of the individual manager, and is competitive with other comparable positions.
The annual bonus is calculated based on two factors: a formulaic performance portion and a discretionary portion. In general,
the formulaic performance portion is a much larger part of the annual bonus than the discretionary portion. The formulaic
performance portion of the annual bonus is measured against the one, three and five year performance, or performance since
inception, as applicable, of the fund(s) relative to an appropriate Morningstar peer group category selected by senior management.
The compensation structure is weighted towards long-term performance of the funds, with one year performance weighted at 20%,
three year performance rated at 30%, and five year performance weighted at 50%. This formula has the effect of rewarding consistently
above median performance, which best aligns the interests of the portfolio manager and the shareholder. Below median performance
in all three periods results in an extremely low, and in some cases no, formulaic performance based bonus.
The discretionary portion of the annual bonus is determined by senior management of the Sub-Adviser and is based on a number
of factors, including, management quality (such as style consistency, risk management, sector coverage, team leadership and
coaching), contributions to marketing efforts and organizational development.
Finally, the long-term award component consists of grants in the form of appreciation rights in regard to the common stock
of the Sub-Adviser's holding company parent, restricted shares of such common stock, as well as deferred cash investments
in the fund(s) managed by a portfolio manager. Portfolio managers must elect to receive either 20% or 40% of their long-term
award component in the form of deferred cash investments in the fund(s) managed. Through this long-term award component, portfolio
managers' interests are further aligned with those of fund shareholders.
The compensation structure of other funds and/or accounts managed by a portfolio manager, if any, is generally the same as
the compensation structure described above. A portfolio manager's compensation with regard to other portfolios may be based
on the performance of those portfolios compared to a peer group category that may be different from that described below.
The peer group category for the portfolio manager with respect to the Fund is Morningstar - Mid-Cap Value.
-
Ownership of Fund Shares.
As of January 31, 2013, the Portfolio Manager beneficially owned shares of the Fund as follows:
|
Portfolio Manager
|
Range of Shares Beneficially Owned in the Fund
|
|
Michael S. Levine, CFA
|
$100,001 - $500,000
|
Brokerage Policies of the Fund
Brokerage Provisions of the Investment Advisory Agreement and the Sub-Advisory Agreement.
One of the duties of the Sub-Adviser under the sub-advisory agreement is to arrange the portfolio transactions for the Fund.
The sub-advisory agreement contains provisions relating to the employment of broker-dealers for that purpose. The sub-advisory
agreement authorizes the Sub-Adviser to employ broker-dealers, including "affiliated brokers," as that term is defined in
the Investment Company Act, that the Sub-Adviser thinks, in its best judgment based on all relevant factors, will implement
the policy of the Fund to obtain the "best execution" of the Fund's portfolio transactions. "Best execution" means executing
trades in a manner such that the total costs or proceeds are the most favorable under the circumstances. Some of the circumstances
that may influence this decision are: cost (brokerage commission or dealer spread), size of order, difficulty of order, and
the firm's ability to provide prompt and reliable execution.
The Sub-Adviser need not seek competitive commission bidding. However, the Sub-Adviser is expected to be aware of the current
rates of eligible brokers and to minimize the commissions paid to the extent consistent with the interests and policies of
the Fund as established by its Board. The Fund is not required to pay the lowest available commission. Under the investment
advisory and sub-advisory agreements, in choosing brokers to execute portfolio transactions for the Fund, the Manager and
the Sub-Adviser may select brokers (other than affiliates) that provide both brokerage and research services to the Fund.
The commissions paid to those brokers may be higher than another qualified broker would charge, if the Manager or the Sub-Adviser
makes a good faith determination that the commission is fair and reasonable in relation to the services provided.
Brokerage Practices Followed by the Sub-Adviser.
The Sub-Adviser allocates brokerage for the Fund subject to the provisions of the sub-advisory agreement and other applicable
rules and procedures described below.
The Sub-Adviser's portfolio traders allocate brokerage based upon recommendations from the Sub-Adviser's portfolio managers,
together with the portfolio traders' judgment as to the execution capability of the broker or dealer. In certain instances,
portfolio managers may directly place trades and allocate brokerage. In either case, the Sub-Adviser's executive officers
supervise the allocation of brokerage.
Transactions in securities other than those for which an exchange is the primary market are generally done with principals
or market makers. In transactions on foreign exchanges, the Fund may be required to pay fixed brokerage commissions and therefore
would not have the benefit of negotiated commissions that are available in U.S. markets. Brokerage commissions are paid primarily
for transactions in listed securities or for certain fixed-income agency transactions executed in the secondary market. Otherwise,
brokerage commissions are paid only if it appears likely that a better price or execution can be obtained by doing so. In
an option transaction, the Fund ordinarily uses the same broker for the purchase or sale of the option and any transaction
in the securities to which the option relates.
Other accounts advised by the Sub-Adviser have investment policies similar to those of the Fund. Those other accounts may
purchase or sell the same securities as the Fund at the same time as the Fund, which could affect the supply and price of
the securities. When possible, the Sub-Adviser tries to combine concurrent orders to purchase or sell the same security by
more than one of the accounts managed by the Sub-Adviser or its affiliates. If two or more accounts advised by the Sub-Adviser
purchase the same security on the same day from the same dealer, the transactions under those combined orders are averaged
as to price and allocated in accordance with the purchase or sale orders actually placed for each account.
Rule 12b-1 under the Investment Company Act prohibits any fund from compensating a broker or dealer for promoting or selling
the fund's shares by (1) directing to that broker or dealer any of the fund's portfolio transactions, or (2) directing any
other remuneration to that broker or dealer, such as commissions, mark-ups, mark downs or other fees from the fund's portfolio
transactions, that were effected by another broker or dealer (these latter arrangements are considered to be a type of "step-out"
transaction). In other words, a fund and its investment adviser cannot use the fund's brokerage for the purpose of rewarding
broker-dealers for selling a fund's shares.
However, the Rule permits funds to effect brokerage transactions through firms that also sell fund shares, provided that certain
procedures are adopted to prevent a quid pro quo with respect to portfolio brokerage allocations. As permitted by the Rule,
the Manager and the Sub-Adviser have adopted procedures (and the Fund's Board has approved those procedures) that permit the
Fund to execute portfolio securities transactions through brokers or dealers that also promote or sell shares of the Fund,
subject to the "best execution" considerations discussed above. Those procedures are designed to prevent: (1) the Sub-Adviser's
personnel who effect the Fund's portfolio transactions from taking into account a broker's or dealer's promotion or sales
of the Fund shares when allocating the Fund's portfolio transactions, and (2) the Fund, the Manager, the Sub-Adviser and the
Distributor from entering into agreements or understandings under which the Sub-Adviser directs or is expected to direct the
Fund's brokerage directly, or through a "step-out" arrangement, to any broker or dealer in consideration of that broker's
or dealer's promotion or sale of the Fund's shares or the shares of any of the other Oppenheimer funds.
The investment advisory and sub-advisory agreements permit the Manager and the Sub-Adviser to allocate brokerage for research
services. The research services provided by a particular broker may be useful both to the Fund and to one or more of the other
accounts advised by the Manager or its affiliates. Investment research may be supplied to the Manager or Sub-Adviser by a
broker through which trades are placed or by a third party at the instance of the broker.
Investment research services include information and analysis on particular companies and industries as well as market or
economic trends and portfolio strategy, market quotations for portfolio evaluations, analytical software and similar products
and services. If a research service also assists the Manager or Sub-Adviser in a non-research capacity (such as bookkeeping
or other administrative functions), then only the percentage or component that provides assistance to the Manager or Sub-Adviser
in the investment decision making process may be paid in commission dollars.
Although the Manager and Sub-Adviser currently do not do so, the Board may permit the Manager and Sub-Adviser to use stated
commissions on secondary fixed-income agency trades to obtain research if the broker represents to the Manager or Sub-Adviser that:
(i) the trade is not from or for the broker's own inventory, (ii) the trade was executed by the broker on an agency basis
at the stated commission, and (iii) the trade is not a riskless principal transaction. The Board may also permit the Manager
and Sub-Adviser to use commissions on fixed-price offerings to obtain research in the same manner as is permitted for agency
transactions.
The research services provided by brokers broaden the scope and supplement the research activities of the Manager and Sub-Adviser.
That research provides additional views and comparisons for consideration, and helps the Manager and Sub-Adviser to obtain
market information for the valuation of securities that are either held in the Fund's portfolio or are being considered for
purchase. The Manager and Sub-Adviser provide information to the Board about the commissions paid to brokers furnishing such
services, together with the Manager's and Sub-Adviser's representation that the amount of such commissions was reasonably
related to the value or benefit of such services.
During the fiscal years ended October 31, 2010, 2011 and 2012, the Fund paid the total brokerage commissions indicated in
the chart below. During the fiscal year ended October 31, 2012, the Fund paid $1,662,049 in commissions to firms that provide brokerage and research services to the Fund with respect to $2,134,366,327 of aggregate portfolio transactions. All such transactions were on a "best execution" basis, as described above. The provision
of research services was not necessarily a factor in the placement of all such transactions.
|
Fiscal Year Ended 10/31:
|
Total Brokerage Commissions Paid by the Fund*
|
|
2010
|
$3,675,001
|
|
2011
|
$3,602,577
|
|
2012
|
$1,774,220
|
* Amounts do not include spreads or commissions on principal transactions on a net trade basis.
Distribution and Service Arrangements
The Distributor.
Under its General Distributor's Agreement with the Fund, the Distributor acts as the Fund's principal underwriter in the
continuous public offering of the Fund's shares. The Distributor bears the expenses normally attributable to sales, including
advertising and the cost of printing and mailing prospectuses, other than those furnished to existing shareholders. The Distributor
is not obligated to sell a specific number of shares.
The sales charges and concessions paid to, or retained by, the Distributor from the sale of shares and the contingent deferred
sales charges ("CDSCs") retained by the Distributor on the redemption of shares during the Fund's three most recent fiscal
years are shown in the tables below.
|
Class A Sales Charges
|
|
|
|
Fiscal Year Ended 10/31:
|
Aggregate Front-End Sales Charges on Class A Shares
|
Class A Front-End Sales Charges Retained by Distributor*
|
|
2010
|
$1,339,912
|
$366,176
|
|
2011
|
$1,130,736
|
$324,623
|
|
2012
|
$718,901
|
$220,317
|
* Includes amounts retained by a broker-dealer that is an affiliate or a parent of the Distributor.
|
Concessions Advanced by Distributor
|
|
Fiscal Year Ended 10/31:
|
Concessions on Class A Shares Advanced by Distributor*
|
Concessions on Class B Shares Advanced by Distributor*
|
Concessions on Class C Shares Advanced by Distributor*
|
Concessions on Class N Shares Advanced by Distributor*
|
|
2010
|
$43,105
|
$335,858
|
$151,762
|
$17,621
|
|
2011
|
$35,504
|
$301,750
|
$120,868
|
$11,510
|
|
2012
|
$8,804
|
$134,948
|
$78,370
|
$10,602
|
* The Distributor advances concession payments to financial intermediaries for certain sales of Class A shares and for sales
of Class B, Class C and Class N shares from its own resources at the time of sale.
|
Contingent Deferred Sales Charges
|
|
Fiscal Year Ended 10/31:
|
Class A Contingent Deferred Sales Charges Retained by Distributor
|
Class B Contingent Deferred Sales Charges Retained by Distributor
|
Class C Contingent Deferred Sales Charges Retained by Distributor
|
Class N Contingent Deferred Sales Charges Retained by Distributor
|
|
2010
|
$137
|
$263,197
|
$24,007
|
$3,489
|
|
2011
|
$23,183
|
$202,832
|
$20,733
|
$5,199
|
|
2012
|
$2,204
|
$127,722
|
$12,152
|
$482
|
Distribution and Service (12b-1) Plans.
The Fund has adopted Distribution and Service Plans for Class A, Class B, Class C and Class N shares under Rule 12b-1 of
the Investment Company Act. Under those plans the Fund pays the Distributor for all or a portion of its costs incurred in
connection with the distribution and/or servicing of the shares of the particular class. Each plan has been approved by a
vote of the Board, including a majority of the Independent Trustees/Directors, cast in person at a meeting called for the
purpose of voting on that plan. The Independent Trustees/Directors are not "interested persons" of the Fund and do not have
any direct or indirect financial interest in the operation of the distribution plan or any agreement under the plan, in accordance
with Rule 12b-1 of the Investment Company Act.
Under the plans, the Sub-Adviser and the Distributor may make payments to affiliates. In their sole discretion, they may also
from time to time make substantial payments from their own resources, which include the profits the Sub-Adviser derives from
the advisory fees it receives from the Fund, to compensate brokers, dealers, financial institutions and other intermediaries
for providing distribution assistance and/or administrative services or that otherwise promote sales of the Fund's shares.
These payments, some of which may be referred to as "revenue sharing," may relate to the Fund's inclusion on a financial intermediary's
preferred list of funds offered to its clients.
A plan continues in effect from year to year only if the Fund's Board and its Independent Trustees/Directors vote annually
to approve its continuance at an in person meeting called for that purpose. A plan may be terminated at any time by the vote
of a majority of the Independent Trustees/Directors or by the vote of the holders of a "majority" (as defined in the Investment
Company Act) of the outstanding shares of the Class of shares to which it applies.
The Board and the Independent Trustees/Directors must approve all material amendments to a plan. An amendment to materially
increase the amount of payments to be made under a plan must also be approved by shareholders of any affected class. Because
Class B shares of the Fund automatically convert into Class A shares 72 months after purchase, the shareholders of both Class
A and Class B, voting separately by class, must approve a proposed amendment to the Class A plan that would materially increase
payments under that plan.
At least quarterly while the plans are in effect, the Treasurer of the Fund will provide the Board with separate written reports
on the plans for its review. The reports will detail the amount of all payments made under a plan and the purpose for which
the payments were made. Those reports are subject to the review and approval of the Independent Trustees/Directors.
While each plan is in effect, the Independent Trustees/Directors of the Fund will select and nominate any other Independent
Trustees/Directors. This does not prevent the involvement of others in the selection and nomination process as long as the
final decision is made by a majority of the Independent Trustees/Directors.
No payment will be made to any recipient for any share class unless, during the applicable period, the aggregate net asset
value of Fund shares of the class held by the recipient (for itself and its customers) exceeds a minimum amount that may be
set by a majority of the Independent Trustees/Directors from time to time.
Class A Distribution and Service Plan Fees.
Under the Class A service plan, the Distributor currently uses the fees it receives from the Fund to pay brokers, dealers
and other financial institutions for personal services and account maintenance services they provide for their customers who
hold Class A shares. The services include, among others, answering customer inquiries about the Fund, assisting in establishing
and maintaining accounts in the Fund, making the Fund's investment plans available and providing other services at the request
of the Fund or the Distributor. The Class A service plan permits compensation to the Distributor at a rate of 0.25% of average
annual net assets of Class A shares. The Distributor does not receive or retain the service fee on Class A shares in accounts
for which the Distributor has been listed as the broker-dealer of record. While the plan permits the Board to authorize payments
to the Distributor to reimburse itself for services under the plan, the Board has not yet done so, except in the case of the
special arrangement described below, regarding grandfathered retirement accounts. The Distributor makes payments to plan recipients
periodically at an annual rate not to exceed 0.25% of the average annual net assets consisting of Class A shares held in the
accounts of the recipients or their customers.
The Distributor does not receive or retain the service fee on Class A shares in accounts for which the Distributor has been
listed as the broker-dealer of record. While the plan permits the Board to authorize payments to the Distributor to reimburse
itself for services under the plan, the Board has not yet done so, except in the case of shares purchased prior to March 1,
2007 with respect to certain group retirement plans that were established prior to March 1, 2001 ("grandfathered retirement
plans"). Prior to March 1, 2007, the Distributor paid the 0.25% service fee for grandfathered retirement plans in advance
for the first year and retained the first year's service fee paid by the Fund with respect to those shares. After the shares
were held for a year, the Distributor paid the ongoing service fees to recipients on a periodic basis. Such shares are subject
to a contingent deferred sales charge if they are redeemed within 18 months. If Class A shares purchased in a grandfathered
retirement plan prior to March 1, 2007 are redeemed within the first year after their purchase, the recipient of the service
fees on those shares will be obligated to repay the Distributor a pro rata portion of the advance payment of those fees. For
Class A shares purchased in grandfathered retirement plans on or after March 1, 2007, the Distributor does not make any payment
in advance and does not retain the service fee for the first year. Such shares are not subject to the contingent deferred
sales charge.
Under the Class A distribution plan, the plan provides for the Fund to pay an asset-based sales charge to the Distributor
calculated at an annual rate of 0.25% of the daily net assets of Class A shares of the Fund. Effective January 1, 2003, the
Board set that rate to zero. Prior to that date, the Fund paid the Distributor an annual asset-based sales charge equal to
0.15% of average annual net assets representing Class A shares purchased before September 1, 1993, and 0.10% of average annual
net assets representing Class A shares purchased on or after that date. The Distributor paid the entire asset-based sales
charge to brokers, dealers and financial institutions.
For the fiscal year ended October 31, 2012, payments under the Class A Distribution and Service Plan totaled $2,696,719, of which $10,937 was retained by the Distributor under the arrangement described above regarding grandfathered retirement accounts, including $231,519 paid to an affiliate of the Distributor's parent company. Any unreimbursed expenses the Distributor incurs with respect to
Class A shares in any fiscal year cannot be recovered in subsequent years. The Distributor may not use payments received under
the Class A plan to pay any of its interest expenses, carrying charges, or other financial costs, or allocation of overhead.
Class B, Class C and Class N Distribution and Service Plans.
Under the Class B, Class C and Class N Distribution and Service Plans (each a "Plan" and together the "Plans"), the Fund
pays the asset-based sales charge (the "distribution fee") to the Distributor for its services in distributing Class B, Class
C and Class N shares. The distribution fee allows investors to buy Class B, Class C and Class N shares without a front-end
sales charge, while allowing the Distributor to compensate dealers that sell those shares. The Distributor may use the service
fees it receives under the Plans to pay recipients for providing services similar to the services provided under the Class
A service plan, described above.
Payments under the Plans are made in recognition that the Distributor:
-
pays sales concessions to authorized brokers and dealers at the time of sale or as an ongoing concession,
-
pays the service fees in advance or periodically, as described below,
-
may finance payment of sales concessions or the advance of the service fee payments to recipients under the Plans, or may
provide such financing from its own resources or from the resources of an affiliate,
-
employs personnel to support distribution of Class B, Class C and Class N shares,
-
bears the costs of sales literature, advertising and prospectuses (other than those furnished to current shareholders) and
certain other distribution expenses,
-
may not be able to adequately compensate dealers that sell Class B, Class C and Class N shares without receiving payment under
the Plans and therefore may not be able to offer such Classes for sale absent the Plans,
-
receives payments under the Plans consistent with the service and distribution fees paid by other non-proprietary funds that
charge 12b-1 fees,
-
may use the payments under the Plan to include the Fund in various third-party distribution programs that might increase sales
of Fund shares,
-
may experience increased difficulty selling the Fund's shares if Plan payments were discontinued, because most competitor
funds have plans that pay dealers as much or more for distribution services than the amounts currently being paid by the Fund,
and
-
may not be able to continue providing the same quality of distribution efforts and services, or to obtain such services from
brokers and dealers, if Plan payments were discontinued.
Distribution fees on Class B and Class N shares are generally retained by the Distributor. If a dealer has a special agreement
with the Distributor, the Distributor may pay the Class B or Class N distribution fees to recipients periodically in lieu
of paying the sales concession in advance at the time of purchase. The Distributor retains the distribution fee on Class C
shares during the first year and then pays it as an ongoing concession to recipients.
