-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, GPNF+XN5VKt+9wb0iKPX+LaSamfK8JeWXWBLO5n3AuPFD0a79JkXWajr3OAAQbF6 AgimbOBm5ezII6Ru4OJ66g== 0000935069-06-000013.txt : 20060103 0000935069-06-000013.hdr.sgml : 20060102 20060103162336 ACCESSION NUMBER: 0000935069-06-000013 CONFORMED SUBMISSION TYPE: N-CSR PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20051031 FILED AS OF DATE: 20060103 DATE AS OF CHANGE: 20060103 EFFECTIVENESS DATE: 20060103 FILER: COMPANY DATA: COMPANY CONFORMED NAME: OPPENHEIMER MIDCAP FUND CENTRAL INDEX KEY: 0001041101 IRS NUMBER: 133955890 STATE OF INCORPORATION: MA FISCAL YEAR END: 1031 FILING VALUES: FORM TYPE: N-CSR SEC ACT: 1940 Act SEC FILE NUMBER: 811-08297 FILM NUMBER: 06502789 BUSINESS ADDRESS: STREET 1: 6803 SOUTH TUCSON WAY STREET 2: N/A CITY: CENTENNIAL STATE: CO ZIP: 80112-3924 BUSINESS PHONE: 303-768-3200 MAIL ADDRESS: STREET 1: 6803 SOUTH TUCSON WAY STREET 2: N/A CITY: CENTENNIAL STATE: CO ZIP: 80112-3924 N-CSR 1 ra745_18622ncsr.txt RA745_18622NCSR.TXT UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM N-CSR CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES Investment Company Act file number 811-08297 OPPENHEIMER MIDCAP FUND (Exact name of registrant as specified in charter) 6803 SOUTH TUCSON WAY, CENTENNIAL, COLORADO 80112-3924 (Address of principal executive offices) (Zip code) ROBERT G. ZACK, ESQ. OPPENHEIMERFUNDS, INC. TWO WORLD FINANCIAL CENTER, NEW YORK, NEW YORK 10281-1008 (Name and address of agent for service) Registrant's telephone number, including area code: (303) 768-3200 Date of fiscal year end: October 31 Date of reporting period: October 31, 2005 ITEM 1. REPORTS TO STOCKHOLDERS. TOP HOLDINGS AND ALLOCATIONS - -------------------------------------------------------------------------------- TOP TEN COMMON STOCK INDUSTRIES - -------------------------------------------------------------------------------- IT Services 9.5% - -------------------------------------------------------------------------------- Health Care Equipment & Supplies 8.4 - -------------------------------------------------------------------------------- Software 8.3 - -------------------------------------------------------------------------------- Specialty Retail 7.8 - -------------------------------------------------------------------------------- Health Care Providers & Services 7.2 - -------------------------------------------------------------------------------- Diversified Financial Services 6.6 - -------------------------------------------------------------------------------- Air Freight & Logistics 4.9 - -------------------------------------------------------------------------------- Oil & Gas 3.8 - -------------------------------------------------------------------------------- Textiles, Apparel & Luxury Goods 3.6 - -------------------------------------------------------------------------------- Commercial Services & Supplies 3.6 Portfolio holdings and allocations are subject to change. Percentages are as of October 31, 2005, and are based on net assets. TOP TEN COMMON STOCK HOLDINGS - -------------------------------------------------------------------------------- Legg Mason, Inc. 3.2% - -------------------------------------------------------------------------------- Fastenal Co. 3.1 - -------------------------------------------------------------------------------- Coventry Health Care, Inc. 2.9 - -------------------------------------------------------------------------------- Expeditors International of Washington, Inc. 2.9 - -------------------------------------------------------------------------------- Getty Images, Inc. 2.5 - -------------------------------------------------------------------------------- Bard (C.R.), Inc. 2.5 - -------------------------------------------------------------------------------- O'Reilly Automotive, Inc. 2.5 - -------------------------------------------------------------------------------- Comverse Technology, Inc. 2.5 - -------------------------------------------------------------------------------- Chicago Mercantile Exchange (The) 2.5 - -------------------------------------------------------------------------------- Whole Foods Market, Inc. 2.4 Portfolio holdings and allocations are subject to change. Percentages are as of October 31, 2005, and are based on net assets. For more current Fund holdings, please visit www.oppenheimerfunds.com. 7 | OPPENHEIMER MIDCAP FUND TOP HOLDINGS AND ALLOCATIONS - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SECTOR ALLOCATION [THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.] Information Technology 25.2% IT Services 9.6 Software 8.3 Semiconductors & Semiconductor Equipment 3.5 Communications Equipment 2.5 Electronic Equipment & Instruments 1.3 Consumer Discretionary 19.9 Industrials 18.4 Health Care 17.9 Financials 10.2 Energy 6.0 Consumer Staples 2.4 Portfolio holdings and allocations are subject to change. Percentages are as of October 31, 2005, and are based on the total market value of common stocks. - -------------------------------------------------------------------------------- 8 | OPPENHEIMER MIDCAP FUND FUND PERFORMANCE DISCUSSION - -------------------------------------------------------------------------------- HOW HAS THE FUND PERFORMED? BELOW IS A DISCUSSION BY OPPENHEIMERFUNDS, INC., OF THE FUND'S PERFORMANCE DURING ITS FISCAL YEAR ENDED OCTOBER 31, 2005, FOLLOWED BY A GRAPHICAL COMPARISON OF THE FUND'S PERFORMANCE TO AN APPROPRIATE BROAD-BASED MARKET INDEX. MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE. The Fund produced relatively strong performance relative to its benchmark, the S&P Mid-Cap 400 Index during its fiscal year. The Fund's competitive performance can be attributed to strong stock selection, particularly in the specialty retail, healthcare and financial sectors. On the negative side, the Fund's relative underweight in energy hurt performance, as energy was the best performing sector in the Index over the period. Outside of energy, the Fund's overweight in IT services combined with several holdings within the electronic equipment and software sectors hampered performance. The Fund's investment strategy focuses on high-growth companies that are industry leaders within their marketplace. We target those we believe possess competitive advantages, stable earnings, sustainable growth rates and experienced management teams with proven records. Our investment strategy succeeded in identifying high performing companies across many market sectors. During the period, specialty retail proved to be the Fund's best performing area, benefiting from a strong economy and a voracious consumer appetite. Top contributors to performance were Chico's FAS, Inc., Urban Outfitters, Inc. and Coach, Inc. Women's clothing retailer, Chico's FAS, Inc., benefited from very strong same-store sales growth and a highly attentive customer service philosophy. Urban Outfitters, Inc., a fashion retailer for young women and men, benefited from strong management, low cost overseas manufacturing and trendy fashion designs. Coach, Inc., a designer, manufacturer and marketer of fine leather goods and accessories, continued to profit from its handbag collection as well as its successful expansion into Japan. As of the end of the period, we have trimmed our exposure to this sector given our concern over the impact that rising energy prices will have on the consumer. Stocks within the healthcare sector also performed well for the Fund. During times of economic uncertainty, as was the case for part of the reporting period, investors tend to flock to defensive investments such as healthcare stocks. The Fund's strongest healthcare holding was Coventry Health Care, Inc., a firm that provides managed healthcare services. Coventry Health Care, Inc. successfully completed its acquisition of First Health Group Corp., which boosted profitability and produced greater margins. The financials sector also helped performance. The Fund benefited from its underweight in commercial banks, as the group was down overall. Among the best performing stocks in this sector were the Chicago Mercantile Exchange Holdings, Inc. and Legg 9 | OPPENHEIMER MIDCAP FUND FUND PERFORMANCE DISCUSSION - -------------------------------------------------------------------------------- Mason, Inc. The Chicago Mercantile Exchange Holdings, Inc., the largest U.S. futures exchange and diversified and innovative global financial services marketplace, profited from its new products and trading platform. Legg Mason, Inc., a financial services firm, sold its brokerage unit to Citi Corp. This strategic realignment has allowed the firm to focus on its more lucrative asset management business and as a result the company's stock has soared. Lastly, within the consumer staples sector, Whole Foods Market, Inc. outperformed. A strong management team that successfully executed on its corporate plan drove the company's stock price higher during the period. Despite strong performance from most of the Fund's holdings, there were some detractors. One of the primary detractors from Fund performance was being underweighted in energy versus the Index. Approximately half way through the reporting period the S&P Mid-Cap 400 Index increased its exposure to the energy sector. A reallocation of this kind is very uncommon and as a result the Fund, which had been overweighted in energy versus the Index, became underweighted. In addition to energy, holdings within the information technology sector held performance back. Disappointments included information technology services providers, such as Affiliated Computer Services, Inc. and Alliance Data Systems Corp. Also hampering performance were the Fund's holdings in the electronic equipment and instruments sector, specifically CDW Corp. and National Instruments Corp. Lastly, in the consumer discretionary sector, Brunswick Corp., a global leader in the leisure products industry, suffered from weak sales due to consumer concerns over rising energy prices. Mid-cap stocks tend to be more sensitive to changes in earnings expectations, and tend to have lower trading volumes than large-cap securities, and therefore they may experience more abrupt and erratic price movements. COMPARING THE FUND'S PERFORMANCE TO THE MARKET. The graphs that follow show the performance of a hypothetical $10,000 investment in each class of shares of the Fund held until October 31, 2005. In the case of Class A, Class B, Class C and Class Y shares, performance is measured from the inception of each Class on December 1, 1997. In the case of Class N shares, performance is measured from inception of the Class on March 1, 2001. The Fund's performance reflects the deduction of the maximum initial sales charge on Class A shares, the applicable contingent deferred sales charge on Class B, Class C, and Class N shares, and reinvestments of all dividends and capital gains distributions. Past performance cannot guarantee future results. 10 | OPPENHEIMER MIDCAP FUND The Fund's performance is compared to that of the S&P Mid-Cap 400 Index. The S&P Mid-Cap 400 Index is an unmanaged index of 400 domestic stocks chosen for market size, market size/liquidity or market size and liquidity, and industry group representation. Index performance reflects the reinvestment of income but does not consider the effect of transaction costs, and none of the data in the graphs shows the effect of taxes. The Fund's performance reflects the effects of the Fund's business and operating expenses. While index comparisons may be useful to provide a benchmark for the Fund's performance, it must be noted that the Fund's investments are not limited to the investments in the index. 11 | OPPENHEIMER MIDCAP FUND FUND PERFORMANCE DISCUSSION - -------------------------------------------------------------------------------- CLASS A SHARES COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN: Oppenheimer MidCap Fund (Class A) S&P Mid-Cap 400 Index [THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.] Oppenheimer S&P Midcap MidCap Fund (Class A) 400 Index 12/01/1997 9,425 10,000 01/31/1998 9,519 10,190 04/30/1998 12,271 11,743 07/31/1998 11,744 10,848 10/31/1998 10,207 10,515 01/31/1999 13,390 11,892 04/30/1999 14,636 12,498 07/31/1999 16,382 12,943 10/31/1999 18,760 12,731 01/31/2000 25,875 13,795 04/30/2000 27,564 15,438 07/31/2000 29,716 15,713 10/31/2000 28,697 16,760 01/31/2001 23,903 17,052 04/30/2001 16,901 16,525 07/31/2001 15,618 16,591 10/31/2001 13,608 14,674 01/31/2002 13,910 16,493 04/30/2002 13,419 17,611 07/31/2002 11,201 14,491 10/31/2002 10,786 13,972 01/31/2003 10,182 13,759 04/30/2003 10,871 14,528 07/31/2003 12,617 16,498 10/31/2003 13,183 18,266 01/31/2004 13,230 19,638 04/30/2004 13,608 19,532 07/31/2004 13,400 19,440 10/31/2004 14,193 20,283 01/31/2005 15,155 21,819 04/30/2005 14,664 21,434 07/31/2005 16,637 24,473 10/31/2005 16,571 23,863 AVERAGE ANNUAL TOTAL RETURN OF CLASS A SHARES WITH SALES CHARGE OF THE FUND AT 10/31/05 1 Year 10.04% 5 Year -11.46% Since Inception (12/1/97) 6.59% 12 | OPPENHEIMER MIDCAP FUND CLASS B SHARES COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN: Oppenheimer MidCap Fund (Class B) S&P Mid-Cap 400 Index [THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.] Oppenheimer S&P Midcap MidCap Fund (Class B) 400 Index 12/01/1997 10,000 10,000 01/31/1998 10,080 10,190 04/30/1998 12,980 11,743 07/31/1998 12,390 10,848 10/31/1998 10,770 10,515 01/31/1999 14,097 11,892 04/30/1999 15,379 12,498 07/31/1999 17,181 12,943 10/31/1999 19,644 12,731 01/31/2000 27,043 13,795 04/30/2000 28,766 15,438 07/31/2000 30,948 15,713 10/31/2000 29,827 16,760 01/31/2001 24,801 17,052 04/30/2001 17,502 16,525 07/31/2001 16,150 16,591 10/31/2001 14,037 14,674 01/31/2002 14,318 16,493 04/30/2002 13,787 17,611 07/31/2002 11,494 14,491 10/31/2002 11,034 13,972 01/31/2003 10,393 13,759 04/30/2003 11,084 14,528 07/31/2003 12,846 16,498 10/31/2003 13,387 18,266 01/31/2004 13,431 19,638 04/30/2004 13,815 19,532 07/31/2004 13,604 19,440 10/31/2004 14,409 20,283 01/31/2005 15,386 21,819 04/30/2005 14,888 21,434 07/31/2005 16,890 24,473 10/31/2005 16,823 23,863 AVERAGE ANNUAL TOTAL RETURN OF CLASS B SHARES WITH SALES CHARGE OF THE FUND AT 10/31/05 1 Year 10.89% 5 Year -11.44% Since Inception (12/1/97) 6.79% THE PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE, WHICH DOES NOT GUARANTEE FUTURE RESULTS. THE INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT IN THE FUND WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE QUOTED. FOR PERFORMANCE DATA CURRENT TO THE MOST RECENT MONTH END, VISIT US AT WWW.OPPENHEIMERFUNDS.COM, OR CALL US AT 1.800.525.7048. FUND RETURNS INCLUDE CHANGES IN SHARE PRICE, REINVESTED DISTRIBUTIONS, AND THE APPLICABLE SALES CHARGE: FOR CLASS A SHARES, THE CURRENT MAXIMUM INITIAL SALES CHARGE OF 5.75%; FOR CLASS B SHARES, THE CONTINGENT DEFERRED SALES CHARGE OF 5% (1-YEAR) AND 2% (5-YEAR); AND FOR CLASS C AND N SHARES, THE CONTINGENT 1% DEFERRED SALES CHARGE FOR THE 1-YEAR PERIOD. THERE IS NO SALES CHARGE FOR CLASS Y SHARES. BECAUSE CLASS B SHARES CONVERT TO CLASS A SHARES 72 MONTHS AFTER PURCHASE, THE "SINCE INCEPTION" RETURN FOR CLASS B USES CLASS A PERFORMANCE FOR THE PERIOD AFTER CONVERSION. SEE PAGE 17 FOR FURTHER INFORMATION. 