Registration No. 33-00371
File No. 811-04410
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES
ACT OF 1933 [X]
Pre-Effective Amendment No. [
]
Post-Effective Amendment No. 44 [X]
and/or
REGISTRATION STATEMENT
UNDER THE INVESTMENT COMPANY ACT OF 1940
[X]
Amendment No. 46
OPPENHEIMER DISCOVERY FUND
(Exact Name of Registrant as Specified in
Charter)
6803 South Tucson Way, Centennial,
Colorado 80112-3924
(Address of Principal Executive Offices)
(Zip Code)
(303) 768-3200
(Registrant’s Telephone Number, including
Area Code)
Arthur S. Gabinet, Esq.
OFI Global Asset Management, Inc.
Two World Financial Center, 225 Liberty
Street, New York, NY 10281
(Name and Address of Agent for Service)
It is proposed that this filing will become
effective (check appropriate box):
[ ] immediately upon filing pursuant
to paragraph (b)
[X] on
January 28, 2013
pursuant to paragraph (b)
[ ] 60 days after filing pursuant
to paragraph (a)(1)
[ ] on ______________ pursuant to
paragraph (a)(1)
[ ] 75 days after filing pursuant
to paragraph (a)(2)
[ ] on ______________ pursuant to
paragraph (a)(2) of Rule 485.
If appropriate, check the following box:
[ ] This
post-effective amendment designates a new effective date for a previously filed post-effective amendment.
OPPENHEIMER
Discovery Fund
Prospectus dated January 28, 2013
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NYSE Ticker Symbols
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Class A
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OPOCX
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Class B
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ODIBX
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Class C
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ODICX
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Class N
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ODINX
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Class Y
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ODIYX
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Class I
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ODIIX
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Oppenheimer Discovery Fund is a mutual fund that seeks capital
appreciation. It emphasizes investments in common stocks of U.S. growth companies that have a small market capitalization.
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 Discovery 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 9 of the prospectus and in the sections "How to Buy Shares" beginning on page 53
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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0.66%
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0.66%
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0.66%
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0.66%
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0.66%
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0.66%
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Distribution and/or Service (12b-1) Fees
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0.24%
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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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0.39%
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0.64%
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0.41%
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0.39%
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0.24%
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0.03%
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Total Annual Fund Operating Expenses
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1.29%
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2.30%
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2.07%
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1.55%
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0.90%
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0.69%
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Fee Waiver and/or Expense Reimbursement*
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(0.06%)
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(0.23%)
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(0.03%)
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(0.01%)
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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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1.23%
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2.07%
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2.04%
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1.54%
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0.90%
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0.69%
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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 net assets per fiscal year for Class A. These limitations may not be amended or withdrawn until one year after the date
of this prospectus. Expenses for Class A have been restated to reflect current fees.
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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694
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$
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957
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$
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1,241
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$
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2,046
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$
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694
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$
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957
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$
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1,241
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$
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2,046
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Class B
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$
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712
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$
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1,004
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$
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1,423
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$
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2,150
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$
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212
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$
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704
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$
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1,223
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$
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2,150
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Class C
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$
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309
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$
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652
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$
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1,122
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$
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2,422
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$
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209
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$
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652
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$
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1,122
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$
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2,422
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Class N
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$
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258
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$
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492
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$
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850
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$
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1,859
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$
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158
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$
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492
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$
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850
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$
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1,859
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Class Y
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$
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92
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$
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288
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$
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501
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$
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1,113
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$
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92
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$
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288
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$
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501
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$
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1,113
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Class I
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$
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71
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$
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221
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$
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385
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$
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861
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$
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71
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$
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221
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$
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385
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$
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861
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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 100% of
the average value of its portfolio.
Principal Investment Strategies.
The Fund mainly invests
in common stocks of U.S. companies that the portfolio manager believes have favorable growth prospects. The Fund emphasizes stocks
of small-capitalization (or "small-cap") companies, which are defined as companies with a market capitalization of less than $3
billion when the Fund buys them. A company's "market capitalization" is the value of its outstanding common stock relative to that
of other companies. Companies are generally classified as small-cap, mid-cap or large-cap. The Fund's target capitalization
range may change over time. These stocks may be traded on stock exchanges or over-the-counter.
The portfolio manager looks for companies with high growth potential. This approach includes
fundamental analysis of a company's financial statements and management structure and consideration of the company's operations
and product development, as well as its position in its industry. The portfolio manager also evaluates research on particular industries,
market trends and general economic conditions.
The portfolio manager currently seeks companies with proven management records that are
able to handle rapid growth, companies with innovative products or services, and companies that have above average
growth profiles and have what the portfolio manager believes are sustainable growth rates. These criteria can vary.
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 economic or market sector. To the extent that the Fund increases its emphasis on investments in a particular industry or sector,
the value of its investments may fluctuate more in response to events affecting that industry or sector, such as changes in economic
conditions, government regulations, availability of basic resources or supplies, or other events that affect that industry or sector
more than others.
Main Risks of Small-Cap Companies.
Small-cap companies may
be either established or newer companies, including "unseasoned" companies that have typically been in operation for less than
three years. While smaller companies might offer greater opportunities for gain than larger companies, they also 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 it might be harder for the Fund to dispose of its
holdings at an acceptable price when it wants to sell them. Small-cap 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-cap companies
typically reinvest a high proportion of their earnings in their business, they may lack liquidity in a declining market, particularly
if they are newer companies. Small-cap 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. It may take a substantial period of time before the Fund realizes
a gain on an investment in a small-sized company, if it realizes any gain at all.
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 Growth Investing.
If a growth company's earnings
or stock price fails to increase as anticipated, or if its business plans do not produce the expected results, its securities may
decline sharply. Growth companies may be newer or smaller companies that may experience greater stock price fluctuations and risks
of loss than larger, more established companies. Newer growth companies tend to retain a large part of their earnings for research,
development or investments in capital assets. Therefore, they may not pay any dividends for some time. Growth investing has gone
in and out of favor during past market cycles and is likely to continue to do so. During periods when growth investing is out of
favor or when markets are unstable, it may be more difficult to sell growth company securities at an acceptable price. Growth stocks
may also be more volatile than other securities because of investor speculation.
Who Is The Fund Designed For?
The Fund is designed primarily
for investors seeking capital growth over the long term from small-cap stocks. Those investors should be willing to assume the
risks of short-term share price fluctuations and losses that are typical for an aggressive growth fund focusing on stocks of small-cap
issuers. Because of its focus on long-term growth, the Fund may be appropriate for investors with a higher risk tolerance and longer
term investment goals. The Fund does not seek current income and the income from its investments will likely be small, so it is
not designed for investors needing 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/investors/overview/DiscoveryFund
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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 21.41% (2nd Qtr
03) and the lowest return was -25.33% (4th Qtr 08). For the period from January 1, 2012 to December 31, 2012, the
cumulative return before sales charges and taxes was 16.99%.
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
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Class A Shares (inception 9/11/86)
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Return Before Taxes
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10.27%
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2.25%
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8.00%
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Return After Taxes on Distributions
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9.09%
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1.81%
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7.75%
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Return After Taxes on Distributions and Sale of Fund Shares
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8.19%
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1.88%
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7.06%
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Class B Shares (inception 4/4/94)
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11.02%
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2.29%
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8.13%
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Class C Shares (inception 10/2/95)
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15.09%
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2.66%
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7.79%
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Class N Shares (inception 3/1/01)
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15.67%
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3.19%
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8.34%
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Class Y Shares (inception 6/1/94)
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17.41%
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3.84%
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8.98%
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Russell 2000 Growth Index
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14.59%
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3.49%
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9.80%
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(reflects no deduction for fees, expenses or taxes)
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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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S&P 500 Index
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16.00%
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1.66%
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|
3.64%
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|
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(reflects no deduction for fees, expenses or taxes)
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|
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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 Manager.
Ronald J. Zibelli, Jr., CFA, has
been Vice President of the Fund since June 2006 and portfolio manager of the Fund since May 2006.
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.
Small-Cap Companies.
Small-cap companies may be either
established or newer 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.
Investing in Growth Companies.
Growth companies are companies
whose earnings and stock prices are expected to grow at a faster rate than the overall market. Growth companies can be new companies
or established companies that may be entering a growth cycle in their business. Their anticipated growth may come from developing
new products or services or from expanding into new or growing markets. Growth companies may be applying new technologies, new
or improved distribution methods or new business models that could enable them to capture an important or dominant market position.
They may have a special area of expertise or the ability to take advantage of changes in demographic or other factors in a more
profitable way. Newer growth companies tend to retain a large part of their earnings for research, development or investments in
capital assets. Although newer growth companies may not pay any dividends for some time, their stocks may be valued because
of their potential for price increases. Current examples include companies in the fields of telecommunications, computer software,
and new consumer products.
Growth stocks may be less liquid and more
volatile than other stock investments. They may lose value if the company's business plans do not produce the expected results,
or if growth investing falls out of favor with investors. Growth stocks may also be more volatile because of investor speculation.
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.
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.
Risks of Foreign Investing.
While foreign securities may
offer special investment opportunities, they are also subject to special risks. Foreign issuers are usually not
subject to the same accounting and disclosure requirements as U.S. companies are subject to, which may make it difficult to
evaluate a foreign company's operations or financial condition. A change in 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 of any income or distributions the
Fund may receive on those securities. Additionally, the value of foreign investments may be affected by exchange control regulations,
expropriation or nationalization of a company's assets, foreign taxes, higher transaction and other costs, delays in settlement
of transactions, changes in economic or monetary policy in the U.S. or abroad, or other political and economic factors.
The Fund has no limits on the amount of its assets that can be
invested in foreign securities but has adopted an operating policy limiting its investments in foreign securities to 25% of
its total assets.
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.
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 types of derivatives the Fund can 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. If the Fund uses a hedging instrument at the wrong time or
judges market conditions incorrectly, however, the hedge might be unsuccessful or could reduce the Fund's 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.
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 10% of its net
assets in illiquid or restricted securities. The Board can increase that limit to 15%. 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.
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.
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.
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.
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.
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. 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 as the Fund's assets grow: 0.75% of the first $200
million of average annual net assets, 0.72% of the next $200 million, 0.69% of the next $200 million, 0.66% of the
next $200 million, 0.60% of the next $700 million, and 0.58% of average annual net assets in excess of $1.5 billion, calculated
on the daily net assets of the Fund. The Fund's management fee for the fiscal year ended September 30, 2012 was 0.66%
of average annual net assets for each class of shares, 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 annual net assets per fiscal year for Class A shares. These limitations may not be amended or withdrawn until one
year after the date of this prospectus.
The Manager has 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 September 30, 2012, these indirect expenses were less than 0.01% of
average annual net assets and therefore are not reflected in the Annual Fund Operating Expenses table shown earlier in this
prospectus.
A discussion regarding the basis for the Board of Trustees' approval
of the Fund's investment advisory arrangements is available in the Fund's Annual Report to shareholders for the fiscal
year ended September 30, 2012.
Portfolio Manager.
The Fund's portfolio is managed by Ronald
J. Zibelli, Jr., CFA, who is primarily responsible for the day-to-day management of the Fund's investments. Mr. Zibelli has
been a Vice President of the Fund since June 2006 and portfolio manager of the Fund since May 2006.
Mr. Zibelli has been a Vice President of the Sub-Adviser since
May 2006. Prior to joining the Sub-Adviser, he spent six years at Merrill Lynch Investment Managers, during which time he was a
Managing Director and Small Cap Growth Team Leader, responsible for managing 11 portfolios. Prior to joining Merrill Lynch Investment
Managers, Mr. Zibelli spent 12 years with Chase Manhattan Bank, including two years as Senior Portfolio Manager (U.S. Small Cap
Equity) at Chase Asset Management. Mr. Zibelli is a portfolio manager and officer of other portfolios in the OppenheimerFunds complex.
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.
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.
|
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:
-
For most types of retirement accounts that OppenheimerFunds offers,
the minimum initial investment is $500.
-
-
For certain retirement accounts that have automatic investments
through salary deduction plans, there is no minimum initial investment.
-
-
For an Asset Builder Plan or Automatic Exchange Plan or a government
allotment plan, the minimum initial investment is $500.
-
-
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.
-
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.
-
-
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.
-
-
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.
|
Amount of Purchase
|
Front-End Sales Charge As a Percentage of Offering Price
|
Front-End Sales Charge As a Percentage of Net Amount Invested
|
Concession As a Percentage of Offering Price
|
|
Less than $25,000
|
5.75%
|
|
6.10%
|
|
4.75%
|
|
|
$25,000 or more but less than $50,000
|
5.50%
|
|
5.82%
|
|
4.75%
|
|
|
$50,000 or more but less than $100,000
|
4.75%
|
|
4.99%
|
|
4.00%
|
|
|
$100,000 or more but less than $250,000
|
3.75%
|
|
3.90%
|
|
3.00%
|
|
|
$250,000 or more but less than $500,000
|
2.50%
|
|
2.56%
|
|
2.00%
|
|
|
$500,000 or more but less than $1 million
|
2.00%
|
|
2.04%
|
|
1.60%
|
|
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.
-
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:
-
-
your individual accounts (including IRAs, 403(b) plans and eligible
529 plans),
-
-
your joint accounts with your spouse,
-
-
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.
Effective after June 29, 2012, Class B shares are no
longer offered for new purchases. Any Class B share purchases for existing accounts will be made in Class A shares
of Oppenheimer Money Market Fund.
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
Service Plan for Class A Shares.
