-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, UZzl9HMce+AV3HCD01fbwdQPaLW83I6MZpVZFvPD6tnqlK77NM0yrEHBMiE4RvTc rupiuCGW+PvU+WIael3qYg== 0000752737-95-000010.txt : 19950428 0000752737-95-000010.hdr.sgml : 19950428 ACCESSION NUMBER: 0000752737-95-000010 CONFORMED SUBMISSION TYPE: 485BPOS PUBLIC DOCUMENT COUNT: 21 FILED AS OF DATE: 19950427 EFFECTIVENESS DATE: 19950427 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: OPPENHEIMER VARIABLE ACCOUNT FUNDS CENTRAL INDEX KEY: 0000752737 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 840974272 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 485BPOS SEC ACT: 1933 Act SEC FILE NUMBER: 002-93177 FILM NUMBER: 95532019 FILING VALUES: FORM TYPE: 485BPOS SEC ACT: 1940 Act SEC FILE NUMBER: 811-04108 FILM NUMBER: 95532020 BUSINESS ADDRESS: STREET 1: 3410 S GALENA ST CITY: DENVER STATE: CO ZIP: 80231 BUSINESS PHONE: 3036713200 MAIL ADDRESS: STREET 2: 3410 S GALENA ST CITY: DENVER STATE: CO ZIP: 80231 FORMER COMPANY: FORMER CONFORMED NAME: OPPENHEIMER VARIABLE LIFE FUNDS DATE OF NAME CHANGE: 19860609 485BPOS 1 POST-EFFECTIVE AMENDMENT #27 Registration No. 2-93177 File No. 811-4108 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM N-1A REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 / X / PRE-EFFECTIVE AMENDMENT NO. __ / / POST-EFFECTIVE AMENDMENT NO. 27 / X / and/or REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 / X / AMENDMENT NO. 24 / X / OPPENHEIMER VARIABLE ACCOUNT FUNDS (Exact Name of Registrant as Specified in Charter) 3410 South Galena Street, Denver, Colorado 80231 (Address of Principal Executive Offices) 303-671-3200 (Registrant's Telephone Number) ANDREW J. DONOHUE, ESQ. Oppenheimer Management Corporation Two World Trade Center, New York, New York 10048-0203 (Name and Address of Agent for Service) It is proposed that this filing will become effective (check appropriate box): / / Immediately upon filing pursuant to paragraph (b) / X / On May 1, 1995, pursuant to paragraph (b) / / 60 days after filing pursuant to paragraph (a)(i) / / On __________________, pursuant to paragraph (a)(i) / / 75 days after filing pursuant to paragraph (a)(2) / / On ______________, pursuant to paragraph (a)(2) of Rule 485 The Registrant has registered an indefinite number of shares under the Securities Act of 1933 pursuant to Rule 24f-2 promulgated under the Investment Company Act of 1940. A Rule 24f-2 Notice for the Registrant's fiscal year ended December 31, 1994, was filed on February 27, 1995. FORM N-1A OPPENHEIMER VARIABLE ACCOUNT FUNDS Cross Reference Sheet Part A of Form N-1A Item No. Prospectus Heading - --------- ------------------ 1 Front Cover Page 2 Overview of the Funds 3 Financial Highlights; Performance of the Funds 4 Front Cover Page; How the Funds are Managed--Organization and History; Investment Objectives and Policies; Investment Restrictions 5 How the Funds are Managed; Expenses; Back Cover 5A Performance of the Funds 6 How the Funds are Managed - Organization and History; The Transfer Agent; Dividends, Capital Gains and Taxes; Investment Objectives and Policies 8 How to Sell Shares 9 * Part B of Form N-1A Item No. Statement of Additional Information Heading - --------- ------------------------------------------- 10 Cover Page 11 Cover Page 12 * 13 Investment Objectives and Policies; Other Investment Techniques and Strategies; Additional Investment Restrictions 14 How the Funds are Managed--Trustees and Officers of the Funds 15 How the Funds are Managed-- Major Shareholders 16 How the Funds are Managed 17 Brokerage Policies of the Funds 18 Additional Information About the Funds 19 Your Investment Account - How to Buy Shares; How to Sell Shares 20 Dividends, Capital Gains and Taxes 21 How the Funds are Managed; Brokerage Policies of the Funds 22 Performance of the Funds 23 Financial Statements ______________ * Not applicable or negative answer. OPPENHEIMER VARIABLE ACCOUNT FUNDS Prospectus dated May 1, 1995 OPPENHEIMER VARIABLE ACCOUNT FUNDS (the "Trust") is a diversified open-end investment company consisting of nine separate funds (collectively, the "Funds"): OPPENHEIMER MONEY FUND ("Money Fund") seeks the maximum current income from investments in "money market" securities consistent with low capital risk and the maintenance of liquidity. Its shares are neither insured nor guaranteed by the U.S. government, and there is no assurance that this Fund will be able to maintain a stable net asset value of $1.00 per share. OPPENHEIMER HIGH INCOME FUND ("High Income Fund") seeks a high level of current income from investment in high yield fixed-income securities. High Income Fund's investments include unrated securities or high risk securities in the lower rating categories, commonly known as "junk bonds," which are subject to a greater risk of loss of principal and nonpayment of interest than higher-rated securities. These securities may be considered to be speculative. OPPENHEIMER BOND FUND ("Bond Fund") primarily seeks a high level of current income from investment in high yield fixed-income securities rated "Baa" or better by Moody's or "BBB" or better by Standard & Poor's. Secondarily, this Fund seeks capital growth when consistent with its primary objective. OPPENHEIMER CAPITAL APPRECIATION FUND ("Capital Appreciation Fund") seeks to achieve capital appreciation by investing in "growth-type" companies. OPPENHEIMER GROWTH FUND ("Growth Fund") seeks to achieve capital appreciation by investing in securities of well-known established companies. OPPENHEIMER MULTIPLE STRATEGIES FUND ("Multiple Strategies Fund") seeks a total investment return (which includes current income and capital appreciation in the value of its shares) from investments in common stocks and other equity securities, bonds and other debt securities, and "money market" securities. OPPENHEIMER GROWTH & INCOME FUND ("Growth & Income Fund") seeks a high total return (which includes growth in the value of its shares as well as current income) from equity and debt securities. From time to time this Fund may focus on small to medium capitalization common stocks, bonds and convertible securities. OPPENHEIMER GLOBAL SECURITIES FUND ("Global Securities Fund") seeks long- term capital appreciation by investing a substantial portion of assets in securities of foreign issuers, "growth-type" companies, cyclical industries and special situations which are considered to have appreciation possibilities. Current income is not an objective. These securities may be considered to be speculative. OPPENHEIMER STRATEGIC BOND FUND ("Strategic Bond Fund") seeks a high level of current income principally derived from interest on debt securities and seeks to enhance such income by writing covered call options on debt securities. The Fund intends to invest principally in: (i) foreign government and corporate debt securities, (ii) U.S. Government securities, and (iii) lower-rated high yield domestic debt securities, commonly known as "junk bonds", which are subject to a greater risk of loss of principal and nonpayment of interest than higher-rated securities. These securities may be considered to be speculative. Shares of the Funds are sold only to provide benefits under variable life insurance policies and variable annuity contracts (collectively, the "Accounts"). The Accounts invest in shares of one or more of the Funds in accordance with allocation instructions received from Account owners. Such allocation rights are further described in the accompanying Account Prospectus. Shares are redeemed to the extent necessary to provide benefits under an Account. This Prospectus explains concisely what you should know before investing in the Trust and the Funds. Please read this Prospectus carefully and keep it for future reference. You can find more detailed information about the Funds in the May 1, 1995 Statement of Additional Information. For a free copy, call Oppenheimer Shareholder Services, the Funds' Transfer Agent, at 1-800-525-7048, or write to the Transfer Agent at the address on the back cover. The Statement of Additional Information has been filed with the Securities and Exchange Commission and is incorporated into this Prospectus by reference (which means that it is legally part of this Prospectus). THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. Contents About the Funds Overview of the Funds Financial Highlights Investment Objectives and Policies How the Funds are Managed Performance of the Funds About Your Account How to Buy Shares How to Sell Shares Dividends, Capital Gains and Taxes Appendix A: Description of Terms Appendix B: Description of Securities Ratings ABOUT THE FUNDS Overview of the Funds Some of the important facts about the Funds are summarized below, with references to the section of this Prospectus where more complete information can be found. You should carefully read the entire Prospectus before making a decision about investing. Keep the Prospectus for reference after you invest. - What Are the Funds' Investment Objectives? The Money Fund's investment objective is to seek current income from investments in "money market" securities consistent with low capital risk and the maintenance of liquidity. The High Income Fund's investment objective is to seek a high level of current income from investment in high yield fixed-income securities. The Bond Fund's investment objective is to seek a high level of current income from investment in high yield fixed-income securities rate "baa" or better by Moody's or "BBB" or better by Standard & Poor's. As a secondary investment objective, the Bond Fund seeks capital growth when consistent with its primary objective. Capital Appreciation Fund's investment objective is to achieve capital appreciation by investing in "growth-type" companies. The Growth Fund's investment objective is to seek to achieve capital appreciation by investing in securities of well- known established companies. The Multiple Strategies Fund's investment objective is to seek a total investment return (which includes current income and capital appreciation in the value of its shares) from investment in common stocks and other equity securities, bonds and other debt securities, and "money market" securities. The Growth & Income Fund's investment objective is to seek a total return (which includes growth in the value of its shares) as well as current income from equity and debt securities. The Global Securities Fund's investment objective is to seek long-term capital appreciation by investing a substantial portion of assets in securities of foreign issuers, "growth-type" companies, cyclical industries and special situations which are considered to have appreciation possibilities. The Strategic Bond Fund's investment objective is to seek a high level of current income principally derived from interest on debt securities and seeks to enhance such income by writing covered call options on debt securities. - What Do the Funds Invest In? To seek their respective investment objectives, the Funds invest as follows. Money Fund primarily invests in money market securities. High Income Fund primarily invests in high yield fixed-income securities, including unrated securities or high risk securities in the lower rating categories, commonly known as "junk bonds." Bond Fund primarily invests in high yield fixed-income securities rated "Baa" or better by Moody's or "BBB" or better by Standard & Poor's. Capital Appreciation Fund primarily invests in "growth-type" companies. Growth Fund primarily invests in securities of well-known established companies. Multiple Strategies Fund primarily invests in common stocks and other equity securities, bonds and other debt securities, and money market securities. Growth & Income Fund is a new fund that will primarily invest in equity and debt securities and focus from time to time on small to medium capitalization companies. Global Securities Fund primarily invests in securities of foreign issuers, "growth-type" companies, cyclical industries and special situations. Strategic Bond Fund primarily invests in foreign government and corporate debt securities, U.S. Government securities, and lower-rated high yield domestic and foreign debt securities, commonly know as "junk bonds." These investments are more fully explained for each Fund in "Investment Objectives and Policies," starting on page ___. - Who Manages the Funds? The Funds' investment adviser is Oppenheimer Management Corporation, which (including a subsidiary) advises investment company portfolios having over $29 billion in assets. Each Fund's portfolio manager is primarily responsible for the selection of securities of that Fund. The portfolio managers are as follows: for Money Fund, Arthur Zimmer; for High Income Fund, Bond Fund, Multiple Strategies Fund and Strategic Bond Fund, David Negri (joined by Richard Rubinstein for Multiple Strategies Fund and by Arthur Steinmetz for Strategic Bond Fund); for Capital Appreciation Fund, Paul LaRocco; for Growth Fund, Jane Putnam; for Global Securities Fund, George Evans; and for Growth & Income Fund, John Wallace. The Manager is paid an advisory fee by each Fund, based on its assets. The Trust's Board of Trustees, elected by shareholders, oversees the investment adviser and the portfolio manager. Please refer to "How The Funds Are Managed," starting on page ____ for more information about the Manager and its fees. - How Risky Are The Funds? While different types of investments have risks that differ in type and magnitude, all investments carry risk to some degree. Changes in overall market movements or interest rates, or factors affecting a particular industry or issuer, can affect the value of the Funds' investments and their price per share. Equity investments are generally subject to a number of risks including the risk that values will fluctuate as a result of changing expectations for the economy and individual issuers. For both equity and income investments, foreign investments are subject to the risk of adverse currency fluctuation and additional risks and expenses in comparison to domestic investments. In comparing levels of risk among the equity and equity- income funds, Growth Fund is most conservative, followed by Multiple Strategies Fund, Growth & Income Fund, Capital Appreciation Fund and Global Securities Fund. Fixed-income investments are generally subject to the risk that values will fluctuate with inflation, with lower-rated fixed-income investments being subject to a greater risk that the issuer will default in its interest or principal payment obligations. In comparing levels of risk among the fixed-income funds, Bond Fund is most conservative, followed by Strategic Bond Fund and High Income Fund. Money Fund is the most conservative of all nine Funds in that Money Fund intends to maintain a stable net asset value, although there is no assurance that it will be able to do so. - How Can I Buy or Sell Shares? Shares of each Fund are offered only for purchase by Accounts as an investment medium for variable life insurance policies and variable annuity contracts. Account owners should refer to the accompanying Account Prospectus on how to buy or sell shares of the Funds. - How Have the Funds Performed? Money Fund, High Income Fund, Bond Fund and Strategic Bond Fund measure their performance by quoting their yields. All of the Funds with the exception of Money Fund may measure their performance by quoting average annual total return and cumulative total return, which measure historical performance. Those returns can be compared to the returns (over similar periods) of other funds. Of course, other funds may have different objectives, investments, and levels of risk. The performance of all but two of the Funds can also be compared to broad market indices, which we have done starting on page ___. Please remember that past performance does not guarantee future results. Financial Highlights The table on the following pages presents selected financial information, including per share data and expense ratios and other data about all the Funds (except Growth & Income Fund, which did not commence operations until after December 31, 1994). The information is based on each such Fund's average net assets. This information has been audited by Deloitte & Touche LLP, the Funds' independent auditors, whose report on the Funds' financial statements for the fiscal year ended December 31, 1994, is included in the Statement of Additional Information.
OPPENHEIMER MONEY FUND --------------------------------------------------------------------- Year Ended December 31, 1994 1993 1992 1991 1990 --------------------------------------------------------------------- PER SHARE OPERATING DATA: Net asset value, beginning of year $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 Income from investment operations - net investment income and net realized gain on investments .04 .03 .04 .06 .08 Dividends and distributions to shareholders (.04) (.03) (.04) (.06) (.08) --------------------------------------------------------------------- Net asset value, end of year $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 ========================================================== =========== RATIOS/SUPPLEMENTAL DATA: Net assets, end of year (in thousands) $89,671 $61,221 $58,266 $58,709 $89,143 Average net assets (in thousands) $90,264 $57,654 $61,317 $75,747 $82,966 Number of shares outstanding at end of year (in thousands) 89,695 61,221 58,266 58,703 89,141 Ratios to average net assets: Net investment income 4.18% 3.12% 3.76% 5.97% 7.80% Expenses .43% .43% .50% .49% .51%
OPPENHEIMER MONEY FUND --------------------------------------------------------------------- 1989 1988 1987 1986 1985(1) --------------------------------------------------------------------- PER SHARE OPERATING DATA: Net asset value, beginning of year $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 Income from investment operations - net investment income and net realized gain on investments .09 .07 .06 .06 .05 Dividends and distributions to shareholders (.09) (.07) (.06) (.06) (.05) --------------------------------------------------------------------- Net asset value, end of year $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 ========================================================== =========== RATIOS/SUPPLEMENTAL DATA: Net assets, end of year (in thousands) $68,440 $69,468 $42,538 $28,218 $2,506 Average net assets (in thousands) $67,586 $60,241 $35,138 $12,914 $2,080 Number of shares outstanding at end of year (in thousands) 68,439 69,468 42,538 28,218 2,506 Ratios to average net assets: Net investment income 8.82% 7.31% 6.33% 5.68% 7.25%(2) Expenses .53% .55% .59% .75% .75%(2)
1. For the period from April 3, 1985 (commencement of operations) to December 31, 1985. 2. Annualized. FINANCIAL HIGHLIGHTS Oppenheimer Variable Account Funds
OPPENHEIMER HIGH INCOME FUND -------------------------------------------------------------------- Year Ended December 31, 1994 1993 1992 1991 1990 -------------------------------------------------------------------- PER SHARE OPERATING DATA: Net asset value, beginning of period $ 11.02 $ 9.74 $ 9.40 $ 7.90 $ 8.59 Income (loss) from investment operations: Net investment income .94 .82 1.19 1.28 1.21 Net realized and unrealized gain (loss) on investments, options written and foreign currency transactions (1.27) 1.65 .43 1.30 (.82) -------------------------------------------------------------------- Total income (loss) from investment operations (.33) 2.47 1.62 2.58 .39 -------------------------------------------------------------------- Dividends and distributions to shareholders: Dividends from net investment income (.66) (1.19) (1.28) (1.08) (1.08) Distributions from net realized gain on investments, options written and foreign currency transactions (.24) -- -- -- -- -------------------------------------------------------------------- Total dividends and distributions to shareholders (.90) (1.19) (1.28) (1.08) (1.08) -------------------------------------------------------------------- Net asset value, end of period $ 9.79 $ 11.02 $ 9.74 $ 9.40 $ 7.90 ========================================================== ========== TOTAL RETURN, AT NET ASSET VALUE(2) (3.18)% 26.34% 17.92% 33.91% 4.65% RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $ 95,698 $93,011 $40,817 $27,308 $19,172 Average net assets (in thousands) $101,096 $67,000 $36,861 $23,663 $21,493 Number of shares outstanding at end of period (in thousands) 9,779 8,443 4,189 2,905 2,427 Ratios to average net assets: Net investment income 9.15% 10.50% 12.08% 14.26% 14.32% Expenses .67% .68% .73% .75% .75% Portfolio turnover rate(4) 110.1% 135.7% 144.2% 108.0% 95.1%
OPPENHEIMER HIGH INCOME FUND ----------------------------------------------------- 1989 1988 1987 1986(1) ----------------------------------------------------- PER SHARE OPERATING DATA: Net asset value, beginning of period $ 9.30 $ 9.14 $ 10.04 $ 10.00 Income (loss) from investment operations: Net investment income 1.09 1.12 1.30 .72 Net realized and unrealized gain (loss) on investments, options written and foreign currency transactions (.65) .23 (.51) (.24) ----------------------------------------------------- Total income (loss) from investment operations .44 1.35 .79 .48 ----------------------------------------------------- Dividends and distributions to shareholders: Dividends from net investment income (1.08) (1.07) (1.55) (.44) Distributions from net realized gain on investments, options written and foreign currency transactions (.07) (.12) (.14) -- ----------------------------------------------------- Total dividends and distributions to shareholders (1.15) (1.19) (1.69) (.44) ----------------------------------------------------- Net asset value, end of period $ 8.59 $ 9.30 $ 9.14 $ 10.04 ===================================================== TOTAL RETURN, AT NET ASSET VALUE(2) 4.84% 15.58% 8.07% 4.73% RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $23,698 $25,551 $21,768 $14,833 Average net assets (in thousands) $26,040 $24,530 $20,637 $ 8,036 Number of shares outstanding at end of period (in thousands) 2,760 2,746 2,382 1,478 Ratios to average net assets: Net investment income 11.52% 11.94% 13.13% 11.18%(3) Expenses .75% .75% .75% .75%(3) Portfolio turnover rate(4) 78.7% 57.9% 42.1% 18.3%
1. For the period from April 30, 1986 (commencement of operations) to December 31, 1986. 2. Assumes a hypothetical initial investment on the business day before the first day of the fiscal period, with all dividends and distributions reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business day of the fiscal period. Total return information does not reflect expenses that apply at the separate account level or to related insurance products. Inclusion of these charges would reduce the total return figures for all periods shown. 3. Annualized. 4. The lesser of purchases or sales of portfolio securities for a period, divided by the monthly average of the market value of portfolio securities owned during the period. Securities with a maturity or expiration date at the time of acquisition of one year or less are excluded from the calculation. FINANCIAL HIGHLIGHTS Oppenheimer Variable Account Funds
OPPENHEIMER BOND FUND -------------------------------------------------------------------- Year Ended December 31, 1994 1993 1992 1991 1990 -------------------------------------------------------------------- PER SHARE OPERATING DATA: Net asset value, beginning of period $ 11.65 $ 10.99 $ 11.15 $ 10.33 $ 10.49 Income (loss) from investment operations: Net investment income .76 .65 .87 .95 .97 Net realized and unrealized gain (loss) on investments and foreign currency transactions (.98) .76 (.17) .80 (.18) -------------------------------------------------------------------- Total income (loss) from investment operations (.22) 1.41 .70 1.75 .79 -------------------------------------------------------------------- Dividends and distributions to shareholders: Dividends from net investment income (.62) (.75) (.86) (.93) (.95) Distributions from net realized gain on investments and foreign currency transactions (.03) -- -- -- -- -------------------------------------------------------------------- Total dividends and distributions to shareholders (.65) (.75) (.86) (.93) (.95) -------------------------------------------------------------------- Net asset value, end of period $ 10.78 $ 11.65 $ 10.99 $ 11.15 $ 10.33 ========================================================== ========== TOTAL RETURN, AT NET ASSET VALUE(2) (1.94)% 13.04% 6.50% 17.63% 7.92% RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $135,067 $111,846 $63,354 $32,762 $16,576 Average net assets (in thousands) $121,884 $ 87,215 $45,687 $22,169 $15,088 Number of shares outstanding at end of period (in thousands) 12,527 9,602 5,766 2,939 1,604 Ratios to average net assets: Net investment income 7.30% 7.20% 7.81% 8.73% 9.30% Expenses .57% .46% .56% .64% .61% Portfolio turnover rate(4) 35.1% 36.3% 41.3% 7.6% 7.4%
OPPENHEIMER BOND FUND -------------------------------------------------------------------- 1989 1988 1987 1986 1985(1) -------------------------------------------------------------------- PER SHARE OPERATING DATA: Net asset value, beginning of period $ 10.15 $ 10.19 $ 11.15 $ 11.27 $ 10.00 Income (loss) from investment operations: Net investment income .98 .94 .97 .97 .86 Net realized and unrealized gain (loss) on investments and foreign currency transactions .32 (.05) (.71) .09 .99 -------------------------------------------------------------------- Total income (loss) from investment operations 1.30 .89 .26 1.06 1.85 -------------------------------------------------------------------- Dividends and distributions to shareholders: Dividends from net investment income (.96) (.93) (1.17) (1.03) (.58) Distributions from net realized gain on investments and foreign currency transactions -- -- (.05) (.15) -- -------------------------------------------------------------------- Total dividends and distributions to shareholders (.96) (.93) (1.22) (1.18) (.58) -------------------------------------------------------------------- Net asset value, end of period $ 10.49 $ 10.15 $ 10.19 $ 11.15 $ 11.27 ========================================================== ========== TOTAL RETURN, AT NET ASSET VALUE(2) 13.32% 8.97% 2.53% 10.12% 18.82% RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $13,422 $ 9,989 $10,415 $7,377 $2,725 Average net assets (in thousands) $11,167 $11,028 $ 8,748 $4,647 $1,614 Number of shares outstanding at end of period (in thousands) 1,280 984 1,022 662 242 Ratios to average net assets: Net investment income 9.34% 9.08% 9.17% 8.71% 10.52%(3) Expenses .64% .70% .75% .75% .75%(3) Portfolio turnover rate(4) 5.4% 36.3% 5.9% 27.7% 101.3%
1. For the period from April 3, 1985 (commencement of operations) to December 31, 1985. 2. Assumes a hypothetical initial investment on the business day before the first day of the fiscal period, with all dividends and distributions reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business day of the fiscal period. Total return information does not reflect expenses that apply at the separate account level or to related insurance products. Inclusion of these charges would reduce the total return figures for all periods shown. 3. Annualized. 4. The lesser of purchases or sales of portfolio securities for a period, divided by the monthly average of the market value of portfolio securities owned during the period. Securities with a maturity or expiration date at the time of acquisition of one year or less are excluded from the calculation. FINANCIAL HIGHLIGHTS Oppenheimer Variable Account Funds
OPPENHEIMER CAPITAL APPRECIATION FUND ---------------------------------------------------------------------- Year Ended December 31, 1994 1993 1992 1991 1990 ---------------------------------------------------------------------- PER SHARE OPERATING DATA: Net asset value, beginning of period $ 31.64 $ 26.04 $ 23.24 $ 15.24 $ 20.40 Income (loss) from investment operations: Net investment income .10 .05 .06 .08 .32 Net realized and unrealized gain (loss) on investments and options written (2.22) 6.71 3.43 8.18 (3.54) ---------------------------------------------------------------------- Total income (loss) from investment operations (2.12) 6.76 3.49 8.26 (3.22) ---------------------------------------------------------------------- Dividends and distributions to shareholders: Dividends from net investment income (.04) (.06) (.14) (.26) (.53) Distributions from net realized gain on investments and options written (3.53) (1.10) (.55) -- (1.41) ---------------------------------------------------------------------- Total dividends and distributions to shareholders (3.57) (1.16) (.69) (.26) (1.94) ---------------------------------------------------------------------- Net asset value, end of period $ 25.95 $ 31.64 $ 26.04 $ 23.24 $ 15.24 ========================================================== ============ TOTAL RETURN, AT NET ASSET VALUE(3) (7.59)% 27.32% 15.42% 54.72% (16.82)% RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $185,774 $136,885 $83,335 $49,371 $23,295 Average net assets (in thousands) $153,832 $98,228 $56,371 $34,887 $24,774 Number of shares outstanding at end of period (in thousands) 7,158 4,326 3,201 2,125 1,528 Ratios to average net assets: Net investment income .50% .23% .30% .81% 1.93% Expenses .57% .47% .54% .63% .71% Portfolio turnover rate(5) 96.5% 122.8% 78.9% 122.3% 222.0%
OPPENHEIMER CAPITAL APPRECIATION FUND ---------------------------------------------------------------------- 1989 1988 1987 1986(2) 1986(1) ---------------------------------------------------------------------- PER SHARE OPERATING DATA: Net asset value, beginning of period $ 16.31 $ 14.39 $ 13.12 $ 16.21 $ 13.71 Income (loss) from investment operations: Net investment income .50 .33 .21 .12 .09 Net realized and unrealized gain (loss) on investments and options written 3.93 1.60 1.67 (1.24) 3.40 ---------------------------------------------------------------------- Total income (loss) from investment operations 4.43 1.93 1.88 (1.12) 3.49 ---------------------------------------------------------------------- Dividends and distributions to shareholders: Dividends from net investment income (.34) -- (.34) (.21) (.20) Distributions from net realized gain on investments and options written -- (.01) (.27) (1.76) (.79) ---------------------------------------------------------------------- Total dividends and distributions to shareholders (.34) (.01) (.61) (1.97) (.99) ---------------------------------------------------------------------- Net asset value, end of period $ 20.40 $ 16.31 $ 14.39 $ 13.12 $ 16.21 ========================================================== ============ TOTAL RETURN, AT NET ASSET VALUE(3) 27.57% 13.41% 14.34% (1.65)% N/A RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $27,523 $13,667 $9,692 $4,549 $3,852 Average net assets (in thousands) $21,307 $13,239 $8,598 $3,099 $2,292 Number of shares outstanding at end of period (in thousands) 1,349 838 674 347 238 Ratios to average net assets: Net investment income 3.27% 2.13% 1.68% 2.36%(4) 2.27% Expenses .68% .73% .75% 1.01%(4) 2.17% Portfolio turnover rate(5) 130.5% 128.7% 138.7% 100.1% 464.8%
1. For the year ended June 30, 1986. Operating results were achieved by Centennial Capital Appreciation Fund, a separate investment company acquired by OCAP on August 14, 1986. 2. For the six months ended December 31, 1986. Operating results prior to August 15, 1986 were achieved by Centennial Capital Appreciation Fund, a separate investment company acquired by OCAP on August 14, 1986. 3. Assumes a hypothetical initial investment on the business day before the first day of the fiscal period, with all dividends and distributions reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business day of the fiscal period. Total return information does not reflect expenses that apply at the separate account level or to related insurance products. Inclusion of these charges would reduce the total return figures for all periods shown. 4. Annualized. 5. The lesser of purchases or sales of portfolio securities for a period, divided by the monthly average of the market value of portfolio securities owned during the period. Securities with a maturity or expiration date at the time of acquisition of one year or less are excluded from the calculation. FINANCIAL HIGHLIGHTS Oppenheimer Variable Account Funds
OPPENHEIMER GROWTH FUND --------------------------------------------------------------------- Year Ended December 31, 1994 1993 1992 1991 1990 --------------------------------------------------------------------- PER SHARE OPERATING DATA: Net asset value, beginning of period $ 17.70 $ 16.96 $ 15.17 $ 12.54 $ 16.38 Income (loss) from investment operations: Net investment income .22 .46 .16 .30 .56 Net realized and unrealized gain (loss) on investments and foreign currency transactions (.05) .74 1.99 2.82 (1.79) --------------------------------------------------------------------- Total income from investment operations .17 1.20 2.15 3.12 (1.23) --------------------------------------------------------------------- Dividends and distributions to shareholders: Dividends from net investment income (.15) (.14) (.36) (.49) (.62) Distributions from net realized gain on investments and foreign currency transactions (.04) (.32) -- -- (1.99) --------------------------------------------------------------------- Total dividends and distributions to (.19) (.46) (.36) (.49) (2.61) shareholders --------------------------------------------------------------------- Net asset value, end of period $ 17.68 $ 17.70 $ 16.96 $ 15.17 $ 12.54 ========================================================== =========== TOTAL RETURN, AT NET ASSET VALUE(2) .97% 7.25% 14.53% 25.54% (8.21)% RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $63,283 $56,701 $36,494 $22,032 $15,895 Average net assets (in thousands) $59,953 $46,389 $25,750 $18,810 $17,235 Number of shares outstanding at end of period (in thousands) 3,580 3,203 2,152 1,453 1,267 Ratios to average net assets: Net investment income 1.38% 1.13% 1.36% 2.82% 4.09% Expenses .58% .50% .61% .70% .71% Portfolio turnover rate(4) 53.8% 12.6% 48.7% 133.9% 267.9%
OPPENHEIMER GROWTH FUND --------------------------------------------------------------------- 1989 1988 1987 1986 1985(1) --------------------------------------------------------------------- PER SHARE OPERATING DATA: Net asset value, beginning of period $ 13.64 $ 11.21 $ 12.53 $ 10.95 $ 10.00 Income (loss) from investment operations: Net investment income .66 .29 .20 .13 .16 Net realized and unrealized gain (loss) on investments and foreign currency transactions 2.50 2.19 .24 1.76 .79 --------------------------------------------------------------------- Total income from investment operations 3.16 2.48 .44 1.89 .95 --------------------------------------------------------------------- Dividends and distributions to shareholders: Dividends from net investment income (.35) -- (.34) (.15) -- Distributions from net realized gain on investments and foreign currency transactions (.07) (.05) (1.42) (.16) -- --------------------------------------------------------------------- Total dividends and distributions to shareholders (.42) (.05) (1.76) (.31) -- --------------------------------------------------------------------- Net asset value, end of period $ 16.38 $ 13.64 $ 11.21 $ 12.53 $ 10.95 ========================================================== =========== TOTAL RETURN, AT NET ASSET VALUE(2) 23.59% 22.09% 3.32% 17.76% 9.50% RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $19,301 $17,746 $14,692 $8,287 $ 820 Average net assets (in thousands) $18,596 $15,585 $15,121 $3,744 $ 388 Number of shares outstanding at end of period (in thousands) 1,179 1,301 1,311 661 75 Ratios to average net assets: Net investment income 3.72% 2.39% 1.56% 2.62% 4.25%(3) Expenses .70% .70% .75% .75% .75%(3) Portfolio turnover rate(4) 148.0% 132.5% 191.0% 100.9% 132.9%
1. For the period from April 3, 1985 (commencement) to December 31, 1985. 2. Assumes a hypothetical initial investment on the business day before the first day of the fiscal period, with all dividends and distributions reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business day of the fiscal period. Total return information does not reflect expenses that apply at the separate account level or to related insurance products. Inclusion of these charges would reduce the total return figures for all periods shown. 3. Annualized. 4. The lesser of purchases or sales of portfolio securities for a period, divided by the monthly average of the market value of portfolio securities owned during the period. Securities with a maturity or expiration date at the time of acquisition of one year or less are excluded from the calculation. FINANCIAL HIGHLIGHTS Oppenheimer Variable Account Funds
OPPENHEIMER MULTIPLE STRATEGIES FUND ------------------------------------------------------------------------ Year Ended December 31, 1994 1993 1992 1991 1990 ------------------------------------------------------------------------ PER SHARE OPERATING DATA: Net asset value, beginning of period $ 13.88 $ 12.47 $ 11.96 $ 10.90 $ 12.30 Income (loss) from investment operations: Net investment income .63 .55 .55 .69 .73 Net realized and unrealized gain (loss) on investments, options written and foreign currency transactions (.90) 1.41 .50 1.15 (.97) ------------------------------------------------------------------------ Total income (loss) from investment operations (.27) 1.96 1.05 1.84 (.24) ------------------------------------------------------------------------ Dividends and distributions to shareholders: Dividends from net investment income (.60) (.55) (.54) (.78) (.70) Distributions from net realized gain on investments, options written and foreign currency transactions (.10) -- -- -- (.46) ------------------------------------------------------------------------ Total dividends and distributions to shareholders (.70) (.55) (.54) (.78) (1.16) ------------------------------------------------------------------------ Net asset value, end of period $ 12.91 $ 13.88 $ 12.47 $ 11.96 $ 10.90 ========================================================== ============== TOTAL RETURN, AT NET ASSET VALUE(2) (1.95)% 15.95% 8.99% 17.48% (1.91)% RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $292,067 $250,290 $159,464 $124,634 $118,888 Average net assets (in thousands) $279,949 $199,954 $139,011 $117,000 $123,231 Number of shares outstanding at end of period (in thousands) 22,620 18,026 12,792 10,421 10,908 Ratios to average net assets: Net investment income 4.90% 4.44% 4.63% 5.95% 6.53% Expenses .56% .48% .55% .54% .55% Portfolio turnover rate(4) 31.4% 32.4% 57.8% 80.3% 99.2%
OPPENHEIMER MULTIPLE STRATEGIES FUND --------------------------------------- 1989 1988 1987(1) --------------------------------------- PER SHARE OPERATING DATA: Net asset value, beginning of period $ 11.58 $ 10.04 $ 10.00 Income (loss) from investment operations: Net investment income .73 .66 .44 Net realized and unrealized gain (loss) on investments, options written and foreign currency transactions 1.04 1.53 .07 --------------------------------------- Total income (loss) from investment operations 1.77 2.19 .51 --------------------------------------- Dividends and distributions to shareholders: Dividends from net investment income (.68) (.65) (.43) Distributions from net realized gain on investments, options written and foreign currency transactions (.37) -- (.04) --------------------------------------- Total dividends and distributions to shareholders (1.05) (.65) (.47) ======================================= Net asset value, end of period $ 12.30 $ 11.58 $ 10.04 TOTAL RETURN, AT NET ASSET VALUE(2) 15.76% 22.15% 3.97% RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $121,286 $78,386 $53,291 Average net assets (in thousands) $101,057 $64,298 $34,256 Number of shares outstanding at end of period (in thousands) 9,860 6,766 5,306 Ratios to average net assets: Net investment income 6.36% 6.18% 6.12%(3) Expenses .57% .58% .65%(3) Portfolio turnover rate(4) 66.9% 110.0% 46.9%
1. For the period from February 9, 1987 (commencement of operations) to December 31, 1987. 2. Assumes a hypothetical initial investment on the business day before the first day of the fiscal period, with all dividends and distributions reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business day of the fiscal period. Total return information does not reflect expenses that apply at the separate account level or to related insurance products. Inclusion of these charges would reduce the total return figures for all periods shown. 3. Annualized. 4. The lesser of purchases or sales of portfolio securities for a period, divided by the monthly average of the market value of portfolio securities owned during the period. Securities with a maturity or expiration date at the time of acquisition of one year or less are excluded from the calculation. FINANCIAL HIGHLIGHTS Oppenheimer Variable Account Funds
OPPENHEIMER GLOBAL SECURITIES FUND --------------------------------------------------------------------- Year Ended December 31, 1994 1993 1992 1991 1990(1) --------------------------------------------------------------------- PER SHARE OPERATING DATA: Net asset value, beginning of period $ 16.30 $ 9.57 $ 10.38 $ 10.04 $ 10.00 Income (loss) from investment operations: Net investment income .04 (.02) .07 .04 -- Net realized and unrealized gain (loss) on investments and foreign currency transactions (.96) 6.75 (.80) .30 .04 --------------------------------------------------------------------- Total income (loss) from investment operations (.92) 6.73 (.73) .34 .04 --------------------------------------------------------------------- Dividends and distributions to shareholders: Dividends from net investment income (.04) -- (.04) -- -- Distributions from net realized gain on investments and foreign currency transactions (.25) -- (.04) -- -- --------------------------------------------------------------------- Total dividends and distributions to shareholders (.29) -- (.08) -- -- --------------------------------------------------------------------- Net asset value, end of period $ 15.09 $ 16.30 $ 9.57 $ 10.38 $ 10.04 ========================================================== =========== TOTAL RETURN, AT NET ASSET VALUE(2) (5.72)% 70.32% (7.11)% 3.39% .40% RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $297,842 $96,425 $13,537 $7,339 $ 432 Average net assets (in thousands) $214,545 $31,696 $11,181 $3,990 $ 263 Number of shares outstanding at end of period (in thousands) 19,743 5,917 1,415 707 43 Ratios to average net assets: Net investment income .54% .72% 1.04% .75% .08%(3) Expenses .91% .92% 1.06% 1.32% 6.84%(3) Portfolio turnover rate(4) 70.4% 65.1% 34.1% 29.5% 0.0%
1. For the period from November 12, 1990 (commencement of operations) to December 31, 1990. 2. Assumes a hypothetical initial investment on the business day before the first day of the fiscal period, with all dividends and distributions reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business day of the fiscal period. Total return information does not reflect expenses that apply at the separate account level or to related insurance products. Inclusion of these charges would reduce the total return figures for all periods shown. 3. Annualized. 4. The lesser of purchases or sales of portfolio securities for a period, divided by the monthly average of the market value of portfolio securities owned during the period. Securities with a maturity or expiration date at the time of acquisition of one year or less are excluded from the calculation. FINANCIAL HIGHLIGHTS Oppenheimer Variable Account Funds
OPPENHEIMER STRATEGIC BOND FUND -------------------------------- Year Ended December 31, 1994 1993(1) -------------------------------- PER SHARE OPERATING DATA: Net asset value, beginning of period $ 5.12 $ 5.00 Income (loss) from investment operations: Net investment income .35 .10 Net realized and unrealized gain (loss) on investments, options written and foreign currency transactions (.54) .11 -------------------------------- Total income (loss) from investment operations (.19) .21 -------------------------------- Dividends and distributions to shareholders: Dividends from net investment income (.32) (.09) Distributions from net realized gain on investments, options written and foreign currency transactions -- -- Distributions in excess of net realized gain on investments (.01) -- -------------------------------- Total dividends and distributions to shareholders (.33) (.09) -------------------------------- Net asset value, end of period $ 4.60 $ 5.12 ================================ TOTAL RETURN, AT NET ASSET VALUE(2) (3.78)% 4.25% RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $20,320 $9,887 Average net assets (in thousands) $15,389 $4,259 Number of shares outstanding at end of period (in thousands) 4,418 1,930 Ratios to average net assets: Net investment income 8.36% 5.67%(3) Expenses .87% .96%(3) Portfolio turnover rate(4) 136.6% 10.9%
1. For the period from May 3, 1993 (commencement of operations) to December 31, 1993. 2. Assumes a hypothetical initial investment on the business day before the first day of the fiscal period, with all dividends and distributions reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business day of the fiscal period. Total return information does not reflect expenses that apply at the separate account level or to related insurance products. Inclusion of these charges would reduce the total return figures for all periods shown. 3. Annualized. 4. The lesser of purchases or sales of portfolio securities for a period, divided by the monthly average of the market value of portfolio securities owned during the period. Securities with a maturity or expiration date at the time of acquisition of one year or less are excluded from the calculation. Investment Objectives and Policies Investment Objective and Policies - Money Fund. The objective of Money Fund is to seek the maximum current income from investments in "money market" securities consistent with low capital risk and the maintenance of liquidity. The Securities and Exchange Commission Rule 2a- 7 ("Rule 2a-7") under the Investment Company Act of 1940 (the "Investment Company Act") places restrictions on a money market fund's investments. Under Rule 2a-7, Money Fund may purchase only "Eligible Securities," as defined below, that the Trust's Board of Trustees has determined have minimal credit risk. An "Eligible Security" is (a) a security that has received a rating in one of the two highest short-term rating categories by any two "nationally-recognized statistical rating organizations" as defined in Rule 2a-7 ("Rating Organizations"), or, if only one Rating Organization has rated that security, by that Rating Organization, or (b) an unrated security that is judged by the Trust's investment adviser, Oppenheimer Management Corporation (the "Manager") to be of comparable quality to investments that are "Eligible Securities" rated by Rating Organizations. Rule 2a-7 permits Money Fund to purchase "First Tier Securities," which are Eligible Securities rated in the highest category for short-term debt obligations by at least two Rating Organizations, or, if only one Rating Organization has rated a particular security, by that Rating Organization, or comparable unrated securities. Under Rule 2a-7, Money Fund may invest only up to 5% of its assets in "Second Tier Securities," which are Eligible Securities that are not "First Tier Securities." In addition to the overall 5% limit on Second Tier Securities, Money Fund may not invest (i) more than 5% of its total assets in the securities of any one issuer (other than the U.S. Government, its agencies or instrumentalities) or (ii) more than 1% of its total assets or $1 million (whichever is greater) in Second Tier Securities of any one issuer. The Trust's Board must approve or ratify the purchase of Eligible Securities that are unrated or are rated by only one Rating Organization. Additionally, under Rule 2a-7, Money Fund must maintain a dollar-weighted average portfolio maturity of no more than 90 days, and the maturity of any single portfolio investment may not exceed 397 days. The Trust's Board has adopted procedures under Rule 2a-7 pursuant to which the Board has delegated to the Manager the responsibility of conforming Money Fund's investments with the requirements of Rule 2a-7 and those Procedures. Ratings at the time of purchase will determine whether securities may be acquired under the above restrictions. The rating restrictions described in this Prospectus do not apply to banks in which the Trust's cash is kept. Subsequent downgrades in ratings may require reassessment of the credit risk presented by a security and may require its sale. See "Investment Objectives and Policies -- Money Fund" in the Statement of Additional Information for further details. The Trust intends to exercise due care in the selection of portfolio securities. However, a risk may exist that the issuers of Money Fund's portfolio securities may not be able to meet their duties and obligations on interest or principal payments at the time called for by the instrument. There is also the risk that because of a redemption demand greater than anticipated by management, some of Money Fund's portfolio may have to be liquidated prior to maturity at prices less than the original cost or maturity value. Any of these risks, if encountered, could cause a reduction in the net asset value of Money Fund's shares. The types of instruments that will form the major part of Money Fund's investments are certificates of deposit, bankers' acceptances, commercial paper, U.S. Treasury bills, securities of U.S. government agencies or instrumentalities and other debt instruments (including bonds) issued by corporations, including variable and floating rate instruments, and variable rate master demand notes. Some of such instruments may be supported by letters of credit or may be subject to repurchase transactions (described below). Except as described below, Money Fund will purchase certificates of deposit or bankers' acceptances only if issued or guaranteed by a domestic bank subject to regulation by the U.S. Government or by a foreign bank having total assets at least equal to U.S. $1 billion. Money Fund may invest in certificates of deposit of up to $100,000 of a domestic bank if such certificates of deposit are fully insured as to principal by the Federal Deposit Insurance Corporation. For purposes of this section, the term "bank" includes commercial banks, savings banks, and savings and loan associations and the term "foreign bank" includes foreign branches of U.S. banks (issuers of "Eurodollar" instruments), U.S. branches and agencies of foreign banks (issuers of "Yankee dollar" instruments) and foreign branches of foreign banks. Money Fund also may purchase obligations issued by other entities if they are: (i) guaranteed as to principal and interest by a bank or corporation whose certificates of deposit or commercial paper may otherwise be purchased by Money Fund, or (ii) subject to repurchase agreements (explained below), if the collateral for the agreement complies with Rule 2a-7. In addition, the Fund may also invest in other types of securities described above in accordance with the requirements of the rule. For further information, see "Foreign Securities" and "Other Investment Restrictions" below. See Appendix A below and "Investment Objectives and Policies" in the Statement of Additional Information for further information on the investments which Money Fund may make. See Appendix B below for a description of the rating categories of the Rating Organizations. Investment Objectives and Policies - High Income Fund, Bond Fund and Strategic Bond Fund. High Income Fund. The objective of High Income Fund is to earn a high level of current income by investing primarily in a diversified portfolio of high yield, fixed-income securities (long-term debt and preferred stock issues, including convertible securities) believed by the Manager not to involve undue risk. The Fund may also acquire participation interests in loans that are made to corporations (see "Participation Interests," below). High Income Fund's investment policy is to assume certain risks (discussed below) in seeking high yield, which is ordinarily associated with high risk securities, commonly known as "junk bonds," in the lower rating categories of the established securities ratings services (i.e., securities rated "Baa" or lower by Moody's Investor Service, Inc. ("Moody's") or "BBB" or lower by Standard & Poor's Corporation ("Standard & Poor's")), and unrated securities. The investments in which High Income Fund will invest principally will be in the lower rating categories; it may invest in securities rated as low as "C" by Moody's or "D" by Standard & Poor's. Such ratings indicate that the obligations are speculative in a high degree and may be in default. Appendix B of this Prospectus describes these rating categories. High Income Fund is not obligated to dispose of securities whose issuers subsequently are in default or if the rating is subsequently downgraded. High Income Fund may invest, without limit, in unrated securities if such securities offer, in the opinion of the Manager, yields and risks comparable to rated securities. Risks of high yield securities are discussed under "Risk Factors" below. High Income Fund's portfolio at December 31, 1994 contained domestic and foreign corporate bonds in the following rating categories as rated by Standard & Poor's (the percentages relate to the weighted average value of the bonds in each rating category as a percentage of that Fund's total assets): AAA, 1.70%; AA, 2.10%; A, 3.06%; BBB, 1.06%; BB, 5.93%; B, 37.14%; CCC, 5.53%; CC, 1.04%; D, 1.69%; and unrated, 18.02%. If a bond was not rated by Standard & Poor's but was rated by Moody's, it is included in the comparable category. The Manager will not rely principally on the ratings assigned by rating services. The Manager's analysis may include consideration of the financial strength of the issuer, including its historic and current financial condition, the trading activity in its securities, present and anticipated cash flow, estimated current value of assets in relation to historical cost, the issuer's experience and managerial expertise, responsiveness to changes in interest rates and business conditions, debt maturity schedules, current and future borrowing requirements, and any change in the financial condition of the issuer and the issuer's continuing ability to meet its future obligations. The Manager also may consider anticipated changes in business conditions, levels of interest rates of bonds as contrasted with levels of cash dividends, industry and regional prospects, the availability of new investment opportunities and the general economic, legislative and monetary outlook for specific industries, the nation and the world. Bond Fund. Bond Fund's primary objective is to earn a high level of current income by investing primarily in a diversified portfolio of high yield fixed-income securities. As a secondary objective, Bond Fund seeks capital growth when consistent with its primary objective. As a matter of non-fundamental policy, Bond Fund will, under normal market conditions, invest at least 65% of its total assets in bonds. Bond Fund will invest only in securities rated "Baa" or better by Moody's or "BBB" or better by Standard & Poor's. However, Bond Fund is not obligated to dispose of securities if the rating is reduced, and therefore will from time to time hold securities rated lower than "Baa" by Moody's or "BBB" by Standard & Poor's. Strategic Bond Fund. The investment objective of Strategic Bond Fund is to seek a high level of current income principally derived from interest on debt securities and to enhance such income by writing covered call options on debt securities. Although the premiums received by Strategic Bond Fund from writing covered calls are a form of capital gain, the Fund generally will not make investments in securities with the objective of seeking capital appreciation. The Fund intends to invest principally in: (i) lower-rated high yield domestic debt securities; (ii) U.S. Government securities, and (iii) foreign government and corporate debt securities. Under normal circumstances, the Fund's assets will be invested in each of these three sectors. However, Strategic Bond Fund may from time to time invest up to 100% of its total assets in any one sector if, in the judgment of the Manager, the Fund has the opportunity of seeking a high level of current income without undue risk to principal. Accordingly, the Fund's investments should be considered speculative. Distributable income will fluctuate as the Fund assets are shifted among the three sectors. - High Yield Securities. The higher yields and high income sought by Strategic Bond Fund are generally obtainable from securities in the lower rating categories of the established rating services, commonly known as "junk bonds." Such securities are rated "Baa" or lower by Moody's or "BBB" or lower by Standard & Poor's. Strategic Bond Fund may invest in securities rated as low as "C" by Moody's or "D" by Standard & Poor's. Such ratings indicate that the obligations are speculative in a high degree and may be in default. Risks of high yield, high risk securities are discussed under "Risk Factors" below. Strategic Bond Fund's portfolio at December 31, 1994, contained securities in the following rating categories as rated by Standard & Poor's (the percentages relate to the weighted average of the bonds in each rating category as a percentage of that Fund's total assets): AAA, 22.53%; AA, 2.41%; BBB, .41%; BB, 5.32%; B, 20.57%; CCC, 3.17%; D, .62%; unrated, 17.76%. If a bond was not rated by Standard & Poor's but was rated by Moody's, it is included in the comparable category. The Manager will not rely principally on the ratings assigned by rating services. Strategic Bond Fund is not obligated to dispose of securities whose issuers subsequently are in default or if the rating of such securities is reduced. Appendix B of this Prospectus describes these rating categories. Strategic Bond Fund may also invest in unrated securities which, in the opinion of the Manager, offer yields and risks comparable to those of securities which are rated. - International Securities. The Fund may invest in foreign government and foreign corporate debt securities (which may be denominated in U.S. dollars or in non-U.S. currencies) issued or guaranteed by foreign corporations, certain supranational entities (such as the World Bank) and foreign governments (including political subdivisions having taxing authority) or their agencies or instrumentalities. These investments may include (i) U.S. dollar-denominated debt obligations known as "Brady Bonds," which are issued for the exchange of existing commercial bank loans to foreign entities for new obligations that are generally collateralized by zero coupon Treasury securities having the same maturity, (ii) debt obligations such as bonds (including sinking fund and callable bonds), (iii) debentures and notes (including variable rate and floating rate instruments), and (iv) preferred stocks and zero coupon securities. Further information about investments in foreign securities is set forth below under "Other Investment Techniques and Strategies - Foreign Securities." - U.S. Government Securities. U.S. Government Securities are debt obligations issued by or guaranteed by the United States Government or one of its agencies or instrumentalities. Although U.S. Government Securities are considered among the most creditworthy of fixed-income investments and their yields are generally lower than the yields available from corporate debt securities, the values of U.S. Government Securities (and of fixed- income securities generally) will vary inversely to changes in prevailing interest rates. To compensate for the lower yields available on U.S. Government securities, Strategic Bond Fund will attempt to augment these yields by writing covered call options against them. See "Hedging," below. Certain of these obligations, including U.S. Treasury notes and bonds, and mortgage-backed securities guaranteed by the Government National Mortgage Association ("Ginnie Maes"), are supported by the full faith and credit of the United States. Certain other U.S. Government Securities, issued or guaranteed by Federal agencies or government- sponsored enterprises, are not supported by the full faith and credit of the United States. These latter securities may include obligations supported by the right of the issuer to borrow from the U.S. Treasury, such as obligations of Federal Home Loan Mortgage Corporation ("Freddie Macs"), and obligations supported by the credit of the instrumentality, such as Federal National Mortgage Association bonds ("Fannie Maes"). U.S. Government Securities in which the Fund may invest include zero coupon U.S. Treasury securities, mortgage-backed securities and money market instruments. Zero coupon Treasury securities are: (i) U.S. Treasury notes and bonds which have been stripped of their unmatured interest coupons and receipts; or (ii) certificates representing interests in such stripped debt obligations or coupons. Because a zero coupon security pays no interest to its holder during its life or for a substantial period of time, it usually trades at a deep discount from its face or par value and will be subject to greater fluctuations of market value in response to changing interest rates than debt obligations of comparable maturities which make current distributions of interest. Because the Fund accrues taxable income from these securities without receiving cash, the Fund may be required to sell portfolio securities in order to pay cash dividends or to meet redemptions. The Fund may invest up to 50% of its total assets at the time of purchase in zero coupon securities issued by either corporations or the U.S. Treasury. - Domestic Securities. The Fund's investments in domestic securities may include preferred stocks, participation interests and zero coupon securities. Domestic investments include fixed-income securities and dividend-paying common stocks issued by domestic corporations in any industry which may be denominated in U.S. dollars or non-U.S. currencies. The Fund's investments may include securities which represent participation interests in loans made to corporations (see "Participation Interests," below) and in pools of residential mortgage loans which may be guaranteed by agencies or instrumentalities of the U.S. Government (e.g. Ginnie Maes, Freddie Macs and Fannie Maes), including collateralized mortgage-backed obligations ("CMOs"), or which may not be guaranteed. Such securities differ from conventional debt securities which provide for periodic payment of interest in fixed amounts (usually semi-annually) with principal payments at maturity or specified call dates. Mortgage-backed securities provide monthly payments which are, in effect, a "pass-through" of the monthly interest and principal payments (including any prepayments) made by the individual borrowers on the pooled mortgage loans. The Fund's reinvestment of scheduled principal payments and unscheduled prepayments it receives may occur at lower rates than the original investment, thus reducing the yield of the Fund. CMOs in which the Fund may invest are securities issued by a U.S. Government instrumentality or private corporation that are collateralized by a portfolio of mortgages or mortgage-backed securities which may or may not be guaranteed by the U.S. Government. The issuer's obligation to make interest and principal payments is secured by the underlying portfolio of mortgages or mortgage- backed securities. Mortgage-backed securities may be less effective than debt obligations of similar maturity at maintaining yields during periods of declining interest rates. The Fund may also invest in CMOs that are "stripped." That means that the security is divided into two parts, one of which receives some or all of the principal payments (and is known as a "P/O") and the other which receives some or all of the interest (and is known as an "I/O"). P/Os and I/Os are generally referred to as "derivative investments," discussed further below. The yield to maturity on the class that receives only interest is extremely sensitive to the rate of payment of the principal on the underlying mortgages. Principal prepayments increase that sensitivity. Stripped securities that pay "interest only" are therefore subject to greater price volatility when interest rates change, and they have the additional risk that if the underlying mortgages are prepaid, the Fund will lose the anticipated cash flow from the interest on the prepaid mortgages. That risk is increased when general interest rates fall, and in times of rapidly falling interest rates, the Fund might receive back less than its investment. The value of "principal only" securities generally increases as interest rates decline and prepayment rates rise. The price of these securities is typically more volatile than that of coupon-bearing bonds of the same maturity. Stripped securities are generally purchased and sold by institutional investors through investment banking firms. At present, established trading markets have not yet developed for these securities. Therefore, some stripped securities may be deemed "illiquid." If the Fund holds illiquid stripped securities, the amount it can hold will be subject to the Fund's investment policy limiting investments in illiquid securities to 15% of the Fund's assets. The Fund may also enter into "forward roll" transactions with mortgage-backed securities. The Fund sells mortgage-backed securities it holds to banks or other buyers and simultaneously agrees to repurchase a similar security from that party at a later date at an agreed-upon price. Forward rolls are considered to be a borrowing. The Fund is required to place liquid assets in a segregated account with its custodian bank in an amount equal to its obligation under the forward roll. The main risk of this investment strategy is risk of default by the counterparty. The Fund may also invest in asset-backed securities, which are securities that represent fractional undivided interests in pools of consumer loans and trade receivables, similar in structure to the mortgage-backed securities in which the Fund may invest, described above. Payments of principal and interest are passed through to holders of asset- backed securities and are typically supported by some form of credit enhancement, such as a letter of credit, surety bond, limited guarantee by another entity or having a priority to certain of the borrower's other securities. The degree of credit enhancement varies, and generally applies to only a fraction of the asset-backed security's par value until exhausted. Risk Factors. The securities in which High Income Fund and Strategic Bond Fund principally invest are considered speculative and involve greater risk than lower yielding, higher rated fixed-income securities, while providing higher yields than such securities. Lower rated securities may be less liquid, and significant losses could be experienced if a substantial number of other holders of such securities decide to sell at the same time. Other risks may involve the default of the issuer or price changes in the issuer's securities due to changes in the issuer's financial strength or economic conditions. Issuers of lower rated or unrated securities are generally not as financially secure or creditworthy as issuers of higher-rated securities. These Funds are not obligated to dispose of securities when issuers are in default or if the rating of the security is reduced. These risks are discussed in more detail in the Statement of Additional Information. Investment Objectives and Policies - Capital Appreciation Fund, Growth Fund, Multiple Strategies Fund, Growth & Income Fund and Global Securities Fund. Capital Appreciation Fund. In seeking its objective of capital appreciation, Capital Appreciation Fund will emphasize investments in securities of "growth-type" companies. Such companies are believed to have relatively favorable long-term prospects for increasing demand for their goods or services, or to be developing new products, services or markets, and normally retain a relatively larger portion of their earnings for research, development and investment in capital assets. "Growth-type" companies may also include companies developing applications for recent scientific advances. Capital Appreciation Fund may also invest in cyclical industries and in "special situations" that the Manager believes present opportunities for capital growth. "Special situations" are anticipated acquisitions, mergers or other unusual developments which, in the opinion of the Manager, will increase the value of an issuer's securities, regardless of general business conditions or market movements. An additional risk is present in this type of investment since the price of the security may be expected to decline if the anticipated development fails to occur. Growth Fund. In seeking its objective of capital appreciation, Growth Fund will emphasize investments in securities of well-known and established companies. Such securities generally have a history of earnings and dividends and are issued by seasoned companies (having an operating history of at least five years, including predecessors). Current income is a secondary consideration in the selection of Growth Fund's portfolio securities. Multiple Strategies Fund. The objective of Multiple Strategies Fund is to seek a high total investment return, which includes current income as well as capital appreciation in the value of its shares. In seeking that objective, Multiple Strategies Fund may invest in equity securities (including common stocks, preferred stocks, convertible securities and warrants), debt securities (including bonds, participation interests, asset-backed securities, private-label mortgage-backed securities and CMOs, zero coupon securities and U.S. government obligations, described above under "Investment Objectives and Policies - High Income Fund, Bond Fund and Strategic Bond Fund" and under "Participation Interests" below) and cash and cash equivalents (identified above as the types of instruments in which the Money Fund may invest). The composition of Multiple Strategies Fund's portfolio among the different types of permitted investments will vary from time to time based upon the Manager's evaluation of economic and market trends and perceived relative total anticipated return from such types of securities. Accordingly, there is neither a minimum nor a maximum percentage of Multiple Strategies Fund's assets that may, at any given time, be invested in any of the types of investments identified above. In the event future economic or financial conditions adversely affect equity securities, it is expected that Multiple Strategies Fund would assume a defensive position by investing in debt securities (with an emphasis on securities maturing in one year or less from the date of purchase), or cash and cash equivalents. Growth & Income Fund. The objective of Growth & Income Fund is to seek a high total return, which includes growth in the value of its shares as well as current income from equity and debt securities. In seeking that objective, Growth & Income Fund may invest in equity and debt securities. Its equity investments will include common stocks, preferred stocks, convertible securities and warrants. Its debt securities will include bonds, participation interests, asset-backed securities, private-label mortgage-backed securities and CMOs, zero coupon securities and U.S. government obligations. From time to time Growth & Income Fund may focus on small to medium capitalization issuers, the securities of which may be subject to greater price volatility than those of larger capitalized issuers. The composition of Growth & Income Fund's portfolio among equity and fixed-income investments will vary from time to time based upon the Manager's evaluation of economic and market trends and perceived relative total anticipated return from such types of investments. Accordingly, there is neither a minimum nor a maximum percentage of Growth & Income Fund's assets that may, at any given time, be invested in either type of investment. In the event future economic or financial conditions adversely affect equity securities, it is expected that Growth & Income Fund would assume a defensive position by investing in debt securities (with an emphasis on securities maturing in one year or less from the date of purchase). Global Securities Fund. The objective of Global Securities Fund is to seek long-term capital appreciation. Current income is not an objective. In seeking its objective, the Fund will invest a substantial portion of its invested assets in securities of foreign issuers, "growth-type" companies (those which, in the opinion of the Manager, have relatively favorable long-term prospects for increasing demand or which develop new products and retain a significant part of earnings for research and development), cyclical industries (e.g. base metals, paper and chemicals) and special investment situations which are considered to have appreciation possibilities (e.g., private placements of start-up companies). The Fund may invest without limit in "foreign securities" (as defined below in "Other Investment Techniques and Strategies - Foreign Securities") and thus the relative amount of such investments will change from time to time. It is currently anticipated that Global Securities Fund may invest as much as 80% or more of its total assets in foreign securities. Under normal market conditions, the Fund will invest its total assets in securities of issuers traded in markets of at least three countries (which may include the United States). See "Other Investment Techniques and Strategies - Foreign Securities," below, for further discussion as to the possible rewards and risks of investing in foreign securities and as to additional diversification requirements for the Fund's foreign investments. - Can the Funds' Investment Objectives and Policies Change? The Funds have investment objectives, described above, as well as investment policies each follows to try to achieve its objectives. Additionally, the Funds use certain investment techniques and strategies in carrying out those investment policies. The Funds' investment policies and techniques are not "fundamental" unless this Prospectus or the Statement of Additional Information says that a particular policy is "fundamental." Each Fund's investment objectives are fundamental policies. The Trust's Board of Trustees may change non-fundamental policies without shareholder approval, although significant changes will be described in amendments to this Prospectus. Fundamental policies are those that cannot be changed without the approval of a "majority" of the Fund's outstanding voting shares. The term "majority" is defined in the Investment Company Act to be a particular