13 | OPPENHEIMER MIDCAP FUND FUND PERFORMANCE DISCUSSION - -------------------------------------------------------------------------------- CLASS C SHARES COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN: Oppenheimer MidCap Fund (Class C) S&P Mid-Cap 400 Index [THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.] Oppenheimer S&P Midcap MidCap Fund (Class C) 400 Index 12/01/1997 10,000 10,000 01/31/1998 10,090 10,190 04/30/1998 12,980 11,743 07/31/1998 12,400 10,848 10/31/1998 10,760 10,515 01/31/1999 14,087 11,892 04/30/1999 15,369 12,498 07/31/1999 17,171 12,943 10/31/1999 19,624 12,731 01/31/2000 27,023 13,795 04/30/2000 28,746 15,438 07/31/2000 30,938 15,713 10/31/2000 29,817 16,760 01/31/2001 24,791 17,052 04/30/2001 17,492 16,525 07/31/2001 16,140 16,591 10/31/2001 14,037 14,674 01/31/2002 14,318 16,493 04/30/2002 13,787 17,611 07/31/2002 11,484 14,491 10/31/2002 11,034 13,972 01/31/2003 10,393 13,759 04/30/2003 11,084 14,528 07/31/2003 12,846 16,498 10/31/2003 13,387 18,266 01/31/2004 13,407 19,638 04/30/2004 13,767 19,532 07/31/2004 13,527 19,440 10/31/2004 14,308 20,283 01/31/2005 15,239 21,819 04/30/2005 14,728 21,434 07/31/2005 16,671 24,473 10/31/2005 16,580 23,863 AVERAGE ANNUAL TOTAL RETURN OF CLASS C SHARES WITH SALES CHARGE OF THE FUND AT 10/31/05 1 Year 14.89% 5 Year -11.07% Since Inception (12/1/97) 6.60% 14 | OPPENHEIMER MIDCAP FUND CLASS N SHARES COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN: Oppenheimer MidCap Fund (Class N) S&P Mid-Cap 400 Index [THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.] Oppenheimer S&P Midcap MidCap Fund (Class N) 400 Index 03/01/2001 10,000 10,000 04/30/2001 9,161 10,278 07/31/2001 8,465 10,319 10/31/2001 7,370 9,126 01/31/2002 7,528 10,258 04/30/2002 7,257 10,953 07/31/2002 6,054 9,013 10/31/2002 5,824 8,690 01/31/2003 5,496 8,557 04/30/2003 5,865 9,036 07/31/2003 6,801 10,261 10/31/2003 7,098 11,361 01/31/2004 7,119 12,214 04/30/2004 7,323 12,148 07/31/2004 7,201 12,090 10/31/2004 7,625 12,615 01/31/2005 8,137 13,570 04/30/2005 7,871 13,331 07/31/2005 8,925 15,221 10/31/2005 8,884 14,841 AVERAGE ANNUAL TOTAL RETURN OF CLASS N SHARES WITH SALES CHARGE OF THE FUND AT 10/31/05 1 Year 15.51% Since Inception (3/1/01) -2.50% THE PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE, WHICH DOES NOT GUARANTEE FUTURE RESULTS. THE INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT IN THE FUND WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE QUOTED. FOR PERFORMANCE DATA CURRENT TO THE MOST RECENT MONTH END, VISIT US AT WWW.OPPENHEIMERFUNDS.COM, OR CALL US AT 1.800.525.7048. FUND RETURNS INCLUDE CHANGES IN SHARE PRICE, REINVESTED DISTRIBUTIONS, AND THE APPLICABLE SALES CHARGE: FOR CLASS A SHARES, THE CURRENT MAXIMUM INITIAL SALES CHARGE OF 5.75%; FOR CLASS B SHARES, THE CONTINGENT DEFERRED SALES CHARGE OF 5% (1-YEAR) AND 2% (5-YEAR); AND FOR CLASS C AND N SHARES, THE CONTINGENT 1% DEFERRED SALES CHARGE FOR THE 1-YEAR PERIOD. THERE IS NO SALES CHARGE FOR CLASS Y SHARES. BECAUSE CLASS B SHARES CONVERT TO CLASS A SHARES 72 MONTHS AFTER PURCHASE, THE "SINCE INCEPTION" RETURN FOR CLASS B USES CLASS A PERFORMANCE FOR THE PERIOD AFTER CONVERSION. SEE PAGE 17 FOR FURTHER INFORMATION. 15 | OPPENHEIMER MIDCAP FUND FUND PERFORMANCE DISCUSSION - -------------------------------------------------------------------------------- CLASS Y SHARES COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN: Oppenheimer MidCap Fund (Class Y) S&P Mid-Cap 400 Index [THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.] Oppenheimer S&P Midcap MidCap Fund (Class Y) 400 Index 12/01/1997 10,000 10,000 01/31/1998 10,110 10,190 04/30/1998 13,040 11,743 07/31/1998 12,500 10,848 10/31/1998 10,880 10,515 01/31/1999 14,297 11,892 04/30/1999 15,639 12,498 07/31/1999 17,521 12,943 10/31/1999 20,095 12,731 01/31/2000 27,744 13,795 04/30/2000 29,596 15,438 07/31/2000 31,949 15,713 10/31/2000 30,898 16,760 01/31/2001 25,771 17,052 04/30/2001 18,232 16,525 07/31/2001 16,861 16,591 10/31/2001 14,708 14,674 01/31/2002 15,048 16,493 04/30/2002 14,538 17,611 07/31/2002 12,155 14,491 10/31/2002 11,724 13,972 01/31/2003 11,094 13,759 04/30/2003 11,844 14,528 07/31/2003 13,757 16,498 10/31/2003 14,368 18,266 01/31/2004 14,438 19,638 04/30/2004 14,868 19,532 07/31/2004 14,648 19,440 10/31/2004 15,529 20,283 01/31/2005 16,600 21,819 04/30/2005 16,080 21,434 07/31/2005 18,272 24,473 10/31/2005 18,212 23,863 AVERAGE ANNUAL TOTAL RETURN OF CLASS Y SHARES OF THE FUND AT 10/31/05 1 Year 17.28% 5 Year -10.03% Since Inception (12/1/97) 7.87% THE PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE, WHICH DOES NOT GUARANTEE FUTURE RESULTS. THE INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT IN THE FUND WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE QUOTED. FOR PERFORMANCE DATA CURRENT TO THE MOST RECENT MONTH END, VISIT US AT WWW.OPPENHEIMERFUNDS.COM, OR CALL US AT 1.800.525.7048. FUND RETURNS INCLUDE CHANGES IN SHARE PRICE, REINVESTED DISTRIBUTIONS, AND THE APPLICABLE SALES CHARGE: FOR CLASS A SHARES, THE CURRENT MAXIMUM INITIAL SALES CHARGE OF 5.75%; FOR CLASS B SHARES, THE CONTINGENT DEFERRED SALES CHARGE OF 5% (1-YEAR) AND 2% (5-YEAR); AND FOR CLASS C AND N SHARES, THE CONTINGENT 1% DEFERRED SALES CHARGE FOR THE 1-YEAR PERIOD. THERE IS NO SALES CHARGE FOR CLASS Y SHARES. BECAUSE CLASS B SHARES CONVERT TO CLASS A SHARES 72 MONTHS AFTER PURCHASE, THE "SINCE INCEPTION" RETURN FOR CLASS B USES CLASS A PERFORMANCE FOR THE PERIOD AFTER CONVERSION. SEE PAGE 17 FOR FURTHER INFORMATION. 16 | OPPENHEIMER MIDCAP FUND NOTES - -------------------------------------------------------------------------------- Total returns and the ending account values in the graphs include changes in share price and reinvestment of dividends and capital gains distributions in a hypothetical investment for the periods shown. The Fund's total returns shown do not reflect the deduction of income taxes on an individual's investment. Taxes may reduce your actual investment returns on income or gains paid by the Fund or any gains you may realize if you sell your shares. Investors should consider the Fund's investment objectives, risks, and other charges and expenses carefully before investing. The Fund's prospectus contains this and other information about the Fund, and may be obtained by asking your financial advisor, calling us at 1.800.525.7048 or visiting our website at www.oppenheimerfunds.com. Read the prospectus carefully before investing. The Fund's investment strategy and focus can change over time. The mention of specific fund holdings does not constitute a recommendation by OppenheimerFunds, Inc. CLASS A shares of the Fund were first publicly offered on 12/1/97. Unless otherwise noted, Class A returns include the current maximum initial sales charge of 5.75%. CLASS B shares of the Fund were first publicly offered on 12/1/97. Unless otherwise noted, Class B returns include the applicable contingent deferred sales charge of 5% (1-year) and 2% (5-year). Class B shares are subject to an annual 0.75% asset-based sales charge. Because Class B shares convert to Class A shares 72 months after purchase, the "since inception" return for Class B uses Class A performance for the period after conversion. CLASS C shares of the Fund were first publicly offered on 12/1/97. Unless otherwise noted, Class C returns include the contingent deferred sales charge of 1% for the 1-year period. Class C shares are subject to an annual 0.75% asset-based sales charge. CLASS N shares of the Fund were first publicly offered on 3/1/01. Class N shares are offered only through retirement plans. Unless otherwise noted, Class N returns include the contingent deferred sales charge of 1% for the 1-year period. Class N shares are subject to an annual 0.25% asset-based sales charge. 17 | OPPENHEIMER MIDCAP FUND NOTES - -------------------------------------------------------------------------------- CLASS Y shares of the Fund were first publicly offered on 12/1/97. Class Y shares are offered only to certain institutional investors under special agreement with the Distributor. An explanation of the calculation of performance is in the Fund's Statement of Additional Information. 18 | OPPENHEIMER MIDCAP FUND FUND EXPENSES - -------------------------------------------------------------------------------- FUND EXPENSES. As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, which may include sales charges (loads) on purchase payments, contingent deferred sales charges on redemptions; and redemption fees, if any; and (2) ongoing costs, including management fees; distribution and service fees; and other Fund expenses. These examples are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The examples are based on an investment of $1,000.00 invested at the beginning of the period and held for the entire 6-month period ended October 31, 2005. ACTUAL EXPENSES. The "actual" lines of the table provide information about actual account values and actual expenses. You may use the information on this line for the class of shares you hold, together with the amount you invested, to estimate the expense that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600.00 account value divided by $1,000.00 = 8.60), then multiply the result by the number in the "actual" line under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES. The "hypothetical" lines of the table provide information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio for each class of shares, and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example for the class of shares you hold with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as front-end or contingent deferred sales charges (loads), or a $12.00 fee imposed annually on accounts valued at less than $500.00 (subject to exceptions described in 19 | OPPENHEIMER MIDCAP FUND FUND EXPENSES - -------------------------------------------------------------------------------- the Statement of Additional Information). Therefore, the "hypothetical" lines of the table are useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher. - -------------------------------------------------------------------------------- BEGINNING ENDING EXPENSES ACCOUNT ACCOUNT PAID DURING VALUE VALUE 6 MONTHS ENDED (5/1/05) (10/31/05) OCTOBER 31, 2005 - ------------------------------------------------------------------------------ Class A Actual $1,000.00 $ 1,130.00 $ 7.27 - ------------------------------------------------------------------------------ Class A Hypothetical 1,000.00 1,018.40 6.89 - ------------------------------------------------------------------------------ Class B Actual 1,000.00 1,125.80 11.42 - ------------------------------------------------------------------------------ Class B Hypothetical 1,000.00 1,014.52 10.82 - ------------------------------------------------------------------------------ Class C Actual 1,000.00 1,125.80 11.20 - ------------------------------------------------------------------------------ Class C Hypothetical 1,000.00 1,014.72 10.62 - ------------------------------------------------------------------------------ Class N Actual 1,000.00 1,128.80 8.35 - ------------------------------------------------------------------------------ Class N Hypothetical 1,000.00 1,017.39 7.91 - ------------------------------------------------------------------------------ Class Y Actual 1,000.00 1,132.60 4.74 - ------------------------------------------------------------------------------ Class Y Hypothetical 1,000.00 1,020.77 4.49 Hypothetical assumes 5% annual return before expenses. Expenses are equal to the Fund's annualized expense ratio for that class, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period). Those annualized expense ratios based on the 6-month period ended October 31, 2005 are as follows: CLASS EXPENSE RATIOS - ----------------------------- Class A 1.35% - ----------------------------- Class B 2.12 - ----------------------------- Class C 2.08 - ----------------------------- Class N 1.55 - ----------------------------- Class Y 0.88 The expense ratios reflect voluntary waivers or reimbursements of expenses by the Fund's Transfer Agent that can be terminated at any time, without advance notice. The "Financial Highlights" tables in the Fund's financial statements, included in this report, also show the gross expense ratios, without such waivers or reimbursements. - -------------------------------------------------------------------------------- 20 | OPPENHEIMER MIDCAP FUND STATEMENT OF INVESTMENTS October 31, 2005 - -------------------------------------------------------------------------------- VALUE SHARES SEE NOTE 1 - ----------------------------------------------------------------------- COMMON STOCKS--99.4% - ----------------------------------------------------------------------- CONSUMER DISCRETIONARY--19.8% - ----------------------------------------------------------------------- HOTELS, RESTAURANTS & LEISURE--2.5% Cheesecake Factory, Inc. (The) 1 227,189 $ 7,797,126 - ----------------------------------------------------------------------- P.F. Chang's China Bistro, Inc. 1 104,100 4,761,534 - ----------------------------------------------------------------------- Starbucks Corp. 1 550,028 15,554,792 --------------- 28,113,452 - ----------------------------------------------------------------------- HOUSEHOLD DURABLES--1.4% Harman International Industries, Inc. 160,900 16,067,474 - ----------------------------------------------------------------------- LEISURE EQUIPMENT & PRODUCTS--2.0% Brunswick Corp. 585,500 22,325,115 - ----------------------------------------------------------------------- MEDIA--2.5% Getty Images, Inc. 1 347,900 28,879,179 - ----------------------------------------------------------------------- SPECIALTY RETAIL--7.8% Bed Bath & Beyond, Inc. 1 392,800 15,916,256 - ----------------------------------------------------------------------- Chico's FAS, Inc. 1 533,100 21,078,774 - ----------------------------------------------------------------------- O'Reilly Automotive, Inc. 1 1,010,800 28,504,560 - ----------------------------------------------------------------------- Tractor Supply Co. 1 143,900 6,979,150 - ----------------------------------------------------------------------- Urban Outfitters, Inc. 1 567,100 16,065,943 --------------- 88,544,683 - ----------------------------------------------------------------------- TEXTILES, APPAREL & LUXURY GOODS--3.6% Coach, Inc. 1 758,466 24,407,436 - ----------------------------------------------------------------------- Polo Ralph Lauren Corp. 338,600 16,659,120 --------------- 41,066,556 - ----------------------------------------------------------------------- CONSUMER STAPLES--2.4% - ----------------------------------------------------------------------- FOOD & STAPLES RETAILING--2.4% Whole Foods Market, Inc. 186,200 26,837,006 - ----------------------------------------------------------------------- ENERGY--6.0% - ----------------------------------------------------------------------- ENERGY EQUIPMENT & SERVICES--2.2% BJ Services Co. 264,400 9,187,900 VALUE SHARES SEE NOTE 1 - ----------------------------------------------------------------------- ENERGY EQUIPMENT & SERVICES Continued Smith International, Inc. 471,800 $ 15,286,320 --------------- 24,474,220 - ----------------------------------------------------------------------- OIL & GAS--3.8% Apache Corp. 289,300 18,466,019 - ----------------------------------------------------------------------- Murphy Oil Corp. 206,200 9,660,470 - ----------------------------------------------------------------------- XTO Energy, Inc. 360,566 15,670,198 --------------- 43,796,687 - ----------------------------------------------------------------------- FINANCIALS--10.1% - ----------------------------------------------------------------------- COMMERCIAL BANKS--1.9% Commerce Bancorp, Inc. 722,600 22,017,622 - ----------------------------------------------------------------------- DIVERSIFIED FINANCIAL SERVICES--6.6% Chicago Mercantile Exchange (The) 77,200 28,189,580 - ----------------------------------------------------------------------- Investors Financial Services Corp. 280,700 10,717,126 - ----------------------------------------------------------------------- Legg Mason, Inc. 339,300 36,410,283 --------------- 75,316,989 - ----------------------------------------------------------------------- INSURANCE--1.6% Brown & Brown, Inc. 333,600 18,124,488 - ----------------------------------------------------------------------- HEALTH CARE--17.8% - ----------------------------------------------------------------------- BIOTECHNOLOGY--2.2% Affymetrix, Inc. 1 151,300 6,873,559 - ----------------------------------------------------------------------- Gilead Sciences, Inc. 1 379,300 17,921,925 --------------- 24,795,484 - ----------------------------------------------------------------------- HEALTH CARE EQUIPMENT & SUPPLIES--8.4% Bard (C.R.), Inc. 458,100 28,576,278 - ----------------------------------------------------------------------- Cooper Cos., Inc. (The) 289,600 19,936,064 - ----------------------------------------------------------------------- Gen-Probe, Inc. 1 367,300 15,000,532 - ----------------------------------------------------------------------- ResMed, Inc. 1 236,200 9,006,306 - ----------------------------------------------------------------------- Varian Medical Systems, Inc. 1 511,952 23,324,533 --------------- 95,843,713 21 | OPPENHEIMER