The Fund has adopted a
Service Plan for Class A shares that reimburses the Distributor for a portion of the costs of maintaining accounts and providing
services to Class A shareholders. Reimbursement is made periodically at an annual rate of up to 0.25% of the Class
A shares daily net assets. The Distributor currently uses all of those 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. Any unreimbursed
expenses the Distributor incurs with respect to Class A shares in any fiscal year cannot be recovered in subsequent periods. 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, subject to further guidance, 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
|
|
Year Ended
|
|
Year Ended
|
|
|
|
September 28,
|
|
September 30,
|
|
|
Class A
|
2012
1
|
|
2011
|
|
2010
|
|
2009
|
|
2008
|
|
|
Per Share Operating Data
|
|
|
|
|
|
|
|
|
|
|
|
Net asset value, beginning of period
|
$52.70
|
|
$47.67
|
|
$40.87
|
|
$47.26
|
|
$57.34
|
|
|
Income (loss) from investment operations:
|
|
|
|
|
|
|
|
|
|
|
|
Net investment loss
2
|
(0.35)
3
|
|
(0.62)
|
|
(0.49)
|
|
(0.36)
|
|
(0.49)
|
|
|
Net realized and unrealized gain (loss)
|
16.61
|
|
5.65
|
|
7.29
|
|
(5.47)
|
|
(9.04)
|
|
|
Total from investment operations
|
16.26
|
|
5.03
|
|
6.80
|
|
(5.83)
|
|
(9.53)
|
|
|
Dividends and/or distributions to shareholders:
|
|
|
|
|
|
|
|
|
|
|
|
Distributions from net realized gain
|
(3.18)
|
|
0.00
|
|
0.00
|
|
(0.56)
|
|
(0.55)
|
|
|
Net asset value, end of period
|
$65.78
|
|
$52.70
|
|
$47.67
|
|
$40.87
|
|
$47.26
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Return, at Net Asset Value
4
|
31.86%
|
|
10.55%
|
|
16.64%
|
|
(12.00)%
|
|
(16.77)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratios/Supplemental Data
|
|
|
|
|
|
|
|
|
|
|
|
Net assets, end of period (in thousands)
|
$1,142,202
|
|
$822,073
|
|
$729,419
|
|
$716,351
|
|
$485,075
|
|
|
Average net assets (in thousands)
|
$1,002,017
|
|
$930,632
|
|
$718,175
|
|
$415,774
|
|
$558,176
|
|
|
Ratios to average net assets:
5
|
|
|
|
|
|
|
|
|
|
|
|
Net investment loss
|
(0.58)%
3
|
|
(1.04)%
|
|
(1.11)%
|
|
(1.00)%
|
|
(0.91)%
|
|
|
Total expenses
6
|
1.29%
|
|
1.30%
|
|
1.45%
|
|
1.50%
|
|
1.26%
|
|
|
Expenses after payments, waivers and/or reimbursements and reduction to custodian expenses
|
1.24%
|
|
1.30%
|
|
1.34%
|
|
1.35%
|
|
1.26%
|
|
|
Portfolio turnover rate
|
100%
|
|
112%
|
|
111%
|
|
170%
|
|
127%
|
|
|
1. September 28, 2012 represents the last business day of the Fund's 2012 fiscal year.
|
|
|
|
2. Per share amounts calculated based on the average shares outstanding during the period.
|
|
|
|
3. Net investment income per share and the net investment income ratio include $0.23 and 0.38%, respectively, resulting from a special dividend from H&E Equipment Services, Inc. in September 2012.
|
|
|
|
4. 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.
|
|
|
|
5. Annualized for periods less than one full year.
|
|
|
|
6. Total expenses including indirect expenses from affiliated fund were as follows:
|
|
|
|
Year Ended September 28, 2012
|
1.29%
|
|
|
Year Ended September 30, 2011
|
1.30%
|
|
|
Year Ended September 30, 2010
|
1.45%
|
|
|
Year Ended September 30, 2009
|
1.50%
|
|
|
Year Ended September 30, 2008
|
1.26%
|
|
|
|
Year Ended
|
|
Year Ended
|
|
|
|
September 28,
|
|
September 30,
|
|
|
Class B
|
2012
1
|
|
2011
|
|
2010
|
|
2009
|
|
2008
|
|
|
Per Share Operating Data
|
|
|
|
|
|
|
|
|
|
|
|
Net asset value, beginning of period
|
$44.67
|
|
$40.72
|
|
$35.18
|
|
$41.12
|
|
$50.35
|
|
|
Income (loss) from investment operations:
|
|
|
|
|
|
|
|
|
|
|
|
Net investment loss
2
|
(0.72)
3
|
|
(0.92)
|
|
(0.72)
|
|
(0.55)
|
|
(0.80)
|
|
|
Net realized and unrealized gain (loss)
|
13.96
|
|
4.87
|
|
6.26
|
|
(4.83)
|
|
(7.88)
|
|
|
Total from investment operations
|
13.24
|
|
3.95
|
|
5.54
|
|
(5.38)
|
|
(8.68)
|
|
|
Dividends and/or distributions to shareholders:
|
|
|
|
|
|
|
|
|
|
|
|
Distributions from net realized gain
|
(3.18)
|
|
0.00
|
|
0.00
|
|
(0.56)
|
|
(0.55)
|
|
|
Net asset value, end of period
|
$54.73
|
|
$44.67
|
|
$40.72
|
|
$35.18
|
|
$41.12
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Return, at Net Asset Value
4
|
30.73%
|
|
9.70%
|
|
15.75%
|
|
(12.71)%
|
|
(17.42)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratios/Supplemental Data
|
|
|
|
|
|
|
|
|
|
|
|
Net assets, end of period (in thousands)
|
$70,099
|
|
$65,720
|
|
$77,831
|
|
$92,663
|
|
$43,927
|
|
|
Average net assets (in thousands)
|
$69,972
|
|
$86,703
|
|
$83,147
|
|
$41,661
|
|
$58,456
|
|
|
Ratios to average net assets:
5
|
|
|
|
|
|
|
|
|
|
|
|
Net investment loss
|
(1.44)%
3
|
|
(1.84)%
|
|
(1.90)%
|
|
(1.79)%
|
|
(1.70)%
|
|
|
Total expenses
6
|
2.30%
|
|
2.35%
|
|
2.52%
|
|
2.61%
|
|
2.05%
|
|
|
Expenses after payments, waivers and/or reimbursements and reduction to custodian expenses
|
2.07%
|
|
2.08%
|
|
2.13%
|
|
2.12%
|
|
2.05%
|
|
|
Portfolio turnover rate
|
100%
|
|
112%
|
|
111%
|
|
170%
|
|
127%
|
|
|
1. September 28, 2012 represents the last business day of the Fund's 2012 fiscal year.
|
|
|
|
2. Per share amounts calculated based on the average shares outstanding during the period.
|
|
|
|
3. Net investment income per share and the net investment income ratio include $0.19 and 0.38%, respectively, resulting from a special dividend from H&E Equipment Services, Inc. in September 2012.
|
|
|
|
4. 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.
|
|
|
|
5. Annualized for periods less than one full year.
|
|
|
|
6. Total expenses including indirect expenses from affiliated fund were as follows:
|
|
|
|
Year Ended September 28, 2012
|
2.30%
|
|
|
Year Ended September 30, 2011
|
2.35%
|
|
|
Year Ended September 30, 2010
|
2.52%
|
|
|
Year Ended September 30, 2009
|
2.61%
|
|
|
Year Ended September 30, 2008
|
2.05%
|
|
|
|
Year Ended
|
|
Year Ended
|
|
|
|
September 28,
|
|
September 30,
|
|
|
Class C
|
2012
1
|
|
2011
|
|
2010
|
|
2009
|
|
2008
|
|
|
Per Share Operating Data
|
|
|
|
|
|
|
|
|
|
|
|
Net asset value, beginning of period
|
$45.63
|
|
$41.60
|
|
$35.93
|
|
$41.96
|
|
$51.39
|
|
|
Income (loss) from investment operations:
|
|
|
|
|
|
|
|
|
|
|
|
Net investment loss
2
|
(0.71)
3
|
|
(0.92)
|
|
(0.73)
|
|
(0.56)
|
|
(0.84)
|
|
|
Net realized and unrealized gain (loss)
|
14.27
|
|
4.95
|
|
6.40
|
|
(4.91)
|
|
(8.04)
|
|
|
Total from investment operations
|
13.56
|
|
4.03
|
|
5.67
|
|
(5.47)
|
|
(8.88)
|
|
|
Dividends and/or distributions to shareholders:
|
|
|
|
|
|
|
|
|
|
|
|
Distributions from net realized gain
|
(3.18)
|
|
0.00
|
|
0.00
|
|
(0.56)
|
|
(0.55)
|
|
|
Net asset value, end of period
|
$56.01
|
|
$45.63
|
|
$41.60
|
|
$35.93
|
|
$41.96
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Return, at Net Asset Value
4
|
30.83%
|
|
9.69%
|
|
15.78%
|
|
(12.67)%
|
|
(17.46)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratios/Supplemental Data
|
|
|
|
|
|
|
|
|
|
|
|
Net assets, end of period (in thousands)
|
$142,944
|
|
$108,443
|
|
$90,710
|
|
$88,063
|
|
$34,164
|
|
|
Average net assets (in thousands)
|
$127,254
|
|
$117,476
|
|
$88,870
|
|
$37,608
|
|
$38,170
|
|
|
Ratios to average net assets:
5
|
|
|
|
|
|
|
|
|
|
|
|
Net investment loss
|
(1.38)%
3
|
|
(1.80)%
|
|
(1.87)%
|
|
(1.76)%
|
|
(1.75)%
|
|
|
Total expenses
6
|
2.07%
|
|
2.11%
|
|
2.30%
|
|
2.40%
|
|
2.11%
|
|
|
Expenses after payments, waivers and/or reimbursements and reduction to custodian expenses
|
2.04%
|
|
2.05%
|
|
2.10%
|
|
2.08%
|
|
2.10%
|
|
|
Portfolio turnover rate
|
100%
|
|
112%
|
|
111%
|
|
170%
|
|
127%
|
|
|
1. September 28, 2012 represents the last business day of the Fund's 2012 fiscal year.
|
|
|
|
2. Per share amounts calculated based on the average shares outstanding during the period.
|
|
|
|
3. Net investment income per share and the net investment income ratio include $0.20 and 0.38%, respectively, resulting from a special dividend from H&E Equipment Services, Inc. in September 2012.
|
|
|
|
4. 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.
|
|
|
|
5. Annualized for periods less than one full year.
|
|
|
|
6. Total expenses including indirect expenses from affiliated fund were as follows:
|
|
|
|
Year Ended September 28, 2012
|
2.07%
|
|
|
Year Ended September 30, 2011
|
2.11%
|
|
|
Year Ended September 30, 2010
|
2.30%
|
|
|
Year Ended September 30, 2009
|
2.40%
|
|
|
Year Ended September 30, 2008
|
2.11%
|
|
|
|
Year Ended
|
|
Year Ended
|
|
|
|
September 28,
|
|
September 30,
|
|
|
Class N
|
2012
1
|
|
2011
|
|
2010
|
|
2009
|
|
2008
|
|
|
Per Share Operating Data
|
|
|
|
|
|
|
|
|
|
|
|
Net asset value, beginning of period
|
$51.12
|
|
$46.36
|
|
$39.83
|
|
$46.20
|
|
$56.24
|
|
|
Income (loss) from investment operations:
|
|
|
|
|
|
|
|
|
|
|
|
Net investment loss
2
|
(0.51)
3
|
|
(0.74)
|
|
(0.58)
|
|
(0.44)
|
|
(0.65)
|
|
|
Net realized and unrealized gain (loss)
|
16.08
|
|
5.50
|
|
7.11
|
|
(5.37)
|
|
(8.84)
|
|
|
Total from investment operations
|
15.57
|
|
4.76
|
|
6.53
|
|
(5.81)
|
|
(9.49)
|
|
|
Dividends and/or distributions to shareholders:
|
|
|
|
|
|
|
|
|
|
|
|
Distributions from net realized gain
|
(3.18)
|
|
0.00
|
|
0.00
|
|
(0.56)
|
|
(0.55)
|
|
|
Net asset value, end of period
|
$63.51
|
|
$51.12
|
|
$46.36
|
|
$39.83
|
|
$46.20
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Return, at Net Asset Value
4
|
31.49%
|
|
10.27%
|
|
16.40%
|
|
(12.24)%
|
|
(17.03)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratios/Supplemental Data
|
|
|
|
|
|
|
|
|
|
|
|
Net assets, end of period (in thousands)
|
$44,516
|
|
$34,945
|
|
$27,823
|
|
$26,319
|
|
$ 8,769
|
|
|
Average net assets (in thousands)
|
$40,753
|
|
$36,695
|
|
$26,676
|
|
$10,777
|
|
$10,206
|
|
|
Ratios to average net assets:
5
|
|
|
|
|
|
|
|
|
|
|
|
Net investment loss
|
(0.89)%
3
|
|
(1.29)%
|
|
(1.35)%
|
|
(1.24)%
|
|
(1.24)%
|
|
|
Total expenses
6
|
1.55%
|
|
1.55%
|
|
1.73%
|
|
1.87%
|
|
1.60%
|
|
|
Expenses after payments, waivers and/or reimbursements and reduction to custodian expenses
|
1.54%
|
|
1.54%
|
|
1.57%
|
|
1.56%
|
|
1.58%
|
|
|
Portfolio turnover rate
|
100%
|
|
112%
|
|
111%
|
|
170%
|
|
127%
|
|
|
1. September 28, 2012 represents the last business day of the Fund's 2012 fiscal year.
|
|
|
|
2. Per share amounts calculated based on the average shares outstanding during the period.
|
|
|
|
3. Net investment income per share and the net investment income ratio include $0.22 and 0.38%, respectively, resulting from a special dividend from H&E Equipment Services, Inc. in September 2012.