percentage of outstanding voting shares (and this term is explained in the Statement of Additional Information). Other Investment Techniques and Strategies. Some of the Funds can also use the investment techniques and strategies described below. These techniques involve certain risks. The Statement of Additional Information contains more information about these practices, including limitations on their use that are designed to reduce some of the risks. - Special Risks - Borrowing for Leverage. From time to time, Capital Appreciation Fund, Strategic Bond Fund, Growth Fund, Multiple Strategies Fund, Growth & Income Fund and Global Securities Fund may borrow money from banks to buy securities. These Funds will borrow only if they can do so without putting up assets as security for a loan. This is a speculative investment method known as "leverage." This investing technique may subject the Fund to greater risks and costs than funds that do not borrow. These risks may include the possibility that a Fund's net asset value per share will fluctuate more than funds that don't borrow, since a Fund pays interest on borrowings and interest expense affects a Fund's share price and yield. Growth Fund may borrow only up to 5% of the value of its total assets and Global Securities Fund may borrow up to 10% of the value of its total assets. Global Securities Fund will not borrow, if as a result of such borrowing more than 25% of its total assets would consist of investments in when-issued or delayed delivery securities or borrowed funds. Borrowing for Leverage is subject to regulatory limits described in more detail in "Borrowing" in the Statement of Additional Information. Pursuant to an undertaking by Capital Appreciation Fund, Strategic Bond Fund, Multiple Strategies Fund, Growth & Income Fund and Global Securities Fund, borrowing by each such Fund is limited to 25% of the value of its net assets, which is further limited to 10% if the borrowing is for a purpose other than to facilitate redemptions. Neither percentage limitation is a fundamental policy. - Investments In Small, Unseasoned Companies. Money Fund, Capital Appreciation Fund, Multiple Strategies Fund, Growth & Income Fund, Growth Fund, Global Securities Fund and Strategic Bond Fund may each invest in securities of small, unseasoned companies. These are companies that have been in operation for less than three years, counting the operations of any predecessors. Securities of these companies may have limited liquidity (which means that the Fund may have difficulty selling them at an acceptable price when it wants to) and the prices of these securities may be volatile. It is not currently intended that investments in securities of companies (including predecessors) that have operated less than three years will exceed 5% of the net assets of either Growth Fund or Multiple Strategies Fund. Money Fund, Capital Appreciation Fund, Growth & Income Fund, Global Securities Fund and Strategic Bond Fund are not subject to this restriction. - Participation Interests. Strategic Bond Fund, Global Securities Fund, High Income Fund and Multiple Strategies Fund and Growth & Income Fund may acquire participation interests in U.S. dollar-denominated loans that are made to U.S. or foreign companies (the "borrower"). They may be interests in, or assignments of, the loan, and are acquired from the banks or brokers that have made the loan or are members of the lending syndicate. No more than 5% of a Fund's net assets can be invested in participation interests of the same borrower. The Manager has set certain creditworthiness standards for issuers of loan participations, and monitors their creditworthiness. The value of loan participation interests primarily depends upon the creditworthiness of the borrower, and its ability to pay interest and principal. Borrowers may have difficulty making payments. If a borrower fails to make scheduled interest or principal payments, the Fund could experience a decline in the net asset value of its shares. Some borrowers may have senior securities rated as low as "C" by Moody's or "D" by Standard & Poor's, but may be deemed acceptable credit risks. Participation interests are subject to each Fund's limitations on investments in illiquid securities. See "Illiquid and Restricted Securities" below. - Foreign Securities. Each Fund may purchase "foreign securities" that is, securities of companies organized under the laws of countries other than the United States that are traded on foreign securities exchanges or in the foreign over-the-counter markets. Securities of foreign issuers that are represented by American Depository Receipts ("ADRs"), or that are listed on a U.S. securities exchange or are traded in the United States over-the-counter markets are not considered "foreign securities" for this purpose because they are not subject to many of the special considerations and risks (discussed below and in the Statement of Additional Information) that apply to foreign securities traded and held abroad. If a Fund's securities are held abroad, the countries in which such securities may be held and the sub-custodians holding them must be approved by the Fund's Board of Trustees under applicable SEC rules. Each Fund may also invest in debt obligations issued or guaranteed by foreign corporations, certain supranational entities (such as the World Bank) and foreign governments (including political subdivisions having taxing authority) or their agencies or instrumentalities, subject to the investment policies described above. Foreign securities which the Funds may purchase may be denominated in U.S. dollars or in non-U.S. currencies. The Funds may convert U.S. dollars into foreign currency, but only to effect securities transactions and not to hold such currency as an investment, other than in hedging transactions (see "Hedging" below). It is currently intended that each Fund (other than Global Securities Fund, Multiple Strategies Fund, Growth & Income Fund or Strategic Bond Fund) will invest no more than 25% of its total assets in foreign securities or in government securities of any foreign country or in obligations of foreign banks. Multiple Strategies Fund will invest no more than 35% of its total assets in foreign securities or in government securities of any foreign country or in obligations of foreign banks. Global Securities Fund, Growth & Income Fund and Strategic Bond Fund have no restrictions on the amount of their assets that may be invested in foreign securities. Investments in securities of issuers in non- industrialized countries generally involve more risk and may be considered highly speculative. The Funds have undertaken to comply with the foreign country diversification guidelines of Section 10506 of the California Insurance Code, as follows: Whenever a Fund's investment in foreign securities exceeds 25% of its net assets, it will invest its assets in securities of issuers located in a minimum of two different foreign countries; this minimum is increased to three foreign countries if foreign investments comprise 40% or more of a Fund's net assets, to four if 60% or more and to five if 80% or more. In addition, no such Fund will have more than 20% of its net assets invested in securities of issuers located in any one foreign country; that limit is increased to 35% for Australia, Canada, France, Japan, the United Kingdom or Germany. The percentage of each Fund's assets that will be allocated to foreign securities will vary depending on the relative yields of foreign and U.S. securities, the economies of foreign countries, the condition of their financial markets, the interest rate climate of such countries, and the relationship of such countries' currencies to the U.S. dollar. These factors are judged on the basis of fundamental economic criteria (e.g., relative inflation levels and trends, growth rate forecasts, balance of payments status, and economic policies) as well as technical and political data. Subsequent foreign currency losses may result in a Fund having previously distributed more income in a particular period than was available from investment income, which could result in a return of capital to shareholders. Each such Fund's portfolio of foreign securities may include those of a number of foreign countries or, depending upon market conditions and subject to the above diversification requirements those of a single country. In summary, foreign securities markets may be less liquid and more volatile than the markets in the U.S. Risks of foreign securities investing may include foreign withholding taxation, changes in currency rates or currency blockage, currency exchange costs, difficulty in obtaining and enforcing judgments against foreign issuers, relatively greater brokerage and custodial costs, risk of expropriation or nationalization of assets, less publicly available information, and differences between domestic and foreign legal, auditing, brokerage and economic standards. See "Investment Objectives and Policies - Foreign Securities" in the Statement of Additional Information for further details. - Warrants and Rights. Warrants basically are options to purchase stock at set prices that are valid for a limited period of time. Rights are options to purchase securities, normally granted to current holders by the issuer. Each of the Funds (except Money Fund) may invest up to 5% of its total assets in warrants and rights. That 5% does not apply to warrants and rights that have been acquired as part of units with other securities or that were attached to other securities. No more than 2% of each such Fund's total assets may be invested in warrants that are not listed on either the New York or American Stock Exchanges. For further details about these investments, see "Warrants and Rights" in the Statement of Additional Information. - Repurchase Agreements. Each Fund may acquire securities that are subject to repurchase agreements to generate income while providing liquidity. In a repurchase transaction, the Fund buys a security and simultaneously sells it to the vendor for delivery at a future date. Repurchase agreements must be fully collateralized. However, if the vendor fails to pay the resale price on the delivery date, the Fund may incur costs in disposing of the collateral and may experience losses if there is any delay in its ability to do so. No Fund will enter into a repurchase agreement that causes more than 15% of its net assets (10% of net assets for Money Fund) to be subject to repurchase agreements having a maturity beyond seven days. There is no limit on the amount of a Fund's net assets that may be subject to repurchase agreements of seven days or less. - Illiquid and Restricted Securities. Under the policies and procedures established by the Board of Trustees, the Manager determines the liquidity of a Fund's investments. Investments may be illiquid because of the absence of a trading market, making it difficult to value them or dispose of them promptly at an acceptable price. A restricted security is one that has a contractual restriction on resale or cannot be sold publicly until it is registered under the Securities Act of 1933. No Fund will invest more than 15% of its net assets in illiquid or restricted securities; no Fund presently intends to invest more than 10% of its net assets in illiquid or restricted securities. This policy applies to participation interests, bank time deposits, master demand notes and repurchase transactions maturing in more than seven days, over- the-counter ("OTC") options held by any Fund and that portion of assets used to cover such OTC options (High Income, Global Securities and Strategic Bond Funds); it does not apply to certain restricted securities that are eligible for resale to qualified institutional purchasers. - Loans of Portfolio Securities. To attempt to increase its income, each Fund may lend its portfolio securities to brokers, dealers and other financial institutions. These loans are limited to 25% of the Fund's net assets and are subject to other conditions described in the Statement of Additional Information. The Funds presently do not intend to lend portfolio securities, but if any Fund does, the value of securities loaned is not expected to exceed 5% of the value of that Fund's total assets. - "When-Issued" or Delayed Delivery Transactions. Each Fund may purchase securities on a "when-issued" basis and may purchase or sell securities on a "delayed delivery" basis. These terms refer to securities that have been created and for which a market exists, but which are not available for immediate delivery. There may be a risk of loss to a Fund if the value of the security changes prior to the settlement date. - Hedging. As described below, the Funds (other than Money Fund) may purchase and sell certain kinds of futures contracts, put and call options, forward contracts, and options on futures and broadly-based stock or bond indices, or enter into interest rate swap agreements. These are all referred to as "hedging instruments." The Funds do not use hedging instruments for speculative purposes, and have limits on the use of them, described below. The hedging instruments the Funds may use are described below and in greater detail in "Other Investment Techniques and Strategies" in the Statement of Additional Information. The Funds may buy and sell options, futures and forward contracts for a number of purposes. They may do so to try to manage their exposure to the possibility that the prices of their portfolio securities may decline, or to establish a position in the securities market as a temporary substitute for purchasing individual securities. High Income Fund, Bond Fund, Multiple Strategies Fund, Growth & Income Fund and Strategic Bond Fund may do so to try to manage their exposure to changing interest rates. Some of these strategies, such as selling futures, buying puts and writing covered calls, hedge the Funds' portfolio against price fluctuations. Other hedging strategies, such as buying futures and call options, tend to increase the Funds' exposure to the securities market. Forward contracts are used to try to manage foreign currency risks on Funds' foreign investments. Foreign currency options are used to try to protect against declines in the dollar value of foreign securities the Funds own, or to protect against an increase in the dollar cost of buying foreign securities. Writing covered call options may also provide income to the Funds for liquidity purposes or to raise cash to distribute to shareholders. - Futures. Global Securities Fund, Capital Appreciation Fund, Growth Fund, Multiple Strategies Fund, Growth & Income Fund and Strategic Bond Fund may buy and sell futures contracts that relate to broadly-based stock indices (these are referred to as Stock Index Futures). The latter three Funds and Global Securities Fund, Bond Fund and High Income Fund may buy and sell futures contracts that relate to interest rates (these are referred to as Interest Rate Futures). These types of Futures are described in "Hedging" in the Statement of Additional Information. - Put and Call Options. The Funds may buy and sell certain kinds of put options (puts) and call options (calls). The Funds may buy calls only on securities, broadly-based stock and bond indices, foreign currencies and Futures that the Fund is permitted to buy and sell (as explained above) or to terminate their obligation on a call that the Fund previously wrote. The Funds may write (that is, sell) covered call options on up to 100% of each Fund's assets. When a Fund writes a call, it receives cash (called a premium). The call gives the buyer the ability to buy the investment on which the call was written from that Fund at the call price during the period in which the call may be exercised. If the value of the investment does not rise above the call price, it is likely that the call will lapse without being exercised, while the Fund keeps the cash premium (and the investment). The Funds may purchase put options. Buying a put on an investment gives that Fund the right to sell the investment at a set price to a seller of a put on that investment. The Funds can buy only those puts that relate to (1) securities (whether or not that Fund owns such securities), (2) Futures that the Fund is permitted to buy and sell (as explained above), (3) broadly-based stock or bond indices or (4) foreign currencies. A Fund can buy a put on a Future whether or not that Fund owns the particular Future in its portfolio. A Fund may not sell a put other than a put that it previously purchased. The Funds may buy and sell puts and calls only if certain conditions are met: (1) calls the Funds buy or sell must be listed on a securities or commodities exchange, or quoted on the Automated Quotation System of the National Association of Securities Dealers, Inc. ("NASDAQ"); (2) in the case of puts and calls on foreign currency, they must be traded on a securities or commodities exchange, or in the over-the-counter market, or quoted by recognized dealers in those options; (3) none of the Funds will write puts if, as a result, more than 50% of its net assets would be required to be segregated liquid assets; (4) each call the Funds write must be "covered" while it is outstanding: that means a Fund must own the investment on which the call was written or it must own other securities that are acceptable for the escrow arrangements required for calls; (5) a Fund may write calls on Futures contracts it owns, but these calls must be covered by securities or other liquid assets the Fund owns and segregates to enable it to satisfy its obligations if the call is exercised; (6) a call or put option may not be purchased if the value of all of a Fund's put and call options would exceed 5% of that Fund's total assets. If a call written by a Fund is exercised, the Fund forgoes any possible profit from an increase in the market price of the underlying security over the exercise price less the commissions paid on the sale. In addition, the Fund could experience capital losses which might cause previously distributed short-term capital gains to be recharacterized as non-taxable return of capital to shareholders. - Forward Contracts. Forward contracts are foreign currency exchange contracts. They are used to buy or sell foreign currency for future delivery at a fixed price. The Funds (other than Money Fund) use them to "lock-in" the U.S. dollar price of a security denominated in a foreign currency that a Fund has bought or sold, or to protect against losses from changes in the relative values of the U.S. dollar and a foreign currency. Such Funds may also use "cross hedging," where a Fund hedges against changes in currencies other than the currency in which a security it holds is denominated. - Interest Rate Swaps. Strategic Bond Fund, High Income Fund and Bond Fund can also enter into interest rate swap transactions. In an interest rate swap, a Fund and another party exchange their right to receive or their obligation to pay interest on a security. For example, they may swap a right to receive floating rate payments for fixed rate payments. A Fund enters into swaps only on securities it owns. Each of these Funds may not enter into swaps with respect to more than 50% of its total assets. Also, each Fund will segregate liquid assets (such as cash or U.S. Government securities) to cover any amounts it could owe under swaps that exceed the amounts it is entitled to receive, and it will adjust that amount daily, as needed. Hedging instruments can be volatile investments and may involve special risks. The use of hedging instruments requires special skills and knowledge of investment techniques that are different than what is required for normal portfolio management. If the Manager uses a hedging instrument at the wrong time or judges market conditions incorrectly, hedging strategies may reduce that Fund's return. A Fund could also experience losses if the prices of its futures and options positions were not correlated with its other investments or if it could not close out a position because of an illiquid market for the future or option. Options trading involves the payment of premiums and has special tax effects on the Funds. There are also special risks in particular hedging strategies. If a covered call written by a Fund is exercised on a security that has increased in value, that Fund will be required to sell the security at the call price and will not be able to realize any profit if the security has increased in value above the call price. The use of forward contracts may reduce the gain that would otherwise result from a change in the relationship between the U.S. dollar and a foreign currency. To limit its exposure in foreign currency exchange contracts, each Fund limits its exposure to the amount of its assets denominated in the foreign currency. Interest rate swaps are subject to credit risks (if the other party fails to meet its obligations) and also to interest rate risks. The Funds could be obligated to pay more under their swap agreements they receive under them, as a result of interest rate changes. These risks are described in greater detail in the Statement of Additional Information. - Derivative Investments. Each Fund (other than Money Fund) can invest in a number of different kinds of "derivative investments." Such Funds may use some types of derivatives for hedging purposes, and may invest in others because they offer the potential for increased income and principal value. In general, a "derivative investment" is a specially- designed investment whose performance is linked to the performance of another investment or security, such as an option, future, index or currency. In the broadest sense, derivative investments include exchange- traded options and futures contracts (please refer to "Hedging"). One risk of investing in derivative investments is that the company issuing the instrument might not pay the amount due on the maturity of the instrument. There is also the risk that the underlying investment or security might not perform the way the Manager expected it to perform. The performance of derivative investments may also be influenced by interest rate changes in the U.S. and abroad. All of these risks can mean that a Fund will realize less income than expected from its investments, or that it can lose part of the value of its investments, which will affect that Fund's share price. Certain derivative investments held by the Funds may trade in the over-the-counter markets and may be illiquid. If that is the case, the Funds' investment in them will be limited, as discussed in "Illiquid and Restricted Securities." Another type of derivative the Funds (other than Money Fund) may invest in is an "index-linked" note. On the maturity of this type of debt security, payment is made based on the performance of an underlying index, rather than based on a set principal amount for a typical note. Another derivative investment such Funds may invest in are currency-indexed securities. These are typically short-term or intermediate-term debt securities. Their value at maturity or the interest rates at which they pay income are determined by the change in value of the U.S. dollar against one or more foreign currencies or an index. In some cases, these securities may pay an amount at maturity based on a multiple of the amount of the relative currency movements. This variety of index security offers the potential for greater income but at a greater risk of loss. Other derivative investments the Funds (other than Money Fund) may invest in include "debt exchangeable for common stock" of an issuer or "equity-linked debt securities" of an issuer. At maturity, the debt security is exchanged for common stock of the issuer or is payable in an amount based on the price of the issuer's common stock at the time of maturity. In either case there is a risk that the amount payable at maturity will be less than the principal amount of the debt (because the price of the issuer's common stock is not as high as was expected). - Portfolio Turnover. A change in the securities held by the Fund is known as "portfolio turnover." The Funds may engage frequently in short-term trading to try to achieve their objectives. High turnover and short-term trading involve correspondingly greater commission expenses and transaction costs for Capital Appreciation Fund, Growth Fund, Multiple Strategies Fund, Growth & Income Fund and Global Securities Fund and to a lesser extent, higher transaction costs for Money Fund, Bond Fund, Strategic Bond Fund and High Income Fund. The "Financial Highlights," above show the portfolio turnover for the past fiscal years for each Fund except Growth & Income Fund, which is not expected to exceed a portfolio turnover rate of 200% in the current fiscal year. If any Fund derives 30% or more of its gross income from the sale of securities held less than three months, it may fail to qualify under the tax laws as a regulated investment company (see "Dividends, Capital Gains and Taxes," below). - Short Sales Against-the-Box. In a short sale, the seller does not own the security that is sold, but normally borrows the security to fulfill its delivery obligation. The seller later buys the security to repay the loan, in the expectation that the price of the security will be lower when the purchase is made, resulting in a gain. The Funds may not sell securities short except that each Fund (except Money Fund) may sell securities short in collateralized transactions referred to as "short sales against-the-box." No more than 15% of any Fund's net assets will be held as collateral for such short sales at any one time. Other Investment Restrictions Each of the Funds has certain investment restrictions which, together with its investment objective, are fundamental policies. Under some of those restrictions, each Fund cannot: (1) with respect to 75% of its total assets, invest in securities (except those of the U.S. Government or its agencies or instrumentalities) of any issuer if immediately thereafter, either (a) more than 5% of that Fund's total assets would be invested in securities of that issuer, or (b) that Fund would then own more than 10% of that issuer's voting securities or 10% in principal amount of the outstanding debt securities of that issuer (the latter limitation on debt securities does not apply to Strategic Bond Fund); (2) lend money except in connection with the acquisition of debt securities which a Fund's investment policies and restrictions permit it to purchase; the Funds may also make loans of portfolio securities (see "Loans of Portfolio Securities"); (3) pledge, mortgage or hypothecate any assets to secure a debt; the escrow arrangements which are involved in options trading are not considered to involve such a mortgage, hypothecation or pledge; (4) concentrate investments in any particular industry, other than securities of the U.S. Government or its agencies or instrumentalities (Money Fund, Bond Fund and High Income Fund, only); therefore these Funds will not purchase the securities of issuers primarily engaged in the same industry if more than 25% of the total value of that Fund's assets would (in the absence of special circumstances) consist of securities of companies in a single industry; however, there is no limitation as to concentration of investments by Money Fund in obligations issued by domestic banks, foreign branches of domestic banks (if guaranteed by the domestic parent), savings and loan associations or in obligations issued by the federal government and its agencies and instrumentalities; and (5) deviate from the percentage requirements and other restrictions listed under "Warrants and Rights," and the first paragraph under "Special Risks-Borrowing for Leverage." None of the percentage limitations and restrictions described above and in the Statement of Additional Information for the Funds with respect to writing covered calls, hedging, short sales and derivatives is a fundamental policy. All of the percentage restrictions described above and elsewhere in this Prospectus, other than those described under "Other Investment Techniques and Strategies--Special Risks-Borrowing for Leverage," apply only at the time a Fund purchases a security. A Fund need not dispose of a security merely because the size of the Fund's assets has changed or the security has increased in value relative to the size of the Fund. Money Fund has separately undertaken to exclude savings and loan associations from the exception to the concentration limitation set forth under investment restriction (4), above. There are other fundamental policies discussed in the Statement of Additional Information. The Trustees of the Trust are required to monitor events to identify any irreconcilable conflicts which may arise between the variable life insurance policies and variable annuity contracts that invest in the Funds. Should any conflict arise which ultimately requires that any substantial amount of assets be withdrawn from any Fund, its operating expenses could increase. How the Funds are Managed Organization and History. The Trust was organized in 1984 as a Massachusetts business trust. The Trust is an open-end, diversified management investment company, with an unlimited number of authorized shares of beneficial interest. It consists of nine separate Funds - Money Fund, Bond Fund and Growth Fund, all organized in 1984, High Income Fund, Capital Appreciation Fund and Multiple Strategies Fund, all organized in 1986, Global Securities Fund, organized in 1990, Strategic Bond Fund, organized in 1993 and Growth & Income Fund, which is expected to commence operations in 1995. The Trust is governed by a Board of Trustees, which is responsible for protecting the interests of shareholders under Massachusetts law. The Trustees meet periodically throughout the year to oversee the Funds' activities, review performance, and review the actions of the Manager. "Trustees and Officers of the Trust" in the Statement of Additional Information names the Trustees and provides more information about them and the officers of the Trust. Although the Trust is not required by law to hold annual meetings, it may hold shareholder meetings from time to time on important matters, and shareholders have the right to call a meeting to remove a Trustee or to take other action described in the Trust's Declaration of Trust. The Manager and Its Affiliates. The Funds are managed by the Manager, Oppenheimer Management Corporation, which is responsible for selecting the Funds' investments and handles its day-to-day business. The Manager carries out its duties, subject to the policies established by the Board of Trustees, under Investment Advisory Agreements for each Fund which state the Manager's responsibilities. The Agreements set forth the fees paid by each Fund to the Manager and describe the expenses that each Fund is responsible to pay to conduct its business. The Manager has operated as an investment adviser since 1959. The Manager (including a subsidiary) currently manages investment companies, including other OppenheimerFunds, with assets of more than $29 billion as of December 31, 1994, and with more than 2.4 million shareholder accounts. The Manager is owned by Oppenheimer Acquisition Corp., a holding company that is owned in part by senior officers of the Manager and controlled by Massachusetts Mutual Life Insurance Company, a mutual life insurance company. - Portfolio Managers. The Portfolio Manager of High Income Fund, Bond Fund, Multiple Strategies Fund and Strategic Bond Fund is David P. Negri, joined by Richard H. Rubinstein for Multiple Strategies Fund and by Arthur P. Steinmetz for Strategic Bond Fund. They are the persons principally responsible for the day-to-day management of those Funds since July 1989, January 1990, July 1989 (April 1991 for Mr. Rubinstein) and May 1993, respectively. During the past five years, Messrs. Steinmetz and Negri have also served as officers of other OppenheimerFunds. During the past five years, Mr. Rubinstein has served as an officer of other OppenheimerFunds and was formerly Vice President and Portfolio Manager/Security Analyst for Oppenheimer Capital Corp., an investment adviser. The Portfolio Manager of Global Securities Fund is George Evans. He has been the person principally responsible for the day-to-day management of that Fund since February, 1991. During the past five years, he has also served as an Associate Portfolio Manager for other OppenheimerFunds and formerly served as an international equities portfolio manager/analyst with Brown Brothers Harriman & Co. The Portfolio Manager of the Money Fund is Arthur Zimmer. Since October 1990, he has been the person principally responsible for the day-to-day management of that Fund's portfolio. During the past five years, he has also served as an officer of other OppenheimerFunds and formerly served as Vice President of Hanifen Imhoff Management Company (mutual fund investment adviser). The Portfolio Manager of Growth Fund is Jane Putnam. She has been the person principally responsible for the day-to-day management of that Fund's portfolio since May 1994. During the past five years, Ms. Putnam has also served as an Associate Portfolio Manager for other OppenheimerFunds and formerly served as a portfolio manager and equity research analyst for Chemical Bank. The Portfolio Manager of Capital Appreciation Fund is Paul LaRocco. He has been the person principally responsible for the day-to-day management of that Fund's portfolio since January 1994. During the past five years, he has also served as an Associate Portfolio Manager for other OppenheimerFunds and formerly served as a securities analyst with Columbus Circle Investors, prior to which he was an investment analyst for Chicago Title & Trust Co. The Portfolio Manager of Growth & Income Fund is John Wallace. He will be the person principally responsible for the day-to-day management of that Fund after its inception in 1995. He is a Vice President of the Manager and an officer of other OppenheimerFunds. During the past five years, he has also been a Securities Analyst and Assistant Portfolio Manager for the Manager. Messrs. Negri, Evans, Zimmer and Rubinstein are Vice Presidents of the Manager, Mr. Steinmetz is a Senior Vice President of the Manager, and Ms. Putnam and Mr. LaRocco are Assistant Vice Presidents of the Manager. Each of the Portfolio Managers named above are also Vice Presidents of the Trust. - Fees and Expenses. The monthly management fee payable to the Manager is computed separately on the net assets of each Fund as of the close of business each day. The management fee rates that became effective September 1, 1994 are as follows: (i) for Money Fund: 0.450% of the first $500 million of net assets, 0.425% of the next $500 million, 0.400% of the next $500 million, and 0.375% of net assets over $1.5 billion; (ii) for Capital Appreciation Fund, Growth Fund, Multiple Strategies Fund, Growth & Income Fund and Global Securities Fund: 0.75% of the first $200 million of net assets, 0.72% of the next $200 million, 0.69% of the next $200 million, 0.66% of the next $200 million, and 0.60% of net assets over $800 million; and (iii) for High Income Fund, Bond Fund and Strategic Bond Fund: 0.75% of the first $200 million of net assets, 0.72% of the next $200 million, 0.69% of the next $200 million, 0.66% of the next $200 million, 0.60% of the next $200 million, and 0.50% of net assets over $1 billion. The management fee rates in effect prior to September 1, 1994 are contained in note 8 to the Funds' financial statements included in the Statement of Additional Information. During the fiscal year ended December 31, 1994, the management fee (computed on an annualized basis as a percentage of the net assets of all the Funds as of the close of business each day) and the total operating expenses as a percentage of average net assets of each Fund, when restated to reflect the current management fee rates described above and the current limitation on expenses described in the Statement of Additional Information, were as follows:
Total Management Operating Fees Expenses(1) - -------------------------------------------------------------------------------------------- Money Fund .45% .50% High Income Fund .75% .81% Bond Fund .75% .81% Capital Appreciation Fund .75% .80% Growth Fund .75% .81% Multiple Strategies Fund .74% .79% Global Securities Fund .75% .95% Strategic Bond Fund .75% .93% Growth & Income Fund(2) .75% .93% ____________________ (1) This table does not reflect expenses that apply at the separate account level or to related insurance products. (2) Because Growth & Income Fund is a new fund and has not completed a full fiscal year, the expenses shown above are based on amounts estimated to be payable in the current fiscal year, assuming that Growth & Income Fund will have average net assets of $15 million at the end of the current fiscal year.
The Funds pay expenses related to their daily operations, such as custodian fees, Trustees' fees, transfer agency fees, legal and auditing costs. Those expenses are paid out of the Funds' assets and are not paid directly by shareholders. However, those expenses reduce the net asset value of shares, and therefore are indirectly borne by shareholders through their investment. More information about the investment advisory agreement is contained in the Statement of Additional Information. There is also information about the Funds' brokerage policies and practices in "Brokerage Policies of the Funds" in the Statement of Additional Information. That section discusses how brokers and dealers are selected for the Funds' portfolio transactions. When deciding which brokers to use, the Manager is permitted by the investment advisory agreements to consider whether brokers have sold shares of the Funds or any other funds for which the Manager serves as investment adviser. - Shareholder Inquiries. Inquiries by policyowners for Account information are to be directed to the insurance company issuing the Account at the address or telephone number shown in the accompanying Account Prospectus. Performance of the Funds Explanation of Performance Terminology. Money Fund uses the terms "yield" to illustrate its performance. High Income Fund, Bond Fund and Strategic Bond Fund use the terms "yield," "total return," and "average annual total return" to illustrate performance. All the Funds, except Money Fund, use the terms "average annual total return" and "total return" to illustrate their performance. This performance information may be useful to help you see how well your investment has done and to compare it to other funds or market indices, as we have done below. It is important to understand that the Funds' total returns and yields represent past performance and should not be considered to be predictions of future returns or performance. This performance data is described below, but more detailed information about how total returns and yields are calculated is contained in the Statement of Additional Information, which also contains information about other ways to measure and compare the Funds' performance. Each Fund's investment performance will vary over time, depending on market conditions, the composition of the portfolio and expenses. - Yields. Money Fund's "yield" is the income generated by an investment in that Fund over a seven-day period, which is then "annualized." In annualizing, the amount of income generated by the investment during that seven days is assumed to be generated each week over a 52-week period, and is shown as a percentage of the investment. The compounded "effective yield" is calculated similarly, but the annualized income earned by an investment in Money Fund is assumed to be reinvested. The compounded effective yield will therefore be slightly higher than the yield because of the effect of the assumed reinvestment. Yield for High Income Fund, Strategic Bond Fund or Bond Fund will be computed in a standardized manner for mutual funds, by dividing that Fund's net investment income per share earned during a 30-day base period by the maximum offering price (equal to the net asset value) per share on the last day of the period. This yield calculation is compounded on a semi-annual basis, and multiplied by 2 to provide an annualized yield. The Statement of Additional Information describes a dividend yield and a distribution return that may also be quoted for these Funds. - Total Returns. There are different types of total returns used to measure each Fund's performance. Total return is the change in value of a hypothetical investment in the Fund over a given period, assuming that all dividends and capital gains distributions are reinvested in additional shares. The cumulative total return measures the change in value over the entire period (for example, ten years). An average annual total return shows the average rate of return for each year in a period that would produce the cumulative total return over the entire period. However, average annual total returns do not show the Funds' actual year-by-year performance. How Have the Funds Performed? Below is a discussion by the Manager of the Funds' performance during their last fiscal year ended December 31, 1994, followed by a graphical comparison of each Fund's performance, except Money Fund and Growth & Income Fund (which commenced operations after that date) to an appropriate broad-based market index. - Management's Discussion of Performance. During the Funds' fiscal year ended December 31, 1994, the Manager emphasized the following investment strategies and techniques. For High Income Fund, bonds issued by U.S. companies that derive a large percentage of their earnings from Europe were emphasized, together with bonds positioned to benefit from rising commodity prices, notably those issued by companies in the chemicals, industrial metals and forest product sectors. For Bond Fund, intermediate and long-term U.S. government bonds were emphasized. For Capital Appreciation Fund, stocks of well-managed, innovative companies in sectors with high potential were emphasized, including technology, health care and consumer cyclicals, such as specialty retailing. For Growth Fund, consumer and industrial company stocks were emphasized, including financial, technology and health care issues. Multiples Strategies Fund's equity portfolio emphasized technology, health care and industrial issues; its fixed income portfolio emphasized commodity-based industries, telecommunications and media issues. For Global Securities Fund, emerging markets such as Latin America were emphasized, including stocks with strong earnings potential driven by corporate restructurings and the privatization of state-owned industries. For Strategic Bond Fund, corporate bonds in U.S. companies that derive a large percentage of their earnings from Europe were emphasized, foreign fixed-income securities were emphasized in Latin American, Asian and Eastern European countries, and U.S. government securities of a longer term were emphasized. - Comparing each Fund's Performance to the Market. The charts below show the performance of hypothetical $10,000 investments in each Fund (except for Money Fund and Growth & Income Fund) held until December 31, 1994. Performance information does not reflect charges that apply to separate accounts investing in the Funds and is not restated to reflect the increased management fee rates that took effect September 1, 1994. If these charges and expenses were taken into account, performance would be lower. High Income Fund's performance is compared to the performance of the Salomon Brothers High Yield Market Index which is an unmanaged index of below-investment grade (but rated at least BB+/Ba1 by Standard & Poor's or Moody's) U.S. corporate debt obligations, widely-recognized as a measure of the performance of the high-yield corporate bond market. Bond Fund's performance is compared to the performance of the Lehman Brothers Corporate Bond Index, which is an unmanaged index of publicly-issued non- convertible investment grade corporate debt of U.S. issuers, widely recognized as a measure of the U.S. fixed-rate corporate bond market. The performance of Capital Appreciation Fund and Growth Fund is compared to the performance of the S&P 500 Index, a broad-based index of equity securities widely regarded as a general measurement of the performance of the U.S. equity securities market. Multiple Strategies Fund's performance is compared to the S&P 500 Index and the Lehman Brothers Aggregate Bond Index, a broad-based, unmanaged index of U.S. corporate bond issues, U.S. government securities and mortgage-backed securities, widely recognized as a measure of the performance of the domestic debt securities market. Global Securities Fund's performance is compared to the Morgan Stanley World Index, an unmanaged index of issuers listed on the stock exchanges of 20 foreign countries and the U.S., and is widely recognized as a measure of global stock market performance. Strategic Bond Fund's performance is compared to the Lehman Brothers Aggregate Bond Index and the Salomon Brothers World Government Bond Index. The Salomon Brothers World Government Bond Index is an unmanaged index of fixed-rate bonds having a maturity of one year or more, and is widely recognized as a benchmark of fixed income performance on a world-wide basis. Index performance reflects the reinvestment of dividends but does not consider the effect of capital gains or transaction costs, and none of the data below shows the effect of taxes. Also, a Fund's performance reflects the effect of that Fund's business and operating expenses. While index comparisons may be useful to provide a benchmark for a Fund's performance, it must be noted that the Fund's investments are not limited to the securities in the one index. Moreover, the index performance data does not reflect any assessment of the risk of the investments included in the index. Comparison of Change in Value of $10,000 Hypothetical Investments in High Income Fund Versus Salomon Brothers High Yield Market Index (Graph comparing total return of High Income Fund shares to performance of Salomon Brothers High Yield Market Index) Average Annual Total Return at 12/31/94 (1) 1 year 5 years Life of Fund -3.18% 15.09% 12.47% (1) The inception date of the Fund was 4/30/86. The average annual total returns and the ending account value in the graph reflect reinvestment of all dividends and capital gains distributions. Past performance is not predictive of future performance. Graphs are not drawn to same scale. Comparison of Change in Value of $10,000 Hypothetical Investments in Bond Fund Versus Lehman Brothers Corporate Bond Index (Graph comparing total return of Bond Fund shares to performance of Lehman Brothers Corporate Bond Index) Average Annual Total Return at 12/31/94(1) 1 year 5 years Life of Fund -1.94% 8.43% 9.78% (1) The inception date of the Fund was 4/3/85. The average annual total returns and the ending account value in the graph reflect reinvestment of all dividends and capital gains distributions. Past performance is not predictive of future performance. Graphs are not drawn to same scale. Comparison of Change in Value of $10,000 Hypothetical Investments in Capital Appreciation Fund Versus S&P 500 Index (Graph comparing total return of Capital Appreciation Fund shares to performance of S&P 500 Index) Average Annual Total Return at 12/31/94(1) 1 year 5 years Life of Fund -7.59% 11.81% 13.28% (1) The inception date of the Fund was 8/15/86. The average annual total returns and the ending account value in the graph reflect reinvestment of all dividends and capital gains distributions. Past performance is not predictive of future performance. Graphs are not drawn to same scale. Comparison of Change in Value of $10,000 Hypothetical Investments in Growth Fund Versus S&P 500 Index (Graph comparing total return of Growth Fund shares to performance of S&P 500 Index) Average Annual Total Return at 12/31/94(1) 1 year 5 years Life of Fund 0.97% 7.40% 11.44% (1) The inception date of the Fund was 4/3/85. The average annual total returns and the ending account value in the graph reflect reinvestment of all dividends and capital gains distributions. Past performance is not predictive of future performance. Graphs are not drawn to same scale. Comparison of Change in Value of $10,000 Hypothetical Investments in Multiple Strategies Fund Versus S&P 500 Index and Lehman Brothers Aggregate Bond Index (Graph comparing total return of Multiple Strategies Fund shares to performance of S&P 500 Index and Lehman Brothers Aggregate Bond Index) Average Annual Total Return at 12/31/94(1) 1 year 5 years Life of Fund -1.95% 7.38% 9.85% (1) The inception date of the Fund was 2/9/87. The average annual total returns and the ending account value in the graph reflect reinvestment of all dividends and capital gains distributions. Past performance is not predictive of future performance. Graphs are not drawn to same scale. Comparison of Change in Value of $10,000 Hypothetical Investments in Global Securities Fund Versus Morgan Stanley World Index (Graph comparing total return of Global Securities Fund shares to performance of Morgan Stanley World Index) Average Annual Total Return at 12/31/94(1) 1 year Life of Fund -5.72% 11.15% (1) The inception date of the Fund was 11/12/90. The average annual total returns and the ending account value in the graph reflect reinvestment of all dividends and capital gains distributions. Past performance is not predictive of future performance. Graphs are not drawn to same scale. Comparison of Change in Value of $10,000 Hypothetical Investments in Strategic Bond Fund Versus Lehman Brothers Aggregate Bond Index and Salomon Brothers World Government Bond Index (Graph comparing total return of Strategic Bond Fund to performance of Lehman Brothers Aggregate Bond Index and Salomon Brothers World Government Bond Index) Average Annual Total Return at 12/31/94(1) 1 year Life of Fund -3.78% 0.19% ______________ (1) The inception date of the Fund was 5/3/93. The average annual total returns and the ending account value in the graph reflect reinvestment of all dividends and capital gains distributions. Past performance is not predictive of future performance. Graphs are not drawn to same scale. ABOUT YOUR ACCOUNT How to Buy Shares Shares of each Fund are offered only for purchase by Accounts as an investment medium for variable life insurance policies and variable annuity contracts, as described in the accompanying Account Prospectus. The sale of shares will be suspended during any period when the determination of net asset value is suspended and may be suspended by the Board of Trustees whenever the Board judges it in that Fund's best interest to do so. Shares of each Fund are offered at their respective offering price, which (as used in this Prospectus and the Statement of Additional Information) is net asset value (without sales charge). Shares of Growth & Income Fund will not be offered prior to July 1, 1995. All purchase orders are processed at the offering price next determined after receipt by the Trust of a purchase order in proper form. The offering price (and net asset value) is determined as of the close of The New York Stock Exchange, which is normally 4:00 P.M., New York time, but may be earlier on some days. Net asset value per share of each Fund is determined by dividing the value of that Fund's net assets by the number of its shares outstanding. The Board of Trustees has established procedures for valuing each Fund's securities. In general, those valuations are based on market value. Under Rule 2a-7, the amortized cost method is used to value Money Fund's net asset value per share, which is expected to remain fixed at $1.00 per share except under extraordinary circumstances; see "About Your Account - How to Buy Shares - Money Fund Net Asset Valuation" in the Statement of Additional Information for further information. There can be no assurance that Money Fund's net asset value will not vary. Further details are in "About Your Account- How to Buy Shares - Money Fund Net Asset Valuation" in the Statement of Additional Information. How to Sell Shares Payment for shares tendered by an Account for redemption is made ordinarily in cash and forwarded within seven days after receipt by the Trust's transfer agent, Oppenheimer Shareholder Services (the "Transfer Agent"), of redemption instructions in proper form, except under unusual circumstances as determined by the Securities and Exchange Commission. The Trust understands that payment to the Account owner will be made in accordance with the terms of the accompanying Account Prospectus. The redemption price will be the net asset value next determined after the receipt by the Transfer Agent of a request in proper form. The market value of the securities in the portfolio of the Funds is subject to daily fluctuations and the net asset value of the Funds' shares (other than shares of the Money Fund) will fluctuate accordingly. Therefore, the redemption value may be more or less than the investor's cost. Dividends, Capital Gains And Taxes Dividends of the Money Fund. The Trust intends to declare Money Fund's dividends from its net investment income on each day the New York Stock Exchange is open for business. Such dividends will be payable on shares held of record at the time of the previous determination of net asset value. Daily dividends accrued since the prior dividend payment will be paid to shareholders monthly as of a date selected by the Board of Trustees. Money Fund's net income for dividend purposes consists of all interest income accrued on portfolio assets, less all expenses of that Fund for such period. Accrued market discount is included in interest income; amortized market premium is treated as an expense. Although distributions from net realized gains on securities, if any, will be paid at least once each year, and may be made more frequently, Money Fund does not expect to realize long-term capital gains, and therefore does not contemplate payment of any capital gains distribution. Distributions from net realized gains will not be distributed unless Money Fund's capital loss carry forwards, if any, have been used or have expired. Money Fund seeks to maintain a net asset value of $1.00 per share for purchases and redemptions. To effect this policy, under certain circumstances the Money Fund may withhold dividends or make distributions from capital or capital gains (see "Dividends, Capital Gains and Taxes" in the Statement of Additional Information). Dividends and Distributions of High Income Fund, Bond Fund, Strategic Bond Fund, Growth & Income Fund and Multiple Strategies Fund. The Trust intends to declare High Income Fund, Bond Fund, Strategic Bond Fund, Growth & Income Fund and Multiple Strategies Fund dividends quarterly, payable in March, June, September and December. Dividends and Distributions of Capital Appreciation Fund, Growth Fund and Global Securities Fund. The Trust intends to declare Capital Appreciation Fund, Growth Fund and Global Securities Fund dividends on an annual basis. Capital Gains. Any Fund (other than Money Fund) may make a supplemental distribution annually in December out of any net short-term or long-term capital gains derived from the sale of securities, premiums from expired calls written by the Fund, and net profits from hedging transactions. Each such Fund may also make a supplemental distribution of capital gains and ordinary income following the end of its fiscal year. All dividends and capital gains distributions paid on shares of any of the Funds are automatically reinvested in additional shares of that Fund at net asset value determined on the distribution date. There are no fixed dividend rates and there can be no assurance as to payment of any dividends or the realization of any capital gains. Tax Treatment to the Account As Shareholder. Dividends paid by each Fund from its ordinary income and distributions of each Fund's net realized short-term or long-term capital gains are includable in gross income of the Accounts holding such shares. The tax treatment of such dividends and distributions depends on the tax status of that Account. Tax Status of the Funds. If the Funds qualify as "regulated investment companies" under the Internal Revenue Code, the Trust will not be liable for Federal income taxes on amounts paid as dividends and distributions from any of the Funds. The Funds did qualify during their last fiscal year and the Trust intends that they will qualify in current and future years. However, the Code contains a number of complex tests relating to qualification which any Fund might not meet in any particular year (see, e.g., "Other Investment Techniques and Strategies - Portfolio Turnover"). If any Fund does not so qualify, it would be treated for tax purposes as an ordinary corporation and would receive no tax deduction for payments made to shareholders of that Fund. The above discussion relates solely to Federal tax laws. This discussion is not exhaustive and a qualified tax adviser should be consulted. APPENDIX A - DESCRIPTION OF TERMS Some of the terms used in the Prospectus and the Statement of Additional Information are described below: Bank obligations include certificates of deposit which are negotiable certificates evidencing the indebtedness of a commercial bank to repay funds deposited with it for a definite period of time (usually 14 days to one year) at a stated interest rate. Bankers' acceptances are credit instruments evidencing the obligation of a bank to pay a draft which has been drawn on it by a customer; these instruments reflect the obligation both of the bank and of the drawer to pay the face amount of the instrument upon maturity. Time deposits are non-negotiable deposits maintained in a banking institution for a specified period of time at a stated interest rate. Bank notes are short-term direct credit obligations of the issuing bank or bank holding company. Commercial paper consists of short-term (usually 1 to 270 days) unsecured promissory notes issued by corporations in order to finance their current operations. Variable rate master demand notes are obligations that permit the investment of fluctuating amounts at varying rates of interest pursuant to direct arrangement between the holder and the borrower. The holder has the right to increase the amount under the note at any time up to the face amount, or to decrease the amount borrowed, and the borrower may repay up to the face amount of the note without penalty. Corporate obligations are bonds and notes issued by corporations and other business organizations, including business trusts, in order to finance their long-term credit needs. Letters of credit are obligations by the issuer (a bank or other person) to honor drafts or other demands for payment upon compliance with specified conditions. Securities issued or guaranteed by the United States Government or its agencies or instrumentalities include issues of the United States Treasury, such as bills, certificates of indebtedness, notes and bonds, and issues of agencies and instrumentalities established under the authority of an act of Congress. Such agencies and instrumentalities include, but are not limited to, Bank for Cooperatives, Federal Financing Bank, Federal Home Loan Bank, Federal Intermediate Credit Banks, Federal Land Banks, Federal National Mortgage Association and Tennessee Valley Authority. Issues of the United States Treasury are direct obligations of the United States Government. Issues of agencies or instrumentalities are (i) guaranteed by the United States Treasury, or (ii) supported by the issuing agency's or instrumentality's right to borrow from the United States Treasury, or (iii) supported by the issuing agency's or instrumentality's own credit. APPENDIX B - DESCRIPTION OF SECURITIES RATINGS This is a description of (i) the two highest rating categories for Short Term Debt and Long Term Debt by the Rating Organizations referred to under "Investment Objectives and Policies -- Money Fund", and (ii) additional rating categories that apply principally to investments by High Income Fund, Strategic Bond Fund and Bond Fund. The rating descriptions are based on information supplied by the Rating Organizations to subscribers. Short Term Debt Ratings. Moody's Investors Service, Inc. ("Moody's"): The following rating designations for commercial paper (defined by Moody's as promissory obligations not having original maturity in excess of nine months), are judged by Moody's to be investment grade, and indicate the relative repayment capacity of rated issuers: Prime-1: Superior capacity for repayment. Capacity will normally be evidenced by the following characteristics: (a) leveling market positions in well-established industries; (b) high rates of return on funds employed; (c) conservative capitalization structures with moderate reliance on debt and ample asset protection; (d) broad margins in earning coverage of fixed financial charges and high internal cash generation; and (e) well established access to a range of financial markets and assured sources of alternate liquidity. Prime-2: Strong capacity for repayment. This will normally be evidenced by many of the characteristics cited above but to a lesser degree. Earnings trends and coverage ratios, while sound, will be more subject to variation. Capitalization characteristics, while still appropriate, may be more affected by external conditions. Ample alternate liquidity is maintained. Standard & Poor's Corporation ("S&P"): The following ratings by S&P for commercial paper (defined by S&P as debt having an original maturity of no more than 365 days) assess the likelihood of payment: A-1: Strong capacity for timely payment. Those issues determined to possess extremely strong safety characteristics are denoted with a plus sign (+) designation. A-2: Satisfactory capacity for timely payment. However, the relative degree of safety is not as high as for issues designated "A-1". Fitch Investors Service, Inc. ("Fitch"): Fitch assigns the following short-term ratings to debt obligations that are payable on demand or have original maturities of generally up to three years, including commercial paper, certificates of deposit, medium-term notes, and municipal and investment notes: F-1+: Exceptionally strong credit quality; the strongest degree of assurance for timely payment. F-1: Very strong credit quality; assurance of timely payment is only slightly less in degree than issues rated "F-1+". F-2: Good credit quality; satisfactory degree of assurance for timely payment, but the margin of safety is not as great as for issues assigned "F-1+" or "F-1" ratings. Duff & Phelps, Inc. ("Duff & Phelps"): The following ratings are for commercial paper (defined by Duff & Phelps as obligations with maturities, when issued, of under one year), asset-backed commercial paper, and certificates of deposit (the ratings cover all obligations of the institution with maturities, when issued, of under one year, including bankers' acceptance and letters of credit): Duff 1+: Highest certainty of timely payment. Short-term liquidity, including internal operating factors and/or access to alternative sources of funds, is outstanding, and safety is just below risk-free U.S. Treasury short-term obligations. Duff 1: Very high certainty of timely payment. Liquidity factors are excellent and supported by good fundamental protection factors. Risk factors are minor. Duff 1-: High certainty of timely payment. Liquidity factors are strong and supported by good fundamental protection factors. Risk factors are very small. Duff 2: Good certainty of timely payment. Liquidity factors and company fundamentals are sound. Although ongoing funding needs may enlarge total financing requirements, access to capital markets is good. Risk factors are small. IBCA Limited or its affiliate IBCA Inc. ("IBCA"): Short-term ratings, including commercial paper (with maturities up to 12 months), are as follows: A1+: Obligations supported by the highest capacity for timely repayment. A1: Obligations supported by a very strong capacity for timely repayment. A2: Obligations supported by a strong capacity for timely repayment, although such capacity may be susceptible to adverse changes in business, economic, or financial conditions. Thomson BankWatch, Inc. ("TBW"): The following short-term ratings apply to commercial paper, certificates of deposit, unsecured notes, and other securities having a maturity of one year or less. TBW-1: The highest category; indicates the degree of safety regarding timely repayment of principal and interest is very strong. TBW-2: The second highest rating category; while the degree of safety regarding timely repayment of principal and interest is strong, the relative degree of safety is not as high as for issues rated "TBW-1". Long Term Debt Ratings. These rating categories apply principally to investments by High Income Fund, Strategic Bond Fund and Bond Fund. For Money Fund only, the two highest rating categories of each Rating Organization are relevant for securities purchased with a remaining maturity of 397 days or less, or for rating issuers of short-term obligations. Moody's: Bonds (including municipal bonds) are rated as follows: Aaa: Judged to be the best quality. They carry the smallest degree of investment risk and are generally referred to as "gilt edge." Interest payments are protected by a large or by an exceptionally stable margin, and principal is secure. While the various protective elements are likely to change, such changes as can be visualized are most unlikely to impair the fundamentally strong positions of such issues. Aa: Judged to be of high quality by all standards. Together with the "Aaa" group, they comprise what are generally known as high-grade bonds. They are rated lower than the best bonds because margins of protection may not be as large as in "Aaa" securities or fluctuations of protective elements may be of greater amplitude or there may be other elements present which make the long-term risks appear somewhat larger than in "Aaa" securities. A: Possess many favorable investment attributes and are to be considered as upper-medium grade obligations. Factors giving security to principal and interest are considered adequate but elements may be present which suggest a susceptibility to impairment sometime in the future. Baa: Considered medium grade obligations, i.e., they are neither highly protected nor poorly secured. Interest payments and principal security appear adequate for the present but certain protective elements may be lacking or may be characteristically unreliable over any great length of time. Such bonds lack outstanding investment characteristics and have speculative characteristics as well. Ba: Judged to have speculative elements; their future cannot be considered well-assured. Often the protection of interest and principal payments may be very moderate and not well safeguarded during both good and bad times over the future. Uncertainty of position characterizes bonds in this class. B: Bonds rated "B" generally lack characteristics of desirable investment. Assurance of interest and principal payments or of maintenance of other terms of the contract over any long period of time may be small. Caa: Of poor standing and may be in default or there may be present elements of danger with respect to principal or interest. Ca: Represent obligations which are speculative in a high degree and are often in default or have other marked shortcomings. C: Bonds rated "C" can be regarded as having extremely poor prospects of ever attaining any real investment standing. Moody's applies numerical modifiers "1", "2" and "3" in each generic rating classification from "Aa" through "B" in its corporate bond rating system. The modifier "1" indicates that the security ranks in the higher end of its generic rating category; the modifier "2" indicates a mid-range ranking; and the modifier "3" indicates that the issue ranks in the lower end of its generic rating category. Standard & Poor's: Bonds are rated as follows: AAA: The highest rating assigned by S&P. Capacity to pay interest and repay principal is extremely strong. AA: A strong capacity to pay interest and repay principal and differ from "AAA" rated issues only in small degree. A: Have a strong capacity to pay principal and interest, although they are somewhat more susceptible to adverse effects of change in circumstances and economic conditions. BBB: Regarded as having an adequate capacity to pay principal and interest. Whereas they normally exhibit protection parameters, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity to pay principal and interest for bonds in this capacity than for bonds in the "A" category. BB, B, CCC, CC: Regarded, on balance, as predominantly speculative with respect to the issuer's capacity to pay interest and repay principal in accordance with the terms of the obligation. "BB" indicates the lowest degree of speculation and"CC" the highest degree. While such bonds will likely have some equality and protective characteristics, these are outweighed by large uncertainties or major risk exposures to adverse conditions. C, D: Bonds on which no interest is being paid are rated "C." Bonds rated "D" are in default and payment of interest and/or repayment of principal is in arrears. Fitch: AAA: Considered to be investment grade and of the highest credit quality. The obligor has an exceptionally strong ability to pay interest and repay principal, which is unlikely to be affected by reasonably foreseeable events. AA: Considered to be investment grade and of very high credit quality. The obligor's ability to pay interest and repay principal is very strong, although not quite as strong as bonds rated "AAA". Plus (+) and minus (-) signs are used in the "AA" category to indicate the relative position of a credit within that category. Because bonds rated in the "AAA" and "AA" categories are not significantly vulnerable to foreseeable future developments, short-term debt of these issuers is generally rated "F-1+". Duff & Phelps: AAA: The highest credit quality. The risk factors are negligible, being only slightly more than the risk-free U.S. Treasury debt. AA: High credit quality. Protection factors are strong. Risk is modest but may vary slightly from time to time because of economic conditions. Plus (+) and minus (-) signs are used in the "AA" category to indicate the relative position of a credit within that category. IBCA: Long-term obligations (with maturities of more than 12 months) are rated as follows: AAA: The lowest expectation for investment risk. Capacity for timely repayment of principal and interest is substantial such that adverse changes in business, economic, or financial conditions are unlikely to increase investment risks significantly. AA: A very low expectation for investment risk. Capacity for timely repayment of principal and interest is substantial. Adverse changes in business, economic, or financial conditions may increase investment risk albeit not very significantly. A plus (+) or minus (-) sign may be appended to a long term rating to denote relative status within a rating category. TBW: TBW issues the following ratings for companies. These ratings assess the likelihood of receiving payment of principal and interest on a timely basis and incorporate TBW's opinion as to the vulnerability of the company to adverse developments, which may impact the market's perception of the company, thereby affecting the marketability of its securities. A: Possesses an exceptionally strong balance sheet and earnings record, translating into an excellent reputation and unquestioned access to its natural money markets. If weakness or vulnerability exists in any aspect of the company's business, it is entirely mitigated by the strengths of the organization. A/B: The company is financially very solid with a favorable track record and no readily apparent weakness. Its overall risk profile, while low, it not quite as favorable as for companies in the highest rating category. APPENDIX TO PROSPECTUS Graphic material included in Prospectus of Oppenheimer Variable Account Funds: "Comparison of Total Return of Oppenheimer Variable Account Funds with Broad-Based Indices - Changes in Value of a $10,000 Hypothetical Investment" Linear graphs will be included in the Prospectus of Oppenheimer Variable Account Funds (the "Funds") depicting the initial account value and subsequent account value of a hypothetical $10,000 investment in shares of the Funds for the life of each Fund (except Oppenheimer Money Fund and Oppenheimer Growth & Income Fund) and comparing such values with the same investments over the same time periods in the Broad-Based Indices. Set forth below are the relevant data points that will appear on the linear graphs. Additional information with respect to the foregoing, including a description of the Broad-Based Indices, is set forth in the Prospectus under "How Have the Funds Performed? - Management's Discussion of Performance."
Salomon Brothers Fiscal High Yield Year Ended High Income Fund Market Index 04/30/86(1) $10,000 $10,000 12/31/86 $10,473 $10,510 12/31/87 $11,318 $10,990 12/31/88 $13,081 $12,664 12/31/89 $13,715 $13,012 12/31/90 $14,352 $12,096 12/31/91 $19,220 $16,851 12/31/92 $22,664 $19,859 12/31/93 $28,632 $24,878 12/31/94 $27,722 $24,569 Lehman Brothers Fiscal Corporate Year Ended Bond Fund Bond Index 04/03/85 $10,000 $10,000 12/31/85 $11,882 $11,819 12/31/86 $13,084 $13,770 12/31/87 $13,415 $14,112 12/31/88 $14,618 $15,352 12/31/89 $16,565 $17,526 12/31/90 $17,877 $18,811 12/31/91 $21,028 $22,325 12/31/92 $22,395 $24,294 12/31/93 $25,315 $27,209 12/31/94 $24,825 $26,139 Fiscal Capital Year Ended Appreciation Fund S&P 500 Index 08/15/86(1) $10,000 $10,000 12/31/86 $ 9,835 $ 9,684 12/31/87 $11,245 $10,192 12/31/88 $12,754 $11,880 12/31/89 $16,269 $15,638 12/31/90 $13,533 $15,152 12/31/91 $20,938 $19,758 12/31/92 $24,167 $21,261 12/31/93 $30,770 $23,400 12/31/94 $28,434 $23,706 Fiscal Year Ended Growth Fund S&P 500 Index 04/30/85 $10,000 $10,000 12/31/85 $10,950 $12,076 12/31/86 $12,894 $14,331 12/31/87 $13,322 $15,083 12/31/88 $16,265 $17,581 12/31/89 $20,101 $23,141 12/31/90 $18,450 $22,422 12/31/91 $23,163 $29,238 12/31/92 $26,528 $31,463 12/31/93 $28,451 $34,668 12/31/94 $28,726 $35,081 Lehman Brothers Fiscal Multiple Aggregate Year Ended Strategies Fund S&P 500 Index Bond Index 02/09/87(1) $10,000 $10,000 $10,000 12/31/87 $10,397 $ 8,923 $10,063 12/31/88 $12,700 $10,401 $10,857 12/31/89 $14,701 $13,690 $12,434 12/31/90 $14,421 $13,265 $13,549 12/31/91 $16,941 $17,297 $15,716 12/31/92 $18,463 $18,613 $16,879 12/31/93 $21,408 $20,486 $18,525 12/31/94 $20,991 $20,754 $17,984 Morgan Fiscal Global Stanley Year Ended Securities Fund World Index 11/12/90(1) $10,000 $10,000 12/31/90 $10,040 $10,211 12/31/91 $10,380 $12,148 12/31/92 $ 9,642 $11,582 12/31/93 $16,423 $14,261 12/31/94 $15,483 $14.985 Lehman Salomon Brothers Brothers World Fiscal Strategic Aggregate Government Year Ended Bond Fund Bond Index Bond Index 05/03/93(1) $10,000 $10,000 $10,000 12/31/93 $10,425 $10,453 $10,426 12/31/94 $10,032 $10,147 $10,671 ________________________ (1) Commencement of operations.