Service fees for the first year after Class B, Class C and Class N shares are purchased are generally paid to recipients in
advance. After the first year, the Distributor pays the service fees to recipients periodically. Under the Plans, the Distributor
is permitted to retain the service fees or to pay recipients the service fee on a periodic basis, without payment in advance.
If a recipient has a special agreement with the Distributor, the Distributor may pay the Class B, Class C or Class N service
fees to recipients periodically in lieu of paying the first year fee in advance. If Class B, Class C or Class N shares are
redeemed during the first year after their purchase, a recipient of service fees on those shares will be obligated to repay
a pro rata portion of the advance payment to the Distributor. Shares purchased by exchange do not qualify for the advance
service fee payment.
Class C or Class N shares may not be purchased by a new investor directly from the Distributor without the investor designating
another registered broker-dealer. If a current investor no longer has another broker-dealer of record for an existing account,
the Distributor is automatically designated as the broker-dealer of record, but solely for the purpose of acting as the investor's
agent to purchase the shares. In those cases, the Distributor retains the distribution fees paid on Class C and Class N shares,
but does not retain any service fees as to the assets represented by that account.
Each Plan provides for the Distributor to be compensated at a flat rate, whether the Distributor's distribution expenses
for a period are more or less than the amounts paid by the Fund under the relevant Plan. During a calendar year, the Distributor's
actual expenses in selling Class B, Class C and Class N shares may be more than the distribution fees paid to the Distributor
under the Plans and the CDSC's collected on redeemed shares. Those excess expenses are carried over on the Distributor's books
and may be recouped from distribution fees paid by the Fund in future years. However, the Distributor has voluntarily agreed
to cap the amount that may be carried over from year to year and recouped for certain categories of expenses at 0.70% of annual
gross sales of shares of the Fund. The capped expenses under the Plans are (i) expenses the Distributor has incurred that
represent compensation and expenses of its sales personnel and (ii) other direct distribution costs it has incurred, such
as sales literature, state registration fees, advertising and prospectuses used to offer Fund shares. If those categories
of expenses exceed the capped amount, the Distributor would bear the excess costs. If a Plan were to be terminated by the
Fund, the Fund's Board may allow the Fund to continue payments of the distribution fees to the Distributor for its services
in distributing shares before the Plan was terminated.
The distribution and service fees under each Plan are computed on the average of the net asset value of shares in the respective
class, determined as of the close of each regular business day. The distribution and service fees increase the annual Class
B and Class C expenses by 1.00% and increase the annual Class N expenses by 0.50% of net assets.
|
Distribution and Service Fees Paid to the Distributor
for the Fiscal Year Ended 10/31/12
|
|
Class:
|
Total Payments Under Plan
|
Amount Retained by Distributor
|
Amount Paid to Affiliate
|
Distributor's Aggregate Unreimbursed Expenses Under Plan
|
Distributor's Unreimbursed Expenses as % of Net Assets of Class
|
|
Class B Plan
|
$669,801
|
$510,662
|
$6,964
|
$0
|
0.00%
|
|
Class C Plan
|
$2,583,358
|
$124,693
|
$33,660
|
$9,106,180
|
3.89%
|
|
Class N Plan
|
$767,862
|
$58,957
|
$22,982
|
$4,733,339
|
3.58%
|
All payments under the Plans are subject to the limitations imposed by the Conduct Rules of FINRA on payments of distribution
and service fees.
Payments to Financial Intermediaries
Financial intermediaries may receive various forms of compensation or reimbursement from the Fund in the form of distribution
and service (12b-1) plan payments as described above. They may also receive payments or concessions from the Distributor,
derived from sales charges paid by the financial intermediary's clients, also as described in this SAI. In addition, the Sub-Adviser
and the Distributor (including their affiliates) may make payments to financial intermediaries in connection with the intermediaries'
offering and sales of Fund shares and shares of other Oppenheimer funds, or their provision of marketing or promotional support,
transaction processing or administrative services. Among the financial intermediaries that may receive these payments are
brokers or dealers who sell or hold shares of the Fund, banks (including bank trust departments), registered investment advisers,
insurance companies, retirement plan or qualified tuition program administrators, third party administrators, recordkeepers
or other institutions that have selling, servicing or similar arrangements with the Sub-Adviser or the Distributor. The payments
to financial intermediaries vary by the types of product sold, the features of the Fund share class and the role played by
the intermediary.
Types of payments to financial intermediaries may include, without limitation, all or portions of the following:
Payments made by the Fund, or by an investor buying or selling shares of the Fund, including:
-
an initial front-end sales charge, all or a portion of which is payable by the Distributor to financial intermediaries (see
the "More About Your Account" section in the Prospectus);
-
ongoing asset-based distribution and/or service fees (described in the section "Distribution and Service Arrangements - Distribution
and Service (12b-1) Plans" above);
-
shareholder servicing expenses that are paid from Fund assets to reimburse the Sub-Adviser or the Distributor for Fund expenses
they incur for providing omnibus accounting, recordkeeping, networking, sub-transfer agency or other administrative or shareholder
services (including retirement plan and 529 plan administrative services fees).
In addition, the Sub-Adviser or Distributor may, at their discretion, make the following types of payments from their own
respective resources, which may include profits the Sub-Adviser derives from investment advisory fees paid by the Fund. Payments
are made based on the guidelines established by the Sub-Adviser and Distributor, subject to applicable law. These payments
are often referred to as "revenue sharing" payments, and may include:
-
compensation for marketing support, support provided in offering shares in the Fund or other Oppenheimer funds through certain
trading platforms and programs, and transaction processing or other services;
-
other compensation, to the extent the payment is not prohibited by law or by any self-regulatory agency, such as FINRA.
Although a broker or dealer that sells Fund shares may also act as a broker or dealer in connection with the purchase or sale
of portfolio securities by the Fund or other Oppenheimer funds, neither the Manager nor the Sub-Adviser considers a financial
intermediary's sales of shares of the Fund or other Oppenheimer funds when choosing brokers or dealers to effect portfolio
transactions for the Fund or other Oppenheimer funds.
Revenue sharing payments can pay for distribution-related or asset retention items including, without limitation:
-
transactional support, one-time charges for setting up access for the Fund or other Oppenheimer funds on particular trading
systems, and paying the intermediary's networking fees;
-
program support, such as expenses related to including the Oppenheimer funds in retirement plans, college savings plans, fee-based
advisory or wrap fee programs, fund "supermarkets", bank or trust company products or insurance companies' variable annuity
or variable life insurance products;
-
placement on the dealer's list of offered funds and providing representatives of the Distributor with access to a financial
intermediary's sales meetings, sales representatives and management representatives; or
-
firm support, such as business planning assistance, advertising, or educating a financial intermediary's sales personnel about
the Oppenheimer funds and shareholder financial planning needs.
These payments may provide an incentive to financial intermediaries to actively market or promote the sale of shares of the
Fund or other Oppenheimer funds, or to support the marketing or promotional efforts of the Distributor in offering shares
of the Fund or other Oppenheimer funds. In addition, some types of payments may provide a financial intermediary with an incentive
to recommend the Fund or a particular share class. Financial intermediaries may earn profits on these payments, since the
amount of the payments may exceed the cost of providing the services. Certain of these payments are subject to limitations
under applicable law. Financial intermediaries may categorize and disclose these arrangements to their clients and to members
of the public in a manner different from the disclosures in the Fund's Prospectus and this SAI. You should ask your financial
intermediary for information about any payments it receives from the Fund, the Sub-Adviser or the Distributor and any services
it provides, as well as the fees and commissions it charges.
For the year ended December 31, 2011, the following financial intermediaries and/or their affiliates (which in some cases
are broker-dealers) offered shares of the Oppenheimer funds and received revenue sharing or similar distribution-related payments
(of at least $5,000) from the Sub-Adviser or the Distributor for marketing or program support:
|
Aegon USA
|
Hartford Life Insurance Company
|
Oppenheimer & Co. Inc.
|
|
AIG Advisor Group, Inc.
|
Hartford Securities Distribution Company
|
Park Avenue Securities LLC
|
|
AIG Life Variable Annuity Company
|
ING Financial Advisers, LLC
|
Pershing LLC
|
|
Allianz Life Insurance Company
|
ING Financial Partners, Inc.
|
PlanMember Securities Corp.
|
|
Allstate Life Insurance Company
|
Investment Centers of America, Inc.
|
Prime Capital Services, Inc.
|
|
American Enterprise Life Insurance Company
|
Invest Financial Corporation
|
Primevest Financial Services, Inc.
|
|
American General Annuity Insurance Company
|
Janney Montgomery Scott LLC
|
Protective Life and Annuity Insurance Company
|
|
American Portfolios Financial Services Inc.
|
Jefferson Pilot Securities Corporation
|
Prudential Investment Management Services, Inc.
|
|
Ameriprise Financial Services, Inc.
|
JP Morgan Securities, Inc.
|
Raymond James & Associates, Inc.
|
|
Ameritas Life Insurance Company
|
Kemper Investors Life Insurance Company
|
RBC Capital Markets
|
|
AXA Advisors, LLC
|
Legend Equities Co.
|
Riversource Life Insurance, Co.
|
|
Bank of America Merrill Lynch
|
Lincoln Benefit National Life
|
Royal Alliance Associates, Inc.
|
|
Cadaret Grant & Co.
|
Lincoln Financial Advisors Corporation
|
Sagepoint Financial Advisors
|
|
CCO Investment Services Corporation
|
Lincoln Investment Planning, Inc.
|
Securities America, Inc.
|
|
Chase Investment Services Corporation
|
Lincoln National Life Insurance Company
|
Security Benefit Life Insurance Company
|
|
Commonwealth Financial Network
|
Linsco Private Ledger
|
Signator Investments, Inc.
|
|
CUNA Brokerage Services, Inc.
|
LPL Financial Corporation
|
SII Investment, Inc.
|
|
Cuso Financial Services, LP
|
Massachusetts Mutual Life Insurance Company
|
Sorrento Pacific Financial LLC
|
|
Directed Services LLC
|
Mass Mutual Financial Group
|
State Farm VP Management Corp.
|
|
Edward Jones and Company
|
MetLife Investors Insurance Company
|
Stifel Nicolaus & Co., Inc.
|
|
Essex National Securities, Inc.
|
MetLife Securities, Inc.
|
Sun Life Assurance Company of Canada
|
|
Federal Kemper Life Assurance Company
|
Morgan Stanley Smith Barney
|
Sun Life Insurance Company
|
|
Financial Network Investment Corporation
|
Multi-Financial Securities Corporation
|
Sun Trust Investments
|
|
First Clearing LLC
|
Mutual Service Corporation
|
Thrivent Financial for Lutherans
|
|
First Global Capital Corporation
|
Nathan & Lewis Securities, Inc.
|
UBS Financial Services, Inc.
|
|
GE Life and Annuity Company
|
National Planning Holdings, Inc.
|
Union Central Life Insurance Company
|
|
Genworth Financial, Inc.
|
National Planning Corporation
|
Walnut Street Securities, Inc.
|
|
Great West Life Insurance Company
|
Nationwide Investment Services, Inc.
|
Wells Fargo Advisors
|
|
GWFS Equities, Inc.
|
New England Securities, Inc.
|
Waterstone Financial Group
|
|
Guardian Insurance & Annuity Company, Inc.
|
NFP Securities Inc.
|
Wescom Financial Services
|
|
H.D. Vest Investment Services, Inc.
|
Northwestern Mutual Investment Services, LLC
|
|
For the year ended December 31, 2011, the following firms (which in some cases are broker-dealers) received payments from
the Sub-Adviser or Distributor (of at least $2,500) for administrative or other services provided (other than revenue sharing
arrangements), as described above:
|
ACS HR Solutions LLC
|
Hewitt Associates LLC
|
PNC Investments LLC
|
|
ADP Broker-Dealer, Inc.
|
HSBC Securities (USA) Inc.
|
Popular Securities Inc.
|
|
Aegon USA
|
ICMA - RC Services LLC
|
Prime Capital Services
|
|
Aetna Life Insurance & Annuity Company
|
Independent Financial Group, LLC
|
Primevest Financial Services, Inc.
|
|
Alliance Benefit Group
|
ING
|
Principal Life Insurance
|
|
Allianz Life Insurance Company
|
ING Financial Advisers LLC
|
Proequities Inc.
|
|
Allstate Financial Services, LLC
|
ING Financial Partners Inc.
|
Protective Life and Annuity Insurance Company
|
|
Allstate Life Insurance Company
|
ING Life Insurance & Annuity Co
|
Pruco Securities LLC
|
|
American Diversified Distribution, LLC
|
Ingham Group
|
Prudential
|
|
American Enterprise Life Insurance
|
Interactive Retirement Systems
|
Prudential Investment Management
|
|
American Funds
|
Intuition Systems, Inc.
|
PSMI Group
|
|
American General Annuity Insurance Company
|
Invest Financial Corporation
|
Raymond James & Associates, Inc.
|
|
American Portfolios Financial
|
Investmart
|
Raymond James Financial Services
|
|
American United Life Insurance Co.
|
Investments Centers of America
|
RBC Capital Markets
|
|
Ameriprise
|
Investors Capital Corp.
|
Reliance Trust Co.
|
|
Ameritas Life Insurance Company
|
Jackson National Life Insurance Company
|
Robert W. Baird & Co.
|
|
Ameritrade, Inc.
|
Janney Montgomery Scott LLC
|
Royal Alliance Associates Inc.
|
|
Annuity Investors Life Insurance Company
|
JJB Hillard W.L. Lyons, Inc.
|
RSM McGladrey
|
|
Ascensus
|
John Hancock Life Insurance Company
|
Sagepoint Financial Inc.
|
|
AXA Advisors LLC
|
JP Morgan Securities, Inc.
|
Santander Securities
|
|
AXA Equitable Life Insurance Company
|
July Business Services
|
Scott & Stringfellow, Inc.
|
|
Baden Retirement Services
|
Kemper Investors Life Insurance Company
|
Scottrade, Inc.
|
|
Banc of America Investment
|
Key Investment Services Inc.
|
Securian Financial Services Inc.
|
|
Bank of America Merrill Lynch
|
KMS Financial Services Inc.
|
Securities America Inc.
|
|
Benefit Administration Co.
|
Legends Equities Corp.
|
Securities Service Network Inc.
|
|
Benefit Consultants Group
|
Lincoln Benefit National Life
|
Security Benefit Life Insurance Company
|
|
Benefit Plans Administrative Services, Inc.
|
Lincoln Financial Advisors Corporation
|
Sigma Financial Corp.
|
|
Benetech, Inc.
|
Lincoln Financial Securities
|
Signator Investors Inc.
|
|
Bisys Retirement Plan Services
|
Lincoln Investment Planning, Inc.
|
SII Investments Inc.
|
|
Boston Financial Data Services, Inc.
|
LPL Financial Corporation
|
Smith Hayes Financial Services
|
|
Cadaret Grant & Co.
|
Manulife Financial
|
Southwest Securities, Inc.
|
|
Cambridge Investment Research
|
Marshall & Ilsley Trust Company, Inc.
|
Standard Insurance Co.
|
|
Charles Schwab & Co, Inc.
|
Massachusetts Mutual Life Insurance Company
|
Stanton Group, Inc.
|
|
Chase Investment Services Corp.
|
Matrix Settlement & Clearance Services
|
Sterne Agee & Leach, Inc.
|
|
CitiGroup Global Markets, Inc.
|
Mercer HR Services
|
Stifel Nicolaus & Co., Inc.
|
|
CitiStreet Advisors LLC
|
Merrill Lynch Pierce Fenner
|
Sun Life Insurance And Annuity
|
|
City National Investments Trust
|
Mesirow Financial, Inc.
|
Sun Trust Investments
|
|
Clark Consulting
|
MetLife Investors Insurance
|
Sun Trust Securities, Inc.
|
|
Commonwealth Financial Network
|
MetLife Securities Inc.
|
Suntrust Bank
|
|
CPI Qualified Plan Consultants
|
MG Trust
|
Suntrust Investment Services Inc.
|
|
CUNA Brokerage Services Inc.
|
Mid Atlantic Capital Co.
|
T. Rowe Price
|
|
CUNA Mutual Insurance Society
|
Milkie/Ferguson Investments Inc.
|
TD Ameritrade
|
|
DA Davidson & Co.
|
Milliman, Inc.
|
The Princeton Retirement Group
|
|
DailyAccess Corp
|
Minnesota Life Insurance Company
|
The Retirement Plan Company, LLC
|
|
David Lerner Associates, Inc.
|
MML Investors Services LLC
|
Thrivent Investment Management
|
|
Digital Retirement Solutions
|
Mony Life Insurance Company of America
|
Tiaa-Cref Individual & Institutional
|
|
Diversified Advisors Investments Inc.
|
Morgan Keegan & Co, Inc.
|
Transamerica Financial Advisors
|
|
DR, Inc.
|
Morgan Stanley Smith Barney
|
Transamerica Life Insurance Co.
|
|
Dyatech, LLC
|
Multi-Financial Securities
|
Transamerica Retirement Services
|
|
E*TRADE Clearing LLC
|
Mutual of Omaha Insurance Company
|
UBS Financial Services, Inc.
|
|
Edward Jones and Company
|
National City Bank
|
Unified Fund Services, Inc.
|
|
ExpertPlan Retirement Plan Services
|
National Financial Services LLC
|
Union Bank & Trust Company
|
|
Federal Kemper Life Assurance Company
|
National Planning Corporation
|
Union Central Life Insurance Company
|
|
Fidelity
|
Nationwide
|
United Planners Financial
|
|
Financial Administrative Services Corporation
|
New England Securities
|
US Clearing Co.
|
|
Financial Network Investment
|
New York Life Insurance and Annuity Company
|
USAA Investment Management Co.
|
|
First Allied Securities Inc.
|
Newport Retirement Services
|
USI Consulting Group
|
|
First Clearing LLC
|
NFP Securities Inc
|
USI Securities Inc.
|
|
First Global Capital Corporation
|
Northridge Securities Corp.
|
Valic Financial Advisors, Inc.
|
|
FSC Securities Corp.
|
Northwest Plan Services Inc.
|
Vanderbilt Securities LLC
|
|
GE Financial Assurance
|
Northwestern Mutual Investment
|
Vanguard Group
|
|
GE Life and Annuity Company
|
NRP Financial Inc.
|
VSR Financial Services Inc.
|
|
Geller Group Ltd.
|
Oneamerica Securities Inc.
|
Wachovia Securities LLC
|
|
Geneos Wealth Management Inc.
|
Oppenheimer & Co. Inc.
|
Walnut Street Securities
|
|
Genworth Financial Securities
|
Pacific Life Insurance Co.
|
Wedbush Morgan Securities
|
|
Girard Securities Inc.
|
Pacific West Securities Inc.
|
Wells Fargo Advisors
|
|
Great American Investors Inc.
|
Park Avenue Securities LLC
|
Wells Fargo Bank NA
|
|
Great West Life Insurance Company
|
Penn Mutual
|
Wilmington Trust Company
|
|
Guardian Insurance & Annuity Company, Inc.
|
Pershing LLC
|
Woodbury Financial Services Inc.
|
|
H.D. Vest Investment Services, Inc.
|
PFS Investments Inc.
|
|
|
Hartford Life & Annuity
|
Phoenix Life Insurance Company
|
|
|
Hartford Life Insurance Company
|
Plan Administrators Inc.
|
|
|
Hennion & Walsh Inc.
|
PlanMember Securities
|
|
About Your Account
The Fund's Prospectus describes how to buy, sell and exchange shares of the Fund and certain other Oppenheimer funds. The
information below provides further details about the Fund's policies regarding those share transactions. It should be read
in conjunction with the information in the Prospectus. Appendix A of this SAI provides more information about the special
sales charge arrangements offered by the Fund, and the circumstances in which sales charges may be reduced or waived for certain
investors and certain types of purchases or redemptions.