|
|
|
|
4. 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.
|
|
|
|
5. Annualized for periods less than one full year.
|
|
|
|
6. Total expenses including indirect expenses from affiliated fund were as follows:
|
|
|
|
Year Ended September 28, 2012
|
1.55%
|
|
|
Year Ended September 30, 2011
|
1.55%
|
|
|
Year Ended September 30, 2010
|
1.73%
|
|
|
Year Ended September 30, 2009
|
1.87%
|
|
|
Year Ended September 30, 2008
|
1.60%
|
|
|
|
Year Ended
|
|
Year Ended
|
|
|
|
September 28,
|
|
September 30,
|
|
|
Class Y
|
2012
1
|
|
2011
|
|
2010
|
|
2009
|
|
2008
|
|
|
Per Share Operating Data
|
|
|
|
|
|
|
|
|
|
|
|
Net asset value, beginning of period
|
$55.83
|
|
$50.30
|
|
$42.92
|
|
$49.48
|
|
$59.82
|
|
|
Income (loss) from investment operations:
|
|
|
|
|
|
|
|
|
|
|
|
Net investment loss
2
|
(0.11)
3
|
|
(0.38)
|
|
(0.29)
|
|
(0.27)
|
|
(0.32)
|
|
|
Net realized and unrealized gain (loss)
|
17.62
|
|
5.91
|
|
7.67
|
|
(5.73)
|
|
(9.47)
|
|
|
Total from investment operations
|
17.51
|
|
5.53
|
|
7.38
|
|
(6.00)
|
|
(9.79)
|
|
|
Dividends and/or distributions to shareholders:
|
|
|
|
|
|
|
|
|
|
|
|
Distributions from net realized gain
|
(3.18)
|
|
0.00
|
|
0.00
|
|
(0.56)
|
|
(0.55)
|
|
|
Net asset value, end of period
|
$70.16
|
|
$55.83
|
|
$50.30
|
|
$42.92
|
|
$49.48
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Return, at Net Asset Value
4
|
32.34%
|
|
11.00%
|
|
17.19%
|
|
(11.81)%
|
|
(16.51)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratios/Supplemental Data
|
|
|
|
|
|
|
|
|
|
|
|
Net assets, end of period (in thousands)
|
$157,892
|
|
$75,912
|
|
$25,772
|
|
$49,505
|
|
$39,384
|
|
|
Average net assets (in thousands)
|
$110,845
|
|
$61,766
|
|
$70,285
|
|
$26,225
|
|
$30,814
|
|
|
Ratios to average net assets:
5
|
|
|
|
|
|
|
|
|
|
|
|
Net investment loss
|
(0.17)%
3
|
|
(0.60)%
|
|
(0.62)%
|
|
(0.71)%
|
|
(0.58)%
|
|
|
Total expenses
6
|
0.90%
|
|
0.86%
|
|
0.83%
|
|
1.16%
|
|
1.10%
|
|
|
Expenses after payments, waivers and/or reimbursements and reduction to custodian expenses
|
0.90%
|
|
0.86%
|
|
0.83%
|
|
1.07%
|
|
0.93%
|
|
|
Portfolio turnover rate
|
100%
|
|
112%
|
|
111%
|
|
170%
|
|
127%
|
|
|
1. September 28, 2012 represents the last business day of the Fund's 2012 fiscal year.
|
|
|
|
2. Per share amounts calculated based on the average shares outstanding during the period.
|
|
|
|
3. Net investment income per share and the net investment income ratio include $0.25 and 0.38%, respectively, resulting from a special dividend from H&E Equipment Services, Inc. in September 2012.
|
|
|
|
4. 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.
|
|
|
|
5. Annualized for periods less than one full year.
|
|
|
|
6. Total expenses including indirect expenses from affiliated fund were as follows:
|
|
|
|
Year Ended September 28, 2012
|
0.90%
|
|
|
Year Ended September 30, 2011
|
0.86%
|
|
|
Year Ended September 30, 2010
|
0.83%
|
|
|
Year Ended September 30, 2009
|
1.16%
|
|
|
Year Ended September 30, 2008
|
1.10%
|
|
|
|
Period Ended
|
|
|
|
September 28,
|
|
|
Class I
|
2012
1
,
2
|
|
|
Per Share Operating Data
|
|
|
|
Net asset value, beginning of period
|
$61.45
|
|
|
Income (loss) from investment operations:
|
|
|
|
Net investment income
3
|
0.06
4
|
|
|
Net realized and unrealized gain
|
8.75
|
|
|
Total from investment operations
|
8.81
|
|
|
Dividends and/or distributions to shareholders:
|
|
|
|
Distributions from net realized gain
|
0.00
|
|
|
Net asset value, end of period
|
$70.26
|
|
|
|
|
|
|
Total Return, at Net Asset Value
5
|
14.36%
|
|
|
|
|
|
|
Ratios/Supplemental Data
|
|
|
|
Net assets, end of period (in thousands)
|
$11
|
|
|
Average net assets (in thousands)
|
$11
|
|
|
Ratios to average net assets:
6
|
|
|
|
Net investment income
|
0.13%
4
|
|
|
Total expenses
7
|
0.69%
|
|
|
Expenses after payments, waivers and/or reimbursements and reduction to custodian expenses
|
0.69%
|
|
|
Portfolio turnover rate
|
100%
|
|
|
1. September 28, 2012 represents the last business day of the Fund's 2012 fiscal year.
|
|
|
|
2. For the period from January 27, 2012 (inception of offering) to September 28, 2012.
|
|
|
|
3. Per share amounts calculated based on the average shares outstanding during the period.
|
|
|
|
4. Net investment income per share and the net investment income ratio include $0.25 and 0.57%, respectively, resulting from a special dividend from H&E Equipment Services, Inc. in September 2012.
|
|
|
|
5. 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.
|
|
|
|
6. Annualized for periods less than one full year.
|
|
|
|
7. Total expenses including indirect expenses from affiliated fund were as follows:
|
|
|
|
Period Ended September 28, 2012
|
0.69%
|
|
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 September 30, 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.: 811-04410
SP0500.001.0113
|
Oppenheimer Discovery Fund
|
NYSE Ticker Symbols
|
|
Class A
|
OPOCX
|
|
Class B
|
ODIBX
|
|
Class C
|
ODICX
|
|
Class N
|
ODINX
|
|
Class Y
|
ODIYX
|
|
Class I
|
ODIIX
|
January 28, 2013
Statement of Additional Information
This document contains additional information about the Fund
and supplements information in the Fund's prospectus dated January 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 Discovery 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. 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. Additionally, references to "OppenheimerFunds"
mean OppenheimerFunds, Inc. and its subsidiaries.
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.
Equity securities include
common stock, preferred stock, rights and warrants, and securities convertible into common stock. The Fund's investments will primarily
include stocks of companies having a market capitalization range as that described in the prospectus, which is generally measured
at the time of the Fund's investment. However, the Fund is not required to sell securities it holds of an issuer if the issuer's
capitalization exceeds that capitalization range.
The Fund can also invest a portion of its assets in securities
of issuers having a market capitalization greater than that capitalization range. 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 relative emphasis
on its equity investments in securities of one or more capitalization ranges, based upon the Sub-Adviser's judgment of where the
best market opportunities are to seek the Fund's objective.
Growth companies might be providing new products or services that
could enable them to capture a dominant or important market position. They may have a special area of expertise or the capability
to take advantage of changes in demographic factors in a more profitable way than larger, more established companies.
Growth companies tend to retain a large part of their earnings
for research, development or investment in capital assets. Therefore, they do not tend to emphasize paying dividends, and may not
pay any dividends for some time. They are selected for the Fund's portfolio because the Sub-Adviser believes the price of
the stock will increase over the long term.
Current income is not a criterion used to select portfolio securities.
However, certain debt securities may be selected for the Fund's portfolio for defensive purposes (including debt securities that
the Sub-Adviser believes may offer some opportunities for capital appreciation when stocks are disfavored).
In general, securities of small-cap issuers may be subject to greater
price volatility in general than securities of large-cap and mid-cap companies. Therefore, to the degree that the Fund has investments
in smaller capitalization companies at times of market volatility, the Fund's share price may fluctuate more. As noted below, the
Fund limits such investments in unseasoned, small-cap issuers.
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.
The Fund currently intends to invest not more than 10% of its
net assets in those securities. The Sub-Adviser might increase that limit, for example, if it believes that these securities
offer better capital appreciation possibilities than those of more established small-cap companies.
Industry and Sector Focus.
At times the Fund may increase
the relative emphasis of its investments in a particular industry or sector. The prices of securities of issuers in a particular
industry or sector may go up and down in response to changes in economic conditions, government regulations, availability of basic
resources or supplies, or other events that affect that industry or sector more than others. To the extent that the Fund increases
the relative emphasis of its investments in a particular industry or sector, its share values may fluctuate in response to events
affecting that industry or sector. To some extent that risk may be limited by the Fund's policy of not concentrating 25% or
more of its total assets in investments in any one industry.
Investing in Cyclical Opportunities.
Although the Fund focuses
on long-term growth, it might seek to take advantage of short-term market movements or events affecting particular issuers or industries
by investing in companies that are sensitive to changes in the business cycle. For example, when the economy is expanding, companies
in consumer durables and the technology sector might benefit. There is the risk that those securities might lose value if the business
cycle becomes unfavorable to that issuer or industry or if the Sub-Adviser's expectations for favorable cyclical movement is not
realized.
The Fund focuses on seeking growth over the long term, but could
seek to take tactical advantage of short-term market movements or events affecting particular issuers or industries.
Over-the-Counter Securities
. Securities of small- and mid-capitalization
issuers may be traded on securities exchanges or in the over-the-counter market. The over-the-counter markets, both in the U.S.
and abroad, may have less liquidity than securities exchanges. That lack of liquidity can affect the price the Fund is able to
obtain when it wants to sell a security, because if there are fewer buyers and less demand for a particular security, the Fund
might not be able to sell it at an acceptable price or might have to reduce the price in writing in order to dispose of the security.
In the U.S., the principal over-the-counter market is the NASDAQ
Stock Market, Inc., which is regulated by the Financial Industry Regulatory Authority ("FINRA"), formerly known as the NASD. It
consists of an electronic quotation system for certain securities, and a security must have at least two market makers to be included
in NASDAQ. There are other over-the-counter markets in the U.S., as well as those abroad, as long as a dealer is willing to make
a market in a particular security.
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.
-
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.
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.
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 Investment Techniques and Strategies
The Fund may also use the following types of investments and investment
strategies.
Foreign Investing
. Foreign securities include equity
and debt securities of companies organized under the laws of countries other than the United States and debt securities issued
or guaranteed by foreign governments or by supra-national entities such as the World Bank, or by their agencies or instrumentalities.
"Foreign securities" also include securities of companies 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, even if those companies are located
in the United States or organized under U.S. laws. Foreign securities may be traded on foreign securities exchanges or in the foreign
over-the-counter markets. Securities denominated in foreign currencies issued by U.S. companies may also be considered to be "foreign
securities."
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 foreign
issuers that may offer growth potential, or to invest in countries with economic, business or market cycles that differ from those
of the U.S.
The percentage of the Fund's assets that are allocated to issuers
in a particular foreign country may vary over time depending on a number of factors including, for example: a country's balance
of payments, growth of gross national product, natural resources, reliance on a particular industry or industries, rate of inflation,
interest rates, economic self-sufficiency, rate of capital reinvestment, market conditions, currency value, international trading
patterns, trade barriers, diplomatic developments, and social and political factors.
Securities of foreign issuers that are represented by American
Depository Receipts, or similar depository arrangements, or that are listed on a U.S. securities exchange or traded in the
U.S. over-the-counter markets are not considered "foreign securities" for purposes of the Fund's investment allocations, because
they are not subject to many of the special considerations and risks that apply to foreign securities held and traded
abroad.
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.
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.
Subject to the limits under the Investment Company Act of 1940,
as amended (the "Investment Company Act"), the Fund may also invest in foreign mutual funds which are also deemed PFICs (since
nearly all of the income of a mutual fund is generally passive income). Investing in these types of PFICs may allow exposure to
various countries because some foreign countries limit, or prohibit, all direct foreign investment in the securities of companies
domiciled therein.
In addition to bearing their proportionate share of a fund's expenses
(management fees and operating expenses), shareholders will also indirectly bear similar expenses of such entities. Additional
risks of investing in other investment companies are described below under "Investments in Other Investment Companies."
Investments in Other Investment Companies.
The Fund can
also invest in the securities of other investment companies, which can include open-end funds, closed-end funds, unit investment
trusts and business development companies, subject to the limits set forth in the Investment Company Act that apply to those types
of investments and subject to its non-fundamental investment policy on investing in other investment companies. For example, the
Fund can invest in exchange-traded funds, which are typically open-end funds or unit investment trusts, listed on a stock exchange.
The Fund might do so as a way of gaining exposure to the segments of the equity or fixed-income markets represented by the exchange-traded
funds' portfolio, at times when the Fund may not be able to buy those portfolio securities directly.