MIDCAP FUND STATEMENT OF INVESTMENTS Continued - -------------------------------------------------------------------------------- VALUE SHARES SEE NOTE 1 - ----------------------------------------------------------------------- HEALTH CARE PROVIDERS & SERVICES--7.2% Coventry Health Care, Inc. 1 608,325 $ 32,843,467 - ----------------------------------------------------------------------- Health Management Associates, Inc., Cl. A 1,193,700 25,557,117 - ----------------------------------------------------------------------- Patterson Cos., Inc. 1 560,500 23,193,490 --------------- 81,594,074 - ----------------------------------------------------------------------- INDUSTRIALS--18.3% - ----------------------------------------------------------------------- AEROSPACE & DEFENSE--3.2% L-3 Communications Holdings, Inc. 228,700 17,797,434 - ----------------------------------------------------------------------- Rockwell Collins, Inc. 406,100 18,607,502 --------------- 36,404,936 - ----------------------------------------------------------------------- AIR FREIGHT & LOGISTICS--4.9% C.H. Robinson Worldwide, Inc. 664,600 23,433,796 - ----------------------------------------------------------------------- Expeditors International of Washington, Inc. 534,700 32,440,249 --------------- 55,874,045 - ----------------------------------------------------------------------- COMMERCIAL SERVICES & SUPPLIES--3.6% Corporate Executive Board Co. 268,400 22,180,576 - ----------------------------------------------------------------------- Stericycle, Inc. 1 327,300 18,839,388 --------------- 41,019,964 - ----------------------------------------------------------------------- MACHINERY--3.5% Donaldson Co., Inc. 498,500 15,578,125 - ----------------------------------------------------------------------- Oshkosh Truck Corp. 556,000 24,219,360 --------------- 39,797,485 - ----------------------------------------------------------------------- TRADING COMPANIES & DISTRIBUTORS--3.1% Fastenal Co. 500,100 35,072,013 - ----------------------------------------------------------------------- INFORMATION TECHNOLOGY--25.0% - ----------------------------------------------------------------------- COMMUNICATIONS EQUIPMENT--2.5% Comverse Technology, Inc. 1 1,124,300 28,219,930 - ----------------------------------------------------------------------- ITF Optical Technologies, Inc. 1,2 384,000 125,000 --------------- 28,344,930 VALUE SHARES SEE NOTE 1 - ----------------------------------------------------------------------- ELECTRONIC EQUIPMENT & INSTRUMENTS--1.3% CDW Corp. 259,900 $ 14,645,365 - ----------------------------------------------------------------------- IT SERVICES--9.5% Alliance Data Systems Corp. 1 527,800 18,768,568 - ----------------------------------------------------------------------- Cognizant Technology Solutions Corp. 1 504,800 22,201,104 - ----------------------------------------------------------------------- Fiserv, Inc. 1 611,600 26,714,688 - ----------------------------------------------------------------------- Global Payments, Inc. 479,400 20,542,290 - ----------------------------------------------------------------------- NAVTEQ Corp. 1 231,000 9,036,720 - ----------------------------------------------------------------------- SRA International, Inc., Cl. A 1 348,300 11,431,206 --------------- 108,694,576 - ----------------------------------------------------------------------- SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT--3.4% Linear Technology Corp. 640,000 21,254,400 - ----------------------------------------------------------------------- Microchip Technology, Inc. 589,500 17,785,215 --------------- 39,039,615 - ----------------------------------------------------------------------- SOFTWARE--8.3% Activision, Inc. 1 1,038,933 16,383,973 - ----------------------------------------------------------------------- Adobe Systems, Inc. 655,200 21,130,200 - ----------------------------------------------------------------------- Amdocs Ltd. 1 652,900 17,282,263 - ----------------------------------------------------------------------- Autodesk, Inc. 422,800 19,080,964 - ----------------------------------------------------------------------- Electronic Arts, Inc. 1 212,500 12,087,000 - ----------------------------------------------------------------------- FactSet Research Systems, Inc. 230,550 8,085,389 --------------- 94,049,789 --------------- Total Common Stocks (Cost $865,752,558) 1,130,739,460 - ----------------------------------------------------------------------- PREFERRED STOCKS--0.0% - ----------------------------------------------------------------------- Centerpoint Broadband Technologies, Inc., Cv., Series D 1,2 (Cost $5,999,997) 556,586 -- 22 | OPPENHEIMER MIDCAP FUND PRINCIPAL VALUE AMOUNT SEE NOTE 1 - ----------------------------------------------------------------------- JOINT REPURCHASE AGREEMENTS--0.6% - ----------------------------------------------------------------------- Undivided interest of 1.05% in joint repurchase agreement (Principal Amount/Value $647,082,000, with a maturity value of $647,153,179) with UBS Warburg LLC, 3.96%, dated 10/31/05, to be repurchased at $6,821,750 on 11/1/05, collateralized by Federal National Mortgage Assn., 5%, 10/1/35, with a value of $661,717,556 (Cost $6,821,000) $ 6,821,000 $ 6,821,000 VALUE SEE NOTE 1 - ----------------------------------------------------------------------- TOTAL INVESTMENTS, AT VALUE (COST $878,573,555) 100.0% $ 1,137,560,460 - ----------------------------------------------------------------------- LIABILITIES IN EXCESS OF OTHER ASSETS 0.0 17,552 -------------------------------- NET ASSETS 100.0% $ 1,137,578,012 ================================ FOOTNOTES TO STATEMENT OF INVESTMENTS 1. Non-income producing security. 2. Illiquid or restricted security. The aggregate value of illiquid or restricted securities as of October 31, 2005 was $125,000, which represents 0.01% of the Fund's net assets, all of which is considered restricted. See Note 5 of Notes to Financial Statements. Affiliated company. Represents ownership of at least 5% of the voting securities of the issuer, and is or was an affiliate, as defined in the Investment Company Act of 1940, at or during the period ended October 31, 2005. There were no affiliate securities held by the Fund as of October 31, 2005. Transactions during the period in which the issuer was an affiliate are as follows:
SHARES GROSS GROSS SHARES OCT. 31, 2004 ADDITIONS REDUCTIONS OCT. 31, 2005 - --------------------------------------------------------------------------------------------------------------- Axsun Technologies, Inc., Cv., Series C 771,208 -- 771,208 --
VALUE DIVIDEND REALIZED SEE NOTE 1 INCOME LOSS - --------------------------------------------------------------------------------------------------------------- Axsun Technologies, Inc., Cv., Series C $-- $-- $8,537,273
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 23 | OPPENHEIMER MIDCAP FUND STATEMENT OF ASSETS AND LIABILITIES October 31, 2005 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- ASSETS - -------------------------------------------------------------------------------- Investments, at value (cost $878,573,555)--see accompanying statement of investments $ 1,137,560,460 - -------------------------------------------------------------------------------- Cash 619,923 - -------------------------------------------------------------------------------- Receivables and other assets: Shares of beneficial interest sold 2,059,389 Interest and dividends 192,207 Receivable from transfer agent 37,637 Other 8,968 ---------------- Total assets 1,140,478,584 - -------------------------------------------------------------------------------- LIABILITIES - -------------------------------------------------------------------------------- Payables and other liabilities: Shares of beneficial interest redeemed 1,692,603 Shareholder communications 497,243 Transfer and shareholder servicing agent fees 298,083 Distribution and service plan fees 226,272 Trustees' compensation 158,124 Other 28,247 ---------------- Total liabilities 2,900,572 - -------------------------------------------------------------------------------- NET ASSETS $ 1,137,578,012 ================ - -------------------------------------------------------------------------------- COMPOSITION OF NET ASSETS - -------------------------------------------------------------------------------- Paid-in capital $ 1,943,533,594 - -------------------------------------------------------------------------------- Accumulated net investment loss (153,273) - -------------------------------------------------------------------------------- Accumulated net realized loss on investments (1,064,789,214) - -------------------------------------------------------------------------------- Net unrealized appreciation on investments 258,986,905 ---------------- NET ASSETS $ 1,137,578,012 ================ 24 | OPPENHEIMER MIDCAP FUND - -------------------------------------------------------------------------------- NET ASSET VALUE PER SHARE - -------------------------------------------------------------------------------- Class A Shares: Net asset value and redemption price per share (based on net assets of $618,270,019 and 35,209,752 shares of beneficial interest outstanding) $17.56 Maximum offering price per share (net asset value plus sales charge of 5.75% of offering price) $18.63 - -------------------------------------------------------------------------------- Class B Shares: Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price per share (based on net assets of $310,352,184 and 18,744,588 shares of beneficial interest outstanding) $16.56 - -------------------------------------------------------------------------------- Class C Shares: Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price per share (based on net assets of $137,308,502 and 8,293,413 shares of beneficial interest outstanding) $16.56 - -------------------------------------------------------------------------------- Class N Shares: Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price per share (based on net assets of $34,878,502 and 2,008,920 shares of beneficial interest outstanding) $17.36 - -------------------------------------------------------------------------------- Class Y Shares: Net asset value, redemption price and offering price per share (based on net assets of $36,768,805 and 2,020,997 shares of beneficial interest outstanding) $18.19 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 25 | OPPENHEIMER MIDCAP FUND STATEMENT OF OPERATIONS For the Year Ended October 31, 2005 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- INVESTMENT INCOME - -------------------------------------------------------------------------------- Dividends $ 4,143,005 - -------------------------------------------------------------------------------- Interest 245,822 - -------------------------------------------------------------------------------- Other income 121,431 ---------------- Total investment income 4,510,258 - -------------------------------------------------------------------------------- EXPENSES - -------------------------------------------------------------------------------- Management fees 7,301,284 - -------------------------------------------------------------------------------- Distribution and service plan fees: Class A 1,396,051 Class B 3,193,935 Class C 1,266,195 Class N 146,798 - -------------------------------------------------------------------------------- Transfer and shareholder servicing agent fees: Class A 2,218,325 Class B 1,512,223 Class C 534,887 Class N 135,824 Class Y 64,944 - -------------------------------------------------------------------------------- Shareholder communications: Class A 405,764 Class B 324,396 Class C 86,701 Class N 6,715 - -------------------------------------------------------------------------------- Trustees' compensation 23,782 - -------------------------------------------------------------------------------- Custodian fees and expenses 16,427 - -------------------------------------------------------------------------------- Administration service fees 1,500 - -------------------------------------------------------------------------------- Other 46,645 ---------------- Total expenses 18,682,396 Less reduction to custodian expenses (712) Less waivers and reimbursements of expenses (738,066) ---------------- Net expenses 17,943,618 - -------------------------------------------------------------------------------- NET INVESTMENT LOSS (13,433,360) 26 | OPPENHEIMER MIDCAP FUND - -------------------------------------------------------------------------------- REALIZED AND UNREALIZED GAIN (LOSS) - -------------------------------------------------------------------------------- Net realized gain (loss) on: Investments: Unaffiliated companies $ 70,199,319 Affiliated companies (8,537,273) ---------------- Net realized gain 61,662,046 - -------------------------------------------------------------------------------- Net change in unrealized appreciation on investments 111,575,281 - -------------------------------------------------------------------------------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 159,803,967 ================ SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 27 | OPPENHEIMER MIDCAP FUND STATEMENTS OF CHANGES IN NET ASSETS - --------------------------------------------------------------------------------
YEAR ENDED OCTOBER 31, 2005 2004 - --------------------------------------------------------------------------------------------------- OPERATIONS - --------------------------------------------------------------------------------------------------- Net investment loss $ (13,433,360) $ (12,888,844) - --------------------------------------------------------------------------------------------------- Net realized gain 61,662,046 93,338,556 - --------------------------------------------------------------------------------------------------- Net change in unrealized appreciation 111,575,281 (17,276,110) ----------------------------------- Net increase in net assets resulting from operations 159,803,967 63,173,602 - --------------------------------------------------------------------------------------------------- BENEFICIAL INTEREST TRANSACTIONS - --------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from beneficial interest transactions: Class A 28,238,994 41,101,126 Class B (48,950,188) (36,309,315) Class C 9,175,002 (222,383) Class N 8,099,224 4,493,365 Class Y 8,312,490 5,221,032 - --------------------------------------------------------------------------------------------------- NET ASSETS - --------------------------------------------------------------------------------------------------- Total increase 164,679,489 77,457,427 - --------------------------------------------------------------------------------------------------- Beginning of period 972,898,523 895,441,096 ----------------------------------- End of period (including accumulated net investment loss of $153,273 and $165,364, respectively) $ 1,137,578,012 $ 972,898,523 ===================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 28 | OPPENHEIMER MIDCAP FUND FINANCIAL HIGHLIGHTS - --------------------------------------------------------------------------------