Oppenheimer Variable Account Funds 3410 South Galena Street Denver, Colorado 80231 1-800-525-7048 Investment Adviser Oppenheimer Management Corporation Two World Trade Center New York, New York 10048-0203 Transfer Agent Oppenheimer Shareholder Services P.O. Box 5270 Denver, Colorado 80217 Custodian of Portfolio Securities The Bank of New York One Wall Street New York, New York 10015 Independent Auditors Deloitte & Touche LLP 1560 Broadway Denver, Colorado 80202 Legal Counsel Myer, Swanson, Adams & Wolf, P.C. 1600 Broadway Denver, Colorado 80202 No dealer, broker, salesperson or any other person has been authorized to give any information or to make any representations other than those contained in this Prospectus or the Statement of Additional Information, and if given or made, such information and representations must not be relied upon as having been authorized by the Fund, Oppenheimer Management Corporation or any affiliate thereof. This Prospectus does not constitute an offer to sell or a solicitation of an offer to buy any of the securities offered hereby in any state to any person to whom it is unlawful to make such an offer in such state. PR0600.001.0495 Oppenheimer Variable Account Funds 3410 South Galena Street, Denver, Colorado 80231 1-800-525-7048 Statement of Additional Information dated May 1, 1995. OPPENHEIMER VARIABLE ACCOUNT FUNDS (the "Trust") is an investment company consisting of nine separate Funds (the "Funds"): Oppenheimer Money Fund ("Money Fund") Oppenheimer High Income Fund ("High Income Fund") Oppenheimer Bond Fund ("Bond Fund") Oppenheimer Capital Appreciation Fund ("Capital Appreciation Fund") Oppenheimer Growth Fund ("Growth Fund") Oppenheimer Multiple Strategies Fund ("Multiple Strategies Fund") Oppenheimer Growth & Income Fund ("Growth & Income Fund") Oppenheimer Global Securities Fund ("Global Securities Fund") Oppenheimer Strategic Bond Fund ("Strategic Bond Fund") Shares of the Funds are sold only to provide benefits under variable life insurance policies and variable annuity contracts (collectively the "Accounts"), as described in the Account Prospectus. This Statement of Additional Information is not a Prospectus. This document contains additional information about the Fund and supplements information in the Prospectus dated May 1, 1995. It should be read together with the Trust's Prospectus, which may be obtained by writing to the Funds' Transfer Agent, Oppenheimer Shareholder Services, at P.O. Box 5270, Denver, Colorado 80217, or by calling the Transfer Agent at the toll-free number shown above, and the Account Prospectus. TABLE OF CONTENTS Page About the Funds Investment Objectives and Policies 2 Investment Policies and Strategies 2 Other Investment Techniques and Strategies 10 Other Investment Restrictions 19 How the Funds are Managed 20 Organization and History 20 Trustees and Officers of the Trust 20 The Manager and Its Affiliates 25 Brokerage Policies of the Funds 27 Performance of the Funds 29 About Your Account How to Buy Shares 32 Dividends, Capital Gains and Taxes 34 Additional Information About the Funds 35 Financial Information About the Funds Independent Auditors' Report 36 Financial Statements 37 Appendix A: Industry Classifications A-1 ABOUT THE FUNDS Investment Objectives and Policies Investment Policies and Strategies. The investment objectives and policies of each of the Funds are described in the Prospectus. Set forth below is supplemental information about those policies. Certain capitalized terms used in this Additional Statement are defined in the Prospectus. - Money Fund. The Prospectus describes "Eligible Securities" in which Money Fund may invest and indicates that if a security's rating is downgraded, the Manager and/or the Board may have to reassess the security's credit risk. If a security has ceased to be a First Tier Security, the Manager will promptly reassess whether the security continues to present "minimal credit risk." If the Manager becomes aware that any Rating Organization has downgraded its rating of a Second Tier Security or rated an unrated security below its second highest rating category, the Trust's Board of Trustees shall promptly reassess whether the security presents minimal credit risk and whether it is in Money Fund's best interests to dispose of it; but if Money Fund disposes of the security within 5 days of Oppenheimer Management Corporation (the "Manager") learning of the downgrade, the Manager will provide the Board with subsequent notice of such downgrade. If a security is in default, or ceases to be an Eligible Security, or is determined no longer to present minimal credit risks, the Board must determine whether it would be in Money Fund's best interests to dispose of the security. The Rating Organizations currently designated as such by the Securities and Exchange Commission ("SEC") are Standard & Poor's Corporation, Moody's Investors Services, Inc., Fitch Investors Services, Inc., Duff & Phelps, Inc., IBCA Limited and its affiliate, IBCA, Inc., and Thomson BankWatch, Inc. See Appendix B to the Prospectus for a description of the rating categories of the Rating Organizations. - Time Deposits. The Fund may invest in fixed time deposits, which are non-negotiable deposits in a bank for a specified period of time at a stated interest rate, whether or not subject to withdrawal penalties; however, such deposits which are subject to such penalties, other than deposits maturing in less than 7 days, are subject to the 10% investment limitation for illiquid securities set forth in "Other Investment Techniques and Strategies - Illiquid and Restricted Securities" in the Prospectus. - Floating Rate/Variable Rate Notes. Money Fund may invest in instruments with floating or variable interest rates. The interest rate on a floating rate obligation is based on a stated prevailing market rate, such as a bank's prime rate, the 90-day U.S. Treasury Bill rate, the rate of return on commercial paper or bank certificates of deposit, or some other standard, and is adjusted automatically each time such market rate is adjusted. The interest rate on a variable rate obligation is also based on a stated prevailing market rate but is adjusted automatically at a specified interval of no less than one year. Some variable rate or floating rate obligations in which Money Fund may invest have a demand feature entitling the holder to demand payment at an amount approximately equal to amortized cost or the principal amount thereof plus accrued interest at any time, or at specified intervals not exceeding one year. These notes may or may not be backed by bank letters of credit. Variable rate demand notes may include master demand notes which are obligations that permit Money Fund to invest fluctuating amounts, which may change daily without penalty, pursuant to direct arrangements between Money Fund, as lender, and the borrower. The interest rates on these notes fluctuate from time to time. The issuer of such obligations normally has a corresponding right, after a given period, to prepay in its discretion the outstanding principal amount of the obligations plus accrued interest upon a specified number of days' notice to the holders of such obligations. Generally, the changes in the interest rate on such securities reduce the fluctuation in their market value. As interest rates decrease or increase, the potential for capital appreciation or depreciation is less than that for fixed-rate obligations of the same maturity. Because these obligations are direct lending arrangements between the lender and the borrower, it is not contemplated that such instruments generally will be traded, and there generally is no established secondary market for these obligations, although they are redeemable at face value. Accordingly, where these obligations are not secured by letters of credit or other credit support arrangements, Money Fund's right to redeem is dependent on the ability of the borrower to pay principal and interest on demand. Such obligations frequently are not rated by credit rating agencies and Money Fund may invest in obligations which are not so rated only if the Manager determines that at the time of investment the obligations are of comparable quality to the other obligations in which Money Fund may invest. The Manager, on behalf of Money Fund, will consider on an ongoing basis the creditworthiness of the issuers of the floating and variable rate obligations in Money Fund's portfolio. There is no limit on the amount of the Money Fund's assets that may be invested in floating rate and variable rate obligations. Floating rate or variable rate obligations which do not provide for recovery of principal and interest within seven days' notice will be subject to the limitations applicable to illiquid securities described in "Other Investment Techniques and Strategies -Illiquid and Restricted Securities" in the Prospectus. - Master Demand Notes. Master demand notes are corporate obligations that permit the investment of fluctuating amounts by Money Fund at varying rates of interest pursuant to direct arrangements between Money Fund, as lender, and the corporate borrower that issues the note. These notes permit daily changes in the amounts borrowed. Money Fund has the right to increase the amount under the note at any time up to the full amount provided by the note agreement, or to decrease the amount. The borrower may repay up to the full amount of the note at any time without penalty. It is not generally contemplated that master demand notes will be traded because they are direct lending arrangements between the lender and the borrower. There is no secondary market for these notes, although they are redeemable and thus immediately repayable by the borrower at face value, plus accrued interest, at any time. Accordingly, Money Fund's right to redeem is dependent upon the ability of the borrower to pay principal and interest on demand. In evaluating the master demand arrangements, the Manager considers the earning power, cash flow, and other liquidity ratios of the issuer. If they are not rated, Money Fund may invest in them only if, at the time of an investment, they are Eligible Securities. The Manager will continuously monitor the borrower's financial ability to meet all of its obligations because Money Fund's liquidity might be impaired if the borrower were unable to pay principal and interest on demand. - Money Fund, High Income Fund, Bond Fund and Strategic Bond Fund. The market value of fixed income securities in which Money Fund, High Income Fund, Bond Fund and Strategic Bond Fund may invest generally will be affected by changes in the level of interest rates. An increase in interest rates will tend to reduce the market value of fixed income investments, and a decline in interest rates will tend to increase their value. In order to take advantage of differences in securities prices and yields or of fluctuations in interest rates, consistent with their respective investment objectives, these Funds may trade for short-term profits. - High Yield Securities. As stated in the Prospectus, the corporate debt in which High Income Fund and Strategic Bond Fund will principally invest may be in the lower rating categories. Risks of high yield securities include: (i) limited liquidity and secondary market support, (ii) substantial market price volatility resulting from changes in prevailing interest rates, (iii) subordination to the prior claims of banks and other senior lenders, (iv) the operation of mandatory sinking fund or call/redemption provisions during periods of declining interest rates which may cause the Fund to invest premature redemption proceeds in lower yielding portfolio securities, (v) the possibility that earnings of the issuer may be insufficient to meet its debt service, and (vi) the issuer's low creditworthiness and potential for insolvency during periods of rising interest rates and economic downturn. As a result of the limited liquidity of high yield securities, their prices have at times experienced significant and rapid decline when a substantial number of holders decided to sell. A decline is also likely in the high yield bond market during an economic downturn. An economic downturn or an increase in interest rates could severely disrupt the market for high yield bonds and adversely affect the value of outstanding bonds and the ability of the issuers to repay principal and interest. In addition, there have been several Congressional attempts to limit the use of tax and other advantages of high yield bonds which, if enacted, could adversely affect the value of these securities and the net asset value of these two Funds. For example, federally-insured savings and loan associations have been required to divest their investments in high yield bonds. - Capital Appreciation Fund, Growth Fund, Multiple Strategies Fund, Growth & Income Fund, Strategic Bond Fund and Global Securities Fund. The investment risks and rewards of certain of the investment policies of these six Funds are discussed below. - Securities of Growth-Type Companies. Capital Appreciation Fund, Growth Fund and Global Securities Fund may emphasize securities of "growth-type" companies. Such issuers typically are those whose goods or services have relatively favorable long-term prospects for increasing demand, or ones which develop new products, services or markets and normally retain a relatively large part of their earnings for research, development and investment in capital assets. They may include companies in the natural resources fields or those developing industrial applications for new scientific knowledge having potential for technological innovation, such as nuclear energy, oceanography, business services and new customer products. - Small, Unseasoned Companies. Each of these six Funds may invest in securities of small unseasoned companies. These are companies that have been in operation for less than three years, even after including the operations of any of their predecessors. Securities of these companies may have a limited liquidity (which means that a Fund may have difficulty selling them at an acceptable price when it wants to) and the price of those securities may be volatile. - Domestic Securities. Investments by Strategic Bond Fund, Growth & Income Fund and Multiple Strategies Fund in fixed-income securities issued by domestic corporations may include participation interests, asset-backed securities and other debt obligations (bonds, debentures, notes, mortgage-backed securities and CMOs) together with preferred stocks. - Investment Policies - Collateralized Securities. Each of these Funds may invest in the collaterized securities described below. High Income Fund, Bond Fund and Strategic Bond Fund are most likely to make such investments. - Asset-Backed Securities. The value of an asset-backed security is affected by changes in the market's perception of the asset backing the security, the creditworthiness of the servicing agent for the loan pool, the originator of the loans, or the financial institution providing any credit enhancement, and is also affected if any credit enhancement has been exhausted. The risks of investing in asset-backed securities are ultimately dependent upon payment of consumer loans by the individual borrowers. As a purchaser of an asset-backed security, the Fund would generally have no recourse to the entity that originated the loans in the event of default by a borrower. The underlying loans are subject to prepayments, which shorten the weighted average life of asset-backed securities and may lower their return, in the same manner as described above for prepayments of a pool of mortgage loans underlying mortgage-backed securities. - Mortgage-Backed Securities. These securities represent participation interests in pools of residential mortgage loans which may or may not be guaranteed by agencies or instrumentalities of the U.S. Government. Such securities differ from conventional debt securities which generally provide for periodic payment of interest in fixed or determinable amounts (usually semi-annually) with principal payments at maturity or specified call dates. Mortgage-backed securities may be backed by the full faith and credit of the U.S. Treasury (e.g., direct pass-through certificates of Government National Mortgage Association); some are supported by the right of the issuer to borrow from the U.S. Government (e.g., obligations of Federal Home Loan Mortgage Corporation); and some are backed by only the credit of the issuer itself. Those guarantees do not extend to the value or yield of the mortgage-backed securities themselves or to the net asset value of the Fund's shares. Any of those government agencies may also issue collateralized mortgage-backed obligations, discussed below. The yield on mortgage-backed securities is based on the average expected life of the underlying pool of mortgage loans. The actual life of any particular pool will be shortened by any unscheduled or early payments of principal and interest. Principal prepayments generally result from the sale of the underlying property or the refinancing or foreclosure of underlying mortgages. The occurrence of prepayments is affected by a wide range of economic, demographic and social factors and, accordingly, it is not possible to predict accurately the average life of a particular pool. Yield on such pools is usually computed by using the historical record of prepayments for that pool, or, in the case of newly-issued mortgages, the prepayment history of similar pools. The actual prepayment experience of a pool of mortgage loans may cause the yield realized by the Fund to differ from the yield calculated on the basis of the expected average life of the pool. Prepayments tend to increase during periods of falling interest rates, while during periods of rising interest rates prepayments will most likely decline. When prevailing interest rates rise, the value of a pass-through security may decrease as do the values of other debt securities, but, when prevailing interest rates decline, the value of a pass-through security is not likely to rise to the extent that the values of other debt securities rise, because of the prepayment feature of pass-through securities. The Fund's reinvestment of scheduled principal payments and unscheduled prepayments it receives may occur at times when available investments offer higher or lower rates than the original investment, thus affecting the yield of the Fund. Monthly interest payments received by the Fund have a compounding effect which may increase the yield to the Fund more than debt obligations that pay interest semi-annually. Because of those factors, mortgage-backed securities may be less effective than Treasury bonds of similar maturity at maintaining yields during periods of declining interest rates. The Fund may purchase mortgage-backed securities at a premium or at a discount. Accelerated prepayments adversely affect yields for pass-through securities purchased at a premium (i.e., at a price in excess of their principal amount) and may involve additional risk of loss of principal because the premium may not have been fully amortized at the time the obligation is repaid. The opposite is true for pass- through securities purchased at a discount. The Fund may purchase mortgage-backed securities at a premium or at a discount. The Fund may invest in "stripped" mortgage backed securities, in which the principal and interest portions of the security are separated and sold. Stripped mortgage-backed securities usually have at least two classes each of which receives different proportions of interest and principal distributions on the underlying pool of mortgage assets. One common variety of stripped mortgage-backed security has one class that receives some of the interest and most of the principal, while the other class receives most of the interest and remainder of the principal. In some cases, one class will receive all of the interest (the "interest-only" or "IO" class), while the other class will receive all of the principal (the "principal-only" or "PO" class). Interest only securities are extremely sensitive to interest rate changes, and prepayments of principal on the underlying mortgage assets. An increase in principal payments or prepayments will reduce the income available to the IO security. In other types of CMOs, the underlying principal payments may apply to various classes in a particular order, and therefore the value of certain classes or "tranches" of such securities may be more volatile that the value of the pool as a whole, and losses may be more severe than on other classes. - Collateralized Mortgage-Backed Obligations ("CMOs"). CMOs are fully-collateralized bonds that are the general obligations of the issuer thereof, either the U.S. Government, a U.S. Government instrumentality, or a private issuer. Such bonds generally are secured by an assignment to a trustee (under the indenture pursuant to which the bonds are issued) of collateral consisting of a pool of mortgages. Payments with respect to the underlying mortgages generally are made to the trustee under the indenture. Payments of principal and interest on the underlying mortgages are not passed through to the holders of the CMOs as such (i.e., the character of payments of principal and interest is not passed through, and therefore payments to holders of CMOs attributable to interest paid and principal repaid on the underlying mortgages do not necessarily constitute income and return of capital, respectively, to such holders), but such payments are dedicated to payment of interest on and repayment of principal of the CMOs. CMOs often are issued in two or more classes with different characteristics such as varying maturities and stated rates of interest. Because interest and principal payments on the underlying mortgages are not passed through to holders of CMOs, CMOs of varying maturities may be secured by the same pool of mortgages, the payments on which are used to pay interest on each class and to retire successive maturities (known as "tranches") in sequence. Unlike other mortgage-backed securities (discussed above), CMOs are designed to be retired as the underlying mortgages are repaid. In the event of prepayment on such mortgages, the class of CMO first to mature generally will be paid down. Therefore, although in most cases the issuer of CMOs will not supply additional collateral in the event of such prepayment, there will be sufficient collateral to secure CMOs that remain outstanding. - Participation Interests. Strategic Bond Fund, Global Securities Fund, High Income Fund, Multiple Strategies Fund and Growth & Income Fund may invest in participation interests, subject to the limitation, described in "Illiquid and Restricted Securities" in the Prospectus, on investments by the Fund in illiquid investments. Participation interests provide the Fund an undivided interest in a loan made by the issuing financial institution in the proportion that the Fund's participation interest bears to the total principal amount of the loan. It is currently intended that no more than 5% of the net assets of Multiple Strategies Fund, Growth & Income Fund or Strategic Bond Fund can be invested in participation interests of the same issuing bank. Participation interests are primarily dependent upon the creditworthiness of the borrowing corporation, which is obligated to make payments of principal and interest on the loan, and there is a risk that such borrowers may have difficulty making payments. In the event the borrower fails to pay scheduled interest or principal payments, the Fund could experience a reduction in its income and might experience a decline in the net asset value of its shares. In the event of a failure by the financial institution to perform its obligation in connection with the participation agreement, the Fund might incur certain costs and delays in realizing payment or may suffer a loss of principal and/or interest. - Foreign Securities. The obligations of foreign governmental entities may or may not be supported by the full faith and credit of a foreign government. Obligations of supranational entities include those of international organizations designated or supported by governmental entities to promote economic reconstruction or development and of international banking institutions and related government agencies. Examples include the International Bank for Reconstruction and Development (the World Bank), the European Coal and Steel Community, the Asian Development Bank and the Inter-American Development Bank. The governmental members, or "stockholders," usually make initial capital contributions to the supranational entity and in many cases are committed to make additional capital contributions if the supranational entity is unable to repay its borrowings. Each supranational entity's lending activities are limited to a percentage of its total capital (including "callable capital" contributed by members at the entity's call), reserves and net income. There is no assurance that foreign governments will be able or willing to honor their commitments. Investing in foreign securities involves considerations and possible risks not typically associated with investing in securities in the U.S. The values of foreign securities will be affected by changes in currency rates or exchange control regulations or currency blockage, application of foreign tax laws, including withholding taxes, changes in governmental administration or economic or monetary policy (in the U.S. or abroad) or changed circumstances in dealings between nations. Costs will be incurred in connection with conversions between various currencies. Foreign brokerage commissions are generally higher than commissions in the U.S., and foreign securities markets may be less liquid, more volatile and less subject to governmental regulation than in the U.S. Investments in foreign countries could be affected by other factors not generally thought to be present in the U.S., including expropriation or nationalization, confiscatory taxation and potential difficulties in enforcing contractual obligations, and could be subject to extended settlement periods. Because each Fund, other than Money Fund, may purchase securities denominated in foreign currencies, a change in the value of any such currency against the U.S. dollar will result in a change in the U.S. dollar value of each Fund's assets and each Fund's income available for distribution. In addition, although a portion of each Fund's investment income may be received or realized in foreign currencies, the Fund will be required to compute and distribute its income in U.S. dollars, and absorb the cost of currency fluctuations. High Income Fund, Strategic Bond Fund, Multiple Strategies Fund, Growth & Income Fund and Global Securities Fund may engage in foreign currency exchange transactions for hedging purposes to attempt to protect against changes in future exchange rates. See "Hedging - Forward Contracts," below. The values of foreign investments and the investment income derived from them may also be affected unfavorably by changes in currency exchange control regulations. Although each Fund, other than Money Fund, will invest only in securities denominated in foreign currencies that at the time of investment do not have significant government- imposed restrictions on conversion into U.S. dollars, there can be no assurance against subsequent imposition of currency controls. In addition, the values of foreign securities will fluctuate in response to changes in U.S. and foreign interest rates. Investments in foreign securities offer potential benefits not available from investments solely in securities of domestic issuers by offering the opportunity to invest in foreign issuers that appear to offer growth potential, or in foreign countries with economic policies or business cycles different from those of the U.S., or to reduce fluctuations in portfolio value by taking advantage of foreign stock markets that do not move in a manner parallel to U.S. markets. From time to time, U.S. government policies have discouraged certain investments abroad by U.S. investors, through taxation or other restrictions, and it is possible that such restrictions could be reimposed. - Warrants and Rights. As described in the Prospectus, each Fund other than Money Fund may invest in warrants and rights. Warrants basically are options to purchase equity securities at set prices valid for a specified period of time. Their prices do not necessarily move in a manner parallel to the prices of the underlying securities. Any price paid for a warrant will be lost unless the warrant is exercised prior to its expiration. Rights are similar to warrants, but normally have a short duration and are distributed directly by the issuer to its shareholders. Warrants and rights have no voting rights, receive no dividends and have no rights with respect to the assets of the issuer. - Repurchase Agreements. These Funds may acquire securities that are subject to repurchase agreements in order to generate income while providing liquidity as set forth in the prospectus. Money Fund's repurchase agreements must comply with the collateral requirements of Rule 2a-7 under the Investment Company Act. In a repurchase transaction, a Fund acquires a security from, and simultaneously resells it to, an approved vendor (a U.S. commercial bank or the U.S. branch of a foreign bank or broker-dealer which has been designated a primary dealer in government securities which must meet the credit requirements set by the Trust's Board of Trustees from time to time for delivery on an agreed-upon future date. The resale price exceeds the purchase price by an amount that reflects an agreed-upon interest rate effective for the period during which the repurchase agreement is in effect. The majority of these transactions run from day to day, and delivery pursuant to resale typically will occur within one to five days of the purchase. Repurchase agreements are considered "loans" under the Investment Company Act, collateralized by the underlying security. The Funds' repurchase agreements require that at all times while the repurchase agreement is in effect, the value of the collateral must equal or exceed the repurchase price to fully collateralize the repayment obligation. Additionally, the Funds' Manager will impose creditworthiness requirements to confirm that the vendor is financially sound and will continuously monitor the collateral's value. - Loans of Portfolio Securities. Each Fund may lend its respective portfolio securities subject to the restrictions stated in the Prospectus. Under applicable regulatory requirements (which are subject to change), the loan collateral must, on each business day, at least equal the value of the loaned securities and must consist of cash, bank letters of credit, U.S. Government securities, or certain other cash equivalents. To be acceptable as collateral, letters of credit must obligate a bank to pay amounts demanded by the Trust if the demand meets the terms of the letter. Such terms and the issuing bank must be satisfactory to the Trust. Any Fund lending its securities receives amounts equal to the dividends declared or interest paid on the loaned securities during the term of the loan as well as the interest on the collateral securities, less any finders' or administrative fees the Fund pays in arranging the loan. A Fund may share the interest it receives on the collateral securities with the borrower as long as it realizes at least a minimum amount of interest required by the lending guidelines established by the Board of Trustees. The lending Fund will not lend its portfolio securities to any officer, trustee, employee or affiliate of the Fund or its Manager. The terms of a Fund's loans must meet certain tests under the Internal Revenue Code and permit it to reacquire loaned securities on five days' notice or in time to vote on any important matter. - Borrowing. From time to time, each of Capital Appreciation Fund, Strategic Bond Fund, Growth Fund, Multiple Strategies Fund, Growth & Income Fund and Global Fund may borrow from banks on an unsecured basis to invest the borrowed funds in portfolio securities. Borrowing is subject to the restrictions stated in the Prospectus. Any such borrowing will be made only from banks. In addition to the percentage restrictions stated in the Prospectus, the Investment Company Act requires that any such borrowing will be made only to the extent that the value of that Fund's assets, less its liabilities other than borrowings, is equal to at least 300% of all borrowings including the proposed borrowing. If the value of such Fund's assets, when computed in that manner, should fail to meet the 300% asset coverage requirement, that Fund is required within three days to reduce its bank debt to the extent necessary to meet such requirement. To do so, the Fund may have to sell a portion of its investments at a time when it would otherwise not want to sell the securities. Borrowing for investment increases both investment opportunity and risk. Interest on money borrowed is an expense these six Funds would not otherwise incur, so that they may have little or no net investment income during periods of substantial borrowings. Since substantially all of these Funds' assets fluctuate in value whereas borrowing obligations are fixed, when a Fund has outstanding borrowings, its net asset value will tend to increase and decrease more when its portfolio assets increase or decrease than would otherwise be the case. - When-Issued and Delayed Delivery Transactions. Each Fund may purchase securities on a "when-issued" basis, and may purchase or sell such securities on a "delayed delivery" basis. Although a Fund will enter into such transactions for the purpose of acquiring securities for its portfolio or for delivery pursuant to options contracts it has entered into, the Fund may dispose of a commitment prior to settlement. "When-issued" or "delayed delivery" refers to securities whose terms and indenture are available and for which a market exists, but which are not available for immediate delivery. When such transactions are negotiated the price (which is generally expressed in yield terms) is fixed at the time the commitment is made, but delivery and payment for the securities take place at a later date. The commitment to purchase a security for which payment will be made on a future date may be deemed a separate security and involve risk of loss if the value of the security declines prior to the settlement date. During the period between commitment by a Fund and settlement (generally within two months but not to exceed 120 days), no payment is made for the securities purchased by the purchaser, and no interest accrues to the purchaser from the transaction. Such securities are subject to market fluctuation; the value at delivery may be less than the purchase price. The Fund will maintain a segregated account with its Custodian, consisting of cash, U.S. Government securities, or other high grade debt securities rated "A" or better by Moody's or Standard & Poor's at least equal to the value of purchase commitments until payment is made. The Funds will engage in when-issued transactions in order to secure what is considered to be an advantageous price and yield at the time of entering into the obligation. When a Fund engages in when-issued or delayed delivery transactions, it relies on the buyer or seller, as the case may be, to consummate the transaction. Failure to do so may result in the Fund losing the opportunity to obtain a price and yield considered to be advantageous. If any of the Funds chooses to (i) dispose of the right to acquire a when-issued security prior to its acquisition or (ii) dispose of its right to deliver or receive against a forward commitment, it may incur a gain or loss. At the time the Fund makes a commitment to purchase or sell a security on a when-issued or forward commitment basis, it records the transaction and reflects the value of the security purchased, or if a sale, the proceeds to be received in determining its net asset value. To the extent any Fund engages in when-issued and delayed delivery transactions, it will do so for the purpose of acquiring or selling securities consistent with its investment objective and policies and not for the purposes of investment leverage. Each Fund enters into such transactions only with the intention of actually receiving or delivering the securities, although (as noted above), when-issued securities and forward commitments may be sold prior to settlement date. In addition, changes in interest rates in a direction other than that expected by the Manager before settlement will affect the value of such securities and may cause loss to that Fund. When-issued transactions and forward commitments allow a Fund a technique to use against anticipated changes in interest rates and prices. For instance, in periods of rising interest rates and falling prices, the Fund might sell securities in its portfolio on a forward commitment basis to attempt to limit its exposure to anticipated falling prices. In periods of falling interest rates and rising prices, a Fund might sell portfolio securities and purchase the same or similar securities on a when-issued or forward commitment basis, thereby obtaining the benefit of currently higher cash yields. Other Investment Techniques and Strategies Covered Calls and Hedging As described in the Prospectus, each Fund (except Money Fund) may each write covered calls and may also employ one or more types of Hedging Instruments, including the futures identified in the Prospectus ("Futures"). The Funds' strategy of hedging with Futures and options on Futures will be incidental to each such Fund's activities in the underlying cash market. When hedging to attempt to protect against declines in the market value of the Fund's portfolio, to permit the Fund to retain unrealized gains in the value of portfolio securities which have appreciated, or to facilitate selling securities for investment reasons, a given Fund would: (i) sell Futures, (ii) purchase puts on such Futures or securities, or (iii) write covered calls on securities or on Futures. When hedging to permit a Fund to establish a position in the securities markets as a temporary substitute for purchasing individual securities (which that Fund will normally purchase, and then terminate that hedging position), or to attempt to protect against the possibility that a Fund's portfolio debt securities are not fully included in a rise in the securities market, these Funds may: (i) purchase Futures, or (ii) purchase calls on such Futures or on securities. When hedging to attempt to protect against declines in the dollar value of a foreign currency-denominated security or in a payment on such security, a Fund would: (a) purchase puts on that foreign currency or on foreign currency Futures, (b) write calls on that currency or on such Futures, or (c) enter into Forward Contracts at a lower or higher rate than the spot ("cash") rate. Additional information about the Hedging Instruments these Funds may use is provided below. At present, the Funds do not intend to purchase or sell Futures or related options if, after any such purchase, the sum of initial margin deposits on Futures and premiums paid for related options exceeds 5% of the value of that Fund's total assets. Certain options on foreign currencies are considered related options for this purpose. In the future, a Fund may employ Hedging Instruments and strategies that are not presently contemplated but which may be developed, to the extent such investment methods are consistent with that Fund's investment objective, legally permissible and adequately disclosed. Writing Covered Call Options. When any of the Funds (except Money Fund) write a call on a security, it receives a premium and agrees to sell the underlying security to a purchaser of a corresponding call on the same security during the call period (usually not more than 9 months) at a fixed exercise price (which may differ from the market price of the underlying security), regardless of market price changes during the call period. Such Fund has retained the risk of loss should the price of the underlying security decline during the call period, which may be offset to some extent by the premium. To terminate its obligation on a call it has written, each such Fund may purchase a corresponding call in a "closing purchase transaction." A profit or loss will be realized, depending upon whether the net of the amount of the option transaction costs and the premium received on the call written was more or less than the price of the call subsequently purchased. A profit may also be realized if the call expires unexercised, because a Fund retains the underlying security and the premium received. Any such profits are considered short-term capital gains for Federal income tax purposes, and when distributed by each such Fund are taxable as ordinary income. If the Fund could not effect a closing purchase transaction due to lack of a market, it would have to hold the callable securities until the call expired or was exercised. Call writing may affect a Fund's turnover rate and brokerage commissions. The exercise of calls written by a Fund may cause that Fund to sell related portfolio securities, thus increasing its turnover rate in a manner beyond its control. The Funds may also write (and purchase) calls on foreign currencies. A call written on a foreign currency by any of the Funds is "covered" if the Fund owns the underlying foreign currency covered by the call or has an absolute and immediate right to acquire that foreign currency without additional cash consideration (or for additional cash consideration held in a segregated account by its custodian) upon conversion or exchange of other foreign currency held in its portfolio. A call written by any of the Funds on a foreign currency is for cross- hedging purposes if it is not covered, but is designed to provide a hedge against a decline (due to an adverse change in the exchange rate) in the U.S. dollar value of a security which the Fund owns or has the right to acquire and which is denominated in the currency underlying the option. In such circumstances, the Fund collateralizes the option by maintaining in a segregated account with the Funds' custodian, cash or U.S. Government securities in an amount not less than the value of the underlying foreign currency in U.S. dollars marked-to-market daily. A Fund may also write calls on Futures without owning a futures contract (or, with respect to the High Income Fund, a deliverable bond) provided that at the time the call is written, the Fund covers the call by segregating in escrow an equivalent dollar amount of liquid assets. The Fund will segregate additional liquid assets if the value of the escrowed assets drops below 100% of the current value of the Future. In no circumstances would an exercise notice require a Fund to deliver a futures contract; it would simply put the Fund in a short futures position, which is permitted by each Fund's hedging policies. Hedging. Set forth below are the Hedging Instruments which the Funds (except Money Fund) may use. Writing Put Options. A put option on securities gives the purchaser the right to sell, and the writer the obligation to buy, the underlying investment at the exercise price during the option period. Writing a put covered by segregated liquid assets equal to the exercise price of the put has the same economic effect to a Fund as writing a covered call. The premium the Fund receives from writing a put option represents a profit, as long as the price of the underlying investment remains above the exercise price. However, a Fund has also assumed the obligation during the option period to buy the underlying investment from the buyer of the put at the exercise price, even though the value of the investment may fall below the exercise price. If the put expires unexercised, the Fund (as the writer of the put) realizes a gain in the amount of the premium less transaction costs. If the put is exercised, the Fund must fulfill its obligation to purchase the underlying investment at the exercise price, which will usually exceed the market value of the investment at that time. In that case, the Fund may incur a loss, equal to the sum of the sale price of the underlying investment and the premium received minus the sum of the exercise price and any transaction costs incurred. When writing put options on securities or on foreign currencies, to secure its obligation to pay for the underlying security, the Fund will deposit in escrow liquid assets with a value equal to or greater than the exercise price of the underlying securities. The Fund therefore forgoes the opportunity of investing the segregated assets or writing calls against those assets. As long as the obligation of the Fund as the put writer continues, it may be assigned an exercise notice by the exchange or broker-dealer through whom such option was sold, requiring the Fund to take delivery of the underlying security against payment of the exercise price. The Fund may be assigned an exercise notice at any time prior to the termination of its obligation as the writer of the put. This obligation terminates upon expiration of the put, or such earlier time at which the Fund effects a closing purchase transaction by purchasing a put of the same series as that previously sold. Once the Fund has been assigned an exercise notice, it is thereafter not allowed to effect a closing purchase transaction. The Fund may effect a closing purchase transaction to realize a profit on an outstanding put option it has written or to prevent an underlying security from being put. Furthermore, effecting such a closing purchase transaction will permit the Fund to write another put option to the extent that the exercise price thereof is secured by the deposited assets, or to utilize the proceeds from the sale of such assets for other investments by that Fund. The Fund will realize a profit or loss from a closing purchase transaction if the cost of the transaction is less or more than the premium received from writing the option. As above for writing covered calls, any and all such profits described herein from writing puts are considered short-term gains for Federal tax purposes, and when distributed by the Fund, are taxable as ordinary income. Purchasing Calls and Puts. When a Fund purchases a call (other than in a closing purchase transaction), it pays a premium and has the right to buy the underlying investment from a seller of a corresponding call on the same investment during the call period at a fixed exercise price. The Fund benefits only if the call is sold at a profit or if, during the call period, the market price of the underlying investment is above the sum of the call price plus the transaction costs and the premium paid for the call and the call is exercised. If the call is not exercised or sold (whether or not at a profit), it will become worthless at its expiration date and the Fund will lose its premium payment and the right to purchase the underlying investment. When such Fund purchases a put, it pays a premium and has the right to sell the underlying investment to a seller of a put on a corresponding investment during the put period at a fixed exercise price. Buying a put on securities or Futures a Fund owns enables the Fund to attempt to protect itself during the put period against a decline in the value of the underlying investment below the exercise price by selling the underlying investment at the exercise price to a seller of a corresponding put. If the market price of the underlying investment is equal to or above the exercise price and, as a result, the put is not exercised or resold, the put will become worthless at its expiration date and the Fund will lose its premium payment and the right to sell the underlying investment; the put may, however, be sold prior to expiration (whether or not at a profit). Purchasing a put on either Futures or on securities it does not own permits a Fund either to resell the put or, if applicable, to buy the underlying investment and sell it at the exercise price. The resale price of the put will vary inversely with the price of the underlying investment. If the market price of the underlying investment is above the exercise price, and, as a result, the put is not exercised, the put will become worthless on its expiration date. In the event of a decline in price of the underlying investment, the Fund could exercise or sell the put at a profit to attempt to offset some or all of its loss on its portfolio securities. When the Fund purchases a put on a Future or security not held by it, the put protects the Fund to the extent that the prices of the underlying Future or securities move in a similar pattern to the prices of the securities in a Fund's portfolio. Futures. No price is paid or received upon the purchase or sale of a Future. Upon entering into a Futures transaction, a Fund will be required to deposit an initial margin payment with the futures commission merchant (the "futures broker"). The initial margin will be deposited with the Fund's Custodian in an account registered in the futures broker's name; however the futures broker can gain access to that account only under specified conditions. As the Future is marked to market to reflect changes in its market value, subsequent margin payments, called variation margin, will be paid to or by the futures broker on a daily basis. Prior to expiration of the Future, if the Fund elects to close out its position by taking an opposite position, a final determination of variation margin is made, additional cash is required to be paid by or released to the Fund, and any loss or gain is realized for tax purposes. All futures transactions are effected through a clearinghouse associated with the exchange on which the contracts are traded. Forward Contracts. A Forward Contract involves bilateral obligations of one party to purchase, and another party to sell, a specific currency at a future date (which may be any fixed number of days from the date of the contract agreed upon by the parties), at a price set at the time the contract is entered into. These contracts are traded in the interbank market conducted directly between currency traders (usually large commercial banks) and their customers. The Funds may use Forward Contracts to protect against uncertainty in the level of future exchange rates. The use of Forward Contracts does not eliminate fluctuations in the prices of the underlying securities the Fund owns or intends to acquire, but it does fix a rate of exchange in advance. In addition, although Forward Contracts limit the risk of loss due to a decline in the value of the hedged currencies, at the same time they limit any potential gain that might result should the value of the currencies increase. These Funds may enter into Forward Contracts with respect to specific transactions. For example, when a Fund enters into a contract for the purchase or sale of a security denominated in a foreign currency, or when a Fund anticipates receipt of dividend payments in a foreign currency, a Fund may desire to "lock-in" the U.S. dollar price of the security or the U.S. dollar equivalent of such payment by entering into a Forward Contract, for a fixed amount of U.S. Dollars per unit of foreign currency, for the purchase or sale of the amount of foreign currency involved in the underlying transaction. A Fund will thereby be able to protect itself against a possible loss resulting from an adverse change in the relationship between the currency exchange rates during the period between the date on which the security is purchased or sold, or on which the payment is declared, and the date on which such payments are made or received. These Funds may also use Forward Contracts to lock in the U.S. dollar value of portfolio positions ("position hedge"). In a position hedge, for example, when a Fund believes that foreign currency may suffer a substantial decline against the U.S. dollar, it may enter into a forward sale contract to sell an amount of that foreign currency approximating the value of some or all of that Fund's portfolio securities denominated in such foreign currency, or when a Fund believes that the U.S. dollar may suffer a substantial decline against a foreign currency, it may enter into a forward purchase contract to buy that foreign currency for a fixed dollar amount. In this situation the Fund may, in the alternative, enter into a Forward Contract to sell a different foreign currency for a fixed U.S. dollar amount where that Fund believes that the U.S. dollar value of the currency to be sold pursuant to the Forward Contract will fall whenever there is a decline in the U.S. dollar value of the currency in which portfolio securities of that Fund are denominated ("cross-hedge"). These Funds will not enter into such Forward Contracts or maintain a net exposure to such contracts where the consummation of the contracts would obligate that Fund to deliver an amount of foreign currency in excess of the value of the Fund's portfolio securities or other assets denominated in that currency. The Fund, however, in order to avoid excess transactions and transaction costs, may maintain a net exposure to Forward Contracts in excess of the value of the Fund's portfolio securities or other assets denominated in that currency provided the excess amount is "covered" by liquid, high-grade debt securities, denominated in that foreign currency or U.S. dollars, at least equal at all times to the amount of such excess. As an alternative, the Fund may purchase a call option permitting the Fund to purchase the amount of foreign currency being hedged by a forward sale contract at a price no higher than the forward contract price or the Fund may purchase a put option permitting the Fund to sell the amount of foreign currency subject to a forward purchase contract at a price as high or higher than the forward contract price. Unanticipated changes in currency prices may result in poorer overall performance for the Fund than if it had not entered into such contracts. The precise matching of the Forward Contract amounts and the value of the securities involved will not generally be possible because the future value of such securities in foreign currencies will change as a consequence of market movements in the value of these securities between the date the Forward Contract is entered into and the date it is sold. Accordingly, it may be necessary for a Fund to purchase additional foreign currency on the spot (i.e., cash) market (and bear the expense of such purchase), if the market value of the security is less than the amount of foreign currency the Fund is obligated to deliver and if a decision is made to sell the security and make delivery of the foreign currency. Conversely, it may be necessary to sell on the spot market some of the foreign currency received upon the sale of the portfolio security if its market value exceeds the amount of foreign currency a Fund is obligated to deliver. The projection of short-term currency market movements is extremely difficult, and the successful execution of a short-term hedging strategy is highly uncertain. Forward Contracts involve the risk that anticipated currency movements will not be accurately predicted, causing a Fund to sustain losses on these contracts and transactions costs. At or before the maturity of a Forward Contract requiring any Fund to sell a currency, the Fund may either sell a portfolio security and use the sale proceeds to make delivery of the currency or retain the security and offset its contractual obligation to deliver the currency by purchasing a second contract pursuant to which the Fund will obtain, on the same maturity date, the same amount of the currency that it is obligated to deliver. Similarly, the Fund may close out a Forward Contract requiring it to purchase a specified currency by entering into a second contract entitling it to sell the same amount of the same currency on the maturity date of the first contract. The Fund would realize a gain or loss as a result of entering into such an offsetting Forward Contract under either circumstance to the extent the exchange rate or rates between the currencies involved moved between the execution dates of the first contract and offsetting contract. The cost to the Fund of engaging in Forward Contracts varies with factors such as the currencies involved, the length of the contract period and the market conditions then prevailing. Because Forward Contracts are usually entered into on a principal basis, no fees or commissions are involved. Because such contracts are not traded on an exchange, a Fund must evaluate the credit and performance risk of each particular counterparty under a Forward Contract. Although each Fund values its assets daily in terms of U.S. dollars, it does not intend to convert its holdings of foreign currencies into U.S. dollars on a daily basis. The Fund may convert foreign currency from time to time, and investors should be aware of the costs of currency conversion. Foreign exchange dealers do not charge a fee for conversion, but they do seek to realize a profit based on the difference between the prices at which they buy and sell various currencies. Thus, a dealer may offer to sell a foreign currency to the Fund at one rate, while offering a lesser rate of exchange should that Fund desire to resell that currency to the dealer. Interest Rate Swap Transactions. The risk incurred by Bond Fund, High Income Fund and Strategic Bond Fund in entering into a swap agreement is twofold: interest rate risk and credit risk. There is a risk that, based on movements of interest rates in the future, the payments made by the Fund under a swap agreement will have been greater than those received by it. Credit risk arises from the possibility that the counterparty will default. If the counterparty to an interest rate swap defaults, the Fund's loss will consist of the net amount of contractual interest payments that the Fund has not yet received. The Manager will monitor the creditworthiness of counterparties to the Fund's interest rate swap transactions on an ongoing basis. These Funds will enter into swap transactions with appropriate counterparties pursuant to master netting agreements. A master netting agreement provides that all swaps done between the Fund and that counterparty under the master agreement shall be regarded as parts of an integral agreement. If on any date amounts are payable in the same currency in respect of one or more swap transactions, the net amount payable on that date in that currency shall be paid. In addition, the master netting agreement may provide that if one party defaults generally or on one swap, the counterparty may terminate the swaps with that party. Under such agreements, if there is a default resulting in a loss to one party, the measure of that party's damages is calculated by reference to the average cost of a replacement swap with respect to each swap (i.e., the mark-to-market value at the time of the termination of each swap). The gains and losses on all swaps are then netted, and the result is the counterparty's gain or loss on termination. The termination of all swaps and the netting of gains and losses on termination is generally referred to as "aggregation." Additional Information About Hedging Instruments and Their Use. Each Fund's Custodian, or a securities depository acting for the Custodian, will act as that Fund's escrow agent, through the facilities of the Options Clearing Corporation ("OCC"), as to the securities on which the Fund has written options or as to other acceptable escrow securities, so that no margin will be required for such transactions. OCC will release the securities on the expiration of the option or upon the Fund's entering into a closing transaction. An option position may be closed out only on a market which provides secondary trading for options of the same series, and there is no assurance that a liquid secondary market will exist for any particular option. When a Fund writes an over-the-counter ("OTC") option, it will enter into an arrangement with a securities dealer, which would establish a formula price at which that Fund would have the absolute right to repurchase that OTC option. This formula price would generally be based on a multiple of the premium received for the option, plus the amount by which the option is exercisable below for a put, above for a call, the market price of the underlying security ("in-the-money"). For any OTC option which any of these three Funds writes, it will treat as illiquid (for purposes of the 15% of net assets restriction on illiquid securities, stated in the Prospectus) the mark-to-market value of any OTC option held by it. The SEC is evaluating the general issue of whether or not OTC options should be considered as liquid securities, and the procedure described above could be affected by the outcome of that evaluation. Each Fund's option activities may affect its turnover rate and brokerage commissions. As noted above, the exercise of calls written by a Fund may cause that Fund to sell related portfolio securities, thus increasing its turnover rate in a manner beyond a Fund's control. The exercise by a Fund of puts on securities or Futures may cause the sale of related investments, also increasing portfolio turnover. Although such exercise is within the Fund's control, holding a put might cause the Fund to sell the underlying investment for reasons which would not exist in the absence of the put. Each Fund will pay a brokerage commission each time it buys or sells a call, buys a put or sells an underlying investment in connection with the exercise of a put or call. Such commissions may be higher than those which would apply to direct purchases or sales of the underlying investments. Premiums paid for options are small in relation to the market value of such investments and consequently, put and call options offer large amounts of leverage. The leverage offered by trading in options could result in a Fund's net asset value being more sensitive to changes in the value of the underlying investment. Regulatory Aspects of Hedging Instruments. These Funds must each operate within certain restrictions as to its long and short positions in Futures and options thereon under a rule (the "CFTC Rule") adopted by the Commodity Futures Trading Commission (the "CFTC") under the Commodity Exchange Act (the "CEA"), which excludes the Fund from registration with the CFTC as a "commodity pool operator" (as defined in the CEA) if it complies with the CFTC Rule. The Rule does not limit the percentage of each Fund's assets that may be used for Futures margin and related options premiums for a bona fide hedging position. However, under the Rule each Fund must limit its aggregate initial futures margin and related option premiums to no more than 5% of that Fund's net assets for hedging strategies that are not considered bona fide hedging strategies under the Rule. Under the restrictions, each Fund also must, as to its short positions, use Futures and options thereon solely for bona-fide hedging purposes within the meaning and intent of the applicable provisions under the CEA. Certain options on foreign currencies are considered related options for this purpose. Transactions in options by these Funds are subject to limitations established by each of the exchanges governing the maximum number of options which may be written or held by a single investor or group of investors acting in concert, regardless of whether the options were written or purchased on the same or different exchanges or are held in one or more accounts or through one or more exchanges or brokers. Thus, the number of options which the Fund may write or hold may be affected by options written or held by other entities, including other investment companies having the same or an affiliated investment adviser. Position limits also apply to Futures. An exchange may order the liquidation of positions found to be in violation of those limits and may impose certain other sanctions. Due to requirements under the Investment Company Act, when a Fund purchases a Future, the Fund will maintain, in a segregated account or accounts with its custodian bank, cash or readily-marketable, short-term (maturing in one year or less) debt instruments in an amount equal to the market value of the securities underlying such Future, less the margin deposit applicable to it. Tax Aspects of Hedging Instruments and Covered Calls. Each Fund intends to qualify as a "regulated investment company" under the Internal Revenue Code of 1986. That qualification enables each Fund to "pass-through" its income and realized capital gains to shareholders without the Fund having to pay tax on them. One of the tests for each Fund's qualification is that less than 30% of its gross income must be derived from gains realized on the sale of securities held for less than three months. To comply with that 30% cap, the Funds will limit the extent to which they engage in the following activities, but will not be precluded from them: (i) selling investments, including Futures, held for less than three months, whether or not they were purchased on the exercise of a call held by that Fund; (ii) purchasing calls or puts which expire in less than three months; (iii) effecting closing transactions with respect to calls or puts purchased less than three months previously; (iv) exercising puts held by that Fund for less than three months; and (v) writing calls on investments held for less than three months. Possible Risk Factors in Hedging. In addition to the risks with respect to options discussed in the Prospectus and above, there is a risk in using short hedging by: (i) selling Futures or (ii) purchasing puts on broadly-based indices or Futures to attempt to protect against declines in the value of the Fund's securities that the prices of the Futures or applicable index (thus the prices of the Hedging Instruments) will correlate imperfectly with the behavior of the cash (i.e., market value prices) of the Fund's securities. The ordinary spreads between prices in the cash and futures markets are subject to distortions due to differences in the natures of those markets. First, all participants in the futures markets are subject to margin deposit and maintenance requirements. Rather than meeting additional margin deposit requirements, investors may close futures contracts through offsetting transactions which could distort the normal relationship between the cash and futures markets. Second, the liquidity of the futures markets depend on participants entering into offsetting transactions rather than making or taking delivery. To the extent participants decide to make or take delivery, liquidity in the futures markets could be reduced, thus producing distortion. Third, from the point of view of speculators, the deposit requirements in the futures markets are less onerous than margin requirements in the securities markets. Therefore, increased participation by speculators in the futures markets may cause temporary price distortions. The risk of imperfect correlation increases as the composition of a Fund's portfolio diverges from the securities included in the applicable index. To compensate for the imperfect correlation of movements in the price of the securities being hedged and movements in the price of the Hedging Instruments, each Fund may use Hedging Instruments in a greater dollar amount than the dollar amount of securities being hedged if the historical volatility of the prices of such securities being hedged is more than the historical volatility of the applicable index. It is also possible that where a Fund has used Hedging Instruments in a short hedge, the market may advance and the value of securities held in the Fund's portfolio may decline. If this occurred, the Fund would lose money on the Hedging Instruments and also experience a decline in value in its securities. However, while this could occur for a very brief period or to a very small degree, over time the value of a diversified portfolio of equity securities will tend to move in the same direction as the indices upon which the Hedging Instruments are based. If a Fund uses Hedging Instruments to establish a position in the securities markets as a temporary substitute for the purchase of individual securities (long hedging) by buying Futures and/or calls on such Futures, on securities, or on stock indices, it is possible that the market may decline. If either Fund then concludes not to invest in such securities at that time because of concerns as to possible further market decline or for other reasons, that Fund will realize a loss on the Hedging Instruments that is not offset by a reduction in the price of the equity securities purchased. - Short Sales Against-the-Box. Each Fund (except Money Fund) may sell securities short in "short sales against-the-box." In a short sale, the seller does not own the security that is sold, but normally borrows the security to fulfill the delivery obligation. The seller later buys the security to repay the loan, in the expectation that the price of the security will be lower when the purchase is made, resulting in a gain. In these transactions, where the Fund owns an equivalent amount of the securities sold short. This technique is primarily used for tax purposes. Other Investment Restrictions The significant investment restrictions of all the Funds are set forth in the Prospectus. The following investment restrictions are also fundamental policies. Fundamental policies and the Funds' investment objectives cannot be changed without the vote of a "majority" of the outstanding shares of the Trust (or of the Fund, as to matters affecting only that Fund). Under the Investment Company Act, such a "majority" vote is defined as the vote of the holders of the lesser of: (1) 67% or more of the shares present or represented by proxy at such meeting, if the holders of more than 50% of the outstanding shares are present or represented by proxy, or (2) more than 50% of the outstanding shares. Under these additional restrictions, each of the Funds cannot: (1) invest in oil or gas exploration or development programs; (2) invest in real estate or in interests in real estate, but may purchase securities of issuers holding real estate or interests therein; (3) invest in companies for the purpose of acquiring control of management thereof; (4) underwrite securities of other companies, except insofar as it might be deemed to be an underwriter for purposes of the Securities Act of 1933 in the resale of any securities held in its own portfolio; (5) invest or hold securities of any issuer if those officers and trustees or directors of the Trust or its adviser owning individually more than 1/2 of 1% of the securities of such issuer together own more than 5% of the securities of such issuer; or (6) invest in other open-end investment companies, or invest more than 5% of its net assets at the time of purchase in closed-end investment companies, including small business investment companies, nor make any such investments at commission rates in excess of normal brokerage commissions. For purposes of the Funds' policy not to concentrate described under investment restriction number four in the Prospectus, the Funds have adopted the industry classifications set forth in Appendix A to the Statement of Additional Information. This is not a fundamental policy. New York's insurance laws require that investments of each Fund be made with a degree of care of an "ordinarily prudent person." The Manager believes that compliance with this standard will not have a negative impact on the performance of any of the Funds. In addition, each Fund's investments must comply with the diversification requirements contained in Section 817(h) of the Internal Revenue Code, and each Fund has undertaken to comply with the diversification requirements of Section 10506 of the California Insurance Code (see "Other Investment Techniques and Strategies -- Foreign Securities" in the Prospectus) and with the regulations adopted under those statutes. How the Funds are Managed Organization and History. As a Massachusetts business trust, the Trust is not required to hold, and does not plan to hold, regular annual meetings of shareholders. The Trust will hold meetings when required to do so by the Investment Company Act or other applicable law, or when a shareholder meeting is called by the Trustees or upon proper request of the shareholders. At all shareholder meetings, shareholders only vote on matters affecting their Fund. Shareholders have the right, upon the declaration in writing or vote of two-thirds of the outstanding shares of the Trust, to remove a Trustee. The Trustees will call a meeting of shareholders to vote on the removal of a Trustee upon the written request of the record holders of 10% of its outstanding shares. In addition, if the Trustees receive a request from at least 10 shareholders (who have been shareholders for at least six months) holding shares of the Trust valued at $25,000 or more or holding at least 1% of the Trust's outstanding shares, whichever is less, stating that they wish to communicate with other shareholders to request a meeting to remove a Trustee, the Trustees will then either make the Trust's shareholder list available to the applicants or mail their communication to all other shareholders at the applicants' expense, or the Trustees may take such other action as set forth under Section 16(c) of the Investment Company Act. At all shareholder meetings, shareholders only vote on matters affecting their Fund, and each Fund votes separately on such matters. However, matters that require a vote by all shareholders of the Trust are submitted to all the shareholders, without individual voting by Fund. The Trust's Declaration of Trust contains an express disclaimer of shareholder or Trustee liability for the Trust's obligations, and provides for indemnification and reimbursement of expenses out of its property for any shareholder held personally liable for its obligations. The Declaration of Trust also provides that the Trust shall, upon request, assume the defense of any claim made against any shareholder for any act or obligation of the Trust and satisfy any judgment thereon. Thus, while Massachusetts law permits a shareholder of a business trust (such as the Trust) to be held personally liable as a "partner" under certain circumstances, the risk of a Trust shareholder incurring financial loss on account of shareholder liability is limited to the relatively remote circumstances in which the Trust would be unable to meet its obligations described above. Any person doing business with the Trust, and any shareholder of the Trust, agrees under the Trust's Declaration of Trust to look solely to the assets of the Trust for satisfaction of any claim or demand which may arise out of any dealings with the Trust, and the Trustees shall have no personal liability to any such person, to the extent permitted by law. Trustees and Officers of the Trust. The Trust's Trustees and officers and their principal occupations and business affiliations during the past five years are set forth below. Each Trustee is also a Trustee, Director or Managing General Partner of Daily Cash Accumulation Fund, Inc., Centennial Money Market Trust, Centennial Tax Exempt Trust, Centennial Government Trust, Centennial New York Tax Exempt Trust, Centennial California Tax Exempt Trust, Oppenheimer Total Return Fund, Inc., Oppenheimer Equity Income Fund, Oppenheimer Champion High Yield Fund, Oppenheimer High Yield Fund, Oppenheimer Cash Reserves, Oppenheimer Main Street Funds, Inc., Oppenheimer Integrity Funds, Oppenheimer Strategic Funds Trust, Oppenheimer Strategic Income & Growth Fund, Oppenheimer Strategic Investment Grade Bond Fund, Oppenheimer Strategic Short-Term Income Fund, Centennial America Fund, L.P., Oppenheimer Tax-Exempt Bond Fund, Oppenheimer Limited-Term Government Fund, and The New York Tax-Exempt Income Fund, Inc. (collectively, the "Denver-based OppenheimerFunds"). Mr. Fossel is President and Mr. Swain is Chairman of each of the Denver-based OppenheimerFunds. As of March 31, 1995, none of the Trustees or officers were Account owners and thus none owned any Fund shares. Robert G. Avis, Trustee*, Age: 63 One North Jefferson Ave., St. Louis, Missouri 63103 Vice Chairman of A.G. Edwards & Sons, Inc. (a broker-dealer) and A.G. Edwards, Inc. (its parent holding company); Chairman of A.G.E. Asset Management and A.G. Edwards Trust Company (its affiliated investment adviser and trust company, respectively). William A. Baker, Trustee; Age: 80 197 Desert Lakes Drive, Palm Springs, California 92264 Management Consultant. Charles Conrad, Jr., Trustee; Age: 64 19411 Merion Circle, Huntington Beach, California 92648 Vice President of McDonnell Douglas Space Systems, Co.; formerly associated with the National Aeronautics and Space Administration. Jon S. Fossel, President and Trustee*: Age: 53 Two World Trade Center, New York, New York 10048-0203 Chairman, Chief Executive Officer and a director of the Manager; President and a director of Oppenheimer Acquisition Corp. ("OAC"), the Manager's parent holding company; President and a director of HarbourView Asset Management Corporation ("HarbourView"), a subsidiary of the Manager; a director of Shareholder Services, Inc. ("SSI") and Shareholder Financial Services, Inc. ("SFSI"), transfer agent subsidiaries of the Manager; formerly President of the Manager. Raymond J. Kalinowski, Trustee; Age: 65 44 Portland Drive, St. Louis, Missouri 63131 Director of Wave Technologies International, Inc.; formerly Vice Chairman and a director of A.G. Edwards, Inc., parent holding company of A.G. Edwards & Sons, Inc. (a broker-dealer), of which he was a Senior Vice President. C. Howard Kast, Trustee; Age: 73 2552 East Alameda, Denver, Colorado 80209 Formerly the Managing Partner of Deloitte, Haskins & Sells (an accounting firm). Robert M. Kirchner, Trustee; Age: 73 7500 E. Arapahoe Road, Englewood, Colorado 80112 President of The Kirchner Company (management consultants). Ned M. Steel, Trustee; Age: 79 3416 South Race Street, Englewood, Colorado 80110 Chartered Property and Casualty Underwriter; Director of Visiting Nurse Corporation of Colorado; formerly Senior Vice President and a Director of Van Gilder Insurance Corp. (insurance brokers). __________________ *A Trustee who is an "interested person" of the Trust as defined in the Investment Company Act. James C. Swain, Chairman and Trustee*; Age: 61 3410 South Galena Street, Denver, Colorado 80231 Vice Chairman and a director of the Manager; President and a director of Centennial Asset Management Corporation, an investment adviser subsidiary of the Manager ("Centennial"); formerly Chairman of the Board of SSI. Andrew J. Donohue, Vice President; Age: 44 Two World Trade Center, New York, New York 10048-0203 Executive Vice President and General Counsel of Oppenheimer Management Corporation ("OMC") (the "Manager") and Oppenheimer Funds Distributor, Inc. ("OFDI"); an officer of other OppenheimerFunds; formerly Senior Vice President and Associate General Counsel of the Manager and the Distributor; formerly a Partner in Kraft & McManimon (a law firm), prior to which he was an officer of First Investors Corporation (a broker-dealer) and First Investors Management Company, Inc. (broker- dealer and investment adviser) and a director and an officer of the First Investors Family of Funds and First Investors Life Insurance Company. George C. Bowen, Vice President, Secretary and Treasurer; Age: 58 3410 South Galena Street Denver, Colorado 80231 Senior Vice President and Treasurer of the Manager; Vice President and Treasurer of the Distributor and HarbourView; Senior Vice President, Treasurer, Assistant Secretary and a director of Centennial; Vice President, Treasurer and Secretary of SSI and SFSI; an officer of other OppenheimerFunds. Paul LaRocco, Vice President; Capital Appreciation Fund Portfolio Manager; Age: 37 Two World Trade Center, New York, New York 10048-0203 Assistant Vice President of the Manager; Associate Portfolio Manager for other OppenheimerFunds; formerly a securities analyst with Columbus Circle Investors, prior to which he was investment analyst for Chicago Title & Trust Co. Jane Putnam, Vice President; Growth Fund Portfolio Manager; Age 34 Two World Trade Center, New York, New York 10048-0203 Associate Portfolio Manager of other OppenheimerFunds; formerly a portfolio manager and equity research analyst for Chemical Bank. Michael S. Levine, Growth & Income Fund Assistant Portfolio Manager; Age: 29 Two World Trade Center, New York, New York 10048-0203 Associate Portfolio Manager of the Manager; formerly portfolio manager and research associate for Amas Securities, Inc.; before which he was an analyst for Shearson Lehman Hutton, Inc. David P. Negri, Vice President; High Income Fund, Bond Fund, Multiple Strategies Fund and Strategic Bond Fund Portfolio Manager; Age: 41 Two World Trade Center, New York, New York 10048 Vice President of the Manager; an officer of other OppenheimerFunds. __________________ *A Trustee who is an "interested person" of the Trust as defined in the Investment Company Act. Richard H. Rubinstein, Vice President; Multiple Strategies Fund Portfolio Manager; Age: 46 Two World Trade Center, New York, New York 10048 Vice President of the Manager; an officer of other OppenheimerFunds; formerly Vice President and Portfolio Manager/Security Analyst for Oppenheimer Capital Corporation (an investment adviser). Arthur J. Zimmer, Vice President; Money Fund Portfolio Manager; Age: 48 3410 South Galena Street, Denver, Colorado 80231 Vice President of the Manager and Centennial; an officer of other OppenheimerFunds; formerly Vice President of Hanifen Imhoff Management Company (mutual fund investment adviser). George Evans, Vice President; Global Securities Fund Portfolio Manager; Age: 35 Two World Trade Center, New York, New York 10048 Vice President of the Manager; formerly an International Equities Portfolio Manager/Analyst with Brown Brothers, Harriman & Co. John L. Wallace, Vice President; Growth & Income Fund Portfolio Manager; Age: 41 Two World Trade Center, New York, NY 10048-0203 Vice President of the Manager; an officer of other OppenheimerFunds; formerly a Securities Analyst and Assistant Portfolio Manager for the Manager. Robert G. Zack, Assistant Secretary; Age: 46 Two World Trade Center, New York, New York 10048-0203 Senior Vice President and Associate General Counsel of the Manager; Assistant Secretary of SSI and SFSI; an officer of other OppenheimerFunds. Robert J. Bishop, Assistant Treasurer; Age: 36 3410 South Galena Street, Denver, Colorado 80231 Assistant Vice President of the Manager/Mutual Fund Accounting; an officer of other OppenheimerFunds; formerly a Fund Controller for the Manager, prior to which he was an Accountant for Yale & Seffinger, P.C., an accounting firm, and previously an Accountant and Commissions Supervisor for Stuart James Company Inc., a broker-dealer. Scott Farrar, Assistant Treasurer; Age: 29 3410 South Galena Street, Denver, Colorado 80231 Assistant Vice President of the Manager/Mutual Fund Accounting, an officer of other OppenheimerFunds; previously a Fund Controller for the Manager, prior to which he was an International Mutual Fund Supervisor for Brown Brothers Harriman & Co. (a bank) and previously a Senior Fund Accountant for State Street Bank & Trust Company. - Remuneration of Trustees. The officers of the Trust are affiliated with the Manager; they and the Trustees of the Trust who are affiliated with the Manager (Messrs. Fossel and Swain, who are both officers and Trustees) receive no salary or fee from the Trust. The Trustees of the Trust (excluding Messrs. Fossel and Swain) received the total amounts shown below (i) from the Trust during its fiscal year ended 12/31/94, and (ii) from all 22 of the Denver-based OppenheimerFunds (including the Trust) listed in the first paragraph of this section, for services in the positions shown:
Total Compensation Aggregate From All Compensation Denver-based Name Position From Fund OppenheimerFunds1 Robert G. Avis Trustee $3,408.41 $53,000.00 William A. Baker Audit and Review $4,716.40 $73,257.01 Committee Chairman and Trustee Charles Conrad, Jr. Audit and Review $4,393.48 $68,293.67 Committee Member and Trustee Raymond J. Kalinowski Trustee $3,408.41 $53,000.00 C. Howard Kast Trustee $3,408.41 $53,000.00 Robert M. Kirchner Audit and Review $4,393.48 $68,293.67 Committee Member and Trustee Ned M. Steel Trustee $3,408.41 $53,000.00 1 For the 1994 calendar year.
- Major Shareholders. As of March 31, 1995, the holders of 5% or more of the outstanding shares of any Fund (except Growth & Income Fund, which had no shares outstanding as of that date) were separate accounts of (i) Monarch Life Insurance Company ("Monarch"), Springfield, MA; (ii) Bankers Security Life Insurance Society ("Bankers Security"), Arlington, VA; (iii) The Life Insurance Company of Virginia ("Life of Virginia"), Richmond, VA; (iv) Nationwide Life Insurance Company ("Nationwide"), Columbus, OH; (v) Confederation Life Insurance and Annuity Company ("Confederation"), Atlanta, GA and (vi) Massachusetts Mutual Life Insurance Company, Springfield, MA (including its subsidiary, MML Bay Street Life Insurance Company "MassMutual"). Such shares were held as follows:
Bankers Life of Monarch Security Virginia Money Fund 27,692,014.570 11,500,387.510 5,774,622.170 High Income Fund 1,274,839.638 2,771,761.985 2,911,052.062 Bond Fund 784,658.507 * 1,705,549.628 Capital Appreciation Fund 763,186.751 1,679,016.594 2,490,858.915 Growth Fund 998,676.400 * 905,702.085 Multiple Strategies Fund 3,809,233.753 4,426,919.490 2,624,441.836 Bankers Life of Monarch Security Virginia Global Securities Fund -- 1,661,772.214 -- Strategic Bond -- * -- Fund Nationwide Confederation MassMutual Money Fund -- 24,709,842.450 * High Income Fund -- 3,723,645.939 * Bond Fund 9,839,158.640 1,716,375.295 * Capital Appreciation -- 1,812,185.670 1,082,891.984 Fund Growth Fund -- 1,933,896.560 * Multiple Strategies Fund 9,612,482.494 3,969,862.404 * Global Securities Fund 13,499,555.502 3,375,603.049 2,732,019.874 Strategic Bond Fund -- 3,149,446.160 2,453,577.671 __________________ * Less than 5% of the outstanding shares of that Fund.