Investing in another investment company may involve the payment
of substantial premiums above the value of such investment company's portfolio securities and is subject to limitations under the
Investment Company Act. The Fund does not intend to invest in other investment companies unless the Sub-Adviser believes that
the potential benefits of the investment justify the expenses. As a shareholder of an investment company, the Fund would be subject
to its ratable share of that investment company's expenses, including its advisory and administration expenses.
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.
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.
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.
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.
The Fund can invest in a variety
of derivative instruments for liquidity, to seek income or investment return or for hedging purposes. Some of the derivative instruments
and hedging strategies that the Fund may use are:
-
selling futures contracts,
-
-
buying puts on such futures or on securities,
-
-
writing covered calls on securities or futures. (Covered calls
may also be used to increase the Fund's income, but the Manager does not expect to engage extensively in that practice.)
-
-
buying calls on such futures or on securities.
-
The Fund can use derivatives to attempt to hedge against declines
in the market value of securities in the Fund's portfolio, to preserve unrealized gains in the value of portfolio securities that
have appreciated, or to facilitate selling securities for investment reasons. The Fund can also use derivatives to establish a
position in the securities market as a temporary substitute for purchasing particular securities or to seek to benefit from an
anticipated rise in their market value. In that case, the Fund would normally purchase the securities and then terminate the derivative
position.
The Fund is not obligated to use hedging, even though it is permitted
to do so, as described below. The Fund's hedging strategies are intended to reduce losses but they may also cause losses or limit
gains if the hedging instrument or strategy does not perform in the way that the Fund anticipates.
The Fund may use derivatives and hedging to the extent consistent
with its investment objective, internal risk management guidelines adopted by the Manager (as they may be amended from time to
time), and as otherwise set forth in the Fund's Prospectus or this SAI. The Fund can employ other derivatives or hedging instruments
and strategies, including new ones that are developed, if those investments or strategies are consistent with the Fund's investment
objective and are permissible under applicable regulations governing the Fund.
Other Derivatives.
The Fund may invest in other types of
derivative instruments. The other derivative investments the Fund can use include "debt exchangeable for common stock" or "equity-linked
debt securities," which are debt securities that are exchangeable for common stock of an issuer. At maturity, the debt security
is exchanged for common stock of the issuer or it is payable in an amount based on the price of the issuer's common stock at the
time of maturity. Both alternatives present a risk that the amount payable at maturity will be less than the principal amount of
the debt because the price of the issuer's common stock might not be as high as the Manager expected.
The Fund does not currently anticipate using derivatives or hedging
to a significant degree.
Futures.
The Fund can buy and sell futures contracts
that relate to (1) broadly-based stock indices ("stock index futures"), (2) other broadly-based securities indices ("financial
futures"), (3) debt securities ("interest rate futures"), (4) foreign currencies ("forward contracts"), or (5) commodities
("commodity futures").
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.
Financial Futures.
Financial futures are
based on the value of the basket of securities that comprise an index. These contracts obligate the buyer or seller to pay
cash to settle the futures transaction, based on the fluctuation of the index's value in response to the change in the relative
values of the underlying securities that are included in the index over the term of the contract. No delivery of the underlying
securities is made to settle the futures contract. Either party may also settle the transaction by entering into an offsetting
contract.
Interest Rate Futures.
An interest rate future
obligates the seller to deliver (and the purchaser to take) cash or a specified type of debt security to settle the futures transaction.
Either party could also enter into an offsetting contract to close out the position.
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."
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.
These futures transactions are effected through a clearinghouse
associated with the exchange on which the contracts are traded. No money is paid or received on the purchase or sale of a future.
Upon entering into a futures transaction, the purchaser is required to deposit an initial margin payment for the futures commission
merchant (the "futures broker"). The initial margin payment will be deposited with the custodian bank in an account, registered
in the futures broker's name, that the futures broker can gain access to only under specified conditions. As the future is marked-to-market
(that is, its value on the books is changed to reflect changes in its market value), subsequent margin payments, called variation
margin, will be paid to or from the futures broker daily.
At any time prior to expiration of the future, the purchaser may
elect to close out its position, at which time a final determination of variation margin is made and any cash in the margin account
must be paid or released. The purchase then realizes any loss or gain on the futures transaction for tax purposes.
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.
Writing Uncovered Call Options on Futures Contracts.
The
Funds may also write calls on futures contracts without owning the futures contract or securities deliverable under the contract.
To do so, at the time the call is written, the Fund must cover the call by segregating in escrow an equivalent dollar value of
liquid assets. The Fund will segregate additional liquid assets if the value of the escrowed assets drops below 100% of the
current value of the future. Because of this escrow requirement, in no circumstances would the Fund's receipt of an exercise notice
as to that future put the Fund in a "short" futures position.
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.
Up to 25% of the Fund's total assets can be subject to call
options the Fund sells. The Fund will not sell put options if more than 50% of the Fund's net assets would be required
to be segregated to cover such options. The Fund can buy a put or call option 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.
Purchasing Calls and Puts.
The Fund can purchase
calls to protect against the possibility that the Fund's portfolio will not participate in an anticipated rise in the securities
market. When the Fund buys a call (other than in a closing purchase transaction), it pays a premium. The Fund then has the right
to buy the underlying investment from a seller of a corresponding call on the same investment during the call period at a fixed
exercise price. The Fund benefits only if it sells the call at a profit or if, during the call period, the market price of the
underlying investment is above the sum of the call price plus the transaction costs and the premium paid for the call and the Fund
exercises the call. If the Fund does not exercise the call or sell it (whether or not at a profit), the call will become worthless
at its expiration date. In that case the Fund will have paid the premium but lost the right to purchase the underlying investment.
The Fund can buy puts on securities, on indices or on futures that are permitted by the Fund's other investment policies. The Fund
can buy puts whether or not it holds the underlying investment in its portfolio. When the Fund purchases a put, it pays a premium
and, except as to puts on indices, has the right to sell the underlying investment to a seller of a put on a corresponding investment
during the put period at a fixed exercise price. Buying a put on securities or futures the Fund owns enables the Fund to attempt
to protect itself during the put period against a decline in the value of the underlying investment below the exercise price by
selling the underlying investment at the exercise price to a seller of a corresponding put. If the market price of the underlying
investment is equal to or above the exercise price and, as a result, the put is not exercised or resold, the put will become worthless
at its expiration date. In that case the Fund will have paid the premium but lost the right to sell the underlying investment.
However, the Fund may sell the put prior to its expiration. That sale may or may not be at a profit.
Buying a put on an investment the Fund does not own (such as an index or future) permits the Fund either to resell the put or to
buy the underlying investment and sell it at the exercise price. The resale price will vary inversely to the price of the underlying
investment. If the market price of the underlying investment is above the exercise price and, as a result, the put is not exercised,
the put will become worthless on its expiration date.
When the Fund purchases a call or put on an index or future, it pays a premium, but settlement is in cash rather than by delivery
of the underlying investment to the Fund. Gain or loss depends on changes in the index in question (and thus on price movements
in the securities market generally) rather than on price movements in individual securities or futures contracts.
The Fund can buy a put or call 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.
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.
The Fund could write a call on a foreign currency to provide a
hedge against a decline in the U.S. dollar value of a security which the Fund owns or has the right to acquire and which is denominated
in the currency underlying the option. That decline might be one that occurs due to an expected adverse change in the exchange
rate. This is known as a "cross-hedging" strategy. In those circumstances, the Fund covers the option by segregating or identifying
on its books cash, U.S. government securities or other liquid securities in an amount equal to the exercise price of the option.
Transaction Costs
. Option activities might also affect portfolio
turnover rates and brokerage commissions. The portfolio turnover rate might increase if the Fund is required to sell
portfolio securities that are subject to call options it has sold or if it exercises put options it has bought. Although the decision
to exercise a put it holds is within the Fund's control, holding a put might create an additional reason to purchase a security.
There may also be a brokerage commission on each purchase or sale of a put or call option. Those commissions may
be higher on a relative basis than the commissions for direct purchases or sales of the underlying investments. A brokerage
commission may also be paid for each purchase or sale of an underlying investment in connection with the exercise of a put
or call.
The costs to the Fund of engaging in forward contracts varies with
factors such as the currencies involved, the length of the contract period and the market conditions then prevailing. Because forward
contracts are usually entered into on a principal basis, no brokerage fees or commissions are involved. Because these contracts
are not traded on an exchange, the Fund must evaluate the credit and performance risk of the counterparty under each forward contract.
Although the Fund values its assets daily in terms of U.S. dollars, it does not intend to convert its holdings of foreign currencies
into U.S. dollars on a daily basis. The Fund may convert foreign currency from time to time, and will incur costs in doing so.
Leverage Risk
. Premiums paid for options are small
compared to the market value of the underlying investments. Consequently, options may involve large amounts of leverage, which
could result in the Fund's net asset value being more sensitive to changes in the value of the underlying investments.
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.
Correlation Risk
. If the Fund sells futures or purchases
puts on broadly-based indices or futures to attempt to protect against declines in the value of its portfolio securities, it may
be subject to the risk that the prices of the futures or the applicable index will not correlate with the prices of those portfolio
securities. For example, the market or the index might rise but the value of the hedged portfolio securities might decline. In
that case, the Fund would lose money on the hedging instruments and also experience a decline in the value of the portfolio securities.
Over time, however, the value of a diversified portfolio of securities will tend to move in the same direction as the indices upon
which related hedging instruments are based.
The risk of imperfect correlation increases as the composition
of the 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 a greater dollar amount of hedging instruments than the dollar amount of portfolio securities being hedged, particularly
if the historical price volatility of the portfolio securities being hedged is more than the historical volatility of the
applicable index.
Futures Market Risk
.
The ordinary differences between
prices in the cash markets and the futures markets are subject to distortions, due to differences in the nature of those markets.
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Participants in the futures market are subject to margin deposit
and maintenance requirements that may cause investors to close futures contracts through offsetting transactions, distorting the
normal market relationships.
-
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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.
-
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Speculators may consider that 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 price distortions.
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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 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.
The costs to the Fund of engaging in forward contracts varies with
factors such as the currencies involved, the length of the contract period and the market conditions then prevailing. Because forward
contracts are usually entered into on a principal basis, no brokerage fees or commissions are involved. Because these contracts
are not traded on an exchange, the Fund must evaluate the credit and performance risk of the counterparty under each forward contract.
Although the Fund values its assets daily in terms of U.S. dollars,
it does not intend to convert its holdings of foreign currencies into U.S. dollars on a daily basis. The Fund may convert foreign
currency from time to time, and will incur costs in doing so.
Asset Coverage for Certain Investments and Trading Practices
.
Typically, the Fund's investments in equity and fixed-income securities do not involve any future financial obligations. However,
the Fund may make investments or employ trading practices that obligate the Fund, on a fixed or contingent basis, to deliver an
asset or make a cash payment to another party in the future. The Fund will comply with guidance from the U.S. Securities and Exchange
Commission (the "SEC") and other applicable regulatory bodies with respect to coverage of certain investments and trading practices.
This guidance may require earmarking or segregation by the Fund of cash or liquid securities with its custodian or a designated
sub-custodian to the extent the Fund's obligations with respect to these strategies are not otherwise "covered" through ownership
of the underlying security or financial instrument or by other portfolio positions, or by other means consistent with applicable
regulatory policies. In some cases, SEC guidance permits the Fund to cover its obligation by entering into an offsetting transaction.
For example, if the Fund enters into a currency forward contract
to sell foreign currency on a future date, the Fund may cover its obligation to deliver the foreign currency by earmarking or otherwise
segregating cash or liquid securities having a value at least equal to the value of the deliverable currency. Alternatively, the
Fund could cover its obligation by earmarking or otherwise segregating an amount of the foreign currency at least equal to the
deliverable amount or by entering into an offsetting transaction to acquire an amount of foreign currency at least equal to the
deliverable amount at a price at or below the sale price received by the Fund under the currency forward contract.
Earmarking or otherwise segregating a large percentage of the Fund's
assets could impede the Sub-Adviser's ability to manage the Fund's portfolio.
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:
-
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
-
-
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.
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. The Fund can buy:
-
high-quality (rated in the top rating categories of nationally
recognized statistical rating organizations ("NRSROs") or deemed by the Sub-Adviser to be of comparable quality), short-term money
market instruments, including those issued by the U.S. Treasury or other government agencies,
-
-
commercial paper (short-term, unsecured, promissory notes of domestic
or foreign companies) rated in the top rating category of a NRSRO,
-
-
debt obligations of corporate issuers, 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 rating organization), or unrated securities judged by the Sub-Adviser to be of a quality comparable to rated securities
in those categories,
-
-
certificates of deposit and bankers' acceptances of domestic and
foreign banks and savings and loan associations, and
-
Short-term debt securities would normally be selected for defensive
or cash management purposes because they can normally be disposed of quickly, are not generally subject to significant fluctuations
in principal value and their value will be less subject to interest rate risk than longer-term debt securities.
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:
-
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
-
-
more than 50% of the outstanding shares.
-
Other Fundamental Investment Restrictions.
The following
investment restrictions are fundamental policies of the Fund.
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.
-
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.
-
-
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.
-
-
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.
-
-
The Fund cannot underwrite securities of other companies. A permitted
exception is in the case it is deemed to be an underwriter under the Securities Act of 1933, as amended, when reselling
any securities held in its own portfolio.
-
-
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.
-
-
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.
-
-
The Fund may not borrow money, except to the extent permitted
under the 1940 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.