CLASS A YEAR ENDED OCTOBER 31, 2005 2004 2003 2002 2001 - ------------------------------------------------------------------------------------------------------------------------- PER SHARE OPERATING DATA - ------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 15.04 $ 13.97 $ 11.43 $ 14.42 $ 30.41 - ------------------------------------------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment loss (.15) 1 (.17) (.12) (.13) (.02) Net realized and unrealized gain (loss) 2.67 1.24 2.66 (2.86) (15.97) ----------------------------------------------------------------------------- Total from investment operations 2.52 1.07 2.54 (2.99) (15.99) - ------------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $ 17.56 $ 15.04 $ 13.97 $ 11.43 $ 14.42 ============================================================================= - ------------------------------------------------------------------------------------------------------------------------- TOTAL RETURN, AT NET ASSET VALUE 2 16.76% 7.66% 22.22% (20.74)% (52.58)% - ------------------------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA - ------------------------------------------------------------------------------------------------------------------------- Net assets, end of period (in thousands) $ 618,270 $ 504,292 $ 430,514 $ 351,983 $ 532,338 - ------------------------------------------------------------------------------------------------------------------------- Average net assets (in thousands) $ 570,513 $ 457,926 $ 366,050 $ 460,797 $ 718,814 - ------------------------------------------------------------------------------------------------------------------------- Ratios to average net assets: 3 Net investment loss (0.94)% (1.05)% (1.01)% (1.06)% (0.09)% Total expenses 1.39% 1.42% 1.61% 1.68% 1.33% Expenses after payments and waivers and reduction to custodian expenses 1.35% 1.33% 1.32% 1.47% 1.32% - ------------------------------------------------------------------------------------------------------------------------- Portfolio turnover rate 39% 114% 76% 51% 84%
1. Per share amounts calculated based on the average shares outstanding during the period. 2. Assumes an investment on the business day before the first day of the fiscal period, with all dividends and distributions reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business day of the fiscal period. Sales charges are not reflected in the total returns. Total returns are not annualized for periods of less than one full year. Returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. 3. Annualized for periods of less than one full year. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 29 | OPPENHEIMER MIDCAP FUND FINANCIAL HIGHLIGHTS Continued - --------------------------------------------------------------------------------
CLASS B YEAR ENDED OCTOBER 31, 2005 2004 2003 2002 2001 - ------------------------------------------------------------------------------------------------------------------------- PER SHARE OPERATING DATA - ------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 14.29 $ 13.37 $ 11.02 $ 14.02 $ 29.79 - ------------------------------------------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment loss (.27) 1 (.30) (.23) (.30) (.15) Net realized and unrealized gain (loss) 2.54 1.22 2.58 (2.70) (15.62) ----------------------------------------------------------------------------- Total from investment operations 2.27 .92 2.35 (3.00) (15.77) - ------------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $ 16.56 $ 14.29 $ 13.37 $ 11.02 $ 14.02 ============================================================================= - ------------------------------------------------------------------------------------------------------------------------- TOTAL RETURN, AT NET ASSET VALUE 2 15.89% 6.88% 21.33% (21.40)% (52.94)% - ------------------------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA - ------------------------------------------------------------------------------------------------------------------------- Net assets, end of period (in thousands) $ 310,352 $ 312,315 $ 327,880 $ 291,397 $ 438,962 - ------------------------------------------------------------------------------------------------------------------------- Average net assets (in thousands) $ 319,953 $ 316,748 $ 291,209 $ 385,917 $ 592,096 - ------------------------------------------------------------------------------------------------------------------------- Ratios to average net assets: 3 Net investment loss (1.71)% (1.83)% (1.75)% (1.85)% (0.84)% Total expenses 2.26% 2.30% 2.51% 2.48% 2.08% Expenses after payments and waivers and reduction to custodian expenses 2.14% 2.12% 2.06% 2.27% 2.07% - ------------------------------------------------------------------------------------------------------------------------- Portfolio turnover rate 39% 114% 76% 51% 84%
1. Per share amounts calculated based on the average shares outstanding during the period. 2. Assumes an investment on the business day before the first day of the fiscal period, with all dividends and distributions reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business day of the fiscal period. Sales charges are not reflected in the total returns. Total returns are not annualized for periods of less than one full year. Returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. 3. Annualized for periods of less than one full year. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 30 | OPPENHEIMER MIDCAP FUND
CLASS C YEAR ENDED OCTOBER 31, 2005 2004 2003 2002 2001 - ------------------------------------------------------------------------------------------------------------------------- PER SHARE OPERATING DATA - ------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 14.29 $ 13.37 $ 11.02 $ 14.02 $ 29.78 - ------------------------------------------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment loss (.26) 1 (.25) (.20) (.30) (.15) Net realized and unrealized gain (loss) 2.53 1.17 2.55 (2.70) (15.61) ----------------------------------------------------------------------------- Total from investment operations 2.27 .92 2.35 (3.00) (15.76) - ------------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $ 16.56 $ 14.29 $ 13.37 $ 11.02 $ 14.02 ============================================================================= - ------------------------------------------------------------------------------------------------------------------------- TOTAL RETURN, AT NET ASSET VALUE 2 15.89% 6.88% 21.33% (21.40)% (52.92)% - ------------------------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA - ------------------------------------------------------------------------------------------------------------------------- Net assets, end of period (in thousands) $ 137,308 $ 110,018 $ 103,271 $ 83,351 $ 128,230 - ------------------------------------------------------------------------------------------------------------------------- Average net assets (in thousands) $ 126,925 $ 105,285 $ 87,528 $ 112,436 $ 170,129 - ------------------------------------------------------------------------------------------------------------------------- Ratios to average net assets: 3 Net investment loss (1.68)% (1.81)% (1.77)% (1.84)% (0.85)% Total expenses 2.17% 2.26% 2.49% 2.47% 2.08% Expenses after payments and waivers and reduction to custodian expenses 2.10% 2.10% 2.08% 2.26% 2.07% - ------------------------------------------------------------------------------------------------------------------------- Portfolio turnover rate 39% 114% 76% 51% 84%
1. Per share amounts calculated based on the average shares outstanding during the period. 2. Assumes an investment on the business day before the first day of the fiscal period, with all dividends and distributions reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business day of the fiscal period. Sales charges are not reflected in the total returns. Total returns are not annualized for periods of less than one full year. Returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. 3. Annualized for periods of less than one full year. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 31 | OPPENHEIMER MIDCAP FUND FINANCIAL HIGHLIGHTS Continued - --------------------------------------------------------------------------------
CLASS N YEAR ENDED OCTOBER 31, 2005 2004 2003 2002 2001 1 - ------------------------------------------------------------------------------------------------------------------------- PER SHARE OPERATING DATA - ------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 14.90 $ 13.87 $ 11.38 $ 14.40 $ 19.54 - ------------------------------------------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment loss (.19) 2 (.18) (.17) (.14) (.05) Net realized and unrealized gain (loss) 2.65 1.21 2.66 (2.88) (5.09) ----------------------------------------------------------------------------- Total from investment operations 2.46 1.03 2.49 (3.02) (5.14) - ------------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $ 17.36 $ 14.90 $ 13.87 $ 11.38 $ 14.40 ============================================================================= - ------------------------------------------------------------------------------------------------------------------------- TOTAL RETURN, AT NET ASSET VALUE 3 16.51% 7.43% 21.88% (20.97)% (26.31)% - ------------------------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA - ------------------------------------------------------------------------------------------------------------------------- Net assets, end of period (in thousands) $ 34,879 $ 22,488 $ 16,606 $ 8,846 $ 2,268 - ------------------------------------------------------------------------------------------------------------------------- Average net assets (in thousands) $ 29,445 $ 18,969 $ 11,846 $ 6,576 $ 1,250 - ------------------------------------------------------------------------------------------------------------------------- Ratios to average net assets: 4 Net investment loss (1.15)% (1.28)% (1.34)% (1.28)% (0.94)% Total expenses 1.67% 1.80% 1.86% 1.87% 1.73% Expenses after payments and waivers and reduction to custodian expenses 1.55% 1.57% 1.64% 1.66% 1.72% - ------------------------------------------------------------------------------------------------------------------------- Portfolio turnover rate 39% 114% 76% 51% 84%
1. For the period from March 1, 2001 (inception of offering) to October 31, 2001. 2. Per share amounts calculated based on the average shares outstanding during the period. 3. Assumes an investment on the business day before the first day of the fiscal period, with all dividends and distributions reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business day of the fiscal period. Sales charges are not reflected in the total returns. Total returns are not annualized for periods of less than one full year. Returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. 4. Annualized for periods of less than one full year. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 32 | OPPENHEIMER MIDCAP FUND
CLASS Y YEAR ENDED OCTOBER 31, 2005 2004 2003 2002 2001 - ------------------------------------------------------------------------------------------------------------------------- PER SHARE OPERATING DATA - ------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 15.51 $ 14.35 $ 11.71 $ 14.69 $ 30.86 - ------------------------------------------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment loss (.08) 1 (.13) (.19) (.08) (.08) Net realized and unrealized gain (loss) 2.76 1.29 2.83 (2.90) (16.09) ----------------------------------------------------------------------------- Total from investment operations 2.68 1.16 2.64 (2.98) (16.17) - ------------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $ 18.19 $ 15.51 $ 14.35 $ 11.71 $ 14.69 ============================================================================= - ------------------------------------------------------------------------------------------------------------------------- TOTAL RETURN, AT NET ASSET VALUE 2 17.28% 8.08% 22.55% (20.29)% (52.40)% - ------------------------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA - ------------------------------------------------------------------------------------------------------------------------- Net assets, end of period (in thousands) $ 36,769 $ 23,785 $ 17,171 $ 7,419 $ 4,759 - ------------------------------------------------------------------------------------------------------------------------- Average net assets (in thousands) $ 31,030 $ 19,540 $ 11,928 $ 6,449 $ 2,720 - ------------------------------------------------------------------------------------------------------------------------- Ratios to average net assets: 3 Net investment loss (0.49)% (0.69)% (0.80)% (0.39)% (0.12)% Total expenses 0.89% 0.98% 1.11% 0.83% 1.07% Expenses after payments and waivers and reduction to custodian expenses 0.89% 0.98% 1.11% 0.83% 1.02% - ------------------------------------------------------------------------------------------------------------------------- Portfolio turnover rate 39% 114% 76% 51% 84%
1. Per share amounts calculated based on the average shares outstanding during the period. 2. Assumes an investment on the business day before the first day of the fiscal period, with all dividends and distributions reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business day of the fiscal period. Sales charges are not reflected in the total returns. Total returns are not annualized for periods of less than one full year. Returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. 3. Annualized for periods of less than one full year. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 33 | OPPENHEIMER MIDCAP FUND NOTES TO FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 1. SIGNIFICANT ACCOUNTING POLICIES Oppenheimer MidCap Fund (the Fund) is registered under the Investment Company Act of 1940, as amended, as an open-end management investment company. The Fund's investment objective is to seek capital appreciation. The Fund's investment advisor is OppenheimerFunds, Inc. (the Manager). The Fund offers Class A, Class B, Class C, Class N and Class Y shares. Class A shares are sold at their offering price, which is normally net asset value plus a front-end sales charge. Class B, Class C and Class N shares are sold without a front-end sales charge but may be subject to a contingent deferred sales charge (CDSC). Class N shares are sold only through retirement plans. Retirement plans that offer Class N shares may impose charges on those accounts. Class Y shares are sold to certain institutional investors without either a front-end sales charge or a CDSC, however, the institutional investor may impose charges on those accounts. All classes of shares have identical rights and voting privileges with respect to the Fund in general and exclusive voting rights on matters that affect that class alone. Earnings, net assets and net asset value per share may differ due to each class having its own expenses, such as transfer and shareholder servicing agent fees and shareholder communications, directly attributable to that class. Class A, B, C and N have separate distribution and/or service plans. No such plan has been adopted for Class Y shares. Class B shares will automatically convert to Class A shares six years after the date of purchase. The following is a summary of significant accounting policies consistently followed by the Fund. - -------------------------------------------------------------------------------- SECURITIES VALUATION. The Fund calculates the net asset value of its shares as of the close of The New York Stock Exchange (the Exchange), normally 4:00 P.M. Eastern time, on each day the Exchange is open for business. Securities may be valued primarily using dealer-supplied valuations or a portfolio pricing service authorized by the Board of Trustees. Securities listed or traded on National Stock Exchanges or other domestic exchanges are valued based on the last sale price of the security traded on that exchange prior to the time when the Fund's assets are valued. Securities traded on NASDAQ are valued based on the closing price provided by NASDAQ prior to the time when the Fund's assets are valued. In the absence of a sale, the security is valued at the last sale price on the prior trading day, if it is within the spread of the closing "bid" and "asked" prices, and if not, at the closing bid price. Securities traded on foreign exchanges are valued based on the last sale price on the principal exchange on which the security is traded, in the country that is identified by the portfolio pricing service, prior to the time when the Fund's assets are valued. In the absence of a sale, the security is valued at the official closing price on the principal exchange. Corporate, government and municipal debt instruments having a remaining maturity in excess of sixty days and all mortgage-backed securities will be valued at the mean between the "bid" and "asked" prices. Futures contracts traded on a commodities or futures exchange will be valued at the final settlement price or official closing price on the principal exchange as reported by 34 | OPPENHEIMER MIDCAP FUND such principal exchange at its trading session ending at, or most recently prior to, the time when the Fund's assets are valued. Securities (including restricted securities) for which market quotations are not readily available are valued at their fair value. Foreign and domestic securities whose values have been materially affected by what the Manager identifies as a significant event occurring before the Fund's assets are valued but after the close of their respective exchanges will be fair valued. Fair value is determined in good faith using consistently applied procedures under the supervision of the Board of Trustees. Short-term "money market type" debt securities with remaining maturities of sixty days or less are valued at amortized cost (which approximates market value). - -------------------------------------------------------------------------------- JOINT REPURCHASE AGREEMENTS. Pursuant to an Exemptive Order issued by the Securities and Exchange Commission, the Fund, along with other affiliated funds advised by the Manager, may transfer uninvested cash balances into joint trading accounts on a daily basis. These balances are invested in one or more repurchase agreements. Securities pledged as collateral for repurchase agreements are held by a custodian bank until the agreements mature. Each agreement requires that the market value of the collateral be sufficient to cover payments of interest and principal. In the event of default by the other party to the agreement, retention of the collateral may be subject to legal proceedings. - -------------------------------------------------------------------------------- ALLOCATION OF INCOME, EXPENSES, GAINS AND LOSSES. Income, expenses (other than those attributable to a specific class), gains and losses are allocated on a daily basis to each class of shares based upon the relative proportion of net assets represented by such class. Operating expenses directly attributable to a specific class are charged against the operations of that class. - -------------------------------------------------------------------------------- FEDERAL TAXES. The Fund intends to comply with provisions of the Internal Revenue Code applicable to regulated investment companies and to distribute substantially all of its investment company taxable income, including any net realized gain on investments not offset by capital loss carryforwards, if any, to shareholders, therefore, no federal income or excise tax provision is required. The tax components of capital shown in the table below represent distribution requirements the Fund must satisfy under the income tax regulations, losses the Fund may be able to offset against income and gains realized in future years and unrealized appreciation or depreciation of securities and other investments for federal income tax purposes. NET UNREALIZED APPRECIATION BASED ON COST OF SECURITIES AND UNDISTRIBUTED UNDISTRIBUTED ACCUMULATED OTHER INVESTMENTS NET INVESTMENT LONG-TERM LOSS FOR FEDERAL INCOME INCOME GAIN CARRYFORWARD 1,2,3 TAX PURPOSES -------------------------------------------------------------------------- $-- $-- $1,064,638,023 $258,835,713 1. As of October 31, 2005, the Fund had $1,064,638,023 of net capital loss carryforwards available to offset future realized capital gains, if any, and thereby reduce future taxable gain distributions. As of October 31, 2005, details of the capital loss carryforwards were as follows: 35 | OPPENHEIMER MIDCAP FUND NOTES TO FINANCIAL STATEMENTS Continued - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 1. SIGNIFICANT ACCOUNTING POLICIES Continued EXPIRING -------------------------- 2009 $ 759,109,628 2010 237,892,098 2011 67,636,297 -------------- TOTAL $1,064,638,023 ============== 2. During the fiscal year ended October 31, 2005, the Fund utilized $61,371,387 of capital loss carryforward to offset capital gains realized in that fiscal year. 3. During the fiscal year ended October 31, 2004, the Fund utilized $93,361,075 of capital loss carryforward to offset capital gains realized in that fiscal year. Net investment income (loss) and net realized gain (loss) may differ for financial statement and tax purposes. The character of dividends and distributions made during the fiscal year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. Also, due to timing of dividends and distributions, the fiscal year in which amounts are distributed may differ from the fiscal year in which the income or net realized gain was recorded by the Fund. Accordingly, the following amounts have been reclassified for October 31, 2005. Net assets of the Fund were unaffected by the reclassifications. REDUCTION TO INCREASE TO ACCUMULATED ACCUMULATED NET REDUCTION TO NET INVESTMENT REALIZED LOSS PAID-IN CAPITAL LOSS ON INVESTMENTS ------------------------------------------------------ $12,924,131 $13,445,451 $521,320 No distributions were paid during the years ended October 31, 2005 and October 31, 2004. The aggregate cost of securities and other investments and the composition of unrealized appreciation and depreciation of securities and other investments for federal income tax purposes as of October 31, 2005 are noted below. The primary difference between book and tax appreciation or depreciation of securities and other investments, if applicable, is attributable to the tax deferral of losses or tax realization of financial statement unrealized gain or loss. Federal tax cost of securities $ 878,724,748 ============== Gross unrealized appreciation $ 280,919,532 Gross unrealized depreciation (22,083,819) -------------- Net unrealized appreciation $ 258,835,713 ============== - -------------------------------------------------------------------------------- TRUSTEES' COMPENSATION. The Fund has adopted an unfunded retirement plan for the Fund's independent trustees. Benefits are based on years of service and fees paid to each trustee during the years of service. During the year ended October 31, 2005, the Fund's projected benefit obligations were decreased by $8,812 and payments of $4,152 were made to retired trustees, resulting in an accumulated liability of $145,312 as of October 31, 2005. 36 | OPPENHEIMER MIDCAP FUND The Board of Trustees has adopted a deferred compensation plan for independent trustees that enables trustees to elect to defer receipt of all or a portion of the annual compensation they are entitled to receive from the Fund. For purposes of determining the amount owed to the Trustee under the plan, deferred amounts are treated as though equal dollar amounts had been invested in shares of the Fund or in other Oppenheimer funds selected by the Trustee. The Fund purchases shares of the funds selected for deferral by the Trustee in amounts equal to his or her deemed investment, resulting in a Fund asset equal to the deferred compensation liability. Such assets are included as a component of "Other" within the asset section of the Statement of Assets and Liabilities. Deferral of trustees' fees under the plan will not affect the net assets of the Fund, and will not materially affect the Fund's assets, liabilities or net investment income per share. Amounts will be deferred until distributed in accordance to the Plan. - -------------------------------------------------------------------------------- DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions to shareholders, which are determined in accordance with income tax regulations, are recorded on the ex-dividend date. Income and capital gain distributions, if any, are declared and paid annually. - -------------------------------------------------------------------------------- INVESTMENT INCOME. Dividend income is recorded on the ex-dividend date or upon ex-dividend notification in the case of certain foreign dividends where the ex-dividend date may have passed. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Interest income, which includes accretion of discount and amortization of premium, is accrued as earned. - -------------------------------------------------------------------------------- CUSTODIAN FEES. Custodian Fees and Expenses in the Statement of Operations may include interest expense incurred by the Fund on any cash overdrafts of its custodian account during the period. Such cash overdrafts may result from the effects of failed trades in portfolio securities and from cash outflows resulting from unanticipated shareholder redemption activity. The Fund pays interest to its custodian on such cash overdrafts at a rate equal to the Federal Funds Rate plus 0.50%. The Reduction to Custodian Expenses line item, if applicable, represents earnings on cash balances maintained by the Fund during the period. Such interest expense and other custodian fees may be paid with these earnings. - -------------------------------------------------------------------------------- SECURITY TRANSACTIONS. Security transactions are recorded on the trade date. Realized gains and losses on securities sold are determined on the basis of identified cost. - -------------------------------------------------------------------------------- OTHER. The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates. 37 | OPPENHEIMER MIDCAP FUND NOTES TO FINANCIAL STATEMENTS Continued - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 2. SHARES OF BENEFICIAL INTEREST The Fund has authorized an unlimited number of no par value shares of beneficial interest of each class. Transactions in shares of beneficial interest were as follows:
YEAR ENDED OCTOBER 31, 2005 YEAR ENDED OCTOBER 31, 2004 SHARES AMOUNT SHARES AMOUNT - -------------------------------------------------------------------------------------- CLASS A Sold 11,360,512 $ 187,484,134 12,246,136 $ 177,432,418 Redeemed (9,680,275) (159,245,140) (9,541,964) (136,331,292) ------------------------------------------------------------ Net increase 1,680,237 $ 28,238,994 2,704,172 $ 41,101,126 ============================================================ - -------------------------------------------------------------------------------------- CLASS B Sold 2,895,842 $ 44,967,755 3,400,008 $ 46,414,529 Redeemed (6,005,026) (93,917,943) (6,061,337) (82,723,844) ------------------------------------------------------------ Net decrease (3,109,184) $ (48,950,188) (2,661,329) $ (36,309,315) ============================================================ - -------------------------------------------------------------------------------------- CLASS C Sold 2,529,971 $ 39,392,766 2,068,251 $ 28,190,122 Redeemed (1,937,019) (30,217,764) (2,092,647) (28,412,505) ------------------------------------------------------------ Net increase (decrease) 592,952 $ 9,175,002 (24,396) $ (222,383) ============================================================ - -------------------------------------------------------------------------------------- CLASS N Sold 1,165,948 $ 18,962,715 849,973 $ 12,080,873 Redeemed (666,117) (10,863,491) (538,064) (7,587,508) ------------------------------------------------------------ Net increase 499,831 $ 8,099,224 311,909 $ 4,493,365 ============================================================ - -------------------------------------------------------------------------------------- CLASS Y Sold 908,834 $ 15,524,588 908,690 $ 13,499,650 Redeemed (421,042) (7,212,098) (571,650) (8,278,618) ------------------------------------------------------------ Net increase 487,792 $ 8,312,490 337,040 $ 5,221,032 ============================================================
- -------------------------------------------------------------------------------- 3. PURCHASES AND SALES OF SECURITIES The aggregate cost of purchases and proceeds from sales of securities, other than short-term obligations, for the year ended October 31, 2005, were as follows: PURCHASES SALES - ---------------------------------------------------------- Investment securities $418,968,604 $415,035,791 - -------------------------------------------------------------------------------- 4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES MANAGEMENT FEES. Management fees paid to the Manager were in accordance with the investment advisory agreement with the Fund which provides for a fee at an annual rate of 0.75% of the first $200 million of average annual net assets of the Fund, 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, 0.58% of the next $1 billion, and 0.56% of average annual net assets in excess of $2.5 billion. 38 | OPPENHEIMER MIDCAP FUND - -------------------------------------------------------------------------------- ADMINISTRATION SERVICE FEES. The Fund pays the Manager a fee of $1,500 per year for preparing and filing the Fund's tax returns. - -------------------------------------------------------------------------------- TRANSFER AGENT FEES. OppenheimerFunds Services (OFS), a division of the Manager, acts as the transfer and shareholder servicing agent for the Fund. The Fund pays OFS a per account fee. For the year ended October 31, 2005, the Fund paid $3,710,067 to OFS for services to the Fund. Additionally, Class Y shares are subject to minimum fees of $10,000 per annum for assets of $10 million or more. The Class Y shares are subject to the minimum fees in the event that the per account fee does not equal or exceed the applicable minimum fees. OFS may voluntarily waive the minimum fees. - -------------------------------------------------------------------------------- DISTRIBUTION AND SERVICE PLAN (12b-1) FEES. Under its General Distributor's Agreement with the Fund, OppenheimerFunds Distributor, Inc. (the Distributor) acts as the Fund's principal underwriter in the continuous public offering of the Fund's classes of shares. - -------------------------------------------------------------------------------- SERVICE PLAN FOR CLASS A SHARES. The Fund has adopted a Service Plan for Class A shares. It reimburses the Distributor for a portion of its costs incurred for services provided to accounts that hold Class A shares. Reimbursement is made quarterly at an annual rate of up to 0.25% of the average annual net assets of Class A shares of the Fund. The Distributor currently uses all of those fees to pay dealers, brokers, banks and other financial institutions quarterly for providing personal services and maintenance of accounts of their customers that hold Class A shares. Any unreimbursed expenses the Distributor incurs with respect to Class A shares in any fiscal year cannot be recovered in subsequent years. Fees incurred by the Fund under the plan are detailed in the Statement of Operations. - -------------------------------------------------------------------------------- DISTRIBUTION AND SERVICE PLANS FOR CLASS B, CLASS C AND CLASS N SHARES. The Fund has adopted Distribution and Service Plans for Class B, Class C and Class N shares to compensate the Distributor for its services in connection with the distribution of those shares and servicing accounts. Under the plans, the Fund pays the Distributor an annual asset-based sales charge of 0.75% on Class B and Class C shares and 0.25% on Class N shares. The Distributor also receives a service fee of 0.25% per year under each plan. If either the Class B, Class C or Class N plan is terminated by the Fund or by the shareholders of a class, the Board of Trustees and its independent trustees must determine whether the Distributor shall be entitled to payment from the Fund of all or a portion of the service fee and/or asset-based sales charge in respect to shares sold prior to the effective date of such termination. The Distributor's aggregate uncompensated expenses under the plan at October 31, 2005 for Class B, Class C and Class N shares were $16,443,602, $4,410,856 and $487,197, respectively. Fees incurred by the Fund under the plans are detailed in the Statement of Operations. - -------------------------------------------------------------------------------- SALES CHARGES. Front-end sales charges and contingent deferred sales charges (CDSC) do not represent expenses of the Fund. They are deducted from the proceeds of sales of Fund shares prior to investment or from redemption proceeds prior to remittance, 39 | OPPENHEIMER MIDCAP FUND NOTES TO FINANCIAL STATEMENTS Continued - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES Continued as applicable. The sales charges retained by the Distributor from the sale of shares and the CDSC retained by the Distributor on the redemption of shares is shown in the table below for the period indicated.