The Manager and Its Affiliates. The Manager is wholly-owned by Oppenheimer Acquisition Corp. ("OAC"), a holding company controlled by Massachusetts Mutual Life Insurance Company. OAC is also owned in part by certain of the Manager's directors and officers, some of whom also serve as officers of the Trust, and two of whom (Mr. Swain and Mr. Fossel) serve as Trustees of the Trust. The Manager and the Funds have a Code of Ethics. It is designed to detect and prevent improper personal trading by certain employees, including portfolio managers, that would compete with or take advantage of a Fund's portfolio transactions. Compliance with the Code of Ethics is carefully monitored and strictly enforced by the Manager. - The Investment Advisory Agreements. The investment advisory agreements between the Manager and the Trust for each of the nine Funds require the Manager, at its expense, to provide each Fund with adequate office space, facilities and equipment, and to provide and supervise the activities of all administrative and clerical personnel required to provide effective corporate administration for each Fund, including the compilation and maintenance of records with respect to its operations, the preparation and filing of specified reports, and composition of proxy materials and registration statements for continuous public sale of shares of each Fund. Expenses not expressly assumed by the Manager under the advisory agreement are paid by the Trust. The advisory agreements list examples of expenses paid by the Trust, the major categories of which relate to interest, taxes, brokerage commissions, fees to certain Trustees, legal and audit expenses, custodian and transfer agent expenses, share issuance costs, certain printing and registration costs and non- recurring expenses, including litigation costs. Expenses with respect to any two or more Funds are allocable in proportion to the net assets of the respective Funds except where allocations of direct expenses can be made. The management fees paid by the Funds to the Manager for the Funds' most recent three fiscal years (except for Growth & Income Fund, which commenced operations after December 31, 1994) were as follows:
Fiscal year ended December 31, 1994 1993 1992 Money Fund $ 341,324 $212,358 $259,778 High Income Fund $ 617,198 $382,629 $230,117 Bond Fund $ 630,514 $361,258 $215,989 Capital Appreciation Fund $ 803,231 $407,611 $267,347 Growth Fund $ 307,904 $193,110 $121,993 Multiple Strategies Fund $1,433,107 $831,139 $658,068 Global Securities Fund $1,517,234 $227,226 $ 82,505 Strategic Bond Fund (1) $ 105,760 $18,509(1) -- ____________________ (1) From May 3, 1993 (commencement of operations) to December 31, 1993.
The advisory agreements provide that the Manager is not liable for any loss sustained by the Trust and/or any Fund in connection with matters to which the Agreements relate, except a loss resulting by reason of the Manager's willful misfeasance, bad faith or gross negligence in the performance of its duties or reckless disregard for its obligations thereunder. The Manager may act as investment adviser for any other person, firm or corporation, and the Agreements permit the Manager to use the name "Oppenheimer" in connection with other investment companies for which it may act as investment adviser or general distributor. If the Manager shall no longer act as investment adviser to the Trust, the right of the Trust or any of the Funds to use the name "Oppenheimer" as part of their names may be withdrawn. Independently of the advisory agreements, the Manager has voluntarily undertaken since January 1, 1995 that the total expenses of any Fund shall not exceed 2.5% of the first $30 million of average net assets of that Fund, 2.0% of the next $70 million and 1.5% of average net assets over $100 million. In addition, the Manager has voluntarily undertaken since September 1, 1994 that it will limit the management fee charged under Strategic Bond Fund's Agreement so that the ordinary operating expenses of that Fund would not exceed 1.0% of its average net assets in any fiscal year. The payment of the management fee will be reduced or eliminated during any fiscal year in which such payment would cause the expenses of a Fund to exceed its expense limitation. Other expense limits were in effect prior to January 1, 1995. The Manager reserves the right to terminate or amend the undertakings at any time. Any assumption of a Fund's expenses under these limitations would lower that Fund's overall expense ratio and increase its total return during any period in which expenses are limited. The expense limitations in effect prior to the above dates are contained in note 8 to the Funds' financial statements, below. - The Transfer Agent. Oppenheimer Shareholder Services, the Trust's Transfer Agent, is responsible for maintaining the Trust's shareholder registry and shareholder accounting records. Brokerage Policies of the Funds Brokerage Provisions of the Investment Advisory Agreements Affecting Capital Appreciation Fund, Growth Fund, Multiple Strategies Fund, Growth & Income Fund, Global Securities Fund and Strategic Bond Fund. One of the duties of the Manager under the advisory agreements is to arrange the portfolio transactions for the Funds. The advisory agreements contain provisions relating to the employment of broker- dealers ("brokers") to effect the Funds' portfolio transactions. In doing so, the Manager is authorized by the advisory agreements to employ broker-dealers, including "affiliated" brokers, as that term is defined in the Investment Company Act, as may, in its best judgment based on all relevant factors, implement the policy of the Funds to obtain, at reasonable expense, the "best execution" (prompt and reliable execution at the most favorable price obtainable) of such transactions. The Manager need not seek competitive commission bidding but is expected to minimize the commissions paid to the extent consistent with the interests and policies of the Funds as established by the Board of Trustees. Purchases of securities from underwriters include a commission or concession paid by the issuer to the underwriter, and purchases from dealers include a spread between the bid and asked price. Under the advisory agreements, the Manager is authorized to select brokers that provide brokerage and/or research services for the Funds and/or the other accounts over which the Manager or its affiliates have investment discretion. The commissions paid to such brokers may be higher than another qualified broker would have charged if a good faith determination is made by the Manager that the commission is fair and reasonable in relation to the services provided. Description of Brokerage Practices Followed by the Manager. Subject to the provisions of the advisory agreements, and the procedures and rules described above, allocations of brokerage are generally made by the Manager's portfolio traders based upon recommendations from the Manager's portfolio managers. In certain instances portfolio managers may directly place trades and allocate brokerage, also subject to the provisions of the advisory agreement and the procedures and rules described above. Regardless, brokerage is allocated under the supervision of the Manager's executive officers. Transactions in securities other than those for which an exchange is the primary market are generally done with principals or market makers. Brokerage commissions are paid primarily for effecting transactions in listed securities and are otherwise paid only if it appears likely that a better price or execution can be obtained. When Funds engage in an option transaction, ordinarily the same broker will be used for the purchase or sale of the option and any transaction in the securities to which the option relates. When possible, concurrent orders to purchase or sell the same security by more than one of the accounts managed by the Manager or its affiliates are combined. The transactions effected pursuant to such combined orders are averaged as to price and allocated in accordance with the purchase or sale orders actually placed for each account. Option commissions may be relatively higher than those which would apply to direct purchases and sales of portfolio securities. Most purchases of money market instruments and debt obligations are principal transactions at net prices. Instead of using a broker for those transactions, the Fund normally deals directly with the selling or purchasing principal or market maker unless the Manager determines that a better price or execution can be obtained by using a broker. Purchases of these securities from underwriters include a commission or concession paid by the issuer to the underwriter. Purchases from dealers include a spread between the bid and asked prices. The Funds seek to obtain prompt execution of these orders at the most favorable net price. The research services provided by a particular broker may be useful only to one or more of the advisory accounts of the Manager and its affiliates, and investment research received for the commissions of those other accounts may be useful both to the Funds and one or more of such other accounts. Such research, which may be supplied by a third party at the instance of a broker, includes information and analyses on particular companies and industries as well as market or economic trends and portfolio strategy, receipt of market quotations for portfolio evaluations, information systems, computer hardware and similar products and services. If a research service also assists the Manager in a non-research capacity (such as bookkeeping or other administrative functions), then only the percentage or component that provides assistance to the Manager in the investment decision-making process may be paid in commission dollars. The Board of Trustees has permitted the Manager to use concessions on fixed price offerings to obtain research in the same manner as is permitted for agency transactions. The research services provided by brokers broaden the scope and supplement the research activities of the Manager, by making available additional views for consideration and comparisons, and by enabling the Manager to obtain market information for the valuation of securities held in the Fund's portfolio or being considered for purchase. The Board of Trustees, including the "independent" Trustees of the Trust (those Trustees of the Trust who are not "interested persons" as defined in the Investment Company Act) annually reviews information furnished by the Manager as to the commissions paid to brokers furnishing such services so that the Board may ascertain whether the amount of such commissions was reasonably related to the value or benefit of such services. Money Fund, High Income Fund, Bond Fund and Strategic Bond Fund. As most purchases made by Money Fund, High Income Fund, Bond Fund and Strategic Bond Fund are principal transactions at net prices, these Funds incur little or no brokerage costs. Purchases of securities from underwriters include a commission or concession paid by the issuer to the underwriter, and purchases from dealers include a spread between the bid and asked price. No principal transactions and, except under unusual circumstances, no agency transactions for these Funds will be handled by any affiliated securities dealer. In the unusual circumstance when these Funds pay brokerage commissions, the above- described brokerage practices and policies are followed. Money Fund's policy of investing in short-term debt securities with maturities of less than 397 days results in high portfolio turnover. However, since brokerage commissions, if any, are small, high portfolio turnover does not have an appreciable adverse effect upon the net asset value of that Fund. During the Funds' fiscal years ended December 31, 1992, 1993 and 1994, total brokerage commissions paid by the Funds (not including spreads or concessions on principal transactions on a net trade basis) were $79,362, $139,429 and $1,570,251, respectively, for Capital Appreciation Fund; $2,470, $6,723 and $13,640, respectively, for High Income Fund; $32,228, $33,497 and $96,732, respectively, for Growth Fund; $187,495, $176,858 and $332,782, respectively, for Multiple Strategies Fund; $53,828, $352,908 and $2,245,838, respectively for Global Securities Fund; and $0 and $3,782 for Strategic Bond Fund. During the fiscal year ended December 31, 1994, $61,327, $64,814, $80,062, $962,152 and $1,245 was paid by Capital Appreciation Fund, Growth Fund, Multiple Strategies Fund, Global Securities Fund and High Income Fund, respectively, to dealers as brokerage commissions in return for research services; the aggregate amount of those transactions was $24,444,067, $32,063,309, $30,426,116, $215,822,430 and $123,945 for Capital Appreciation Fund, Growth Fund, Multiple Strategies Fund, Global Securities Fund and High Income Fund, respectively. Performance of the Funds - Money Fund Yield Information. Money Fund's current yield for a seven day period of time is determined in accordance with regulations adopted under the Investment Company Act as follows. First, a base period return is calculated for the seven-day period by determining the net change in the value of a hypothetical pre-existing account having one share at the beginning of a seven day period. The change includes dividends declared on the original share and dividends declared on any shares purchased with dividends on that share, but such dividends are adjusted to exclude any realized or unrealized capital gains or losses affecting the dividends declared. Next, the base period return is multiplied by 365/7 to obtain the current yield to the nearest hundredth of one percent. The compounded effective yield for a seven- day period is calculated by (a) adding 1 to the base period return (obtained as described above), (b) raising the sum to a power equal to 365 divided by 7 and (c) subtracting 1 from the result. For the seven days ended December 31, 1994, Money Fund's "current yield" was 5.45% and its compounded "effective yield" for that period was 5.60%. The yield as calculated above may vary for accounts less than approximately $100 in value due to the effect of rounding off each daily dividend to the nearest full cent. Since the calculation of yield under either procedure described above does not take into consideration any realized or unrealized gains or losses on the Fund's portfolio securities which may affect dividends, the dividends declared during a period may not be the same on an annualized basis as the yield for that period. - High Income Fund, Bond Fund and Strategic Bond Fund Yield Information. The "yield" or "standardized yield" of High Income Fund, Bond Fund and Strategic Bond Fund for a 30-day period is calculated using the following formula set forth in the SEC rules: a-b 6 Yield = 2 ((---- + 1) -1) cd The symbols above represent the following factors: a = dividends and interest earned during the 30-day period. b = expenses accrued for the period (net of any expense reimbursements). c = the average daily number of Fund shares outstanding during the 30-day period that were entitled to receive dividends. d = the Fund's maximum offering price (including sales charge) per share on the last day of the period. Each Fund's yield for a 30-day period may differ from its yield for any other period. The SEC formula assumes that the yield for a 30- day period occurs at a constant rate for a six-month period and is annualized at the end of the six-month period. For the 30 days ended December 31, 1994, the yield of High Income Fund, Bond Fund and Strategic Bond Fund, calculated as described above, was 10.00%, 8.07% and 10.00%, respectively. The "standardized" yield is not based on distributions paid by a Fund to shareholders in the 30-day period, but is a hypothetical yield based upon the return on a Fund's portfolio investments, and may differ from a Fund's "distribution return" described below. - Dividend Yield and Distribution Return. From time to time High Income, Bond and Strategic Bond Funds may quote a "dividend yield" or a "distribution return." Dividend yield is based on that Fund's dividends derived from net investment income during a stated period, and distribution return includes dividends derived from net investment income and from realized capital gains declared during a stated period. Under those calculations, the Fund's dividends and/or distributions declared during a stated period of one year or less (for example, 30 days) are added together, and the sum is divided by the Fund's maximum offering price (equal to its net asset value) per share on the last day of the period. The result may be annualized if the period of measurement is less than one year. The dividend yield of High Income Fund, Bond Fund and Strategic Bond Fund for the quarter ended December 31, 1994, was 8.99%, 7.79% and 9.13%, respectively. Total Return. Each Fund, except Money Fund, may quote its "total return" or "average annual total return." "Average annual total return" ("T" in the formula below) is an average annual compounded rate of return. It is the rate of return based on factors which include a hypothetical initial investment of $1,000 ("P" in the formula below) over a number of years ("n") with an Ending Redeemable Value ("ERV") of that investment, according to the following formula: ( ERV ) 1/n (-----) -1 = Average Annual Total Return ( P ) The cumulative "total return" calculation measures the change in value of a hypothetical investment of $1,000 over a stated period. Its calculation uses some of the same factors as average annual total return, but it does not average the rate of return on an annual basis. Cumulative total return is determined as follows: ERV - P - ------- = Total Return P Both formulas assume that all dividends and capital gains distributions during the period are reinvested at net asset value per share, and that the investment is redeemed at the end of the period. Set forth below is the "average annual total return" and "total return" for each Fund (using the method described above) other than Growth & Income Fund (which commenced operations on May 1, 1995) during the periods indicated:
Average Annual Total Return for: Cumulative Total Fiscal Year Five Year Return From Ended Period Inception(1) Inception(1) Fund 12/31/94 Ended 12/31/94 to 12/31/94 to 12/31/94 High Income Fund -3.18% 15.09% 12.47% 176.94% Bond Fund -1.94% 8.43% 9.78% 148.25% Capital Appreciation Fund -7.59% 11.81% 13.28% 184.34% Growth Fund 0.97% 7.40% 11.44% 187.26% Multiple Strategies Fund -1.95% 7.38% 9.85% 109.91% Global Securities Fund -5.72% N/A 11.15% 54.83% Strategic Bond Fund -3.78% N/A 0.19% 0.32% ______________ (1)Inception dates are as follows: April 30, 1986 for High Income Fund; April 3, 1985 for Bond Fund and Growth Fund; August 15, 1986 for Capital Appreciation Fund; February 9, 1987 for Multiple Strategies Fund; November 12, 1990 for Global Securities Fund; and May 3, 1993 for Strategic Bond Fund.
The total return on an investment made in shares of any one of these Funds may be compared with performance for the same period of either the Standard & Poor's 500 Index ("S&P 500") or the Dow Jones Industrial Average ("Dow"). Both the S&P 500 and the Dow are widely recognized indices of stock market performance consisting of unmanaged groups of common stocks (the Dow consists of 30 such issues). The performance of both indices includes a factor for the reinvestment of income dividends but not capital gains and does not take sales charges or taxes into consideration. Yield and total return information may be useful to investors in reviewing performance of the Funds. However, a number of factors should be taken into account before using such performance information as a basis for comparison with alternative investments. An investment in any of these Funds is not insured. Their performance is not guaranteed and will fluctuate over time. Yield and total return for any Fund for any given past period is not an indication or representation by that Fund of future yields or rates of return on its shares. In comparing the performance of one Fund to another, consideration should be given to each Fund's investment policy, portfolio quality, portfolio maturity, type of instrument held and operating expenses. When comparing yield, total return and investment risk of an investment in any of the Funds with those of other investment instruments, investors should understand that certain other investment alternative such as money market instruments, certificates of deposits ("CDs"), U.S. Government securities or bank accounts provide yields that are fixed or that may vary above a stated minimum, and may be insured or guaranteed. Finally, the performance quotations do not reflect the charges deducted from an Account, as explained in the attached Prospectus for the Policies. If these charges were deducted, that performance would be lower than as described above. Other Performance Comparisons. From time to time the Trust may publish the ranking of any of the Funds by Lipper Analytical Services, Inc. ("Lipper"), a widely-recognized independent service. Lipper monitors the performance of regulated investment companies, including the Funds, and ranks their performance for various periods based on categories relating to investment objectives. The performance of the Funds is ranked against all other funds underlying variable insurance products. The Lipper performance analysis includes the reinvestment of capital gains distributions and income dividends but do not take sales charges or taxes into consideration. From time to time, the Trust may include in its advertisements and sales literature performance information about the Trust cited in other newspapers and periodicals, such as The New York Times, which may include performance quotations from other sources, including Lipper. From time to time the Trust may publish the ranking of the performance of any of the separate accounts that offer its Funds by Morningstar, Inc., an independent mutual fund monitoring service, that ranks mutual funds, including the Funds, monthly in broad investment categories (equity, taxable bond, municipal bond and hybrid) based on risk-adjusted investment return. Investment return measures a fund's three, five and ten-year average annual total returns (when available) in excess of 90-day U.S. Treasury bill returns after considering sales charges and expenses. Risk reflects fund performance below 90-day U.S. Treasury bill monthly returns. Risk and return are combined to produce star rankings reflecting performance relative to the average fund in a fund's category. Five stars is the "highest" ranking (top 10%), four stars is "above average" (next 22.5%), three stars is "average" (next 35%), two stars is "below average" (next 22.5%) and one star is "lowest" (bottom 10%). Rankings are subject to change. About Your Account How To Buy Shares Determination of Net Asset Value Per Share. The sale of shares of the Funds is currently limited to Accounts as explained on the cover page of this Statement of Additional Information and the Prospectus. Such shares are sold at their respective offering prices (net asset values without sales charges) and redeemed at their respective net asset values as described in the Prospectus. The net asset values per share of each Fund is determined as of the close of business of The New York Stock Exchange on each day that the Exchange is open, by dividing the value of the Fund's net assets by the number of shares that are outstanding. The Exchange normally closes at 4:00 P.M., New York time, but may close earlier on some days (for example, in case of weather emergencies or on days falling before a holiday). The Exchange's most recent annual announcement (which is subject to change) states that it will close on New Year's Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day. It may also close on other days. Dealers may conduct trading at times when the Exchange is closed (including weekends and holidays). Trading may occur in debt securities and in foreign securities at times when the NYSE is closed (including weekends and holidays or after 4:00 P.M., New York time, on a regular business day). Because the net asset value of the Funds will not be calculated at such times, the net asset value per share of the Funds may be significantly affected on such days when shareholders may not purchase or redeem shares. The Trust's Board of Trustees has established procedures for the valuation of each Fund's (other than the Money Fund's) securities, generally as follows: (i) equity securities traded on a U.S. securities exchange or on NASDAQ for which last sale information is regularly reported are valued at the last reported sale price on their primary exchange or NASDAQ that day (or, in the absence of sales that day, at values based on the last sales prices of the preceding trading day, or closing bid and asked prices); (ii) securities actively traded on a foreign securities exchange are valued at the last sales price available to the pricing service approved by the Board of Trustees or to the Manager as reported by the principal exchange on which the security is traded; (iii) unlisted foreign securities or listed foreign securities not actively traded are valued at the mean between "bid" and "asked" prices determined by a pricing service approved by the Board of Trustees or by the Manager; (iv) long-term debt securities having a remaining maturity in excess of 60 days are valued at the mean between the "bid" and "asked" prices determined by a portfolio pricing service approved by the Board of Trustees or obtained from active market makers in the security on the basis of reasonable inquiry; (v) debt instruments having a maturity of more than one year when issued, and non-money market type instruments having a maturity of one year or less when issued, which have a remaining maturity of 60 days or less are valued at the mean between the "bid" and "asked" prices determined by a pricing service approved by the Board of Trustees or obtained from active market makers in the security on the basis of reasonable inquiry; (vi) money market-type debt securities having a maturity of less than one year when issued that having a remaining maturity of 60 days or less are valued at cost, adjusted for amortization of premiums and accretion of discounts; and (vii) securities (including restricted securities) not having readily-available market quotations are valued at fair value under the Board's procedures. Trading in securities on European and Asian exchanges and over-the- counter markets is normally completed before the close of The New York Stock Exchange. Events affecting the values of foreign securities traded in stock markets that occur between the time their prices are determined and the close of the Exchange will not be reflected in a Fund's calculation of net asset value unless the Board of Trustees or the Manager, under procedures established by the Board of Trustees, determines that the particular event would materially affect a Fund's net asset value, in which case an adjustment would be made, if necessary. Foreign currency will be valued as close to the time fixed for the valuation date as is reasonably practicable. The values of securities denominated in foreign currency will be converted to U.S. dollars at the prevailing rates of exchange at the time of valuation. In the case of U.S. Government Securities, mortgage-backed securities, foreign fixed-income securities and corporate bonds, when last sale information is not generally available, such pricing procedures may include "matrix" comparisons to the prices for comparable instruments on the basis of quality, yield, maturity, and other special factors involved. The Trust's Board of Trustees has authorized the Manager to employ a pricing service to price U.S. Government Securities, mortgage-backed securities, foreign government securities and corporate bonds. The Trustees will monitor the accuracy of such pricing services by comparing prices used for portfolio evaluation to actual sales prices of selected securities. Puts, calls and Futures held by a Fund are valued at the last sales price on the principal exchange on which they are traded, or on NASDAQ as applicable, as determined by a pricing service approved by the Board of Trustees or by the Manager, or, if there are no sales that day, in accordance with (i), above. Forward currency contracts are valued at the closing price in the London foreign exchange market as provided by a reliable bank, dealer or pricing service. When a Fund writes an option, an amount equal to the premium received by that Fund is included in its Statement of Assets and Liabilities as an asset, and an equivalent deferred credit is included in the liability section. The deferred credit is adjusted ("marked-to-market") to reflect the current market value of the option. In determining a Fund's gain on investments, if a call written by that Fund is exercised, the proceeds are increased by the premium received. If a call or put written by a Fund expires, that Fund has a gain in the amount of the premium; if the Fund enters into a closing purchase transaction, it will have a gain or loss depending on whether the premium was more or less than the cost of the closing transaction. If a Fund exercises a put it holds, the amount that Fund receives on its sale of the underlying investment is reduced by the amount of premium paid by the Fund. Money Fund Net Asset Valuation. Money Fund will seek to maintain a net asset value of $1.00 per share for purchases and redemptions. There can be no assurance that it will do so. The Fund operates under SEC Rule 2a-7, under which the Fund may use the amortized cost method of valuing its shares. The amortized cost method values a security initially at its cost and thereafter assumes a constant amortization of any premium or accretion of any discount, regardless of the impact of fluctuating interest rates on the market value of the security. The method does not take into account unrealized capital gains or losses. The Trust's Board of Trustees has established procedures intended to stabilize Money Fund's net asset value at $1.00 per share. If the Fund's net asset value per share were to deviate from $1.00 by more than 0.5%, Rule 2a-7 requires the Board promptly to consider what action, if any, should be taken. If the Trustees find that the extent of any such deviation may result in material dilution or other unfair effects on shareholders, the Board will take whatever steps it considers appropriate to eliminate or reduce such dilution or unfair effects, including, without limitation, selling portfolio securities prior to maturity, shortening the average portfolio maturity, withholding or reducing dividends, reducing the outstanding number of Fund shares without monetary consideration, or calculating net asset value per share by using available market quotations. As long as it uses Rule 2a-7, Money Fund must abide by certain conditions described above and in the prospectus. For purposes of the Rule, the maturity of an instrument is generally considered to be its stated maturity (or in the case of an instrument called for redemption, the date on which the redemption payment must be made), with special exceptions for certain variable and floating rate instruments. Repurchase agreements and securities loan agreements are, in general, treated as having a maturity equal to the period scheduled until repurchase or return, or if subject to demand, equal to the notice period. While the amortized cost method provides certainty in valuation, there may be periods during which the value of an instrument as determined by amortized cost is higher or lower than the price the Fund would receive if it sold the instrument. During periods of declining interest rates, the daily yield on Money Fund shares may tend to be lower than a like computation made by a fund with identical investments utilizing a method of valuation based upon market prices or estimates of market prices for its portfolio. Conversely, during periods of rising interest rates, the daily yield on Money Fund shares will tend to be higher than that of a portfolio priced at market value. Dividends, Capital Gains and Taxes Distributions and Taxes. The Trust intends for each Fund to qualify as a "regulated investment company" under Subchapter M of the Internal Revenue Code. By so qualifying, the Funds will not be subject to Federal income taxes on amounts paid by them as dividends and distributions, as described in the Prospectus. Each Fund is treated as a single entity for purposes of determining Federal tax treatment. The Trust will endeavor to ensure that each Fund's assets are so invested so that all such requirements are satisfied, but there can be no assurance that it will be successful in doing so. The Internal Revenue Code requires that a holder (such as a Fund) of a zero coupon security accrue a portion of the discount at which the security was purchased as income each year even though that Fund receives no interest payment in cash on the security during the year. As an investment company, each Fund must pay out substantially all of its net investment income each year. Accordingly, when a Fund holds zero coupon securities, it may be required to pay out as an income distribution each year an amount which is greater than the total amount of cash interest the Fund actually received. Such distributions will be made from the cash assets of that Fund or by liquidation of portfolio securities, if necessary. The Fund may realize a gain or loss from such sales. In the event the Fund realizes net capital gains from such transactions, its shareholders may receive a larger capital gain distribution than they would have had in the absence of such transactions. Additional Information About the Funds The Custodian and the Transfer Agent. The Bank of New York is the custodian of the Trust's securities. The custodian's responsibilities include safeguarding and controlling the Trust's portfolio securities, collecting income on the portfolio securities, and handling the delivery of portfolio securities to and from the Trust. The Manager has represented to the Trust that its banking relationships with the Custodian have been and will continue to be unrelated to and unaffected by the relationship between the Trust and the Custodian. It will be the practice of the Trust to deal with the Custodian in a manner uninfluenced by any banking relationship the Custodian may have with the Manager and its affiliates. Oppenheimer Shareholder Services, as transfer agent, is responsible for maintaining the Trust's shareholder registry and shareholder accounting records, and for administrative functions. Independent Auditors. The independent auditors of the Trust examine its financial statements and perform other related audit services. They also act as auditors for the Manager and certain other funds advised by the Manager and its affiliates. Appendix A Industry Classifications Aerospace/Defense Air Transportation Auto Parts Distribution Automotive Bank Holding Companies Banks Beverages Broadcasting Broker-Dealers Building Materials Cable Television Chemicals Commercial Finance Computer Hardware Computer Software Conglomerates Consumer Finance Containers Convenience Stores Department Stores Diversified Financial Diversified Media Drug Stores Drug Wholesalers Durable Household Goods Education Electric Utilities Electrical Equipment Electronics Energy Services & Producers Entertainment/Film Environmental Food Gas Utilities Gold Health Care/Drugs Health Care/Supplies & Services Homebuilders/Real Estate Hotel/Gaming Industrial Services Insurance Leasing & Factoring Leisure Manufacturing Metals/Mining Nondurable Household Goods Oil - Integrated Paper Publishing/Printing Railroads Restaurants Savings & Loans Shipping Special Purpose Financial Specialty Retailing Steel Supermarkets Telecommunications - Technology Telephone - Utility Textile/Apparel Tobacco Toys Trucking INDEPENDENT AUDITORS' REPORT The Board of Trustees and Shareholders of Oppenheimer Variable Account Funds: We have audited the accompanying statements of assets and liabilities, including the statements of investments, of Oppenheimer Money Fund, Oppenheimer High Income Fund, Oppenheimer Bond Fund, Oppenheimer Capital Appreciation Fund, Oppenheimer Growth Fund, Oppenheimer Multiple Strategies Fund, Oppenheimer Global Securities Fund and Oppenheimer Strategic Bond Fund (all of which are series of Oppenheimer Variable Account Funds) as of December 31, 1994, the related statements of operations for the year then ended, the statements of changes in net assets for the years ended December 31, 1994 and 1993, and the financial highlights for the applicable periods ended December 31, 1994, 1993, 1992, 1991, 1990, 1989, 1988, 1987, and 1986, June 30, 1986 and December 31, 1985. These financial statements and financial highlights are the responsibility of the Funds' 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 generally accepted auditing standards. 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 at December 31, 1994 by correspondence with the custodian and brokers; where replies were not received from brokers, we performed other auditing procedures. 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, such financial statements and financial highlights present fairly, in all material respects, the financial position of Oppenheimer Money Fund, Oppenheimer High Income Fund, Oppenheimer Bond Fund, Oppenheimer Capital Appreciation Fund, Oppenheimer Growth Fund, Oppenheimer Multiple Strategies Fund, Oppenheimer Global Securities Fund and Oppenheimer Strategic Bond Fund at December 31, 1994, the results of their operations, the changes in their net assets, and the financial highlights for the respective stated periods, in conformity with generally accepted accounting principles. /s/ Deloitte & Touche LLP - ------------------------- DELOITTE & TOUCHE LLP Denver, Colorado January 23, 1995
- ----------------------------------------------------------------------------------------------------------------------------------- STATEMENT OF INVESTMENTS December 31, 1994 Oppenheimer Variable Account Funds - Oppenheimer Money Fund FACE MARKET VALUE AMOUNT SEE NOTE 1 - ----------------------------------------------------------------------------------------------------------------------------------- REPURCHASE AGREEMENTS - 2.5% - ----------------------------------------------------------------------------------------------------------------------------------- Repurchase agreement with Morgan Guaranty Trust Co., 6.15%, dated 12/30/94, to be repurchased at $2,201,503 on 1/3/95, collateralized by FNMA 8.50%, 12/1/24, with a value of $2,263,118 (Cost $2,200,000) $ 2,200,000 $ 2,200,000 - ----------------------------------------------------------------------------------------------------------------------------------- CERTIFICATES OF DEPOSIT - 4.5% - ----------------------------------------------------------------------------------------------------------------------------------- DOMESTIC CERTIFICATES OF DEPOSIT - 4.5% - ----------------------------------------------------------------------------------------------------------------------------------- Huntington National Bank, 5.82%, 1/4/95 (Cost $3,999,207) (1) 4,000,000 3,999,207 - ----------------------------------------------------------------------------------------------------------------------------------- DIRECT BANK OBLIGATIONS - 6.7% - ----------------------------------------------------------------------------------------------------------------------------------- Canadian Imperial Holdings, Inc., 6.03%, 2/23/95 3,000,000 2,973,368 ------------------------------------------------------------------------------------------------------------------------- FCC National Bank, 5.82%, 1/4/95 (1) 3,000,000 2,997,712 ---------------- Total Direct Bank Obligations (Cost $5,971,080) 5,971,080 - ----------------------------------------------------------------------------------------------------------------------------------- LETTERS OF CREDIT - 10.4% - ----------------------------------------------------------------------------------------------------------------------------------- Credit Suisse, guaranteeing commercial paper of: Queensland Alumina Ltd., 5.75%, 2/10/95 3,337,000 3,315,680 ------------------------------------------------------------------------------------------------------------------------- Mitsubishi Bank Ltd., guaranteeing commercial paper of: DIC Americas, Inc., 5.85%, 1/18/95 3,000,000 2,991,713 ------------------------------------------------------------------------------------------------------------------------- Sanwa Bank Ltd., guaranteeing commercial paper of: Orix America, Inc., 6.20%, 2/1/95 (2) 3,000,000 2,983,983 ---------------- Total Letters of Credit (Cost $9,291,376) 9,291,376 - ----------------------------------------------------------------------------------------------------------------------------------- SHORT-TERM NOTES - 73.3% - ----------------------------------------------------------------------------------------------------------------------------------- ASSET-BACKED - 12.6% ------------------------------------------------------------------------------------------------------------------------- Beta Finance, Inc., 5.85%, 2/21/95 (2) 2,400,000 2,380,110 ------------------------------------------------------------------------------------------------------------------------- Cooperative Association of Tractor Dealers, Inc., 5.50%, 1/11/95 1,000,000 998,472 ------------------------------------------------------------------------------------------------------------------------- CXC, Inc., 5.75%, 2/10/95 4,000,000 3,974,444 ------------------------------------------------------------------------------------------------------------------------- WCP Funding, 6.10%, 2/13/95 4,000,000 3,970,856 ---------------- 11,323,882 - ----------------------------------------------------------------------------------------------------------------------------------- BANKS - 7.8% ------------------------------------------------------------------------------------------------------------------------- Chase Manhattan Corp., 5.36%, 1/13/95 4,000,000 3,992,853 ------------------------------------------------------------------------------------------------------------------------- NationsBank Corp., 5.42%, 1/18/95 3,000,000 2,992,322 ---------------- 6,985,175 - ----------------------------------------------------------------------------------------------------------------------------------- BROKER/DEALERS - 13.9% ------------------------------------------------------------------------------------------------------------------------- Bear Stearns Cos., Inc., 5.79%, 1/3/95 (1) 2,000,000 2,000,000 ------------------------------------------------------------------------------------------------------------------------- Dean Witter, Discover & Co., 6.10%-6.11%, 2/10/95 3,000,000 2,979,633 ------------------------------------------------------------------------------------------------------------------------- Lehman Brothers Holdings, Inc., 5.61%, 1/12/95 2,000,000 2,000,000 ------------------------------------------------------------------------------------------------------------------------- Lehman Brothers Holdings, Inc., 6.22%, 1/3/95 (1) 1,500,000 1,500,000 ------------------------------------------------------------------------------------------------------------------------- Morgan Stanley Group, Inc., 5.49%, 1/3/95 (1) 4,000,000 4,000,000 ---------------- 12,479,633 - ----------------------------------------------------------------------------------------------------------------------------------- COMMERCIAL FINANCE - 1.1% ------------------------------------------------------------------------------------------------------------------------- CIT Group Holdings, Inc., 6.309%, 1/11/95 (1)(3) 1,000,000 1,000,000 - ----------------------------------------------------------------------------------------------------------------------------------- CONSUMER FINANCE (PERSONAL LOANS) - 3.3% ------------------------------------------------------------------------------------------------------------------------- Sears Roebuck Acceptance Corp., 5.10%, 1/23/95 3,000,000 2,990,650 - ----------------------------------------------------------------------------------------------------------------------------------- DIVERSIFIED FINANCE - 13.9% ------------------------------------------------------------------------------------------------------------------------- General Electric Capital Corp., 5.79%, 1/3/95 (1) 4,000,000 3,997,889
STATEMENT OF INVESTMENTS (CONTINUED) December 31, 1994 Oppenheimer Variable Account Funds - Oppenheimer Money Fund FACE MARKET VALUE SHORT-TERM NOTES (CONTINUED) AMOUNT SEE NOTE 1 - ----------------------------------------------------------------------------------------------------------------------------------- DIVERSIFIED FINANCE (CONTINUED) ------------------------------------------------------------------------------------------------------------------------- ITT Financial Corp., 5.83%, 2/15/95 $ 4,000,000 $ 3,970,850 ------------------------------------------------------------------------------------------------------------------------- Transamerica Finance Corp., 5.10%, 2/3/95 4,500,000 4,478,963 ---------------- 12,447,702 - ----------------------------------------------------------------------------------------------------------------------------------- HEALTHCARE: MISCELLANEOUS - 4.4% ------------------------------------------------------------------------------------------------------------------------- Allergan, Inc., 6.18%, 2/10/95 4,000,000 3,972,533 - ----------------------------------------------------------------------------------------------------------------------------------- INSURANCE - 4.4% ------------------------------------------------------------------------------------------------------------------------- Internationale Nederlanden Verzekeringen, NV, guaranteeing commercial paper of: Internationale Nederlanden U.S. Insurance Holdings, Inc., 6.10%, 2/7/95 4,000,000 3,974,922 - ----------------------------------------------------------------------------------------------------------------------------------- LEASE FINANCING - 7.5% ------------------------------------------------------------------------------------------------------------------------- International Lease Finance Corp., 5.85%, 2/24/95 3,000,000 2,973,675 ------------------------------------------------------------------------------------------------------------------------- Sanwa Business Credit Corp., 6.08%, 2/21/95 3,800,000 3,767,269 ---------------- 6,740,944 - ----------------------------------------------------------------------------------------------------------------------------------- TECHNOLOGY - 4.4% ------------------------------------------------------------------------------------------------------------------------- Electronic Data Systems Corp., 5.95%, 2/15/95 4,000,000 3,970,251 ---------------- Total Short-Term Notes (Cost $65,885,692) 65,885,692 - ----------------------------------------------------------------------------------------------------------------------------------- U.S. GOVERNMENT OBLIGATIONS - 2.3% - ----------------------------------------------------------------------------------------------------------------------------------- Small Business Administration, 9.375%-10.375%, 1/1/95 (Cost $2,079,755) (1) 1,969,925 2,079,755 ------------------------------------------------------------------------------------------------------------------------- TOTAL INVESTMENTS, AT VALUE (COST $89,427,110) 99.7% 89,427,110 ------------------------------------------------------------------------------------------------------------------------- OTHER ASSETS NET OF LIABILITIES 0.3 243,807 ------------------ ---------------- NET ASSETS 100.0% $ 89,670,917 ------------------ ---------------- ------------------ ----------------
1. Variable rate security. The interest rate, which is based on specific, or an index of, market interest rates, is subject to change periodically and is the effective rate on December 31, 1994. 2. Security purchased in private placement transaction, without registration under the Securities Act of 1933 (the Act). The securities were acquired between November 22, 1994 and December 31, 1994, are carried at amortized cost, and amount to $5,364,093, or 5.98% of the Fund's net assets. 3. Put obligation redeemable at full face value on the date reported. See accompanying Notes to Financial Statements.
- ----------------------------------------------------------------------------------------------------------------------------------- STATEMENT OF INVESTMENTS December 31, 1994 Oppenheimer Variable Account Funds - Oppenheimer High Income Fund FACE MARKET VALUE AMOUNT (1) SEE NOTE 1 - ----------------------------------------------------------------------------------------------------------------------------------- REPURCHASE AGREEMENTS - 6.3% - ----------------------------------------------------------------------------------------------------------------------------------- Repurchase agreement with First Chicago Capital Markets, 6%, dated 12/30/94, to be repurchased at $6,004,000 on 1/3/95, collateralized by U.S. Treasury Nts., 3.875%-8.875%, 5/31/95-8/31/05, with a value of $5,705,931 and U.S. Treasury Bonds, 10.75%-14.25%, 2/15/02-8/15/05, with a value of $419,161(Cost $6,000,000) $ 6,000,000 $ 6,000,000 - ----------------------------------------------------------------------------------------------------------------------------------- MORTGAGE-BACKED OBLIGATIONS - 2.3% - ----------------------------------------------------------------------------------------------------------------------------------- PRIVATE - 2.3% - ----------------------------------------------------------------------------------------------------------------------------------- MULTI-FAMILY - 1.4% ------------------------------------------------------------------------------------------------------------------------- Resolution Trust Corp. Commercial Mtg. Pass-Through Certificates, 8%, Series 1994-C2, Cl. G, 4/25/25 994,250 725,492 ------------------------------------------------------------------------------------------------------------------------- Resolution Trust Corp. Commercial Mtg. Pass-Through Certificates, 8%, Series 1994-Cl, Cl. E, 6/25/26 789,270 598,612 ---------------- 1,324,104 - ----------------------------------------------------------------------------------------------------------------------------------- RESIDENTIAL - 0.9% ------------------------------------------------------------------------------------------------------------------------- Residential Funding Corp. Mtg. Pass-Through Certificates, 7.97%, Series 1993-J2, Cl. B1, 6/15/23 (5) 1,198,290 850,121 ---------------- Total Mortgage-Backed Obligations (Cost $2,355,538) 2,174,225 - ----------------------------------------------------------------------------------------------------------------------------------- FOREIGN GOVERNMENT OBLIGATIONS - 9.8% - ----------------------------------------------------------------------------------------------------------------------------------- Bonos de la Tesoreria de la Federacion, 0%, 1/12/95 500,000 496,415 ------------------------------------------------------------------------------------------------------------------------- Bonos de la Tesoreria de la Federacion, 0%, 10/11/95 1,000,000 863,309 ------------------------------------------------------------------------------------------------------------------------- Bonos de la Tesoreria de la Federacion, 0%, 4/6/95 1,000,000 939,261 ------------------------------------------------------------------------------------------------------------------------- Bonos de la Tesoreria de la Federacion, 0%, 7/27/95 500,000 447,984 ------------------------------------------------------------------------------------------------------------------------- Brazil (Federal Republic of) Bonds, Banco Do Nordeste Brasil, 10.375%, 11/6/95 (5) 750,000 742,500 - ----------------------------------------------------------------------------------------------------------------------------------- Indonesia (Republic of) CD, Bank Negara, 0%, 5/12/95 IDR 2,000,000,000 863,967 - ----------------------------------------------------------------------------------------------------------------------------------- International Bank for Reconstruction and Development Bonds, 12.50%, 7/25/97 NZD 1,000,000 684,949 - ----------------------------------------------------------------------------------------------------------------------------------- Japan Development Bank (The) Gtd. Bonds, 5%, 10/1/99 JPY 95,000,000 989,682 - ----------------------------------------------------------------------------------------------------------------------------------- Morocco (Kingdom of) Loan Participation Agreement, Tranche A, 5.938%, 1/1/09 (4) 1,000,000 663,750 - ----------------------------------------------------------------------------------------------------------------------------------- New Zealand (Republic of) Bonds, 10%, 7/15/97 NZD 500,000 324,797 - ----------------------------------------------------------------------------------------------------------------------------------- New Zealand (Republic of) Bonds, 8%, 11/15/95 NZD 1,500,000 948,259 - ----------------------------------------------------------------------------------------------------------------------------------- New Zealand (Republic of) Bonds, 9%, 11/15/96 NZD 1,250,000 794,465 - ----------------------------------------------------------------------------------------------------------------------------------- Poland (Republic of) Disc. Bonds, 6.813%, 10/27/24 250,000 180,626 - ----------------------------------------------------------------------------------------------------------------------------------- Venezuela (Republic of) Debs., 9%, 5/27/96 500,000 471,250 ---------------- Total Foreign Government Obligations (Cost $9,628,161) 9,411,214 - ----------------------------------------------------------------------------------------------------------------------------------- MUNICIPAL BONDS AND NOTES - 1.5% - ----------------------------------------------------------------------------------------------------------------------------------- Pinole, California Redevelopment Agency Tax Allocation Taxable Bonds, Pinole Vista Redevelopment, Series B, 7.65%, 975,000 901,696 8/1/07 ------------------------------------------------------------------------------------------------------------------------- San Joaquin Hills, California Transportation Corridor Agency Toll Road Capital Appreciation Revenue Bonds, Jr. Lien, 0%, 1/1/28 12,500,000 571,400 ---------------- Total Municipal Bonds and Notes (Cost $1,645,000) 1,473,096
STATEMENT OF INVESTMENTS (CONTINUED) December 31, 1994 Oppenheimer Variable Account Funds - Oppenheimer High Income Fund FACE MARKET VALUE AMOUNT (1) SEE NOTE 1 - ----------------------------------------------------------------------------------------------------------------------------------- CORPORATE BONDS AND NOTES - 67.8% - ----------------------------------------------------------------------------------------------------------------------------------- BASIC MATERIALS - 7.0% - ----------------------------------------------------------------------------------------------------------------------------------- CHEMICALS - 1.7% ------------------------------------------------------------------------------------------------------------------------- Carbide/Graphite Group, Inc., 11.50% Sr. Nts., 9/1/03 $ 1,000,000 $ 1,007,500 ------------------------------------------------------------------------------------------------------------------------- Synthetic Industries, Inc., 12.75% Sr. Sub. Debs., 12/1/02 750,000 663,750 ---------------- 1,671,250 - ----------------------------------------------------------------------------------------------------------------------------------- METALS - 2.2% ------------------------------------------------------------------------------------------------------------------------- Kaiser Aluminum & Chemical Corp., 12.75% Sr. Sub. Nts., 2/1/03 250,000 251,875 ------------------------------------------------------------------------------------------------------------------------- Kaiser Aluminum & Chemical Corp., 9.875% Sr. Nts., 2/15/02 700,000 644,000 ------------------------------------------------------------------------------------------------------------------------- NL Industries, Inc., 0%/13% Sr. Sec. Disc. Nts., 10/15/05 (3) 850,000 531,250 ------------------------------------------------------------------------------------------------------------------------- NL Industries, Inc., 11.75% Sr. Sec. Nts., 10/15/03 650,000 650,000 ---------------- 2,077,125 - ----------------------------------------------------------------------------------------------------------------------------------- PAPER AND FOREST PRODUCTS - 3.1% ------------------------------------------------------------------------------------------------------------------------- Equitable Bag, Inc., 12.375% Sr. Nts., 8/15/02 (2) 100,000 50,500 ------------------------------------------------------------------------------------------------------------------------- PT Inti Indorayon Utama, 9.125% Sr. Nts., 10/15/00 310,000 254,200 ------------------------------------------------------------------------------------------------------------------------- Repap Wisconsin, Inc., 9.25% Fst. Priority Sr. Sec. Nts., 2/1/02 450,000 403,875 ------------------------------------------------------------------------------------------------------------------------- Riverwood International Corp., 10.375% Sr. Sub. Nts., 6/30/04 400,000 406,000 ------------------------------------------------------------------------------------------------------------------------- SD Warren Co., 12% Sr. Sub. Nts., 12/15/04 (5) 350,000 360,500 ------------------------------------------------------------------------------------------------------------------------- Stone Consolidated Corp., 10.25% Sr. Sec. Nts., 12/15/00 500,000 493,750 ------------------------------------------------------------------------------------------------------------------------- Stone Container Corp., 10.75% Fst. Mtg. Nts., 10/1/02 1,000,000 1,000,000 ---------------- 2,968,825 - ----------------------------------------------------------------------------------------------------------------------------------- CONSUMER CYCLICALS - 21.3% - ----------------------------------------------------------------------------------------------------------------------------------- AUTOMOBILES - 1.0% ------------------------------------------------------------------------------------------------------------------------- Envirotest Systems Corp., 9.125% Sr. Nts., 3/15/01 100,000 82,500 ------------------------------------------------------------------------------------------------------------------------- Foamex LP/JPS Automotive Corp., Units (3) 500,000 265,000 ------------------------------------------------------------------------------------------------------------------------- Penda Corp., 10.75% Sr. Nts., Series B, 3/1/04 675,000 617,625 ---------------- 965,125 - ----------------------------------------------------------------------------------------------------------------------------------- CONSTRUCTION SUPPLIES AND DEVELOPMENT - 3.8% ------------------------------------------------------------------------------------------------------------------------- Hillsborough Holdings Corp., 7.50% Participation Agreement, 12/30/99 (2)(5) 1,000,000 1,575,000 ------------------------------------------------------------------------------------------------------------------------- Triangle Pacific Corp., 10.50% Sr. Nts., 8/1/03 600,000 573,000 ------------------------------------------------------------------------------------------------------------------------- Tribasa Toll Road Trust, 10.50% Nts., Series 1993-A, 12/1/11 (5) 500,000 432,500 ------------------------------------------------------------------------------------------------------------------------- Walter Industries, Inc., 14.625% Sr. Nts., Series B, 1/1/99 (2) 400,000 748,000 ------------------------------------------------------------------------------------------------------------------------- Walter Industries, Inc., 17% Sub. Debs., 1/1/96 (2) 400,000 278,000 ---------------- 3,606,500 - ----------------------------------------------------------------------------------------------------------------------------------- CONSUMER GOODS AND SERVICES - 5.1% ------------------------------------------------------------------------------------------------------------------------- Amstar Corp., 11.375% Sr. Sub. Nts., 2/15/97 500,000 497,500 ------------------------------------------------------------------------------------------------------------------------- Coleman Holdings, Inc., 0% Sr. Sec. Disc. Nts., Series B, 500,000 340,000 5/27/98 ------------------------------------------------------------------------------------------------------------------------- Harman International Industries, Inc., 12% Sr. Sub. Nts., 8/1/02 1,000,000 1,085,000 ------------------------------------------------------------------------------------------------------------------------- MacAndrews & Forbes Group, Inc., 12.25% Sub. Nts., 7/1/96 750,000 748,125 ------------------------------------------------------------------------------------------------------------------------- Mary Kay Corp., 12.75% Gtd. Sr. Nts., Series B, 12/6/00 (5) 1,000,000 1,045,000 ------------------------------------------------------------------------------------------------------------------------- Protection One Alarm Monitoring, Inc., 12% Sr. Sub. Nts., Series B, 11/1/03 1,000,000 955,000 ------------------------------------------------------------------------------------------------------------------------- Revlon Worldwide Corp., 0% Sr. Sec. Disc. Nts., 3/15/98 350,000 207,375 ---------------- 4,878,000 - ----------------------------------------------------------------------------------------------------------------------------------- ENTERTAINMENT - 1.2% ------------------------------------------------------------------------------------------------------------------------- Aztar Corp., 13.75% Sr. Sub. Nts., 10/1/04 150,000 152,250 ------------------------------------------------------------------------------------------------------------------------- Gillett Holdings, Inc., 12.25% Sr. Sub. Nts., Series A, 6/30/02 521,305 553,887
STATEMENT OF INVESTMENTS (CONTINUED) December 31, 1994 Oppenheimer Variable Account Funds - Oppenheimer High Income Fund FACE MARKET VALUE CORPORATE BONDS AND NOTES (CONTINUED) AMOUNT (1) SEE NOTE 1 - ----------------------------------------------------------------------------------------------------------------------------------- CONSUMER CYCLICALS (CONTINUED) - ----------------------------------------------------------------------------------------------------------------------------------- ENTERTAINMENT (CONTINUED) ------------------------------------------------------------------------------------------------------------------------- Lady Luck Gaming Finance Corp., 10.50% Fst. Mtg. Nts., 3/1/01 $ 450,000 $ 200,250 ------------------------------------------------------------------------------------------------------------------------- United Gaming, Inc., 7.50% Cv. Sub. Debs., 9/15/03 320,000 251,200 ---------------- 1,157,587 - ----------------------------------------------------------------------------------------------------------------------------------- MEDIA - 7.4% ------------------------------------------------------------------------------------------------------------------------- Ackerley Communications, Inc., 10.75% Sr. Sec. Nts., Series A, 10/1/03 750,000 716,250 ------------------------------------------------------------------------------------------------------------------------- Act III Broadcasting, Inc., 9.625% Sr. Sub. Nts., 12/15/03 430,000 396,675 ------------------------------------------------------------------------------------------------------------------------- Bell Cablemedia PLC, 0%/11.95% Sr. Disc. Nts., 7/15/04 (3) 350,000 189,000 ------------------------------------------------------------------------------------------------------------------------- Chancellor Broadcasting Co., 12.50% Sr. Sub. Nts., 10/1/04 700,000 689,500 ------------------------------------------------------------------------------------------------------------------------- Continental Broadcasting Ltd./Continental Broadcasting Capital Corp., 10.625% Sr. Sub. Nts., 7/1/03 600,000 607,500 ------------------------------------------------------------------------------------------------------------------------- GSPI Corp., 10.15% Fst. Mtg. Bonds, 6/24/10 (5) 487,255 517,099 ------------------------------------------------------------------------------------------------------------------------- Lamar Advertising Co., 11% Sr. Sec. Nts., 5/15/03 500,000 479,375 ------------------------------------------------------------------------------------------------------------------------- New City Communications, Inc., 11.375% Sr. Sub. Nts., 11/1/03 1,500,000 1,470,000 ------------------------------------------------------------------------------------------------------------------------- Outlet Broadcasting, Inc., 10.875% Sr. Sub. Nts., 7/15/03 1,000,000 990,000 ------------------------------------------------------------------------------------------------------------------------- Sinclair Broadcasting Group, Inc., 10% Sr. Sub. Nts., 12/15/03 345,000 324,300 ------------------------------------------------------------------------------------------------------------------------- Univision Television Group, Inc., 11.75% Sr. Sub. Nts., 1/15/01 700,000 731,500 ---------------- 7,111,199 - ----------------------------------------------------------------------------------------------------------------------------------- REAL ESTATE DEVELOPMENT - 1.0% ------------------------------------------------------------------------------------------------------------------------- Olympia & York First Canadian Place Ltd., 11% Debs., Series 3, 11/4/49 (2)CAD 1,000,000 455,377 ------------------------------------------------------------------------------------------------------------------------- Saul (B.F.) Real Estate Investment Trust, 11.625% Sr. Nts., 4/1/02 650,000 546,000 ---------------- 1,001,377 - ----------------------------------------------------------------------------------------------------------------------------------- RETAIL - 1.8% ------------------------------------------------------------------------------------------------------------------------- Eye Care Centers of America, Inc., 12% Sr. Nts., 10/1/03 700,000 546,000 ------------------------------------------------------------------------------------------------------------------------- International Semi-Tech Microelectronics, Inc., 0%/11.50% Sr. Sec. Disc. Nts., 8/15/03 (3) 1,500,000 645,000 ------------------------------------------------------------------------------------------------------------------------- Zale Delaware, Inc., 11% Gtd. 2nd Priority Sr. Sec. Nts., 7/30/00 500,000 501,250 ---------------- 1,692,250 - ----------------------------------------------------------------------------------------------------------------------------------- CONSUMER NON-CYCLICALS - 4.1% - ----------------------------------------------------------------------------------------------------------------------------------- FOOD - 0.0% ------------------------------------------------------------------------------------------------------------------------- Kash 'N Karry Food Stores, Inc., 14% Sub. Debs., 2/1/01 (2) 300,000 111,000 - ----------------------------------------------------------------------------------------------------------------------------------- FOOD AND DRUG DISTRIBUTION - 2.4% ------------------------------------------------------------------------------------------------------------------------- Di Giorgio Corp., 12% Sr. Nts., 2/15/03 700,000 658,000 ------------------------------------------------------------------------------------------------------------------------- Duane Reade, 12% Sr. Nts., Series B, 9/15/02 250,000 211,250 ------------------------------------------------------------------------------------------------------------------------- Grand Union Co., 11.25% Sr. Nts., 7/15/00 250,000 222,500 ------------------------------------------------------------------------------------------------------------------------- Grand Union Co., 12.25% Sr. Sub. Nts., 7/15/02 1,350,000 533,250 ------------------------------------------------------------------------------------------------------------------------- Purity Supreme, Inc., 11.75% Sr. Sec. Nts., Series B, 8/1/99 750,000 626,250 ---------------- 2,251,250 - ----------------------------------------------------------------------------------------------------------------------------------- HEALTHCARE - 1.7% ------------------------------------------------------------------------------------------------------------------------- Icon Health & Fitness, Inc., Units (5) 700 689,500 ------------------------------------------------------------------------------------------------------------------------- Total Renal Care, Inc., Units 1,200,000 906,000 ---------------- 1,595,500 - ----------------------------------------------------------------------------------------------------------------------------------- ENERGY - 3.2% - ----------------------------------------------------------------------------------------------------------------------------------- BP America, Inc., 10.875% Nts., 8/1/01 CAD 350,000 261,530 ------------------------------------------------------------------------------------------------------------------------- Maxus Energy Corp., 11.50% Debs., 11/15/15 800,000 758,000
STATEMENT OF INVESTMENTS (CONTINUED) December 31, 1994 Oppenheimer Variable Account Funds - Oppenheimer High Income Fund FACE MARKET VALUE CORPORATE BONDS AND NOTES (CONTINUED) AMOUNT (1) SEE NOTE 1 - ----------------------------------------------------------------------------------------------------------------------------------- ENERGY (CONTINUED) - ----------------------------------------------------------------------------------------------------------------------------------- Maxus Energy Corp., 8.50% Debs., 4/1/08 $ 500,000 $ 395,000 ------------------------------------------------------------------------------------------------------------------------- OPI International, Inc., 12.875% Gtd. Sr. Nts., 7/15/02 750,000 836,250 ------------------------------------------------------------------------------------------------------------------------- Presidio Oil Co., 11.50% Sr. Sec. Nts., Series B, 9/15/00 925,000 689,125 ------------------------------------------------------------------------------------------------------------------------- Presidio Oil Co., 13.675% Sr. Sub. Gas Indexed Nts., Series B, 7/15/02 (4) 150,000 93,000 ---------------- 3,032,905 - ----------------------------------------------------------------------------------------------------------------------------------- FINANCIAL - 7.1% - ----------------------------------------------------------------------------------------------------------------------------------- Card Establishment Services, Inc., 10% Sr. Sub. Nts., Series B, 10/1/03 1,600,000 1,672,000 ------------------------------------------------------------------------------------------------------------------------- Citibank, 15% CD, 8/28/95 (7)CLP 417,450,058 1,040,893 ------------------------------------------------------------------------------------------------------------------------- Citibank, 15.20% CD, 11/20/95 (7)CLP 431,553,156 1,076,058 ------------------------------------------------------------------------------------------------------------------------- Citibank, 15.20% CD, 9/1/95 (7)CLP 419,050,049 1,044,882 ------------------------------------------------------------------------------------------------------------------------- ECM Fund, L.P.I., 14% Sub. Nts., 6/10/02 (5) 369,597 406,557 ------------------------------------------------------------------------------------------------------------------------- Nacolah Holding Corp., 9.50% Sr. Nts., 12/1/03 650,000 578,500 ------------------------------------------------------------------------------------------------------------------------- SBC Finance (C.I.) Ltd., 5.50% Swiss Bank Corp. Gtd. Nts., 9/30/97 CHF 1,280,000 987,146 ---------------- 6,806,036 - ----------------------------------------------------------------------------------------------------------------------------------- INDUSTRIAL - 5.0% - ----------------------------------------------------------------------------------------------------------------------------------- GENERAL INDUSTRIAL - 1.9% ------------------------------------------------------------------------------------------------------------------------- EnviroSource, Inc., 9.75% Sr. Nts., 6/15/03 500,000 431,250 ------------------------------------------------------------------------------------------------------------------------- Farley, Inc., 0% Sub. Debs., 12/30/12 115,000 12,075 ------------------------------------------------------------------------------------------------------------------------- Southdown, Inc., 14% Sr. Sub. Nts., Series B, 10/15/01 640,000 720,000 ------------------------------------------------------------------------------------------------------------------------- Terex Corp., 13% Sr. Nts., 8/1/96 (5) 688,000 651,880 ---------------- 1.815,205 - ----------------------------------------------------------------------------------------------------------------------------------- TRANSPORTATION - 3.1% ------------------------------------------------------------------------------------------------------------------------- AMR Corp., 10% Nts., 4/15/21 825,000 799,105 ------------------------------------------------------------------------------------------------------------------------- Trans Ocean Container Corp., 12.25% Sr. Sub. Nts., 7/1/04 1,200,000 1,134,000 ------------------------------------------------------------------------------------------------------------------------- Transtar Holdings LP/Transtar Capital Corp., 0%/13.375% Sr. Disc. Nts., Series B, 12/15/03 (3) 2,000,000 1,010,000 ---------------- 2,943,105 - ----------------------------------------------------------------------------------------------------------------------------------- TECHNOLOGY - 15.9% - ----------------------------------------------------------------------------------------------------------------------------------- AEROSPACE/DEFENSE - 1.0% ------------------------------------------------------------------------------------------------------------------------- GPA Delaware, Inc., 8.75% Gtd. Nts., 12/15/98 300,000 231,000 ------------------------------------------------------------------------------------------------------------------------- GPA Holland BV, 9.50% Medium-Term Nts., Series A, 12/15/01 (5) 500,000 332,500 ------------------------------------------------------------------------------------------------------------------------- Rohr, Inc., 11.625% Sr. Nts., 5/15/03 400,000 398,000 ---------------- 961,500 - ----------------------------------------------------------------------------------------------------------------------------------- CABLE TELEVISION - 5.7% ------------------------------------------------------------------------------------------------------------------------- American Telecasting, Inc., 0%/12.50% Sr. Disc. Nts., 6/15/04 (3) 1,000,000 450,000 ------------------------------------------------------------------------------------------------------------------------- Cablevision Industries Corp., 9.25% Sr. Debs., Series B, 4/1/08 500,000 450,000 ------------------------------------------------------------------------------------------------------------------------- Cablevision Systems Corp., 10.75% Sr. Sub. Debs., 4/1/04 500,000 502,500 ------------------------------------------------------------------------------------------------------------------------- Cablevision Systems Corp., 9.875% Sr. Sub. Debs., 4/1/23 200,000 180,000 ------------------------------------------------------------------------------------------------------------------------- Continental Cablevision, Inc., 9.50% Sr. Debs., 8/1/13 650,000 599,625 ------------------------------------------------------------------------------------------------------------------------- Echostar Communications Corp., Units 1,100,000 574,750 ------------------------------------------------------------------------------------------------------------------------- Helicon Group LP/Helicon Capital Corp., 9% Sr. Sec. Nts., Series B, 11/1/03 (4) 1,000,000 905,000 ------------------------------------------------------------------------------------------------------------------------- Marcus Cable Operating Co. LP/Marcus Capital Corp., 0%/13.50% Gtd. Sr. Sub. Disc. Nts., Series II, 8/1/04 (3) 1,500,000 795,000 ------------------------------------------------------------------------------------------------------------------------- TKR Cable I, Inc., 10.50% Sr. Debs., 10/30/07 1,000,000 1,037,500 ---------------- 5,494,375
STATEMENT OF INVESTMENTS (CONTINUED) December 31, 1994 Oppenheimer Variable Account Funds - Oppenheimer High Income Fund FACE MARKET VALUE CORPORATE BONDS AND NOTES (CONTINUED) AMOUNT (1) SEE NOTE 1 - ----------------------------------------------------------------------------------------------------------------------------------- TECHNOLOGY (CONTINUED) - ----------------------------------------------------------------------------------------------------------------------------------- COMMUNICATIONS - 7.2% ------------------------------------------------------------------------------------------------------------------------- Celcaribe SA, 0%/13.50% Sr. Sec. Nts., 3/15/04 (3)(5) $ 1,250,000 $ 815,775 ------------------------------------------------------------------------------------------------------------------------- Cellular, Inc., 0%/11.75% Sr. Sub. Disc. Nts., 9/1/03 (3) 2,000,000 1,310,000 ------------------------------------------------------------------------------------------------------------------------- Comcast Cellular Corp., 0% Nts., Series B, 3/5/00 500,000 342,500 ------------------------------------------------------------------------------------------------------------------------- Horizon Cellular Telephone LP/Horizon Finance Corp., 0%/11.375% Sr. Sub. Disc. Nts., 10/1/00 (3) 1,500,000 1,050,000 ------------------------------------------------------------------------------------------------------------------------- MFS Communications, Inc., 0%/9.375% Sr. Disc. Nts., 1/15/04 (3) 1,000,000 597,500 ------------------------------------------------------------------------------------------------------------------------- Panamsat LP/Panamsat Capital Corp., 0%/11.375% Sr. Sub. Disc. Nts., 8/1/03 (3) 2,000,000 1,240,000 ------------------------------------------------------------------------------------------------------------------------- Panamsat LP/Panamsat Capital Corp., 9.75% Sr. Sec. Nts., 8/1/00 500,000 473,750 ------------------------------------------------------------------------------------------------------------------------- PriCellular Wireless Corp., .50%/14% Sr. Sub. Disc. Nts., 11/15/01 (5)(9) 1,000,000 665,000 ------------------------------------------------------------------------------------------------------------------------- USA Mobile Communications, Inc. II, 14% Sr. Nts., 11/1/04 400,000 402,500 ---------------- 6,897,025 - ----------------------------------------------------------------------------------------------------------------------------------- TECHNOLOGY - 2.0% ------------------------------------------------------------------------------------------------------------------------- Dell Computer Corp., 11% Sr. Nts., 8/15/00 500,000 525,000 ------------------------------------------------------------------------------------------------------------------------- Imax Corp., 7%/10% Sr. Nts., 3/1/01 (8) 1,600,000 1,336,000 ---------------- 1,861,000 - ----------------------------------------------------------------------------------------------------------------------------------- UTILITIES - 4.2% - ----------------------------------------------------------------------------------------------------------------------------------- Beaver Valley II Funding Corp., 9% 2nd Lease Obligation Bonds, 6/1/17 2,070,000 1,481,778 ------------------------------------------------------------------------------------------------------------------------- El Paso Electric Co., 10.375% Lease Obligation Debs., 1/2/11 (2) 900,000 468,705 ------------------------------------------------------------------------------------------------------------------------- El Paso Funding Co., 10.75% Debs., 4/1/13 (2) 750,000 390,574 ------------------------------------------------------------------------------------------------------------------------- First PV Funding Corp., 10.15% Lease Obligation Bonds, Series 1986B, 1/15/16 600,000 544,088 ------------------------------------------------------------------------------------------------------------------------- First PV Funding Corp., 10.30% Lease Obligation Bonds, Series 1986A, 1/15/14 1,000,000 917,336 ------------------------------------------------------------------------------------------------------------------------- Subic Power Corp., 9.50% Sr. Sec. Nts., Series A, 12/28/08 (5) 250,000 216,250 ---------------- 4,018,731 ---------------- Total Corporate Bonds and Notes (Cost $68,797,660) 64,916,870 SHARES - ----------------------------------------------------------------------------------------------------------------------------------- COMMON STOCKS - 3.3% - ----------------------------------------------------------------------------------------------------------------------------------- CONSUMER CYCLICALS - 2.2% - ----------------------------------------------------------------------------------------------------------------------------------- AUTOMOBILES - 0.1% ------------------------------------------------------------------------------------------------------------------------- Leaseway Transportation Corp. (2) 11,142 123,955 - ----------------------------------------------------------------------------------------------------------------------------------- BROADCAST MEDIA - 0.1% ------------------------------------------------------------------------------------------------------------------------- New World Communications Group, Inc., Cl. A (2) 4,964 58,327 - ----------------------------------------------------------------------------------------------------------------------------------- HOMEBUILDING - 0.2% ------------------------------------------------------------------------------------------------------------------------- Triangle Wire & Cable, Inc. (2)(5) 21,111 84,444 ------------------------------------------------------------------------------------------------------------------------- Trizec, Ltd. (2) 8,410 56,959 ---------------- 141,403 - ----------------------------------------------------------------------------------------------------------------------------------- HOTELS/MOTELS - 0.2% ------------------------------------------------------------------------------------------------------------------------- Celcaribe SA (5) 203,250 234,225 - ----------------------------------------------------------------------------------------------------------------------------------- LEISURE TIME - 0.5% ------------------------------------------------------------------------------------------------------------------------- Capital Gaming, Inc. (2) 25,336 76,008 ------------------------------------------------------------------------------------------------------------------------- Gillett Holdings, Inc., Cl. 1 (2)(5) 10,355 203,217
STATEMENT OF INVESTMENTS (CONTINUED) December 31, 1994 Oppenheimer Variable Account Funds - Oppenheimer High Income Fund MARKET VALUE COMMON STOCKS (CONTINUED) SHARES SEE NOTE 1 - ----------------------------------------------------------------------------------------------------------------------------------- CONSUMER CYCLICALS (CONTINUED) - ----------------------------------------------------------------------------------------------------------------------------------- LEISURE TIME (CONTINUED) ------------------------------------------------------------------------------------------------------------------------- Hollywood Casino Corp. (2) 31,666 $ 182,078 ---------------- 461,303 - ----------------------------------------------------------------------------------------------------------------------------------- RETAIL STORES: DEPARTMENT STORES - 0.4% ------------------------------------------------------------------------------------------------------------------------- Federated Department Stores, Inc. 20,239 389,601 - ----------------------------------------------------------------------------------------------------------------------------------- RETAIL STORES: DEPARTMENT, GENERAL AND SPECIALTY - 0.0% ------------------------------------------------------------------------------------------------------------------------- Finlay Enterprises, Inc., Cl. A (2) 2,000 30,000 - ----------------------------------------------------------------------------------------------------------------------------------- RETAIL: SPECIALTY - 0.7% ------------------------------------------------------------------------------------------------------------------------- Zale Corp. (2) 56,802 681,624 - ----------------------------------------------------------------------------------------------------------------------------------- ENERGY - 0.7% - ----------------------------------------------------------------------------------------------------------------------------------- OIL WELL SERVICES AND EQUIPMENT - 0.7% ------------------------------------------------------------------------------------------------------------------------- Petrolane, Inc., Cl. B 45,360 629,370 - ----------------------------------------------------------------------------------------------------------------------------------- FINANCIAL - 0.2% - ----------------------------------------------------------------------------------------------------------------------------------- DIVERSIFIED FINANCE - 0.2% ------------------------------------------------------------------------------------------------------------------------- ECM Fund L.P.I. (5) 150 150,000 - ----------------------------------------------------------------------------------------------------------------------------------- TECHNOLOGY - 0.2% - ----------------------------------------------------------------------------------------------------------------------------------- ELECTRONICS: INSTRUMENTATION - 0.2% ------------------------------------------------------------------------------------------------------------------------- Berg Electronics Holdings Corp. (2)(5) 46,220 207,990 ---------------- Total Common Stocks (Cost $2,608,222) 3,107,798 - ----------------------------------------------------------------------------------------------------------------------------------- PREFERRED STOCKS - 5.3% - ----------------------------------------------------------------------------------------------------------------------------------- AK Steel Holding Corp., 7% Cv. Stock Appreciation Income Linked Securities 10,000 312,500 ------------------------------------------------------------------------------------------------------------------------- Atlantic Richfield Co., 9% Exchangeable Notes for Common Stock of Lyondell Petrochemical Co., 9/15/97 17,000 444,124 ------------------------------------------------------------------------------------------------------------------------- Berg Electronics Holdings Corp., $3.3438, Series E 12,306 313,803 ------------------------------------------------------------------------------------------------------------------------- California Federal Bank, 10.625% Non-Cum., Series B 5,000 501,250 ------------------------------------------------------------------------------------------------------------------------- Dell Computer Corp., $7.00 Cv., Series A (5) 2,500 431,250 ------------------------------------------------------------------------------------------------------------------------- First Nationwide Bank, 11.50% Non-Cum. 7,500 735,000 ------------------------------------------------------------------------------------------------------------------------- Glendale Federal Bank, F.S.B., 8.75% Non-Cum. Cv., Series E 16,500 459,938 ------------------------------------------------------------------------------------------------------------------------- Kaiser Aluminum Corp., 8.255% Provisionally Redeemable Income Debt Exchangeable for Stock 40,700 432,438 ------------------------------------------------------------------------------------------------------------------------- K-III Communications Corp., $11.625 Exch., Series B (6) 6,698 643,067 ------------------------------------------------------------------------------------------------------------------------- Navistar International Corp., $6.00 Cv., Series G 2,500 128,750 ------------------------------------------------------------------------------------------------------------------------- Offshore Pipelines, Inc., $2.25 Cum. Cv. Exch. 5,000 245,000 ------------------------------------------------------------------------------------------------------------------------- Pantry Pride, Inc., $14.875 Exch., Series B 2,000 192,000 ------------------------------------------------------------------------------------------------------------------------- Prime Retail, Inc., $19.00 Cv., Series B 14,000 266,000 ---------------- Total Preferred Stocks (Cost $4,909,991) 5,105,120 UNITS - ----------------------------------------------------------------------------------------------------------------------------------- RIGHTS, WARRANTS AND CERTIFICATES - 0.9% - ----------------------------------------------------------------------------------------------------------------------------------- American Telecasting, Inc. Wts., Exp. 6/99 5,000 11,250 ------------------------------------------------------------------------------------------------------------------------- Ames Department Stores, Inc., Excess Cash Flow Payment Certificates, Series AG-7A 12,400 124 ------------------------------------------------------------------------------------------------------------------------- Ames Department Stores, Inc., Litigation Trust 39,658 397 ------------------------------------------------------------------------------------------------------------------------- Capital Gaming International, Inc. Wts., Exp. 2/99 21,112 15,834 ------------------------------------------------------------------------------------------------------------------------- Casino America, Inc. Wts., Exp. 11/96 1,631 816 ------------------------------------------------------------------------------------------------------------------------- Digicon, Inc. Wts., Exp. 7/96 4,699 293 ------------------------------------------------------------------------------------------------------------------------- Eye Care Centers of America, Inc. Wts., Exp. 10/03 700 3,500
STATEMENT OF INVESTMENTS (CONTINUED) December 31, 1994 Oppenheimer Variable Account Funds - Oppenheimer High Income Fund MARKET VALUE RIGHTS, WARRANTS AND CERTIFICATES (CONTINUED) UNITS SEE NOTE 1 - ----------------------------------------------------------------------------------------------------------------------------------- Federated Department Stores, Inc. Wts., Cl. C, Exp. 12/99 13,481 $ 69,090 ------------------------------------------------------------------------------------------------------------------------- Federated Department Stores, Inc. Wts., Cl. D, Exp. 12/01 13,481 75,830 ------------------------------------------------------------------------------------------------------------------------- Gaylord Container Corp. Wts., Exp. 7/96 71,950 521,638 ------------------------------------------------------------------------------------------------------------------------- Protection One, Inc. Wts., Exp. 11/03 28,000 105,000 ------------------------------------------------------------------------------------------------------------------------- Purity Supreme, Inc. Wts., Exp. 8/97 (5) 2,599 52 ------------------------------------------------------------------------------------------------------------------------- Southland Corp. Wts., Exp. 3/96 400 1,000 ------------------------------------------------------------------------------------------------------------------------- Terex Corp. Rts., Exp. 7/96 (5) 144 108 ------------------------------------------------------------------------------------------------------------------------- UGI Corp. Wts., Exp. 3/98 6,000 10,200 ---------------- Total Rights, Warrants and Certificates (Cost $514,543) 815,132 FACE AMOUNT - ----------------------------------------------------------------------------------------------------------------------------------- STRUCTURED INSTRUMENTS - 1.3% - ----------------------------------------------------------------------------------------------------------------------------------- Argentina Local Market Securities Trust, Series 1994-II, 11.30%, 4/1/00 (5) $ 956,521 815,435 ------------------------------------------------------------------------------------------------------------------------- Lehman Brothers Holdings, Inc., Standard & Poor's 500 Index-Linked Nts., 5.788%, 1/25/95 (5) 250,000 292,800 ------------------------------------------------------------------------------------------------------------------------- Merrill Lynch & Co. Inc., Standard & Poor's 500 Index-Linked Nts., 5.60%, 2/6/95 (5) 100,000 116,990 ---------------- Total Structured Instruments (Cost $1,461,322) 1,225,225 - ----------------------------------------------------------------------------------------------------------------------------------- TOTAL INVESTMENTS, AT VALUE (COST $97,920,437) 98.5% 94,228,680 - ----------------------------------------------------------------------------------------------------------------------------------- OTHER ASSETS NET OF LIABILITIES 1.5 1,469,629 ------------------ ---------------- NET ASSETS 100.0% $ 95,698,309 ------------------ ---------------- ------------------ ----------------
1. Face amount is reported in local currency. Foreign currency abbreviations are as follows: CAD - Canadian Dollar IDR - Indonesian Rupiah CHF - Swiss Franc JPY - Japanese Yen CLP - Chilean Peso NZD - New Zealand Dollar 2. Non-income producing security. 3. Represents a zero coupon bond that converts to a fixed rate of interest at a designated future date. 4. Represents the current interest rate for a variable rate security. 5. Restricted security - See Note 7 of Notes to Financial Statements. 6. Interest or dividend is paid in kind. 7. Indexed instrument for which the principal amount due at maturity is affected by the relative value of a foreign currency. 8. Represents the current interest rate for an increasing rate security. 9. Represents a bond that pays contingent supplemental interest until it converts to a fixed rate of interest at a designated future date. See accompanying Notes to Financial Statements.