-
The Fund cannot invest in physical commodities or commodity contracts;
however, the Fund may: (1) buy and sell hedging instruments permitted by any of its other investment policies, and (2) buy and
sell options, futures, securities or other instruments backed by, or the investment return from which is linked to changes in the
price of, physical commodities.
-
-
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.
-
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.
-
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.
-
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);
-
-
The Fund's independent registered public accounting firm;
-
-
Members of the Fund's Board and the Board's legal counsel;
-
-
The Fund's custodian bank;
-
-
A proxy voting service designated by the Fund and its Board;
-
-
Rating/ranking organizations (such as Lipper, Inc. and Morningstar,
Inc.);
-
-
Portfolio pricing services retained by the Manager/Sub-Adviser
to provide portfolio security prices;
-
-
Insurance companies that have separate accounts invested in Oppenheimer
Variable Account Funds or Panorama Series Fund (to prepare their financial statements and analysis);
-
-
Brokers and dealers for purposes of providing portfolio analytic
services;
-
-
Brokers and dealers in connection with portfolio transactions
(purchases and sales); and
-
-
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:
-
The third-party recipient must first submit a request for release
of Fund portfolio holdings, explaining the business reason for the request;
-
-
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
-
-
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:
-
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;
-
-
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);
-
-
To potential sub-advisers of portfolios (pursuant to confidentiality
agreements);
-
-
To consultants for retirement plans for plan sponsors/discussions
at due diligence meetings (pursuant to confidentiality agreements);
-
-
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:
|
13D Research
|
FTN Financial
|
Petercam Group
|
|
1st Discount Brokerage
|
Furey Research Partners
|
Pipeline Trading Systems LLC
|
|
ABG Sundal Collier
|
Gabelli & Co.
|
Piper Jaffray Corp.
|
|
Access342
|
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
|
Ramirez & Co. Inc.
|
|
Avondale Partners
|
Goldman, Sachs & Co.
|
RBC Capital Markets
|
|
B. Riley & Co.
|
Greenstreet Advisers
|
Red Capital Markets
|
|
Baird & Co., Inc.
|
Griffin Securities
|
Redburn Partners
|
|
Banco Itau
|
Guggenheim Capital Markets
|
Renaissance Macro Research
|
|
Bank of America Securities LLC
|
Hapoalim Securities Bank USA
|
Rice Financial Products Co.
|
|
Barclays Capital
|
Hedgeye Risk Management
|
Risk Metrics Group
|
|
BarraOne
|
Height Analytics
|
Robert W. Baird & Co.
|
|
Barrington Research Associates
|
Herbert J. Sims & Co, Inc.
|
Rocaton Investment Advisors, LLC
|
|
BB&T Capital Markets
|
Hewitt Financial Services LLC
|
Rochdale Securities Corp.
|
|
Belle Haven Investments, Inc.
|
Howard Weil Inc.
|
Rodman & Renshaw, Inc.
|
|
Belton Enclave
|
HSBC Securities
|
Rogerscasey, LLC
|
|
Bergen Capital
|
India Infoline
|
Roosevelt & Cross
|
|
Blackrock, Inc.
|
Investec
|
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
|
ITG - Majestic Research
|
Samuel A. Ramirez & Co. Inc.
|
|
Branch Bank & Trust Capital Markets
|
Janco Partners
|
Sander Morris Harris
|
|
Brean, Murray, Carret & Co.
|
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 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 July 1985.
Classes of Shares.
The Fund's Board of Trustees (the "Board")
is authorized, without shareholder approval, to:
-
create new series and classes of shares;
-
-
reclassify unissued shares into additional series and classes;
and
-
-
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
-
-
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;
-
-
may be voted in person or by proxy at shareholder meetings; and
-
-
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:
-
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;
-
-
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;
-
-
Rollover contributions, contract exchanges and plan to plan
transfers made to 403(b) Plans;
-
-
"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:
-
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 solely comprised of Joanne Pace. The Advisory Board assists the Board in a non-voting capacity in its oversight of the
Fund. Ms. Pace is also an Independent Trustee of certain Funds, identified below. For purposes of the following disclosure, Ms.
Pace is listed among other Independent Trustees but is identified as a Trustee/Advisory Board Member.
During the Fund's fiscal year ended September 30, 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
All of the Trustees are Independent Trustees. All of
the Trustees are also Trustees of the following Oppenheimer funds (referred to as the "New York Board Funds"), with the exception
of Ms. Pace, who is 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. Zibelli, Edwards, Gabinet, Glavin, Kennedy, Legg,
O'Donnell, Petersen, Vandehey and Wixted and Mss. Bullington, Bloomberg, LaFond, Kantesaria 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 January 4, 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 2007
|
|
|
Trustee
|
Since 2005
|
|
David K. Downes
|
Trustee
|
Since 2007
|
|
Matthew P. Fink
|
Trustee
|
Since 2005
|
|
Phillip A. Griffiths
|
Trustee
|
Since 1999
|
|
Mary F. Miller
|
Trustee
|
Since 2004
|
|
Joel W. Motley
|
Trustee
|
Since 2002
|
|
Joanne Pace
|
Trustee/Advisory Board Member
|
Since 2012
|
|
Mary Ann Tynan
|
Trustee
|
Since 2008
|
|
Joseph M. Wikler
|
Trustee
|
Since 2005
|
|
Peter I. Wold
|
Trustee
|
Since 2005
|
|
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
|
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 2012, during which time she has become familiar with the Funds (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 (64)
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 January 1, 2013, Ms. Pace serves as a Trustee 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.
The addresses of the officers in the charts below are as follows:
for Messrs. Zibelli, Edwards, Gabinet and 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
|
|
Ronald J. Zibelli, Jr.
|
Vice President
|
Since 2006
|
|
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
|
|
Ronald J. Zibelli, Jr. (53) Vice President
|
Vice President of the Manager (since May 2006); Vice President of the Fund (since 2006); a Chartered Financial Analyst. Prior to joining the manager, he spent six years at Merrill Lynch Investment Managers during which time he was Managing Director and Small Cap Growth Team Leader. A portfolio manager and officer of other portfolios in the OppenheimerFunds complex.
|
3
|
|
Other Information About the Officers of the Fund
|
|
|
Name, Age, Position(s)
|
Principal Occupation(s) During the Last 5 Years
|
Portfolios Overseen in Fund Complex
|
|
William F. Glavin, Jr. (54) President and Principal Executive Officer
|
Chief Executive Officer of OppenheimerFunds (since January 2013); 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.
|
86
|
|
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
|
Chief Compliance Officer of OppenheimerFunds (since January 2013); 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 (53)
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 (54)
Secretary and Chief Legal Officer
|
General Counsel of OppenheimerFunds (since January 2013); 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 (44)
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
|
|
|
|
Dollar Range of Shares Beneficially Owned in the Fund
|
Aggregate Dollar Range of Shares Beneficially Owned in Supervised Funds
|
|
Independent Trustees
|
|
|
|
David K. Downes
|
None
|
Over $100,000
|
|
Matthew P. Fink
|
None
|
Over $100,000
|
|
Phillip A. Griffiths
|
None
|
Over $100,000
|
|
Mary F. Miller
|
None
|
Over $100,000
|
|
Joel W. Motley
|
None
|
Over $100,000
|
|
Joanne Pace
1
|
None
|
None
|
|
Mary Ann Tynan
|
None
|
Over $100,000
|
|
Joseph M. Wikler
|
None
|
Over $100,000
|
|
Peter I. Wold
|
None
|
Over $100,000
|
|
Brian Wruble
|
$10,001 - $50,000
|
Over $100,000
|
1
Effective November 1, 2012, as previously described
above, Ms. Pace became an Independent Trustee/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 September 30, 2012
|
Year Ended December 31, 2012
|
|
Brian F. Wruble
|
$2,713
2
|
$305,750
|
|
Chairman of the Board, Audit Committee Member and Regulatory & Oversight Committee Member
|
|
|
|
David Downes
|
$2,284
|
$260,750
|
|
Audit Committee Chairman and Regulatory & Oversight Committee Member
|
|
|
|
Matthew P. Fink
|
$2,284
3
|
$260,750
|
|
Regulatory & Oversight Committee Chairman and Governance Committee Member
|
|
|
|
Phillip A. Griffiths
|
$2,528
|
$284,100
|
|
Audit Committee Member and Regulatory & Oversight Committee Member
|
|
|
|
Mary F. Miller
|
$2,147
4
|
$242,500
|
|
Audit Committee Member and Governance Committee Member
|
|
|
|
Joel W. Motley
|
$2,284
5
|
$260,750
|
|
Governance Committee Chairman and Regulatory & Oversight Committee Member
|
|
|
|
Joanne Pace
|
$0
6
|
$36,467
|
|
Audit Committee Member and Regulatory & Oversight Committee Member
|
|
|
|
Mary Ann Tynan
|
$2,147
7
|
$187,500
|
|
Regulatory & Oversight Committee Member and Governance Committee Member
|
|
|
|
Joseph M. Wikler
|
$2,147
8
|
$242,500
|
|
Audit Committee Member and Regulatory & Oversight Committee Member
|
|
|
|
Peter I. Wold
|
$2,147
9
|
$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 $873 deferred by Mr. Fink under the Compensation Deferral Plan.
4. Includes $859 deferred by Ms. Miller under the Compensation Deferral Plan.
5. Includes $228 deferred by Mr. Motley under the Compensation Deferral Plan.
6. Effective November 1, 2012, Ms. Pace became an Independent Trustee/Advisory Board Member and member of the Audit Committee and
Regulatory & Oversight Committee.
7. Includes $821 deferred by Ms. Tynan under the Compensation Deferral Plan.
8. Includes $1,074 deferred by Mr. Wikler under the Compensation Deferral Plan.
9. Includes $2,147 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 January 4, 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
|
|
7.03%
|
A
|
MLPF&S FOR THE SOLE BENEFIT
OF ITS CUSTOMERS
ATTN: FUND ADMIN.
|
4800 DEER LAKE DRIVE E., FL. 3
JACKSONVILLE, FL 32246-6484
|
|
6.15%
|
N
|
LPL FINANCIAL
OMNIBUS CUSTOMER ACCOUNT
ATTN: LINDSAY OTOOLE
|
9785 TOWNE CENTRE DR.
SAN DIEGO, CA 92121
|
|
14.35%
|
Y
|
NATIONAL FINANCIAL SERVICES LLC
FOR EXCLUSIVE BEBEFIT OF CUSTOMERS
ATTN: MUTUAL FUNDS, 5TH FLOOR
|
200 LIBERTY STREET
ONE WORLD FINANCIAL CENTER
NEW YORK, NY 10281-1003
|
|
11.69%
|
Y
|
|
PERSHING LLC
|
1 PERSHING PLAZA
JERSEY CITY, NJ 07399-0001
|
|
8.99%
|
Y
|
WELLS FARGO BANK
FBO VARIOUS RETIREMENT PLANS
|
1525 WEST WT HARRIS BLVD
CHARLOTTE, NC 28288-1076
|
|
8.86%
|
Y
|
MASS MUTUAL LIFE INSURANCE CO.
SEPARATE INVESTMENT ACCT.
|
1295 STATE ST MIP C105
SPRINGFIELD, MA 01111-0001
|
|
7.47%
|
Y
|
FIDELITY INVESTMENTS
INSTITUTIONAL OPERATIONS CO. INC.
CERTAIN EMPLOYEE BENEFIT PLANS
|
100 MAGELLAN WAY #KW1C
COVINGTON, KY 41015-1987
|
|
6.14%
|
Y
|
FIRST CLEARING LLC
SPECIAL COSTODY ACCT. FOR THE
EXCLUSIVE BENEFIT OF CUSTOMER
|
2801 MARKET STREET
ST. LOUIS, MO 63103
|
|
5.93%
|
Y
|
|
TAYNIK & CO.
|
1200 CROWN COLONY DRIVE
QUINCY, MA 02169-0938
|
|
50.74%
|
I
|
INVESTORS BANK & TRUST
FBO VARIOUS RETIREMENT PLANS
|
4400 MAMARONECK AVE.
HARRISON, NY 10528-2418
|
|
15.74%
|
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 9/30:
|
Management Fee Paid to the Manager
|
|
2010
|
$6,763,271
|
|
2011
|
$8,237,084
|
|
2012
|
$8,941,956
|
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 Ronald J.
Zibelli, Jr. (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. Zibelli 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 September 30, 2012.
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
3
|
|
Ronald J. Zibelli, Jr.
|
5
|
$1.28
|
1
|
$24.70
|
0
|
$0
|
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 used with respect to the Fund
is Morningstar - Small Growth.
-
Ownership of Fund Shares.
As of September 30, 2012,
the Portfolio Manager(s) beneficially owned shares of the Fund as follows:
-
|
Portfolio Manager
|
Range of Shares Beneficially Owned in the Fund
|
|
Ronald J. Zibelli, Jr.
|
$500,001 - $1,000,000
|
|
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 September 30, 2010, 2011 and
2012, the Fund paid the total brokerage commissions indicated in the chart below. During the fiscal year ended September 30,
2012, the Fund paid $2,135,992 in commissions to firms that provide brokerage and research services to the Fund with respect
to $2,511,636,379 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 9/30:
|
Total Brokerage Commissions Paid by the Fund*
|
|
2010
|
$2,697,435
|
|
2011
|
$2,454,471
|
|
2012
|
$2,250,317
|
* 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 9/30:
|
Aggregate Front-End Sales Charges on Class A Shares
|
Class A Front-End Sales Charges Retained by Distributor*
|
|
2010
|
$742,807
|
$229,673
|
|
2011
|
$1,342,048
|
$402,771
|
|
2012
|
$1,266,333
|
$368,540
|
* Includes amounts retained by a broker-dealer that is an affiliate
or a parent of the Distributor.
|
Concessions Advanced by Distributor
|
|
Fiscal Year Ended 9/30:
|
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
|
$9,647
|
$302,161
|
$43,047
|
$4,504
|
|
2011
|
$27,621
|
$388,050
|
$114,391
|
$9,187
|
|
2012
|
$33,242
|
$246,533
|
$109,359
|
$11,391
|
* 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 9/30:
|
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
|
$1,014
|
$171,449
|
$5,312
|
$432
|
|
2011
|
$4,181
|
$144,314
|
$17,890
|
$4,618
|
|
2012
|
$1,148
|
$126,896
|
$13,080
|
$1,417
|
Distribution and Service (12b-1) Plans.