Determination of Net Asset Value Per Share.
The net asset value ("NAV") per share for each class of shares of the Fund is determined by dividing the value of the Fund's
net assets attributable to a class by the number of shares of that class that are outstanding. The NAV is determined as of
the close of business on the New York Stock Exchange ("NYSE") on each day that the NYSE is open. The NYSE normally closes
at 4:00 p.m., Eastern time, but may close earlier on some other days (for example, in case of weather emergencies or on days
falling before a U.S. holiday). All references to time in this SAI mean "Eastern time." The NYSE's most recent annual announcement
(which is subject to change) states that it will close on New Year's Day, Martin Luther King, Jr. Day, Washington's Birthday
(Presidents Day), Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day. It may also
close on other days.
Dealers other than NYSE members may conduct trading in certain securities on days that the NYSE is closed (including weekends
and holidays) or after 4:00 p.m. on a regular business day. Because the Fund's net asset values will not be calculated on
those days, the Fund's net asset values per share may be significantly affected on days when shareholders may not purchase
or redeem shares. Additionally, trading on many foreign stock exchanges and over-the-counter markets normally is completed
before the close of the NYSE.
Changes in the values of securities traded on foreign exchanges or markets as a result of events that occur after the close
of the principal market on which a security is traded, but before the close of the NYSE, will not be reflected in the Fund's
calculation of its net asset values that day unless the Sub-Adviser learns of the event and determines that the event is likely
to cause a material change in the value of the security. The Board has adopted valuation procedures for the Fund and has delegated
the day-to-day responsibility for fair value determinations under those procedures to the Sub-Adviser's "Valuation Committee".
Fair value determinations by the Sub-Adviser are subject to review, approval, ratification and confirmation by the Board at
its next scheduled meeting after the fair valuations are determined.
Securities Valuation.
The Fund's Board has established procedures for the valuation of the Fund's securities. In general those procedures are as
follows:
-
Equity securities traded on a U.S. securities exchange are valued as follows:
-
if "
last sale
" information is regularly reported on the principal exchange on which a security is traded, it is valued at the last reported
sale price on that day, or
-
if "
last sale
" information is not available on a valuation date, the security is valued at the last reported sale price preceding the valuation
date if it is within the spread of the closing "
bid
" and "
asked
" prices on the valuation date, or
-
if "
last sale
" information is not available on a valuation date, and the last reported sale price for the security preceding the valuation
date is not within the spread of the closing "
bid
" and "
asked
" prices on the valuation date, the security is valued at the closing "
bid
" price on the valuation date.
-
Equity securities traded on a foreign securities exchange generally are valued in one of the following ways:
-
at the last sale price available to the pricing service approved by the Board, or
-
at the last sale price obtained by the Sub-Adviser from the report of the principal exchange on which the security is traded
at its last trading session on or immediately before the valuation date, or
-
at the mean between the "bid" and "asked" prices obtained from the principal exchange on which the security is traded, or
-
on the basis of reasonable inquiry, from two market makers in the security.
-
Long-term debt securities having a remaining maturity of more than 60 days are valued based on the mean between the "
bid
" and "
asked
" prices determined by a portfolio pricing service approved by the Fund's Board or obtained by the Sub-Adviser from two active
market makers in the security on the basis of reasonable inquiry.
-
The following securities are valued at the mean between the "
bid
" and "
asked
" prices determined by a pricing service approved by the Fund's Board or obtained by the Sub-Adviser from two active market
makers in the security on the basis of reasonable inquiry:
-
debt instruments that have a maturity of more than 397 days when issued,
-
debt instruments that had a maturity of 397 days or less when issued and have a remaining maturity of more than 60 days, and
-
non-money market debt instruments that had a maturity of 397 days or less when issued and which have a remaining maturity
of 60 days or less.
-
The following securities are valued at cost, adjusted for amortization of premiums and accretion of discounts:
-
money market debt securities held by a non-money market fund that had a maturity of less than 397 days when issued and that
have a remaining maturity of 60 days or less, and
-
debt instruments held by a money market fund that have a remaining maturity of 397 days or less.
-
Securities (including restricted securities) not having readily-available market quotations are valued at fair value determined
under the Board's procedures. If the Sub-Adviser is unable to locate two market makers willing to give quotes, a security
may be priced at the mean between the "
bid
" and "
asked
" prices provided by a single active market maker, or the "
bid
" price if no "
asked
" price is available.
In the case of U.S. government securities, mortgage-backed securities, corporate bonds and foreign government securities,
the Sub-Adviser may use pricing services approved by the Board when last sale information is not generally available. The
pricing service may use "matrix" comparisons to the prices for comparable instruments on the basis of quality, yield and maturity.
Other special factors may be involved (such as the tax-exempt status of the interest paid by municipal securities). The Sub-Adviser
will monitor the accuracy of the pricing services valuations. That monitoring may include comparing prices used for portfolio
valuation to the actual sale prices of selected securities.
Foreign currency, including forward contracts, is valued and securities that are denominated in foreign currency are converted
to U.S. dollars, using the closing prices in the New York foreign exchange market or that are provided to the Sub-Adviser
by a bank, dealer or pricing service that the Sub-Adviser has determined to be reliable.
Puts, calls, and futures are valued at the last sale price on the principal exchange on which they are traded, as determined
by a pricing service approved by the Board or by the Sub-Adviser. If there were no sales on the valuation date, those investments
are valued at the last sale price on the preceding trading day if it is within the spread of the closing
"bid"
and
"asked"
prices on the principal exchange on the valuation date. If the last sale price on the preceding trading day is not within
the spread of the closing
"bid"
and
"asked"
prices on the principal exchange on the valuation date, the value shall be the closing
"bid"
price. If the put, call or future is not traded on an exchange, it shall be valued at the mean between
"bid"
and
"asked"
prices obtained by the Sub-Adviser from two active market makers. In certain cases the
"bid"
price may be used if no
"asked"
price is available.
When the Fund sells an option, an amount equal to the premium the Fund receives is included in the Fund's Statement of Assets
and Liabilities as an asset. An equivalent credit is included in the liability section. The credit is adjusted ("marked-to-market")
to reflect the current market value of the option. In determining the Fund's gain on investments, if a call or put sold by
the Fund is exercised, the proceeds are increased by the premium received. If a call or put sold by the Fund expires, the
Fund has a gain in the amount of the premium. If the Fund enters into a closing purchase transaction, it will have a gain
or loss, depending on whether the premium received was more or less than the cost of the closing transaction. If the Fund
exercises a put it holds, the amount the Fund receives on its sale of the underlying investment is reduced by the amount of
the premium that was paid by the Fund.
Allocation of Expenses.
The Fund pays expenses related to its daily operations, such as custodian fees, Board fees, transfer agency fees, legal fees
and auditing costs. Those expenses are paid out of the Fund's assets, not directly by shareholders. However, those expenses
reduce the net asset value of Fund shares, and therefore are borne indirectly by shareholders.
For calculating the Fund's net asset value, dividends and distributions, the Fund differentiates between two types of expenses.
General expenses that do not pertain specifically to any one class are allocated pro rata to the shares of all classes. Those
expenses are first allocated based on the percentage of the Fund's total assets that is represented by the assets of each
share class. Such general expenses include management fees, legal, bookkeeping and audit fees, Board compensation, custodian
expenses, share issuance costs, interest, taxes, brokerage commissions, and non-recurring expenses, such as litigation costs.
Then the expenses allocated to a share class are allotted equally to each outstanding share within a given class.
Other expenses that are directly attributable to a particular class are allocated equally to each outstanding share within
that class. Examples of such expenses include distribution and service plan (12b-1) fees, transfer and shareholder servicing
agent fees and expenses, and shareholder meeting expenses to the extent that such expenses pertain only to a specific class.
How to Buy Shares
The Oppenheimer Funds.
The "Oppenheimer funds" are those mutual funds for which the Distributor acts as distributor and currently include the following:
|
Oppenheimer AMT-Free Municipals
|
Oppenheimer New Jersey Municipal Fund
|
|
Oppenheimer California Municipal Fund
|
Oppenheimer Pennsylvania Municipal Fund
|
|
Oppenheimer Capital Appreciation Fund
|
Oppenheimer Portfolio Series Funds
:
|
|
Oppenheimer Capital Income Fund
|
Active Allocation Fund
|
|
Oppenheimer Commodity Strategy Total Return Fund
|
Conservative Investor Fund
|
|
Oppenheimer Core Bond Fund
|
Equity Investor Fund
|
|
Oppenheimer Corporate Bond Fund
|
Moderate Investor Fund
|
|
Oppenheimer Currency Opportunities Fund
|
Oppenheimer Real Estate Fund
|
|
Oppenheimer Developing Markets Fund
|
Oppenheimer Rising Dividends Fund
|
|
Oppenheimer Discovery Fund
|
Oppenheimer Rochester AMT-Free New York Municipal Fund
|
|
Oppenheimer Diversified Alternatives Fund
|
Oppenheimer Rochester Arizona Municipal Fund
|
|
Oppenheimer Emerging Markets Debt Fund
|
Oppenheimer Rochester Intermediate Term Municipal Fund
|
|
Oppenheimer Equity Fund
|
Oppenheimer Rochester Limited Term Municipal Fund
|
|
Oppenheimer Equity Income Fund, Inc.
|
Oppenheimer Rochester Maryland Municipal Fund
|
|
Oppenheimer Flexible Strategies Fund
|
Oppenheimer Rochester Massachusetts Municipal Fund
|
|
Oppenheimer Global Fund
|
Oppenheimer Rochester Michigan Municipal Fund
|
|
Oppenheimer Global Allocation Fund
|
Oppenheimer Rochester Minnesota Municipal Fund
|
|
Oppenheimer Global Multi Strategies Fund
|
Oppenheimer Rochester National Municipals
|
|
Oppenheimer Global Opportunities Fund
|
Oppenheimer Rochester North Carolina Municipal Fund
|
|
Oppenheimer Global Strategic Income Fund
|
Oppenheimer Rochester Ohio Municipal Fund
|
|
Oppenheimer Global Value Fund
|
Oppenheimer Rochester Short Term Municipal Fund
|
|
Oppenheimer Gold & Special Minerals Fund
|
Oppenheimer Rochester Virginia Municipal Fund
|
|
Oppenheimer International Bond Fund
|
Oppenheimer Select Value Fund
|
|
Oppenheimer International Diversified Fund
|
Oppenheimer Senior Floating Rate Fund
|
|
Oppenheimer International Growth Fund
|
Oppenheimer Short Duration Fund
|
|
Oppenheimer International Small Company Fund
|
Oppenheimer Small- & Mid-Cap Growth Fund
|
|
Oppenheimer International Value Fund
|
Oppenheimer Small- & Mid-Cap Value Fund
|
|
Oppenheimer Limited Term California Municipal Fund
|
Oppenheimer U.S. Government Trust
|
|
Oppenheimer Limited-Term Government Fund
|
Oppenheimer Value Fund
|
|
Oppenheimer Main Street Fund
|
Limited Term New York Municipal Fund
|
|
Oppenheimer Main Street Select Fund
|
Rochester Fund Municipals
|
|
Oppenheimer Main Street Small- & Mid-Cap Fund
|
|
|
Money Market Funds
:
|
|
|
Oppenheimer Cash Reserves
|
|
|
Oppenheimer Institutional Money Market Fund
|
|
|
Oppenheimer Money Market Fund, Inc.
|
|
Classes of Shares.
Each class of shares of the Fund represents an interest in the same portfolio of investments of the Fund. However, each class
has different shareholder privileges and features. The net income attributable to each class of shares and the dividends payable
on each class of shares will be reduced by incremental expenses borne solely by that class. Those expenses include the asset-based
sales charges to which some share classes are subject.
The availability of different classes of shares permits an investor to choose the method of purchasing shares that is more
appropriate for the investor. That may depend on the amount of the purchase, the length of time the investor expects to hold
shares, and other relevant circumstances. Class A shares of the Oppenheimer funds normally are sold subject to an initial
sales charge (except Oppenheimer Cash Reserves, Oppenheimer Institutional Money Market Fund, Oppenheimer Money Market Fund
and Oppenheimer Short Duration Fund). The purpose of the deferred sales charge and asset-based sales charge that are applicable
to some other share classes is the same as that of the initial sales charge on Class A shares of many of the Oppenheimer funds
- to compensate the Distributor and brokers, dealers and financial institutions that sell shares of those funds. A salesperson
who is entitled to receive compensation from his or her firm for selling Fund shares of the Oppenheimer funds may receive
different levels of compensation for selling one class of shares rather than another.
Effective after June 29, 2012, Class B shares are no longer offered for new purchases. See the Prospectus section "More About
Your Account" for details.
Class A Sales Charges Reductions and Waivers.
There is an initial sales charge on the purchase of Class A shares of each of the Oppenheimer funds except for the money
market funds (under certain circumstances described in this SAI, redemption proceeds of certain money market fund shares may
be subject to a CDSC). As discussed in the Prospectus, a reduced initial sales charge rate may be obtained for certain share
purchases because of the reduced sales efforts and reduction in expenses realized by the Distributor, dealers or brokers in
making such sales. Sales charge waivers may apply in certain other circumstances because the Distributor or dealer or broker
incurs little or no selling expenses. Appendix A to this SAI includes additional information regarding certain of these sales
charge reductions and waivers.
A reduced sales charge rate may be obtained for Class A shares under a Right of Accumulation or Letter of Intent because of
the reduction in sales effort and expenses to the Distributor, dealers or brokers for those sales.
Letter of Intent.
Under a Letter of Intent (a "Letter"), you may be able to reduce the initial sales charge rate that applies to your Class
A share purchases of the Fund if you purchase Class A, Class B or Class C shares of most Oppenheimer funds (including the
Fund) or Class A, Class B, Class C, Class G and Class H units of advisor sold Section 529 plans, for which an affiliate of
the Manager or the Distributor serves as the Program Manager or Program Distributor.
A Letter is an investor's statement in writing to the Distributor of his or her intention to purchase a specified value of
those shares or units during a 13 month period (the "Letter period"), which begins on the date of the investor's first share
purchase following the establishment of the Letter. The sales charge on each purchase of Class A shares during the Letter
period will be at the rate that would apply to a single lump-sum purchase of shares in the amount intended to be purchased.
In submitting a Letter, the investor makes no commitment to purchase shares. However, if the investor does not fulfill the
terms of the Letter within the Letter period, he or she agrees to pay the additional sales charges that would have been applicable
to any purchases that are made. The investor agrees that shares equal in value to 2% of the intended purchase amount will
be held in escrow by the Transfer Agent for that purpose, as described in "Terms of Escrow" below. It is the responsibility
of the dealer of record and/or the investor to advise the Distributor about the Letter when placing purchase orders during
the Letter period. The investor must also notify the Distributor or his or her financial intermediary of any qualifying 529
plan holdings.
To determine whether an investor has fulfilled the terms of a Letter, the Transfer Agent will count purchases of "qualified"
Class A, Class B and Class C shares and Class A, Class B, Class C, Class G and Class H units during the Letter period. Purchases
of Class N, Class Y or Class I shares, purchases made by reinvestment of dividends or capital gains distributions from the
Fund or other Oppenheimer funds, purchases of Class A shares with redemption proceeds under the Reinvestment Privilege, and
purchases of Class A shares of Oppenheimer Money Market Fund, Inc. or Oppenheimer Cash Reserves on which a sales charge has
not been paid do not count as "qualified" shares for satisfying the terms of a Letter. An investor will also be considered
to have fulfilled the Letter if the value of the investor's total holdings of qualified shares on the last day of the Letter
period equals or exceeds the intended purchase amount.
If the terms of the Letter are not fulfilled within the Letter period, the concessions previously paid to the dealer of record
for the account and the amount of sales charge retained by the Distributor will be adjusted on the first business day following
the expiration of the Letter period to reflect the sales charge rates that are applicable to the actual total purchases.
If subsequent eligible purchases during the Letter period cause the amount of total eligible purchases to exceed the intended
purchase amount and also exceed the amount needed to qualify for the next sales charge rate reduction (stated in the Prospectus),
the sales charges paid on those subsequent purchases will be charged at the lower rate as permitted under the Fund's Right
of Accumulation policy.
By establishing a Letter, the investor agrees to be bound by the terms of the Prospectus, this SAI and the application used
for a Letter, and if those terms are amended to be bound by the amended terms and that any amendments by the Fund will apply
automatically to existing Letters. Group retirement plans qualified under section 401(a) of the Internal Revenue Code may
not establish a Letter, however defined benefit plans and Single K sole proprietor plans may do so.
Terms of Escrow That Apply to Letters of Intent
.
1. Out of the initial purchase, or out of subsequent purchases if necessary, the Transfer Agent will hold in escrow Fund
shares equal to 2% of the intended purchase amount specified in the Letter. For example, if the intended purchase amount is
$50,000, the escrow amount would be shares valued at $1,000 (computed at the offering price for a $50,000 share purchase).
Any dividends and capital gains distributions on the escrowed shares will be credited to the investor's account.
2. If the Letter applies to more than one fund account, the investor can designate the fund from which shares will be escrowed.
If no fund is selected, the Transfer Agent will escrow shares in the fund account that has the highest dollar balance on the
date of the first purchase under the Letter. If there are not sufficient shares to cover the escrow amount, the Transfer Agent
will escrow shares in the fund account(s) with the next highest balance(s). If there are not sufficient shares in the accounts
to which the Letter applies, the Transfer Agent may escrow shares in other accounts that are linked for Right of Accumulation
purposes. Additionally, if there are not sufficient shares available for escrow at the time of the first purchase under the
Letter, the Transfer Agent will escrow future purchases until the escrow amount is met.
3. If, during the Letter period, an investor exchanges shares of the Fund for shares of another fund (as described in the
Prospectus section titled "The OppenheimerFunds Exchange Privilege"), the Fund shares held in escrow will automatically be
exchanged for shares of the other fund and the escrow obligations will also be transferred to that fund.
4. If the total purchases under the Letter are less than the intended purchases specified, on the first business day after
the end of the Letter period, the Distributor will redeem escrowed shares equal in value to the difference between the dollar
amount of the sales charges actually paid and the amount of the sales charges that would have been paid if the total purchases
had been made at a single time. Any shares remaining after such redemption will be released from escrow.
5. If the terms of the Letter are fulfilled, the escrowed shares will be promptly released to the investor at the end of
the Letter period.
6. By signing the Letter, the investor irrevocably constitutes and appoints the Transfer Agent as attorney-in-fact to surrender
for redemption any or all escrowed shares.
Class A Shares Purchased with Proceeds from Certain Retirement Plans.
Class A shares of the Fund may be purchased at net asset value with the redemption proceeds of shares of another mutual fund
offered as an investment option in a retirement plan in which Oppenheimer funds are also offered as investment options, if
the purchase occurs more than 30 days after the Oppenheimer funds are added as an investment option under that plan. No sales
concessions will be paid to the broker-dealer of record on sales of such Class A shares, whether or not they are subject to
a CDSC as described in the Prospectus. Additionally, no concession will be paid on Class A share purchases by a retirement
plan that are made with the redemption proceeds of Class N shares of an Oppenheimer fund held by a retirement plan for more
than 18 months.
Class B Conversion.