- ----------------------------------------------------------------------------------------------------------------------------------- STATEMENT OF INVESTMENTS December 31, 1994 Oppenheimer Variable Account Funds - Oppenheimer Bond Fund FACE MARKET VALUE AMOUNT (1) SEE NOTE 1 - ----------------------------------------------------------------------------------------------------------------------------------- REPURCHASE AGREEMENTS - 11.6% - ----------------------------------------------------------------------------------------------------------------------------------- Repurchase agreement with First Chicago Capital Markets, 6%, dated 12/30/94, to be repurchased at $15,710,467 on 1/3/95, collateralized by U.S. Treasury Nts., 3.875%-8.875%, 5/31/95-8/31/05, with a value of $14,930,519 and U.S. Treasury Bonds, 10.75%-14.25%, 2/15/02-8/15/05, with a value of $1,096,803 (Cost $15,700,000) $ 15,700,000 $ 15,700,000 - ----------------------------------------------------------------------------------------------------------------------------------- MORTGAGE-BACKED OBLIGATIONS - 12.2% - ----------------------------------------------------------------------------------------------------------------------------------- GOVERNMENT AGENCY - 7.2% - ----------------------------------------------------------------------------------------------------------------------------------- FHLMC/FNMA/SPONSORED - 5.1% ------------------------------------------------------------------------------------------------------------------------- Federal National Mortgage Assn., Collateralized Mtg. Obligations, Gtd. Real Estate Mtg. Investment Conduit Pass-Through Certificates, 8.75%, 12/25/20 3,000,000 3,041,880 ------------------------------------------------------------------------------------------------------------------------- Federal National Mortgage Assn., Gtd. Real Estate Mtg. Investment Conduit Pass-Through Certificates, 10.40%, 4/25/19 2,000,000 2,100,680 ------------------------------------------------------------------------------------------------------------------------- Federal National Mortgage Assn., Interest-Only Stripped Mtg.-Backed Security, Trust 240, Cl. 2, 7%, 9/25/23 (4) 1,694,353 631,941 ------------------------------------------------------------------------------------------------------------------------- Federal National Mortgage Assn., Interest-Only Stripped Mtg.-Backed Security, Trust 257, Cl. 2, 7%, 2/25/24 (4) 2,797,923 1,058,839 ---------------- 6,833,340 - ----------------------------------------------------------------------------------------------------------------------------------- GNMA/GUARANTEED - 2.1% ------------------------------------------------------------------------------------------------------------------------- Government National Mortgage Assn., 6%, 10/20/24 3,056,995 2,897,458 - ----------------------------------------------------------------------------------------------------------------------------------- PRIVATE - 5.0% - ----------------------------------------------------------------------------------------------------------------------------------- COMMERCIAL - 4.0% ------------------------------------------------------------------------------------------------------------------------- FDIC Trust, Series 1994-C1, Cl. 2-D, 8.70%, 9/25/25 (2) 1,500,000 1,426,875 ------------------------------------------------------------------------------------------------------------------------- FDIC Trust, Series 1994-C1, Cl. 2-E, 8.70%, 9/25/25 (2) 1,500,000 1,374,844 ------------------------------------------------------------------------------------------------------------------------- Resolution Trust Corp., Commercial Mtg. Pass-Through Certificates, Series 1992-CHF, Cl. C, 8.25%, 12/25/20 1,098,572 1,047,421 ------------------------------------------------------------------------------------------------------------------------- Resolution Trust Corp., Commercial Mtg. Pass-Through Certificates, Series 1994-C1, Cl. A4, 7.25%, 6/25/26 1,536,996 1,512,020 ---------------- 5,361,160 - ----------------------------------------------------------------------------------------------------------------------------------- MULTI-FAMILY - 1.0% ------------------------------------------------------------------------------------------------------------------------- Resolution Trust Corp., Commercial Mtg. Pass-Through Certificates, Series 1991-M5, Cl. A, 9%, 3/25/17 1,358,728 1,347,902 ---------------- Total Mortgage-Backed Obligations (Cost $16,407,096) 16,439,860 - ----------------------------------------------------------------------------------------------------------------------------------- U.S. GOVERNMENT OBLIGATIONS - 24.3% - ----------------------------------------------------------------------------------------------------------------------------------- TREASURY - 24.3% - ----------------------------------------------------------------------------------------------------------------------------------- U.S. Treasury Bonds, 7.125%, 2/15/23 3,000,000 2,729,061 ------------------------------------------------------------------------------------------------------------------------- U.S. Treasury Bonds, 7.25%, 8/15/22 6,000,000 5,536,871 ------------------------------------------------------------------------------------------------------------------------- U.S. Treasury Bonds, 7.50%, 11/15/24 3,000,000 2,868,750 ------------------------------------------------------------------------------------------------------------------------- U.S. Treasury Bonds, 8%, 11/15/21 5,000,000 5,017,184 ------------------------------------------------------------------------------------------------------------------------- U.S. Treasury Nts., 5.875%, 5/15/95 3,000,000 2,994,375 ------------------------------------------------------------------------------------------------------------------------- U.S. Treasury Nts., 6%, 12/31/97 3,000,000 2,859,375 ------------------------------------------------------------------------------------------------------------------------- U.S. Treasury Nts., 6.375%, 6/30/97 1,000,000 969,062 ------------------------------------------------------------------------------------------------------------------------- U.S. Treasury Nts., 7.25%, 5/15/04 1,000,000 960,625 ------------------------------------------------------------------------------------------------------------------------- U.S. Treasury Nts., 7.25%, 8/15/04 6,000,000 5,760,000 ------------------------------------------------------------------------------------------------------------------------- U.S. Treasury Nts., 7.875%, 6/30/96 1,000,000 1,005,312 -------------------------------------------------------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (CONTINUED) December 31, 1994 Oppenheimer Variable Account Funds - Oppenheimer Bond Fund FACE MARKET VALUE U.S. GOVERNMENT OBLIGATIONS (CONTINUED) AMOUNT (1) SEE NOTE 1 - ----------------------------------------------------------------------------------------------------------------------------------- U.S. Treasury Nts., 9.25%, 8/15/98 $ 2,000,000 $ 2,087,500 ---------------- Total U.S. Government Obligations (Cost $34,170,590) 32,788,115 - ----------------------------------------------------------------------------------------------------------------------------------- FOREIGN GOVERNMENT OBLIGATIONS - 16.1% - ----------------------------------------------------------------------------------------------------------------------------------- Bonos de la Tesoreria de la Federacion, 0%, 1/12/95 500,000 496,415 ------------------------------------------------------------------------------------------------------------------------- Bonos de la Tesoreria de la Federacion, 0%, 10/11/95 1,000,000 863,309 ------------------------------------------------------------------------------------------------------------------------- Bonos de la Tesoreria de la Federacion, 0%, 3/2/95 2,070,000 2,001,074 ------------------------------------------------------------------------------------------------------------------------- Bonos de la Tesoreria de la Federacion, 0%, 4/6/95 1,000,000 939,261 ------------------------------------------------------------------------------------------------------------------------- Bonos de la Tesoreria de la Federacion, 0%, 7/27/95 2,084,000 1,867,198 ------------------------------------------------------------------------------------------------------------------------- Bonos de la Tesoreria de la Federacion, 0%, 8/3/95 250,000 232,300 ------------------------------------------------------------------------------------------------------------------------- Corporacion Andina de Fomento Bonds, 6.625%, 10/14/98 (2) 1,000,000 900,000 ------------------------------------------------------------------------------------------------------------------------- Corporacion Andina de Fomento Nts., 7.25%, 4/30/98 (2) 1,000,000 918,750 ------------------------------------------------------------------------------------------------------------------------- Czechoslovakia National Bank Bonds, 7%, 4/6/96 (2) 1,500,000 1,482,188 ------------------------------------------------------------------------------------------------------------------------- Financiera Energetica Nacional Nts., 6.625%, 12/13/96 2,350,000 2,235,438 ------------------------------------------------------------------------------------------------------------------------- Indonesia (Republic of) CD, Bank Negara, 0%, 5/12/95 IDR 3,000,000,000 1,295,951 ------------------------------------------------------------------------------------------------------------------------- International Bank for Reconstruction and Development Bonds, 12.50%, 7/25/97 NZD 1,000,000 684,949 ------------------------------------------------------------------------------------------------------------------------- Japan Development Bank (The) Gtd. Bonds, 5%, 10/1/99 JPY 195,000,000 2,031,453 ------------------------------------------------------------------------------------------------------------------------- New Zealand (Republic of) Bonds, 10%, 7/15/97 NZD 1,250,000 811,993 ------------------------------------------------------------------------------------------------------------------------- New Zealand (Republic of) Bonds, 8%, 11/15/95 NZD 1,500,000 948,259 ------------------------------------------------------------------------------------------------------------------------- New Zealand (Republic of) Bonds, 9%, 11/15/96 NZD 2,250,000 1,430,037 ------------------------------------------------------------------------------------------------------------------------- South Australia Government Finance Authority Bonds, 10%, 1/15/03 AUD 2,000,000 1,497,979 ------------------------------------------------------------------------------------------------------------------------- United Kingdom Treasury Nts. (Gilt), 12%, 11/20/98 GBP 550,000 951,362 ------------------------------------------------------------------------------------------------------------------------- Western Australia Treasury Corp. Gtd. Bonds, Series 98, 12.50%, 4/1/98 AUD 200,000 164,390 ---------------- Total Foreign Government Obligations (Cost $22,268,415) 21,752,306 - ----------------------------------------------------------------------------------------------------------------------------------- MUNICIPAL BONDS AND NOTES - 2.8% - ----------------------------------------------------------------------------------------------------------------------------------- City of New York Taxable General Obligation Bonds, Series D, 9.90%, 2/1/15 500,000 531,275 ------------------------------------------------------------------------------------------------------------------------- Connecticut State Taxable General Obligation Bonds, 6.625%, 12/15/97 650,000 624,593 ------------------------------------------------------------------------------------------------------------------------- Dade County, Florida Educational Facilities Authority Taxable Exchange Revenue Bonds, University of Miami, MBIA 325,000 346,339 Insured, 7.65%, 4/1/10 ------------------------------------------------------------------------------------------------------------------------- Dade County, Florida Educational Facilities Authority Taxable Exchange Revenue Bonds, University of Miami, MBIA 175,000 192,802 Insured, 9.70%, 4/1/10 ------------------------------------------------------------------------------------------------------------------------- New York State Environmental Facilities Corp. State Service Contract Taxable Revenue Bonds, Series B, 7.30%, 3/15/97 200,000 196,945 ------------------------------------------------------------------------------------------------------------------------- New York State Environmental Facilities Corp. State Service Contract Taxable Revenue Bonds, Series B, 8.15%, 3/15/02 800,000 772,090 ------------------------------------------------------------------------------------------------------------------------- Pinole, California Redevelopment Agency Tax Allocation 670,000 625,107 Taxable Bonds, Pinole Vista Redevelopment, Series B, 8.35%, 8/1/17 ------------------------------------------------------------------------------------------------------------------------- Port of Portland, Oregon Special Obligation Taxable Revenue Bonds, PAMCO Project, 9.20%, 5/15/22 500,000 500,431 ---------------- Total Municipal Bonds and Notes (Cost $3,803,121) 3,789,582
STATEMENT OF INVESTMENTS (CONTINUED) December 31, 1994 Oppenheimer Variable Account Funds - Oppenheimer Bond Fund FACE MARKET VALUE AMOUNT (1) SEE NOTE 1 - ----------------------------------------------------------------------------------------------------------------------------------- CORPORATE BONDS AND NOTES - 30.2% - ----------------------------------------------------------------------------------------------------------------------------------- BASIC MATERIALS - 4.7% - ----------------------------------------------------------------------------------------------------------------------------------- CHEMICALS - 1.7% ------------------------------------------------------------------------------------------------------------------------- Quantum Chemical Corp., 10.375% Fst. Mtg. Nts., 6/1/03 $ 2,100,000 $ 2,276,473 - ----------------------------------------------------------------------------------------------------------------------------------- PAPER AND FOREST PRODUCTS - 3.0% ------------------------------------------------------------------------------------------------------------------------- Boise Cascade Corp., 9.90% Nts., 3/15/00 750,000 774,117 ------------------------------------------------------------------------------------------------------------------------- Noranda Forest, Inc., 11% Debs., 7/15/98 CAD 1,000,000 736,088 ------------------------------------------------------------------------------------------------------------------------- R.P. Scherer International Corp., 6.75% Sr. Nts., 2/1/04 1,250,000 1,081,250 ------------------------------------------------------------------------------------------------------------------------- Scotia Pacific Holding Co., 7.95% Timber Collaterized Nts., 7/20/15 1,606,437 1,492,805 ---------------- 4,084,260 - ----------------------------------------------------------------------------------------------------------------------------------- CONSUMER CYCLICALS - 5.7% - ----------------------------------------------------------------------------------------------------------------------------------- AUTOMOBILES - 0.6% ------------------------------------------------------------------------------------------------------------------------- Chrysler Corp., 10.95% Debs., 8/1/17 800,000 873,248 - ----------------------------------------------------------------------------------------------------------------------------------- CONSUMER GOODS AND SERVICES - 1.7% ------------------------------------------------------------------------------------------------------------------------- Eastman Kodak Co., 10% Nts., 6/15/01 250,000 257,327 ------------------------------------------------------------------------------------------------------------------------- Fruit of the Loom, Inc., 7% Debs., 3/15/11 1,097,000 893,291 ------------------------------------------------------------------------------------------------------------------------- Mattel, Inc., 6.875% Sr. Nts., 8/1/97 700,000 675,235 ------------------------------------------------------------------------------------------------------------------------- Philip Morris Cos., Inc., 8.875% Nts., 7/1/96 500,000 504,659 ---------------- 2,330,512 - ----------------------------------------------------------------------------------------------------------------------------------- ENTERTAINMENT - 1.2% ------------------------------------------------------------------------------------------------------------------------- Circus Circus Enterprises, Inc., 6.75% Nts., 7/15/03 1,225,000 1,064,427 ------------------------------------------------------------------------------------------------------------------------- Columbia Pictures Entertainment, Inc., 9.875% Sr. Sub. Nts., 2/1/98 500,000 515,472 ---------------- 1,579,899 - ----------------------------------------------------------------------------------------------------------------------------------- HOTELS/LODGING - 0.5% ------------------------------------------------------------------------------------------------------------------------- Host Marriott Hospitality, Inc., 10.125% Sr. Nts., Series F, 1/15/99 138,000 138,690 ------------------------------------------------------------------------------------------------------------------------- Host Marriott Hospitality, Inc., 10.625% Sr. Nts., Series B, 2/1/00 164,000 164,205 ------------------------------------------------------------------------------------------------------------------------- Host Marriott Hospitality, Inc., 11% Sr. Nts., Series L, 5/1/07 388,000 391,880 ---------------- 694,775 - ----------------------------------------------------------------------------------------------------------------------------------- MEDIA - 1.7% ------------------------------------------------------------------------------------------------------------------------- GSPI Corp., 10.15% Fst. Mtg. Bonds, 6/24/10 (2) 1,169,412 1,241,039 ------------------------------------------------------------------------------------------------------------------------- News America Holdings, Inc., 10.125% Gtd. Sr. Debs., 10/15/12 500,000 532,242 ------------------------------------------------------------------------------------------------------------------------- News America Holdings, Inc., 12% Sr. Nts., 12/15/01 500,000 556,905 ---------------- 2,330,186 - ----------------------------------------------------------------------------------------------------------------------------------- CONSUMER NON-CYCLICALS - 1.0% - ----------------------------------------------------------------------------------------------------------------------------------- FOOD AND DRUG DISTRIBUTION - 1.0% ------------------------------------------------------------------------------------------------------------------------- Hook-Superx Inc., 10.125% Sr. Nts., 6/1/02 600,000 610,500 ------------------------------------------------------------------------------------------------------------------------- Revco D.S., Inc., 9.125% Sr. Nts., 1/15/00 750,000 751,875 ---------------- 1,362,375 - ----------------------------------------------------------------------------------------------------------------------------------- ENERGY - 4.5% ------------------------------------------------------------------------------------------------------------------------- Atlantic Richfield Co., 10.375% Nts., 7/15/95 375,000 380,966 ------------------------------------------------------------------------------------------------------------------------- BP America, Inc., 10.875% Nts., 8/1/01 CAD 650,000 485,698 ------------------------------------------------------------------------------------------------------------------------- Coastal Corp., 11.75% Sr. Debs., 6/15/06 2,000,000 2,135,000 ------------------------------------------------------------------------------------------------------------------------- Coastal Corp., 9.75% Sr. Debs., 8/1/03 200,000 209,452 ------------------------------------------------------------------------------------------------------------------------- Enron Corp., 9.875% Debs., 6/15/03 375,000 406,137 ------------------------------------------------------------------------------------------------------------------------- McDermott, Inc., 9.375% Nts., 3/15/02 400,000 407,163 ------------------------------------------------------------------------------------------------------------------------- Mitchell Energy & Development Corp., 9.25% Sr. Nts., 1/15/02 1,000,000 1,016,446 ------------------------------------------------------------------------------------------------------------------------- Tenneco, Inc., 10% Debs., 3/15/08 400,000 432,972
STATEMENT OF INVESTMENTS (CONTINUED) December 31, 1994 Oppenheimer Variable Account Funds - Oppenheimer Bond Fund FACE MARKET VALUE CORPORATE BONDS AND NOTES (CONTINUED) AMOUNT (1) SEE NOTE 1 - ----------------------------------------------------------------------------------------------------------------------------------- ENERGY (CONTINUED) - ----------------------------------------------------------------------------------------------------------------------------------- Tenneco, Inc., 7.875% Nts., 10/1/02 $ 650,000 $ 621,512 ---------------- 6,095,346 - ----------------------------------------------------------------------------------------------------------------------------------- FINANCIAL - 7.2% - ----------------------------------------------------------------------------------------------------------------------------------- American Car Line Co., 8.25% Equipment Trust Certificates, Series 1993-A, 4/15/08 660,000 640,200 ------------------------------------------------------------------------------------------------------------------------- Chemical New York Corp., 9.75% Sub. Cap. Nts., 6/15/99 200,000 207,898 ------------------------------------------------------------------------------------------------------------------------- Citibank, 11.10% CD, 11/15/95 (3) CLP 649,629,998 1,619,823 ------------------------------------------------------------------------------------------------------------------------- Citibank, 15% CD, 8/28/95 (3) CLP 521,812,572 1,301,116 ------------------------------------------------------------------------------------------------------------------------- First Chicago Corp., 11.25% Sub. Nts., 2/20/01 750,000 842,527 ------------------------------------------------------------------------------------------------------------------------- First Fidelity Bancorporation, 8.50% Sub. Cap. Nts., 4/1/98 100,000 100,619 ------------------------------------------------------------------------------------------------------------------------- General Motors Acceptance Corp., 5.50% Nts., 12/15/01 300,000 247,797 ------------------------------------------------------------------------------------------------------------------------- General Motors Acceptance Corp., 7.75% Nts., 4/15/97 700,000 687,697 ------------------------------------------------------------------------------------------------------------------------- General Motors Acceptance Corp., 8% Nts., 10/1/96 700,000 696,821 ------------------------------------------------------------------------------------------------------------------------- Heller Financial, Inc., 7.75% Nts., 5/15/97 475,000 468,761 ------------------------------------------------------------------------------------------------------------------------- Lehman Brothers Holdings, Inc., 8.375% Nts., 2/15/99 350,000 336,445 ------------------------------------------------------------------------------------------------------------------------- NBD Bancorp, Inc., 7.25% Sub. Debs., 8/15/04 165,000 151,188 ------------------------------------------------------------------------------------------------------------------------- PaineWebber Group, Inc., 7.75% Sub. Nts., 9/1/02 450,000 411,258 ------------------------------------------------------------------------------------------------------------------------- SBC Finance (C.I.) Ltd., 5.50% Swiss Bank Corp. Gtd. Nts., 9/30/97 CHF 2,570,000 1,982,004 ---------------- 9,694,154 - ----------------------------------------------------------------------------------------------------------------------------------- INDUSTRIAL - 1.0% - ----------------------------------------------------------------------------------------------------------------------------------- TRANSPORTATION - 1.0% ------------------------------------------------------------------------------------------------------------------------- AMR Corp., 10% Nts., 4/15/21 975,000 944,397 ------------------------------------------------------------------------------------------------------------------------- Union Pacific Corp., 9.65% Medium-Term Nts., 4/17/00 400,000 420,968 ---------------- 1,365,365 - ----------------------------------------------------------------------------------------------------------------------------------- TECHNOLOGY - 4.3% - ----------------------------------------------------------------------------------------------------------------------------------- CABLE TELEVISION - 3.9% ------------------------------------------------------------------------------------------------------------------------- Time Warner, Inc., 9.15% Debs., 2/1/23 300,000 269,968 ------------------------------------------------------------------------------------------------------------------------- Time Warner, Inc./Time Warner Entertainment LP, 8.375% Sr. Debs., 3/15/23 1,500,000 1,255,012 ------------------------------------------------------------------------------------------------------------------------- TKR Cable I, Inc., 10.50% Sr. Debs., 10/30/07 3,600,000 3,735,000 ---------------- 5,259,980 - ----------------------------------------------------------------------------------------------------------------------------------- COMMUNICATIONS - 0.4% ------------------------------------------------------------------------------------------------------------------------- GTE Corp., 9.375% Debs., 12/1/00 500,000 520,010 - ----------------------------------------------------------------------------------------------------------------------------------- UTILITIES - 1.8% - ----------------------------------------------------------------------------------------------------------------------------------- Commonwealth Edison Co., 6.40% Nts., 10/15/05 275,000 220,162 ------------------------------------------------------------------------------------------------------------------------- Commonwealth Edison Co., 6.50% Nts., 7/15/97 550,000 522,735 ------------------------------------------------------------------------------------------------------------------------- Long Island Lighting Co., 7% Nts., 3/1/04 150,000 119,856 ------------------------------------------------------------------------------------------------------------------------- Public Service Company of Colorado, 8.75% Fst. Mtg. Bonds, 3/1/22 750,000 729,657 ------------------------------------------------------------------------------------------------------------------------- Sonat, Inc., 9.50% Nts., 8/15/99 250,000 259,444 ------------------------------------------------------------------------------------------------------------------------- Southwest Gas Corp., 9.75% Debs., Series F, 6/15/02 500,000 521,319 ---------------- 2,373,173 ---------------- Total Corporate Bonds and Notes (Cost $43,341,744) 40,839,756 - ----------------------------------------------------------------------------------------------------------------------------------- PREFERRED STOCKS - 0.5% - ----------------------------------------------------------------------------------------------------------------------------------- Atlantic Richfield Co., 9% Exchangeable Notes for Common Stock of Lyondell Petrochemical Co., 9/15/97 (Cost $717,850) 25,000 653,125
STATEMENT OF INVESTMENTS (CONTINUED) December 31, 1994 Oppenheimer Variable Account Funds - Oppenheimer Bond Fund FACE MARKET VALUE AMOUNT (1) SEE NOTE 1 - ----------------------------------------------------------------------------------------------------------------------------------- STRUCTURED INSTRUMENTS - 0.4% - ----------------------------------------------------------------------------------------------------------------------------------- Morgan Guaranty Trust Co. of New York (Singapore Branch), 12.15% CD, 2/3/95 (Cost $600,000) (3) $ 600,000 $ 549,553 ------------------------------------------------------------------------------------------------------------------------- TOTAL INVESTMENTS, AT VALUE (COST $137,008,816) 98.1% 132,512,297 ------------------------------------------------------------------------------------------------------------------------- OTHER ASSETS NET OF LIABILITIES 1.9 2,555,087 ------------------ ---------------- NET ASSETS 100.0% $ 135,067,384 ------------------ ---------------- ------------------ ----------------
1. Face amount is reported in local currency. Foreign currency abbreviations are as follows: AUD - Australian Dollar GBP - Pound Sterling CAD - Canadian Dollar IDR - Indonesian Rupah CHF - Swiss Franc JPY - Japanese Yen CLP - Chilean Peso NZD - New Zealand Dollar 2. Restricted security - See Note 7 of Notes to Financial Statements. 3. Indexed instrument for which the principal amount and/or interest due at maturity is affected by the relative value of a foreign currency. 4. Interest - Only Strips represent the right to receive the monthly interest payment on an underlying pool of mortgage loans. These securities typically decline in price as interest rates decline. Most other fixed-income securities increase in price when interest rates decline. The principal amount of the underlying pool represents the notional amount on which current interest is calculated. The price of these securities is typically more sensitive to changes in prepayment rates than traditional mortgage-backed securities (for example, GNMA pass-throughs). See accompanying Notes to Financial Statements.
STATEMENT OF INVESTMENTS December 31, 1994 Oppenheimer Variable Account Funds - Oppenheimer Capital Appreciation Fund FACE MARKET VALUE AMOUNT SEE NOTE 1 - ----------------------------------------------------------------------------------------------------------------------------------- REPURCHASE AGREEMENTS - 12.6% - ----------------------------------------------------------------------------------------------------------------------------------- Repurchase agreement with First Chicago Capital Markets, 6%, dated 12/30/94, to be repurchased at $23,415,600 on 1/3/95, collateralized by U.S. Treasury Nts., 3.875%-8.875%, 5/31/95-8/31/05, with a value of $22,253,130 and U.S. Treasury Bonds, 10.75%-14.25%, 2/15/02-8/15/05, with a value of $1,634,726 (Cost $23,400,000) $ 23,400,000 $ 23,400,000 - ----------------------------------------------------------------------------------------------------------------------------------- CONVERTIBLE CORPORATE BONDS AND NOTES - 3.0% - ----------------------------------------------------------------------------------------------------------------------------------- CONSUMER NON-CYCLICALS - 0.9% - ----------------------------------------------------------------------------------------------------------------------------------- HEALTHCARE - 0.9% ------------------------------------------------------------------------------------------------------------------------- Medaphis Corp., 6.50% Cv. Sub. Nts., 1/1/00 (1) 1,000,000 1,672,500 - ----------------------------------------------------------------------------------------------------------------------------------- INDUSTRIAL - 0.4% - ----------------------------------------------------------------------------------------------------------------------------------- GENERAL INDUSTRIAL - 0.4% ------------------------------------------------------------------------------------------------------------------------- PerSeptive Biosystems, Inc., 8.25% Cv. Sub. Debs., 8/15/01 (1) 1,000,000 685,000 - ----------------------------------------------------------------------------------------------------------------------------------- TECHNOLOGY - 1.7% ------------------------------------------------------------------------------------------------------------------------- Intelcom Group, Inc., 7% Cv. Sub. Nts., 10/30/98 (1)(3) 1,070,000 860,666 ------------------------------------------------------------------------------------------------------------------------- Sierra On-Line, Inc., 6.50% Cv. Sub. Nts., 4/1/01 (1) 1,000,000 1,275,000 ------------------------------------------------------------------------------------------------------------------------- Solectron Corp., 0% Cv. Liquid Yield Option Sub. Nts., 5/5/12 1,700,000 971,125 ---------------- 3,106,791 ---------------- Total Convertible Corporate Bonds and Notes (Cost $4,674,033) 5,464,291 SHARES - ----------------------------------------------------------------------------------------------------------------------------------- COMMON STOCKS - 82.5% - ----------------------------------------------------------------------------------------------------------------------------------- BASIC MATERIALS - 2.4% - ----------------------------------------------------------------------------------------------------------------------------------- CHEMICALS - 1.6% ------------------------------------------------------------------------------------------------------------------------- Geon Co. (The) 30,000 821,250 ------------------------------------------------------------------------------------------------------------------------- Georgia Gulf Corp. (2) 57,000 2,215,875 ---------------- 3,037,125 - ----------------------------------------------------------------------------------------------------------------------------------- STEEL - 0.8% ------------------------------------------------------------------------------------------------------------------------- Birmingham Steel Corp. 71,000 1,420,000 - ----------------------------------------------------------------------------------------------------------------------------------- CONSUMER CYCLICALS - 21.7% - ----------------------------------------------------------------------------------------------------------------------------------- AUTO PARTS: AFTER MARKET - 1.3% ------------------------------------------------------------------------------------------------------------------------- Breed Technologies, Inc. 54,000 1,532,250 ------------------------------------------------------------------------------------------------------------------------- Gentex Corp. (2) 40,000 970,000 ---------------- 2,502,250 - ----------------------------------------------------------------------------------------------------------------------------------- HOTELS/MOTELS - 1.9% ------------------------------------------------------------------------------------------------------------------------- Carnival Corp., Inc., Cl. A 82,000 1,742,500 ------------------------------------------------------------------------------------------------------------------------- Doubletree Corp. (2) 35,000 638,750 ------------------------------------------------------------------------------------------------------------------------- Hospitality Franchise Systems, Inc. (2) 41,000 1,086,500 ---------------- 3,467,750 - ----------------------------------------------------------------------------------------------------------------------------------- HOUSEHOLD FURNISHINGS AND APPLIANCES - 1.6% ------------------------------------------------------------------------------------------------------------------------- Duracraft Corp. (2) 20,000 637,500 ------------------------------------------------------------------------------------------------------------------------- Sunbeam-Oster, Inc. 90,300 2,325,225 ---------------- 2,962,725 - ----------------------------------------------------------------------------------------------------------------------------------- LEISURE TIME - 1.1% ------------------------------------------------------------------------------------------------------------------------- Brunswick Corp. 62,000 1,170,250 ------------------------------------------------------------------------------------------------------------------------- Cannondale Corp. (2) 40,000 410,000
STATEMENT OF INVESTMENTS (CONTINUED) December 31, 1994 Oppenheimer Variable Account Funds - Oppenheimer Capital Appreciation Fund MARKET VALUE COMMON STOCKS (CONTINUED) SHARES SEE NOTE 1 - ----------------------------------------------------------------------------------------------------------------------------------- CONSUMER CYCLICALS (CONTINUED) - ----------------------------------------------------------------------------------------------------------------------------------- LEISURE TIME (CONTINUED) ------------------------------------------------------------------------------------------------------------------------- Outboard Marine Corp. 25,000 $ 490,625 ---------------- 2,070,875 - ----------------------------------------------------------------------------------------------------------------------------------- RESTAURANTS - 0.9% ------------------------------------------------------------------------------------------------------------------------- Apple South, Inc. 67,500 885,938 ------------------------------------------------------------------------------------------------------------------------- Outback Steakhouse, Inc. (2) 30,500 716,750 ---------------- 1,602,688 - ----------------------------------------------------------------------------------------------------------------------------------- RETAIL STORES: DEPARTMENT STORES - 3.0% ------------------------------------------------------------------------------------------------------------------------- Carson Pirie Scott & Co. (2) 52,000 988,000 ------------------------------------------------------------------------------------------------------------------------- Dollar General Corp. 76,000 2,280,000 ------------------------------------------------------------------------------------------------------------------------- Kohl's Corp. (2) 22,000 874,500 ------------------------------------------------------------------------------------------------------------------------- Nordstrom, Inc. 35,000 1,470,000 ---------------- 5,612,500 - ----------------------------------------------------------------------------------------------------------------------------------- RETAIL: SPECIALTY - 8.6% ------------------------------------------------------------------------------------------------------------------------- AnnTaylor Stores, Inc. (2) 45,000 1,546,875 ------------------------------------------------------------------------------------------------------------------------- Bolle America, Inc. (2) 100,000 900,000 ------------------------------------------------------------------------------------------------------------------------- General Nutrition Cos., Inc. (2) 64,400 1,867,600 ------------------------------------------------------------------------------------------------------------------------- Gymboree Corp. (2) 45,000 1,293,750 ------------------------------------------------------------------------------------------------------------------------- Heilig-Meyers Co. 22,500 568,125 ------------------------------------------------------------------------------------------------------------------------- Insurance Auto Auctions, Inc. (2) 35,000 1,069,688 ------------------------------------------------------------------------------------------------------------------------- Micro Warehouse, Inc. (2) 65,000 2,275,000 ------------------------------------------------------------------------------------------------------------------------- Office Depot, Inc. (2) 30,000 720,000 ------------------------------------------------------------------------------------------------------------------------- OfficeMax, Inc. (2) 30,500 808,250 ------------------------------------------------------------------------------------------------------------------------- Rex Stores Corp. (2) 40,000 650,000 ------------------------------------------------------------------------------------------------------------------------- Sports & Recreation, Inc. (2) 35,000 901,250 ------------------------------------------------------------------------------------------------------------------------- Staples, Inc. (2) 45,000 1,113,750 ------------------------------------------------------------------------------------------------------------------------- Strouds, Inc. (2) 19,000 182,875 ------------------------------------------------------------------------------------------------------------------------- Viking Office Products, Inc. (2) 65,000 1,990,625 ---------------- 15,887,788 - ----------------------------------------------------------------------------------------------------------------------------------- SHOES - 1.9% ------------------------------------------------------------------------------------------------------------------------- Nike, Inc., Cl. B 46,000 3,432,750 - ----------------------------------------------------------------------------------------------------------------------------------- TEXTILES: APPAREL MANUFACTURERS - 1.4% ------------------------------------------------------------------------------------------------------------------------- Cygne Designs, Inc. (2) 50,000 687,500 ------------------------------------------------------------------------------------------------------------------------- Tommy Hilfiger Corp. (2) 42,100 1,899,763 ---------------- 2,587,263 - ----------------------------------------------------------------------------------------------------------------------------------- CONSUMER NON-CYCLICALS - 22.4% - ----------------------------------------------------------------------------------------------------------------------------------- BEVERAGES: ALCOHOLIC - 1.0% ------------------------------------------------------------------------------------------------------------------------- Canandaigua Wine Co., Inc., Cl. A (2) 50,000 1,900,000 - ----------------------------------------------------------------------------------------------------------------------------------- DRUGS - 5.3% ------------------------------------------------------------------------------------------------------------------------- CIMA Labs, Inc. (2) 60,000 615,000 ------------------------------------------------------------------------------------------------------------------------- Dura Pharmaceuticals, Inc. (2) 65,000 942,500 ------------------------------------------------------------------------------------------------------------------------- Elan Corp. PLC, ADR (2) 45,000 1,603,125 ------------------------------------------------------------------------------------------------------------------------- R.P. Scherer Corp. (2) 70,000 3,176,250 ------------------------------------------------------------------------------------------------------------------------- Roberts Pharmaceutical Corp. (2) 50,000 1,587,500 ------------------------------------------------------------------------------------------------------------------------- Watson Pharmaceuticals, Inc. (2) 75,000 1,968,750 ---------------- 9,893,125 - ----------------------------------------------------------------------------------------------------------------------------------- FOOD PROCESSING - 1.0% ------------------------------------------------------------------------------------------------------------------------- Hudson Foods, Inc., Cl. A 70,000 1,758,750 - ----------------------------------------------------------------------------------------------------------------------------------- HEALTHCARE: MISCELLANEOUS - 11.3% ------------------------------------------------------------------------------------------------------------------------- American Medical Response, Inc. (2) 30,000 866,250 ------------------------------------------------------------------------------------------------------------------------- Cephalon, Inc. (2) 30,000 247,500
STATEMENT OF INVESTMENTS (CONTINUED) December 31, 1994 Oppenheimer Variable Account Funds - Oppenheimer Capital Appreciation Fund MARKET VALUE COMMON STOCKS (CONTINUED) SHARES SEE NOTE 1 - ----------------------------------------------------------------------------------------------------------------------------------- CONSUMER NON-CYCLICALS (CONTINUED) - ----------------------------------------------------------------------------------------------------------------------------------- HEALTHCARE: MISCELLANEOUS (CONTINUED) ------------------------------------------------------------------------------------------------------------------------- Chiron Corp. (2) 25,000 $ 2,009,375 ------------------------------------------------------------------------------------------------------------------------- Coram Healthcare Corp. (2) 85,000 1,402,500 ------------------------------------------------------------------------------------------------------------------------- Ethical Holdings, Sponsored ADR (2) 50,000 325,000 ------------------------------------------------------------------------------------------------------------------------- Genesis Health Ventures, Inc. (2) 38,000 1,201,750 ------------------------------------------------------------------------------------------------------------------------- Horizon Healthcare Corp. (2) 108,700 3,043,600 ------------------------------------------------------------------------------------------------------------------------- Integrated Health Services, Inc. 67,500 2,666,250 ------------------------------------------------------------------------------------------------------------------------- Lincare Holdings, Inc. (2) 70,000 2,030,000 ------------------------------------------------------------------------------------------------------------------------- Mariner Health Group, Inc. (2) 96,000 2,076,000 ------------------------------------------------------------------------------------------------------------------------- Martek Biosciences Corp. (2) 50,000 475,000 ------------------------------------------------------------------------------------------------------------------------- Matrix Pharmaceutical, Inc. (2) 40,400 555,500 ------------------------------------------------------------------------------------------------------------------------- Omnicare, Inc. 35,000 1,535,625 ------------------------------------------------------------------------------------------------------------------------- PacifiCare Health Systems, Inc. (2) 21,300 1,405,800 ------------------------------------------------------------------------------------------------------------------------- PerSeptive Biosystems, Inc. (2) 15,000 80,157 ------------------------------------------------------------------------------------------------------------------------- Physicians Health Services, Inc., Cl. A (2) 38,400 1,046,400 ---------------- 20,966,707 - ----------------------------------------------------------------------------------------------------------------------------------- HOSPITAL MANAGEMENT - 1.6% ------------------------------------------------------------------------------------------------------------------------- Community Psychiatric Centers 95,000 1,045,000 ------------------------------------------------------------------------------------------------------------------------- Ornda Healthcorp (2) 80,000 1,000,000 ------------------------------------------------------------------------------------------------------------------------- Quorum Health Group, Inc. (2) 46,000 874,000 ---------------- 2,919,000 - ----------------------------------------------------------------------------------------------------------------------------------- MEDICAL PRODUCTS - 0.7% ------------------------------------------------------------------------------------------------------------------------- Steris Corp. (2) 37,000 1,387,500 - ----------------------------------------------------------------------------------------------------------------------------------- RETAIL STORES: DRUG STORES - 1.5% ------------------------------------------------------------------------------------------------------------------------- Revco D.S., Inc. (2) 120,000 2,835,000 - ----------------------------------------------------------------------------------------------------------------------------------- ENERGY - 2.6% - ----------------------------------------------------------------------------------------------------------------------------------- OIL AND GAS DRILLING - 1.0% ------------------------------------------------------------------------------------------------------------------------- Cross Timbers Oil Co. 30,800 462,000 ------------------------------------------------------------------------------------------------------------------------- St. Mary Land & Exploration Co. 50,000 662,500 ------------------------------------------------------------------------------------------------------------------------- Stone Energy Corp. (2) 35,000 673,750 ---------------- 1,798,250 - ----------------------------------------------------------------------------------------------------------------------------------- OIL WELL SERVICES AND EQUIPMENT - 1.4% ------------------------------------------------------------------------------------------------------------------------- Halliburton Co. 50,000 1,656,250 ------------------------------------------------------------------------------------------------------------------------- NUMAR Corp. (2) 36,000 351,000 ------------------------------------------------------------------------------------------------------------------------- Weatherford International, Inc. (2) 60,000 585,000 ---------------- 2,592,250 - ----------------------------------------------------------------------------------------------------------------------------------- OIL: EXPLORATION AND PRODUCTION - 0.2% ------------------------------------------------------------------------------------------------------------------------- Newfield Exploration Co. (2) 20,000 395,000 - ----------------------------------------------------------------------------------------------------------------------------------- FINANCIAL - 2.0% - ----------------------------------------------------------------------------------------------------------------------------------- FINANCIAL SERVICES: MISCELLANEOUS - 1.4% ------------------------------------------------------------------------------------------------------------------------- Advanta Corp., Cl. B 50,000 1,262,500 ------------------------------------------------------------------------------------------------------------------------- First USA, Inc. 39,400 1,295,275 ---------------- 2,557,775 - ----------------------------------------------------------------------------------------------------------------------------------- MAJOR BANKS: REGIONAL - 0.6% ------------------------------------------------------------------------------------------------------------------------- First Interstate Bancorp 15,000 1,014,375 - ----------------------------------------------------------------------------------------------------------------------------------- INDUSTRIAL - 7.2% - ----------------------------------------------------------------------------------------------------------------------------------- BUILDING MATERIALS GROUP - 0.8% ------------------------------------------------------------------------------------------------------------------------- BMC West Corp. (2) 60,000 840,000 ------------------------------------------------------------------------------------------------------------------------- Giant Cement Holding, Inc. (2) 60,000 712,500 ---------------- 1,552,500
STATEMENT OF INVESTMENTS (CONTINUED) December 31, 1994 Oppenheimer Variable Account Funds - Oppenheimer Capital Appreciation Fund MARKET VALUE COMMON STOCKS (CONTINUED) SHARES SEE NOTE 1 - ----------------------------------------------------------------------------------------------------------------------------------- INDUSTRIAL - (CONTINUED) - ----------------------------------------------------------------------------------------------------------------------------------- COMMERCIAL SERVICES - 2.1% ------------------------------------------------------------------------------------------------------------------------- Manpower, Inc. 43,000 $ 1,209,375 ------------------------------------------------------------------------------------------------------------------------- Reynolds & Reynolds Co., Cl. A 67,000 1,675,000 ------------------------------------------------------------------------------------------------------------------------- Sensormatic Electronics Corp. 30,000 1,080,000 ---------------- 3,964,375 - ----------------------------------------------------------------------------------------------------------------------------------- ELECTRICAL EQUIPMENT - 1.6% ------------------------------------------------------------------------------------------------------------------------- AER Energy Resources, Inc. (2) 52,000 234,000 ------------------------------------------------------------------------------------------------------------------------- Micrel, Inc. (2) 65,000 942,500 ------------------------------------------------------------------------------------------------------------------------- Molex, Inc., Cl. A 56,250 1,743,750 ---------------- 2,920,250 - ----------------------------------------------------------------------------------------------------------------------------------- MANUFACTURING: DIVERSIFIED INDUSTRIALS - 0.4% ------------------------------------------------------------------------------------------------------------------------- Ultralife Batteries, Inc. (2) 50,000 800,000 - ----------------------------------------------------------------------------------------------------------------------------------- POLLUTION CONTROL - 0.8% ------------------------------------------------------------------------------------------------------------------------- United Waste Systems, Inc. (2) 60,000 1,500,000 - ----------------------------------------------------------------------------------------------------------------------------------- RAILROADS - 0.7% ------------------------------------------------------------------------------------------------------------------------- Southern Pacific Rail Corp. (2) 76,000 1,377,500 - ----------------------------------------------------------------------------------------------------------------------------------- TRANSPORTATION: MISCELLANEOUS - 0.8% ------------------------------------------------------------------------------------------------------------------------- Covenant Transport, Inc., Cl. A (2) 75,000 1,462,500 - ----------------------------------------------------------------------------------------------------------------------------------- TECHNOLOGY - 24.2% - ----------------------------------------------------------------------------------------------------------------------------------- COMMUNICATION: EQUIPMENT/MANUFACTURERS - 3.4% ------------------------------------------------------------------------------------------------------------------------- Andrew Corp. (2) 31,500 1,645,875 ------------------------------------------------------------------------------------------------------------------------- DSC Communications Corp. (2) 30,000 1,076,250 ------------------------------------------------------------------------------------------------------------------------- Glenayre Technologies, Inc. (2) 23,000 1,328,250 ------------------------------------------------------------------------------------------------------------------------- Tellabs, Inc. (2) 42,000 2,341,500 ---------------- 6,391,875 - ----------------------------------------------------------------------------------------------------------------------------------- COMPUTER SOFTWARE AND SERVICES - 8.5% ------------------------------------------------------------------------------------------------------------------------- Compuware Corp. (2) 75,000 2,700,000 ------------------------------------------------------------------------------------------------------------------------- Cornerstone Imaging, Inc. (2) 45,200 689,300 ------------------------------------------------------------------------------------------------------------------------- CUC International, Inc. (2) 36,000 1,206,000 ------------------------------------------------------------------------------------------------------------------------- Davidson & Associates, Inc. (2) 20,000 650,000 ------------------------------------------------------------------------------------------------------------------------- First Data Corp. 60,000 2,842,500 ------------------------------------------------------------------------------------------------------------------------- FTP Software, Inc. (2) 55,000 1,739,375 ------------------------------------------------------------------------------------------------------------------------- HBO & Co. 40,000 1,380,000 ------------------------------------------------------------------------------------------------------------------------- Lotus Development Corp. (2) 40,000 1,640,000 ------------------------------------------------------------------------------------------------------------------------- NETCOM On-Line Communication Services, Inc. (2) 40,000 1,135,000 ------------------------------------------------------------------------------------------------------------------------- Pyxis Corp. (2) 80,000 1,520,000 ------------------------------------------------------------------------------------------------------------------------- 7th Level, Inc. (2) 70,000 367,500 ---------------- 15,869,675 - ----------------------------------------------------------------------------------------------------------------------------------- COMPUTER SYSTEMS - 2.2% ------------------------------------------------------------------------------------------------------------------------- ADFlex Solutions, Inc. (2) 35,000 586,250 ------------------------------------------------------------------------------------------------------------------------- American Power Conversion Corp. (2) 26,000 425,750 ------------------------------------------------------------------------------------------------------------------------- Cabletron Systems, Inc. (2) 20,000 930,000 ------------------------------------------------------------------------------------------------------------------------- EMC Corp. (2) 99,000 2,140,875 ---------------- 4,082,875 - ----------------------------------------------------------------------------------------------------------------------------------- ELECTRONICS: INSTRUMENTATION - 3.3% ------------------------------------------------------------------------------------------------------------------------- First Alert, Inc. (2) 24,000 351,000 ------------------------------------------------------------------------------------------------------------------------- Recoton Corp. (2) 84,000 1,575,000 ------------------------------------------------------------------------------------------------------------------------- Sanmina Corp. (2) 40,000 1,090,000 ------------------------------------------------------------------------------------------------------------------------- Symbol Technologies, Inc. (2) 47,400 1,463,475 ------------------------------------------------------------------------------------------------------------------------- Teradyne, Inc. (2) 50,000 1,693,750 ---------------- 6,173,225
STATEMENT OF INVESTMENTS (CONTINUED) December 31, 1994 Oppenheimer Variable Account Funds - Oppenheimer Capital Appreciation Fund MARKET VALUE COMMON STOCKS (CONTINUED) SHARES SEE NOTE 1 - ----------------------------------------------------------------------------------------------------------------------------------- TECHNOLOGY (CONTINUED) - ----------------------------------------------------------------------------------------------------------------------------------- ELECTRONICS: SEMICONDUCTORS - 1.5% ------------------------------------------------------------------------------------------------------------------------- Advanced Technology Materials, Inc. (2) 47,800 $ 283,813 ------------------------------------------------------------------------------------------------------------------------- Lam Research Corp. (2) 20,000 745,000 ------------------------------------------------------------------------------------------------------------------------- Novellus Systems, Inc. (2) 21,000 1,050,000 ------------------------------------------------------------------------------------------------------------------------- Tower Semiconductor Ltd. (2) 60,000 660,000 ---------------- 2,738,813 - ----------------------------------------------------------------------------------------------------------------------------------- TELECOMMUNICATIONS - 5.3% ------------------------------------------------------------------------------------------------------------------------- ALC Communications Corp. (2) 68,000 2,116,500 ------------------------------------------------------------------------------------------------------------------------- IDB Communications Group, Inc. (2) 113,750 1,045,076 ------------------------------------------------------------------------------------------------------------------------- LCI International, Inc. (2) 83,400 2,168,400 ------------------------------------------------------------------------------------------------------------------------- LDDS Communications, Inc. (2) 76,354 1,484,131 ------------------------------------------------------------------------------------------------------------------------- Millicom International Cellular SA (2) 50,000 1,506,250 ------------------------------------------------------------------------------------------------------------------------- ProNet, Inc. (2) 100,000 1,450,000 ---------------- 9,770,357 ---------------- Total Common Stocks (Cost $138,044,877) 153,205,391 - ----------------------------------------------------------------------------------------------------------------------------------- PREFERRED STOCKS - 0.4% - ----------------------------------------------------------------------------------------------------------------------------------- AK Steel Holding Corp., 7% Cv. Stock Appreciation Income 25,000 781,250 Linked Securities (Cost $768,750) UNITS - ----------------------------------------------------------------------------------------------------------------------------------- RIGHTS, WARRANTS AND CERTIFICATES - 0.0% - ----------------------------------------------------------------------------------------------------------------------------------- Tapistron International, Inc. Wts., Exp. 6/97 120,000 33,756 ------------------------------------------------------------------------------------------------------------------------- Viacom, Inc., Cl. B Rts., Exp. 9/95 30,000 33,750 ---------------- Total Rights, Warrants and Certificates (Cost $97,860) 67,506 ------------------------------------------------------------------------------------------------------------------------- TOTAL INVESTMENTS, AT VALUE (COST $166,985,520) 98.5% 182,918,438 ------------------------------------------------------------------------------------------------------------------------- OTHER ASSETS NET OF LIABILITIES 1.5 2,855,103 ------------------ ---------------- NET ASSETS 100.0% $ 185,773,541 ------------------ ---------------- ------------------ ----------------
1. Restricted security - See Note 7 of Notes to Financial Statements. 2. Non-income producing security. 3. Interest or dividend is paid in kind. See accompanying Notes to Financial Statements.