CLASS A CLASS B CLASS C CLASS N CLASS A CONTINGENT CONTINGENT CONTINGENT CONTINGENT FRONT-END DEFERRED DEFERRED DEFERRED DEFERRED SALES CHARGES SALES CHARGES SALES CHARGES SALES CHARGES SALES CHARGES RETAINED BY RETAINED BY RETAINED BY RETAINED BY RETAINED BY YEAR ENDED DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR - --------------------------------------------------------------------------------------------- October 31, 2005 $500,715 $16,155 $726,957 $23,685 $13,596
- -------------------------------------------------------------------------------- WAIVERS AND REIMBURSEMENTS OF EXPENSES. OFS has voluntarily agreed to limit transfer and shareholder servicing agent fees for all classes to 0.35% of average annual net assets per class. During the year ended October 31, 2005, OFS waived $221,529, $392,386, $90,649 and $33,502 for Class A, Class B, Class C and Class N shares, respectively. This undertaking may be amended or withdrawn at any time. - -------------------------------------------------------------------------------- 5. ILLIQUID OR RESTRICTED SECURITIES As of October 31, 2005, investments in securities included issues that are illiquid or restricted. Restricted securities are purchased in private placement transactions, are not registered under the Securities Act of 1933, may have contractual restrictions on resale, and are valued under methods approved by the Board of Trustees as reflecting fair value. A security may also be considered illiquid if it lacks a readily available market or if its valuation has not changed for a certain period of time. The Fund will not invest more than 10% of its net assets (determined at the time of purchase and reviewed periodically) in illiquid or restricted securities. Certain restricted securities, eligible for resale to qualified institutional investors, are not subject to that limitation. Securities that are illiquid or restricted are marked with the applicable footnote on the Statement of Investments. Information concerning restricted securities is as follows:
VALUATION AS OF ACQUISITION OCTOBER 31, UNREALIZED SECURITY DATES COST 2005 DEPRECIATION - ---------------------------------------------------------------------------------------------------- Centerpoint Broadband Technologies, Inc., Cv., Series D 10/23/00 $ 5,999,997 $ -- $ 5,999,997 ITF Optical Technologies, Inc. 4/7/00 5,000,000 125,000 4,875,000 ----------------------------------------------- $ 10,999,997 $125,000 $ 10,874,997 ===============================================
40 | OPPENHEIMER MIDCAP FUND - -------------------------------------------------------------------------------- 6. LITIGATION A consolidated amended complaint has been filed as putative derivative and class actions against the Manager, OFS and the Distributor, as well as 51 of the Oppenheimer funds (as "Nominal Defendants") including the Fund, 30 present and former Directors or Trustees and 8 present and former officers of the funds. This complaint, initially filed in the U.S. District Court for the Southern District of New York on January 10, 2005 and amended on March 4, 2005, consolidates into a single action and amends six individual previously-filed putative derivative and class action complaints. Like those prior complaints, the complaint alleges that the Manager charged excessive fees for distribution and other costs, improperly used assets of the funds in the form of directed brokerage commissions and 12b-1 fees to pay brokers to promote sales of the funds, and failed to properly disclose the use of assets of the funds to make those payments in violation of the Investment Company Act of 1940 and the Investment Advisers Act of 1940. Also, like those prior complaints, the complaint further alleges that by permitting and/or participating in those actions, the Directors/Trustees and the Officers breached their fiduciary duties to shareholders of the funds under the Investment Company Act of 1940 and at common law. The complaint seeks unspecified compensatory and punitive damages, rescission of the funds' investment advisory agreements, an accounting of all fees paid, and an award of attorneys' fees and litigation expenses. The defendants believe that the allegations contained in the Complaints are without merit and that they have meritorious defenses against the claims asserted. The defendants intend to defend these lawsuits vigorously and to contest any claimed liability. The defendants believe that it is premature to render any opinion as to the likelihood of an outcome unfavorable to them and that no estimate can yet be made with any degree of certainty as to the amount or range of any potential loss. 41 | OPPENHEIMER MIDCAP FUND REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- THE BOARD OF TRUSTEES AND SHAREHOLDERS OF OPPENHEIMER MIDCAP FUND: We have audited the accompanying statement of assets and liabilities of Oppenheimer MidCap Fund, including the statement of investments, as of October 31, 2005, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the years in the two-year period then ended, and the financial highlights for each of the years in the five-year period then ended. These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of October 31, 2005, by correspondence with the custodian. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Oppenheimer MidCap Fund as of October 31, 2005, the results of its operations for the year then ended, the changes in its net assets for each of the years in the two-year period then ended, and the financial highlights for each of the years in the five-year period then ended, in conformity with U.S. generally accepted accounting principles. KPMG LLP Denver, Colorado December 20, 2005 42 | OPPENHEIMER MIDCAP FUND FEDERAL INCOME TAX INFORMATION Unaudited - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- In early 2006, if applicable, shareholders of record will receive information regarding all dividends and distributions paid to them by the Fund during calendar year 2005. Regulations of the U.S. Treasury Department require the Fund to report this information to the Internal Revenue Service. The foregoing information is presented to assist shareholders in reporting distributions received from the Fund to the Internal Revenue Service. Because of the complexity of the federal regulations which may affect your individual tax return and the many variations in state and local tax regulations, we recommend that you consult your tax advisor for specific guidance. 43 | OPPENHEIMER MIDCAP FUND PORTFOLIO PROXY VOTING POLICIES AND PROCEDURES; UPDATES TO STATEMENTS OF INVESTMENTS Unaudited - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- The Fund has adopted Portfolio Proxy Voting Policies and Procedures under which the Fund votes proxies relating to securities ("portfolio proxies") held by the Fund. A description of the Fund's Portfolio Proxy Voting Policies and Procedures is available (i) without charge, upon request, by calling the Fund toll-free at 1.800.525.7048, (ii) on the Fund's website at www.oppenheimerfunds.com, and (iii) on the SEC's website at www.sec.gov. In addition, the Fund is required to file Form N-PX, with its complete proxy voting record for the 12 months ended June 30th, no later than August 31st of each year. The Fund's voting record is available (i) without charge, upon request, by calling the Fund toll-free at 1.800.525.7048, and (ii) in the Form N-PX filing on the SEC's website at www.sec.gov. The Fund files its complete schedule of portfolio holdings with the SEC for the first quarter and the third quarter of each fiscal year on Form N-Q. The Fund's Form N-Q filings are available on the SEC's website at http://www.sec.gov. Those forms may be reviewed and copied at the SEC's Public Reference Room in Washington D.C. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. 44 | OPPENHEIMER MIDCAP FUND TRUSTEES AND OFFICERS Unaudited - --------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------- NAME, POSITION(S) HELD WITH PRINCIPAL OCCUPATION(S) DURING THE PAST 5 YEARS; OTHER TRUSTEESHIPS/DIRECTORSHIPS HELD; NUMBER OF THE FUND, LENGTH OF SERVICE, PORTFOLIOS IN THE FUND COMPLEX CURRENTLY OVERSEEN AGE INDEPENDENT THE ADDRESS OF EACH TRUSTEE IN THE CHART BELOW IS 6803 S. TUCSON WAY, CENTENNIAL, CO 80112-3924. TRUSTEES EACH TRUSTEE SERVES FOR AN INDEFINITE TERM, UNTIL HIS OR HER RESIGNATION, RETIREMENT, DEATH OR REMOVAL. THOMAS W. COURTNEY, Principal of Courtney Associates, Inc. (venture capital firm) (since 1982); General Partner of Chairman of the Trivest Venture Fund (private venture capital fund); President of Investment Counseling Federated Board of Trustees, Trustee Investors, Inc. (1973-1982); Trustee of the following open-end investment companies: Cash Assets (since 1997) Trust, PIMCO Advisors VIT, Tax Free Trust of Arizona (since 1984) and four funds for the Hawaiian Age: 72 Tax Free Trust. Oversees 10 portfolios in the OppenheimerFunds complex. PAUL Y. CLINTON, Principal of Clinton Management Associates (financial and venture capital consulting firm) (since Trustee (since 1997) 1996); Trustee of PIMCO Advisors VIT (open-end investment company); Trustee of Capital Cash Age: 74 Management Trust (money market fund) (1979-December 2004); Trustee of Narragansett Insured Tax-Free Income Fund (tax-exempt bond fund) (1996-December 2004); Trustee of Prime Cash Fund (1996-December 2004); and Director of OCC Cash Reserves, Inc. (open-end investment company) (1989-December 2002). Oversees 10 portfolios in the OppenheimerFunds complex. ROBERT G. GALLI, A trustee or director of other Oppenheimer funds. Oversees 48 portfolios in the OppenheimerFunds Trustee (since 1998) complex. Age: 72 LACY B. HERRMANN, Founder and Chairman Emeritus of Aquila Management Corporation (open-end investment company) (since Trustee (since 1997) December 2004); Chairman and Chief Executive Officer of Aquila Management Corporation (since August Age: 76 1984); Chairman of the Board and President of Aquila Management Corporation (August 1984-December 1984); Vice President, Director and Secretary of Aquila Distributors, Inc. (distributor of Aquila Management Corporation); Treasurer of Aquila Distributors, Inc.; President and Chairman of the Board of Trustees of Capital Cash Management Trust ("CCMT"); President and Director of STCM Management Company, Inc. (sponsor and adviser to CCMT); Chairman, President and Director of InCap Management Corporation (nature of business); Sub-Advisor and Administrator of Prime Cash Fund & Short Term Asset Reserves (nature of business); Director of OCC Cash Reserves, Inc. (open-end investment company) (until June 2003); Trustee of OCC Accumulation Trust (open-end investment company); Chairman of the Board of Trustees and President of Hawaiian Tax-Free Trust (open-end investment company) (February 1985-December 2003); Trustee Emeritus of Brown University (since June 1983) . Oversees 10 portfolios in the OppenheimerFunds complex. BRIAN WRUBLE, General Partner of Odyssey Partners, L.P. (hedge fund) (since September 1995); Director of Special Trustee (since 2001) Value Opportunities Fund, LLC (registered investment company) (since September 2004); Director of Age: 62 Zurich Financial Investment Advisory Board (affiliate of the Manager's parent company) (since October 2004); Board of Governing Trustees of The Jackson Laboratory (non-profit) (since August 1990); Trustee of the Institute for Advanced Study (non-profit educational institute) (since May 1992); Special Limited Partner of Odyssey Investment Partners, LLC (private equity investment) (January 1999-September 2004); Trustee of Research Foundation of AIMR (2000-2002) (investment research, non-profit); Governor, Jerome Levy Economics Institute of Bard College (August 1990-September 2001) (economics research); Director of Ray & Berendtson, Inc.