Under current interpretations of applicable federal income tax law by the Internal Revenue Service (the "IRS"), the conversion
of Class B shares to Class A shares is not treated as a taxable event for the shareholder. If those laws or the IRS' interpretation
of those laws should change, the automatic conversion feature may be suspended. In that event, no further conversions of Class
B shares would occur while that suspension remained in effect. Although Class B shares could then be exchanged for Class A
shares on the basis of relative net asset value of the two classes, without the imposition of a sales charge or fee, such
exchange could constitute a taxable event for the shareholder, and absent such exchange, Class B shares might continue to
be subject to the asset-based sales charge for longer than six years. A fund account that has a balance below $500 due to the automatic conversion of Class B shares to Class A shares will not be subject to the Minimum Balance Fee (described
below). However, once all Class B shares held in the account have been converted to Class A shares the new Class A share account
balance may become subject to that fee.
Share Certificates.
When you purchase shares of the Fund, your ownership interest in the shares of the Fund will be recorded as a book entry
on the records of the Fund. The Fund will not issue or re-register physical share certificates.
Cancellation of Purchase Orders.
Cancellation of purchase orders for the Fund's shares (for example, when a purchase check is returned to the Fund unpaid)
causes a loss to be incurred when the net asset values of the Fund's shares on the cancellation date is less than on the purchase
date. That loss is equal to the amount of the decline in the net asset value per share multiplied by the number of shares
in the purchase order. The investor is responsible for that loss. If the investor fails to compensate the Fund for the loss,
the Distributor will do so. The Fund may reimburse the Distributor for that amount by redeeming shares from any account registered
in that investor's name, or the Fund or the Distributor may seek other redress.
AccountLink.
Shares purchased through AccountLink will be purchased at the net asset value calculated on the same regular business day
if the Distributor is instructed to initiate the Automated Clearing House ("ACH") transfer to buy the shares before the close
of the NYSE. The NYSE normally closes at 4:00 p.m., but may close earlier on certain days. If the Distributor is instructed
to initiate the ACH transfer after the close of the NYSE, the shares will be purchased on the next regular business day.
Dividends will begin to accrue on the shares purchased through the ACH system on the next regular business day after the purchase
date. If the proceeds of an ACH transfer are not received on a timely basis, the Distributor reserves the right to cancel
the purchase order. The Distributor and the Fund are not responsible for any delays in purchasing shares resulting from delays
in ACH transmissions.
The minimum purchase through AccountLink is generally $50, however for accounts established prior to November 1, 2002 the
minimum purchase is $25.
Asset Builder Plans.
As indicated in the Prospectus, you normally must establish your Fund account with $1,000 or more. However, you can open
a Fund account for as little as $500 if you establish an Asset Builder Plan at the time of your initial share purchase to
automatically purchase additional shares directly from a bank account.
An Asset Builder Plan is available only if your bank is an ACH member and you establish AccountLink. Under an Asset Builder
Plan, payments to purchase shares of the Fund will be debited from your bank account automatically. Normally the debit will
be made two business days prior to the investment dates you select on your application. Neither the Distributor, the Transfer
Agent nor the Fund will be responsible for any delays in purchasing shares that result from delays in ACH transmissions.
To establish an Asset Builder Plan at the time you initially purchase Fund shares, complete the "Asset Builder Plan" information
on the Account Application. To establish an Asset Builder Plan for an existing account, use the Asset Builder Enrollment Form.
The Account Application and the Asset Builder Enrollment Form are available by contacting the Distributor or may be downloaded
from our website at www.oppenheimerfunds.com. Before you establish a new Fund account under the Asset Builder Plan, you should
obtain a prospectus of the selected Fund and read it carefully.
You may change the amount of your Asset Builder payment or you can terminate your automatic investments at any time by writing
to the Transfer Agent. The Transfer Agent requires a reasonable period (approximately 10 days) after receipt of your instructions
to implement them. The minimum additional purchase under an Asset Builder Plan is $50, except that for Asset Builder Plans
established prior to November 1, 2002, the minimum additional purchase is $25. Shares purchased by Asset Builder Plan payments
are subject to the redemption restrictions for recent purchases described in the Prospectus. An Asset Builder Plan may not
be used to buy shares for OppenheimerFunds employer-sponsored qualified retirement accounts. The Fund reserves the right to
amend, suspend or discontinue offering Asset Builder Plans at any time without prior notice.
Retirement Plans.
Certain types of retirement plans are entitled to purchase shares of the Fund without sales charges or at reduced sales charge
rates, as described in Appendix A to this SAI.
Certain special sales charge arrangements described in Appendix A apply to retirement plans whose records are maintained on
a daily valuation basis by Bank of America Merrill Lynch ("Merrill Lynch") or an independent record keeper that has a contract
or special arrangement with Merrill Lynch. The amount of assets the plan had in applicable investments on the date the plan
sponsor signed the Merrill Lynch record keeping service agreement determines which share classes are available for purchase.
If the plan had less than $1 million in such assets, then it may purchase only Class C shares. If the plan had $1 million
or more but less than $5 million in such assets it may purchase only Class N shares. If the plan had $5 million or more in
such assets it may purchase only Class A shares.
The Transfer Agent has entered into arrangements with certain record keepers whereby the Transfer Agent compensates the record
keeper for its record keeping and account servicing functions that it performs on behalf of the participant accounts in a
retirement plan. While such compensation may act to reduce the record keeping fees charged by the retirement plan's record
keeper, that compensation arrangement may be terminated at any time, potentially affecting the record keeping fees charged
by the retirement plan's record keeper.
No commission payments, account servicing fees, recordkeeping fees, 12b-1 fees, transfer agent fees, so called "finder's fees,"
administrative fees or other similar fees will be paid with respect to Class I shares.
Electronic Document Delivery.
To access your account documents electronically via eDocs Direct, please visit our website at www.oppenheimerfunds.com and
click the hyperlink "Sign Up for Electronic Document Delivery" under the heading "I want to..." in the left hand column, or
call 1.888.470.0862 for instructions.
How to Sell Shares
Receiving Redemption Proceeds by Federal Funds Wire.
The Fund would normally authorize a Federal Funds wire of redemption proceeds to be made on its next regular business day
following the redemption. A Federal Funds wire may be delayed if the Fund's custodian bank is not open for business on that
day. In that case, the wire will not be transmitted until the next business day on which the bank and the Fund are both open
for business. No dividends will be paid on the proceeds of redeemed shares awaiting transfer by Federal Funds wire.
Redeeming Shares Through Brokers or Dealers.
The Distributor is the Fund's agent to repurchase its shares from authorized brokers or dealers on behalf of their customers.
Shareholders should contact their broker or dealer to arrange this type of redemption. The repurchase price per share will
be the next net asset value computed after the Distributor or the broker or dealer receives the order. A repurchase will be
processed at that day's net asset value if the order was received by the broker or dealer from its customer prior to the time
the close of the NYSE. Normally, the NYSE closes at 4:00 p.m., but may do so earlier on some days.
For accounts redeemed through a broker-dealer, payment will ordinarily be made within three business days after the shares
are redeemed. However, the Distributor must receive the required redemption documents in proper form, with the signature(s)
of the registered shareholder(s) guaranteed as described in the Prospectus.
Payments "In Kind."
As stated in the Prospectus, payment for redeemed shares is ordinarily made in cash. Under certain circumstances, however,
the Board may determine that it would be detrimental to the best interests of the remaining shareholders for the Fund to pay
for the redeemed shares in cash. In that case, the Fund may pay the redemption proceeds, in whole or in part, by a distribution
"in kind" of liquid securities from the Fund's portfolio. The Fund will value securities used to pay a redemption in kind
using the same method described above under "Determination of Net Asset Value Per Share." That valuation will be made as of
the time the redemption price is determined. If shares are redeemed in kind, the redeeming shareholder might incur brokerage
or other costs in selling the securities for cash.
The Fund has elected to be governed by Rule 18f-1 under the Investment Company Act. Under that rule, redemptions by a shareholder,
of up to the lesser of $250,000 or 1% of the net assets of the Fund during any 90-day period, must be redeemed solely in cash.
Distributions From Retirement Plans.
Participants in OppenheimerFunds-sponsored pension or profit-sharing plans (other than self-employed plan sponsors), whose
shares of the Fund are held in the name of the plan or its fiduciary, may not request redemption of their accounts directly.
The plan administrator or fiduciary must submit the request.
Requests for distributions from OppenheimerFunds-sponsored IRA's, SEP-IRA's, SIMPLE IRA's, 403(b)(7) custodial plans, 401(k)
plans or pension or profit-sharing plans should be addressed to "Trustee, OppenheimerFunds Retirement Plans," c/o the Transfer
Agent at its address listed on the back cover of this SAI. The request must:
-
state the reason for the distribution;
-
if the distribution is premature, state the owner's awareness of tax penalties; and
-
conform to the requirements of the plan and the Fund's other redemption requirements.
Distributions from pension and profit sharing plans are subject to special requirements under the Internal Revenue Code and
certain documents (available from the Transfer Agent) must be completed and submitted to the Transfer Agent before the distribution
may be made. Distributions from retirement plans are subject to withholding requirements under the Internal Revenue Code,
and IRS Form W-4P (available from the Transfer Agent) must be submitted to the Transfer Agent with the distribution request,
or the distribution may be delayed. Unless the shareholder has provided the Transfer Agent with a certified tax identification
number, the Internal Revenue Code requires that tax be withheld from any distribution even if the shareholder elects not to
have tax withheld. The Fund, the Manager, the Distributor, and the Transfer Agent assume no responsibility for determining
whether a distribution satisfies the conditions of applicable tax laws and they will not be responsible for any tax penalties
assessed in connection with a distribution.
Automatic Withdrawal Plans.
Under an Automatic Withdrawal Plan, investors who own Fund shares can authorize the Transfer Agent to redeem shares automatically
on a monthly, quarterly, semi-annual or annual basis. The minimum periodic redemption amount under an Automatic Withdrawal
Plan is $50. Shareholders having AccountLink privileges may have Automatic Withdrawal Plan payments deposited to their designated
bank account. Payments may also be made by check, payable to all shareholders of record and sent to the address of record
for the account. Automatic withdrawals may be requested by telephone for amounts up to $1,500 per month if the payments are
to be made by checks sent to the address of record for the account. Telephone requests are not available if the address on
the account has been changed within the prior 15 days.
Fund shares will be redeemed as necessary to meet the requested withdrawal payments. Shares will be redeemed at the net asset
value per share determined on the redemption date, which is normally three business days prior to the payment receipt date
requested by the shareholder. The Fund cannot guarantee receipt of a payment on the date requested, however. Shares acquired
without a sales charge will be redeemed first. Shares acquired with reinvested dividends and capital gains distributions will
be redeemed next, followed by shares acquired with a sales charge, to the extent necessary to make withdrawal payments. Depending
on the amount withdrawn, the investor's principal may be depleted. Payments made under these plans should not be considered
as a yield or income on your investment.
Because of the sales charge assessed on Class A share purchases, shareholders should usually not make additional Class A share
purchases while participating in an Automatic Withdrawal Plan. A shareholder whose account is subject to a CDSC should usually
not establish an automatic withdrawal plan because of the imposition of the CDSC on the withdrawals. If a CDSC does apply
to a redemption, the amount of the check or payment will be reduced accordingly. Distributions of capital gains from accounts
subject to an Automatic Withdrawal Plan must be reinvested in Fund shares. Dividends on shares held in the account may be
paid in cash or reinvested. Required minimum distributions from OppenheimerFunds-sponsored retirement plans may not be arranged
on this basis.
The shareholder may change the amount, the payment interval, the address to which checks are to be mailed, the designated
bank account for AccountLink payments or may terminate a plan at any time by writing to the Transfer Agent. A signature guarantee
may be required for certain changes. The requested change will usually be put into effect approximately two weeks after such
notification is received. The shareholder may redeem all or any part of the shares in the account by written notice to the
Transfer Agent. That notice must be in proper form in accordance with the requirements in the then-current Fund Prospectus.
The Transfer Agent will administer the Automatic Withdrawal Plan as agent for the shareholder(s) who executed the plan authorization
and application submitted to the Transfer Agent. Neither the Fund nor the Transfer Agent shall incur any liability for any
action taken or not taken by the Transfer Agent in good faith to administer the plan. Any share certificates must be surrendered
unendorsed to the Transfer Agent with the plan application to be eligible for automatic withdrawal payments. If the Transfer
Agent ceases to act as transfer agent for the Fund, the shareholder will be deemed to have appointed any successor transfer
agent to act as agent in administering the plan.
The Transfer Agent will terminate a plan upon its receipt of evidence, satisfactory to it, that the shareholder has died or
is legally incapacitated. The Fund may also give directions to the Transfer Agent to terminate a plan. Shares that have not
been redeemed at the time a plan is terminated will be held in an account in the name of the shareholder. Share certificates
will not be issued for any such shares and all dividends will be reinvested in the account unless and until different instructions
are received, in proper form, from the shareholder, his or her executor or guardian, or another authorized person.
The Fund reserves the right to amend, suspend or discontinue offering these plans at any time without prior notice. By requesting
an Automatic Withdrawal Plan, the shareholder agrees to the terms and conditions that apply to such plans. These provisions
may be amended from time to time by the Fund and/or the Distributor. When adopted, any amendments will automatically apply
to existing Plans.
Transfers of Shares.
A shareholder will not be required to pay a CDSC when Fund shares are transferred to registration in the name of another
person or entity. The transfer may occur by absolute assignment, gift or bequest, as long as it does not involve, directly
or indirectly, a public sale of the shares. When shares subject to a CDSC are transferred, the CDSC will continue to apply
to the transferred shares and will be calculated as if the transferee had acquired the shares in the same manner and at the
same time as the transferring shareholder.
If less than all of the shares held in an account are transferred, and some but not all shares in the account would be subject
to a CDSC if redeemed at that time, the priorities for the imposition of the CDSC described in the Prospectus will be followed
in determining the order in which the shares are transferred.
Minimum Account Balance.
Except for Class I shares, the minimum account balance is $500. The minimum account balance for Class I shares is $2.5 million, excluding accounts for which the minimum initial investment
was waived.
Minimum Balance Fee.
A $12 annual "Minimum Balance Fee" is assessed on each Fund account with a share balance of less than $500, except for Class I share accounts. The Minimum Balance Fee is automatically deducted from each such Fund account in September.
Listed below are certain cases in which the Fund has elected, in its discretion, not to assess the Minimum Balance Fee. These
exceptions are subject to change:
-
A fund account whose shares were acquired after September 30th of the prior year;
-
Accounts of shareholders who elect to access their account documents electronically via eDoc Direct (to access account documents
electronically via eDocs Direct, please visit our website at www.oppenheimerfunds.com and click the hyperlink "Sign Up for
Electronic Document Delivery (eDocs Direct)" under the heading "I Want To," or call 1.888.470.0862 for instructions);
A fund account that has only certificated shares and has a balance below $500 and is being escheated;
-
Accounts of shareholders that are held by broker-dealers under the NSCC Fund/SERV system in Networking level 1 and 3 accounts;
-
Accounts holding certain Oppenheimer Variable Account Funds;
-
Omnibus accounts holding shares pursuant to the Pinnacle, Ascender, Custom Plus and Pension Alliance Retirement Plan programs;
-
A fund account that falls below the minimum $500 solely due to market fluctuations within the 12-month period preceding the date the fee is deducted; and
-
Accounts held in the OppenheimerFunds Portfolio Builder Program which is offered through certain broker/dealers to qualifying
shareholders.
Involuntary Redemptions.
The Fund's Board has the right to involuntarily redeem shares held in any account, except for Class I share accounts, with
an aggregate net asset value of less than $500. The Board may change the amount of the aggregate net asset value to which this involuntary redemption policy may apply.
The Board will not cause the involuntary redemption of shares in an account if the aggregate net asset value of such shares
has fallen below the stated minimum solely as a result of market fluctuations within the last 12-month period. If the Board
exercises this right, it may also determine the requirements for any notice to be given to the shareholders (but not less
than 30 days). Alternatively, the Board may set requirements for the shareholder to increase the investment, or set other
terms and conditions so that the shares would not be involuntarily redeemed.
If a Class I account falls below the $2.5 million minimum balance, the account may be involuntarily redeemed or converted
into a Class Y share account. This policy does not apply to accounts for which the minimum initial investment is waived.
Unclaimed accounts may be subject to state escheatment laws, and the Fund and the Transfer Agent will not be liable to shareholders
or their representatives for good faith compliance with those laws.
The Fund reserves the authority to modify the minimum balance policies in its discretion.
Reinvestment Privilege.
Within six months after redeeming Class A or Class B shares, a shareholder may reinvest all or part of the redemption proceeds in
Class A shares without a sales charge if:
-
An initial sales charge was paid on the redeemed Class A shares or a Class A CDSC was paid when the shares were redeemed;
or
-
The Class B CDSC was paid on the redeemed Class B shares.
The reinvestment may only be made in Class A shares of the Fund or other Oppenheimer funds into which shares of the Fund are
exchangeable, as described in "How to Exchange Shares" below. This privilege does not apply to any other share class or to
purchases made through automatic investment options. The Fund may amend, suspend or cease offering this reinvestment privilege
at any time for shares redeemed after the date of the amendment, suspension or cessation. The shareholder must request the
reinvestment privilege from the Transfer Agent or his or her financial intermediary at the time of purchase.
Reinvestment will be at the next net asset value computed after the Transfer Agent receives the reinvestment order. Any capital
gain that was realized when the shares were redeemed is taxable, and reinvestment will not alter any capital gains tax payable
on that gain. If there was a capital loss on the redemption, some or all of the loss may not be tax deductible, depending
on the timing and amount of the reinvestment. Under the Internal Revenue Code, if the redemption proceeds of Fund shares on
which a sales charge was paid are reinvested in shares of the Fund or another of the Oppenheimer funds within 90 days after
the payment of the sales charge, in certain circumstances, the shareholder's basis in the shares of the Fund that were redeemed
may not include the amount of the sales charge paid. That would reduce the loss or increase the gain recognized from the redemption,
however, the sales charge would be added to the basis of the shares acquired with the redemption proceeds.
How to Exchange Shares
Shares of the Fund (including shares acquired by reinvestment of dividends or distributions from other Oppenheimer funds)
may be exchanged for shares of certain other Oppenheimer funds at net asset value without the imposition of a sales charge,
however a CDSC may apply to the acquired shares as described below. Shares of certain money market funds purchased without
a sales charge may be exchanged for shares of other Oppenheimer funds offered with a sales charge upon payment of the sales
charge. Exchanges into another Oppenheimer fund must meet any applicable minimum investment requirements of that fund.
As stated in the Prospectus, shares of a particular class of Oppenheimer funds having more than one class of shares may be
exchanged only for shares of the same class of other Oppenheimer funds. The prospectus of each of the Oppenheimer funds indicates
which share class or classes that fund offers and provides information about limitations on the purchase of particular share
classes, as applicable for the particular fund.
Shareholders that own more than one class of shares of the Fund must specify which class of shares they wish to exchange.
You can obtain a current list of the share classes offered by the funds by calling the toll-free phone number on the first
page of this SAI.
The different Oppenheimer funds that are available for exchange have different investment objectives, policies and risks.
A shareholder should determine whether the fund selected is appropriate for his or her investment goals and should be aware
of the tax consequences of an exchange. For federal income tax purposes, an exchange transaction is treated as a redemption
of shares of one fund and a purchase of shares of another. Some of the tax consequences of reinvesting redemption proceeds
are discussed in "Reinvestment Privilege," above. The Fund, the Distributor, and the Transfer Agent are unable to provide
investment, tax or legal advice to a shareholder in connection with an exchange request or any other investment transaction.