The Fund has adopted
a Service Plan for Class A shares and Distribution and Service Plans for 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 Service Plan.
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 (referred
to as "recipients") for personal and account maintenance services they provide for their customers who hold Class A shares. Those
services may include answering customer inquiries about the Fund, assisting in establishing and maintaining Fund accounts, 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 the Fund to reimburse the Distributor at an annual rate of up to 0.25% of the Class A average net assets. The
Distributor makes payments to recipients periodically at an annual rate of not more than 0.25% of the Class A average net assets
held in the accounts of the recipient or it customers.
The Distributor does not receive or retain the service fee for
Class A share accounts for which the Distributor is listed as the broker-dealer of record. While the plan permits the Board to
authorize payments to the Distributor to reimburse itself for those services, the Board has not yet done so, except with respect
to shares purchased prior to March 1, 2007 by 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% first
year service fee for grandfathered retirement plans in advance and retained the service fee paid by the Fund with respect to those
shares for the first year. After those shares are held for a year, the Distributor pays the ongoing service fees to recipients
on a periodic basis. If those shares were redeemed within the first year after their purchase, the recipient of the service fees
on those shares was obligated to repay the Distributor a pro rata portion of the advance payment of the fees. If those shares were
redeemed within 18 months, they were subject to a CDSC. 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 and
the shares are not subject to a CDSC.
For the fiscal year ended September 30, 2012 payments
under the Class A service plan totaled $2,403,130, of which $0 was retained by the Distributor under the arrangement described
above, regarding grandfathered retirement accounts, including $202,006 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 9/30/12
|
|
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
|
$696,405
|
$547,051
|
$13,065
|
$23,776,880
|
33.92%
|
|
Class C Plan
|
$1,262,730
|
$146,778
|
$44,215
|
$9,143,097
|
6.40%
|
|
Class N Plan
|
$202,240
|
$35,904
|
$14,074
|
$1,275,562
|
2.87%
|
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 InsuranceCompany
|
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 InsuranceCompany
|
Invest Financial Corporation
|
Primevest Financial Services, Inc.
|
|
American General Annuity InsuranceCompany
|
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 InsuranceCompany
|
|
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 InsuranceCompany
|
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:
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Oppenheimer AMT-Free Municipals
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Oppenheimer New Jersey Municipal Fund
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Oppenheimer California Municipal Fund
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Oppenheimer Pennsylvania Municipal Fund
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Oppenheimer Capital Appreciation Fund
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Oppenheimer Portfolio Series Funds:
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Oppenheimer Capital Income Fund
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Active Allocation Fund
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Oppenheimer Commodity Strategy Total Return Fund
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Conservative Investor Fund
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Oppenheimer Core Bond Fund
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Equity Investor Fund
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Oppenheimer Corporate Bond Fund
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Moderate Investor Fund
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Oppenheimer Currency Opportunities Fund
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Oppenheimer Real Estate Fund
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Oppenheimer Developing Markets Fund
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Oppenheimer Rising Dividends Fund
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Oppenheimer Discovery Fund
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Oppenheimer Rochester AMT-Free New York Municipal Fund
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Oppenheimer Diversified Alternatives Fund
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Oppenheimer Rochester Arizona Municipal Fund
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Oppenheimer Emerging Markets Debt Fund
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Oppenheimer Rochester Intermediate Term Municipal Fund
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Oppenheimer Equity Fund
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Oppenheimer Rochester Limited Term Municipal Fund
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Oppenheimer Equity Income Fund, Inc.
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Oppenheimer Rochester Maryland Municipal Fund
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Oppenheimer Flexible Strategies Fund
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Oppenheimer Rochester Massachusetts Municipal Fund
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Oppenheimer Global Fund
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Oppenheimer Rochester Michigan Municipal Fund
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Oppenheimer Global Allocation Fund
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Oppenheimer Rochester Minnesota Municipal Fund
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Oppenheimer Global Multi Strategies Fund
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Oppenheimer Rochester National Municipals
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Oppenheimer Global Opportunities Fund
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Oppenheimer Rochester North Carolina Municipal Fund
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Oppenheimer Global Strategic Income Fund
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Oppenheimer Rochester Ohio Municipal Fund
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Oppenheimer Global Value Fund
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Oppenheimer Rochester Short Term Municipal Fund
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Oppenheimer Gold & Special Minerals Fund
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Oppenheimer Rochester Virginia Municipal Fund
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Oppenheimer International Bond Fund
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Oppenheimer Select Value Fund
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Oppenheimer International Diversified Fund
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Oppenheimer Senior Floating Rate Fund
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Oppenheimer International Growth Fund
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Oppenheimer Short Duration Fund
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Oppenheimer International Small Company Fund
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Oppenheimer Small- & Mid-Cap Growth Fund
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Oppenheimer International Value Fund
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Oppenheimer Small- & Mid-Cap Value Fund
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Oppenheimer Limited Term California Municipal Fund
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Oppenheimer U.S. Government Trust
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Oppenheimer Limited-Term Government Fund
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Oppenheimer Value Fund
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Oppenheimer Main Street Fund
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Limited Term New York Municipal Fund
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Oppenheimer Main Street Select Fund
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Rochester Fund Municipals
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Oppenheimer Main Street Small- & Mid-Cap Fund
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Money Market Funds :
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Oppenheimer Cash Reserves
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Oppenheimer Institutional Money Market Fund
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Oppenheimer Money Market Fund, Inc.
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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.
OppenheimerFunds 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:
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A fund account whose shares were acquired after September 30th
of the prior year;
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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;
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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
-
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Accounts held in the OppenheimerFunds Portfolio Builder Program
which is offered through certain broker/dealers to qualifying shareholders.
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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).
Additional risks of investing in other investment companies are
described under "Investments in Other Investment Companies."
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.
If future legislation extends expired tax provisions that applied
to taxable years of regulated investment companies beginning before January 1, 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.
Subject to the issuance of further guidance, 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
Manager 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 September 30, 2012, including the notes thereto and the report of KPMG LLP thereon, are incorporated by
reference into this Statement of Additional Information.
Oppenheimer Discovery 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
OPPENHEIMER DISCOVERY FUND
FORM N-1A
PART C
OTHER INFORMATION
Item 28. Exhibits
(a) (i) Amended and Restated
Declaration of Trust dated 1/12/01: Previously filed with Registrant’s Post-Effective Amendment No. 30, (11/20/03), and incorporated
herein by reference.
(ii) Amendment No. 1 dated
1/12/06 to the Amended and Restated Declaration of Trust dated 1/12/01: Previously filed with Registrant’s Post-Effective
Amendment No. 33, (1/27/06), and incorporated herein by reference.
(iii) Amendment No. 2 dated
1/16/01 to the Amended and Restated Declaration of Trust dated 1/12/01: Previously filed with Registrant’s Post-Effective
Amendment No. 42, (1/26/12), and incorporated herein by reference.
(iv) Amendment No. 3 dated
9/15/11 to the Amended and Restated Declaration of Trust dated 1/12/01: Previously filed with Registrant’s Post-Effective
Amendment No. 42, (1/26/12), and incorporated herein by reference.
(b) Amended and Restated
By-Laws dated 6/16/05: Previously filed with Registrant’s Post-Effective Amendment No. 33, (1/27/06), and incorporated herein
by reference.
(c) (i) Specimen Class A
Share Certificate: Previously filed with Registrant’s Post-Effective Amendment No. 24, (1/28/00), and incorporated herein
by reference.
(ii) Specimen Class B Share
Certificate: Previously filed with Registrant’s Post-Effective Amendment No. 24, (1/28/00), and incorporated herein by reference.
(iii) Specimen Class C Share
Certificate: Previously filed with Registrant’s Post-Effective Amendment No. 24, (1/28/00), and incorporated herein by reference.
(iv) Specimen Class N Share
Certificate: Previously filed with Registrant’s Post-Effective Amendment No. 25, (11/14/00), and incorporated herein by reference.
(v) Specimen Class Y Share
Certificate: Previously filed with Registrant’s Post-Effective Amendment No. 24, (1/28/00), and incorporated herein by reference.
(d) (i) Restated Investment
Advisory Agreement dated 1/1/13: Filed herewith.
(ii) Investment Sub-Advisory
Agreement dated 1/1/13: Filed herewith.
(e) (i) General Distributor's
Agreement dated 12/10/92: Previously filed with Registrant's Post-Effective Amendment No. 11, (1/28/93), and re-filed with Registrant's
Post-Effective Amendment No. 16, (1/13/95), pursuant to Item 102 of Regulation S-T, and incorporated herein by reference.
(ii) Form of Dealer Agreement
of OppenheimerFunds Distributor, Inc.: Previously filed with Post-Effective Amendment No. 34 to the Registration Statement of Oppenheimer
Main Street Funds, Inc. (Reg. No.33-17850), (10/23/06), and incorporated herein by reference.
(iii) Form of Broker Agreement
of OppenheimerFunds Distributor, Inc.: Previously filed with Post-Effective Amendment No. 34 to the Registration Statement of Oppenheimer
Main Street Funds, Inc. (Reg. No.33-17850), (10/23/06), and incorporated herein by reference.
(iv) Form of Agency Agreement
of OppenheimerFunds Distributor, Inc.: Previously filed with Post-Effective Amendment No. 34 to the Registration Statement of Oppenheimer
Main Street Funds, Inc. (Reg. No.33-17850), (10/23/06), and incorporated herein by reference
(v) Form of Trust Company
Fund/SERV Purchase Agreement of OppenheimerFunds Distributor, Inc.: Previously filed with Post-Effective Amendment No. 45 to the
Registration Statement of Oppenheimer High Yield Fund (Reg. No. 2-62076), (10/26/01), and incorporated herein by reference.
(vi) Form of Trust Company
Agency Agreement of OppenheimerFunds Distributor, Inc.: Previously filed with Post-Effective Amendment No. 34 to the Registration
Statement of Oppenheimer Main Street Funds, Inc. (Reg. No.33-17850), (10/23/06), and incorporated herein by reference.
(f) Amended & Restated
Compensation Deferral Plan for Eligible Trustees, effective 1/1/08: Previously filed with Post-Effective Amendment No. 4 to
the Registration Statement of Oppenheimer Portfolio Series (Reg. No. 333-121449), (5/29/09), and incorporated herein
by reference.
(g) (i) Global Custody Agreement
dated 2/16/07: Previously filed with Post-Effective Amendment No. 57 to the Registration Statement of Oppenheimer Rising Dividends
Fund (Reg. No. 2-65223), (7/31/07), and incorporated herein by reference.
(ii) Amendment dated 8/16/10
to the Global Custody Agreement: Previously filed with Post-Effective Amendment No. 9 to the Registration Statement of Oppenheimer
Select Value Fund (Reg. No. 333-100700), (8/26/10), and incorporated herein by reference.
(h) Not applicable.
(i) Opinion and Consent
of Counsel dated 8/1/86: Previously filed with Registrant's Post-Effective Amendment No. 3, (1/27/88), and re-filed with Registrant's
Post-Effective Amendment No. 16, (1/13/95), pursuant to Item 102 of Regulation S-T, and incorporated herein by reference.
(j) Independent Registered
Public Accounting Firm's Consent: Filed herewith.
|
|
(l)
|
Investment Letter from OppenheimerFunds, Inc. to Registrant dated 8/15/86: Previously filed with Registrant’s Post-Effective Amendment No. 5, (12/1/89), and re-filed with Registrant’s Post-Effective Amendment No. 16, (1/13/95), pursuant to Item 102 of Regulation S-T, and incorporated herein by reference.
|
(m) (i) Amended and Restated
Service Plan and Agreement for Class A shares dated 6/30/11: Previously filed with Registrant’s Post-Effective Amendment
No. 42, (1/26/12), and incorporated herein by reference.
(ii) Amended and Restated
Distribution and Service Plan and Agreement for Class B shares dated 6/30/11: Previously filed with Registrant’s Post-Effective
Amendment No. 42, (1/26/12), and incorporated herein by reference.
(iii) Amended and Restated
Distribution and Service Plan and Agreement for Class C shares dated 6/30/11: Previously filed with Registrant’s Post-Effective
Amendment No. 42, (1/26/12), and incorporated herein by reference.
(iv) Amended and Restated
Distribution and Service Plan and Agreement for Class N shares dated 6/30/11: Previously filed with Registrant’s Post-Effective
Amendment No. 42, (1/26/12), and incorporated herein by reference.
(n) Oppenheimer Funds Multiple
Class Plan under Rule 18f-3 as updated through 4/20/11: Previously filed with Post-Effective Amendment No. 5 to the Registration
Statement of Oppenheimer Transition 2010 Fund (Reg. No. 333-135516), (6/27/11), and incorporated herein by reference.