- ----------------------------------------------------------------------------------------------------------------------------------- STATEMENT OF INVESTMENTS December 31, 1994 Oppenheimer Variable Account Funds - Oppenheimer Growth Fund FACE MARKET VALUE AMOUNT SEE NOTE 1 - ----------------------------------------------------------------------------------------------------------------------------------- REPURCHASE AGREEMENTS - 12.6% - ----------------------------------------------------------------------------------------------------------------------------------- Repurchase agreement with First Chicago Capital Markets, 6%, dated 12/30/94, to be repurchased at $8,005,333 on 1/3/95, collateralized by U.S. Treasury Nts., 3.875%-8.875%, 5/31/95-8/31/05, with a value of $7,607,908 and U.S. Treasury Bonds, 10.75%-14.25%, 2/15/02-8/15/05, with a value of $558,881 (Cost $8,000,000) $ 8,000,000 $ 8,000,000 SHARES - ----------------------------------------------------------------------------------------------------------------------------------- COMMON STOCKS - 82.6% - ----------------------------------------------------------------------------------------------------------------------------------- BASIC MATERIALS - 3.0% - ----------------------------------------------------------------------------------------------------------------------------------- CHEMICALS - 1.0% ------------------------------------------------------------------------------------------------------------------------- Georgia Gulf Corp. (1) 17,000 660,875 - ----------------------------------------------------------------------------------------------------------------------------------- CHEMICALS: DIVERSIFIED - 1.6% ------------------------------------------------------------------------------------------------------------------------- FMC Corp. (1) 4,000 231,000 ------------------------------------------------------------------------------------------------------------------------- Monsanto Co. 1,000 70,500 ------------------------------------------------------------------------------------------------------------------------- PPG Industries, Inc. 18,000 668,250 ---------------- 969,750 - ----------------------------------------------------------------------------------------------------------------------------------- PAPER AND FOREST PRODUCTS - 0.4% ------------------------------------------------------------------------------------------------------------------------- Boise Cascade Corp. 10,000 267,500 - ----------------------------------------------------------------------------------------------------------------------------------- CONSUMER CYCLICALS - 13.4% - ----------------------------------------------------------------------------------------------------------------------------------- AUTO PARTS: AFTER MARKET - 0.8% ------------------------------------------------------------------------------------------------------------------------- Goodyear Tire & Rubber Co. 15,000 504,375 - ----------------------------------------------------------------------------------------------------------------------------------- BROADCAST MEDIA - 1.0% ------------------------------------------------------------------------------------------------------------------------- Multimedia, Inc. (1) 12,000 342,000 ------------------------------------------------------------------------------------------------------------------------- Viacom, Inc., Cl. B (1) 6,667 270,847 ---------------- 612,847 - ----------------------------------------------------------------------------------------------------------------------------------- ENTERTAINMENT - 0.6% ------------------------------------------------------------------------------------------------------------------------- King World Productions, Inc. (1) 12,000 414,000 - ----------------------------------------------------------------------------------------------------------------------------------- HOUSEHOLD FURNISHINGS AND APPLIANCES - 0.6% ------------------------------------------------------------------------------------------------------------------------- Maytag Corp. 20,000 300,000 ------------------------------------------------------------------------------------------------------------------------- Newell Co. 5,000 105,000 ---------------- 405,000 - ----------------------------------------------------------------------------------------------------------------------------------- LEISURE TIME - 2.6% ------------------------------------------------------------------------------------------------------------------------- Acclaim Entertainment, Inc. (1) 25,000 359,375 ------------------------------------------------------------------------------------------------------------------------- Brunswick Corp. 30,000 566,250 ------------------------------------------------------------------------------------------------------------------------- Harley-Davidson, Inc. 26,000 728,000 ---------------- 1,653,625 - ----------------------------------------------------------------------------------------------------------------------------------- PUBLISHING - 0.1% ------------------------------------------------------------------------------------------------------------------------- Marvel Entertainment Group, Inc. (1) 4,000 57,000 - ----------------------------------------------------------------------------------------------------------------------------------- RESTAURANTS - 0.6% ------------------------------------------------------------------------------------------------------------------------- McDonald's Corp. 9,000 263,250 ------------------------------------------------------------------------------------------------------------------------- Shoney's, Inc. (1) 10,000 127,500 ---------------- 390,750 - ----------------------------------------------------------------------------------------------------------------------------------- RETAIL STORES: DEPARTMENT STORES - 1.7% ------------------------------------------------------------------------------------------------------------------------- Dollar General Corp. 20,000 600,000 ------------------------------------------------------------------------------------------------------------------------- May Department Stores Co. 14,000 472,500 ---------------- 1,072,500 - ----------------------------------------------------------------------------------------------------------------------------------- RETAIL STORES: GENERAL MERCHANDISE CHAINS - 1.7% ------------------------------------------------------------------------------------------------------------------------- Waban, Inc. (1) 35,000 621,250
STATEMENT OF INVESTMENTS (CONTINUED) December 31, 1994 Oppenheimer Variable Account Funds - Oppenheimer Growth Fund MARKET VALUE COMMON STOCKS (CONTINUED) SHARES SEE NOTE 1 - ----------------------------------------------------------------------------------------------------------------------------------- CONSUMER CYCLICALS (CONTINUED) - ----------------------------------------------------------------------------------------------------------------------------------- RETAIL STORES: GENERAL MERCHANDISE CHAINS (CONTINUED) ------------------------------------------------------------------------------------------------------------------------- Wal-Mart Stores, Inc. 21,000 $ 446,250 ---------------- 1,067,500 - ----------------------------------------------------------------------------------------------------------------------------------- RETAIL: SPECIALTY - 2.7% ------------------------------------------------------------------------------------------------------------------------- CML Group, Inc. 12,000 121,500 ------------------------------------------------------------------------------------------------------------------------- Home Depot, Inc. (The) 14,000 644,000 ------------------------------------------------------------------------------------------------------------------------- Michaels Stores, Inc. (1) 10,000 347,500 ------------------------------------------------------------------------------------------------------------------------- OfficeMax, Inc. (1) 10,000 265,000 ------------------------------------------------------------------------------------------------------------------------- Toys 'R' Us, Inc. (1) 10,000 305,000 ---------------- 1,683,000 - ----------------------------------------------------------------------------------------------------------------------------------- RETAIL: SPECIALTY APPAREL - 1.0% ------------------------------------------------------------------------------------------------------------------------- Gap, Inc. (The) 20,000 610,000 - ----------------------------------------------------------------------------------------------------------------------------------- CONSUMER NON-CYCLICALS - 18.7% - ----------------------------------------------------------------------------------------------------------------------------------- BEVERAGES: SOFT DRINKS - 1.7% ------------------------------------------------------------------------------------------------------------------------- Coca-Cola Co. (The) 21,000 1,081,500 - ----------------------------------------------------------------------------------------------------------------------------------- DRUGS - 2.3% ------------------------------------------------------------------------------------------------------------------------- Pfizer, Inc. 10,000 772,500 ------------------------------------------------------------------------------------------------------------------------- Schering-Plough 9,000 666,000 ---------------- 1,438,500 - ----------------------------------------------------------------------------------------------------------------------------------- FOOD PROCESSING - 0.9% ------------------------------------------------------------------------------------------------------------------------- ConAgra, Inc. 4,000 125,000 ------------------------------------------------------------------------------------------------------------------------- General Mills, Inc. 3,000 171,000 ------------------------------------------------------------------------------------------------------------------------- IBP, Inc. 10,000 302,500 ---------------- 598,500 - ----------------------------------------------------------------------------------------------------------------------------------- HEALTHCARE: DIVERSIFIED - 4.1% ------------------------------------------------------------------------------------------------------------------------- Abbott Laboratories 22,000 717,750 ------------------------------------------------------------------------------------------------------------------------- American Home Products Corp. 4,500 282,375 ------------------------------------------------------------------------------------------------------------------------- Bristol-Myers Squibb Co. 4,500 260,438 ------------------------------------------------------------------------------------------------------------------------- Johnson & Johnson 10,000 547,500 ------------------------------------------------------------------------------------------------------------------------- Smithkline Beecham PLC, ADR Equity Unit 4,000 137,000 ------------------------------------------------------------------------------------------------------------------------- Warner-Lambert Co. 8,000 616,000 ---------------- 2,561,063 - ----------------------------------------------------------------------------------------------------------------------------------- HEALTHCARE: MISCELLANEOUS - 2.8% ------------------------------------------------------------------------------------------------------------------------- Amgen, Inc. (1) 8,000 472,000 ------------------------------------------------------------------------------------------------------------------------- National Health Laboratories, Inc. 8,000 106,000 ------------------------------------------------------------------------------------------------------------------------- U.S. Healthcare, Inc. 14,000 577,500 ------------------------------------------------------------------------------------------------------------------------- United Healthcare Corp. 13,000 586,625 ---------------- 1,742,125 - ----------------------------------------------------------------------------------------------------------------------------------- HOSPITAL MANAGEMENT - 1.6% ------------------------------------------------------------------------------------------------------------------------- Columbia/HCA Healthcare Corp. 12,000 438,000 ------------------------------------------------------------------------------------------------------------------------- HealthCare COMPARE Corp. (1) 16,000 546,000 ---------------- 984,000 - ----------------------------------------------------------------------------------------------------------------------------------- HOUSEHOLD PRODUCTS - 1.4% ------------------------------------------------------------------------------------------------------------------------- Colgate-Palmolive Co. 4,000 253,500 ------------------------------------------------------------------------------------------------------------------------- Procter & Gamble Co. 10,000 620,000 ---------------- 873,500 - ----------------------------------------------------------------------------------------------------------------------------------- MEDICAL PRODUCTS - 2.1% ------------------------------------------------------------------------------------------------------------------------- Cordis Corp. (1) 4,000 242,000 ------------------------------------------------------------------------------------------------------------------------- Medtronic, Inc. 20,000 1,112,500 ---------------- 1,354,500 ----------------
STATEMENT OF INVESTMENTS (CONTINUED) December 31, 1994 Oppenheimer Variable Account Funds - Oppenheimer Growth Fund MARKET VALUE COMMON STOCKS (CONTINUED) SHARES SEE NOTE 1 - ----------------------------------------------------------------------------------------------------------------------------------- CONSUMER NON-CYCLICALS (CONTINUED) - ----------------------------------------------------------------------------------------------------------------------------------- TOBACCO - 1.8% ------------------------------------------------------------------------------------------------------------------------- Philip Morris Cos., Inc. 16,000 $ 920,000 ------------------------------------------------------------------------------------------------------------------------- UST, Inc. 9,000 249,750 ---------------- 1,169,750 - ----------------------------------------------------------------------------------------------------------------------------------- ENERGY - 0.6% - ----------------------------------------------------------------------------------------------------------------------------------- OIL: INTEGRATED INTERNATIONAL - 0.6% ------------------------------------------------------------------------------------------------------------------------- Royal Dutch Petroleum Co. 3,500 376,250 - ----------------------------------------------------------------------------------------------------------------------------------- FINANCIAL - 19.7% - ----------------------------------------------------------------------------------------------------------------------------------- FINANCIAL SERVICES: MISCELLANEOUS - 9.1% ------------------------------------------------------------------------------------------------------------------------- Advanta Corp., Cl. A 26,000 682,500 ------------------------------------------------------------------------------------------------------------------------- Countrywide Credit Industries, Inc. 28,000 364,000 ------------------------------------------------------------------------------------------------------------------------- Federal Home Loan Mortgage Corp. 15,000 757,500 ------------------------------------------------------------------------------------------------------------------------- Federal National Mortgage Assn. 8,700 634,012 ------------------------------------------------------------------------------------------------------------------------- First USA, Inc. 20,000 657,500 ------------------------------------------------------------------------------------------------------------------------- Green Tree Financial Corp. 36,000 1,093,500 ------------------------------------------------------------------------------------------------------------------------- MBIA, Inc. 5,000 280,625 ------------------------------------------------------------------------------------------------------------------------- Student Loan Marketing Assn. 7,000 227,500 ------------------------------------------------------------------------------------------------------------------------- SunAmerica, Inc. 13,000 471,250 ------------------------------------------------------------------------------------------------------------------------- Travelers, Inc. 18,000 585,000 ---------------- 5,753,387 - ----------------------------------------------------------------------------------------------------------------------------------- INSURANCE: LIFE - 1.6% ------------------------------------------------------------------------------------------------------------------------- AFLAC, Inc. 11,250 360,000 ------------------------------------------------------------------------------------------------------------------------- Conseco, Inc. 4,000 172,500 ------------------------------------------------------------------------------------------------------------------------- Lincoln National Corp. 4,000 140,000 ------------------------------------------------------------------------------------------------------------------------- UNUM Corp. 10,000 377,500 ---------------- 1,050,000 - ----------------------------------------------------------------------------------------------------------------------------------- INSURANCE: PROPERTY AND CASUALTY - 1.5% ------------------------------------------------------------------------------------------------------------------------- Loews Corp. 7,000 608,125 ------------------------------------------------------------------------------------------------------------------------- USF&G Corp. 22,800 310,650 ---------------- 918,775 - ----------------------------------------------------------------------------------------------------------------------------------- MAJOR BANKS: OTHER - 0.9% ------------------------------------------------------------------------------------------------------------------------- Bank of Boston Corp. 21,000 543,375 - ----------------------------------------------------------------------------------------------------------------------------------- MAJOR BANKS: REGIONAL - 5.8% ------------------------------------------------------------------------------------------------------------------------- Banc One Corp. 12,787 324,470 ------------------------------------------------------------------------------------------------------------------------- First Fidelity Bancorporation 5,000 224,375 ------------------------------------------------------------------------------------------------------------------------- First Interstate Bancorp 11,000 743,875 ------------------------------------------------------------------------------------------------------------------------- Mellon Bank Corp. 7,500 229,688 ------------------------------------------------------------------------------------------------------------------------- Midlantic Corp. 19,000 503,500 ------------------------------------------------------------------------------------------------------------------------- NationsBank Corp. 9,000 406,125 ------------------------------------------------------------------------------------------------------------------------- Shawmut National Corp. 10,000 163,750 ------------------------------------------------------------------------------------------------------------------------- Signet Banking Corp. 8,000 229,000 ------------------------------------------------------------------------------------------------------------------------- SunTrust Banks, Inc. 5,000 238,750 ------------------------------------------------------------------------------------------------------------------------- UJB Financial Corp. 9,000 217,125 ------------------------------------------------------------------------------------------------------------------------- West One Bancorp 15,000 397,500 ---------------- 3,678,158 - ----------------------------------------------------------------------------------------------------------------------------------- MONEY CENTER BANKS - 0.8% ------------------------------------------------------------------------------------------------------------------------- Chase Manhattan Corp. 15,000 515,625 - ----------------------------------------------------------------------------------------------------------------------------------- INDUSTRIAL - 4.5% - ----------------------------------------------------------------------------------------------------------------------------------- CONGLOMERATES - 1.8% ------------------------------------------------------------------------------------------------------------------------- Canadian Pacific Ltd. 35,000 525,000
STATEMENT OF INVESTMENTS (CONTINUED) December 31, 1994 Oppenheimer Variable Account Funds - Oppenheimer Growth Fund MARKET VALUE COMMON STOCKS (CONTINUED) SHARES SEE NOTE 1 - ----------------------------------------------------------------------------------------------------------------------------------- INDUSTRIAL (CONTINUED) - ----------------------------------------------------------------------------------------------------------------------------------- CONGLOMERATES (CONTINUED) ------------------------------------------------------------------------------------------------------------------------- ITT Corp. 7,000 $ 620,375 ---------------- 1,145,375 - ----------------------------------------------------------------------------------------------------------------------------------- ELECTRICAL EQUIPMENT - 1.6% ------------------------------------------------------------------------------------------------------------------------- Emerson Electric Co. 7,000 437,500 ------------------------------------------------------------------------------------------------------------------------- General Electric Co. 11,000 561,000 ---------------- 998,500 - ----------------------------------------------------------------------------------------------------------------------------------- MACHINERY: DIVERSIFIED - 0.6% ------------------------------------------------------------------------------------------------------------------------- Varity Corp. (1) 11,000 398,750 - ----------------------------------------------------------------------------------------------------------------------------------- RAILROADS - 0.5% ------------------------------------------------------------------------------------------------------------------------- Illinois Central Corp. 10,000 307,500 - ----------------------------------------------------------------------------------------------------------------------------------- TECHNOLOGY - 20.6% - ----------------------------------------------------------------------------------------------------------------------------------- AEROSPACE/DEFENSE - 0.7% ------------------------------------------------------------------------------------------------------------------------- Boeing Co. (The) 6,000 280,500 ------------------------------------------------------------------------------------------------------------------------- Northrop Corp. 4,000 168,000 ---------------- 448,500 - ----------------------------------------------------------------------------------------------------------------------------------- COMPUTER SOFTWARE AND SERVICES - 7.6% ------------------------------------------------------------------------------------------------------------------------- Automatic Data Processing, Inc. 20,000 1,170,000 ------------------------------------------------------------------------------------------------------------------------- BMC Software, Inc. (1) 13,000 739,375 ------------------------------------------------------------------------------------------------------------------------- Computer Associates International, Inc. 12,000 582,000 ------------------------------------------------------------------------------------------------------------------------- Informix Corp. (1) 15,000 481,875 ------------------------------------------------------------------------------------------------------------------------- Microsoft Corp. (1) 19,400 1,185,825 ------------------------------------------------------------------------------------------------------------------------- Oracle Systems Corp. (1) 11,000 485,375 ------------------------------------------------------------------------------------------------------------------------- Sybase, Inc. (1) 3,000 156,000 ---------------- 4,800,450 - ----------------------------------------------------------------------------------------------------------------------------------- COMPUTER SYSTEMS - 6.5% ------------------------------------------------------------------------------------------------------------------------- Cabletron Systems, Inc. (1) 12,000 558,000 ------------------------------------------------------------------------------------------------------------------------- Compaq Computer Corp. (1) 18,500 730,750 ------------------------------------------------------------------------------------------------------------------------- EMC Corp. (1) 21,000 454,125 ------------------------------------------------------------------------------------------------------------------------- Quantum Corp. (1) 60,000 907,500 ------------------------------------------------------------------------------------------------------------------------- Seagate Technology, Inc. (1) 8,500 204,000 ------------------------------------------------------------------------------------------------------------------------- 3Com Corp. (1) 14,000 721,875 ------------------------------------------------------------------------------------------------------------------------- Western Digital Corp. (1) 34,000 569,500 ---------------- 4,145,750 - ----------------------------------------------------------------------------------------------------------------------------------- ELECTRONICS: INSTRUMENTATION - 1.1% ------------------------------------------------------------------------------------------------------------------------- Belden, Inc. 30,000 667,500 - ----------------------------------------------------------------------------------------------------------------------------------- ELECTRONICS: SEMICONDUCTORS - 2.2% ------------------------------------------------------------------------------------------------------------------------- Intel Corp. 12,000 766,500 ------------------------------------------------------------------------------------------------------------------------- Texas Instruments, Inc. 6,000 449,250 ------------------------------------------------------------------------------------------------------------------------- VLSI Technology, Inc. (1) 15,000 180,000 ---------------- 1,395,750 - ----------------------------------------------------------------------------------------------------------------------------------- TELECOMMUNICATIONS - 2.5% ------------------------------------------------------------------------------------------------------------------------- AT & T Corp. 25,000 1,256,250 ------------------------------------------------------------------------------------------------------------------------- Hong Kong Telecommunications Ltd., Sponsored ADR 17,000 325,125 ---------------- 1,581,375 - ----------------------------------------------------------------------------------------------------------------------------------- UTILITIES - 2.1% - ----------------------------------------------------------------------------------------------------------------------------------- ELECTRIC COMPANIES - 0.9% ------------------------------------------------------------------------------------------------------------------------- Empresa Nacional de Electricidad SA, Sponsored ADR 15,000 607,500 - ----------------------------------------------------------------------------------------------------------------------------------- TELEPHONE - 1.2% ------------------------------------------------------------------------------------------------------------------------- BellSouth Corp. 2,500 135,312
STATEMENT OF INVESTMENTS (CONTINUED) December 31, 1994 Oppenheimer Variable Account Funds - Oppenheimer Growth Fund MARKET VALUE COMMON STOCKS (CONTINUED) SHARES SEE NOTE 1 - ----------------------------------------------------------------------------------------------------------------------------------- UTILITIES (CONTINUED) - ----------------------------------------------------------------------------------------------------------------------------------- TELEPHONE (CONTINUED) ------------------------------------------------------------------------------------------------------------------------- Telefonos de Mexico SA, Sponsored ADR 15,000 $ 615,000 ---------------- 750,312 ---------------- Total Common Stocks (Cost $45,029,800) 52,254,992 UNITS - ----------------------------------------------------------------------------------------------------------------------------------- RIGHTS, WARRANTS AND CERTIFICATES - 0.0% - ----------------------------------------------------------------------------------------------------------------------------------- Viacom, Inc., Cl. B Rts., Exp. 9/95 (Cost $16,500) 11,000 12,375 ------------------------------------------------------------------------------------------------------------------------- TOTAL INVESTMENTS, AT VALUE (COST $53,046,300) 95.2% 60,267,367 ------------------------------------------------------------------------------------------------------------------------- OTHER ASSETS NET OF LIABILITIES 4.8 3,015,807 ------------------ ---------------- NET ASSETS 100.0% $ 63,283,174 ------------------ ---------------- ------------------ ----------------
1. Non-income producing security. See accompanying Notes to Financial Statements.
- ----------------------------------------------------------------------------------------------------------------------------------- STATEMENT OF INVESTMENTS December 31, 1994 Oppenheimer Variable Account Funds - Oppenheimer Multiple Strategies Fund FACE MARKET VALUE AMOUNT (1) SEE NOTE 1 - ----------------------------------------------------------------------------------------------------------------------------------- REPURCHASE AGREEMENTS - 5.9% - ----------------------------------------------------------------------------------------------------------------------------------- Repurchase agreement with First Chicago Capital Markets, 6%, dated 12/30/94, to be repurchased at $17,211,467 on 1/3/95, collateralized by U.S. Treasury Nts., 3.875%-8.875%, 5/31/95-8/31/05, with a value of $16,357,002 and U.S. Treasury Bonds, 10.75%-14.25%, 2/15/02-8/15/05, with a value of $1,201,593 (Cost $17,200,000) $ 17,200,000 $ 17,200,000 - ----------------------------------------------------------------------------------------------------------------------------------- MORTGAGE-BACKED OBLIGATIONS - 2.1% - ----------------------------------------------------------------------------------------------------------------------------------- GOVERNMENT AGENCY - 1.9% - ----------------------------------------------------------------------------------------------------------------------------------- GNMA/GUARANTEED - 1.9% ------------------------------------------------------------------------------------------------------------------------- Government National Mortgage Assn., 8%, 4/15/23 3,968,026 3,803,472 ------------------------------------------------------------------------------------------------------------------------- Government National Mortgage Assn., 8%, 7/15/22 1,847,061 1,782,673 ---------------- 5,586,145 - ----------------------------------------------------------------------------------------------------------------------------------- PRIVATE - 0.2% - ----------------------------------------------------------------------------------------------------------------------------------- MULTI-FAMILY - 0.2% ------------------------------------------------------------------------------------------------------------------------- Resolution Trust Corp. Commercial Mtg. Pass-Through Certificates, Series 1994-C2, Cl. E, 8%, 4/25/25 797,138 637,212 ---------------- Total Mortgage-Backed Obligations (Cost $6,729,111) 6,223,357 - ----------------------------------------------------------------------------------------------------------------------------------- U.S. GOVERNMENT OBLIGATIONS - 13.7% - ----------------------------------------------------------------------------------------------------------------------------------- TREASURY - 13.7% - ----------------------------------------------------------------------------------------------------------------------------------- U.S. Treasury Nts., 6.375%, 8/15/02 5,000,000 4,581,250 ------------------------------------------------------------------------------------------------------------------------- U.S. Treasury Nts., 6.75%, 5/31/97 10,300,000 10,071,473 ------------------------------------------------------------------------------------------------------------------------- U.S. Treasury Nts., 7.625%, 5/31/96 12,500,000 12,523,438 ------------------------------------------------------------------------------------------------------------------------- U.S. Treasury Nts., 9.25%, 8/15/98 9,000,000 9,393,750 ------------------------------------------------------------------------------------------------------------------------- U.S. Treasury Nts., STRIPS, 0%, 8/15/02 3,900,000 2,164,707 ------------------------------------------------------------------------------------------------------------------------- U.S. Treasury Nts., STRIPS, 0%, 8/15/03 2,500,000 1,282,297 ---------------- Total U.S. Government Obligations (Cost $40,709,033) 40,016,915 - ----------------------------------------------------------------------------------------------------------------------------------- FOREIGN GOVERNMENT OBLIGATIONS - 9.5% - ----------------------------------------------------------------------------------------------------------------------------------- Argentina (Republic of) Bonds, Bonos de Consolidacion de Deudas, Series 1, 5.625%, 4/1/01 (4)(6) 3,490,713 2,236,057 ------------------------------------------------------------------------------------------------------------------------- Argentina (Republic of) Par Bonds, 4.25%, 3/31/23 (7) 4,500,000 1,904,766 ------------------------------------------------------------------------------------------------------------------------- Canada (Government of) Bonds, 8.50%, 4/1/02 CAD 1,500,000 1,037,296 ------------------------------------------------------------------------------------------------------------------------- Canada (Government of) Bonds, 9.75%, 12/1/01 CAD 3,000,000 2,212,542 ------------------------------------------------------------------------------------------------------------------------- Canada (Government of) Bonds, 9.75%, 6/1/01 CAD 2,000,000 1,474,315 ------------------------------------------------------------------------------------------------------------------------- Queensland (Government of) Development Authority Global Transferable Registered Nts., 10.50%, 5/15/03 AUD 3,600,000 2,822,410 ------------------------------------------------------------------------------------------------------------------------- Spain (Kingdom of) Bonds, 11.45%, 8/30/98 ESP 50,000,000 377,270 ------------------------------------------------------------------------------------------------------------------------- Spain (Kingdom of) Bonds, 13.45%, 4/15/96 ESP 175,000,000 1,376,680 ------------------------------------------------------------------------------------------------------------------------- Spain (Kingdom of) Gtd. Bonds, Bonos y Obligacion del Estado, 12.25%, 3/25/00 ESP 350,000,000 2,696,858 ------------------------------------------------------------------------------------------------------------------------- Sweden (Kingdom of) Bonds, 11%, 1/21/99 SEK 7,500,000 1,031,972 ------------------------------------------------------------------------------------------------------------------------- Treasury Corp. of Victoria Gtd. Bonds, 8.25%, 10/15/03 AUD 6,000,000 4,060,296 ------------------------------------------------------------------------------------------------------------------------- United Mexican States Gtd. Cv. Bonds, Series B, 6.25%, 12/31/19 2,000,000 1,065,000 ------------------------------------------------------------------------------------------------------------------------- United Mexican States Collateralized Fixed Rate Par Bonds, 2,000,000 1,065,000 Series A, 6.25%, 12/31/19
STATEMENT OF INVESTMENTS (CONTINUED) December 31, 1994 Oppenheimer Variable Account Funds - Oppenheimer Multiple Strategies Fund FACE MARKET VALUE FOREIGN GOVERNMENT OBLIGATIONS (CONTINUED) AMOUNT (1) SEE NOTE 1 - ----------------------------------------------------------------------------------------------------------------------------------- Venezuela (Republic of) Collateralized Par Bonds, Series W-A, 6.75%, 3/31/20 $ 4,500,000 $ 2,070,000 ------------------------------------------------------------------------------------------------------------------------- Venezuela (Republic of) Collateralized Par Bonds, Series W-B, 6.75%, 3/31/20 3,000,000 1,380,000 ------------------------------------------------------------------------------------------------------------------------- Venezuela (Republic of) Front-Loaded Interest Reduction 2,000,000 918,750 Bonds, Series B, 7%, 3/31/07 ---------------- Total Foreign Government Obligations (Cost $32,988,359) 27,729,212 - ----------------------------------------------------------------------------------------------------------------------------------- MUNICIPAL BONDS AND NOTES - 0.2% - ----------------------------------------------------------------------------------------------------------------------------------- Port of Portland, Oregon Special Obligation Taxable Revenue Bonds, PAMCO Project, 9.20%, 5/15/22 (Cost $500,000) 500,000 500,431 - ----------------------------------------------------------------------------------------------------------------------------------- NON-CONVERTIBLE CORPORATE BONDS AND NOTES - 18.6% - ----------------------------------------------------------------------------------------------------------------------------------- BASIC MATERIALS - 2.4% - ----------------------------------------------------------------------------------------------------------------------------------- CHEMICALS - 0.4% ------------------------------------------------------------------------------------------------------------------------- Harris Chemical North America, Inc., 0%/10.25% Gtd. Sr. Sec. Disc. Nts., 7/15/01 (3) 600,000 496,500 ------------------------------------------------------------------------------------------------------------------------- Quantum Chemical Corp., 10.375% Fst. Mtg. Nts., 6/1/03 500,000 542,017 ------------------------------------------------------------------------------------------------------------------------- Synthetic Industries, Inc., 12.75% Sr. Sub. Debs., 12/1/02 300,000 265,500 ---------------- 1,304,017 - ----------------------------------------------------------------------------------------------------------------------------------- METALS - 1.0% ------------------------------------------------------------------------------------------------------------------------- Armco, Inc., 8.50% SF Debs., 9/1/01 200,000 179,000 ------------------------------------------------------------------------------------------------------------------------- Horsehead Industries, Inc., 14% Sub. Nts., 6/1/99 400,000 398,000 ------------------------------------------------------------------------------------------------------------------------- Kaiser Aluminum & Chemical Corp., 12.75% Sr. Sub. Nts., 1,000,000 1,007,500 2/1/03 ------------------------------------------------------------------------------------------------------------------------- NL Industries, Inc., 11.75% Sr. Sec. Nts., 10/15/03 1,350,000 1,350,000 ---------------- 2,934,500 - ----------------------------------------------------------------------------------------------------------------------------------- PAPER AND FOREST PRODUCTS - 1.0% ------------------------------------------------------------------------------------------------------------------------- Gaylord Container Corp., 11.50% Sr. Nts., 5/15/01 500,000 516,250 ------------------------------------------------------------------------------------------------------------------------- Malette, Inc., 12.25% Sr. Sec. Nts., 7/15/04 800,000 812,000 ------------------------------------------------------------------------------------------------------------------------- Pacific Lumber Co., 10.50% Sr. Nts., 3/1/03 425,000 394,187 ------------------------------------------------------------------------------------------------------------------------- Stone Consolidated Corp., 10.25% Sr. Sec. Nts., 12/15/00 250,000 246,875 ------------------------------------------------------------------------------------------------------------------------- Stone Container Corp., 9.875% Sr. Nts., 2/1/01 1,000,000 945,000 ---------------- 2,914,312 - ----------------------------------------------------------------------------------------------------------------------------------- CONSUMER CYCLICALS - 5.0% - ----------------------------------------------------------------------------------------------------------------------------------- AUTOMOBILES - 0.2% ------------------------------------------------------------------------------------------------------------------------- Penda Corp., 10.75% Sr. Nts., Series B, 3/1/04 825,000 754,875 - ----------------------------------------------------------------------------------------------------------------------------------- CONSTRUCTION SUPPLIES AND DEVELOPMENT - 1.3% ------------------------------------------------------------------------------------------------------------------------- American Standard, Inc., 10.875% Sr. Nts., 5/15/99 500,000 505,000 ------------------------------------------------------------------------------------------------------------------------- Baldwin Co., 10.375% Sr. Nts., Series B, 8/1/03 500,000 332,500 ------------------------------------------------------------------------------------------------------------------------- NVR, Inc., 11% Gtd. Sr. Nts., 4/15/03 500,000 420,000 ------------------------------------------------------------------------------------------------------------------------- Triangle Pacific Corp., 10.50% Sr. Nts., 8/1/03 1,000,000 955,000 ------------------------------------------------------------------------------------------------------------------------- USG Corp., 10.25% Sr. Sec. Nts., 12/15/02 500,000 511,250 ------------------------------------------------------------------------------------------------------------------------- USG Corp., 9.25% Sr. Nts., Series B, 9/15/01 600,000 555,000 ------------------------------------------------------------------------------------------------------------------------- Walter Industries, Inc., 14.625% Sr. Nts., Series B, 1/1/99 (2) 300,000 561,000 ---------------- 3,839,750 - ----------------------------------------------------------------------------------------------------------------------------------- CONSUMER GOODS AND SERVICES - 0.7% ------------------------------------------------------------------------------------------------------------------------- Amstar Corp., 11.375% Sr. Sub. Nts., 2/15/97 800,000 796,000 ------------------------------------------------------------------------------------------------------------------------- Coleman Holdings, Inc., 0% Sr. Sec. Disc. Nts., Series B, 5/27/98 1,000,000 680,000
STATEMENT OF INVESTMENTS (CONTINUED) December 31, 1994 Oppenheimer Variable Account Funds - Oppenheimer Multiple Strategies Fund FACE MARKET VALUE NON-CONVERTIBLE CORPORATE BONDS AND NOTES (CONTINUED) AMOUNT (1) SEE NOTE 1 - ----------------------------------------------------------------------------------------------------------------------------------- CONSUMER CYCLICALS (CONTINUED) - ----------------------------------------------------------------------------------------------------------------------------------- CONSUMER GOODS AND SERVICES (CONTINUED) ------------------------------------------------------------------------------------------------------------------------- Harman International Industries, Inc., 12% Sr. Sub. Nts., 8/1/02 $ 500,000 $ 542,500 ---------------- 2,018,500 - ----------------------------------------------------------------------------------------------------------------------------------- ENTERTAINMENT - 1.0% ------------------------------------------------------------------------------------------------------------------------- Aztar Corp., 11% Sr. Sub. Nts., 10/1/02 475,000 432,250 ------------------------------------------------------------------------------------------------------------------------- GNF Corp., 10.625% Gtd. Fst. Mtg. Nts., Series B, 4/1/03 500,000 332,500 ------------------------------------------------------------------------------------------------------------------------- Hollywood Casino Corp., 14% Sr. Sec. Nts., 4/1/98 1,000,000 990,000 ------------------------------------------------------------------------------------------------------------------------- Marvel (Parent) Holdings, Inc., 0% Sr. Sec. Disc. Nts., 4/15/98 400,000 244,000 ------------------------------------------------------------------------------------------------------------------------- Station Casinos, Inc., 9.625% Sr. Sub. Nts., 6/1/03 1,000,000 850,000 ---------------- 2,848,750 - ----------------------------------------------------------------------------------------------------------------------------------- MEDIA - 0.8% ------------------------------------------------------------------------------------------------------------------------- Lamar Advertising Co., 11% Sr. Sec. Nts., 5/15/03 750,000 719,063 ------------------------------------------------------------------------------------------------------------------------- Outlet Broadcasting, Inc., 10.875% Sr. Sub. Nts., 7/15/03 1,000,000 990,000 ------------------------------------------------------------------------------------------------------------------------- SCI Television, Inc., 11% Sr. Nts., Series 1, 6/30/05 500,000 500,000 ---------------- 2,209,063 - ----------------------------------------------------------------------------------------------------------------------------------- REAL ESTATE DEVELOPMENT - 0.4% ------------------------------------------------------------------------------------------------------------------------- Casino Magic Finance Corp., 11.50% Fst. Mtg. Nts., 10/15/01 500,000 317,500 ------------------------------------------------------------------------------------------------------------------------- Saul (B.F.) Real Estate Investment Trust, 11.625% Sr. Nts., 4/1/02 950,000 798,000 ---------------- 1,115,500 - ----------------------------------------------------------------------------------------------------------------------------------- RETAIL - 0.6% ------------------------------------------------------------------------------------------------------------------------- Cole National Group, Inc., 11.25% Sr. Nts., 10/1/01 1,000,000 967,500 ------------------------------------------------------------------------------------------------------------------------- Finlay Fine Jewelry Corp., 10.625% Sr. Nts., 5/1/03 750,000 710,625 ---------------- 1,678,125 - ----------------------------------------------------------------------------------------------------------------------------------- CONSUMER NON-CYCLICALS - 2.6% - ----------------------------------------------------------------------------------------------------------------------------------- FOOD - 0.9% ------------------------------------------------------------------------------------------------------------------------- Family Restaurants, Inc., 9.75% Sr. Nts., 2/1/02 1,500,000 1,181,250 ------------------------------------------------------------------------------------------------------------------------- Foodmaker, Inc., 14.25% Sr. Sub. Nts., 5/15/98 500,000 517,500 ------------------------------------------------------------------------------------------------------------------------- Foodmaker, Inc., 9.25% Sr. Nts., 3/1/99 500,000 423,750 ------------------------------------------------------------------------------------------------------------------------- RJR Nabisco, Inc., 8.625% Medium-Term Nts., 12/1/02 500,000 465,258 ---------------- 2,587,758 - ----------------------------------------------------------------------------------------------------------------------------------- FOOD AND DRUG DISTRIBUTION - 0.9% ------------------------------------------------------------------------------------------------------------------------- AmeriSource Corp., 11.25% Sr. Debs., 7/15/05 (6) 833,381 791,712 ------------------------------------------------------------------------------------------------------------------------- Di Giorgio Corp., 12% Sr. Nts., 2/15/03 250,000 235,000 ------------------------------------------------------------------------------------------------------------------------- Grand Union Co., 11.25% Sr. Nts., 7/15/00 750,000 667,500 ------------------------------------------------------------------------------------------------------------------------- Grand Union Co., 12.25% Sr. Sub. Nts., 7/15/02 350,000 138,250 ------------------------------------------------------------------------------------------------------------------------- Purity Supreme, Inc., 11.75% Sr. Sec. Nts., Series 300,000 250,500 B, 8/1/99 ------------------------------------------------------------------------------------------------------------------------- Thrifty Payless, Inc., 11.75% Sr. Nts., 4/15/03 500,000 493,750 ---------------- 2,576,712 - ----------------------------------------------------------------------------------------------------------------------------------- HEALTHCARE - 0.8% ------------------------------------------------------------------------------------------------------------------------- American Medical International, Inc., 13.50% Sr. Sub. Nts., 8/15/01 500,000 548,750 ------------------------------------------------------------------------------------------------------------------------- Charter Medical Corp., 11.25% Sr. Sub. Nts., 4/15/04 500,000 502,500 ------------------------------------------------------------------------------------------------------------------------- Farm Fresh, Inc., 12.25% Sr. Nts., 10/1/00 750,000 648,750 ------------------------------------------------------------------------------------------------------------------------- Mediq, Inc., 7.50% Exch. Sub. Debs., 7/15/03 1,000,000 808,750 ---------------- 2,508,750 - ----------------------------------------------------------------------------------------------------------------------------------- ENERGY - 0.7% - ----------------------------------------------------------------------------------------------------------------------------------- Coastal Corp., 11.75% Sr. Debs., 6/15/06 500,000 533,750
STATEMENT OF INVESTMENTS (CONTINUED) December 31, 1994 Oppenheimer Variable Account Funds - Oppenheimer Multiple Strategies Fund FACE MARKET VALUE NON-CONVERTIBLE CORPORATE BONDS AND NOTES (CONTINUED) AMOUNT (1) SEE NOTE 1 - ----------------------------------------------------------------------------------------------------------------------------------- ENERGY (CONTINUED) - ----------------------------------------------------------------------------------------------------------------------------------- Gulf Canada Resources Ltd., 9.25% Sr. Sub. Debs., 1/15/04 $ 500,000 $ 453,775 ------------------------------------------------------------------------------------------------------------------------- OPI International, Inc., 12.875% Gtd. Sr. Nts., 7/15/02 1,000,000 1,115,000 ---------------- 2,102,525 - ----------------------------------------------------------------------------------------------------------------------------------- FINANCIAL - 0.9% - ----------------------------------------------------------------------------------------------------------------------------------- Card Establishment Services, Inc., 10% Sr. Sub. Nts., Series B, 10/1/03 1,400,000 1,463,000 ------------------------------------------------------------------------------------------------------------------------- First Chicago Corp., 11.25% Sub. Nts., 2/20/01 250,000 280,842 ------------------------------------------------------------------------------------------------------------------------- First Chicago Corp., 9% Sub. Nts., 6/15/99 250,000 254,261 ------------------------------------------------------------------------------------------------------------------------- Pioneer Finance Corp., 13.50% Gtd. Fst. Mtg. Bonds, 12/1/98 1,000,000 685,000 ---------------- 2,683,103 - ----------------------------------------------------------------------------------------------------------------------------------- INDUSTRIAL - 1.5% - ----------------------------------------------------------------------------------------------------------------------------------- CONTAINERS - 0.4% ------------------------------------------------------------------------------------------------------------------------- Calmar, Inc., 12% Sr. Sec. Nts., 12/15/97 500,000 505,000 ------------------------------------------------------------------------------------------------------------------------- Owens-Illinois, Inc., 10% Sr. Sub. Nts., 8/1/02 500,000 490,000 ---------------- 995,000 - ----------------------------------------------------------------------------------------------------------------------------------- GENERAL INDUSTRIAL - 0.6% ------------------------------------------------------------------------------------------------------------------------- EnviroSource, Inc., 9.75% Sr. Nts., 6/15/03 1,250,000 1,078,125 ------------------------------------------------------------------------------------------------------------------------- Pace Industries, Inc., 10.625% Sr. Nts., 12/1/02 500,000 450,000 ------------------------------------------------------------------------------------------------------------------------- PerSeptive Biosystems, Inc., 8.25% Cv. Sub. Debs., 8/15/01 (5) 500,000 342,500 ---------------- 1,870,625 - ----------------------------------------------------------------------------------------------------------------------------------- TRANSPORTATION - 0.5% ------------------------------------------------------------------------------------------------------------------------- Chrysler Financial Corp., 13.25% Sr. Nts., 10/15/99 500,000 589,082 ------------------------------------------------------------------------------------------------------------------------- Tiphook Financial Corp., 7.125% Gtd. Nts., 5/1/98 100,000 73,750 ------------------------------------------------------------------------------------------------------------------------- Tiphook Financial Corp., 8% Gtd. Nts., 3/15/00 350,000 248,500 ------------------------------------------------------------------------------------------------------------------------- Trans Ocean Container Corp., 12.25% Sr. Sub. Nts., 7/1/04 500,000 472,500 ---------------- 1,383,832 - ----------------------------------------------------------------------------------------------------------------------------------- TECHNOLOGY - 5.0% - ----------------------------------------------------------------------------------------------------------------------------------- AEROSPACE/DEFENSE - 0.6% ------------------------------------------------------------------------------------------------------------------------- GPA Delaware, Inc., 8.75% Gtd. Nts., 12/15/98 250,000 192,500 ------------------------------------------------------------------------------------------------------------------------- GPA Holland BV, 9.75% Medium-Term Nts., Series B, 6/10/96 1,000,000 940,000 ------------------------------------------------------------------------------------------------------------------------- Talley Industries, Inc., 0%/12.25% Sr. Disc. Debs., 10/15/05 (3) 1,250,000 631,250 ---------------- 1,763,750 - ----------------------------------------------------------------------------------------------------------------------------------- CABLE TELEVISION - 1.9% ------------------------------------------------------------------------------------------------------------------------- Adelphia Communications Corp., 12.50% Sr. Nts., 5/15/02 1,000,000 960,000 ------------------------------------------------------------------------------------------------------------------------- American Telecasting, Inc., 0%/12.50% Sr. Disc. Nts., 6/15/04 (3) 1,200,000 540,000 ------------------------------------------------------------------------------------------------------------------------- Auburn Hills Trust, 12.375% Gtd. Exch. Certificates, 5/1/20 (4) 400,000 521,474 ------------------------------------------------------------------------------------------------------------------------- Cablevision Industries Corp., 9.25% Sr. Debs., Series B, 4/1/08 500,000 450,000 ------------------------------------------------------------------------------------------------------------------------- Continental Cablevision, Inc., 9.50% Sr. Debs., 8/1/13 1,100,000 1,014,750 ------------------------------------------------------------------------------------------------------------------------- Echostar Communications Corp., Units 600,000 313,500 ------------------------------------------------------------------------------------------------------------------------- International CableTel, Inc., 0%/10.875% Sr. Def. Cpn. Nts., 10/15/03 (3) 500,000 257,500 ------------------------------------------------------------------------------------------------------------------------- Time Warner, Inc./Time Warner Entertainment LP, 10.15% Sr. Nts., 5/1/12 500,000 496,349
STATEMENT OF INVESTMENTS (CONTINUED) December 31, 1994 Oppenheimer Variable Account Funds - Oppenheimer Multiple Strategies Fund FACE MARKET VALUE NON-CONVERTIBLE CORPORATE BONDS AND NOTES (CONTINUED) AMOUNT (1) SEE NOTE 1 - ----------------------------------------------------------------------------------------------------------------------------------- TECHNOLOGY (CONTINUED) - ----------------------------------------------------------------------------------------------------------------------------------- CABLE TELEVISION (CONTINUED) ------------------------------------------------------------------------------------------------------------------------- TKR Cable I, Inc., 10.50% Sr. Debs., 10/30/07 $ 1,000,000 $ 1,037,500 ---------------- 5,591,073 - ----------------------------------------------------------------------------------------------------------------------------------- COMMUNICATIONS - 1.5% ------------------------------------------------------------------------------------------------------------------------- Call-Net Enterprises, Inc., 0%/13.25% Sr. Disc. Nts., 12/1/04 (3) 800,000 420,000 ------------------------------------------------------------------------------------------------------------------------- Centennial Cellular Corp., 8.875% Sr. Nts., 11/1/01 500,000 440,000 ------------------------------------------------------------------------------------------------------------------------- Comcast Cellular Corp., 0% Nts., Series B, 3/5/00 1,000,000 685,000 ------------------------------------------------------------------------------------------------------------------------- MFS Communications, Inc., 0%/9.375% Sr. Disc. Nts., 1/15/04 (3) 1,500,000 896,250 ------------------------------------------------------------------------------------------------------------------------- Panamsat LP/Panamsat Capital Corp., 0%/11.375% Sr. Sub. Disc. Nts., 8/1/03 (3) 250,000 155,000 ------------------------------------------------------------------------------------------------------------------------- Panamsat LP/Panamsat Capital Corp., 9.75% Sr. Sec. Nts., 8/1/00 500,000 473,750 ------------------------------------------------------------------------------------------------------------------------- PriCellular Wireless Corp., .50%/14% Sr. Sub. Disc. Nts., 11/15/01 (5)(8) 750,000 498,750 ------------------------------------------------------------------------------------------------------------------------- USA Mobile Communications, Inc., 9.50% Sr. Nts., Series II, 2/1/04 1,000,000 815,000 ---------------- 4,383,750 - ----------------------------------------------------------------------------------------------------------------------------------- TECHNOLOGY - 1.0% ------------------------------------------------------------------------------------------------------------------------- Bell & Howell Holdings Co., 0%/10.75% Sr. Disc. Debs., Series B, 3/1/05 (3) 1,000,000 495,000 ------------------------------------------------------------------------------------------------------------------------- Imax Corp., 7%/10% Sr. Nts., 3/1/01 (7) 600,000 501,000 ------------------------------------------------------------------------------------------------------------------------- Unisys Corp., 13.50% Credit Sensitive Nts., 7/1/97 1,250,000 1,356,250 ------------------------------------------------------------------------------------------------------------------------- Unisys Corp., 9.75% Sr. Nts., 9/15/16 500,000 445,537 ---------------- 2,797,787 - ----------------------------------------------------------------------------------------------------------------------------------- UTILITIES - 0.4% - ----------------------------------------------------------------------------------------------------------------------------------- Beaver Valley II Funding Corp., 9% 2nd Lease Obligation Bonds, 6/1/17 489,000 350,043 ------------------------------------------------------------------------------------------------------------------------- First PV Funding Corp., 10.15% Lease Obligation Bonds, Series 1986B, 1/15/16 1,000,000 906,814 ---------------- 1,256,857 - ----------------------------------------------------------------------------------------------------------------------------------- OTHER - 0.1% - ----------------------------------------------------------------------------------------------------------------------------------- MISCELLANEOUS - 0.1% ------------------------------------------------------------------------------------------------------------------------- United States Banknote Corp., 11.625% Sr. Nts., Series B, 8/1/02 380,000 336,300 ---------------- Total Non-Convertible Corporate Bonds and Notes (Cost $59,327,145) 54,455,214 SHARES - ----------------------------------------------------------------------------------------------------------------------------------- COMMON STOCKS - 46.4% - ----------------------------------------------------------------------------------------------------------------------------------- BASIC MATERIALS - 3.9% - ----------------------------------------------------------------------------------------------------------------------------------- CHEMICALS - 1.1% ------------------------------------------------------------------------------------------------------------------------- Air Products and Chemicals, Inc. (9) 10,000 446,250 ------------------------------------------------------------------------------------------------------------------------- Dow Chemical Co. (The) (9) 8,500 571,625 ------------------------------------------------------------------------------------------------------------------------- IMC Global, Inc. (9) 19,000 821,750 ------------------------------------------------------------------------------------------------------------------------- Praxair, Inc. 41,500 850,750 ------------------------------------------------------------------------------------------------------------------------- Sybron Chemical Industries, Inc. (2) 29,500 457,250 ---------------- 3,147,625 - ----------------------------------------------------------------------------------------------------------------------------------- CHEMICALS: DIVERSIFIED - 0.9% ------------------------------------------------------------------------------------------------------------------------- ARCO Chemical Co. 25,400 1,117,600
STATEMENT OF INVESTMENTS (CONTINUED) December 31, 1994 Oppenheimer Variable Account Funds - Oppenheimer Multiple Strategies Fund MARKET VALUE COMMON STOCKS (CONTINUED) SHARES SEE NOTE 1 - ----------------------------------------------------------------------------------------------------------------------------------- BASIC MATERIALS (CONTINUED) - ----------------------------------------------------------------------------------------------------------------------------------- CHEMICALS: DIVERSIFIED (CONTINUED) ------------------------------------------------------------------------------------------------------------------------- Bayer AG, Sponsored ADR (2) 70,000 $ 1,621,270 ---------------- 2,738,870 - ----------------------------------------------------------------------------------------------------------------------------------- CHEMICALS: SPECIALTY - 0.1% ------------------------------------------------------------------------------------------------------------------------- Goldschmidt (T.H.) AG 750 401,609 - ----------------------------------------------------------------------------------------------------------------------------------- METAL: MISCELLANEOUS - 0.6% ------------------------------------------------------------------------------------------------------------------------- Brush Wellman, Inc. 69,300 1,204,088 ------------------------------------------------------------------------------------------------------------------------- Inco Ltd. 22,700 649,787 ---------------- 1,853,875 - ----------------------------------------------------------------------------------------------------------------------------------- PAPER AND FOREST PRODUCTS - 0.9% ------------------------------------------------------------------------------------------------------------------------- Georgia-Pacific Corp. 11,000 786,500 ------------------------------------------------------------------------------------------------------------------------- Indah Kiat Pulp & Paper Corp. 99,400 113,057 ------------------------------------------------------------------------------------------------------------------------- Louisiana-Pacific Corp. 30,400 828,400 ------------------------------------------------------------------------------------------------------------------------- MacMillan Bloedel Ltd. 57,800 715,275 ------------------------------------------------------------------------------------------------------------------------- PT Pabrik Kertas Tjiwi Kimia 40,000 74,613 ---------------- 2,517,845 - ----------------------------------------------------------------------------------------------------------------------------------- STEEL - 0.3% ------------------------------------------------------------------------------------------------------------------------- Inland Steel Industries, Inc. (2)(9) 22,000 772,750 - ----------------------------------------------------------------------------------------------------------------------------------- CONSUMER CYCLICALS - 8.6% - ----------------------------------------------------------------------------------------------------------------------------------- AIRLINES - 0.3% ------------------------------------------------------------------------------------------------------------------------- AMR Corp. (2) 14,000 745,500 - ----------------------------------------------------------------------------------------------------------------------------------- AUTO PARTS: AFTER MARKET - 0.1% ------------------------------------------------------------------------------------------------------------------------- Excel Industries, Inc. 30,000 416,250 - ----------------------------------------------------------------------------------------------------------------------------------- AUTOMOBILES - 0.4% ------------------------------------------------------------------------------------------------------------------------- Fiat SpA (2) 280,000 1,039,050 ------------------------------------------------------------------------------------------------------------------------- Mahindra & Mahindra Ltd., GDR 10,000 111,575 ---------------- 1,150,625 - ----------------------------------------------------------------------------------------------------------------------------------- BROADCAST MEDIA - 1.2% ------------------------------------------------------------------------------------------------------------------------- Capital Cities/ABC, Inc. 10,000 852,500 ------------------------------------------------------------------------------------------------------------------------- Comcast Corp. Special, Cl. A 67,350 1,056,553 ------------------------------------------------------------------------------------------------------------------------- SFX Broadcasting, Inc., Cl. A (2) 56,100 1,037,850 ------------------------------------------------------------------------------------------------------------------------- TeleCommunications, Inc., Cl. A (2) 27,000 587,250 ---------------- 3,534,153 - ----------------------------------------------------------------------------------------------------------------------------------- ENTERTAINMENT - 0.7% ------------------------------------------------------------------------------------------------------------------------- King World Productions, Inc. (2) 23,000 793,500 ------------------------------------------------------------------------------------------------------------------------- MGM Grand, Inc. (2)(9) 27,000 651,375 ------------------------------------------------------------------------------------------------------------------------- Sega Enterprises 11,500 662,774 ---------------- 2,107,649 - ----------------------------------------------------------------------------------------------------------------------------------- HOTELS/MOTELS - 0.2% ------------------------------------------------------------------------------------------------------------------------- Circus Circus Enterprises, Inc. (2) 30,800 716,100 - ----------------------------------------------------------------------------------------------------------------------------------- HOUSEHOLD FURNISHINGS AND APPLIANCES - 0.4% ------------------------------------------------------------------------------------------------------------------------- Chromcraft Revington, Inc. (2) 50,000 1,100,000 - ----------------------------------------------------------------------------------------------------------------------------------- LEISURE TIME - 0.8% ------------------------------------------------------------------------------------------------------------------------- Caesar's World, Inc. (2)(9) 19,600 1,308,300 ------------------------------------------------------------------------------------------------------------------------- Eastman Kodak Co. 15,400 735,350 ------------------------------------------------------------------------------------------------------------------------- International Game Technology (9) 23,600 365,800 ---------------- 2,409,450 - ----------------------------------------------------------------------------------------------------------------------------------- PUBLISHING - 0.7% ------------------------------------------------------------------------------------------------------------------------- Bowne & Co., Inc 46,000 799,250 ------------------------------------------------------------------------------------------------------------------------- Time Warner, Inc. 17,100 600,638
STATEMENT OF INVESTMENTS (CONTINUED) December 31, 1994 Oppenheimer Variable Account Funds - Oppenheimer Multiple Strategies Fund MARKET VALUE COMMON STOCKS (CONTINUED) SHARES SEE NOTE 1 - ----------------------------------------------------------------------------------------------------------------------------------- CONSUMER CYCLICALS (CONTINUED) - ----------------------------------------------------------------------------------------------------------------------------------- PUBLISHING (CONTINUED) ------------------------------------------------------------------------------------------------------------------------- Wolters Kluwer NV 10,167 $ 752,280 ---------------- 2,152,168 - ----------------------------------------------------------------------------------------------------------------------------------- RETAIL STORES: DEPARTMENT STORES - 0.3% ------------------------------------------------------------------------------------------------------------------------- Dillard Department Stores, Inc., Cl. A 30,000 802,500 - ----------------------------------------------------------------------------------------------------------------------------------- RETAIL STORES: GENERAL MERCHANDISE CHAINS - 0.6% ------------------------------------------------------------------------------------------------------------------------- Price/Costco, Inc. (2) 50,000 643,750 ------------------------------------------------------------------------------------------------------------------------- Waban, Inc. (2)(9) 55,000 976,250 ---------------- 1,620,000 - ----------------------------------------------------------------------------------------------------------------------------------- RETAIL: SPECIALTY - 1.0% ------------------------------------------------------------------------------------------------------------------------- Castorama Dubois Investissements LP 4,086 510,675 ------------------------------------------------------------------------------------------------------------------------- CML Group, Inc. (9) 66,400 672,300 ------------------------------------------------------------------------------------------------------------------------- Toys 'R' Us, Inc. (2) 27,700 844,850 ------------------------------------------------------------------------------------------------------------------------- Venture Stores, Inc. 67,000 778,875 ---------------- 2,806,700 - ----------------------------------------------------------------------------------------------------------------------------------- SHOES - 0.2% ------------------------------------------------------------------------------------------------------------------------- Justin Industries, Inc. 60,000 712,500 - ----------------------------------------------------------------------------------------------------------------------------------- TEXTILES: APPAREL MANUFACTURERS - 1.1% ------------------------------------------------------------------------------------------------------------------------- Authentic Fitness Corp. (2) 59,400 824,175 ------------------------------------------------------------------------------------------------------------------------- Cone Mills Corp. (2) 42,200 501,125 ------------------------------------------------------------------------------------------------------------------------- Fruit of the Loom, Inc., Cl. A (2) 32,400 874,800 ------------------------------------------------------------------------------------------------------------------------- Warnaco Group, Inc. (The), Cl. A (2) 55,000 948,750 ---------------- 3,148,850 - ----------------------------------------------------------------------------------------------------------------------------------- TOYS - 0.6% ------------------------------------------------------------------------------------------------------------------------- Mattel, Inc. (9) 34,350 863,044 ------------------------------------------------------------------------------------------------------------------------- Nintendo Corp. Ltd. 12,000 648,291 ------------------------------------------------------------------------------------------------------------------------- SLM International, Inc. (2) 74,200 190,137 ---------------- 1,701,472 - ----------------------------------------------------------------------------------------------------------------------------------- CONSUMER NON-CYCLICALS - 8.6% - ----------------------------------------------------------------------------------------------------------------------------------- BEVERAGES: ALCOHOLIC - 0.3% ------------------------------------------------------------------------------------------------------------------------- Guinness PLC 100,000 704,025 - ----------------------------------------------------------------------------------------------------------------------------------- BEVERAGES: SOFT DRINKS - 0.4% ------------------------------------------------------------------------------------------------------------------------- Whitman Corp. 70,000 1,207,500 - ----------------------------------------------------------------------------------------------------------------------------------- COSMETICS - 0.2% ------------------------------------------------------------------------------------------------------------------------- Maybelline, Inc. 22,800 410,400 - ----------------------------------------------------------------------------------------------------------------------------------- DRUGS - 1.5% ------------------------------------------------------------------------------------------------------------------------- Agouron Pharmaceuticals, Inc. (2) 22,000 247,500 ------------------------------------------------------------------------------------------------------------------------- Astra AB Free, Series A 15,500 400,319 ------------------------------------------------------------------------------------------------------------------------- Ciba-Geigy AG 950 566,954 ------------------------------------------------------------------------------------------------------------------------- Lilly (Eli) & Co. (9) 8,000 525,000 ------------------------------------------------------------------------------------------------------------------------- Medeva PLC 342,715 873,969 ------------------------------------------------------------------------------------------------------------------------- Mylan Laboratories, Inc. (9) 48,400 1,306,800 ------------------------------------------------------------------------------------------------------------------------- Nature's Bounty, Inc. (2) 111,000 603,563 ---------------- 4,524,105 - ----------------------------------------------------------------------------------------------------------------------------------- FOOD PROCESSING - 0.8% ------------------------------------------------------------------------------------------------------------------------- Chiquita Brands International, Inc. 3 41 ------------------------------------------------------------------------------------------------------------------------- Nestle SA, Sponsored ADR 17,000 809,950 ------------------------------------------------------------------------------------------------------------------------- Sanfilippo (John B.) & Son, Inc. 60,000 330,000 ------------------------------------------------------------------------------------------------------------------------- Sara Lee Corp. 50,800 1,282,700 ---------------- 2,422,691