The Fund may amend, suspend or terminate the exchange privilege at any time. Although the Fund may impose these changes at
any time, it will provide notice of those changes whenever it is required to do so by applicable law. It may be required to
provide 60 days' notice prior to materially amending or terminating the exchange privilege, however that notice is not required
in extraordinary circumstances.
How Exchanges Affect Contingent Deferred Sales Charges.
If shares acquired by exchange are later redeemed within the CDSC holding period applicable to those acquired shares, the
CDSC applicable to the share class of the fund you are exchanging into will apply to the acquired shares. This includes the
redemption of shares of Oppenheimer Cash Reserves and Oppenheimer Money Market Fund, Inc. that were acquired by exchange.
When shares that are subject to a CDSC are exchanged, the priorities for the imposition of the CDSC described in "About Your
Account" in the Prospectus will be followed in determining the order in which the shares are exchanged. Before exchanging
shares, shareholders should consider how the exchange may affect any CDSC that might be imposed on the subsequent redemption
of any remaining shares.
For circumstances in which a CDSC on shares acquired by exchange may be waived, see Appendix A "Special Sales Charge Arrangements
and Waivers."
Telephone Exchange Requests.
When exchanging shares by telephone, a shareholder must have an existing account in the fund to which the exchange is to
be made. Otherwise, the investors must obtain a prospectus of that fund before the exchange request may be submitted. If all
telephone lines are busy (which might occur, for example, during periods of substantial market fluctuations), shareholders
might not be able to request exchanges by telephone and would have to submit written exchange requests.
Automatic Exchange Plans.
Under an Automatic Exchange Plan, shareholders can authorize the Transfer Agent to exchange shares of the Fund for shares
of other Oppenheimer funds automatically on a monthly, quarterly, semi-annual or annual basis. The minimum amount that may
be exchanged to each other fund account is $50. Instructions regarding the exchange amount, the selected fund(s) and the exchange
interval should be provided on the OppenheimerFunds account application or by signature-guaranteed instructions. Any requested
changes will usually be put into effect approximately two weeks after notification of a change is received. Exchanges made
under these plans are subject to the restrictions that apply to exchanges as set forth in this SAI and in "The Oppenheimer
Exchange Privilege" section in the Prospectus.
The Transfer Agent will administer the Automatic Exchange Plan as agent for the shareholder(s). Neither the Fund nor the Transfer
Agent shall incur any liability for any action taken or not taken by the Transfer Agent in good faith to administer the plan.
Any share certificates must be surrendered unendorsed to the Transfer Agent with the plan application to be eligible for automatic
exchanges. If the Transfer Agent ceases to act as transfer agent for the Fund, the shareholder will be deemed to have appointed
any successor transfer agent to act as agent in administering the plan.
The Fund reserves the right to amend, suspend or discontinue offering automatic exchanges at any time without prior notice.
By requesting an Automatic Exchange Plan, the shareholder agrees to the terms and conditions that apply to such plans. These
provisions may be amended from time to time and any amendments will automatically apply to existing Plans.
Processing Exchange Requests.
Shares to be exchanged are redeemed at the net asset value calculated on the regular business day the Transfer Agent receives
an exchange request in proper form before the close of the NYSE (the "Redemption Date"). Normally, shares of the fund to be
acquired are purchased on the Redemption Date, but such purchases may be delayed by up to five business days if it is determined
that either fund would be disadvantaged by an immediate transfer of the redemption proceeds. The Fund reserves the right,
in its discretion, to refuse any exchange request that may disadvantage it. For example, if the receipt of multiple exchange
requests from a dealer might require the disposition of portfolio securities at a time or at a price that might be disadvantageous
to the Fund, the Fund may refuse the request.
When you exchange some or all of your shares, any special features of your account that are available in the new fund (such
as an Asset Builder Plan or Automatic Withdrawal Plan) will be applied to the new fund account unless you tell the Transfer
Agent not to do so.
Shares that are subject to a restriction cited in the Prospectus or this SAI and shares covered by a share certificate that
is not tendered will not be exchanged. If an exchange request includes such shares, only the shares available without restrictions
will be exchanged.
Distributions and Taxes
Dividends and Other Distributions.
The Fund does not have a fixed rate for dividends or other distributions ("distributions") and cannot assure the payment
of any distributions. The distributions made by the Fund will vary depending on market conditions, the composition of the
Fund's portfolio and Fund expenses. The Fund intends to distribute substantially all of its net investment income and net
realized capital gains at least annually, and may sometimes pay a special distribution near the end of the calendar year in
order to comply with federal tax requirements.
Distributions are calculated in the same manner, at the same time, and on the same day for each class of shares but will normally
differ in amount. Distributions on Class B, Class C and Class N shares are expected to be lower than distributions on Class A, Class Y and Class I shares because of the effect of the asset-based sales charge on Class B, Class C and Class N shares. Distributions are taxable to shareholders, as discussed below, regardless of whether the distributions are paid in
cash or reinvested in additional shares of the Fund (or of another fund). Shareholders receiving a distribution in the form
of additional shares will be treated as receiving a distribution in an amount equal to the fair market value of the shares
received, determined as of the reinvestment date.
Returned checks for the proceeds of redemptions are invested in shares of Oppenheimer Money Market Fund, Inc. If a dividend
check or a check representing an automatic withdrawal payment is returned to the Transfer Agent by the Postal Service as undeliverable,
it will be reinvested in shares of the Fund. Reinvestments will be made as promptly as possible after the return of such checks
to the Transfer Agent. Unclaimed accounts may be subject to state escheatment laws, and the Fund and the Transfer Agent will
not be liable to shareholders or their representatives for compliance with those laws in good faith.
Taxes.
The federal tax treatment of the Fund and distributions to shareholders is briefly highlighted in the Prospectus. The following
is only a summary of certain additional tax considerations generally affecting the Fund and its shareholders. The tax discussion
in the Prospectus and this SAI is based on tax laws in effect on the date of the Prospectus and SAI. Those laws and regulations
may be changed by legislative, judicial, or administrative action, sometimes with retroactive effect. State and local tax
treatment may differ from the treatment under the Internal Revenue Code as described below.
Before purchasing Fund shares, investors are urged to consult their tax advisers with reference to their own particular tax
circumstances as well as the consequences of federal, state, local and any other jurisdiction's tax rules affecting an investment
in the Fund.
Qualification and Taxation as a Regulated Investment Company.
The Fund has elected to be taxed as a regulated investment company ("RIC") under Subchapter M of the Internal Revenue Code.
As long as the Fund qualifies as a RIC, the Fund may deduct the amount of investment company taxable income and net capital
gains that it distributes to its shareholders, thereby eliminating Fund-level corporate income tax that would otherwise be
imposed on such income. Qualification as a RIC also allows the Fund, under certain conditions, to characterize the distributions
made to its shareholders as composed of specific types of tax-favored income such as corporate dividends, capital gains and
tax-exempt interest.
Even though the Fund expects to continue to qualify as a RIC, to the extent that it distributes less than all of its income,
the Fund may still be subject to a corporate income tax and an excise tax. In addition, any investment income received from
a foreign source may be subject to foreign withholding taxes, although the rate of any such withholding tax may be reduced
under an income tax treaty if the Fund qualifies for the benefits of the treaty. If possible, the Fund will operate so as
to qualify for such reduced rates. Any foreign withholding taxes will reduce the Fund's income and capital gain. The Fund
may also be subject to corporate income tax and a penalty on distributions or gains if the Fund invests in "passive foreign
investment companies" (described below) even if those amounts are distributed to the Fund's shareholders.
Qualifying as a RIC.
To qualify as a RIC, the Fund must be a domestic corporation that is either registered under the Investment Company Act as
a management company or unit investment trust or is otherwise described in the Internal Revenue Code as having a specific
status under the Investment Company Act. The Fund must also satisfy certain tests with respect to (i) the composition of its
gross income, (ii) the composition of its assets and (iii) the amount of its dividend distributions.
Gross Income Test.
To qualify as a RIC, the Fund must derive at least 90% of its gross income from dividends, interest, certain payments with
respect to loans of securities, gains from the sale or other disposition of securities or foreign currencies, and certain
other income derived with respect to its business of investing in such securities or currencies (including, but not limited
to, gains from options, futures or forward contracts), and net income derived from interests in certain "qualified publicly
traded partnerships."
Asset Test.
In addition, at the close of each quarter of its taxable year, the Fund must satisfy two asset tests. First, at least 50%
of the value of the Fund's assets must consist of U.S. government securities, securities of other RICs, securities of other
issuers ("Other Issuers") and cash or cash items (including receivables). The securities of an Other Issuer are not counted
towards satisfying the 50% test if the Fund either invests more than 5% of the value of the Fund's assets in the securities
of that Other Issuer or holds more than 10% of the outstanding voting securities of that Other Issuer. Second, no more than
25% of the value of the Fund's total assets may be invested in (1) the securities of any one issuer (other than U.S. government
securities and the securities of other RICs), (2) the securities of two or more issuers (other than the securities of other
RICs) that the Fund controls and that are engaged in the same or similar trades or businesses, or (3) the securities of one
or more qualified publicly traded partnerships. For purposes of these tests, obligations issued or guaranteed by certain agencies
or instrumentalities of the U.S. government are treated as U.S. government securities.
Dividend Distributions Test.
During the taxable year or, under specified circumstances, within 12 months after the close of the taxable year, the Fund
must distribute at least 90% of its investment company taxable income for the taxable year, which is generally its net investment
income and the excess of its net short-term capital gain minus its net long-term capital loss.
Failure to Qualify.
If the Fund failed to qualify as a RIC, it would (unless certain cure provisions apply) then be unable to deduct from its
taxable income the dividend distributions made to its shareholders and therefore those amounts would be subject to a Fund-level
corporate income tax. In addition, the Fund would not be able to characterize the distributions made to its shareholders as
anything other than ordinary corporate distributions. To the extent the Fund had "earnings and profits" (as determined for
tax purposes), distributions to its shareholders would be taxable as ordinary dividend income. In the case of individuals,
those distributions might qualify for the maximum 15% or 20% tax rate on dividend income and, in the case of corporations,
they might qualify for the dividends-received deduction.
Portfolio Investments Subject to Special Tax Rules.
The Fund may engage in transactions and investments that are subject to special tax rules under the Internal Revenue Code.
These special tax rules may, among other things, affect the Fund's holding period in its investments, change the character
of, or accelerate, the Fund's income, defer or disallow the Fund's deductions and losses, and compel the Fund to report as
taxable income mere increases in the value of its assets. For example, the Fund may invest in foreign currencies or securities
denominated in foreign currencies. Under certain circumstances losses from foreign securities could be capital losses but
gains from foreign currencies are ordinary income. Because capital losses cannot be deducted against ordinary income, this
mismatch in character may negatively affect the character and amount of the Fund's distributions. In addition, part of an
"interest" payment from a high yield debt obligation may be characterized for tax purposes as a dividend and, therefore, eligible
for the dividends-received deduction available to corporations.
Certain positions in the Fund's portfolio may have to be "marked-to-market" (that is, treated as if they were sold and repurchased
on the last day of the Fund's taxable year). Such "deemed sales" under the mark-to-market rules may alter the character, amount
and timing of distributions to shareholders by requiring the Fund to make distributions in order to satisfy the RIC dividend
distributions test even though the deemed sales generate no cash. The Fund will monitor its transactions, and seek to make
appropriate tax elections and appropriate entries in its books and records in order to reduce the effect of the mark-to-market
rules while remaining qualified for treatment as a RIC.
Passive Foreign Investment Companies.
If the Fund invests in a "passive foreign investment company" ("PFIC"), then the Fund may be subject to special rules meant
to discourage U.S. taxpayers from investing in foreign companies as a way of deferring taxable income. Under those rules,
any income from certain PFIC distributions or the sale of PFIC shares is allocated ratably to the current taxable year and
to prior taxable years. Income allocated to the current year is treated as part of the year's ordinary income. Income allocated
to a prior taxable year is taxed at the highest corporate rate for that year (regardless of the Fund's actual income or tax
rate for that prior year). For each prior taxable year, the Fund must pay both the amount of tax so computed and a penalty
that is calculated as if the amount of tax was due but unpaid for the prior taxable year. Liability for such taxes and penalties
would reduce the investment return of the Fund.
If a PFIC is willing to provide the Fund with certain necessary reporting information annually (which PFICs frequently do
not provide), the Fund may elect to treat a PFIC as a "qualified electing fund" ("QEF") and, in lieu of the tax consequences
described above, the Fund would be required to include in each year's income its share of the ordinary earnings and net capital
gains of the PFIC, even if they are not distributed to the Fund. Those amounts would be treated as taxable income for purposes
of the 90% dividends distributions test mentioned above and the excise tax discussed below.
Alternatively, if the Fund invests in a PFIC, it may make a mark-to-market election that will result in the Fund being treated
as if it had sold and repurchased such PFIC stock at the end of each year. In that case, the Fund would report any gains as
ordinary income and would deduct any losses as ordinary losses to the extent of previously recognized gains. The election
must be made separately for each PFIC owned by the Fund and, once made, would be effective for all subsequent taxable years,
unless revoked with the consent of the U.S. Internal Revenue Service (the "IRS"). By making the election, the Fund might be
able to mitigate the adverse tax consequences with respect to its ownership of shares in a PFIC, but in any particular year
it could be required to recognize income in excess of the distributions it received from the PFIC and the proceeds from dispositions
of the PFIC's stock. The amounts so included would be treated as taxable income for purposes of the 90% dividends distributions
test and for excise tax purposes (discussed below).
Excise Tax on Regulated Investment Companies.
Under the Internal Revenue Code, the Fund must pay an annual, non-deductible excise tax unless, by December 31st each year,
it distributes (1) 98% of its taxable investment income earned from January 1 through December 31, (2) 98.2% of its capital
gain net income realized in the period from November 1 of the prior year through October 31 of the current year and (3) undistributed
amounts from prior years. It is presently anticipated that the Fund will meet these distribution requirements, although to
do so the Fund might be required to liquidate portfolio investments in certain circumstances. In some years, the Board and
the Manager and/or the Sub-Adviser may determine that it would be in the shareholders' best interests for the Fund to pay
the excise tax on undistributed amounts rather than making the required level of distributions. In that event, the tax may
reduce shareholder total returns from the Fund.
Taxation of Fund Distributions.
The Fund anticipates distributing substantially all of its investment company taxable income and net capital gain for each
taxable year. The Fund's distributions will be treated as dividends to the extent paid from the Fund's earnings and profits
(as determined under the Internal Revenue Code). Distributions in excess of the Fund's earnings and profits will be treated
as a return of capital to the extent of each shareholder's basis in his or her shares, and any remaining amounts will be treated
as gain from the sale of those shares, as discussed below. Shareholders will be notified if at the end of the fiscal year,
any part of an earlier distribution is re-characterized as a non-taxable return of capital. A reduction in the basis of shares
could result in a higher taxable capital gain (or lower capital loss) on a subsequent sale or exchange of the shares.
Special Characteristics of Certain Distributions.
Different types of Fund earnings may have different federal income tax characteristics, including different types of capital
gains and different types of ordinary income. For example, if the Fund invests in stock, a portion of the Fund's ordinary
income may be composed of dividends eligible for the dividends-received deduction or that qualify for the special maximum
tax rate on "qualified dividend income" as described below. The Fund may also generate foreign tax credits. The Fund will
allocate the tax characteristics of its earnings among its distributions as prescribed by the IRS. The percentage of each
distribution that corresponds to a particular type of income will generally be based on how much of that income the Fund earns
for the taxable year in accordance with the IRS rules, rather than how much of that income the Fund has earned at time of
the distribution. Those percentages normally will be determined after the close of the Fund's taxable year. The Fund will
provide a statement to shareholders shortly after the end of each year indicating the amount and character of distributions
made during the preceding calendar year.
Distributions Derived from Dividends.
If the Fund earns dividend income from U.S. corporations, for the Fund's corporate shareholders to claim the dividends-received
deduction against the Fund's distributions, both the Fund and its corporate shareholders must satisfy special provisions of
the Internal Revenue Code. If a dividend the Fund receives on a stock held in its portfolio otherwise qualifies for the dividends-received
deduction, the Fund still (1) must hold the stock for a minimum number of days during a specified period that includes the
stock's ex-dividend date, (2) cannot enter into certain positions that reduce the risk of holding the stock and (3) cannot
debt finance the stock. Similarly, distributions of otherwise qualifying dividends will not be eligible for the dividends-received
deduction in the hands of a corporate shareholder of the Fund unless the corporate shareholder (1) holds the Fund's shares
for at least 46 days during a specified period that includes the portfolio stock's ex-dividend date and (2) does not debt
finance its investment in the Fund's shares. To the extent the Fund's distributions are derived from items such as option
premiums, interest income, gains from the sale of securities, or dividends from foreign corporations, those distributions
will not qualify for the dividends-received deduction.
If the Fund earns qualified dividend income, as discussed below, special rules may also apply to regular dividends paid to
a non-corporate shareholder of the Fund. Provided that the shareholder receiving the dividend satisfies certain holding period
and other requirements, those dividends may be subject to tax at the reduced rates generally applicable to long-term capital
gains for individuals. Dividends subject to these special rules are not actually treated as capital gains, however. They are
not included in the computation of the shareholder's net capital gain and generally cannot be offset by capital losses. For
a taxable year of the Fund, (i) if 95% or more of the Fund's gross income is attributable to qualified dividend income (defined
below), then the special maximum rate will apply to 100% of the regular dividends paid to the shareholder during such year
and (ii) if less than 95% of the Fund's gross income is attributable to qualified dividend income, then the special maximum
rate will only apply to the portion of the regular dividends reported by the Fund as qualified dividend income, which generally
cannot exceed the ratio that the Fund's qualified dividend income bears to its gross income. Gross income, for these purposes,
does not include gains attributable to the sale or other disposition of stocks and securities, except to the extent the net
short-term capital gain from such sales and dispositions exceeds the net long-term capital loss from such sales and dispositions.
"Qualified dividend income" generally means dividends received by the Fund with respect to the stock of a U.S. corporation
or qualified foreign corporation. It also includes dividends received with respect to the stock of certain foreign corporations.
In each case, however, the Fund must hold the stock for a minimum number of days during a specified period that includes the
stock's ex-dividend date and cannot enter into certain positions that reduce the risk of holding the stock. Qualified dividend
income does not include "payments in lieu of dividends" received in securities lending transactions or dividends received
from a real estate investment trust ("REIT") or another RIC, except to the extent such dividends were paid from qualified
dividend income received and reported by such REIT or RIC. If a shareholder elects to treat Fund dividends as investment income
for purposes of the limitation on the deductibility of investment interest, such dividends will not be treated as qualified
dividend income.
Ordinary Income Dividends.
Distributions from income earned by the Fund from one or more of the following sources will be treated as ordinary income
to the shareholder:
-
certain taxable investments (such as certificates of deposit, repurchase agreements, commercial paper and obligations of the
U.S. government, or its agencies and instrumentalities) or from bonds or other debt obligations;
-
income from loans of portfolio securities;
-
income or gains from options or futures;
-
any net short-term capital gain; and
-
any market discount accrual on tax-exempt bonds.
Capital Gain Distributions.
The Fund may either retain or distribute to shareholders its net capital gain (the excess of net long-term capital gain over
net short-term capital loss). Currently, the Fund intends to distribute these gains. Distributed net capital gain that is
properly reported will be taxable to the Fund's shareholders as long-term capital gain. The amount of distributions reported as
net capital gain will be reported to shareholders shortly after the end of each year. Such treatment will apply no matter
how long the shareholder has held Fund shares and even if the gain was recognized by the Fund before the shareholder acquired
Fund shares.