(o) (i) Power of Attorney
dated 12/5/11 for Mary Ann Tynan: Previously filed with Post-Effective Amendment No. 24 to the Registration Statement
of Oppenheimer Equity
Income Fund, Inc. (Reg. No. 333-16881), (12/15/11), and incorporated
herein by reference
.
(ii) Power of Attorney dated 11/27/12
for all Trustees/Directors and Officers, except for Mary Ann Tynan and Joanne Pace: Previously filed with Pre-Effective Amendment
No. 2 to the Registration Statement of Oppenheimer Diversified Alternatives
Fund (Reg.
No. 333-
184384
), (12/27/12), and incorporated herein by reference.
(iii)
Power
of Attorney dated 11/27/12 for Joanne Pace: Previously filed with Pre-Effective Amendment No. 2 to the Registration
Statement of Oppenheimer Diversified Alternatives
Fund (Reg. No. 333-
184384
),
(12/27/12), and incorporated herein by reference.
|
|
(p)
|
Code of Ethics of the Oppenheimer Funds, OppenheimerFunds, Inc. (including affiliates and subsidiaries) and OppenheimerFunds Distributor, Inc., dated as of 5/25/12, under Rule 17j-1 of the Investment Company Act of 1940: Previously filed with Post-Effective Amendment No. 7 to the Registration Statement of Oppenheimer Transition 2010 Fund (Reg. No. 333-135516), (6/26/12), and incorporated herein by reference.
|
Item 29. - Persons Controlled by or Under Common Control
with the Fund
None.
Item 30. – Indemnification
Reference is made to the provisions of Article Seventh of Registrant's
Amended and Restated Declaration of Trust filed as Exhibit 23(a) to the Registration Statement and incorporated herein by reference.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to trustees, officers and controlling persons of Registrant pursuant to the foregoing provisions
or otherwise, Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by Registrant of expenses incurred or paid by a trustee, officer
or controlling person of Registrant in the successful defense of any action, suit or proceeding) is asserted by such trustee, officer
or controlling person, Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed
in the Securities Act of 1933 and will be governed by the final adjudication of such issue.
Item 31. - Business and Other Connections
of the Investment Adviser
(a)
OFI
Global Asset Management, Inc. (the “Manager”) is the manager of the Registrant. The information required by this Item 31
about officers and directors of the Manager, together with information as to any other business, profession, vocation or employment
of a substantial nature engaged in by such officers and directors during the past two years, is incorporated by reference to Form ADV,
filed by the Manager pursuant to the Investment Advisers Act of 1940 (SEC File No. 801-76771)
.
(b)
OppenheimerFunds,
Inc. (the “Sub-Adviser”) provides advisory services to the Registrant. The information required by this Item 31
about officers and directors of the Sub-Adviser, together with information as to any other business, profession, vocation or employment
of a substantial nature engaged in by such officers and directors during the past two years, is incorporated by reference to Form ADV,
filed by the Sub-Adviser pursuant to the Investment Advisers Act of 1940 (SEC File No. 801-8253)
.
Item 32. Principal Underwriter
(a) OppenheimerFunds Distributor,
Inc. is the Distributor of the Registrant's shares. It is also the Distributor of each of the registered open-end investment companies
listed below (except Panorama Series Fund) and for MassMutual Institutional Funds.
Limited Term New York Municipal
Fund (a series of Rochester Portfolio Series)
Oppenheimer AMT-Free Municipals
Oppenheimer California Municipal
Fund
Oppenheimer Capital Appreciation
Fund
Oppenheimer Capital Income
Fund
Oppenheimer Cash Reserves
Oppenheimer Commodity Strategy
Total Return Fund
Oppenheimer Core Bond Fund
(a series of Oppenheimer Integrity Funds)
Oppenheimer Corporate Bond
Fund
Oppenheimer Currency Opportunities
Fund
Oppenheimer Developing Markets Fund
Oppenheimer Diversified Alternatives Fund
Oppenheimer Discovery Fund
Oppenheimer Emerging Markets
Debt Fund
Oppenheimer Equity Fund
Oppenheimer Equity Income Fund
Oppenheimer Global Fund
Oppenheimer Global Multi Strategies Fund
Oppenheimer Global Opportunities Fund
Oppenheimer Global Strategic
Income Fund
Oppenheimer Global Value Fund
Oppenheimer Gold & Special
Minerals Fund
Oppenheimer International Bond
Fund
Oppenheimer Institutional Money
Market Fund
Oppenheimer International Diversified
Fund
Oppenheimer International Growth
Fund
Oppenheimer International Small
Company Fund
Oppenheimer International Value
Fund
Oppenheimer Limited Term California
Municipal Fund
Oppenheimer Limited-Term Government
Fund
Oppenheimer Main Street Fund
(a series of Oppenheimer Main Street Funds)
Oppenheimer Main Street Select
Fund
Oppenheimer Main Street Small-
& Mid-Cap Fund
Oppenheimer Master Event-Linked
Bond Fund, LLC
Oppenheimer Master Loan Fund,
LLC
Oppenheimer Master Inflation
Protected Securities Fund, LLC
Oppenheimer Master International
Value Fund, LLC
Oppenheimer SteelPath Master
MLP Fund, LLC
Oppenheimer SteelPath MLP Funds
Trust (5 series):
Oppenheimer SteelPath MLP Select 40 Fund
Oppenheimer SteelPath MLP Alpha Fund
Oppenheimer SteelPath MLP Income Fund
Oppenheimer SteelPath MLP Alpha Plus Fund
Oppenheimer SteelPath MLP and Infrastructure Debt Fund
Oppenheimer Money Market Fund,
Inc.
Oppenheimer Multi-State Municipal Trust
(3 series):
Oppenheimer New Jersey Municipal
Fund
Oppenheimer Pennsylvania Municipal
Fund
Oppenheimer Rochester National
Municipals
Oppenheimer Portfolio Series (4 series):
Active Allocation Fund
Equity Investor Fund
Conservative Investor Fund
Moderate Investor Fund
Oppenheimer Quest For Value Funds (3 series):
Oppenheimer Global Allocation Fund
Oppenheimer Flexible Strategies
Fund
Oppenheimer Small- & Mid-Cap
Value Fund
Oppenheimer Real Estate Fund
Oppenheimer Rising Dividends
Fund
Oppenheimer Rochester AMT-Free
New York Municipals
Oppenheimer Rochester Arizona Municipal Fund
Oppenheimer Rochester Intermediate Term Municipal Fund
Oppenheimer Rochester Limited
Term Municipal Fund (a series of Oppenheimer Municipal Fund)
Oppenheimer Rochester Maryland
Municipal Fund
Oppenheimer Rochester Massachusetts
Municipal Fund
Oppenheimer Rochester Michigan
Municipal Fund
Oppenheimer Rochester Minnesota
Municipal Fund
Oppenheimer Rochester North
Carolina Municipal Fund
Oppenheimer Rochester Ohio Municipal Fund
Oppenheimer Rochester Short Term Municipal Fund
Oppenheimer Rochester Virginia Municipal Fund
Oppenheimer Select Value Fund
Oppenheimer Senior Floating
Rate Fund
Oppenheimer Value Fund (a series of Oppenheimer
Series Fund, Inc.)
Oppenheimer Small- & Mid-Cap Growth Fund
Oppenheimer Short Duration Fund
Oppenheimer U.S. Government
Trust
Oppenheimer Variable Account Funds (10
series):
Oppenheimer Balanced Fund/VA
Oppenheimer Capital Appreciation
Fund/VA
Oppenheimer Core Bond Fund/VA
Oppenheimer Global Securities
Fund/VA
Oppenheimer Global Strategic
Income Fund/VA
Oppenheimer Main Street Fund/VA
Oppenheimer Main Street Small-
& Mid-Cap Fund/VA
Oppenheimer Money Fund/VA
Oppenheimer Small- & Mid-Cap
Growth Fund/VA
Oppenheimer Value Fund/VA
Oppenheimer International Growth Fund/VA
(a series of Panorama Series Fund)
Rochester Fund Municipals
(b) The directors and officers of the Registrant's principal
underwriter are:
|
Name & Principal
Business Address
|
Position & Office
with Underwriter
|
Position and Office
with Registrant
|
|
Michael Albert
(1)
|
Vice President
|
None
|
|
Anthony Allocco
(2)
|
Assistant Vice President
|
None
|
|
Janette Aprilante
(2)
|
Secretary
|
None
|
|
James Austin
(1)
|
Vice President
|
None
|
|
David J. Barker
(2)
|
Vice President
|
None
|
|
James Barker
(2)
|
Vice President
|
None
|
|
Cesar Bastidas
(2)
|
Assistant Vice President
|
None
|
|
William Beagle
(2)
|
Vice President
|
None
|
|
Kathleen Beichert
(1)
|
Senior Vice President
|
None
|
|
Rocco Benedetto
(2)
|
Vice President
|
None
|
|
Christopher Bergeron
(2)
|
Vice President
|
None
|
|
Rick Bettridge
(2)
|
Vice President
|
None
|
|
Adam Bilmes
(2)
|
Assistant Vice President
|
None
|
|
Paul Blease
(2)
|
Vice President
|
None
|
|
William Borders
(2)
|
Assistant Vice President
|
None
|
|
David A. Borrelli
(2)
|
Senior Vice President
|
None
|
|
Jeffrey R. Botwinick
(2)
|
Vice President
|
None
|
|
Sarah Bourgraf
(1)
|
Vice President
|
None
|
|
Joshua Broad
(2)
|
Vice President
|
None
|
|
Ken Brodsky
(2)
|
Vice President
|
None
|
|
Kevin E. Brosmith
(2)
|
Senior Vice President
|
None
|
|
Ross Burkstaller
211 Tulane Drive SE
Albuquerque, NM 87106
|
Vice President
|
None
|
|
Tracy Cairoli
(2)
|
Vice President
|
None
|
|
Mersin Capollari
|
Vice President
|
None
|
|
Sean Carey
(2)
|
Assistant Vice President
|
None
|
|
Robert Caruso
15 Deforest Road
Wilton, CT 06897
|
Vice President
|
None
|
|
Donelle Chisolm
(2)
|
Vice President
|
None
|
|
Andrew Chronofsky
|
Vice President
|
None
|
|
Angelanto Ciaglia
(2)
|
Vice President
|
None
|
|
Nicholas Cirbo
(1)
|
Vice President
|
None
|
|
Kevin Clark
(2)
|
Assistant Vice President
|
None
|
|
Sean Clark
(2)
|
Vice President
|
None
|
|
John Corcoran
(2)
|
Vice President
|
None
|
|
Craig Colby
(2)
|
Vice President
|
None
|
|
Gerald James Concepcion
(2)
|
Vice President
|
None
|
|
Rodney Constable
(1)
|
Vice President
|
None
|
|
Cameron Cowden
(2)
|
Vice President
|
None
|
|
Neev Crane
(2)
|
Vice President
|
None
|
|
Geoffrey Crumine
(2)
|
Senior Vice President
|
None
|
|
Scott Curran
(2)
|
Vice President
|
None
|
|
Michael Daley
(2)
|
Vice President
|
None
|
|
Brendan J. Deasy
(2)
|
Vice President
|
None
|
|
Madeline T. Delianides
|
Vice President
|
None
|
|
Michael Dennehy
(2)
|
Vice President
|
None
|
|
Jeffrey Dickin
(2)
|
Vice President
|
None
|
|
Brian Dietrich
(1)
|
Assistant Vice President
|
None
|
|
Steven Dombrower
(2)
|
Vice President
|
None
|
|
Robert Duffey
(2)
|
Vice President
|
None
|
|
Ryan Duffy
(2)
|
Vice President
|
None
|
|
Robert Dunphy
(2)
|
Vice President
|
None
|
|
Paul Eisenhardt
(2)
|
Senior Vice President
|
None
|
|
Kent M. Elwell
(2)
|
Vice President
|
None
|
|
Rick Ernzen
(2)
|
Vice President
|
None
|
|
Dana Espinel
(2)
|
Assistant Vice President
|
None
|
|
Gregg A. Everett
(2)
|
Vice President
|
None
|
|
George R. Fahey
(1)
|
Senior Vice President
|
None
|
|
Eric C. Fallon
(2)
|
Vice President
|
None
|
|
Kristie Feinberg
(2)
|
Assistant Treasurer
|
None
|
|
Kristin Fenik
(1)
|
Vice President
|
None
|
|
Josean Fernandez
(2)
|
Assistant Vice President
|
None
|
|
Joseph Fernandez
(2)
|
Vice President
|
None
|
|
Christopher Ferrara