45 | OPPENHEIMER MIDCAP FUND TRUSTEES AND OFFICERS Unaudited / Continued - -------------------------------------------------------------------------------- BRIAN WRUBLE, (May 2000-April 2002) (executive search firm). Oversees 48 portfolios in the OppenheimerFunds Continued complex. - ----------------------------------------------------------------------------------------------------------------------------------- OTHER OFFICERS THE ADDRESS OF THE OFFICERS IN THE CHART BELOW ARE AS FOLLOWS: FOR MESSRS. O'HARE, MURPHY, AND ZACK, OF THE FUND TWO WORLD FINANCIAL CENTER, 225 LIBERTY STREET, 11TH FLOOR, NEW YORK, NEW YORK 10281-1008, AND FOR MR. WIXTED AND MR. VANDEHEY, 6803 S. TUCSON WAY, CENTENNIAL, COLORADO 80112-3924. EACH OFFICER SERVES FOR AN ANNUAL TERM OR UNTIL HIS EARLIER RESIGNATION, RETIREMENT, DEATH OR REMOVAL. JOHN O'HARE, Vice President of the Manager since September 2003. Formerly Executive Vice President and Portfolio Vice President Manager (June 2000 - August 2003) and Portfolio Manager and Senior Vice President (August 1997 - (since 2003) June 2000) at Geneva Capital Management, Ltd. (an investment advisor). Mr. O'Hare holds a BBA in Age: 46 Finance and Economics from the University of Wisconsin and is a Chartered Financial Analyst. An officer of 2 portfolios in the OppenheimerFunds complex. JOHN V. MURPHY, Chairman, Chief Executive Officer and Director (since June 2001) and President (since September President (since 2001) 2000) of the Manager; President and director or trustee of other Oppenheimer funds; President and Age: 56 Director of Oppenheimer Acquisition Corp. ("OAC") (the Manager's parent holding company) and of Oppenheimer Partnership Holdings, Inc. (holding company subsidiary of the Manager) (since July 2001); Director of OppenheimerFunds Distributor, Inc. (subsidiary of the Manager) (since November 2001); Chairman and Director of Shareholder Services, Inc. and of Shareholder Financial Services, Inc. (transfer agent subsidiaries of the Manager) (since July 2001); President and Director of OppenheimerFunds Legacy Program (charitable trust program established by the Manager) (since July 2001); Director of the following investment advisory subsidiaries of the Manager: OFI Institutional Asset Management, Inc., Centennial Asset Management Corporation, Trinity Investment Management Corporation and Tremont Capital Management, Inc. (since November 2001), HarbourView Asset Management Corporation and OFI Private Investments, Inc. (since July 2001); President (since November 1, 2001) and Director (since July 2001) of Oppenheimer Real Asset Management, Inc.; Executive Vice President of Massachusetts Mutual Life Insurance Company (OAC's parent company) (since February 1997); Director of DLB Acquisition Corporation (holding company parent of Babson Capital Management LLC) (since June 1995); Member of the Investment Company Institute's Board of Governors (since October 3, 2003); Chief Operating Officer of the Manager (September 2000-June 2001); President and Trustee of MML Series Investment Fund and MassMutual Select Funds (open-end investment companies) (November 1999-November 2001); Director of C.M. Life Insurance Company (September 1999-August 2000); President, Chief Executive Officer and Director of MML Bay State Life Insurance Company (September 1999-August 2000); Director of Emerald Isle Bancorp and Hibernia Savings Bank (wholly-owned subsidiary of Emerald Isle Bancorp) (June 1989-June 1998). Oversees 77 portfolios in the OppenheimerFunds complex as a director or trustee and officer and an additional 10 portfolios as an officer. MARK S. VANDEHEY, Senior Vice President and Chief Compliance Officer of the Manager (since March 2004); Vice President Vice President and of OppenheimerFunds Distributor, Inc., Centennial Asset Management Corporation and Shareholder Chief Compliance Officer Services, Inc. (since June 1983). Former Vice President and Director of Internal Audit of the (since 2004) Manager (1997- February 2004). An officer of 87 portfolios in the OppenheimerFunds complex. Age: 55
46 | OPPENHEIMER MIDCAP FUND BRIAN W. WIXTED, Senior Vice President and Treasurer of the Manager (since March 1999); Treasurer of the following: Treasurer (since 1999) HarbourView Asset Management Corporation, Shareholder Financial Services, Inc., Shareholder Age: 46 Services, Inc., Oppenheimer Real Asset Management Corporation, and Oppenheimer Partnership Holdings, Inc. (since March 1999), OFI Private Investments, Inc. (since March 2000), OppenheimerFunds International Ltd. (since May 2000), OppenheimerFunds plc (since May 2000), OFI Institutional Asset Management, Inc. (since November 2000), and OppenheimerFunds Legacy Program (charitable trust program established by the Manager) (since June 2003); Treasurer and Chief Financial Officer of OFI Trust Company (trust company subsidiary of the Manager) (since May 2000); Assistant Treasurer of the following: OAC (since March 1999),Centennial Asset Management Corporation (March 1999-October 2003) and OppenheimerFunds Legacy Program (April 2000-June 2003); Principal and Chief Operating Officer of Bankers Trust Company-Mutual Fund Services Division (March 1995-March 1999). An officer of 87 portfolios in the OppenheimerFunds complex. ROBERT G. ZACK, Executive Vice President (since January 2004) and General Counsel (since March 2002) of the Manager; Secretary (since 2001) General Counsel and Director of the Distributor (since December 2001); General Counsel of Centennial Age: 57 Asset Management Corporation (since December 2001); Senior Vice President and General Counsel of HarbourView Asset Management Corporation (since December 2001); Secretary and General Counsel of OAC (since November 2001); Assistant Secretary (since September 1997) and Director (since November 2001) of OppenheimerFunds International Ltd. and OppenheimerFunds plc; Vice President and Director of Oppenheimer Partnership Holdings, Inc. (since December 2002); Director of Oppenheimer Real Asset Management, Inc. (since November 2001); Senior Vice President, General Counsel and Director of Shareholder Financial Services, Inc. and Shareholder Services, Inc. (since December 2001); Senior Vice President, General Counsel and Director of OFI Private Investments, Inc. and OFI Trust Company (since November 2001); Vice President of OppenheimerFunds Legacy Program (since June 2003); Senior Vice President and General Counsel of OFI Institutional Asset Management, Inc. (since November 2001); Director of OppenheimerFunds (Asia) Limited (since December 2003); Senior Vice President (May 1985-December 2003), Acting General Counsel (November 2001-February 2002) and Associate General Counsel (May 1981-October 2001) of the Manager; Assistant Secretary of the following: Shareholder Services, Inc. (May 1985-November 2001), Shareholder Financial Services, Inc. (November 1989-November 2001), and OppenheimerFunds International Ltd. (September 1997-November 2001). An officer of 87 portfolios in the OppenheimerFunds complex.
THE FUND'S STATEMENT OF ADDITIONAL INFORMATION CONTAINS ADDITIONAL INFORMATION ABOUT THE FUND'S TRUSTEES AND OFFICERS AND IS AVAILABLE WITHOUT CHARGE UPON REQUEST, BY CALLING 1.800.525.7048. 47 | OPPENHEIMER MIDCAP FUND ITEM 2. CODE OF ETHICS. The registrant has adopted a code of ethics that applies to the registrant's principal executive officer, principal financial officer, principal accounting officer or controller or persons performing similar functions. ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT. The Board of Trustees of the registrant has determined that the registrant does not have an audit committee financial expert serving on its Audit Committee. In this regard, no member of the Audit Committee was identified as having all of the technical attributes identified in Instruction 2(b) to Item 3 of Form N-CSR to qualify as an "audit committee financial expert," whether through the type of specialized education or experience described in that Instruction. The Board has concluded that while the members of the Audit Committee collectively have the necessary attributes and experience required to serve effectively as an Audit Committee, no single member possesses all of the required technical attributes through the particular methods of education or experience set forth in the Instructions to be designated as an audit committee financial expert. ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES. (a) Audit Fees The principal accountant for the audit of the registrant's annual financial statements billed $17,000 in fiscal 2005 and $15,000 in fiscal 2004. (b) Audit-Related Fees The principal accountant for the audit of the registrant's annual financial statements billed no such fees during the last two fiscal years. The principal accountant for the audit of the registrant's annual financial statements billed $156,805 in fiscal 2005 and $39,500 in fiscal 2004 to the registrant's investment adviser or any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant. Such services: internal control reviews. (c) Tax Fees The principal accountant for the audit of the registrant's annual financial statements billed no such fees during the last two fiscal years. The principal accountant for the audit of the registrant's annual financial statements billed $5,000 in fiscal 2005 and $6,000 in fiscal 2004 to the registrant's investment adviser or any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant. Such services: Computations of capital gain tax liability, preparation of tax returns, preparation of Form 5500 and tax consultations on pass through of foreign withholding taxes and mortgage dollar roll transactions. (d) All Other Fees The principal accountant for the audit of the registrant's annual financial statements billed no such fees in fiscal 2005 and $103 in fiscal 2004. Such services: the cost to the principal accountant of attending audit committee meetings. The principal accountant for the audit of the registrant's annual financial statements billed no such fees during the last two fiscal years to the registrant's investment adviser or any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant. (e) (1) During its regularly scheduled periodic meetings, the registrant's audit committee will pre-approve all audit, audit-related, tax and other services to be provided by the principal accountants of the registrant. The audit committee has delegated pre-approval authority to its Chairman for any subsequent new engagements that arise between regularly scheduled meeting dates provided that any fees such pre-approved are presented to the audit committee at its next regularly scheduled meeting. Under applicable laws, pre-approval of non-audit services maybe waived provided that: 1) the aggregate amount of all such services provided constitutes no more than five percent of the total amount of fees paid by the registrant to it principal accountant during the fiscal year in which services are provided 2) such services were not recognized by the registrant at the time of engagement as non-audit services and 3) such services are promptly brought to the attention of the audit committee of the registrant and approved prior to the completion of the audit. (2) 100% (f) Not applicable as less than 50%. (g) The principal accountant for the audit of the registrant's annual financial statements billed $161,805 in fiscal 2005 and $45,603 in fiscal 2004 to the registrant and the registrant's investment adviser or any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant related to non-audit fees. Those billings did not include any prohibited non-audit services as defined by the Securities Exchange Act of 1934. The registrant's audit committee of the board of trustees has considered whether the provision of non-audit services that were rendered to the registrant's investment adviser, and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with maintaining the principal accountant's independence. ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS Not applicable. ITEM 6. SCHEDULE OF INVESTMENTS. Not applicable. ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES. Not applicable. ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES. Not applicable. ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS. Not applicable. ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. THE FUND'S AUDIT COMMITTEE PROVISIONS WITH RESPECT TO NOMINATIONS OF DIRECTORS/TRUSTEES TO THE RESPECTIVE BOARDS 1. The Fund's Audit Committee (the "Committee") will evaluate potential Board candidates to assess their qualifications. The Committee shall have the authority, upon approval of the Board, to retain an executive search firm to assist in this effort. The Committee may consider recommendations by business and personal contacts of current Board members and by executive search firms which the Committee may engage from time to time and may also consider shareholder recommendations. The Committee may consider the advice and recommendation of the Funds' investment manager and its affiliates in making the selection. 2. The Committee shall screen candidates for Board membership. The Committee has not established specific qualifications that it believes must be met by a trustee nominee. In evaluating trustee nominees, the Committee considers, among other things, an individual's background, skills, and experience; whether the individual is an "interested person" as defined in the Investment Company Act of 1940; and whether the individual would be deemed an "audit committee financial expert" within the meaning of applicable SEC rules. The Committee also considers whether the individual's background, skills, and experience will complement the background, skills, and experience of other nominees and will contribute to the Board. There are no differences in the manner in which the Committee evaluates nominees for trustees based on whether the nominee is recommended by a shareholder. 3. The Committee may consider nominations from shareholders for the Board at such times as the Committee meets to consider new nominees for the Board. The Committee shall have the sole discretion to determine the candidates to present to the Board and, in such cases where required, to shareholders. Recommendations for trustee nominees should, at a minimum, be accompanied by the following: o the name, address, and business, educational, and/or other pertinent background of the person being recommended; o a statement concerning whether the person is an "interested person" as defined in the Investment Company Act of 1940; o any other information that the Funds would be required to include in a proxy statement concerning the person if he or she was nominated; and o the name and address of the person submitting the recommendation and, if that person is a shareholder, the period for which that person held Fund shares. The recommendation also can include any additional information which the person submitting it believes would assist the Committee in evaluating the recommendation. 4. Shareholders should note that a person who owns securities issued by Massachusetts Mutual Life Insurance Company (the parent company of the Funds' investment adviser) would be deemed an "interested person" under the Investment Company Act of 1940. In addition, certain other relationships with Massachusetts Mutual Life Insurance Company or its subsidiaries, with registered broker-dealers, or with the Funds' outside legal counsel may cause a person to be deemed an "interested person." 5. Before the Committee decides to nominate an individual as a trustee, Committee members and other directors customarily interview the individual in person. In addition, the individual customarily is asked to complete a detailed questionnaire which is designed to elicit information which must be disclosed under SEC and stock exchange rules and to determine whether the individual is subject to any statutory disqualification from serving as a trustee of a registered investment company. ITEM 11. CONTROLS AND PROCEDURES. Based on their evaluation of the registrant's disclosure controls and procedures (as defined in rule 30a-3(c) under the Investment Company Act of 1940 (17 CFR 270.30a-3(c)) as of October 31, 2005, the registrant's principal executive officer and principal financial officer found the registrant's disclosure controls and procedures to provide reasonable assurances that information required to be disclosed by the registrant in the reports that it files under the Securities Exchange Act of 1934 (a) is accumulated and communicated to registrant's management, including its principal executive officer and principal financial officer, to allow timely decisions regarding required disclosure, and (b) is recorded, processed, summarized and reported, within the time periods specified in the rules and forms adopted by the U.S. Securities and Exchange Commission. There have been no changes in the registrant's internal controls over financial reporting that occurred during the registrant's second fiscal quarter of the period covered by this report that have materially affected, or are reasonably likely to materially affect, the registrant's internal control over financial reporting. ITEM 12. EXHIBITS. (a) (1) Exhibit attached hereto. (2) Exhibits attached hereto. (3) Not applicable. (b) Exhibit attached hereto. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Oppenheimer MidCap Fund By: /s/ John V. Murphy ------------------ John V. Murphy Principal Executive Officer Date: December 20, 2005 Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By: /s/ John V. Murphy ------------------ John V. Murphy Principal Executive Officer Date: December 20, 2005 By: /s/ Brian W. Wixted ------------------- Brian W. Wixted Principal Financial Officer Date: December 20, 2005 EX-99.CERT 2 ra745_18622ex302.txt RA745_18622EX302.TXT Exhibit 99.CERT Section 302 Certifications CERTIFICATIONS I, John V. Murphy, certify that: 1. I have reviewed this report on Form N-CSR of Oppenheimer MidCap Fund; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; (c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and (d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of Trustees (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: December 20, 2005 /s/ John V. Murphy - ------------------ John V. Murphy Principal Executive Officer Exhibit 99.CERT Section 302 Certifications CERTIFICATIONS I, Brian W. Wixted, certify that: 1. I have reviewed this report on Form N-CSR of Oppenheimer MidCap Fund; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; (c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and (d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of Trustees (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: December 20, 2005 /s/ Brian W. Wixted - ------------------- Brian W. Wixted Principal Financial Officer EX-99.906 3 ra745_18622ex906.txt RA745_18622EX906.TXT EX-99.906CERT Section 906 Certifications CERTIFICATION PURSUANT TO 18 U.S.C SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 John V. Murphy, Principal Executive Officer, and Brian W. Wixted, Principal Financial Officer, of Oppenheimer MidCap Fund (the "Registrant"), each certify to the best of his knowledge that: 1. The Registrant's periodic report on Form N-CSR for the period ended October 31, 2005 (the "Form N-CSR") fully complies with the requirements of Section 15(d) of the Securities Exchange Act of 1934, as amended; and 2. The information contained in the Form N-CSR fairly presents, in all material respects, the financial condition and results of operations of the Registrant. This certification is being furnished to the Commission solely pursuant to 18 U.S.C. ss. 1350 and is not being filed as part of the Form N-CSR filed with the Commission. Principal Executive Officer Principal Financial Officer Oppenheimer MidCap Fund Oppenheimer MidCap Fund /s/ John V. Murphy /s/ Brian W. Wixted - ------------------ ------------------- John V. Murphy Brian W. Wixted Date: December 20, 2005 Date: December 20, 2005 EX-99.CODE ETH 4 ra745_18622ethics.txt RA745_18622ETHICS.TXT EX-99.CODE ETH CODE OF ETHICS FOR PRINCIPAL EXECUTIVE AND SENIOR FINANCIAL OFFICERS OF THE OPPENHEIMER FUNDS AND OF OPPENHEIMERFUNDS, INC. This Code of Ethics for Principal Executive and Senior Financial Officers (referred to in this document as the "Code") has been adopted by each of the investment companies for which OppenheimerFunds, Inc. or one of its subsidiaries or affiliates (referred to collectively in this document as "OFI") acts as investment adviser (individually, a "Fund" and collectively, the "Funds"), and by OFI to effectuate compliance with Section 406 under the Sarbanes-Oxley Act of 2002 and the rules adopted to implement Section 406. This Code applies to each Fund's principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions ("Covered Officers"). A listing of positions currently within the ambit of Covered Officers is attached as EXHIBIT A. 1 1. PURPOSE OF THE CODE This Code sets forth standards and procedures that are reasonably designed to deter wrongdoing and promote: o honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships; o full, fair, accurate, timely, and understandable disclosure in reports and documents that a Fund files with, or submits to, the U.S. Securities and Exchange Commission ("SEC") and in other public communications made by the Fund; o compliance with applicable governmental laws, rules and regulations; o the prompt internal reporting of violations of this Code to the Code Administrator identified below; and - ---------- 1 The obligations imposed by this Code on Covered Officers are separate from and in addition to any obligations that may be imposed on such persons as Covered Persons under the Code of Ethics adopted by the Oppenheimer Funds dated May 15, 2002, under Rule 17j-1 of the Investment Company Act of 1940, as amended and any other code of conduct applicable to Covered Officers in whatever capacity they serve. This Code does not incorporate by reference any provisions of the Rule 17j-1 Code of Ethics and accordingly, any violations or waivers granted under the Rule 17j-1 Code of Ethics will not be considered a violation or waiver under this Code. o accountability for adherence to this Code. In general, the principles that govern honest and ethical conduct, including the avoidance of conflicts of interest between personal and professional relationships, reflect, at the minimum, the following: (1) the duty at all times in performing any responsibilities as a Fund financial officer, controller, accountant or principal executive officer to place the interests of the Funds ahead of personal interests; (2) the fundamental standard that Covered Officers should not take inappropriate advantage of their positions; (3) the duty to assure that a Fund's financial statements and reports to its shareholders are prepared honestly and accurately in accordance with applicable rules, regulations and accounting standards; and (4) the duty to conduct the Funds' business and affairs in an honest and ethical manner. Each Covered Officer should be sensitive to situations that may give rise to actual as well as apparent conflicts of interest. It is acknowledged that, as a result of the contractual relationship between each Fund and OFI, of which the Covered Officers are also officers or employees, and subject to OFI's fiduciary duties to each Fund, the Covered Officers will, in the normal course of their duties, be involved in establishing policies and implementing decisions that will have different effects on OFI and the Funds. It is further acknowledged that the participation of the Covered Officers in such activities is inherent in the contractual relationship between each Fund and OFI and is consistent with the expectations of the Board of Trustees/Directors of the performance by the Covered Officers of their duties as officers of the Funds. 2. PROHIBITIONS The specific provisions and reporting requirements of this Code are concerned primarily with promoting honest and ethical conduct and avoiding conflicts of interest in personal and professional relationships. No Covered Officer may use information concerning the business and affairs of a Fund, including the investment intentions of a Fund, or use his or her ability to influence such investment intentions, for personal gain to himself or herself, his or her family or friends or any other person or in a manner detrimental to the interests of a Fund or its shareholders. No Covered Officer may use his or her personal influence or personal relationships to influence the preparation and issuance of financial reports of a Fund whereby the Covered Officer would benefit personally to the detriment of the Fund and its shareholders. No Covered Officer shall intentionally for any reason take any action or fail to take any action in connection with his or her official acts on behalf of a Fund that causes the Fund to violate applicable laws, rules and regulations. No Covered Officer shall, in connection with carrying out his or her official duties and responsibilities on behalf of a Fund: (i) employ any device, scheme or artifice to defraud a Fund or its shareholders; (ii) intentionally cause a Fund to make any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which they are made, not misleading in its official documents, regulatory filings, financial statements or communications to the public; (iii) engage in any act, practice, or course of business which operates or would operate as a fraud or deceit upon any Fund or its shareholders; (iv) engage in any manipulative practice with respect to any Fund; (v) use his or her personal influence or personal relationships to influence any business decision, investment decisions, or financial reporting by a Fund whereby the Covered Officer would benefit personally to the detriment of the Fund or its shareholders; (vi) intentionally cause a Fund to fail to comply with applicable laws, rules and regulations, including failure to comply with the requirement of full, fair, accurate, understandable and timely disclosure in reports and documents that a Fund files with, or submits to, the SEC and in other public communications made by the Fund; (vii) intentionally mislead or omit to provide material information to the Fund's independent auditors or to the Board of Trustees/Directors or the officers of the Fund or its investment adviser in connection with financial reporting matters; (viii) fail to notify the Code Administrator or the Chief Executive Officer of the Fund or its investment adviser promptly if he or she becomes aware of any existing or potential violations of this Code or applicable laws; (ix) retaliate against others for, or otherwise discourage the reporting of, actual or apparent violations of this Code; or (x) fails to acknowledge or certify compliance with this Code if requested to do so. 3. REPORTS OF CONFLICTS OF INTERESTS If a Covered Officer becomes aware of a conflict of interest under this Code or, to the Covered Officer's reasonable belief, the appearance of one, he or she must immediately report the matter to the Code's Administrator. If the Code Administrator is involved or believed to be involved in the conflict of interest or appearance of conflict of interest, the Covered Officer shall report the matter directly to the OFI's Chief Executive Officer. Upon receipt of a report of a conflict, the Code Administrator will take prompt steps to determine whether a conflict of interest exists. If the Code Administrator determines that an actual conflict of interest exists, the Code Administrator will take steps to resolve the conflict. If the Code Administrator determines that the appearance of a conflict exists, the Code Administrator will take appropriate steps to remedy such appearance. If the Code Administrator determines that no conflict or appearance of a conflict exists, the Code Administrator shall meet with the Covered Officer to advise him or her of such finding and of his or her reason for taking no action. In lieu of determining whether a conflict or appearance of conflict exists, the Code Administrator may in his or her discretion refer the matter to the Fund's Board of Trustees/Directors. 4. WAIVERS Any Covered Officer requesting a waiver of any of the provisions of this Code must submit a written request for such waiver to the Code Administrator, setting forth the basis of such request and all necessary facts upon which such request can be evaluated. The Code Administrator shall review such request and make a written determination thereon, which shall be binding. The Code Administrator may in reviewing such request, consult at his discretion with legal counsel to OFI or to the Fund. In determining whether to waive any of the provisions of this Code, the Code Administrator shall consider whether the proposed waiver: (i) is prohibited by this Code; (ii) is consistent with honest and ethical conduct; and (iii) will result in a conflict of interest between the Covered Officer's personal and professional obligations to a Fund. In lieu of determining whether to grant a waiver, the Code Administrator in his or her discretion may refer the matter to the appropriate Fund's Board of Trustees/Directors. 5. REPORTING REQUIREMENTS (a) Each Covered Officer shall, upon becoming subject to this Code, be provided with a copy of this Code and shall affirm in writing that he or she has received, read, understands and shall adhere to this Code. (b) At least annually, all Covered Officers shall be provided with a copy of this Code and shall certify that they have read and understand this Code and recognize that they are subject thereto. (c) At least annually, all Covered Officers shall certify that they have complied with the requirements of this Code and that they have disclosed or reported any violations of this Code to the Code Administrator or the Chief Executive Officer of the Fund or its investment adviser. (d) The Code Administrator shall submit a quarterly report to the Board of Trustees/Directors of each Fund containing (i) a description of any report of a conflict of interest or apparent conflict and the disposition thereof; (ii) a description of any request for a waiver from this Code and the disposition thereof; (iii) any violation of the Code that has been reported or found and the sanction imposed; (iv) interpretations issued under the Code by the Code Administrator; and (v) any other significant information arising under the Code including any proposed amendments. (e) Each Covered Officer shall notify the Code Administrator promptly if he or she knows of or has a reasonable belief that any violation of this Code has occurred or is likely to occur. Failure to do so is itself a violation of this Code. (f) Any changes to or waivers of this Code, including "implicit" waivers as defined in applicable SEC rules, will, to the extent required, be disclosed by the Code Administrator or his or her designee as provided by applicable SEC rules. 2 6. ANNUAL RENEWAL At least annually, the Board of Trustees/Directors of each Fund shall review the Code and determine whether any amendments (including any amendments that may be recommended by OFI or the Fund's legal counsel) are necessary or desirable, and shall consider whether to renew and/or amend the Code. 7. SANCTIONS Any violation of this Code of Ethics shall be subject to the imposition of such sanctions by OFI as may be deemed appropriate under the circumstances to achieve the purposes of this Code and may include, without limitation, a letter of censure, suspension from employment or termination of employment, in the sole discretion of OFI. 8. ADMINISTRATION AND CONSTRUCTION (a) The administration of this Code of Ethics shall be the responsibility of OFI's General Counsel or his designee as the "Code Administrator" of this Code, acting under the terms of this Code and the oversight of the Trustees/Directors of the Funds. (b) The duties of such Code Administrator will include: (i) Continuous maintenance of a current list of the names of all Covered Officers; (ii) Furnishing all Covered Officers a copy of this Code and initially and periodically informing them of their duties and obligations thereunder; (iii) Maintaining or supervising the maintenance of all records required by this Code, including records of waivers granted hereunder; - ---------- 2 An "implicit waiver" is the failure to take action within a reasonable period of time regarding a material departure from a provision of this Code that has been made known to the General Counsel, the Code Administrator, an executive officer of the Fund or OFI. (iv) Issuing interpretations of this Code which appear to the Code Administrator to be consistent with the objectives of this Code and any applicable laws or regulations; (v) Conducting such inspections or investigations as shall reasonably be required to detect and report any violations of this Code, with his or her recommendations, to the Chief Executive Officer of OFI and to the Trustees/Directors of the affected Fund(s) or any committee appointed by them to deal with such information; and (vi) Periodically conducting educational training programs as needed to explain and reinforce the terms of this Code. (c) In carrying out the duties and responsibilities described under this Code, the Code Administrator may consult with legal counsel, who may include legal counsel to the applicable Funds, and such other persons as the Administrator shall deem necessary or desirable. The Code Administrator shall be protected from any liability hereunder or under any applicable law, rule or regulation, for decisions made in good faith based upon his or her reasonable judgment. 9. REQUIRED RECORDS The Administrator shall maintain and cause to be maintained in an easily accessible place, the following records for the period required by applicable SEC rules (currently six years following the end of the fiscal year of OFI in which the applicable event or report occurred): (a) A copy of any Code which has been in effect during the period; (b) A record of any violation of any such Code and of any action taken as a result of such violation, during the period; (c) A copy of each annual report pursuant to the Code made by a Covered Officer during the period; (d) A copy of each report made by the Code Administrator pursuant to this Code during the period; (e) A list of all Covered Officers who are or have been required to make reports pursuant to this Code during the period, plus those person(s) who are or were responsible for reviewing these reports; (f) A record of any request to waive any requirement of this Code, the decision thereon and the reasons supporting the decision; and (g) A record of any report of any conflict of interest or appearance of a conflict of interest received by the Code Administrator or discovered by the Code Administrator during the period, the decision thereon and the reasons supporting the decision. 10. AMENDMENTS AND MODIFICATIONS This Code may not be amended or modified except by an amendment in writing which is approved or ratified by OFI and by a majority vote of the Independent Trustees/Directors of each of the applicable Funds. 11. CONFIDENTIALITY. This Code is identified for the internal use of the Funds and OFI. Reports and records prepared or maintained under this Code are considered confidential and shall be maintained and protected accordingly to the extent permitted by applicable laws, rules and regulations. Except as otherwise required by law or this Code, such matters shall not be disclosed to anyone other than the Trustees/Directors of the affected Fund(s) and their counsel, the independent auditors of the affected Funds and/or OFI, and to OFI, except as such disclosure may be required pursuant to applicable judicial or regulatory process. Dated as of: June 25, 2003 Adopted by Board I of the Oppenheimer Funds June 13, 2003 /s/ ROBERT G. ZACK - ------------------ Robert G. Zack, Secretary Adopted by Board II of the Oppenheimer/Centennial Funds June 24, 2003 /s/ ROBERT G. ZACK - ------------------ Robert G. Zack, Secretary Adopted by Board III of the Oppenheimer Funds June 9, 2003 /s/ ROBERT G. ZACK - ------------------ Robert G. Zack, Secretary Adopted by Board IV of the Oppenheimer Funds May 21, 2003 /s/ ROBERT G. ZACK - ------------------ Robert G. Zack, Secretary Adopted by the Boards of Directors of OppenheimerFunds, Inc. and its subsidiaries and affiliates that act as investment adviser to the Oppenheimer or Centennial funds June 1, 2003 /s/ ROBERT G. ZACK - ------------------ Robert G. Zack, Senior Vice President and General Counsel Exhibit A Positions Covered by this Code of Ethics for Senior Officers EACH OPPENHEIMER OR CENTENNIAL FUND Principal Executive Officer Principal Financial Officer Treasurer Assistant Treasurer PERSONNEL OF OFI WHO BY VIRTUE OF THEIR JOBS PERFORM CRITICAL FINANCIAL AND ACCOUNTING FUNCTIONS FOR OFI ON BEHALF OF A FUND, INCLUDING: Treasurer Senior Vice President/Fund Accounting Vice President/Fund Accounting -----END PRIVACY-ENHANCED MESSAGE-----