If the Fund elects to retain all or a portion of its net capital gain for a taxable year, the Fund will be subject to tax
on such gain at the highest corporate tax rate. If the Fund so elects, each shareholder of record on the last day of such
taxable year will be informed of his or her portion of both the gain and the tax paid, will be required to report the gain
as long-term capital gain, will be able to claim the tax paid as a refundable credit, and will increase the basis of his or
her shares by the amount of the capital gain reported minus the tax credit.
3.8% Medicare Tax.
For taxable years beginning after December 31, 2012, an additional 3.8% tax will be imposed on certain net investment income
(including ordinary dividends and capital gain distributions received from the Fund and net gains from redemptions or other
taxable dispositions of Fund shares) of U.S. individuals, estates and trusts to the extent that such person's "modified adjusted
gross income" (in the case of an individual) or "adjusted gross income" (in the case of an estate or trust) exceeds a threshold
amount.
Foreign Source Income.
Investment income that the Fund may receive from sources within foreign countries may be subject to foreign taxes withheld
at the source. If more than 50% of the value of the Fund's total assets at the close of any taxable year consists of securities
of foreign corporations the Fund may elect to treat any foreign income and withholding taxes it pays as having been paid by
its shareholders for U.S. federal income tax purposes, as long as the Fund continues to qualify as a RIC. If the Fund makes
that election, the amount of foreign income taxes paid by the Fund will be included in the income of its shareholders and
each shareholder will be entitled (subject to certain limitations) to either credit the amount against the shareholder's U.S.
federal income tax due, or deduct the amount from his or her U.S. taxable income. If the Fund has investments in foreign securities,
the Fund may qualify for and make this election in some, but not necessarily all, of its taxable years.
Shortly after any year for which it makes such an election, the Fund will report to its shareholders the amount per share
of such foreign tax that must be included in each shareholder's gross income and the amount that will be available for deduction
or credit. In general, a shareholder may elect each year whether to claim deductions or credits for foreign taxes. However,
no deductions for foreign taxes may be claimed by a non corporate shareholder who does not itemize deductions. If a shareholder
elects to credit foreign taxes, the amount of credit that may be claimed in any year can not exceed the same proportion of
the U.S. tax against which such credit is taken as the shareholder's taxable income from foreign sources bears to his or her
entire taxable income, unless the shareholder is an individual all of whose gross income from non-U.S. sources is qualified
passive income and whose creditable foreign taxes for the taxable year do not exceed $300 ($600 for a joint return).
As a general rule, if the Fund has made the appropriate election, a shareholder may treat as foreign source income the portion
of any dividend paid by the Fund which represents income derived from sources within foreign countries, as well as the shareholder's
proportionate share of the taxes paid to those countries. Capital gains realized by the Fund on the sale of foreign securities
and other foreign currency gains of the Fund are considered to be U.S.-source income and, therefore, any portion of the tax
credit passed through to shareholders that is attributable to such gains or distributions might not be usable by a shareholder
who does not have other foreign source income.
Tax Consequences of Share Redemptions.
If all or a portion of a shareholder's investment in the Fund is redeemed, the shareholder will generally recognize a gain
or loss on the redeemed shares equal to the difference between the proceeds of the redeemed shares and the shareholder's adjusted
tax basis in the shares. In general, any gain or loss from the redemption of shares of the Fund will be considered capital
gain or loss if the shares were held as a capital asset and will be long-term capital gain or loss if the shares were held
for more than one year. Any capital loss arising from the redemption of shares held for six months or less, however, will
be treated as a long-term capital loss to the extent of the amount of capital gain dividends received on those shares. Special
holding period rules under the Internal Revenue Code apply in this case to determine the holding period of shares. There are
limits on the deductibility of capital losses in any year.
All or a portion of any loss on redeemed shares may be disallowed if the shareholder purchases other shares of the Fund within
30 days before or after the redemption (including purchases through the reinvestment of dividends). In that case, the basis
of the acquired shares will be adjusted to reflect the disallowed loss. If a shareholder exercises the exchange privilege
within 90 days after acquiring Fund shares, and no later than January 31 of the following calendar year, in certain circumstances,
any loss that the shareholder recognizes on the exchange will be reduced, or any gain will be increased, to the extent that
any sales charge paid on the exchanged shares reduces any charges the shareholder would have incurred on the purchase of the
new shares in the absence of the exchange privilege. Such sales charge will be treated as an amount paid for the new shares.
Backup Withholding.
The Fund will be required in certain cases to withhold 28% of ordinary income dividends, capital gain distributions and the
proceeds of the redemption of shares, paid to any shareholder (1) who has failed to provide a correct taxpayer identification
number or to properly certify that number when required, (2) who is subject to backup withholding for failure to report properly
the receipt of interest or dividend income, or (3) who has failed to certify to the Fund that the shareholder is not subject
to backup withholding or is an "exempt recipient" (such as a corporation). Any tax withheld by the Fund is remitted by the
Fund to the U.S. Treasury and is identified in reports mailed to shareholders after the end of each calendar year with a copy
sent to the IRS. Backup withholding is not an additional tax. Any amount withheld generally may be allowed as a refund or
a credit against a shareholder's federal income tax liability, provided the required information is timely provided to the
IRS.
Taxation of Foreign Shareholders.
Under the Internal Revenue Code, taxation of a foreign shareholder depends primarily on whether the foreign shareholder's
income from the Fund is effectively connected with the conduct of a U.S. trade or business. A "foreign shareholder" includes,
but is not limited to, a nonresident alien individual, a foreign trust, a foreign estate, a foreign corporation, or a foreign
partnership.
If a foreign shareholder fails to provide a properly completed and signed Certificate of Foreign Status, the Fund will be
required to withhold U.S. tax on ordinary income dividends, capital gains distributions and the proceeds of the redemption
of shares. Provided the Fund obtains a proper certification of foreign status, ordinary income dividends that are paid by
the Fund to foreign shareholders and that are not "effectively connected income," will be subject to a U.S. withholding tax.
The tax rate may be reduced if the foreign person's country of residence has an income tax treaty with the United States allowing
for a reduced tax rate on ordinary income dividends paid by the Fund. If the ordinary income dividends from the Fund are effectively
connected with the conduct of a U.S. trade or business, then the foreign shareholder may claim an exemption from the U.S.
withholding tax described above provided the Fund obtains a properly completed and signed Certificate of Foreign Status. Any
tax withheld by the Fund is remitted to the U.S. Treasury and all income and any tax withheld is identified in reports mailed
to shareholders in the early part of each year with a copy sent to the IRS. Capital gain dividends are not subject to U.S.
withholding tax unless the recipient is a nonresident alien who is present in the United States for 183 days or more during
the taxable year in which the dividends are received. A foreign individual who is present in the United States for 183 days
or more generally loses his or her status as a nonresident alien.
For taxable years of the Fund beginning before 2014, properly reported dividends will generally be exempt from U.S. federal
withholding tax on foreign persons provided such dividends (i) are derived from the Fund's "qualified net interest income"
(generally, the Fund's U.S. source interest income, other than certain contingent interest and interest from obligations of
a corporation or partnership in which the Fund is a 10% or greater shareholder, reduced by expenses that are allocable to
such income) or (ii) are derived from the Fund's "qualified short-term capital gains" (generally, the excess of the Fund's
net short-term capital gain over the Fund's net long-term capital loss for such taxable year). In order to qualify for this
exemption from withholding, a shareholder that is a foreign person must comply with applicable certification requirements
relating to its non-U.S. status. However, depending on its circumstances, the Fund may report some, all, or none of its potentially
eligible dividends as interest-related dividends or as short-term capital gain dividends, and/or treat such dividends, in
whole or in part, as ineligible for this exemption from withholding on foreign persons. In the case of shares held through
an intermediary, the intermediary may withhold even if the Fund reports the payment as qualified net interest income or qualified
short-term capital gain. Shareholders that are foreign persons should contact their intermediaries with respect to the application
of these rules to their accounts.
The tax consequences to foreign persons entitled to claim the benefits of an applicable income tax treaty may be different
from those described in this SAI. Foreign shareholders are urged to consult their tax advisers with respect to the particular
tax consequences of an investment in the Fund, including the applicability of the U.S. withholding taxes described above and
the possible applicability of U.S. estate tax.
Under legislation known as "FATCA" (the Foreign Account Tax Compliance Act), ordinary dividends the Fund pays after December
31, 2013, and the gross proceeds of share redemptions and certain capital gains dividends it pays after December 31, 2016, to
"foreign financial institutions" and certain other foreign entities will be subject to U.S. withholding tax at a rate of 30%
unless various certification, information reporting, due diligence and other applicable requirements (different from, and
in addition to, those described above) are satisfied. In general, no such withholding will occur with respect to a U.S. person
or non-U.S. individual that timely provides the Fund with a valid IRS Form W-9 or W-8, respectively. Payments that are taken
into account as effectively connected income are not subject to these withholding rules. Foreign shareholders should consult
their own tax advisors as to the applicability and consequences of this new legislation to them.
Additional information reporting requirements apply to individuals that hold any interest in a "specified foreign financial
asset" if the aggregate value of all such assets held by such individual exceeds $50,000. Significant penalties can apply
upon a failure to make the required disclosure and in respect to understatements of tax attributable to undisclosed foreign
financial assets. The scope of this reporting requirement is not entirely clear and all shareholders should consult their
own tax advisors as to whether reporting may be required in respect of their indirect interests in the Fund's investments.
Tax Shelter and Other Reporting Requirements.
If a shareholder realizes a loss on the disposition of Fund shares of at least $2 million in any single taxable year or $4
million in any combination of taxable years (for an individual shareholder); or at least $10 million in any single taxable
year or $20 million in any combination of taxable years (for a corporate shareholder), the shareholder must file with the
Internal Revenue Service a disclosure statement on Form 8886. Shareholders should consult their tax advisers to determine
the applicability of this requirement in light of their individual circumstances. Some states may similarly require such transactions
to be reported separately with the appropriate state taxing authorities.
Additional Information About the Fund
The Distributor.
The Fund's shares are sold through dealers, brokers and other financial institutions that have a sales agreement with OppenheimerFunds
Distributor, Inc., a subsidiary of the Sub-Adviser that acts as the Fund's Distributor. The Distributor also distributes shares
of the other Oppenheimer funds.
The Transfer Agent.
OFI Global Asset Management, Inc. is the Fund's Transfer Agent. Shareholder Services, Inc., an affiliate of the Transfer
Agent, doing business as OppenheimerFunds Services is the Fund's Sub-Transfer Agent. OppenheimerFunds Services is responsible
for maintaining the Fund's shareholder registry and shareholder accounting records, and for paying dividends and distributions
to shareholders. It also handles shareholder servicing and administrative functions. It serves as the Transfer Agent for an
annual per account fee. It also acts as shareholder servicing agent for the other Oppenheimer funds. Shareholders should direct
inquiries about their accounts to OppenheimerFunds Services at the address and toll-free numbers shown on the back cover.
The Custodian.
Brown Brothers Harriman & Co. (BBH) is the custodian of the Fund's assets. The custodian's responsibilities include safeguarding
and controlling the Fund's portfolio securities and handling the delivery of such securities to and from the Fund. It is the
practice of the Fund to deal with the custodian in a manner uninfluenced by any banking relationship the custodian may have
with the Manager and its affiliates. As a bank regulated by the New York State Banking Department, BBH is not an FDIC insured
bank. As such, the Fund's cash balances with BBH are not protected by the Federal Deposit Insurance Corporation ("FDIC").
Independent Registered Public Accounting Firm.
KPMG LLP serves as the independent registered public accounting firm for the Fund. KPMG LLP audits the Fund's financial
statements and performs other related audit and tax services. KPMG LLP also acts as the independent registered public accounting
firm for the Manager, the Sub-Adviser and certain other funds advised by the Manager and its affiliates. Audit and non-audit
services provided by KPMG LLP to the Fund must be pre-approved by the Audit Committee.
Appendix A
OppenheimerFunds Special Sales Charge Arrangements and Waivers
In certain cases, the initial sales charge that applies to purchases of Class A shares of the Oppenheimer funds or the contingent
deferred sales charge ("CDSC") that may apply to Class A, Class B, Class C or Class N shares may be waived. That is because
of the economies of sales efforts realized by OppenheimerFunds Distributor, Inc., (referred to in this document as the "Distributor"),
or by dealers or other financial institutions that offer those shares to certain classes of investors. Not all Oppenheimer
funds have all of the share classes described and not all waivers apply to all Oppenheimer funds.
For the purposes of some of the waivers described below and in the Prospectus and Statement of Additional Information of the
applicable Oppenheimer funds, the term "Retirement Plan" refers to the following types of plans:
-
plans created or qualified under Sections 401(a) or 401(k) of the Internal Revenue Code,
-
non-qualified deferred compensation plans,
-
"Grouped Plans," as defined in the section "Class N Share Availability" in this SAI,
-
403(b)(7) custodial plan accounts, and
-
Individual Retirement Accounts ("IRAs"), including traditional IRAs, Roth IRAs, SEP-IRAs, SARSEPs or SIMPLE plans
The interpretation of these provisions as to the applicability of a special arrangement or waiver in a particular case is
in the sole discretion of the Distributor or the transfer agent (referred to in this document as the "Transfer Agent") of
the particular Oppenheimer fund. These waivers and special arrangements may be amended or terminated at any time by a particular
fund, the Distributor, OFI Global Asset Management, Inc., and/or OppenheimerFunds, Inc. (OFI Global Asset Management, Inc.
and OppenheimerFunds, Inc. are together referred to in this appendix as the "Manager").
Waivers that apply at the time shares are redeemed must be requested by the shareholder and/or dealer in the redemption request.
I. Applicability of Class A Contingent Deferred Sales Charges in Certain Cases
Purchases of Class A Shares of Oppenheimer Funds That Are Not Subject to Initial Sales Charge but May Be Subject to the Class
A Contingent Deferred Sales Charge (unless a waiver applies). Class A shares acquired by conversion from another share class
are not considered a "purchase" for any purpose.
There is no initial sales charge on purchases of Class A shares of any of the Oppenheimer funds in the cases listed below.
However, these purchases may be subject to the Class A CDSC if redeemed within 18 months (24 months in the case of shares
of Oppenheimer Rochester National Municipals and Rochester Fund Municipals shares purchased prior to 10/22/07), as described
in the Prospectus (unless a waiver described elsewhere in this Appendix applies to the redemption). Additionally, on shares
purchased under these waivers that are subject to the Class A CDSC, the Distributor will pay the applicable concession described
in the Prospectus under "Class A Contingent Deferred Sales Charge."
1
This waiver provision applies to:
-
Purchases of Class A shares aggregating $1 million or more ($250,000 or more for certain Funds).
-
Purchases of Class A shares by a Retirement Plan that was permitted to purchase such shares at net asset value but subject
to a contingent deferred sales charge prior to March 1, 2001. That included plans (other than IRA or 403(b)(7) Custodial Plans)
that: 1) bought shares costing $500,000 or more, 2) had at the time of purchase 100 or more eligible employees or total plan
assets of $500,000 or more, or 3) certified to the Distributor that it projects to have annual plan purchases of $200,000
or more.
-
Purchases by an OppenheimerFunds-sponsored Rollover IRA, if the purchases are made:
-
through a broker, dealer, bank or registered investment adviser that has made special arrangements with the Distributor for
those purchases, or
-
by a direct rollover of a distribution from a qualified Retirement Plan if the administrator of that Plan has made special
arrangements with the Distributor for those purchases.
-
Purchases of Class A shares by Retirement Plans that have any of the following record-keeping arrangements:
-
The record keeping is performed by Merrill Lynch Pierce Fenner & Smith, Inc. ("Merrill Lynch") on a daily valuation basis
for the Retirement Plan. On the date the plan sponsor signs the record-keeping service agreement with Merrill Lynch, the Plan
must have $3 million or more of its assets invested in (a) mutual funds, other than those advised or managed by Merrill Lynch
Investment Management, L.P. ("MLIM"), that are made available under a Service Agreement between Merrill Lynch and the mutual
fund's principal underwriter or distributor, and (b) funds advised or managed by MLIM (the funds described in (a) and (b)
are referred to as "Applicable Investments"). The record keeping for the Retirement Plan is performed on a daily valuation
basis by a record keeper whose services are provided under a contract or arrangement between the Retirement Plan and Merrill
Lynch. On the date the plan sponsor signs the record keeping service agreement with Merrill Lynch, the Plan must have $5 million
or more of its assets (excluding assets invested in money market funds) invested in Applicable Investments.
-
The record keeping for the Retirement Plan is performed on a daily valuation basis by a record keeper whose services are provided
under a contract or arrangement between the Retirement Plan and Merrill Lynch. On the date the plan sponsor signs the record
keeping service agreement with Merrill Lynch, the Plan must have $5 million or more of its assets (excluding assets invested
in money market funds) invested in Applicable Investments.
-
The record keeping for a Retirement Plan is handled under a service agreement with Merrill Lynch and on the date of the plan
sponsor signs that agreement, the Plan has 500 or more eligible employees (as determined by the Merrill Lynch plan conversion
manager).
II. Waivers of Class A Sales Charges of Oppenheimer Funds
A. Waivers of Initial and Contingent Deferred Sales Charges for Certain Purchasers.
Class A shares purchased by the following investors are not subject to any Class A sales charges (and no concessions are paid
by the Distributor on such purchases):
-
The Manager or its affiliates.
-
Present or former officers, directors, trustees and employees (and their "immediate families") of the Fund, the Manager and
its affiliates, and retirement plans established by them for their employees. The term "immediate family" refers to one's
spouse, children, grandchildren, grandparents, parents, parents in law, brothers and sisters, sons and daughters in law,
a sibling's spouse, a spouse's siblings, aunts, uncles, nieces and nephews; relatives by virtue of a remarriage (step-children,
step-parents, etc.) are included.
-
Registered management investment companies, or separate accounts of insurance companies having an agreement with the Manager
or the Distributor for that purpose.
-
Dealers or brokers that have a sales agreement with the Distributor, if they purchase shares for their own accounts or for
retirement plans for their employees.
-
Employees and registered representatives (and their spouses) of dealers or brokers described above or financial institutions
that have entered into sales arrangements with such dealers or brokers (and which are identified as such to the Distributor)
or with the Distributor. The purchaser must certify to the Distributor at the time of purchase that the purchase is for the
purchaser's own account (or for the benefit of such employee's spouse or minor children).
-
Dealers, brokers, banks or registered investment advisers that have entered into an agreement with the Distributor providing
specifically for the use of shares of the Fund in particular investment products made available to their clients. Those clients
may be charged a transaction fee by their dealer, broker, bank or advisor for the purchase or sale of Fund shares.
-
Investment advisers and financial planners who have entered into an agreement for this purpose with the Distributor and who
charge an advisory, consulting or other fee for their services and buy shares for their own accounts or the accounts of their
clients.
-
"Rabbi trusts" that buy shares for their own accounts, if the purchases are made through a broker or agent or other financial
intermediary that has made special arrangements with the Distributor for those purchases.
-
Clients of investment advisers or financial planners (that have entered into an agreement for this purpose with the Distributor)
who buy shares for their own accounts may also purchase shares without sales charge but only if their accounts are linked
to a master account of their investment advisor or financial planner on the books and records of the broker, agent or financial
intermediary with which the Distributor has made such special arrangements. Each of these investors may be charged a fee by
the broker, agent or financial intermediary for purchasing shares.
-
Directors, trustees, officers or full-time employees of OpCap Advisors or its affiliates, their relatives or any trust, pension,
profit sharing or other benefit plan which beneficially owns shares for those persons.