STATEMENT OF INVESTMENTS (CONTINUED) December 31, 1994 Oppenheimer Variable Account Funds - Oppenheimer Multiple Strategies Fund MARKET VALUE COMMON STOCKS (CONTINUED) SHARES SEE NOTE 1 - ----------------------------------------------------------------------------------------------------------------------------------- CONSUMER NON-CYCLICALS (CONTINUED) - ----------------------------------------------------------------------------------------------------------------------------------- FOOD WHOLESALERS - 0.2% ------------------------------------------------------------------------------------------------------------------------- Food Lion, Inc., Cl. A 114,500 $ 586,813 - ----------------------------------------------------------------------------------------------------------------------------------- HEALTHCARE: DIVERSIFIED - 1.0% ------------------------------------------------------------------------------------------------------------------------- Abbott Laboratories 28,800 939,600 ------------------------------------------------------------------------------------------------------------------------- Bristol-Myers Squibb Co. 25,000 1,446,875 ------------------------------------------------------------------------------------------------------------------------- Schering AG 1,025 671,203 ---------------- 3,057,678 - ----------------------------------------------------------------------------------------------------------------------------------- HEALTHCARE: MISCELLANEOUS - 1.8% ------------------------------------------------------------------------------------------------------------------------- Amgen, Inc. (2)(9) 13,900 820,100 ------------------------------------------------------------------------------------------------------------------------- Biosys, Inc. (2) 74,400 167,400 ------------------------------------------------------------------------------------------------------------------------- Chiron Corp. (2)(9) 8,400 675,150 ------------------------------------------------------------------------------------------------------------------------- Genzyme Corp. (2)(9) 28,900 910,350 ------------------------------------------------------------------------------------------------------------------------- Manor Care, Inc. 41,185 1,127,439 ------------------------------------------------------------------------------------------------------------------------- Matrix Pharmaceutical, Inc. (2) 18,000 247,500 ------------------------------------------------------------------------------------------------------------------------- U.S. Healthcare, Inc. (9) 28,800 1,188,000 ---------------- 5,135,939 - ----------------------------------------------------------------------------------------------------------------------------------- HOSPITAL MANAGEMENT - 0.5% ------------------------------------------------------------------------------------------------------------------------- Novacare, Inc. (2) 72,500 525,625 ------------------------------------------------------------------------------------------------------------------------- Wellpoint Health Networks, Inc., Cl. A (2) 27,000 786,375 ---------------- 1,312,000 - ----------------------------------------------------------------------------------------------------------------------------------- MEDICAL PRODUCTS - 1.4% ------------------------------------------------------------------------------------------------------------------------- Biomet, Inc. (2) 52,100 729,400 ------------------------------------------------------------------------------------------------------------------------- Medtronic, Inc. 14,400 801,000 ------------------------------------------------------------------------------------------------------------------------- Mitek Surgical Products, Inc. (2) 54,000 1,336,500 ------------------------------------------------------------------------------------------------------------------------- Nellcor, Inc. (2) 23,000 759,000 ------------------------------------------------------------------------------------------------------------------------- Sofamor Danek Group, Inc. (2) 45,000 585,000 ---------------- 4,210,900 - ----------------------------------------------------------------------------------------------------------------------------------- RETAIL STORES: FOOD CHAINS - 0.1% ------------------------------------------------------------------------------------------------------------------------- Giant Food, Inc., Cl. A 17,900 389,325 - ----------------------------------------------------------------------------------------------------------------------------------- TOBACCO - 0.4% ------------------------------------------------------------------------------------------------------------------------- Philip Morris Cos., Inc. 20,000 1,150,000 - ----------------------------------------------------------------------------------------------------------------------------------- ENERGY - 2.0% - ----------------------------------------------------------------------------------------------------------------------------------- COAL - 0.3% ------------------------------------------------------------------------------------------------------------------------- Ashland Coal, Inc. 24,200 689,700 - ----------------------------------------------------------------------------------------------------------------------------------- OIL WELL SERVICES AND EQUIPMENT - 0.2% ------------------------------------------------------------------------------------------------------------------------- Landmark Graphics Corp. (2) 36,900 664,200 - ----------------------------------------------------------------------------------------------------------------------------------- OIL: INTEGRATED DOMESTIC - 0.7% ------------------------------------------------------------------------------------------------------------------------- Ashland Oil, Inc. 17,000 586,500 ------------------------------------------------------------------------------------------------------------------------- Atlantic Richfield Co. 8,900 905,575 ------------------------------------------------------------------------------------------------------------------------- Unocal Corp. 22,000 599,500 ---------------- 2,091,575 - ----------------------------------------------------------------------------------------------------------------------------------- OIL: INTEGRATED INTERNATIONAL - 0.8% ------------------------------------------------------------------------------------------------------------------------- Royal Dutch Petroleum Co. 10,000 1,075,000 ------------------------------------------------------------------------------------------------------------------------- Saga Petroleum AS, Cl. A 12,000 130,396 ------------------------------------------------------------------------------------------------------------------------- Saga Petroleum AS, Cl. B 19,000 196,629 ------------------------------------------------------------------------------------------------------------------------- Total SA, Sponsored ADR 15,701 463,180 ------------------------------------------------------------------------------------------------------------------------- YuKong Ltd., GDR (2)(5) 18,500 291,374 ------------------------------------------------------------------------------------------------------------------------- YuKong Ltd., GDR (2)(5) 9,000 135,000 ---------------- 2,291,579
STATEMENT OF INVESTMENTS (CONTINUED) December 31, 1994 Oppenheimer Variable Account Funds - Oppenheimer Multiple Strategies Fund MARKET VALUE COMMON STOCKS (CONTINUED) SHARES SEE NOTE 1 - ----------------------------------------------------------------------------------------------------------------------------------- FINANCIAL - 5.1% - ----------------------------------------------------------------------------------------------------------------------------------- COMMERCIAL FINANCE - 0.3% ------------------------------------------------------------------------------------------------------------------------- SG Warburg & Co., Inc. Ords. 76,500 $ 827,018 - ----------------------------------------------------------------------------------------------------------------------------------- FINANCIAL SERVICES: MISCELLANEOUS - 1.3% ------------------------------------------------------------------------------------------------------------------------- American Express Co. (9) 31,500 929,250 ------------------------------------------------------------------------------------------------------------------------- CMAC Investment Corp. 33,600 970,200 ------------------------------------------------------------------------------------------------------------------------- H & R Block, Inc. 15,400 571,725 ------------------------------------------------------------------------------------------------------------------------- Merrill Lynch & Co., Inc. 26,300 940,225 ------------------------------------------------------------------------------------------------------------------------- Santa Anita Realty Enterprises, Inc., Units (5) 30,000 412,500 ---------------- 3,823,900 - ----------------------------------------------------------------------------------------------------------------------------------- INSURANCE: LIFE - 0.4% ------------------------------------------------------------------------------------------------------------------------- Bankers Life Holding Corp. 39,500 750,500 ------------------------------------------------------------------------------------------------------------------------- National Mutual Asia Ltd. (2) 150,000 98,875 ------------------------------------------------------------------------------------------------------------------------- UNUM Corp. 13,100 494,525 ---------------- 1,343,900 - ----------------------------------------------------------------------------------------------------------------------------------- INSURANCE: MULTI-LINE - 1.1% ------------------------------------------------------------------------------------------------------------------------- Aetna Life & Casualty Co. 16,800 791,700 ------------------------------------------------------------------------------------------------------------------------- American International Group, Inc. 12,000 1,176,000 ------------------------------------------------------------------------------------------------------------------------- American Re Corp. (2) 36,000 1,161,000 ---------------- 3,128,700 - ----------------------------------------------------------------------------------------------------------------------------------- INSURANCE: PROPERTY AND CASUALTY - 0.3% ------------------------------------------------------------------------------------------------------------------------- W.R. Berkley Corp. 21,000 787,500 - ----------------------------------------------------------------------------------------------------------------------------------- MAJOR BANKS: OTHER - 0.3% ------------------------------------------------------------------------------------------------------------------------- Banco Frances del Rio Plata 11,000 78,375 ------------------------------------------------------------------------------------------------------------------------- Deutsche Bank AG, ADR 1,325 615,478 ------------------------------------------------------------------------------------------------------------------------- Korea First Bank (2) 4,942 68,944 ------------------------------------------------------------------------------------------------------------------------- Turkiye Garanti Bankasi AS, Sponsored ADR (5) 10,000 25,321 ---------------- 788,118 - ----------------------------------------------------------------------------------------------------------------------------------- MAJOR BANKS: REGIONAL - 0.5% ------------------------------------------------------------------------------------------------------------------------- NationsBank Corp. 35,400 1,597,425 - ----------------------------------------------------------------------------------------------------------------------------------- MONEY CENTER BANKS - 0.7% ------------------------------------------------------------------------------------------------------------------------- Bankers Trust New York Corp. (9) 15,700 869,388 ------------------------------------------------------------------------------------------------------------------------- Chemical Banking Corp. 29,000 1,040,375 ---------------- 1,909,763 - ----------------------------------------------------------------------------------------------------------------------------------- SAVINGS AND LOANS/HOLDING COS. - 0.2% ------------------------------------------------------------------------------------------------------------------------- Golden West Financial Corp. 20,000 705,000 - ----------------------------------------------------------------------------------------------------------------------------------- INDUSTRIAL - 7.4% - ----------------------------------------------------------------------------------------------------------------------------------- BUILDING MATERIALS GROUP - 0.5% ------------------------------------------------------------------------------------------------------------------------- Masco Corp. 23,000 520,375 ------------------------------------------------------------------------------------------------------------------------- Owens-Corning Fiberglass Corp. (2) 30,000 960,000 ---------------- 1,480,375 - ----------------------------------------------------------------------------------------------------------------------------------- COMMERCIAL SERVICES - 0.3% ------------------------------------------------------------------------------------------------------------------------- Borg-Warner Corp. (2) 35,000 341,250 ------------------------------------------------------------------------------------------------------------------------- Sylvan Learning Systems, Inc. (2) 26,100 515,475 ---------------- 856,725 - ----------------------------------------------------------------------------------------------------------------------------------- CONGLOMERATES - 0.9% ------------------------------------------------------------------------------------------------------------------------- Jardine Matheson Holdings Ltd. 50,468 360,391 ------------------------------------------------------------------------------------------------------------------------- Kinnevik Investments AB Free, Series B 24,500 810,727 ------------------------------------------------------------------------------------------------------------------------- Tenneco, Inc. 20,400 867,000 ------------------------------------------------------------------------------------------------------------------------- Wharf Holdings 175,000 590,342 ---------------- 2,628,460
STATEMENT OF INVESTMENTS (CONTINUED) December 31, 1994 Oppenheimer Variable Account Funds - Oppenheimer Multiple Strategies Fund MARKET VALUE COMMON STOCKS (CONTINUED) SHARES SEE NOTE 1 - ----------------------------------------------------------------------------------------------------------------------------------- INDUSTRIAL (CONTINUED) - ----------------------------------------------------------------------------------------------------------------------------------- CONTAINERS: METAL AND GLASS - 0.6% ------------------------------------------------------------------------------------------------------------------------- Corning, Inc. 27,200 $ 812,600 ------------------------------------------------------------------------------------------------------------------------- Interpool, Inc. (2) 50,000 743,750 ---------------- 1,556,350 - ----------------------------------------------------------------------------------------------------------------------------------- ELECTRICAL EQUIPMENT - 1.1% ------------------------------------------------------------------------------------------------------------------------- ASEA AB, Sponsored ADR 10,000 721,250 ------------------------------------------------------------------------------------------------------------------------- C-Cube Microsystems, Inc. (2) 30,000 570,000 ------------------------------------------------------------------------------------------------------------------------- General Electric Co. 20,000 1,020,000 ------------------------------------------------------------------------------------------------------------------------- Methode Electronics, Inc., Cl. A 50,000 850,000 ---------------- 3,161,250 - ----------------------------------------------------------------------------------------------------------------------------------- ENGINEERING AND CONSTRUCTION - 0.7% ------------------------------------------------------------------------------------------------------------------------- Empresas ICA Sociedad Controladora SA de C.V. (9) 33,600 520,800 ------------------------------------------------------------------------------------------------------------------------- Foster Wheeler Corp. 17,000 505,750 ------------------------------------------------------------------------------------------------------------------------- Huarte SA 50,150 468,620 ------------------------------------------------------------------------------------------------------------------------- Insituform Mid-America, Inc., Cl. A 60,000 540,000 ---------------- 2,035,170 - ----------------------------------------------------------------------------------------------------------------------------------- HEAVY DUTY TRUCKS AND PARTS - 0.1% ------------------------------------------------------------------------------------------------------------------------- Spartan Motors, Inc. 24,000 321,000 - ----------------------------------------------------------------------------------------------------------------------------------- MACHINERY: DIVERSIFIED - 0.3% ------------------------------------------------------------------------------------------------------------------------- Harnischfeger Industries, Inc. 26,000 731,250 - ----------------------------------------------------------------------------------------------------------------------------------- MANUFACTURING: DIVERSIFIED INDUSTRIALS - 1.0% ------------------------------------------------------------------------------------------------------------------------- Instrument Systems Corp. (2) 48,750 408,281 ------------------------------------------------------------------------------------------------------------------------- Johnstown America Industries, Inc. 20,000 327,500 ------------------------------------------------------------------------------------------------------------------------- Mannesmann AG 3,287 890,662 ------------------------------------------------------------------------------------------------------------------------- Olin Corp. 11,000 566,500 ------------------------------------------------------------------------------------------------------------------------- Siemens AG, ADR 10,000 837,411 ---------------- 3,030,354 - ----------------------------------------------------------------------------------------------------------------------------------- POLLUTION CONTROL - 0.2% ------------------------------------------------------------------------------------------------------------------------- Waste Management International PLC, Sponsored ADR (2) 55,000 625,625 - ----------------------------------------------------------------------------------------------------------------------------------- RAILROADS - 0.5% ------------------------------------------------------------------------------------------------------------------------- Burlington Northern, Inc. 17,000 818,125 ------------------------------------------------------------------------------------------------------------------------- Chicago & North Western Holdings Corp. (2) 40,400 777,700 ---------------- 1,595,825 - ----------------------------------------------------------------------------------------------------------------------------------- TRANSPORTATION: MISCELLANEOUS - 1.2% ------------------------------------------------------------------------------------------------------------------------- Airborne Freight Corp. 38,000 779,000 ------------------------------------------------------------------------------------------------------------------------- Consolidated Freightways, Inc. 61,000 1,364,875 ------------------------------------------------------------------------------------------------------------------------- DS Svendborg, Cl. B 10 273,600 ------------------------------------------------------------------------------------------------------------------------- Lisnave-Estaleiros Navais de Lisbona SA (2) 19,000 93,090 ------------------------------------------------------------------------------------------------------------------------- OMI Corp. 22,400 148,400 ------------------------------------------------------------------------------------------------------------------------- Stolt-Nielsen SA 40,000 825,000 ------------------------------------------------------------------------------------------------------------------------- Westmont Berhad Ord. 14,000 87,173 ---------------- 3,571,138 - ----------------------------------------------------------------------------------------------------------------------------------- TECHNOLOGY - 9.3% - ----------------------------------------------------------------------------------------------------------------------------------- AEROSPACE/DEFENSE - 0.6% ------------------------------------------------------------------------------------------------------------------------- General Dynamics Corp. (9) 9,900 430,650 ------------------------------------------------------------------------------------------------------------------------- McDonnell Douglas Corp. (9) 4,000 568,000 ------------------------------------------------------------------------------------------------------------------------- Rockwell International Corp. 17,000 607,750 ---------------- 1,606,400 - ----------------------------------------------------------------------------------------------------------------------------------- COMPUTER SOFTWARE AND SERVICES - 3.9% ------------------------------------------------------------------------------------------------------------------------- Bay Networks, Inc. (2)(9) 33,205 979,548 ------------------------------------------------------------------------------------------------------------------------- BMC Software, Inc. (2)(9) 22,600 1,285,375
STATEMENT OF INVESTMENTS (CONTINUED) December 31, 1994 Oppenheimer Variable Account Funds - Oppenheimer Multiple Strategies Fund MARKET VALUE COMMON STOCKS (CONTINUED) SHARES SEE NOTE 1 - ----------------------------------------------------------------------------------------------------------------------------------- TECHNOLOGY (CONTINUED) - ----------------------------------------------------------------------------------------------------------------------------------- COMPUTER SOFTWARE AND SERVICES (CONTINUED) ------------------------------------------------------------------------------------------------------------------------- Computer Associates International, Inc. (9) 23,100 $ 1,120,350 ------------------------------------------------------------------------------------------------------------------------- Delrina Corp. (2) 62,000 767,250 ------------------------------------------------------------------------------------------------------------------------- Electronic Arts, Inc. (2) 54,000 1,039,500 ------------------------------------------------------------------------------------------------------------------------- Informix Corp. (2) 20,000 642,500 ------------------------------------------------------------------------------------------------------------------------- Legent Corp. (2)(9) 23,000 661,250 ------------------------------------------------------------------------------------------------------------------------- Lotus Development Corp. (2)(9) 10,100 414,100 ------------------------------------------------------------------------------------------------------------------------- Marcam Corp. (2) 48,300 489,038 ------------------------------------------------------------------------------------------------------------------------- Microsoft Corp. (9) 10,200 623,474 ------------------------------------------------------------------------------------------------------------------------- Novell, Inc. (2) 69,100 1,183,338 ------------------------------------------------------------------------------------------------------------------------- Pyxis Corp. (2)(9) 48,000 912,000 ------------------------------------------------------------------------------------------------------------------------- Symantec Corp. (2) 51,000 892,500 ------------------------------------------------------------------------------------------------------------------------- Trinzic Corp. (2) 80,000 440,000 ---------------- 11,450,223 - ----------------------------------------------------------------------------------------------------------------------------------- COMPUTER SYSTEMS - 1.3% ------------------------------------------------------------------------------------------------------------------------- Cabletron Systems, Inc. (2)(9) 12,500 581,250 ------------------------------------------------------------------------------------------------------------------------- Norand Corp. (2) 18,500 656,750 ------------------------------------------------------------------------------------------------------------------------- Seagate Technology, Inc. (2) 16,000 384,000 ------------------------------------------------------------------------------------------------------------------------- Sun Microsystems, Inc. (2)(9) 33,000 1,171,500 ------------------------------------------------------------------------------------------------------------------------- Tandem Computers, Inc. (2)(9) 66,000 1,130,250 ---------------- 3,923,750 - ----------------------------------------------------------------------------------------------------------------------------------- ELECTRONICS: DEFENSE - 0.2% ------------------------------------------------------------------------------------------------------------------------- CAE, Inc. 115,000 614,892 - ----------------------------------------------------------------------------------------------------------------------------------- ELECTRONICS: INSTRUMENTATION - 0.5% ------------------------------------------------------------------------------------------------------------------------- Hewlett-Packard Co. (9) 11,500 1,148,563 ------------------------------------------------------------------------------------------------------------------------- Molecular Dynamics, Inc. (2) 25,000 168,750 ---------------- 1,317,313 - ----------------------------------------------------------------------------------------------------------------------------------- ELECTRONICS: SEMICONDUCTORS - 0.9% ------------------------------------------------------------------------------------------------------------------------- Intel Corp. 34,500 2,203,688 ------------------------------------------------------------------------------------------------------------------------- Samsung Electronics Co., GDR (2)(5) 476 22,134 ------------------------------------------------------------------------------------------------------------------------- Samsung Electronics Co., Sponsored GDS (2) 8,500 395,250 ---------------- 2,621,072 - ----------------------------------------------------------------------------------------------------------------------------------- OFFICE EQUIPMENT AND SUPPLIES - 0.3% ------------------------------------------------------------------------------------------------------------------------- Xerox Corp. 8,500 841,500 - ----------------------------------------------------------------------------------------------------------------------------------- TELECOMMUNICATIONS - 1.6% ------------------------------------------------------------------------------------------------------------------------- Airtouch Communications, Inc. (2)(9) 46,000 1,339,750 ------------------------------------------------------------------------------------------------------------------------- AT & T Corp. 16,000 804,000 ------------------------------------------------------------------------------------------------------------------------- ECI Telecommunications Ltd. 51,000 694,875 ------------------------------------------------------------------------------------------------------------------------- MCI Communications Corp. 46,300 850,763 ------------------------------------------------------------------------------------------------------------------------- Rogers Cantel Mobile Communications, Inc., Sub. Cl. B (2) 30,500 889,267 ------------------------------------------------------------------------------------------------------------------------- Technology Resources Industries 25,000 79,790 ---------------- 4,658,445 - ----------------------------------------------------------------------------------------------------------------------------------- UTILITIES - 1.5% - ----------------------------------------------------------------------------------------------------------------------------------- ELECTRIC COMPANIES - 0.5% ------------------------------------------------------------------------------------------------------------------------- Central Puerto SA, ADR (5) 3,000 74,245 ------------------------------------------------------------------------------------------------------------------------- Public Service Enterprise Group, Inc. 35,000 927,500 ------------------------------------------------------------------------------------------------------------------------- Verbund Oest Electriz 9,400 542,929 ---------------- 1,544,674 - ----------------------------------------------------------------------------------------------------------------------------------- NATURAL GAS - 0.3% ------------------------------------------------------------------------------------------------------------------------- Hong Kong & China Gas 244,800 395,500
STATEMENT OF INVESTMENTS (CONTINUED) December 31, 1994 Oppenheimer Variable Account Funds - Oppenheimer Multiple Strategies Fund MARKET VALUE COMMON STOCKS (CONTINUED) SHARES SEE NOTE 1 - ----------------------------------------------------------------------------------------------------------------------------------- UTILITIES (CONTINUED) - ----------------------------------------------------------------------------------------------------------------------------------- NATURAL GAS (CONTINUED) ------------------------------------------------------------------------------------------------------------------------- Southwestern Energy Co. 40,000 $ 595,000 ---------------- 990,500 - ----------------------------------------------------------------------------------------------------------------------------------- TELEPHONE - 0.7% ------------------------------------------------------------------------------------------------------------------------- BCE, Inc. 22,000 706,750 ------------------------------------------------------------------------------------------------------------------------- US West, Inc. 35,000 1,246,875 ---------------- 1,953,625 ---------------- Total Common Stocks (Cost $122,460,917) 135,432,161 - ----------------------------------------------------------------------------------------------------------------------------------- PREFERRED STOCKS - 2.2% - ----------------------------------------------------------------------------------------------------------------------------------- Advanced Micro Devices, Inc., Depositary Cv. Exchangeable Preferred Shares Each Representing 1/10th Share of $30 Cv. Exchangeable Preferred Shares 16,200 850,500 ------------------------------------------------------------------------------------------------------------------------- Alumax, Inc., $4.00 Cv., Series A 3,000 362,250 ------------------------------------------------------------------------------------------------------------------------- Chiquita Brands International, Inc., $1.32 Depositary Shares 26,000 357,500 ------------------------------------------------------------------------------------------------------------------------- Cyprus Amax Minerals Co., $4.00 Cv., Series A 12,000 700,500 ------------------------------------------------------------------------------------------------------------------------- Delta Airlines, Inc., $3.50 Cv. Depositary Shares, Series C 13,200 577,500 ------------------------------------------------------------------------------------------------------------------------- FHP International Corp., Series A 45,900 1,124,550 ------------------------------------------------------------------------------------------------------------------------- First Chicago Corp., Debt Exchangeable for Common Stock of Nextel Communications, Inc., 5.50%, 2/15/97 25,000 437,500 ------------------------------------------------------------------------------------------------------------------------- K-III Communications Corp., Sr. Exch., Series A 20,000 505,000 ------------------------------------------------------------------------------------------------------------------------- Pantry Pride, Inc., $14.875 Exch., Series B 8,000 768,000 ------------------------------------------------------------------------------------------------------------------------- Sap AG 1,050 598,833 ---------------- Total Preferred Stocks (Cost $5,959,788) 6,282,133 UNITS - ----------------------------------------------------------------------------------------------------------------------------------- RIGHTS, WARRANTS AND CERTIFICATES - 0.0% - ----------------------------------------------------------------------------------------------------------------------------------- American Telecasting, Inc. Wts., Exp. 6/99 6,000 13,500 ------------------------------------------------------------------------------------------------------------------------- Gaylord Container Corp. Wts., Exp. 7/96 16,412 118,987 ---------------- Total Rights, Warrants and Certificates (Cost $36,927) 132,487 ------------------------------------------------------------------------------------------------------------------------- TOTAL INVESTMENTS, AT VALUE (COST $285,911,280) 98.6% 287,971,910 ------------------------------------------------------------------------------------------------------------------------- OTHER ASSETS NET OF LIABILITIES 1.4 4,095,294 ------------------ ---------------- NET ASSETS 100.0% $ 292,067,204 ------------------ ---------------- ------------------ ----------------
1. Face amount is reported in local currency. Foreign currency abbreviations are as follows: AUD - Australian Dollar ESP - Spanish Peseta CAD - Canadian Dollar SEK - Swedish Krona 2. Non-income producing security. 3. Represents a zero coupon bond that converts to a fixed rate of interest at a designated future date. 4. Represents the current interest rate for a variable rate security. 5. Restricted security - See Note 7 of Notes to Financial Statements. 6. Interest or dividend is paid in kind. 7. Represents the current interest rate for an increasing rate security. 8. Represents a bond that pays contingent supplemental interest until it converts to a fixed rate of interest at a designated future date.
STATEMENT OF INVESTMENTS (CONTINUED) December 31, 1994 Oppenheimer Variable Account Funds - Oppenheimer Multiple Strategies Fund - ----------------------------------------------------------------------------------------------------------------------------------- 9. Securities with an aggregate market value of $7,904,988 are held in escrow to cover outstanding call options, as follows: SHARES SUBJECT EXPIRATION EXERCISE PREMIUM MARKET VALUE TO CALL DATE PRICE RECEIVED SEE NOTE 1 ------- ----------- -------- -------- ------------- Air Products and Chemicals, Inc. 3,000 3/95 50.00 $ 11,159 $ 1,312 Airtouch Communications, Inc. 7,500 1/95 30.00 7,743 2,812 American Express Co. 7,000 4/95 35.00 11,165 1,750 Amgen, Inc. 4,000 4/95 60.00 19,880 16,000 Bankers Trust New York Corp. 3,000 1/95 70.00 13,410 187 Bay Networks, Inc. 6,600 3/95 30.00 14,652 18,562 BMC Software, Inc. 6,600 5/95 60.00 25,409 33,000 Cabletron Systems, Inc. 2,500 1/95 48.00 4,845 2,344 Cabletron Systems, Inc. 1,000 4/95 50.00 4,220 2,687 Caesar's World, Inc. 4,600 2/95 50.00 15,941 80,500 Chiron Corp. 2,000 1/95 75.00 7,690 10,500 Chiron Corp. 3,000 4/95 80.00 20,159 3,375 CML Group, Inc. 13,200 1/95 12.50 14,454 1,650 Computer Associates International, Inc. 6,500 4/95 50.00 32,466 23,562 DowChemical Co. (The) 1,600 3/95 85.00 2,352 200 Empresas ICA Sociedad Controladora SA de C.V. 12,000 1/95 35 00 27,389 750 General Dynamics Corp. 1,800 2/95 45.00 4,333 2,250 General Dynamics Corp. 1,800 5/95 50.00 3,134 1,913 Genzyme Corp. 5,200 1/95 40.00 7,503 325 Hewlett-Packard Co. 2,000 5/95 5.00 12,440 10,000 Hewlett-Packard Co. 2,000 5/95 95.00 15,689 22,750 IMC Global, Inc. 3,800 4/95 45.00 11,286 10,450 Inland Steel Industries, Inc. 4,000 3/95 45.00 5,880 750 International Game Technology 3,800 1/95 25.00 7,248 238 Legent Corp. 10,000 1/95 25.00 35,949 43,750 Legent Corp. 6,000 1/95 30.00 10,695 5,250 Legent Corp. 7,000 7/95 35.00 32,164 14,875 Lilly (Eli) & Co. 4,000 4/95 60.00 17,379 31,000 Lotus Development Corp. 2,600 1/95 50.00 9,347 813 Lotus Development Corp. 4,000 1/95 50.00 12,880 250 Lotus Development Corp. 3,500 4/95 50.00 15,644 6,125 Mattel, Inc. 7,600 1/95 30.00 13,547 950 McDonnell Douglas Corp. 1,000 5/95 40.00 10,470 11,375 MGM Grand, Inc. 5,400 3/95 35.00 9,625 1,013 Microsoft Corp. 100 4/95 65.00 2,964 2,850 Mylan Laboratories, Inc. 9,600 4/95 30.00 17,711 12,600 Pyxis Corp. 6,800 4/95 30.00 24,445 6,375 Sun Microsystems, Inc. 6,600 1/95 30.00 10,114 38,775 Sun Microsystems, Inc. 6,600 4/95 35.00 11,352 23,100 Sun Microsystems, Inc. 3,800 7/95 40.00 7,248 9,025 Tandem Computers, Inc. 11,800 4/95 17.50 14,396 17,700 U.S. Healthcare, Inc. 5,000 1/95 45.00 14,537 1,250 U.S. Healthcare, Inc. 5,000 4/95 50.00 19,224 4,375 Waban, Inc. 11,000 3/95 20.00 17,544 2,063 -------- --------- $607,682 $ 481,381 -------- --------- -------- ---------
See accompanying Notes to Financial Statements.
- ---------------------------------------------------------------------------------------------------------------------------------- STATEMENT OF INVESTMENTS December 31, 1994 Oppenheimer Variable Account Funds - Oppenheimer Global Securities Fund FACE MARKET VALUE AMOUNT (1) SEE NOTE 1 - ---------------------------------------------------------------------------------------------------------------------------------- REPURCHASE AGREEMENTS - 11.3% - ---------------------------------------------------------------------------------------------------------------------------------- Repurchase agreement with First Chicago Capital Markets, 6%, dated 12/30/94, to be repurchased at $33,822,533 on 1/3/95, collateralized by U.S. Treasury Nts., 3.875%-8.875%, 5/31/95-8/31/05, with a value of $32,143,410 and U.S. Treasury Bonds, 10.75%-14.25%, 2/15/02-8/15/05, with a value of $2,361,271 (Cost $33,800,000) $ 33,800,000 $ 33,800,000 - ---------------------------------------------------------------------------------------------------------------------------------- NON-CONVERTIBLE CORPORATE BONDS AND NOTES - 0.1% - ---------------------------------------------------------------------------------------------------------------------------------- FINANCIAL - 0.1% - ---------------------------------------------------------------------------------------------------------------------------------- Mediobanca, 4.25% Debs., 1/1/00 (Cost $306,880) ITL 497,120,000 229,216 - ---------------------------------------------------------------------------------------------------------------------------------- CONVERTIBLE CORPORATE BONDS AND NOTES - 1.2% - ---------------------------------------------------------------------------------------------------------------------------------- BASIC MATERIALS - 0.1% - ---------------------------------------------------------------------------------------------------------------------------------- METALS - 0.1% ------------------------------------------------------------------------------------------------------------------------ Jindal Strips Ltd., 4.25% Cv. Debs., 3/31/99 300,000 309,000 - ---------------------------------------------------------------------------------------------------------------------------------- CONSUMER NON-CYCLICALS - 0.5% - ---------------------------------------------------------------------------------------------------------------------------------- FOOD - 0.5% ------------------------------------------------------------------------------------------------------------------------ Global Mark International Ltd., 3.50% Cv. Debs., 2/9/95 (4) 1,500,000 1,533,750 - ---------------------------------------------------------------------------------------------------------------------------------- FINANCIAL - 0.5% - ---------------------------------------------------------------------------------------------------------------------------------- Industrial Credit and Investment Corp. India Ltd., 2.50% Cv. Debs., 4/30/00 (3) 1,375,000 1,026,094 ------------------------------------------------------------------------------------------------------------------------ Scici Ltd., 3.50% Cv. Bonds, 4/1/04 (3) 660,000 583,275 ------------ 1,609,369 ------------ Total Convertible Corporate Bonds and Notes (Cost $4,177,000) 3,452,119 SHARES - ---------------------------------------------------------------------------------------------------------------------------------- COMMON STOCKS - 85.6% - ---------------------------------------------------------------------------------------------------------------------------------- BASIC MATERIALS - 12.5% - ---------------------------------------------------------------------------------------------------------------------------------- CHEMICALS - 1.0% ------------------------------------------------------------------------------------------------------------------------ PT Tri Polyta Indonesia, ADR (2) 30,000 727,500 ------------------------------------------------------------------------------------------------------------------------ Reliance Industries Ltd., GDS (2)(3) 75,000 1,485,000 ------------------------------------------------------------------------------------------------------------------------ Tianjin Bohai Chemical Industry Co. (2) 7,000,000 841,407 ------------ 3,053,907 - ---------------------------------------------------------------------------------------------------------------------------------- CHEMICALS: SPECIALTY - 0.8% ------------------------------------------------------------------------------------------------------------------------ Indo Gulf Fertilizer, GDR (2)(3) 147,000 439,324 ------------------------------------------------------------------------------------------------------------------------ Minerals Technologies, Inc. 40,000 1,170,000 ------------------------------------------------------------------------------------------------------------------------ PT Argha Karya Prima Industry 700,000 732,484 ------------ 2,341,808 - ---------------------------------------------------------------------------------------------------------------------------------- METAL: MISCELLANEOUS - 2.1% ------------------------------------------------------------------------------------------------------------------------ Asturiana de Zinc SA (2) 64,000 695,282 ------------------------------------------------------------------------------------------------------------------------ Capex SA-GDR (2)(3) 124,000 2,030,500 ------------------------------------------------------------------------------------------------------------------------ Plettac AG 2,778 1,317,296 ------------------------------------------------------------------------------------------------------------------------ Swissreal Schweiz Liegenscha 2,800 2,139,592 ------------ 6,182,670 - ---------------------------------------------------------------------------------------------------------------------------------- PAPER AND FOREST PRODUCTS - 5.4% ------------------------------------------------------------------------------------------------------------------------ Attisholz Holding AG 5,000 3,018,352 ------------------------------------------------------------------------------------------------------------------------ Corticeira Amorim SA 129,700 2,159,765 ------------------------------------------------------------------------------------------------------------------------ Forsheda B Free (5) 100,000 2,185,883 ------------------------------------------------------------------------------------------------------------------------ Hansol Paper 29,687 1,600,124
STATEMENT OF INVESTMENTS (CONTINUED) December 31, 1994 Oppenheimer Variable Account Funds - Oppenheimer Global Securities Fund MARKET VALUE COMMON STOCKS (CONTINUED) SHARES SEE NOTE 1 - ---------------------------------------------------------------------------------------------------------------------------------- BASIC MATERIALS (CONTINUED) - ---------------------------------------------------------------------------------------------------------------------------------- PAPER AND FOREST PRODUCTS (CONTINUED) ------------------------------------------------------------------------------------------------------------------------ Indah Kiat Pulp & Paper Corp. 240,000 $ 272,975 ------------------------------------------------------------------------------------------------------------------------ Mo och Domsjo AB Free, Series B (2) 50,000 2,327,124 ------------------------------------------------------------------------------------------------------------------------ PT Pabrik Kertas Tjiwi Kimia 1,000,000 1,865,332 ------------------------------------------------------------------------------------------------------------------------ Rottneros Bruks AB Free (2) 2,000,000 2,515,446 ------------ 15,945,001 - ---------------------------------------------------------------------------------------------------------------------------------- STEEL - 3.2% ------------------------------------------------------------------------------------------------------------------------ Dofasco, Inc. 160,000 2,153,014 ------------------------------------------------------------------------------------------------------------------------ Korea Iron & Steel Works (2) 67,761 1,787,481 ------------------------------------------------------------------------------------------------------------------------ Pohang Iron & Steel Co. Ltd. 5,000 505,945 ------------------------------------------------------------------------------------------------------------------------ Pohang Iron & Steel Co. Ltd., ADR 20,000 585,000 ------------------------------------------------------------------------------------------------------------------------ Sahaviriya Steel Industries PLC (2) 233,000 593,985 ------------------------------------------------------------------------------------------------------------------------ Tung Ho Steel Enterprise Corp., GDR (2)(3) 70,000 1,085,000 ------------------------------------------------------------------------------------------------------------------------ Ugine SA 41,600 2,923,108 ------------ 9,633,533 - ---------------------------------------------------------------------------------------------------------------------------------- CONSUMER CYCLICALS - 12.0% - ---------------------------------------------------------------------------------------------------------------------------------- AUTO PARTS: AFTER MARKET - 0.9% ------------------------------------------------------------------------------------------------------------------------ Epeda-Bertrand Faure SA 14,199 2,413,156 ------------------------------------------------------------------------------------------------------------------------ Epeda-Bertrand Faure SA, Units (2) 2,028 344,664 ------------ 2,757,820 - ---------------------------------------------------------------------------------------------------------------------------------- AUTOMOBILES - 3.9% ------------------------------------------------------------------------------------------------------------------------ CIADEA SA (2) 201,620 1,764,066 ------------------------------------------------------------------------------------------------------------------------ Consorcio Grupo Dina SA, Sponsored ADR (2) 45,000 427,500 ------------------------------------------------------------------------------------------------------------------------ Consorcio Grupo Dina SA, Sponsored ADR, Series L (2) 7,100 53,250 ------------------------------------------------------------------------------------------------------------------------ Fiat SpA di Risp. 1,068,000 2,373,333 ------------------------------------------------------------------------------------------------------------------------ Mahindra & Mahindra Ltd., GDR 120,000 1,338,900 ------------------------------------------------------------------------------------------------------------------------ Mayne Nickless Ltd. 200,000 1,023,867 ------------------------------------------------------------------------------------------------------------------------ Nissan Motor Co. (2) 250,000 2,062,243 ------------------------------------------------------------------------------------------------------------------------ Volvo AB, Series B Free 142,500 2,683,591 ------------ 11,726,750 - ---------------------------------------------------------------------------------------------------------------------------------- BROADCAST MEDIA - 0.7% ------------------------------------------------------------------------------------------------------------------------ United International Holdings, Inc., Cl. A (2) 112,000 1,960,000 - ---------------------------------------------------------------------------------------------------------------------------------- ENTERTAINMENT - 1.3% ------------------------------------------------------------------------------------------------------------------------ Euro Disney SCA 480,000 1,002,851 ------------------------------------------------------------------------------------------------------------------------ Filmes Lusomundo SA (2) 205,200 2,861,456 ------------ 3,864,307 - ---------------------------------------------------------------------------------------------------------------------------------- HOUSEHOLD FURNISHINGS AND APPLIANCES - 1.5% ------------------------------------------------------------------------------------------------------------------------ Philips Electronics NV 150,000 4,442,997 - ---------------------------------------------------------------------------------------------------------------------------------- PUBLISHING - 0.4% ------------------------------------------------------------------------------------------------------------------------ Roto Smeets de Boer 60,000 1,310,425 - ---------------------------------------------------------------------------------------------------------------------------------- RETAIL STORES: DEPARTMENT STORES - 1.0% ------------------------------------------------------------------------------------------------------------------------ Sonae Industria E. Investimentos (2) 125,000 2,874,528 - ---------------------------------------------------------------------------------------------------------------------------------- RETAIL STORES: GENERAL MERCHANDISE CHAINS - 0.3% ------------------------------------------------------------------------------------------------------------------------ PT Matahari Putra Prima 400,000 746,133 - ---------------------------------------------------------------------------------------------------------------------------------- RETAIL: SPECIALTY - 1.8% ------------------------------------------------------------------------------------------------------------------------ Dickson Concepts International Ltd. 1,984,500 1,295,292 ------------------------------------------------------------------------------------------------------------------------ Vereinigte Baubeschlag 14,000 3,965,120 ------------ 5,260,412 - ---------------------------------------------------------------------------------------------------------------------------------- TEXTILES: APPAREL MANUFACTURERS - 0.2% ------------------------------------------------------------------------------------------------------------------------ Indian Rayon and Industries Ltd., GDR (2)(3) 30,000 583,380
STATEMENT OF INVESTMENTS (CONTINUED) December 31, 1994 Oppenheimer Variable Account Funds - Oppenheimer Global Securities Fund MARKET VALUE COMMON STOCKS (CONTINUED) SHARES SEE NOTE 1 - ---------------------------------------------------------------------------------------------------------------------------------- CONSUMER NON-CYCLICALS - 7.1% - ---------------------------------------------------------------------------------------------------------------------------------- BEVERAGES: ALCOHOLIC - 1.9% ------------------------------------------------------------------------------------------------------------------------ Jinro Ltd. 19,000 $ 554,217 ------------------------------------------------------------------------------------------------------------------------ LVMH Moet Hennessy Louis Vuitton 15,000 2,369,404 ------------------------------------------------------------------------------------------------------------------------ Vina Concha y Toro SA, ADR 148,600 2,451,900 ------------ 5,375,521 - ---------------------------------------------------------------------------------------------------------------------------------- DRUGS - 1.2% ------------------------------------------------------------------------------------------------------------------------ Astra AB Free, Series A 50,000 1,291,352 ------------------------------------------------------------------------------------------------------------------------ Pharmavit GDS (2)(5) 100,000 1,125,000 ------------------------------------------------------------------------------------------------------------------------ WPP Group PLC 630,000 1,079,270 ------------ 3,495,622 - ---------------------------------------------------------------------------------------------------------------------------------- FOOD PROCESSING - 0.8% ------------------------------------------------------------------------------------------------------------------------ Grupo Herdez SA 400,000 190,050 ------------------------------------------------------------------------------------------------------------------------ Grupo Herdez SA, Series A 300,000 146,192 ------------------------------------------------------------------------------------------------------------------------ Mavesa, ADR (3) 105,000 519,225 ------------------------------------------------------------------------------------------------------------------------ Molinos Rio de la Plata SA (2) 301,343 1,673,853 ------------ 2,529,320 - ---------------------------------------------------------------------------------------------------------------------------------- FOOD WHOLESALERS - 0.3% ------------------------------------------------------------------------------------------------------------------------ Prodega AG 920 1,012,332 - ---------------------------------------------------------------------------------------------------------------------------------- HEALTHCARE: MISCELLANEOUS - 1.4% ------------------------------------------------------------------------------------------------------------------------ Genzyme Corp. (2) 60,000 1,890,000 ------------------------------------------------------------------------------------------------------------------------ Genzyme Corp. Tissue Repair (2) 8,100 30,375 ------------------------------------------------------------------------------------------------------------------------ Plant Genetics Systems International NV (2) 9,104 68,714 ------------------------------------------------------------------------------------------------------------------------ Takare PLC 650,000 2,237,234 ------------ 4,226,323 - ---------------------------------------------------------------------------------------------------------------------------------- MEDICAL PRODUCTS - 1.0% ------------------------------------------------------------------------------------------------------------------------ Elekta Instrument AB Free, Series B (2) 135,000 2,905,542 - ---------------------------------------------------------------------------------------------------------------------------------- RETAIL STORES: FOOD CHAINS - 0.5% ------------------------------------------------------------------------------------------------------------------------ Carulla SA (2)(3) 107,000 1,235,208 ------------------------------------------------------------------------------------------------------------------------ President Enterprises Corp. (2)(3) 7,414 150,134 ------------ 1,385,342 - ---------------------------------------------------------------------------------------------------------------------------------- ENERGY - 7.9% - ---------------------------------------------------------------------------------------------------------------------------------- OIL AND GAS DRILLING - 2.4% ------------------------------------------------------------------------------------------------------------------------ Naviera Perez Companc SA, CIA Cl. B 250,000 1,029,934 ------------------------------------------------------------------------------------------------------------------------ Petroleum Geo-Services AS (2) 172,000 3,127,729 ------------------------------------------------------------------------------------------------------------------------ Transocean Drilling AS (2) 354,960 2,938,752 ------------ 7,096,415 - ---------------------------------------------------------------------------------------------------------------------------------- OIL WELL SERVICES AND EQUIPMENT - 1.7% ------------------------------------------------------------------------------------------------------------------------ Baker Hughes, Inc. 150,000 2,737,500 ------------------------------------------------------------------------------------------------------------------------ Coflexip SA, Sponsored ADR 102,440 2,381,730 ------------ 5,119,230 - ---------------------------------------------------------------------------------------------------------------------------------- OIL: EXPLORATION AND PRODUCTION - 0.4% ------------------------------------------------------------------------------------------------------------------------ ASTRA Compania Argentina de Petroleo SA 750,000 1,237,421 - ---------------------------------------------------------------------------------------------------------------------------------- OIL: INTEGRATED INTERNATIONAL - 3.4% ------------------------------------------------------------------------------------------------------------------------ Elf Gabon SA 11,000 2,133,307 ------------------------------------------------------------------------------------------------------------------------ OeMV AG (2) 50,500 4,277,970 ------------------------------------------------------------------------------------------------------------------------ YPF Sociedad Anonima, Sponsored ADR 47,300 1,011,038 ------------------------------------------------------------------------------------------------------------------------ YuKong Ltd. 11,605 538,672 ------------------------------------------------------------------------------------------------------------------------ YuKong Ltd., GDR (2)(3) 100,000 1,500,000 ------------------------------------------------------------------------------------------------------------------------ Yukong Ltd., New 16,340 758,458 ------------ 10,219,445
STATEMENT OF INVESTMENTS (CONTINUED) December 31, 1994 Oppenheimer Variable Account Funds - Oppenheimer Global Securities Fund MARKET VALUE COMMON STOCKS (CONTINUED) SHARES SEE NOTE 1 - ---------------------------------------------------------------------------------------------------------------------------------- FINANCIAL - 11.3% - ---------------------------------------------------------------------------------------------------------------------------------- BANKS - 0.9% ------------------------------------------------------------------------------------------------------------------------ Banco Portugues de Investimento 113,000 $ 1,686,482 ------------------------------------------------------------------------------------------------------------------------ Banco Wiese, Sponsored ADR (2) 59,700 1,119,375 ------------ 2,805,857 - ---------------------------------------------------------------------------------------------------------------------------------- DIVERSIFIED FINANCE - 0.4% ------------------------------------------------------------------------------------------------------------------------ Petersburg Long Distance, Inc. 187,000 1,192,125 - ---------------------------------------------------------------------------------------------------------------------------------- FINANCIAL SERVICES: MISCELLANEOUS - 2.9% ------------------------------------------------------------------------------------------------------------------------ First NIS Regional Fund (3)(6) 180,000 765,000 ------------------------------------------------------------------------------------------------------------------------ Industrial Finance Corp. 720,000 1,534,355 ------------------------------------------------------------------------------------------------------------------------ Marschollek, Lautenschlaeger und Partner AG 9,587 5,133,631 ------------------------------------------------------------------------------------------------------------------------ Sturge Holdings PLC 680,000 691,509 ------------------------------------------------------------------------------------------------------------------------ Taipei Fund, Cl. B, IDR (2)(3) 6 575,400 ------------ 8,699,895 - ---------------------------------------------------------------------------------------------------------------------------------- INSURANCE: LIFE - 2.1% ------------------------------------------------------------------------------------------------------------------------ National Mutual Asia Ltd. (2) 2,700,000 1,779,750 ------------------------------------------------------------------------------------------------------------------------ Swiss Reinsurance 7,500 4,521,797 ------------ 6,301,547 - ---------------------------------------------------------------------------------------------------------------------------------- INSURANCE: PROPERTY AND CASUALTY - 1.8% ------------------------------------------------------------------------------------------------------------------------ Reinsurance Australia Corp. (2) 3,300,000 5,375,302 - ---------------------------------------------------------------------------------------------------------------------------------- MAJOR BANKS: OTHER - 3.2% ------------------------------------------------------------------------------------------------------------------------ Akbank T.A.S. 6,448,440 1,749,574 ------------------------------------------------------------------------------------------------------------------------ Banco de Galicia, Series B 152,375 609,461 ------------------------------------------------------------------------------------------------------------------------ Banco Frances del Rio Plata 109,326 778,948 ------------------------------------------------------------------------------------------------------------------------ Grupo Financiero Banamex Accival SA, Cl. C 160,000 464,566 ------------------------------------------------------------------------------------------------------------------------ Korea First Bank 98,857 1,379,108 ------------------------------------------------------------------------------------------------------------------------ Kwangju Bank (2) 100,000 1,318,960 ------------------------------------------------------------------------------------------------------------------------ PT Panin Bank (3) 1,200,000 1,665,150 ------------------------------------------------------------------------------------------------------------------------ Standard Chartered Bank PLC 43 189 ------------------------------------------------------------------------------------------------------------------------ Turkiye Garanti Bankasi AS, Sponsored ADR (3) 660,000 1,671,252 ------------ 9,637,208 - ---------------------------------------------------------------------------------------------------------------------------------- INDUSTRIAL - 23.1% - ---------------------------------------------------------------------------------------------------------------------------------- BUILDING MATERIALS GROUP - 1.0% ------------------------------------------------------------------------------------------------------------------------ Ceramicas Carabobo CA, Series B 25,000 88,832 ------------------------------------------------------------------------------------------------------------------------ Ceramicas Carabobo CA, Sponsored ADR, Cl. B 120,000 139,164 ------------------------------------------------------------------------------------------------------------------------ Cimentos de Portugal SA 80,000 1,412,060 ------------------------------------------------------------------------------------------------------------------------ Internacional de Ceramica SA, Series B, ADR (2)(3) 10,000 177,664 ------------------------------------------------------------------------------------------------------------------------ Sung Shin Cement (2) 28,000 1,278,377 ------------ 3,096,097 - ---------------------------------------------------------------------------------------------------------------------------------- COMMERCIAL SERVICES - 1.8% ------------------------------------------------------------------------------------------------------------------------ BIS SA (2) 28,425 1,720,376 ------------------------------------------------------------------------------------------------------------------------ Eurotunnel SA, ESA-Unites (2) 234,090 1,050,531 ------------------------------------------------------------------------------------------------------------------------ Measurex Corp. 110,000 2,598,750 ------------ 5,369,657 - ---------------------------------------------------------------------------------------------------------------------------------- CONGLOMERATES - 4.5% ------------------------------------------------------------------------------------------------------------------------ Catena AB Free, Series A (2) 425,000 3,630,247 ------------------------------------------------------------------------------------------------------------------------ Commercial del Plata 75,400 192,258 ------------------------------------------------------------------------------------------------------------------------ Internatio-Muller NV 50,000 2,650,816 ------------------------------------------------------------------------------------------------------------------------ Jardine Matheson Holdings Ltd. 197,551 1,410,706 ------------------------------------------------------------------------------------------------------------------------ JK Corp. Ltd., GDR (2)(3) 562,000 3,779,450 ------------------------------------------------------------------------------------------------------------------------ Kinnevik Investments AB Free, Series B 52,000 1,720,727 ------------ 13,384,204
STATEMENT OF INVESTMENTS (CONTINUED) December 31, 1994 Oppenheimer Variable Account Funds - Oppenheimer Global Securities Fund MARKET VALUE COMMON STOCKS (CONTINUED) SHARES SEE NOTE 1 - ---------------------------------------------------------------------------------------------------------------------------------- INDUSTRIAL (CONTINUED) - ---------------------------------------------------------------------------------------------------------------------------------- CONTAINERS: METAL AND GLASS - 0.3% ------------------------------------------------------------------------------------------------------------------------ M C Packaging Corp Ltd. 2,662,000 $ 1,032,178 - ---------------------------------------------------------------------------------------------------------------------------------- ELECTRICAL EQUIPMENT - 0.4% ------------------------------------------------------------------------------------------------------------------------ PT Kabelmetal Indonesia 800,000 1,091,902 - ---------------------------------------------------------------------------------------------------------------------------------- ENGINEERING AND CONSTRUCTION - 4.2% ------------------------------------------------------------------------------------------------------------------------ Babcock International Group PLC (2) 5,400,000 2,513,369 ------------------------------------------------------------------------------------------------------------------------ Cristaleria Espanola SA 40,000 2,130,213 ------------------------------------------------------------------------------------------------------------------------ SNC Lavalin Group 219,800 3,564,913 ------------------------------------------------------------------------------------------------------------------------ Trafalgar House PLC 1,500,000 1,783,530 ------------------------------------------------------------------------------------------------------------------------ VA Technologie AG (2)(3) 25,000 2,516,615 ------------ 12,508,640 - ---------------------------------------------------------------------------------------------------------------------------------- MACHINERY: DIVERSIFIED - 3.4% ------------------------------------------------------------------------------------------------------------------------ Buderus AG 4,500 1,929,174 ------------------------------------------------------------------------------------------------------------------------ Maschinenfabrik Berthold Hermle AG 5,101 543,004 ------------------------------------------------------------------------------------------------------------------------ Powerscreen International PLC 580,000 2,150,561 ------------------------------------------------------------------------------------------------------------------------ Tampella AB (2) 838,333 2,476,333 ------------------------------------------------------------------------------------------------------------------------ Traub AG (2) 22,000 2,980,614 ------------ 10,079,686 - ---------------------------------------------------------------------------------------------------------------------------------- MANUFACTURING: DIVERSIFIED INDUSTRIALS - 3.3% ------------------------------------------------------------------------------------------------------------------------ Autoliv AB (2) 125,000 4,808,942 ------------------------------------------------------------------------------------------------------------------------ Bollore Technologies SA (2) 10,000 828,776 ------------------------------------------------------------------------------------------------------------------------ Hindustan Development Corp. Ltd., Units (2)(3) 370,000 786,250 ------------------------------------------------------------------------------------------------------------------------ Valmet Corp., Cl. A (2) 150,000 2,851,547 ------------------------------------------------------------------------------------------------------------------------ Vitro Sociedad Anonima, ADR 30,000 420,000 ------------ 9,695,515 - ---------------------------------------------------------------------------------------------------------------------------------- POLLUTION CONTROL - 0.8% ------------------------------------------------------------------------------------------------------------------------ Elco Looser Holdings Inhaber 6,000 2,292,420 - ---------------------------------------------------------------------------------------------------------------------------------- TRANSPORTATION: MISCELLANEOUS - 2.8% ------------------------------------------------------------------------------------------------------------------------ Kvaerner Industrier AS, Series A Free 3,900 182,200 ------------------------------------------------------------------------------------------------------------------------ Kvaerner Industrier AS, Series B 21,232 960,523 ------------------------------------------------------------------------------------------------------------------------ Lisnave-Estaleiros Navais de Lisbona SA (2) 501,250 2,455,872 ------------------------------------------------------------------------------------------------------------------------ Malaysian International Shipping Corp. 400,333 1,144,467 ------------------------------------------------------------------------------------------------------------------------ Singmarine Industries Ltd. 437,500 1,104,272 ------------------------------------------------------------------------------------------------------------------------ Unitor Ships Service AS 33,100 557,864 ------------------------------------------------------------------------------------------------------------------------ Vard AS (2) 356,000 784,209 ------------------------------------------------------------------------------------------------------------------------ Westmont Berhad Ord. 200,000 1,245,334 ------------ 8,434,741 - ---------------------------------------------------------------------------------------------------------------------------------- TRUCKERS - 0.6% ------------------------------------------------------------------------------------------------------------------------ Koninklijke Frans Maas Groep NV 61,300 1,907,550 - ---------------------------------------------------------------------------------------------------------------------------------- TECHNOLOGY - 8.5% - ---------------------------------------------------------------------------------------------------------------------------------- AEROSPACE/DEFENSE - 0.5% ------------------------------------------------------------------------------------------------------------------------ Celsius Industrier AB, Cl. B 64,900 1,440,463 - ---------------------------------------------------------------------------------------------------------------------------------- ELECTRONICS - 0.4% ------------------------------------------------------------------------------------------------------------------------ Cray Electronics Holdings 500,000 1,263,333 - ---------------------------------------------------------------------------------------------------------------------------------- ELECTRONICS: SEMICONDUCTORS - 2.2% ------------------------------------------------------------------------------------------------------------------------ Austria Mikro Systeme International AG 70,000 5,275,264 ------------------------------------------------------------------------------------------------------------------------ Samsung Electronics Co., GDR (2)(3) 745 34,643 ------------------------------------------------------------------------------------------------------------------------ Samsung Electronics Co., Sponsored GDS (2) 25,000 1,162,500 ------------ 6,472,407 - ---------------------------------------------------------------------------------------------------------------------------------- TELECOMMUNICATIONS - 5.4% ------------------------------------------------------------------------------------------------------------------------ Airtouch Communications, Inc. (2) 85,000 2,475,625
STATEMENT OF INVESTMENTS (CONTINUED) December 31, 1994 Oppenheimer Variable Account Funds - Oppenheimer Global Securities Fund MARKET VALUE COMMON STOCKS (CONTINUED) SHARES SEE NOTE 1 - ---------------------------------------------------------------------------------------------------------------------------------- TECHNOLOGY (CONTINUED) - ---------------------------------------------------------------------------------------------------------------------------------- TELECOMMUNICATIONS (CONTINUED) ------------------------------------------------------------------------------------------------------------------------ Comcast UK Cable Partners Ltd. (2) 49,000 $ 784,000 ------------------------------------------------------------------------------------------------------------------------ Millicom International Cellular SA (2) 121,678 3,665,550 ------------------------------------------------------------------------------------------------------------------------ Netas Telekomunik 2,970,000 940,115 ------------------------------------------------------------------------------------------------------------------------ Pakistan Telecommunications, GDR (2)(3) 10,000 1,355,000 ------------------------------------------------------------------------------------------------------------------------ PT Indosat, ADR (2) 28,000 1,001,000 ------------------------------------------------------------------------------------------------------------------------ Shinawatra Computer & Communication PLC 50,000 1,091,415 ------------------------------------------------------------------------------------------------------------------------ Technology Resources Industries 500,000 1,595,829 ------------------------------------------------------------------------------------------------------------------------ USHA Beltron Ltd. (2) 160,000 1,500,000 ------------------------------------------------------------------------------------------------------------------------ Vodafone Group 500,000 1,658,370 ------------ 16,066,904 - ---------------------------------------------------------------------------------------------------------------------------------- UTILITIES - 3.2% - ---------------------------------------------------------------------------------------------------------------------------------- ELECTRIC COMPANIES - 1.9% ------------------------------------------------------------------------------------------------------------------------ Calcutta Electric Supply (2) 15,000 570,000 ------------------------------------------------------------------------------------------------------------------------ Central Puerto SA, ADR (3) 20,000 494,968 ------------------------------------------------------------------------------------------------------------------------ Korea Electric Power Co. 25,000 862,397 ------------------------------------------------------------------------------------------------------------------------ Tata Electric Cos. (2)(3) 500 218,750 ------------------------------------------------------------------------------------------------------------------------ Veba AG 10,000 3,463,190 ------------ 5,609,305 - ---------------------------------------------------------------------------------------------------------------------------------- TELEPHONE - 1.3% ------------------------------------------------------------------------------------------------------------------------ Telecom Italia SpA 900,000 2,341,191 ------------------------------------------------------------------------------------------------------------------------ Telecommunication de Argentina, Cl. B 300,000 1,469,900 ------------------------------------------------------------------------------------------------------------------------ Telefonos de Mexico SA, Sponsored ADR 3,000 123,000 ------------ 3,934,091 ------------ Total Common Stocks (Cost $261,335,260) 254,977,211 - ---------------------------------------------------------------------------------------------------------------------------------- PREFERRED STOCKS - 0.7% ------------------------------------------------------------------------------------------------------------------------ Moebel Walther AG (2) 3,500 1,585,145 ------------------------------------------------------------------------------------------------------------------------ Rhoen Klinikum AG 660 400,254 ------------------------------------------------------------------------------------------------------------------------ Telecom Brasileiras SA 600,000 26,848 ------------ Total Preferred Stocks (Cost $1,857,274) 2,012,247 UNITS - ---------------------------------------------------------------------------------------------------------------------------------- RIGHTS, WARRANTS AND CERTIFICATES - 0.1% ------------------------------------------------------------------------------------------------------------------------ Ciba-Geigy AG Wts., Exp. 6/95 100 309 ------------------------------------------------------------------------------------------------------------------------ Eurotunnel SA Wts., Exp. 10/95 30,000 3,373 ------------------------------------------------------------------------------------------------------------------------ Rottneros Bruks AB Rts., Exp. 1/95 2,000,000 322,838 ------------ Total Rights, Warrants and Certificates (Cost $0) 326,520 FACE AMOUNT - ---------------------------------------------------------------------------------------------------------------------------------- CERTIFICATE OF DEPOSIT - 0.7% - ---------------------------------------------------------------------------------------------------------------------------------- Cayman Time Deposit, 5.125%, 2/27/95 (Cost $2,300,000) 2,300,000 2,300,000 ------------------------------------------------------------------------------------------------------------------------ TOTAL INVESTMENTS, AT VALUE (COST $303,776,414) 99.7% 297,097,313 ------------------------------------------------------------------------------------------------------------------------ OTHER ASSETS NET OF LIABILITIES 0.3 744,608 --------- ------------ NET ASSETS 100.0% $297,841,921 --------- ------------ --------- ------------
STATEMENT OF INVESTMENTS (CONTINUED) December 31, 1994 Oppenheimer Variable Account Funds - Oppenheimer Global Securities Fund - -------------------------------------------------------------------------------- 1. Face amount is reported in local currency. Foreign currency abbreviation is as follows: ITL - Italian Lira 2. Non-income producing security. 3. Restricted security - See Note 7 of Notes to Financial Statements. 4. Represents the current interest rate for an increasing rate security. 5. 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 December 31, 1994. The aggregate fair value of all securities of affiliated companies as December 31, amounted to $3,310,883. Transactions during the period in which the issuer was an affiliate are as follows:
Balance Balance December 31, 1993 Gross Additions Gross Reductions December 31, 1994 ----------------- ------------------ ---------------- ----------------- Dividend Shares Cost Shares Cost Shares Cost Shares Cost Income - ------------------------------------------------------------------------------------------------------------------------------------ Forsheda B Free - $ - 100,000 $1,200,236 - $ - 100,000 $1,200,236 $10,808 Pharmavit GDS - - 100,000 1,300,000 - - 100,000 1,300,000 - ---- ---------- ---- ---------- ------- - $ - $2,500,236 - $ - $2,500,236 $10,808 ---- ---------- ---- ---------- ------- ---- ---------- ---- ---------- -------
6. First NIS Regional Fund, a closed end fund listed on the Luxembourg Stock Exchange, is offered in installments. The Fund entered into the first installment (40% of the total commitment) on November 29, 1994. The second and third installments (30% each of the total commitment) are provisional and may be postponed indefinitely at the discretion of the Board of NIS Fund. See accompanying Notes to Financial Statements.