(2)
|
Assistant Vice President
|
None
|
|
Michael Ferrer
(2)
|
Vice President
|
None
|
|
Mark J. Ferro
(2)
|
Senior Vice President
|
None
|
|
Eric P. Fishel
(2)
|
Vice President
|
None
|
|
Patrick W. Flynn
(1)
|
Senior Vice President
|
None
|
|
John Fortuna
(2)
|
Vice President
|
None
|
|
Jayme Fowler
(2)
|
Vice President
|
None
|
|
Diane Frankenfield
(2)
|
Senior Vice President
|
None
|
|
Jerry Fraustro
(2)
|
Vice President
|
None
|
|
William Friebel
(2)
|
Vice President
|
None
|
|
Alice Fricke
(2)
|
Vice President
|
None
|
|
Alyson Frost
(2)
|
Assistant Vice President
|
None
|
|
Arthur S. Gabinet
(2)
|
Chief Legal Officer
|
Secretary and Chief Legal Officer
|
|
William Gahagan
(2)
|
Vice President
|
None
|
|
Hazem Gamal
(2)
|
Vice President
|
None
|
|
Charlotte Gardner
(1)
|
Vice President
|
None
|
|
Jack Goldin
(2)
|
Vice President
|
None
|
|
Michael Gottesman
(2)
|
Vice President
|
None
|
|
Raquel Granahan
(2)
|
Senior Vice President
|
None
|
|
Eric Grossjung
(2)
|
Vice President
|
None
|
|
Michael D. Guman
(2)
|
Vice President
|
None
|
|
James E. Gunter
(2)
|
Vice President
|
None
|
|
LeaAnna Hartman
(1)
|
Vice President
|
None
|
|
Alexander Hayes
(2)
|
Vice President
|
None
|
|
Kevin J. Healy
(2)
|
Vice President
|
None
|
|
Kenneth Henry
(2)
|
Vice President
|
None
|
|
Philipp Hensler
(2)
|
Chairman, Chief Executive Officer & Director
|
None
|
|
Wendy Hetson Ehrlich
(2)
|
Vice President
|
None
|
|
Jennifer Hoelscher
(1)
|
Assistant Vice President
|
None
|
|
Eric Holquist
(2)
|
Vice President
|
None
|
|
Lucienne Howell
(2)
|
Vice President
|
None
|
|
Edward Hrybenko
(2)
|
Senior Vice President
|
None
|
|
Jason Hubersberger
(2)
|
Vice President
|
None
|
|
Brian F. Husch
(2)
|
Vice President
|
None
|
|
Keith Hylind
(2)
|
Vice President
|
None
|
|
Vincent Iacono
(2)
|
Vice President
|
None
|
|
Kathleen T. Ives
(1)
|
Assistant Secretary
|
None
|
|
Shonda Rae Jaquez
(2)
|
Vice President
|
None
|
|
Robin Jennings
(2)
|
Assistant Vice President
|
None
|
|
Brian Johnson
(1)
|
Vice President
|
None
|
|
Eric K. Johnson
(1)
|
Senior Vice President
|
None
|
|
Scott Kelley
(1)
|
Vice President
|
None
|
|
Richard Keri
(2)
|
Senior Vice President
|
None
|
|
Brian Kiley
(2)
|
Vice President
|
None
|
|
Richard Klein
(2)
|
Senior Vice President
|
None
|
|
Eric Kristenson
(2)
|
Vice President
|
None
|
|
Lamar Kunes
(2)
|
Vice President
|
None
|
|
David T. Kuzia
(1)
|
Vice President
|
None
|
|
John Laudadio
(2)
|
Vice President
|
None
|
|
Daniel Lee
(2)
|
Assistant Vice President
|
None
|
|
Wendy Lee
(2)
|
Vice President
|
None
|
|
John Leonard
(2)
|
Vice President
|
None
|
|
Jesse Levitt
(2)
|
Vice President
|
None
|
|
Julie Libby
(2)
|
Senior Vice President
|
None
|
|
Eric J. Liberman
(2)
|
Vice President
|
None
|
|
Lorna Lindquist
(2)
|
Vice President
|
None
|
|
Malissa Lischin
(2)
|
Vice President
|
None
|
|
Christina Loftus
(2)
|
Senior Vice President
|
None
|
|
Thomas Loncar
(2)
|
Vice President
|
None
|
|
Peter Maddox
(2)
|
Vice President
|
None
|
|
Michael Malik
(2)
|
Vice President
|
None
|
|
Joseph Marich
(2)
|
Vice President
|
None
|
|
Steven C. Manns
(2)
|
Vice President
|
None
|
|
Todd A. Marion
(2)
|
Vice President
|
None
|
|
Kyle Martin
(1)
|
Vice President
|
None
|
|
Anthony Mazzariello
(2)
|
Vice President
|
None
|
|
Derren McDaniel
(1)
|
Vice President
|
None
|
|
John C. McDonough
(2)
|
President
|
None
|
|
Brian McGinty
(1)
|
Vice President
|
None
|
|
Kent C. McGowan
(2)
|
Vice President
|
None
|
|
William McNamara
(2)
|
Vice President
|
None
|
|
Daniel Melehan
(2)
|
Vice President
|
None
|
|
Brian F. Medina
(1)
|
Vice President
|
None
|
|
Debbie S. Michaelson
|
Vice President
|
None
|
|
Toller Miller
(1)
|
Vice President
|
None
|
|
Clint Modler
(1)
|
Vice President
|
None
|
|
Joseph Moran
(2)
|
Senior Vice President
|
None
|
|
Jason Morris
(2)
|
Assistant Vice President
|
None
|
|
Robert Moser
(2)
|
Vice President
|
None
|
|
James Mugno
(2)
|
Vice President
|
None
|
|
Matthew Mulcahy
(2)
|
Vice President
|
None
|
|
Wendy Jean Murray
(2)
|
Vice President
|
None
|
|
Kimberly Mustin
(2)
|
Senior Vice President
|
None
|
|
John S. Napier
(2)
|
Senior Vice President
|
None
|
|
Christina Nasta
(2)
|
Senior Vice President
|
Chief Business Officer and Vice President
|
|
Kevin P. Neznek
(2)
|
Senior Vice President
|
None
|
|
Nichola Noriega
(2)
|
Vice President
|
None
|
|
Christopher Nicholson
(2)
|
Vice President
|
None
|
|
Peter Novak
(2)
|
Vice President
|
None
|
|
Timothy O’Connell
(2)
|
Vice President
|
None
|
|
Alan Panzer
(2)
|
Vice President
|
None
|
|
Maria Paster
(2)
|
Assistant Vice President
|
None
|
|
Ashley Patten
(1)
|
Vice President
|
None
|
|
Donald Pawluk
(2)
|
Vice President
|
None
|
|
Brian C. Perkes
(2)
|
Vice President
|
None
|
|
Charles K. Pettit
(2)
|
Vice President
|
None
|
|
David Pfeffer
(2)
|
Director & Chief Financial Officer
|
None
|
|
Andrew Phillips
(1)
|
Assistant Vice President
|
None
|
|
Cheryl Pipia
(2)
|
Senior Vice President
|
None
|
|
Rachel Powers
(1)
|
Vice President
|
None
|
|
Nicole Pretzel Holahan
(2)
|
Vice President
|
None
|
|
Minnie Ra
(2)
|
Vice President
|
None
|
|
Richard E. Rath
|
Vice President
|
None
|
|
William J. Raynor
(2)
|
Vice President
|
None
|
|
Dennis Robinson
(1)
|
Vice President
|
None
|
|
Ian M. Roche
(2)
|
Vice President
|
None
|
|
Michael Rock
(2)
|
Vice President
|
None
|
|
Thomas Sabow
(2)
|
Vice President
|
None
|
|
Mark Santero
(2)
|
Senior Vice President
|
None
|
|
Christopher Saul
(2)
|
Assistant Vice President
|
None
|
|
John Saunders
(2)
|
Vice President
|
None
|
|
Timothy Scanlan
(2)
|
Vice President
|
None
|
|
Alex Schardt
(2)
|
Vice President
|
None
|
|
Thomas Schmitt
(2)
|
Vice President
|
None
|
|
William Schories
|
Vice President
|
None
|
|
Jennifer Sexton
(2)
|
Vice President
|
None
|
|
Jeffrey Sharon
(2)
|
Vice President
|
None
|
|
Kenneth Shell
(1)
|
Vice President
|
None
|
|
Bryant Smith
(2)
|
Vice President
|
None
|
|
Aaron Spatz
(2)
|
Vice President
|
None
|
|
Christopher M. Spencer
(2)
|
Vice President
|
None
|
|
John A. Spensley
(2)
|
Vice President
|
None
|
|
Michael Staples
(2)
|
Vice President
|
None
|
|
Alfred St. John
(2)
|
Vice President
|
None
|
|
Bryan Stein
(2)
|
Vice President
|
None
|
|
Robert Stidham
|
Vice President
|
None
|
|
Brian C. Summe
(2)
|
Vice President
|
None
|
|
Michael Sussman
(2)
|
Vice President
|
None
|
|
George T. Sweeney
(2)
|
Senior Vice President
|
None
|
|
Leo Tallon
(2)
|
Vice President
|
None
|
|
Brian Taylor
(2)
|
Vice President
|
None
|
|
James Taylor
(2)
|
Vice President
|
None
|
|
Paul Temple
(2)
|
Vice President
|
None
|
|
David G. Thomas
(2)
|
Vice President
|
None
|
|
Luz Touma
(2)
|
Vice President
|
None
|
|
Cenk Toroslu
(1)
|
Vice President
|
None
|
|
Wesley Vance
(2)
|
Vice President
|
None
|
|
Mark S. Vandehey
(1)
|
Chief Compliance Officer
|
Vice President and Chief Compliance Officer
|
|
Richard Walsh
(2)
|
Vice President
|
None
|
|
Vincent Vermette
(2)
|
Vice President
|
None
|
|
Janeanne Weickum
(1)
|
Vice President
|
None
|
|
Michael J. Weigner
(2)
|
Vice President
|
None
|
|
Donn S. Weise
(2)
|
Vice President
|
None
|
|
Chris G. Werner
(2)
|
Vice President
|
None
|
|
Jason Widener
(2)
|
Vice President
|
None
|
|
Ryan Wilde
(1)
|
Vice President
|
None
|
|
Martha B. Willis
(2)
|
Director & Executive Vice President
|
None
|
|
Patrick Wisneski
(1)
|
Vice President
|
None
|
|
Meredith Wolff
(2)
|
Vice President
|
None
|
|
Kevin Woodson
(1)
|
Assistant Vice President
|
None
|
|
Cary Patrick Wozniak
|
Vice President
|
None
|
|
David Zicchinella
(2)
|
Assistant Vice President
|
None
|
|
Steven Zito
(1)
|
Vice President
|
None
|
(1)
6803 South Tucson Way, Centennial,
CO 80112-3924
(2)
Two World Financial Center,
225 Liberty Street, 11
th
Floor, New York, NY 10281-1008
(c) Not applicable.
Item 33. Location of Accounts and
Records
The accounts, books and other documents
required to be maintained by Registrant pursuant to Section 31(a) of the Investment Company Act of 1940 and rules promulgated thereunder
are in the possession of OFI Global Asset Management, Inc., OppenheimerFunds, Inc. and Shareholder Services, Inc., as applicable,
at each entity’s offices at 6803 South Tucson Way, Centennial, Colorado 80112-3924
.
Item 34. Management Services
Not applicable.
Item 35. Undertakings
Not applicable.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and
the Investment Company Act of 1940, the Registrant certifies that it meets all the requirements for effectiveness of this Registration
Statement pursuant to Rule 485(b) under the Securities Act of 1933 and has duly caused this Registration Statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in the City of New York and State of New York on the 25
th
day of January, 2013.
OPPENHEIMER DISCOVERY FUND
By:
William
F. Glavin, Jr.*
William F.
Glavin, Jr.*, President and
Principal
Executive Officer
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed below by the following persons in the capacities on the dates indicated:
|
Signatures
|
Title
|
Date
|
|
|
|
|
|
|
|
|
|
Brian F. Wruble*
|
Chairman of the
|
January 25, 2013
|
|
Brian F. Wruble
|
Board of Trustees
|
|
|
|
|
|
|
|
|
|
|
William F. Glavin, Jr.*
|
President and Principal
|
January 25, 2013
|
|
William F. Glavin, Jr.
|
Executive Officer
|
|
|
|
|
|
|
|
|
|
|
Brian W. Wixted*
|
Treasurer, Principal
|
January 25, 2013
|
|
Brian W. Wixted
|
Financial & Accounting Officer
|
|
|
|
|
|
|
David K. Downes*
|
Trustee
|
January 25, 2013
|
|
David K. Downes
|
|
|
|
|
|
|
|
Matthew P. Fink*
|
Trustee
|
January 25, 2013
|
|
Matthew P. Fink
|
|
|
|
|
|
|
|
|
|
|
|
Phillip A. Griffiths*
|
Trustee
|
January 25, 2013
|
|
Phillip A. Griffiths
|
|
|
|
|
|
|
|
|
|
|
|
Mary F. Miller*
|
Trustee
|
January 25, 2013
|
|
Mary F. Miller
|
|
|
|
|
|
|
|
|
|
|
|
Joel W. Motley*
|
Trustee
|
January 25, 2013
|
|
Joel W. Motley
|
|
|
|
|
|
|
|
|
|
|
|
Mary Ann Tynan *
|
Trustee
|
January 25, 2013
|
|
Mary Ann Tynan
|
|
|
|
|
|
|
|
|
|
|
|
Joseph M. Wikler*
|
Trustee
|
January 25, 2013
|
|
Joseph M. Wikler
|
|
|
|
|
|
|
|
|
|
|
|
Peter I. Wold*
|
Trustee
|
January 25, 2013
|
|
Peter I. Wold
|
|
|
*By:
/s/ Mitchell J. Lindauer
Mitchell J. Lindauer, Attorney-in-Fact
OPPENHEIMER DISCOVERY FUND
Post-Effective Amendment No. 44
Registration Statement No. 811-04410
EXHIBIT INDEX
Exhibit No.
Description
28(d)(i) Restated
Investment Advisory Agreement dated 1/1/13
|
|
28(d)(ii)
|
Investment Sub-Advisory Agreement dated 1/1/13
|
28
(j) Independent
Registered Public Accounting Firm’s Consent
Asanko Gold, Inc. (AMEX:KGN)
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