-
Accounts for which Oppenheimer Capital (or its successor) is the investment adviser (the Distributor must be advised of this
arrangement) and persons who are directors or trustees of the company or trust which is the beneficial owner of such accounts.
-
A unit investment trust that has entered into an appropriate agreement with the Distributor.
-
Dealers, brokers, banks, or registered investment advisers that have entered into an agreement with the Distributor to sell
shares to defined contribution employee retirement plans for which the dealer, broker or investment adviser provides administration
services.
-
Retirement Plans and deferred compensation plans and trusts used to fund those plans (including, for example, plans qualified
or created under sections 401(a), 401(k), 403(b) or 457 of the Internal Revenue Code), in each case if those purchases are
made through a broker, agent or other financial intermediary that has made special arrangements with the Distributor for those
purchases.
-
Effective October 1, 2005, taxable accounts established with the proceeds of Required Minimum Distributions from Retirement
Plans.
-
Purchases of Class A shares by former shareholders of Atlas Strategic Income Fund in any Oppenheimer fund into which shareholders
of Oppenheimer Global Strategic Income Fund may exchange.
-
Purchases of Class A shares by former shareholders of Oppenheimer Total Return Fund Periodic Investment Plan in any Oppenheimer
fund into which shareholders of Oppenheimer Equity Fund, Inc. may exchange.
-
Purchases of Class A shares within retirement plans that were converted to Class A shares on July 1, 2011.
B. Waivers of the Class A Initial and Contingent Deferred Sales Charges in Certain Transactions.
1. Class A shares issued or purchased in the following transactions are not subject to sales charges (and no concessions
are paid by the Distributor on such purchases):
-
Shares issued in plans of reorganization, such as mergers, asset acquisitions and exchange offers, to which the Fund is a
party.
-
Shares purchased by the reinvestment of dividends or other distributions reinvested from the Fund or other Oppenheimer funds
or unit investment trusts for which reinvestment arrangements have been made with the Distributor.
-
Shares purchased by certain Retirement Plans that are part of a retirement plan or platform offered by banks, broker-dealers,
financial advisors or insurance companies, or serviced by recordkeepers.
-
Shares purchased by the reinvestment of loan repayments by a participant in a Retirement Plan for which the Manager or an
affiliate acts as sponsor.
-
Shares purchased in amounts of less than $5.
2. Class A shares issued and purchased in the following transactions are not subject to sales charges (a dealer concession
at the annual rate of 0.25% is paid by the Distributor on purchases made within the first 6 months of plan establishment):
-
Retirement Plans that have $5 million or more in plan assets.
-
Retirement Plans with a single plan sponsor that have $5 million or more in aggregate assets invested in Oppenheimer funds.
C. Waivers of the Class A Contingent Deferred Sales Charge for Certain Redemptions.
The Class A CDSC is also waived if shares that would otherwise be subject to the CDSC are redeemed in the following cases:
-
To make Automatic Withdrawal Plan payments that are limited annually to no more than 12% of the account value adjusted annually.
-
Involuntary redemptions of shares by operation of law or involuntary redemptions of small accounts (please refer to "Shareholder
Account Rules and Policies," in the applicable fund Prospectus).
-
For distributions from Retirement Plans, deferred compensation plans or other employee benefit plans for any of the following
purposes:
-
Following the death or disability (as defined in the Internal Revenue Code) of the participant or beneficiary. The death or
disability must occur after the participant's account was established.
-
To return excess contributions.
-
To return contributions made due to a mistake of fact.
-
Hardship withdrawals, as defined in the plan.
2
-
Under a Qualified Domestic Relations Order, as defined in the Internal Revenue Code, or, in the case of an IRA, a divorce
or separation agreement described in Section 71(b) of the Internal Revenue Code.
-
To meet the minimum distribution requirements of the Internal Revenue Code.
-
To make "substantially equal periodic payments" as described in Section 72(t) of the Internal Revenue Code.
-
For loans to participants or beneficiaries.
-
Separation from service.
3
-
Participant-directed redemptions to purchase shares of a mutual fund (other than a fund managed by the Manager or a subsidiary
of the Manager) if the plan has made special arrangements with the Distributor.
-
Plan termination or "in-service distributions," if the redemption proceeds are rolled over directly to an OppenheimerFunds-sponsored
IRA.
-
For distributions from 401(k) plans sponsored by broker-dealers that have entered into a special agreement with the Distributor
allowing this waiver.
-
For distributions from retirement plans that have $10 million or more in plan assets and that have entered into a special
agreement with the Distributor.
-
For distributions from retirement plans which are part of a retirement plan product or platform offered by certain banks,
broker-dealers, financial advisors, insurance companies or record keepers which have entered into a special agreement with
the Distributor.
-
At the sole discretion of the Distributor, the CDSC may be waived for redemptions of shares requested by the shareholder of
record within 60 days following the termination by the Distributor of the selling agreement between the Distributor and the
shareholder of record's broker-dealer of record for the account.
III. Waivers of Class B, Class C and Class N Sales Charges of Oppenheimer Funds
The Class B, Class C and Class N CDSCs will not be applied to shares purchased in certain types of transactions or redeemed
in certain circumstances described below. Class C or Class N shares acquired by conversion from another share class are not
considered a "purchase" for any purpose.
A. Waivers for Redemptions in Certain Cases.
The Class B, Class C and Class N CDSCs will be waived for redemptions of shares in the following cases:
-
Shares redeemed involuntarily, as described in "Shareholder Account Rules and Policies," in the applicable Prospectus.
-
Redemptions from accounts other than Retirement Plans following the death or disability of the last surviving shareholder.
The death or disability must have occurred after the account was established, and for disability you must provide evidence
of a determination of disability by the Social Security Administration.
-
The CDSCs are generally not waived following the death or disability of a grantor or trustee for a trust account. The CDSCs
will only be waived in the limited case of the death of the trustee of a grantor trust or revocable living trust for which
the trustee is also the sole beneficiary. The death or disability must have occurred after the account was established, and
for disability you must provide evidence of a determination of disability (as defined in the Internal Revenue Code).
-
Distributions from accounts for which the broker-dealer of record has entered into a special agreement with the Distributor
allowing this waiver.
-
At the sole discretion of the Distributor, the CDSC may be waived for redemptions of shares requested by the shareholder of
record within 60 days following the termination by the Distributor of the selling agreement between the Distributor and the
shareholder of record's broker-dealer of record for the account.
-
Redemptions of Class B shares held by Retirement Plans whose records are maintained on a daily valuation basis by Merrill
Lynch or an independent record keeper under a contract with Merrill Lynch.
-
Redemptions by OppenheimerFunds Single K plans of Class B shares purchased after June 30, 2008.
-
Redemptions of Class C shares of an Oppenheimer fund, requested in writing by a Retirement Plan sponsor and submitted more
than 12 months after the Retirement Plan's first purchase of Class C shares, if the redemption proceeds are invested to purchase
Class N shares of one or more Oppenheimer funds.
-
Distributions4 from Retirement Plans or other employee benefit plans for any of the following purposes:
-
Following the death or disability (as defined in the Internal Revenue Code) of the participant or beneficiary. The death or
disability must occur after the participant's account was established in an Oppenheimer fund.
-
To return excess contributions made to a participant's account.
-
To return contributions made due to a mistake of fact.
-
To make hardship withdrawals, as defined in the plan.
2
-
To make distributions required under a Qualified Domestic Relations Order or, in the case of an IRA, a divorce or separation
agreement described in Section 71(b) of the Internal Revenue Code.
-
To meet the minimum distribution requirements of the Internal Revenue Code.
-
To make "substantially equal periodic payments" as described in Section 72(t) of the Internal Revenue Code.
-
For loans to participants or beneficiaries.
5
-
On account of the participant's separation from service.
6
-
Participant-directed redemptions to purchase shares of a mutual fund (other than a fund managed by the Manager or a subsidiary
of the Manager) offered as an investment option in a Retirement Plan if the plan has made special arrangements with the Distributor.
-
Distributions made on account of a plan termination or "in-service" distributions, if the redemption proceeds are rolled over
directly to an OppenheimerFunds-sponsored IRA.
-
For distributions from a participant's account under an Automatic Withdrawal Plan after the participant reaches age 59½, as
long as the aggregate value of the distributions does not exceed 10% of the account's value, adjusted annually.
-
For distributions from 401(k) plans sponsored by broker-dealers that have entered into a special arrangement with the Distributor
allowing this waiver.
-
Redemptions of Class B shares or Class C shares under an Automatic Withdrawal Plan from an account other than a Retirement
Plan if the aggregate value of the redeemed shares does not exceed 10% of the account's value annually.
B. Waivers for Shares Sold or Issued in Certain Transactions.
The CDSC is also waived on Class B, Class C and Class N shares sold or issued in the following cases:
-
Shares sold to the Manager or its affiliates.
-
Shares sold to registered management investment companies or separate accounts of insurance companies having an agreement
with the Manager or the Distributor for that purpose.
-
Shares sold to present or former officers, directors, trustees or employees (and their "immediate families" as defined above
in Section I.A.) of the Fund, the Manager and its affiliates and retirement plans established by them for their employees.
-
Shares issued in plans of reorganization to which the Fund is a party.
Footnotes to Appendix A:
1.
However, that concession will not be paid on purchases of shares in amounts of $1 million or more (including any right of
accumulation) by a Retirement Plan that pays for the purchase with the redemption proceeds of Class C shares of one or more
Oppenheimer funds held by the Plan for more than one year.
2.
This provision does not apply to IRAs.
3.
This provision only applies to qualified retirement plans and 403(b)(7) custodial plans after your separation from service
in or after the year you reached age 55.
4.
The distribution must be requested prior to Plan termination or the elimination of the Oppenheimer funds as an investment
option under the Plan.
5.
This provision does not apply to loans from 403(b)(7) custodial plans or from OppenheimerFunds Single K plans.
6.
This provision does not apply to 403(b)(7) custodial plans if the participant is less than age 55, nor to IRAs.
Appendix B
Ratings Definitions
Below are summaries of the rating definitions used by the nationally recognized statistical rating organizations ("NRSROs")
listed below. Those ratings represent the opinion of the NRSRO as to the credit quality of issues that they rate. The summaries
below are based upon publicly available information provided by the NRSROs.
Moody's Investors Service, Inc. ("Moody's")
LONG-TERM OBLIGATION RATINGS
Long-term ratings are assigned to issuers or obligations with an original maturity of one year or more and reflect both on
the likelihood of a default on contractually promised payments and the expected financial loss suffered in the event of default.
Aaa:
Obligations rated Aaa are judged to be of the highest quality, subject to the lowest level of credit risk.
Aa:
Obligations rated Aa are judged to be of high quality and are subject to very low credit risk.
A:
Obligations rated A are judged to be upper-medium grade and are subject to low credit risk.
Baa:
Obligations rated Baa are judged to be medium-grade and subject to moderate credit risk and as such may possess certain speculative
characteristics.
Ba:
Obligations rated Ba are judged to be speculative and are subject to substantial credit risk.
B:
Obligations rated B are considered speculative and are subject to high credit risk.
Caa:
Obligations rated Caa are judged to be speculative of poor standing and are subject to very high credit risk.
Ca:
Obligations rated Ca are highly speculative and are likely in, or very near, default, with some prospect of recovery of principal
and interest.
C:
Obligations rated C are the lowest rated and are typically in default, with little prospect for recovery of principal or
interest.
Note:
Moody's appends numerical modifiers 1, 2, and 3 to each generic rating classification from Aa through Caa. The modifier 1
indicates that the obligation ranks in the higher end of its generic rating category; the modifier 2 indicates a mid-range
ranking; and the modifier 3 indicates a ranking in the lower end of that generic rating category. Additionally, a "(hyb)"
indicator is appended to all ratings of hybrid securities issued by banks, insurers, finance companies, and securities firms.*
*
By their terms, hybrid securities allow for the omission of scheduled dividends, interest, or principal payments, which can
potentially result in impairment if such an omission occurs. Hybrid securities may also be subject to contractually allowable
write-downs of principal that could result in impairment. Together with the hybrid indicator, the long-term obligation rating
assigned to a hybrid security is an expression of the relative credit risk associated with that security.
SHORT-TERM OBLIGATION RATINGS FOR TAXABLE DEBT AND U.S. MUNICIPAL TAX-EXEMPT COMMERCIAL PAPER
Short-term ratings are assigned to obligations with an original maturity of thirteen months or less and reflect the likelihood
of a default on contractually promised payments.
P-1:
Issuers (or supporting institutions) rated Prime-1 have a superior ability to repay short-term debt obligations.
P-2:
Issuers (or supporting institutions) rated Prime-2 have a strong ability to repay short-term debt obligations.
P-3:
Issuers (or supporting institutions) rated Prime-3 have an acceptable ability to repay short-term obligations.
NP:
Issuers (or supporting institutions) rated Not Prime do not fall within any of the Prime rating categories.
U.S. MUNICIPAL SHORT-TERM DEBT AND DEMAND OBLIGATION RATINGS
Short-Term Obligation Ratings
The Municipal Investment Grade (MIG) scale is used to rate US municipal bond anticipation notes of up to three years maturity.
Municipal notes rated on the MIG scale may be secured by either pledged revenues or proceeds of a take-out financing received
prior to note maturity.
MIG 1:
This designation denotes superior credit quality. Excellent protection is afforded by established cash flows, highly reliable
liquidity support, or demonstrated broad-based access to the market for refinancing.
MIG 2:
This designation denotes strong credit quality. Margins of protection are ample, although not as large as in the preceding
group.
MIG 3:
This designation denotes acceptable credit quality. Liquidity and cash-flow protection may be narrow, and market access for
refinancing is likely to be less well-established.
SG:
This designation denotes speculative-grade credit quality. Debt instruments in this category may lack sufficient margins
of protection.
Demand Obligation Ratings
In the case of variable rate demand obligations (VRDOs), a two-component rating is assigned: a long or short-term debt rating
and a demand obligation rating. The first element represents Moody's evaluation of risk associated with scheduled principal
and interest payments. The second element represents Moody's evaluation of risk associated with the ability to receive purchase
price upon demand ("demand feature"). The second element uses a rating from a variation of the MIG scale called the Variable
Municipal Investment Grade (VMIG) scale.
VMIG 1:
This designation denotes superior credit quality. Excellent protection is afforded by the superior short-term credit strength
of the liquidity provider and structural and legal protections that ensure the timely payment of purchase price upon demand.
VMIG 2:
This designation denotes strong credit quality. Good protection is afforded by the strong short-term credit strength of the
liquidity provider and structural and legal protections that ensure the timely payment of purchase price upon demand.
VMIG 3:
This designation denotes acceptable credit quality. Adequate protection is afforded by the satisfactory short-term credit
strength of the liquidity provider and structural and legal protections that ensure the timely payment of purchase price upon
demand.
SG:
This designation denotes speculative-grade credit quality. Demand features rated in this category may be supported by a liquidity
provider that does not have an investment grade short-term rating or may lack the structural and/or legal protections necessary
to ensure the timely payment of purchase price upon demand.
Standard & Poor's Ratings Services ("Standard & Poor's"), a division of The McGraw-Hill Companies, Inc.
ISSUE CREDIT RATINGS
A Standard & Poor's issue credit rating is a forward-looking opinion about the creditworthiness of an obligor with respect
to a specific financial obligation, a specific class of financial obligations, or a specific financial program (including
ratings on medium-term note programs and commercial paper programs). It takes into consideration the creditworthiness of guarantors,
insurers, or other forms of credit enhancement on the obligation and takes into account the currency in which the obligation
is denominated. The opinion reflects Standard & Poor's view of the obligor's capacity and willingness to meet its financial
commitments as they come due, and may assess terms, such as collateral security and subordination, which could affect ultimate
payment in the event of default.
Issue credit ratings are based, in varying degrees, on Standard & Poor's analysis of the following considerations:
-
Likelihood of payment-capacity and willingness of the obligor to meet its financial commitment on an obligation in accordance
with the terms of the obligation;
-
Nature of and provisions of the obligation;
-
Protection afforded by, and relative position of, the obligation in the event of bankruptcy, reorganization, or other arrangement
under the laws of bankruptcy and other laws affecting creditors' rights.
Issue ratings are an assessment of default risk, but may incorporate an assessment of relative seniority or ultimate recovery
in the event of default. Junior obligations are typically rated lower than senior obligations, to reflect the lower priority
in bankruptcy, as noted above. (Such differentiation may apply when an entity has both senior and subordinated obligations,
secured and unsecured obligations, or operating company and holding company obligations.)
LONG-TERM ISSUE CREDIT RATINGS
AAA:
An obligation rated 'AAA' has the highest rating assigned by Standard & Poor's. The obligor's capacity to meet its financial
commitment on the obligation is extremely strong.
AA:
An obligation rated 'AA' differs from the highest-rated obligations only to a small degree. The obligor's capacity to meet
its financial commitment on the obligation is very strong.
A:
An obligation rated 'A' is somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions
than obligations in higher-rated categories. However, the obligor's capacity to meet its financial commitment on the obligation
is still strong.
BBB:
An obligation rated 'BBB' exhibits adequate protection parameters. However, adverse economic conditions or changing circumstances
are more likely to lead to a weakened capacity of the obligor to meet its financial commitment on the obligation.
BB; B; CCC; CC; and C:
Obligations rated 'BB', 'B', 'CCC', 'CC', and 'C' are regarded as having significant speculative characteristics. 'BB' indicates
the least degree of speculation and 'C' the highest. While such obligations will likely have some quality and protective characteristics,
these may be outweighed by large uncertainties or major exposures to adverse conditions.
BB:
An obligation rated 'BB' is less vulnerable to nonpayment than other speculative issues. However, it faces major ongoing
uncertainties or exposure to adverse business, financial, or economic conditions which could lead to the obligor's inadequate
capacity to meet its financial commitment on the obligation.
B:
An obligation rated 'B' is more vulnerable to nonpayment than obligations rated 'BB', but the obligor currently has the capacity
to meet its financial commitment on the obligation. Adverse business, financial, or economic conditions will likely impair
the obligor's capacity or willingness to meet its financial commitment on the obligation.
CCC:
An obligation rated 'CCC' is currently vulnerable to nonpayment, and is dependent upon favorable business, financial, and
economic conditions for the obligor to meet its financial commitment on the obligation. In the event of adverse business,
financial, or economic conditions, the obligor is not likely to have the capacity to meet its financial commitment on the
obligation.
CC:
An obligation rated 'CC' is currently highly vulnerable to nonpayment.
C:
A 'C' rating is assigned to obligations that are currently highly vulnerable to nonpayment, obligations that have payment
arrearages allowed by the terms of the documents, or obligations of an issuer that is the subject of a bankruptcy petition
or similar action which have not experienced a payment default. Among others, the 'C' rating may be assigned to subordinated
debt, preferred stock or other obligations on which cash payments have been suspended in accordance with the instrument's
terms or when preferred stock is the subject of a distressed exchange offer, whereby some or all of the issue is either repurchased
for an amount of cash or replaced by other instruments having a total value that is less than par.
D:
An obligation rated 'D' is in payment default. The 'D' rating category is used when payments on an obligation are not made
on the date due, unless Standard & Poor's believes that such payments will be made within five business days, irrespective
of any grace period. The 'D' rating also will be used upon the filing of a bankruptcy petition or the taking of similar action
if payments on an obligation are jeopardized. An obligation's rating is lowered to 'D' upon completion of a distressed exchange
offer, whereby some or all of the issue is either repurchased for an amount of cash or replaced by other instruments having
a total value that is less than par.
NR:
This indicates that no rating has been requested, that there is insufficient information on which to base a rating, or that
Standard & Poor's does not rate a particular obligation as a matter of policy.
Note:
The ratings from 'AA' to 'CCC' may be modified by the addition of a plus (+) or minus (-) sign to show relative standing
within the major rating categories.
SHORT-TERM ISSUE CREDIT RATINGS
Short-term ratings are generally assigned to those obligations considered short-term in the relevant market. In the U.S.,
for example, that means obligations with an original maturity of no more than 365 days-including commercial paper.
A-1:
A short-term obligation rated 'A-1' is rated in the highest category by Standard & Poor's. The obligor's capacity to meet
its financial commitment on the obligation is strong. Within this category, certain obligations are designated with a plus
sign (+). This indicates that the obligor's capacity to meet its financial commitment on these obligations is extremely strong.
A-2:
A short-term obligation rated 'A-2' is somewhat more susceptible to the adverse effects of changes in circumstances and economic
conditions than obligations in higher rating categories. However, the obligor's capacity to meet its financial commitment
on the obligation is satisfactory.
A-3:
A short-term obligation rated 'A-3' exhibits adequate protection parameters. However, adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity of the obligor to meet its financial commitment on the obligation.
B:
A short-term obligation rated 'B' is regarded as vulnerable and has significant speculative characteristics. The obligor
currently has the capacity to meet its financial commitments; however, it faces major ongoing uncertainties which could lead
to the obligor's inadequate capacity to meet its financial commitments.
C:
A short-term obligation rated 'C' is currently vulnerable to nonpayment and is dependent upon favorable business, financial,
and economic conditions for the obligor to meet its financial commitment on the obligation.
D:
A short-term obligation rated 'D' is in payment default. The 'D' rating category is used when payments on an obligation are
not made on the date due, unless Standard & Poor's believes that such payments will be made within any stated grace period.
However, any stated grace period longer than five business days will be treated as five business days. The 'D' rating also
will be used upon the filing of a bankruptcy petition or the taking of a similar action if payments on an obligation are jeopardized.
MUNICIPAL SHORT-TERM NOTE RATINGS
A Standard & Poor's U.S. municipal note rating reflects Standard & Poor's opinion about the liquidity factors and market access
risks unique to the notes. Notes due in three years or less will likely receive a note rating. Notes with an original maturity
of more than three years will most likely receive a long-term debt rating. In determining which type of rating, if any, to
assign, Standard & Poor's analysis will review the following considerations:
-
Amortization schedule-the larger the final maturity relative to other maturities, the more likely it will be treated as a
note; and
-
Source of payment-the more dependent the issue is on the market for its refinancing, the more likely it will be treated as
a note.
SP-1:
Strong capacity to pay principal and interest. An issue determined to possess a very strong capacity to pay debt service
is given a plus (+) designation.
SP-2:
Satisfactory capacity to pay principal and interest, with some vulnerability to adverse financial and economic changes over
the term of the notes.
SP-3:
Speculative capacity to pay principal and interest.
ISSUER CREDIT RATINGS
A Standard & Poor's issuer credit rating is a forward-looking opinion about an obligor's overall creditworthiness in order
to pay its financial obligations. This opinion focuses on the obligor's capacity and willingness to meet its financial commitments
as they come due. It does not apply to any specific financial obligation, as it does not take into account the nature of and
provisions of the obligation, its standing in bankruptcy or liquidation, statutory preferences, or the legality and enforceability
of the obligation.
LONG-TERM ISSUER CREDIT RATINGS
AAA:
An obligor rated 'AAA' has extremely strong capacity to meet its financial commitments. 'AAA' is the highest issuer credit
rating assigned by Standard & Poor's.
AA:
An obligor rated 'AA' has very strong capacity to meet its financial commitments. It differs from the highest-rated obligors
only to a small degree.
A:
An obligor rated 'A' has strong capacity to meet its financial commitments but is somewhat more susceptible to the adverse
effects of changes in circumstances and economic conditions than obligors in higher-rated categories.
BBB:
An obligor rated 'BBB' has adequate capacity to meet its financial commitments. However, adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity of the obligor to meet its financial commitments.
BB; B; CCC; and CC:
Obligors rated 'BB', 'B', 'CCC', and 'CC' are regarded as having significant speculative characteristics. 'BB' indicates
the least degree of speculation and 'CC' the highest. While such obligors will likely have some quality and protective characteristics,
these may be outweighed by large uncertainties or major exposures to adverse conditions.
BB:
An obligor rated 'BB' is less vulnerable in the near term than other lower-rated obligors. However, it faces major ongoing
uncertainties and exposure to adverse business, financial, or economic conditions which could lead to the obligor's inadequate
capacity to meet its financial commitments.
B:
An obligor rated 'B' is more vulnerable than the obligors rated 'BB', but the obligor currently has the capacity to meet
its financial commitments. Adverse business, financial, or economic conditions will likely impair the obligor's capacity or
willingness to meet its financial commitments.
CCC:
An obligor rated 'CCC' is currently vulnerable, and is dependent upon favorable business, financial, and economic conditions
to meet its financial commitments.
CC:
An obligor rated 'CC' is currently highly vulnerable.
R:
An obligor rated 'R' is under regulatory supervision owing to its financial condition. During the pendency of the regulatory
supervision the regulators may have the power to favor one class of obligations over others or pay some obligations and not
others.
SD and D:
An obligor rated 'SD' (selective default) or 'D' is in payment default on one or more of its financial obligations (rated
or unrated) unless Standard & Poor's believes that such payments will be made within five business days, irrespective of any
grace period. The 'D' rating also will be used upon the filing of a bankruptcy petition or the taking of similar action if
payments on a financial obligation are jeopardized. A 'D' rating is assigned when Standard & Poor's believes that the default
will be a general default and that the obligor will fail to pay all or substantially all of its obligations as they come due.
An 'SD' rating is assigned when Standard & Poor's believes that the obligor has selectively defaulted on a specific issue
or class of obligations, but it will continue to meet its payment obligations on other issues or classes of obligations in
a timely manner. A selective default includes the completion of a distressed exchange offer, whereby one or more financial
obligation is either repurchased for an amount of cash or replaced by other instruments having a total value that is less
than par.
NR:
An issuer designated 'NR' is not rated.
Note:
The ratings from 'AA' to 'CCC' may be modified by the addition of a plus (+) or minus (-) sign to show relative standing
within the major rating categories.
SHORT-TERM ISSUER CREDIT RATINGS
A-1:
An obligor rated 'A-1' has strong capacity to meet its financial commitments. It is rated in the highest category by Standard
& Poor's. Within this category, certain obligors are designated with a plus sign (+). This indicates that the obligor's capacity
to meet its financial commitments is extremely strong.
A-2:
An obligor rated 'A-2' has satisfactory capacity to meet its financial commitments. However, it is somewhat more susceptible
to the adverse effects of changes in circumstances and economic conditions than obligors in the highest rating category.
A-3:
An obligor rated 'A-3' has adequate capacity to meet its financial obligations. However, adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity of the obligor to meet its financial commitments.
B:
An obligor rated 'B' is regarded as vulnerable and has significant speculative characteristics. The obligor currently has
the capacity to meet its financial commitments; however, it faces major ongoing uncertainties which could lead to the obligor's
inadequate capacity to meet its financial commitments.
C:
An obligor rated 'C' is currently vulnerable to nonpayment and is dependent upon favorable business, financial, and economic
conditions for it to meet its financial commitments.
R:
An obligor rated 'R' is under regulatory supervision owing to its financial condition. During the pendency of the regulatory
supervision the regulators may have the power to favor one class of obligations over others or pay some obligations and not
others. Please see Standard & Poor's issue credit ratings for a more detailed description of the effects of regulatory supervision
on specific issues or classes of obligations.
SD and D:
An obligor rated 'SD' (selective default) or 'D' has failed to pay one or more of its financial obligations (rated or unrated)
when it came due, unless Standard & Poor's believes that such payments will be made within any stated grace period. However,
any stated grace period longer than five business days will be treated as five business days. A 'D' rating is assigned when
Standard & Poor's believes that the default will be a general default and that the obligor will fail to pay all or substantially
all of its obligations as they come due. An 'SD' rating is assigned when Standard & Poor's believes that the obligor has selectively
defaulted on a specific issue or class of obligations but it will continue to meet its payment obligations on other issues
or classes of obligations in a timely manner. Please see Standard & Poor's issue credit ratings for a more detailed description
of the effects of a default on specific issues or classes of obligations.
NR:
An issuer designated 'NR' is not rated.
Fitch, Inc.
International credit ratings relate to either foreign currency or local currency commitments and, in both cases, assess the
capacity to meet these commitments using a globally applicable scale. As such, both foreign currency and local currency international
ratings are internationally comparable assessments. The local currency international rating measures the likelihood of repayment
in the currency of the jurisdiction in which the issuer is domiciled and hence does not take account of the possibility that
it will not be possible to convert local currency into foreign currency, or make transfers between sovereign jurisdictions
(transfer and convertibility risk). Foreign currency ratings additionally consider the profile of the issuer or note after
taking into account transfer and convertibility risk. Where the rating is not explicitly described in the relevant rating
action commentary as local or foreign currency, the reader should assume that the rating is a "foreign currency" rating (i.e.
the rating is applicable for all convertible currencies of obligation).
INTERNATIONAL LONG-TERM ISSUER RATINGS
AAA:
Highest credit quality. 'AAA' ratings denote the lowest expectation of default risk. They are assigned only in cases of exceptionally
strong capacity for payment of financial commitments. This capacity is highly unlikely to be adversely affected by foreseeable
events.
AA:
Very high credit quality. 'AA' ratings denote expectations of very low default risk. They indicate very strong capacity for
payment of financial commitments. This capacity is not significantly vulnerable to foreseeable events.
A:
High credit quality. 'A' ratings denote expectations of low default risk. The capacity for payment of financial commitments
is considered strong. This capacity may, nevertheless, be more vulnerable to adverse business or economic conditions than
is the case for higher ratings.
BBB:
Good credit quality. 'BBB' ratings indicate that expectations of default risk are currently low. The capacity for payment
of financial commitments is considered adequate but adverse business or economic conditions are more likely to impair this
capacity.
BB:
Speculative. 'BB' ratings indicate an elevated vulnerability to default risk, particularly in the event of adverse changes
in business or economic conditions over time; however, business or financial flexibility exists which supports the servicing
of financial commitments.
B:
Highly speculative. 'B' ratings indicate that material default risk is present, but a limited margin of safety remains. Financial
commitments are currently being met; however, capacity for continued payment is vulnerable to deterioration in the business
and economic environment.
CCC:
Substantial credit risk. Default is a real possibility.
CC:
Very high levels of credit risk. Default of some kind appears probable.
C:
Exceptionally high levels of credit risk. Default is imminent or inevitable, or the issuer is in standstill. Conditions that
are indicative of a 'C' category rating for an issuer include:
a. the issuer has entered into a grace or cure period following non-payment of a material financial obligation;
b. the issuer has entered into a temporary negotiated waiver or standstill agreement following a payment default on a material
financial obligation; or
c. Fitch Ratings otherwise believes a condition of 'RD' or 'D' to be imminent or inevitable, including through the formal
announcement of a distressed debt exchange.
RD:
Restricted default. 'RD' ratings indicate an issuer that in Fitch Ratings' opinion has experienced an uncured payment default
on a bond, loan or other material financial obligation but which has not entered into bankruptcy filings, administration,
receivership, liquidation or other formal winding-up procedure, and which has not otherwise ceased operating. This would include:
a. the selective payment default on a specific class or currency of debt;
b. the uncured expiry of any applicable grace period, cure period or default forbearance period following a payment default
on a bank loan, capital markets security or other material financial obligation;
c. the extension of multiple waivers or forbearance periods upon a payment default on one or more material financial obligations,
either in series or in parallel; or
d. execution of a distressed debt exchange on one or more material financial obligations.
D:
Default. 'D' ratings indicate an issuer that in Fitch Ratings' opinion has entered into bankruptcy filings, administration,
receivership, liquidation or other formal winding-up procedure, or which has otherwise ceased business. Default ratings are
not assigned prospectively to entities or their obligations; within this context, non-payment on an instrument that contains
a deferral feature or grace period will generally not be considered a default until after the expiration of the deferral or
grace period, unless a default is otherwise driven by bankruptcy or other similar circumstance, or by a distressed debt exchange.
"Imminent" default typically refers to the occasion where a payment default has been intimated by the issuer, and is all but
inevitable. This may, for example, be where an issuer has missed a scheduled payment, but (as is typical) has a grace period
during which it may cure the payment default. Another alternative would be where an issuer has formally announced a distressed
debt exchange, but the date of the exchange still lies several days or weeks in the immediate future. In all cases, the assignment
of a default rating reflects the agency's opinion as to the most appropriate rating category consistent with the rest of its
universe of ratings, and may differ from the definition of default under the terms of an issuer's financial obligations or
local commercial practice.
Note:
The modifiers "+" or "-" may be appended to a rating to denote relative status within major rating categories. Such suffixes
are not added to the 'AAA' Long-Term category, or to Long-Term categories below 'B'.
INTERNATIONAL SHORT-TERM ISSUER AND ISSUE CREDIT RATINGS
A short-term issuer or obligation rating is based in all cases on the short-term vulnerability to default of the rated entity
or security stream and relates to the capacity to meet financial obligations in accordance with the documentation governing
the relevant obligation. Short-Term Ratings are assigned to obligations whose initial maturity is viewed as "short term" based
on market convention. Typically, this means up to 13 months for corporate, sovereign, and structured obligations, and up to
36 months for obligations in U.S. public finance markets.
F1:
Highest short-term credit quality. Indicates the strongest intrinsic capacity for timely payment of financial commitments;
may have an added "+" to denote any exceptionally strong credit feature.
F2:
Good short-term credit quality. Good intrinsic capacity for timely payment of financial commitments.
F3:
Fair short-term credit quality. The intrinsic capacity for timely payment of financial commitments is adequate.
B:
Speculative short-term credit quality. Minimal capacity for timely payment of financial commitments, plus heightened vulnerability
to near term adverse changes in financial and economic conditions.
C:
High short-term default risk. Default is a real possibility.
RD:
Restricted default. Indicates an entity that has defaulted on one or more of its financial commitments, although it continues
to meet other financial obligations. Applicable to entity ratings only.
D:
Default Indicates a broad-based default event for an entity, or the default of a short-term obligation.
DBRS
LONG-TERM OBLIGATIONS
The DBRS® long-term rating scale provides an opinion on the risk of default. That is, the risk that an issuer will fail to
satisfy its financial obligations in accordance with the terms under which an obligations has been issued. Ratings are based
on quantitative and qualitative considerations relevant to the issuer, and the relative ranking of claims. All rating categories
other than AAA and D also contain subcategories "(high)" and "(low)". The absence of either a "(high)" or "(low)" designation
indicates the rating is in the middle of the category.
AAA:
Highest credit quality. The capacity for the payment of financial obligations is exceptionally high and unlikely to be adversely
affected by future events.
AA:
Superior credit quality. The capacity for the payment of financial obligations is considered high. Credit quality differs
from AAA only to a small degree. Unlikely to be significantly vulnerable to future events.
A:
Good credit quality. The capacity for the payment of financial obligations is substantial, but of lesser credit quality than
AA. May be vulnerable to future events, but qualifying negative factors are considered manageable.
BBB:
Adequate credit quality. The capacity for the payment of financial obligations is considered acceptable. May be vulnerable
to future events.
BB:
Speculative, non investment-grade credit quality. The capacity for the payment of financial obligations is uncertain. Vulnerable
to future events.
B:
Highly speculative credit quality. There is a high level of uncertainty as to the capacity to meet financial obligations.
CCC/CC/C:
Very highly speculative credit quality. In danger of defaulting on financial obligations. There is little difference between
these three categories, although CC and C ratings are normally applied to obligations that are seen as highly likely to default,
or subordinated to obligations rated in the CCC to B range. Obligations in respect of which default has not technically taken
place but is considered inevitable may be rated in the C category.
D:
A financial obligation has not been met or it is clear that a financial obligation will not be met in the near future or
a debt instrument has been subject to a distressed exchange. A downgrade to D may not immediately follow an insolvency or
restructuring filing as grace periods or extenuating circumstances may exist.
COMMERCIAL PAPER AND SHORT-TERM DEBT
The DBRS® short-term debt rating scale provides an opinion on the risk that an issuer will not meet its short-term financial
obligations in a timely manner. Ratings are based on quantitative and qualitative considerations relevant to the issuer and
the relative ranking of claims. The R-1 and R-2 rating categories are further denoted by the subcategories "(high)," "(middle),"
and "(low)."
R-1 (high):
Highest credit quality. The capacity for the payment of short-term financial obligations as they fall due is exceptionally
high. Unlikely to be adversely affected by future events.
R-1 (middle):
Superior credit quality. The capacity for the payment of short-term financial obligations as they fall due is very high.
Differs from R-1 (high) by a relatively modest degree. Unlikely to be significantly vulnerable to future events.
R-1 (low):
Good credit quality. The capacity for the payment of short-term financial obligations as they fall due is substantial. Overall
strength is not as favourable as higher rating categories. May be vulnerable to future events, but qualifying negative factors
are considered manageable.
R-2 (high):
Upper end of adequate credit quality. The capacity for the payment of short-term financial obligations as they fall due is
acceptable. May be vulnerable to future events.
R-2 (middle):
Adequate credit quality. The capacity for the payment of short-term financial obligations as they fall due is acceptable.
May be vulnerable to future events or may be exposed to other factors that could reduce credit quality.
R-2 (low):
Lower end of adequate credit quality. The capacity for the payment of short-term financial obligations as they fall due is
acceptable. May be vulnerable to future events. A number of challenges are present that could affect the issuer's ability
to meet such obligations.
R-3:
Lowest end of adequate credit quality. There is a capacity for the payment of short-term financial obligations as they fall
due. May be vulnerable to future events and the certainty of meeting such obligations could be impacted by a variety of developments.
R-4:
Speculative credit quality. The capacity for the payment of short-term financial obligations as they fall due is uncertain.
R-5:
Highly speculative credit quality. There is a high level of uncertainty as to the capacity to meet short-term financial obligations
as they fall due.
D:
A financial obligation has not been met or it is clear that a financial obligation will not be met in the near future, or
a debt instrument has been subject to a distressed exchange. A downgrade to D may not immediately follow an insolvency or
restructuring filing as grace periods, other procedural considerations, or extenuating circumstance may exist.
Financial Statements
The Fund's audited Financial Statements, included in the Fund's Annual Report dated October 31, 2012, including the notes thereto and the report of KPMG LLP thereon, are incorporated by reference into this Statement of Additional
Information.
Oppenheimer Small- & Mid- Cap Value Fund
Website
www.oppenheimerfunds.com
Investment Adviser and Sub-Adviser
OFI Global Asset Management, Inc. and OppenheimerFunds, Inc.
Two World Financial Center
225 Liberty Street, 11th Floor
New York, New York 10281-1008
Distributor
OppenheimerFunds Distributor, Inc.
Two World Financial Center
225 Liberty Street, 11th Floor
New York, New York 10281-1008
Transfer Agent and Sub-Transfer Agent
OFI Global Asset Management, Inc. and
Shareholder Services Inc. doing business as OppenheimerFunds Services
P.O. Box 5270
Denver, Colorado 80217
1.800.CALL OPP (225.5677)
Custodian Bank
Brown Brothers Harriman & Co.
40 Water Street
Boston, Massachusetts 02109-3661
Independent Registered Public Accounting Firm
KPMG LLP
1225 17th Street, Suite 800
Denver, Colorado 80202
Legal Counsel
Kramer Levin Naftalis & Frankel LLP
1177 Avenue of the Americas
New York, New York 10036
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