- ----------------------------------------------------------------------------------------------------------------------------------- STATEMENT OF INVESTMENTS December 31, 1994 Oppenheimer Variable Account Funds - Oppenheimer Strategic Bond Fund FACE MARKET VALUE AMOUNT (1) SEE NOTE 1 - ----------------------------------------------------------------------------------------------------------------------------------- REPURCHASE AGREEMENTS - 16.7% - ----------------------------------------------------------------------------------------------------------------------------------- Repurchase agreement with First Chicago Capital Markets, 6%, dated 12/30/94, to be repurchased at $3,402,267 on 1/3/95, 1/3/95 collateralized by U.S. Treasury Nts., 3.875%-8.875%, 5/31/95-8/31/05, with a value of $3,233,361 and U.S. Treasury Bonds, 10.75%-14.25%, 2/15/02-8/15/05, with a value of $237,524 (Cost $3,400,000) $ 3,400,000 $ 3,400,000 - ----------------------------------------------------------------------------------------------------------------------------------- MORTGAGE-BACKED OBLIGATIONS - 6.2% - ----------------------------------------------------------------------------------------------------------------------------------- GOVERNMENT AGENCY - 5.2% - ----------------------------------------------------------------------------------------------------------------------------------- FHLMC/FNMA/SPONSORED - 1.6% ------------------------------------------------------------------------------------------------------------------------- Federal Home Loan Mortgage Corp., Series 176, Cl. F, 8.95%, 3/15/20 58,000 58,436 ------------------------------------------------------------------------------------------------------------------------- Federal National Mortgage Assn., Gtd. Real Estate Mtg. Investment Conduit Pass-Through Certificates, 10.50%, 11-25-20 130,000 143,450 ------------------------------------------------------------------------------------------------------------------------- Federal National Mortgage Assn., Series 1994-83, Cl. Z, 7.50%, 6/25/24 166,094 124,890 ---------------- 326,776 - ----------------------------------------------------------------------------------------------------------------------------------- GNMA/GUARANTEED - 3.6% ------------------------------------------------------------------------------------------------------------------------- Government National Mortgage Assn., 7%, 1/1/95 750,000 737,109 - ----------------------------------------------------------------------------------------------------------------------------------- PRIVATE - 1.0% - ----------------------------------------------------------------------------------------------------------------------------------- MULTI-FAMILY - 1.0% ------------------------------------------------------------------------------------------------------------------------- Resolution Trust Corp. Commercial Mtg. Pass-Through Certificates, Series 1994-C2, Cl. E, 8%, 4/25/25 249,105 199,129 ---------------- Total Mortgage-Backed Obligations (Cost $1,263,157) 1,263,014 - ----------------------------------------------------------------------------------------------------------------------------------- U.S. GOVERNMENT OBLIGATIONS - 13.6% - ----------------------------------------------------------------------------------------------------------------------------------- TREASURY - 13.6% - ----------------------------------------------------------------------------------------------------------------------------------- U.S. Treasury Bonds, 7.875%, 2/15/21 470,000 463,831 ------------------------------------------------------------------------------------------------------------------------- U.S. Treasury Nts., 4.25%, 5/15/96 (10)(11) 2,289,000 2,194,579 ------------------------------------------------------------------------------------------------------------------------- U.S. Treasury Nts., 5.125%, 4/30/98 120,000 110,662 ---------------- Total U.S. Government Obligations (Cost $2,959,676) 2,769,072 - ----------------------------------------------------------------------------------------------------------------------------------- FOREIGN GOVERNMENT OBLIGATIONS - 22.2% - ----------------------------------------------------------------------------------------------------------------------------------- Argentina (Republic of) Bonds, Bonos de Consolidacion de Deudas, Series 1, 5.625%, 4/1/01 (4)(6) 639,964 409,944 ------------------------------------------------------------------------------------------------------------------------- Brazil (Federal Republic of) Interest Due and Unpaid Bonds, 6.063%, 1/1/01 (4) 98,000 81,861 ------------------------------------------------------------------------------------------------------------------------- Brazil (Federal Republic of) Nts., Banco Estado Minas Gerais, 10%, 1/15/96 240,000 231,000 ------------------------------------------------------------------------------------------------------------------------- Ecuador (Republic of) Bonds, 0%, 12/29/49 (5)(9) 250,000 135,938 ------------------------------------------------------------------------------------------------------------------------- International Bank for Reconstruction and Development Bonds, 12.50%, 7/25/97 NZD 325,000 222,608 ------------------------------------------------------------------------------------------------------------------------- Morocco (Kingdom of) Loan Participation Agreement, Tranche A, 5.938%, 1/1/09 (4) 300,000 199,125 ------------------------------------------------------------------------------------------------------------------------- Morocco (Kingdom of) Loan Participation Agreement, Tranche B, 5.938%, 1/1/04 (4) 50,000 35,453 ------------------------------------------------------------------------------------------------------------------------- New South Wales State Bank Bonds, 9.25%, 2/18/03 AUD 100,000 72,863
STATEMENT OF INVESTMENTS (CONTINUED) December 31, 1994 Oppenheimer Variable Account Funds - Oppenheimer Strategic Bond Fund FACE MARKET VALUE AMOUNT (1) SEE NOTE 1 - ----------------------------------------------------------------------------------------------------------------------------------- FOREIGN GOVERNMENT OBLIGATIONS (CONTINUED) - ----------------------------------------------------------------------------------------------------------------------------------- New South Wales Treasury Corp. Gtd. Bonds, 12%, 12/1/01 AUD $ 148,000 $ 123,766 ------------------------------------------------------------------------------------------------------------------------- New Zealand (Republic of) Bonds, 10%, 7/15/97 NZD 155,000 100,687 ------------------------------------------------------------------------------------------------------------------------- New Zealand (Republic of) Bonds, 8%, 11/15/95 NZD 400,000 252,869 ------------------------------------------------------------------------------------------------------------------------- Petroquimica do Nordeste Sr. Unsec. Unsub. Nts., 9.50%, 10/19/01 50,000 43,938 ------------------------------------------------------------------------------------------------------------------------- Poland (Republic of) Disc. Bonds, 6.813%, 10/27/24 500,000 361,250 ------------------------------------------------------------------------------------------------------------------------- Queensland Treasury Corp. Gtd. Nts., 8%, 8/14/01 AUD 270,000 186,275 ------------------------------------------------------------------------------------------------------------------------- Spain (Kingdom of) Gtd. Bonds, Bonos y Obligacion del Estado, 10.25%, 11/30/98 ESP 26,000,000 188,931 ------------------------------------------------------------------------------------------------------------------------- Spain (Kingdom of) Gtd. Bonds, Bonos y Obligacion del Estado, 12.25%, 3/25/00 ESP 22,000,000 169,517 ------------------------------------------------------------------------------------------------------------------------- Treasury Corp. of Victoria Gtd. Nts., 12.50%, 7/15/00 AUD 190,000 160,086 ------------------------------------------------------------------------------------------------------------------------- United Kingdom Treasury Nts. (Gilt), 12%, 11/20/98 GBP 185,000 320,004 ------------------------------------------------------------------------------------------------------------------------- United Kingdom Treasury Nts. (Gilt), 12.25%, 3/26/99 GBP 30,000 52,597 ------------------------------------------------------------------------------------------------------------------------- United Kingdom Treasury Nts. (Gilt), 13%, 7/14/00 GBP 92,000 169,887 ------------------------------------------------------------------------------------------------------------------------- United Mexican States Treasury Bills, 0%, 1/19/95 MXP 176,940 35,378 ------------------------------------------------------------------------------------------------------------------------- United Mexican States Treasury Bills, 0%, 4/6/95 MXP 363,930 69,047 ------------------------------------------------------------------------------------------------------------------------- United Mexican States Treasury Bills, 0%, 5/4/95 MXP 184,250 34,798 ------------------------------------------------------------------------------------------------------------------------- United Mexican States Combined Facility 3 Loan Participation Agreement, 7.625%, 3/20/00 (4)(5) 200,000 172,000 ------------------------------------------------------------------------------------------------------------------------- United Mexican States Myra Old Money Loan Participation Agreements, 7.625%, 3/20/05 (4)(5) 200,000 139,000 ------------------------------------------------------------------------------------------------------------------------- United Mexican States Petacalco Topolobampo Trust Sr. Sec. Unsub. Nts., 8.125%, 12/15/03 300,000 222,000 ------------------------------------------------------------------------------------------------------------------------- United Mexican States Petroleos Mexicanos Gtd. Medium-Term Nts., 7.60%, 6/15/00 100,000 84,720 ------------------------------------------------------------------------------------------------------------------------- Venezuela (Republic of) Debs., 6.75%, 9/20/95 200,000 192,000 ------------------------------------------------------------------------------------------------------------------------- Venezuela (Republic of) Debs., 9%, 5/27/96 50,000 47,124 ---------------- Total Foreign Government Obligations (Cost $4,778,402) 4,514,666 - ----------------------------------------------------------------------------------------------------------------------------------- CORPORATE BONDS AND NOTES - 34.2% - ----------------------------------------------------------------------------------------------------------------------------------- BASIC MATERIALS - 3.7% - ----------------------------------------------------------------------------------------------------------------------------------- CHEMICALS - 1.3% ------------------------------------------------------------------------------------------------------------------------- Borg-Warner Security Corp., 9.125% Sr. Sub. Nts., 5/1/03 100,000 85,250 ------------------------------------------------------------------------------------------------------------------------- Synthetic Industries, Inc., 12.75% Sr. Sub. Debs., 12/1/02 200,000 177,000 ---------------- 262,250 - ----------------------------------------------------------------------------------------------------------------------------------- METALS - 0.5% ------------------------------------------------------------------------------------------------------------------------- NL Industries, Inc., 11.75% Sr. Sec. Nts., 10/15/03 100,000 100,000 - ----------------------------------------------------------------------------------------------------------------------------------- PAPER AND FOREST PRODUCTS - 1.9% ------------------------------------------------------------------------------------------------------------------------- PT Inti Indorayon Utama, 9.125% Sr. Nts., 10/15/00 75,000 61,500 ------------------------------------------------------------------------------------------------------------------------- Repap Wisconsin, Inc., 9.25% Fst. Priority Sr. Sec. Nts., 2/1/02 100,000 89,750 ------------------------------------------------------------------------------------------------------------------------- SD Warren Co., 12% Sr. Sub. Nts., 12/15/04 (5) 50,000 51,500 ------------------------------------------------------------------------------------------------------------------------- Stone Container Corp., 10.75% Fst. Mtg. Nts., 10/1/02 190,000 190,000 ---------------- 392,750 - ----------------------------------------------------------------------------------------------------------------------------------- CONSUMER CYCLICALS - 10.5% - ----------------------------------------------------------------------------------------------------------------------------------- AUTOMOBILES - 0.9% ------------------------------------------------------------------------------------------------------------------------- Penda Corp., 10.75% Sr. Nts., Series B, 3/1/04 200,000 183,000 - ----------------------------------------------------------------------------------------------------------------------------------- CONSTRUCTION SUPPLIES AND DEVELOPMENT - 1.7% ------------------------------------------------------------------------------------------------------------------------- Atlantis Group, Inc., 11% Sr. Nts., 2/15/03 130,000 129,350
STATEMENT OF INVESTMENTS (CONTINUED) December 31, 1994 Oppenheimer Variable Account Funds - Oppenheimer Strategic Bond Fund FACE MARKET VALUE AMOUNT (1) SEE NOTE 1 - ----------------------------------------------------------------------------------------------------------------------------------- CORPORATE BONDS AND NOTES (CONTINUED) - ----------------------------------------------------------------------------------------------------------------------------------- CONSUMER CYCLICALS (CONTINUED) - ----------------------------------------------------------------------------------------------------------------------------------- CONSTRUCTION SUPPLIES AND DEVELOPMENT (CONTINUED) ------------------------------------------------------------------------------------------------------------------------- Tribasa Toll Road Trust, 10.50% Nts., 12/1/11 Series 1993-A, 12/1/11 (5) $ 250,000 $ 216,250 ---------------- 345,600 - ----------------------------------------------------------------------------------------------------------------------------------- CONSUMER GOODS AND SERVICES - 3.3% ------------------------------------------------------------------------------------------------------------------------- Amstar Corp., 11.375% Sr. Sub. Nts., 2/15/97 200,000 199,000 ------------------------------------------------------------------------------------------------------------------------- Coleman Holdings, Inc., 0% Sr. Sec. Disc. Nts., Series B, 5/27/98 50,000 34,000 ------------------------------------------------------------------------------------------------------------------------- Harman International Industries, Inc., 12% Sr. Sub. Nts., 8/1/02 150,000 162,750 ------------------------------------------------------------------------------------------------------------------------- MacAndrews & Forbes Holdings, Inc., 13% Sub. Debs., 3/1/99 175,000 174,125 ------------------------------------------------------------------------------------------------------------------------- PT Polysindo Eka Perkasa, 0% Promissory Nts., 10/23/96 IDR 300,000,000 97,589 ---------------- 667,464 - ----------------------------------------------------------------------------------------------------------------------------------- MEDIA - 3.3% ------------------------------------------------------------------------------------------------------------------------- Ackerley Communications, Inc., 10.75% Sr. Sec. Nts., Series A, 10/1/0 200,000 191,000 ------------------------------------------------------------------------------------------------------------------------- Bell Cablemedia PLC, 0%/11.95% Sr. Disc. Nts., 7/15/04 (3) 100,000 54,000 ------------------------------------------------------------------------------------------------------------------------- Lamar Advertising Co., 11% Sr. Sec. Nts., 5/15/03 150,000 143,813 ------------------------------------------------------------------------------------------------------------------------- New City Communications, Inc., 11.375% Sr. Sub. Nts., 11/1/03 200,000 196,000 ------------------------------------------------------------------------------------------------------------------------- Sinclair Broadcasting Group, Inc., 10% Sr. Sub. Nts., 12/15/03 100,000 94,000 ---------------- 678,813 - ----------------------------------------------------------------------------------------------------------------------------------- REAL ESTATE DEVELOPMENT - 0.4% ------------------------------------------------------------------------------------------------------------------------- Saul (B.F.) Real Estate Investment Trust, 11.625% Sr. Nts., 4/1/02 100,000 84,000 - ----------------------------------------------------------------------------------------------------------------------------------- RETAIL - 0.9% ------------------------------------------------------------------------------------------------------------------------- International Semi-Tech Microelectronics, Inc., 0%/11.50% (3) Sr. Sec. Disc. Nts., 8/15/03 400,000 172,000 - ----------------------------------------------------------------------------------------------------------------------------------- CONSUMER NON-CYCLICALS - 4.2% - ----------------------------------------------------------------------------------------------------------------------------------- FOOD AND DRUG DISTRIBUTION - 2.1% ------------------------------------------------------------------------------------------------------------------------- AmeriSource Corp., 11.25% Sr. Debs., 7/15/05 (6) 165,831 157,539 ------------------------------------------------------------------------------------------------------------------------- Di Giorgio Corp., 12% Sr. Nts., 2/15/03 150,000 141,000 ------------------------------------------------------------------------------------------------------------------------- Grand Union Co., 12.25% Sr. Sub. Nts., 7/15/02 200,000 79,000 ------------------------------------------------------------------------------------------------------------------------- Purity Supreme, Inc., 11.75% Sr. Sec. Nts., Series B, 8/1/99 50,000 41,750 ---------------- 419,289 - ----------------------------------------------------------------------------------------------------------------------------------- HEALTHCARE - 2.1% ------------------------------------------------------------------------------------------------------------------------- Icon Health & Fitness, Inc., Units (5) 200,000 197,000 ------------------------------------------------------------------------------------------------------------------------- Total Renal Care, Inc., Units 300,000 226,500 ---------------- 423,500 - ----------------------------------------------------------------------------------------------------------------------------------- FINANCIAL - 3.1% - ----------------------------------------------------------------------------------------------------------------------------------- Card Establishment Services, Inc., 10% Sr. Sub. Nts., Series B, 10/1/03 300,000 313,500 ------------------------------------------------------------------------------------------------------------------------- Citibank, 10.50% CD, 7/14/95 (7)ARA 100,000 99,994 ------------------------------------------------------------------------------------------------------------------------- Citibank, 16% CD, 3/17/95 (7)CLP 20,711,846 51,644 ------------------------------------------------------------------------------------------------------------------------- Citibank, 16% CD, 5/3/95 (7)CLP 64,500,000 160,828 ---------------- 625,966 - ----------------------------------------------------------------------------------------------------------------------------------- INDUSTRIAL - 0.4% - ----------------------------------------------------------------------------------------------------------------------------------- GENERAL INDUSTRIAL - 0.4% ------------------------------------------------------------------------------------------------------------------------- Terex Corp., 13% Sr. Nts., 8/1/96 (5) 90,000 85,275
STATEMENT OF INVESTMENTS (CONTINUED) December 31, 1994 Oppenheimer Variable Account Funds - Oppenheimer Strategic Bond Fund FACE MARKET VALUE AMOUNT (1) SEE NOTE 1 - ----------------------------------------------------------------------------------------------------------------------------------- CORPORATE BONDS AND NOTES (CONTINUED) - ----------------------------------------------------------------------------------------------------------------------------------- TECHNOLOGY - 9.4% - ----------------------------------------------------------------------------------------------------------------------------------- AEROSPACE/DEFENSE - 1.6% ------------------------------------------------------------------------------------------------------------------------- GPA Holland BV, 8.625% Medium-Term Nts., Series C, 1/15/99 (5) $ 250,000 $ 178,750 ------------------------------------------------------------------------------------------------------------------------- Talley Industries, Inc., 0%/12.25% Sr. Disc. Debs., 10/15/05 (3) 300,000 151,500 ---------------- 330,250 - ----------------------------------------------------------------------------------------------------------------------------------- CABLE TELEVISION - 3.8% ------------------------------------------------------------------------------------------------------------------------- American Telecasting, Inc., 0%/12.50% Sr. Disc. Nts., 6/15/04 (3) 200,000 90,000 ------------------------------------------------------------------------------------------------------------------------- Cablevision Systems Corp., 10.75% Sr. Sub. Debs., 4/1/04 100,000 100,500 ------------------------------------------------------------------------------------------------------------------------- Cablevision Systems Corp., 9.875% Sr. Sub. Debs., 2/15/13 100,000 90,000 ------------------------------------------------------------------------------------------------------------------------- Continental Cablevision, Inc., 11% Sr. Sub. Debs., 6/1/07 300,000 306,000 ------------------------------------------------------------------------------------------------------------------------- Echostar Communications Corp., Units 80,000 41,800 ------------------------------------------------------------------------------------------------------------------------- Marcus Cable Operating Co. LP/Marcus Capital Corp., 0%/13.50% Gtd. Sr. Sub. Disc. Nts., Series II, 8/1/04 (3) 100,000 53,000 ------------------------------------------------------------------------------------------------------------------------- Time Warner, Inc., 9.125% Debs., 1/15/13 50,000 45,856 ------------------------------------------------------------------------------------------------------------------------- Time Warner, Inc./Time Warner Entertainment LP, 8.375% Sr. Debs., 3/15/23 50,000 41,834 ---------------- 768,990 - ----------------------------------------------------------------------------------------------------------------------------------- COMMUNICATIONS - 2.9% ------------------------------------------------------------------------------------------------------------------------- Call-Net Enterprises, Inc., 0%/13.25% Sr. Disc. Nts., 12/1/04 (3) 200,000 105,000 ------------------------------------------------------------------------------------------------------------------------- Celcaribe SA, 0%/13.50% Sr. Sec. Nts., 3/15/04 (3)(5) 150,000 97,893 ------------------------------------------------------------------------------------------------------------------------- Cellular, Inc., 0%/11.75% Sr. Sub. Disc. Nts., 9/1/03 (3) 50,000 32,750 ------------------------------------------------------------------------------------------------------------------------- MFS Communications, Inc., 0%/9.375% Sr. Disc. Nts., 1/15/04 (3) 50,000 29,875 ------------------------------------------------------------------------------------------------------------------------- Mobile Telecommunications Technologies Corp., 13.50% Sr. Nts., 12/15/02 50,000 50,875 ------------------------------------------------------------------------------------------------------------------------- Panamsat LP/Panamsat Capital Corp., 9.75% Sr. Sec. Nts., 8/1/00 150,000 142,125 ------------------------------------------------------------------------------------------------------------------------- PriCellular Wireless Corp., .50%/14% Sr. Sub. Disc. Nts., 11/15/01 (5)(12) 200,000 133,000 ---------------- 591,518 - ----------------------------------------------------------------------------------------------------------------------------------- TECHNOLOGY - 1.1% ------------------------------------------------------------------------------------------------------------------------- Imax Corp., 7%/10% Sr. Nts., 3/1/01 (8) 200,000 167,000 ------------------------------------------------------------------------------------------------------------------------- Unisys Corp., 13.50% Credit Sensitive Nts., 7/1/97 50,000 54,250 ---------------- 221,250 - ----------------------------------------------------------------------------------------------------------------------------------- UTILITIES - 2.9% - ----------------------------------------------------------------------------------------------------------------------------------- Beaver Valley II Funding Corp., 9% 2nd Lease Obligation Bonds, 6/1/17 199,000 142,451 ------------------------------------------------------------------------------------------------------------------------- El Paso Funding Co., 10.75% Debs., 4/1/13 (2) 100,000 52,077 ------------------------------------------------------------------------------------------------------------------------- First PV Funding Corp., 10.30% Lease Obligation Bonds, Series 1986A, 1/15/14 200,000 183,467 ------------------------------------------------------------------------------------------------------------------------- Subic Power Corp., 9.50% Sr. Sec. Nts., Series A, 12/28/08 (5) 250,000 216,250 ---------------- 594,245 ---------------- Total Corporate Bonds and Notes (Cost $7,408,174) 6,946,160
STATEMENT OF INVESTMENTS (CONTINUED) December 31, 1994 Oppenheimer Variable Account Funds - Oppenheimer Strategic Bond Fund MARKET VALUE SHARES SEE NOTE 1 - ----------------------------------------------------------------------------------------------------------------------------------- COMMON STOCKS - 0.6% - ----------------------------------------------------------------------------------------------------------------------------------- CONSUMER CYCLICALS - 0.6% - ----------------------------------------------------------------------------------------------------------------------------------- HOTELS/MOTELS - 0.2% ------------------------------------------------------------------------------------------------------------------------- Celcaribe SA (5) 24,390 $ 28,106 - ----------------------------------------------------------------------------------------------------------------------------------- RETAIL STORES: DEPARTMENT STORES - 0.4% ------------------------------------------------------------------------------------------------------------------------- Federated Department Stores, Inc. 4,498 86,587 ---------------- Total Common Stocks (Cost $113,924) 114,693 - ----------------------------------------------------------------------------------------------------------------------------------- PREFERRED STOCKS - 4.2% - ----------------------------------------------------------------------------------------------------------------------------------- AK Steel Holding Corp., 7% Cv. Stock Appreciation Income Linked Securities 5,000 156,250 ------------------------------------------------------------------------------------------------------------------------- Atlantic Richfield Co., 9% Exchangeable Notes for Common Stock of Lyondell Petrochemical Co., 9/15/97 5,000 130,625 ------------------------------------------------------------------------------------------------------------------------- California Federal Bank, 10.625% Non-Cum., Series B 2,000 200,500 ------------------------------------------------------------------------------------------------------------------------- First Nationwide Bank, 11.50% Non-Cum. 2,000 196,000 ------------------------------------------------------------------------------------------------------------------------- Glendale Federal Bank, F.S.B., 8.75% Non-Cum. Cv., Series E 1,000 27,875 ------------------------------------------------------------------------------------------------------------------------- Kaiser Aluminum Corp., 8.255% Provisionally Redeemable Income Debt Exchangeable for Stock 3,200 34,000 ------------------------------------------------------------------------------------------------------------------------- Prime Retail, Inc., $19.00 Cv., Series B 6,000 114,000 ---------------- Total Preferred Stocks (Cost $916,622) 859,250 UNITS - ----------------------------------------------------------------------------------------------------------------------------------- RIGHTS, WARRANTS AND CERTIFICATES - 0.2% - ----------------------------------------------------------------------------------------------------------------------------------- American Telecasting, Inc. Wts., Exp. 6/99 1,000 2,250 ------------------------------------------------------------------------------------------------------------------------- Federated Department Stores, Inc. Wts., Cl. C, Exp. 12/99 2,996 15,355 ------------------------------------------------------------------------------------------------------------------------- Federated Department Stores, Inc. Wts., Cl. D, Exp. 12/01 2,996 16,853 ------------------------------------------------------------------------------------------------------------------------- Terex Corp. Rts., Exp. 7/96 (5) 36 27 ---------------- Total Rights, Warrants and Certificates (Cost $35,293) 34,485 FACE AMOUNT - ----------------------------------------------------------------------------------------------------------------------------------- STRUCTURED INSTRUMENTS - 3.1% - ----------------------------------------------------------------------------------------------------------------------------------- Argentina Local Market Securities Trust, Series 1994-II, 11.30%, 4/1/00 (5) $286,956 $244,630 ------------------------------------------------------------------------------------------------------------------------- Bayerische Landesbank, N.Y. Branch, Italian Lira/Deutsche Mark Linked Confidence Nt., Girozentrale Branch, 10%, 8/7/95 (7) 90,000 76,455 ------------------------------------------------------------------------------------------------------------------------- Lehman Brothers Holdings, Inc., 5.788% Standard & Poor's 500 Index-Linked Nts., 1/25/95 (5) 50,000 58,560 ------------------------------------------------------------------------------------------------------------------------- Morgan Guaranty Trust Co. of New York (Singapore Branch), 12.15% CD, 2/3/95 (7) 100,000 91,592 ------------------------------------------------------------------------------------------------------------------------- Swiss Bank Corporation Investment Banking, Inc., 10% CD Sterling Rate Linked Nts., 7/3/95 (7) 160,000 154,880 ---------------- Total Structured Instruments (Cost $709,157) 626,117 - ----------------------------------------------------------------------------------------------------------------------------------- TOTAL INVESTMENTS, AT VALUE (COST $21,584,405) 101.0% 20,527,457 - ----------------------------------------------------------------------------------------------------------------------------------- LIABILITIES IN EXCESS OF OTHER ASSETS (1.0) (207,142) ------ ---------------- NET ASSETS 100.0% $ 20,320,315 ------ ---------------- ------ ----------------
STATEMENT OF INVESTMENTS (CONTINUED) December 31, 1994 Oppenheimer Variable Account Funds - Oppenheimer Strategic Bond Fund - -------------------------------------------------------------------------------- 1. Face amount is reported in local currency. Foreign currency abbreviations are as follows: ARA - Argentine Austral GBP - Pound Sterling AUD - Australian Dollar IDR - Indonesian Rupiah CLP - Chilean Peso MXP - Mexican Peso ESP - Spanish Peseta NZD - New Zealand Dollar 2. Non-income producing security. 3. Represents a zero coupon bond that converts to a fixed rate of interest at a designated future date. 4. Represents the current interest for a variable rate security. 5. Restricted security - See Note 7 of Notes to Financial Statements. 6. Interest or dividend is paid in kind. 7. Indexed instrument for which the principal amount due at maturity is affected by the relative value of a foreign currency. 8. Represents the current interest rate for an increasing rate security. 9. When-issued security to be delivered and settled after December 31, 1994. 10. Securities with an aggregate market value of $402,675 are held in escrow to cover initial margin requirements on open interest rate futures sales contracts. See Note 6 of Notes to Financial Statements. 11. Securities with an aggregate market value of $1,150,500 are held in escrow to cover outstanding call options, as follows:
SHARES SUBJECT EXPIRATION EXERCISE PREMIUM MARKET VALUE TO CALL DATE PRICE RECEIVED SEE NOTE 1 - ------------------------------------------------------------------------------------------------------- European OTC Australian Dollar/U.S. Dollar 307,425 3/6/95 79.00AUD $1,600 $1,548
12. Represents a bond that pays contingent supplemental interest until it converts to a fixed rate of interest at a designated future date. See accompanying Notes to Financial Statements. STATEMENTS OF ASSETS AND LIABILITIES December 31, 1994 Oppenheimer Variable Account Funds
OPPENHEIMER OPPENHEIMER OPPENHEIMER OPPENHEIMER CAPITAL MONEY HIGH INCOME BOND APPRECIATION FUND FUND FUND FUND ---------------------------------------------------------- ASSETS: Investments, at value (cost * ) (including repurchase agreements**) - see accompanying statements $89,427,110 $94,228,680 $132,512,297 $182,918,438 Unrealized appreciation on futures contracts - Note 6 -- -- -- -- Cash 32,522 426,475 170,380 23,807 Receivables: Dividends and interest 221,806 1,814,941 2,314,374 142,370 Shares of beneficial interest sold 55,012 29,436 386,737 3,813,210 Investments sold 185,438 1,834,980 -- 2,987,756 Other 5,623 1,251 7,049 8,710 ---------------------------------------------------------- Total assets 89,927,511 98,335,763 135,390,837 189,894,291 ---------------------------------------------------------- LIABILITIES: Options written, at value (premiums received ***) - see accompanying statements - Note 4 -- -- -- -- Unrealized depreciation on forward foreign currency exchange contracts - Note 5 -- -- -- -- Payables and other liabilities: Dividends 231,446 -- -- -- Investments purchased -- 1,190,212 280,624 -- Shares of beneficial interest redeemed 8,469 1,419,562 19,613 4,077,624 Other 16,679 27,680 23,216 43,126 ---------------------------------------------------------- Total liabilities 256,594 2,637,454 323,453 4,120,750 ---------------------------------------------------------- NET ASSETS $89,670,917 $95,698,309 $135,067,384 $185,773,541 ========================================================== COMPOSITION OF NET ASSETS: Paid-in capital $89,694,620 $101,247,704 $140,125,237 $170,177,063 Undistributed (distributions in excess of) net investment income -- 1,981,784 1,832,232 711,671 Accumulated net realized gain (loss) from investment, written option and foreign currency transactions (23,703) (3,843,420) (2,398,141) (1,048,111) Net unrealized appreciation (depreciation) on investments, options written and translation of assets and liabilities denominated in foreign currencies -- (3,687,759) (4,491,944) 15,932,918 ---------------------------------------------------------- NET ASSETS $89,670,917 $95,698,309 $135,067,384 $185,773,541 ========================================================== SHARES OF BENEFICIAL INTEREST OUTSTANDING 89,694,620 9,779,151 12,527,081 7,157,574 NET ASSET VALUE, REDEMPTION PRICE AND OFFERING PRICE PER SHARE $1.00 $9.79 $10.78 $25.95 *Cost $89,427,110 $97,920,437 $137,008,816 $166,985,520 **Repurchase Agreements $2,200,000 $6,000,000 $15,700,000 $23,400,000 ***Premiums received -- -- -- --
See accompanying Notes to Financial Statements.
OPPENHEIMER OPPENHEIMER OPPENHEIMER OPPENHEIMER MULTIPLE GLOBAL STRATEGIC GROWTH STRATEGIES SECURITIES BOND FUND FUND FUND FUND ---------------------------------------------------------- ASSETS: Investments, at value (cost * ) (including repurchase agreements**) - see accompanying statements $60,267,367 $287,971,910 $297,097,313 $20,527,457 Unrealized appreciation on futures contracts - Note 6 -- -- -- 19,136 Cash 298,128 93,979 436,640 179,286 Receivables: Dividends and interest 87,998 3,351,382 405,375 355,898 Shares of beneficial interest sold 2,330,643 174,490 1,469,588 87,118 Investments sold 790,262 1,870,537 663,125 96,758 Other -- 2,303 9,748 15,259 ------------------------------------------------------- Total assets 63,774,398 293,464,601 300,081,789 21,280,912 ------------------------------------------------------- LIABILITIES: Options written, at value (premiums received ***) - see accompanying statements - Note 4 -- 481,381 -- 1,548 Unrealized depreciation on forward foreign currency exchange contracts - Note 5 -- -- 1,151,806 -- Payables and other liabilities: Dividends -- -- -- -- Investments purchased 469,945 841,544 919,245 937,797 Shares of beneficial interest redeemed 2,871 45,585 7,926 -- Other 18,408 28,887 160,891 21,252 ------------------------------------------------------- Total liabilities 491,224 1,397,397 2,239,868 960,597 ------------------------------------------------------- NET ASSETS $63,283,174 $292,067,204 $297,841,921 $20,320,315 ======================================================= COMPOSITION OF NET ASSETS: Paid-in capital $54,399,542 $280,209,466 $304,182,420 $22,014,634 Undistributed (distributions in excess of) net investment income 814,551 1,038,677 (1,069) 111,729 Accumulated net realized gain (loss) from investment, written option and foreign currency transactions 848,014 8,636,344 1,503,327 (769,757) Net unrealized appreciation (depreciation) on investments, options written and translation of assets and liabilities denominated in foreign currencies 7,221,067 2,182,717 (7,842,757) (1,036,291) ------------------------------------------------------- NET ASSETS $63,283,174 $292,067,204 $297,841,921 $20,320,315 ======================================================= SHARES OF BENEFICIAL INTEREST OUTSTANDING 3,579,510 22,619,777 19,743,343 4,418,161 NET ASSET VALUE, REDEMPTION PRICE AND OFFERING PRICE PER SHARE $17.68 $12.91 $15.09 $4.60 *Cost $53,046,300 $285,911,280 $303,776,414 $21,584,405 **Repurchase Agreements $8,000,000 $17,200,000 $33,800,000 $3,400,000 ***Premiums received -- $607,682 -- $1,600
See accompanying Notes to Financial Statements. STATEMENTS OF OPERATIONS For the Year Ended December 31, 1994 Oppenheimer Variable Account Funds
OPPENHEIMER OPPENHEIMER OPPENHEIMER OPPENHEIMER CAPITAL MONEY HIGH INCOME BOND APPRECIATION FUND FUND FUND FUND -------------------------------------------------------- INVESTMENT INCOME: Interest $4,161,100 $9,509,093 $9,585,487 $1,275,631 Dividends: Unaffiliated companies -- 418,776 14,021 376,542 Affiliated companies -- -- -- -- -------------------------------------------------------- Total income (net of withholding taxes of *) 4,161,100 9,927,869 9,599,508 1,652,173 -------------------------------------------------------- EXPENSES: Management fees - Note 8 341,324 617,198 630,514 803,231 Custodian fees and expenses 22,150 21,386 27,333 17,171 Legal and auditing fees 14,929 17,125 14,932 21,982 Trustees' fees and expenses 2,730 4,160 2,460 5,062 Registration and filing fees -- 2,422 9,189 20,451 Other 5,503 11,590 14,158 15,242 -------------------------------------------------------- Total expenses 386,636 673,881 698,586 883,139 -------------------------------------------------------- NET INVESTMENT INCOME 3,774,464 9,253,988 8,900,922 769,034 -------------------------------------------------------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS, OPTIONS WRITTEN AND FOREIGN CURRENCY TRANSACTIONS: Net realized gain (loss) on: Investments (5,168) (3,006,191) (914,480) (1,045,951) Expiration and closing of option contracts written - Note 4 -- -- -- -- Foreign currency transactions -- (683,194) (1,455,675) -- Net change in unrealized appreciation or depreciation on: Investments and options written -- (8,762,313) (8,925,071) (10,016,034) Translation of assets and liabilities denominated in foreign currencies -- 132,937 100,340 -- -------------------------------------------------------- Net realized and unrealized gain (loss) on investments, options written and foreign currency transactions (5,168) (12,318,761) (11,194,886) (11,061,985) -------------------------------------------------------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $3,769,296 ($3,064,773) ($2,293,964) ($10,292,951) ======================================================== *Withholding -- $15,178 $18,617 --
See accompanying Notes to Financial Statements.
OPPENHEIMER OPPENHEIMER OPPENHEIMER OPPENHEIMER MULTIPLE GLOBAL STRATEGIC GROWTH STRATEGIES SECURITIES BOND FUND FUND FUND FUND -------------------------------------------------------- INVESTMENT INCOME: Interest $334,611 $13,042,562 $658,349 $1,387,029 Dividends: Unaffiliated companies 835,252 2,252,337 2,445,315 32,822 Affiliated companies -- -- 10,808 -- ------------------------------------------------------- Total income (net of withholding taxes of *) 1,169,863 15,294,899 3,114,472 1,419,851 ------------------------------------------------------- EXPENSES: Management fees - Note 8 307,904 1,433,107 1,517,234 105,760 Custodian fees and expenses 11,043 60,309 280,616 4,959 Legal and auditing fees 12,605 23,706 12,597 10,666 Trustees' fees and expenses 1,962 7,454 1,890 1,419 Registration and filing fees 1,295 18,049 98,664 7,241 Other 10,078 25,155 41,397 3,649 ------------------------------------------------------- Total expenses 344,887 1,567,780 1,952,398 133,694 ------------------------------------------------------- NET INVESTMENT INCOME 824,976 13,727,119 1,162,074 1,286,157 ------------------------------------------------------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS, OPTIONS WRITTEN AND FOREIGN CURRENCY TRANSACTIONS: Net realized gain (loss) on: Investments 1,441,127 7,828,434 (558,527,187) (879,244) Expiration and closing of option contracts written - Note 4 -- 741,274 -- -- Foreign currency transactions -- 233,398 558,913,024 83,129 Net change in unrealized appreciation or depreciation on: Investments and options written (1,915,053) (27,789,525) (26,402,301) (1,105,520) Translation of assets and liabilities denominated in foreign currencies -- (400,208) 2,386,926 (15,352) ------------------------------------------------------- Net realized and unrealized gain (loss) on investments, options written and foreign currency transactions (473,926) (19,386,627) (23,629,538) (1,916,987) ------------------------------------------------------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $351,050 ($5,659,508) ($22,467,464) ($630,830) ======================================================= *Withholding -- $45,100 $141,142 $12,168
See accompanying Notes to Financial Statements. STATEMENTS OF CHANGES IN NET ASSETS Oppenheimer Variable Account Funds
OPPENHEIMER OPPENHEIMER MONEY HIGH INCOME FUND FUND ---------------------------------------------------------- 1994(1) 1993(1) 1994(1) 1993(1) ---------------------------------------------------------- OPERATIONS: Net investment income $3,774,464 $1,795,672 $9,253,988 $7,032,421 Net realized gain (loss) on investments, options written and foreign currency transactions (5,168) 972 (3,689,385) 2,870,765 Net change in unrealized appreciation or depreciation on investments, options written and translation of assets and liabilities denominated in foreign currencies -- -- (8,629,376) 4,936,980 ---------------------------------------------------------- Net increase (decrease) in net assets resulting from operations 3,769,296 1,796,644 (3,064,773) 14,840,166 NET CHANGE IN EQUALIZATION -- -- -- 1,194,413 DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS: Dividends from net investment income (3,793,971) (1,795,672) (6,580,907) (7,933,113) Distributions from net realized gain on investments, options written and foreign currency transactions -- -- (2,106,023) -- Distributions in excess of net realized gain on investments, options written and foreign currency transactions -- -- -- -- BENEFICIAL INTEREST TRANSACTIONS: Net increase (decrease) in net assets resulting from beneficial interest transactions - Note 2 28,473,973 2,954,149 14,438,679 44,092,559 ---------------------------------------------------------- NET ASSETS: Total increase (decrease) 28,449,298 2,955,121 2,686,976 52,194,025 Beginning of period 61,221,619 58,266,498 93,011,333 40,817,308 ---------------------------------------------------------- End of period $89,670,917 $61,221,619 $95,698,309 $93,011,333 ==========================================================
1. For the year ended December 31. See accompanying Notes to Financial Statements.
OPPENHEIMER OPPENHEIMER CAPITAL BOND APPRECIATION FUND FUND ---------------------------------------------------------- 1994(1) 1993(1) 1994(1) 1993(1) ---------------------------------------------------------- OPERATIONS: Net investment income $8,900,922 $6,281,918 $769,034 $221,843 Net realized gain (loss) on investments, options written and foreign currency transactions (2,370,155) 431,623 (1,045,951) 17,171,028 Net change in unrealized appreciation or depreciation on investments, options written and translation of assets and liabilities denominated in foreign currencies (8,824,731) 3,179,352 (10,016,034) 8,012,743 ----------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (2,293,964) 9,892,893 (10,292,951) 25,405,614 NET CHANGE IN EQUALIZATION -- 747,196 -- -- DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS: Dividends from net investment income (7,101,380) (6,021,196) (218,275) (173,608) Distributions from net realized gain on investments, options written and foreign currency transactions (283,274) -- (17,112,748) (3,478,465) Distributions in excess of net realized gain on investments, options written and foreign currency transactions -- -- -- -- BENEFICIAL INTEREST TRANSACTIONS: Net increase (decrease) in net assets resulting from beneficial interest transactions - Note 2 32,899,881 43,872,915 76,512,412 31,796,464 ----------------------------------------------------------- NET ASSETS: Total increase (decrease) 23,221,263 48,491,808 48,888,438 53,550,005 Beginning of period 111,846,121 63,354,313 136,885,103 83,335,098 ----------------------------------------------------------- End of period $135,067,384 $111,846,121 $185,773,541 $136,885,103 ========================================================== =
1. For the year ended December 31. See accompanying Notes to Financial Statements. STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED) Oppenheimer Variable Account Funds
OPPENHEIMER OPPENHEIMER MULTIPLE GROWTH STRATEGIES FUND FUND ---------------------------------------------------------- 1994(1) 1993(1) 1994(1) 1993(1) ---------------------------------------------------------- OPERATIONS: Net investment income $824,976 $521,913 $13,727,119 $8,871,280 Net realized gain (loss) on investments, options written and foreign currency transactions 1,441,127 (416,658) 8,803,106 3,175,446 Net change in unrealized appreciation or depreciation on investments, options written and translation of assets and liabilities denominated in foreign currencies (1,915,053) 3,377,578 (28,189,733) 17,718,371 ---------------------------------------------------------- Net increase (decrease) in net assets resulting from operations 351,050 3,482,833 (5,659,508) 29,765,097 NET CHANGE IN EQUALIZATION -- -- -- -- DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS: Dividends from net investment income (516,871) (339,216) (13,056,112) (8,601,104) Distributions from net realized gain on investments, options written and foreign currency transactions (127,540) (768,083) (1,925,053) -- Distributions in excess of net realized gain on investments, options written and foreign currency transactions -- -- -- -- BENEFICIAL INTEREST TRANSACTIONS: Net increase (decrease) in net assets resulting from beneficial interest transactions - Note 2 6,875,487 17,831,569 62,417,829 69,662,484 ----------------------------------------------------------- NET ASSETS: Total increase (decrease) 6,582,126 20,207,103 41,777,156 90,826,477 Beginning of period 56,701,048 36,493,945 250,290,048 159,463,571 ----------------------------------------------------------- End of period $63,283,174 $56,701,048 $292,067,204 $250,290,048 ========================================================== =
1. For the year ended December 31. 2. For the period from May 3, 1993 (commencement of operations) to December 31, 1993. See accompanying Notes to Financial Statements.
OPPENHEIMER OPPENHEIMER GLOBAL STRATEGIC SECURITIES BOND FUND FUND ---------------------------------------------------------- 1994(1) 1993(1) 1994(1) 1993(2) ---------------------------------------------------------- OPERATIONS: Net investment income $1,162,074 $228,462 $1,286,157 $161,471 Net realized gain (loss) on investments, options written and foreign currency transactions 385,837 2,546,181 (796,115) 23,918 Net change in unrealized appreciation or depreciation on investments, options written and translation of assets and liabilities denominated in foreign currencies (24,015,375) 16,954,257 (1,120,872) 84,581 ---------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (22,467,464) 19,728,900 (630,830) 269,970 NET CHANGE IN EQUALIZATION -- -- -- -- DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS: Dividends from net investment income (359,955) -- (1,161,570) (155,087) Distributions from net realized gain on investments, options written and foreign currency transactions (2,441,859) -- -- -- Distributions in excess of net realized gain on investments, options written and foreign currency transactions -- -- (16,802) -- BENEFICIAL INTEREST TRANSACTIONS: Net increase (decrease) in net assets resulting from beneficial interest transactions - Note 2 226,686,688 63,158,438 12,242,999 9,771,635 ---------------------------------------------------------- NET ASSETS: Total increase (decrease) 201,417,410 82,887,338 10,433,797 9,886,518 Beginning of period 96,424,511 13,537,173 9,886,518 -- ---------------------------------------------------------- End of period $297,841,921 $96,424,511 $20,320,315 $9,886,518 ==========================================================
1. For the year ended December 31. 2. For the period from May 3, 1993 (commencement of operations) to December 31, 1993. See accompanying Notes to Financial Statements. FINANCIAL HIGHLIGHTS Oppenheimer Variable Account Funds
OPPENHEIMER MONEY FUND --------------------------------------------------------------------- Year Ended December 31, 1994 1993 1992 1991 1990 --------------------------------------------------------------------- PER SHARE OPERATING DATA: Net asset value, beginning of year $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 Income from investment operations - net investment income and net realized gain on investments .04 .03 .04 .06 .08 Dividends and distributions to shareholders (.04) (.03) (.04) (.06) (.08) --------------------------------------------------------------------- Net asset value, end of year $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 ========================================================== =========== RATIOS/SUPPLEMENTAL DATA: Net assets, end of year (in thousands) $89,671 $61,221 $58,266 $58,709 $89,143 Average net assets (in thousands) $90,264 $57,654 $61,317 $75,747 $82,966 Number of shares outstanding at end of year (in thousands) 89,695 61,221 58,266 58,703 89,141 Ratios to average net assets: Net investment income 4.18% 3.12% 3.76% 5.97% 7.80% Expenses .43% .43% .50% .49% .51%
OPPENHEIMER MONEY FUND --------------------------------------------------------------------- 1989 1988 1987 1986 1985(1) --------------------------------------------------------------------- PER SHARE OPERATING DATA: Net asset value, beginning of year $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 Income from investment operations - net investment income and net realized gain on investments .09 .07 .06 .06 .05 Dividends and distributions to shareholders (.09) (.07) (.06) (.06) (.05) --------------------------------------------------------------------- Net asset value, end of year $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 ========================================================== =========== RATIOS/SUPPLEMENTAL DATA: Net assets, end of year (in thousands) $68,440 $69,468 $42,538 $28,218 $2,506 Average net assets (in thousands) $67,586 $60,241 $35,138 $12,914 $2,080 Number of shares outstanding at end of year (in thousands) 68,439 69,468 42,538 28,218 2,506 Ratios to average net assets: Net investment income 8.82% 7.31% 6.33% 5.68% 7.25%(2) Expenses .53% .55% .59% .75% .75%(2)
1. For the period from April 3, 1985 (commencement of operations) to December 31, 1985. 2. Annualized. See accompanying Notes to Financial Statements. FINANCIAL HIGHLIGHTS Oppenheimer Variable Account Funds
OPPENHEIMER HIGH INCOME FUND -------------------------------------------------------------------- Year Ended December 31, 1994 1993 1992 1991 1990 -------------------------------------------------------------------- PER SHARE OPERATING DATA: Net asset value, beginning of period $ 11.02 $ 9.74 $ 9.40 $ 7.90 $ 8.59 Income (loss) from investment operations: Net investment income .94 .82 1.19 1.28 1.21 Net realized and unrealized gain (loss) on investments, options written and foreign currency transactions (1.27) 1.65 .43 1.30 (.82) -------------------------------------------------------------------- Total income (loss) from investment operations (.33) 2.47 1.62 2.58 .39 -------------------------------------------------------------------- Dividends and distributions to shareholders: Dividends from net investment income (.66) (1.19) (1.28) (1.08) (1.08) Distributions from net realized gain on investments, options written and foreign currency transactions (.24) -- -- -- -- -------------------------------------------------------------------- Total dividends and distributions to shareholders (.90) (1.19) (1.28) (1.08) (1.08) -------------------------------------------------------------------- Net asset value, end of period $ 9.79 $ 11.02 $ 9.74 $ 9.40 $ 7.90 ========================================================== ========== TOTAL RETURN, AT NET ASSET VALUE(2) (3.18)% 26.34% 17.92% 33.91% 4.65% RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $ 95,698 $93,011 $40,817 $27,308 $19,172 Average net assets (in thousands) $101,096 $67,000 $36,861 $23,663 $21,493 Number of shares outstanding at end of period (in thousands) 9,779 8,443 4,189 2,905 2,427 Ratios to average net assets: Net investment income 9.15% 10.50% 12.08% 14.26% 14.32% Expenses .67% .68% .73% .75% .75% Portfolio turnover rate(4) 110.1% 135.7% 144.2% 108.0% 95.1%
OPPENHEIMER HIGH INCOME FUND ----------------------------------------------------- 1989 1988 1987 1986(1) ----------------------------------------------------- PER SHARE OPERATING DATA: Net asset value, beginning of period $ 9.30 $ 9.14 $ 10.04 $ 10.00 Income (loss) from investment operations: Net investment income 1.09 1.12 1.30 .72 Net realized and unrealized gain (loss) on investments, options written and foreign currency transactions (.65) .23 (.51) (.24) ----------------------------------------------------- Total income (loss) from investment operations .44 1.35 .79 .48 ----------------------------------------------------- Dividends and distributions to shareholders: Dividends from net investment income (1.08) (1.07) (1.55) (.44) Distributions from net realized gain on investments, options written and foreign currency transactions (.07) (.12) (.14) -- ----------------------------------------------------- Total dividends and distributions to shareholders (1.15) (1.19) (1.69) (.44) ----------------------------------------------------- Net asset value, end of period $ 8.59 $ 9.30 $ 9.14 $ 10.04 ===================================================== TOTAL RETURN, AT NET ASSET VALUE(2) 4.84% 15.58% 8.07% 4.73% RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $23,698 $25,551 $21,768 $14,833 Average net assets (in thousands) $26,040 $24,530 $20,637 $ 8,036 Number of shares outstanding at end of period (in thousands) 2,760 2,746 2,382 1,478 Ratios to average net assets: Net investment income 11.52% 11.94% 13.13% 11.18%(3) Expenses .75% .75% .75% .75%(3) Portfolio turnover rate(4) 78.7% 57.9% 42.1% 18.3%
1. For the period from April 30, 1986 (commencement of operations) to December 31, 1986. 2. Assumes a hypothetical initial investment on the business day before the first day of the fiscal period, with all dividends and distributions reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business day of the fiscal period. Total return information does not reflect expenses that apply at the separate account level or to related insurance products. Inclusion of these charges would reduce the total return figures for all periods shown. 3. Annualized. 4. The lesser of purchases or sales of portfolio securities for a period, divided by the monthly average of the market value of portfolio securities owned during the period. Securities with a maturity or expiration date at the time of acquisition of one year or less are excluded from the calculation. See accompanying Notes to Financial Statements. FINANCIAL HIGHLIGHTS Oppenheimer Variable Account Funds
OPPENHEIMER BOND FUND -------------------------------------------------------------------- Year Ended December 31, 1994 1993 1992 1991 1990 -------------------------------------------------------------------- PER SHARE OPERATING DATA: Net asset value, beginning of period $ 11.65 $ 10.99 $ 11.15 $ 10.33 $ 10.49 Income (loss) from investment operations: Net investment income .76 .65 .87 .95 .97 Net realized and unrealized gain (loss) on investments and foreign currency transactions (.98) .76 (.17) .80 (.18) -------------------------------------------------------------------- Total income (loss) from investment operations (.22) 1.41 .70 1.75 .79 -------------------------------------------------------------------- Dividends and distributions to shareholders: Dividends from net investment income (.62) (.75) (.86) (.93) (.95) Distributions from net realized gain on investments and foreign currency transactions (.03) -- -- -- -- -------------------------------------------------------------------- Total dividends and distributions to shareholders (.65) (.75) (.86) (.93) (.95) -------------------------------------------------------------------- Net asset value, end of period $ 10.78 $ 11.65 $ 10.99 $ 11.15 $ 10.33 ========================================================== ========== TOTAL RETURN, AT NET ASSET VALUE(2) (1.94)% 13.04% 6.50% 17.63% 7.92% RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $135,067 $111,846 $63,354 $32,762 $16,576 Average net assets (in thousands) $121,884 $ 87,215 $45,687 $22,169 $15,088 Number of shares outstanding at end of period (in thousands) 12,527 9,602 5,766 2,939 1,604 Ratios to average net assets: Net investment income 7.30% 7.20% 7.81% 8.73% 9.30% Expenses .57% .46% .56% .64% .61% Portfolio turnover rate(4) 35.1% 36.3% 41.3% 7.6% 7.4%
OPPENHEIMER BOND FUND -------------------------------------------------------------------- 1989 1988 1987 1986 1985(1) -------------------------------------------------------------------- PER SHARE OPERATING DATA: Net asset value, beginning of period $ 10.15 $ 10.19 $ 11.15 $ 11.27 $ 10.00 Income (loss) from investment operations: Net investment income .98 .94 .97 .97 .86 Net realized and unrealized gain (loss) on investments and foreign currency transactions .32 (.05) (.71) .09 .99 -------------------------------------------------------------------- Total income (loss) from investment operations 1.30 .89 .26 1.06 1.85 -------------------------------------------------------------------- Dividends and distributions to shareholders: Dividends from net investment income (.96) (.93) (1.17) (1.03) (.58) Distributions from net realized gain on investments and foreign currency transactions -- -- (.05) (.15) -- -------------------------------------------------------------------- Total dividends and distributions to shareholders (.96) (.93) (1.22) (1.18) (.58) -------------------------------------------------------------------- Net asset value, end of period $ 10.49 $ 10.15 $ 10.19 $ 11.15 $ 11.27 ========================================================== ========== TOTAL RETURN, AT NET ASSET VALUE(2) 13.32% 8.97% 2.53% 10.12% 18.82% RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $13,422 $ 9,989 $10,415 $7,377 $2,725 Average net assets (in thousands) $11,167 $11,028 $ 8,748 $4,647 $1,614 Number of shares outstanding at end of period (in thousands) 1,280 984 1,022 662 242 Ratios to average net assets: Net investment income 9.34% 9.08% 9.17% 8.71% 10.52%(3) Expenses .64% .70% .75% .75% .75%(3) Portfolio turnover rate(4) 5.4% 36.3% 5.9% 27.7% 101.3%
1. For the period from April 3, 1985 (commencement of operations) to December 31, 1985. 2. Assumes a hypothetical initial investment on the business day before the first day of the fiscal period, with all dividends and distributions reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business day of the fiscal period. Total return information does not reflect expenses that apply at the separate account level or to related insurance products. Inclusion of these charges would reduce the total return figures for all periods shown. 3. Annualized. 4. The lesser of purchases or sales of portfolio securities for a period, divided by the monthly average of the market value of portfolio securities owned during the period. Securities with a maturity or expiration date at the time of acquisition of one year or less are excluded from the calculation. See accompanying Notes to Financial Statements. FINANCIAL HIGHLIGHTS Oppenheimer Variable Account Funds
OPPENHEIMER CAPITAL APPRECIATION FUND ---------------------------------------------------------------------- Year Ended December 31, 1994 1993 1992 1991 1990 ---------------------------------------------------------------------- PER SHARE OPERATING DATA: Net asset value, beginning of period $ 31.64 $ 26.04 $ 23.24 $ 15.24 $ 20.40 Income (loss) from investment operations: Net investment income .10 .05 .06 .08 .32 Net realized and unrealized gain (loss) on investments and options written (2.22) 6.71 3.43 8.18 (3.54) ---------------------------------------------------------------------- Total income (loss) from investment operations (2.12) 6.76 3.49 8.26 (3.22) ---------------------------------------------------------------------- Dividends and distributions to shareholders: Dividends from net investment income (.04) (.06) (.14) (.26) (.53) Distributions from net realized gain on investments and options written (3.53) (1.10) (.55) -- (1.41) ---------------------------------------------------------------------- Total dividends and distributions to shareholders (3.57) (1.16) (.69) (.26) (1.94) ---------------------------------------------------------------------- Net asset value, end of period $ 25.95 $ 31.64 $ 26.04 $ 23.24 $ 15.24 ========================================================== ============ TOTAL RETURN, AT NET ASSET VALUE(3) (7.59)% 27.32% 15.42% 54.72% (16.82)% RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $185,774 $136,885 $83,335 $49,371 $23,295 Average net assets (in thousands) $153,832 $98,228 $56,371 $34,887 $24,774 Number of shares outstanding at end of period (in thousands) 7,158 4,326 3,201 2,125 1,528 Ratios to average net assets: Net investment income .50% .23% .30% .81% 1.93% Expenses .57% .47% .54% .63% .71% Portfolio turnover rate(5) 96.5% 122.8% 78.9% 122.3% 222.0%
OPPENHEIMER CAPITAL APPRECIATION FUND ---------------------------------------------------------------------- 1989 1988 1987 1986(2) 1986(1) ---------------------------------------------------------------------- PER SHARE OPERATING DATA: Net asset value, beginning of period $ 16.31 $ 14.39 $ 13.12 $ 16.21 $ 13.71 Income (loss) from investment operations: Net investment income .50 .33 .21 .12 .09 Net realized and unrealized gain (loss) on investments and options written 3.93 1.60 1.67 (1.24) 3.40 ---------------------------------------------------------------------- Total income (loss) from investment operations 4.43 1.93 1.88 (1.12) 3.49 ---------------------------------------------------------------------- Dividends and distributions to shareholders: Dividends from net investment income (.34) -- (.34) (.21) (.20) Distributions from net realized gain on investments and options written -- (.01) (.27) (1.76) (.79) ---------------------------------------------------------------------- Total dividends and distributions to shareholders (.34) (.01) (.61) (1.97) (.99) ---------------------------------------------------------------------- Net asset value, end of period $ 20.40 $ 16.31 $ 14.39 $ 13.12 $ 16.21 ========================================================== ============ TOTAL RETURN, AT NET ASSET VALUE(3) 27.57% 13.41% 14.34% (1.65)% N/A RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $27,523 $13,667 $9,692 $4,549 $3,852 Average net assets (in thousands) $21,307 $13,239 $8,598 $3,099 $2,292 Number of shares outstanding at end of period (in thousands) 1,349 838 674 347 238 Ratios to average net assets: Net investment income 3.27% 2.13% 1.68% 2.36%(4) 2.27% Expenses .68% .73% .75% 1.01%(4) 2.17% Portfolio turnover rate(5) 130.5% 128.7% 138.7% 100.1% 464.8%
1. For the year ended June 30, 1986. Operating results were achieved by Centennial Capital Appreciation Fund, a separate investment company acquired by OCAP on August 14, 1986. 2. For the six months ended December 31, 1986. Operating results prior to August 15, 1986 were achieved by Centennial Capital Appreciation Fund, a separate investment company acquired by OCAP on August 14, 1986. 3. Assumes a hypothetical initial investment on the business day before the first day of the fiscal period, with all dividends and distributions reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business day of the fiscal period. Total return information does not reflect expenses that apply at the separate account level or to related insurance products. Inclusion of these charges would reduce the total return figures for all periods shown. 4. Annualized. 5. The lesser of purchases or sales of portfolio securities for a period, divided by the monthly average of the market value of portfolio securities owned during the period. Securities with a maturity or expiration date at the time of acquisition of one year or less are excluded from the calculation. See accompanying Notes to Financial Statements. FINANCIAL HIGHLIGHTS Oppenheimer Variable Account Funds
OPPENHEIMER GROWTH FUND --------------------------------------------------------------------- Year Ended December 31, 1994 1993 1992 1991 1990 --------------------------------------------------------------------- PER SHARE OPERATING DATA: Net asset value, beginning of period $ 17.70 $ 16.96 $ 15.17 $ 12.54 $ 16.38 Income (loss) from investment operations: Net investment income .22 .46 .16 .30 .56 Net realized and unrealized gain (loss) on investments and foreign currency transactions (.05) .74 1.99 2.82 (1.79) --------------------------------------------------------------------- Total income from investment operations .17 1.20 2.15 3.12 (1.23) --------------------------------------------------------------------- Dividends and distributions to shareholders: Dividends from net investment income (.15) (.14) (.36) (.49) (.62) Distributions from net realized gain on investments and foreign currency transactions (.04) (.32) -- -- (1.99) --------------------------------------------------------------------- Total dividends and distributions to (.19) (.46) (.36) (.49) (2.61) shareholders --------------------------------------------------------------------- Net asset value, end of period $ 17.68 $ 17.70 $ 16.96 $ 15.17 $ 12.54 ========================================================== =========== TOTAL RETURN, AT NET ASSET VALUE(2) .97% 7.25% 14.53% 25.54% (8.21)% RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $63,283 $56,701 $36,494 $22,032 $15,895 Average net assets (in thousands) $59,953 $46,389 $25,750 $18,810 $17,235 Number of shares outstanding at end of period (in thousands) 3,580 3,203 2,152 1,453 1,267 Ratios to average net assets: Net investment income 1.38% 1.13% 1.36% 2.82% 4.09% Expenses .58% .50% .61% .70% .71% Portfolio turnover rate(4) 53.8% 12.6% 48.7% 133.9% 267.9%
OPPENHEIMER GROWTH FUND --------------------------------------------------------------------- 1989 1988 1987 1986 1985(1) --------------------------------------------------------------------- PER SHARE OPERATING DATA: Net asset value, beginning of period $ 13.64 $ 11.21 $ 12.53 $ 10.95 $ 10.00 Income (loss) from investment operations: Net investment income .66 .29 .20 .13 .16 Net realized and unrealized gain (loss) on investments and foreign currency transactions 2.50 2.19 .24 1.76 .79 --------------------------------------------------------------------- Total income from investment operations 3.16 2.48 .44 1.89 .95 --------------------------------------------------------------------- Dividends and distributions to shareholders: Dividends from net investment income (.35) -- (.34) (.15) -- Distributions from net realized gain on investments and foreign currency transactions (.07) (.05) (1.42) (.16) -- --------------------------------------------------------------------- Total dividends and distributions to shareholders (.42) (.05) (1.76) (.31) -- --------------------------------------------------------------------- Net asset value, end of period $ 16.38 $ 13.64 $ 11.21 $ 12.53 $ 10.95 ========================================================== =========== TOTAL RETURN, AT NET ASSET VALUE(2) 23.59% 22.09% 3.32% 17.76% 9.50% RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $19,301 $17,746 $14,692 $8,287 $ 820 Average net assets (in thousands) $18,596 $15,585 $15,121 $3,744 $ 388 Number of shares outstanding at end of period (in thousands) 1,179 1,301 1,311 661 75 Ratios to average net assets: Net investment income 3.72% 2.39% 1.56% 2.62% 4.25%(3) Expenses .70% .70% .75% .75% .75%(3) Portfolio turnover rate(4) 148.0% 132.5% 191.0% 100.9% 132.9%
1. For the period from April 3, 1985 (commencement) to December 31, 1985. 2. Assumes a hypothetical initial investment on the business day before the first day of the fiscal period, with all dividends and distributions reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business day of the fiscal period. Total return information does not reflect expenses that apply at the separate account level or to related insurance products. Inclusion of these charges would reduce the total return figures for all periods shown. 3. Annualized. 4. The lesser of purchases or sales of portfolio securities for a period, divided by the monthly average of the market value of portfolio securities owned during the period. Securities with a maturity or expiration date at the time of acquisition of one year or less are excluded from the calculation. See accompanying Notes to Financial Statements. FINANCIAL HIGHLIGHTS Oppenheimer Variable Account Funds
OPPENHEIMER MULTIPLE STRATEGIES FUND ------------------------------------------------------------------------ Year Ended December 31, 1994 1993 1992 1991 1990 ------------------------------------------------------------------------ PER SHARE OPERATING DATA: Net asset value, beginning of period $ 13.88 $ 12.47 $ 11.96 $ 10.90 $ 12.30 Income (loss) from investment operations: Net investment income .63 .55 .55 .69 .73 Net realized and unrealized gain (loss) on investments, options written and foreign currency transactions (.90) 1.41 .50 1.15 (.97) ------------------------------------------------------------------------ Total income (loss) from investment operations (.27) 1.96 1.05 1.84 (.24) ------------------------------------------------------------------------ Dividends and distributions to shareholders: Dividends from net investment income (.60) (.55) (.54) (.78) (.70) Distributions from net realized gain on investments, options written and foreign currency transactions (.10) -- -- -- (.46) ------------------------------------------------------------------------ Total dividends and distributions to shareholders (.70) (.55) (.54) (.78) (1.16) ------------------------------------------------------------------------ Net asset value, end of period $ 12.91 $ 13.88 $ 12.47 $ 11.96 $ 10.90 ========================================================== ============== TOTAL RETURN, AT NET ASSET VALUE(2) (1.95)% 15.95% 8.99% 17.48% (1.91)% RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $292,067 $250,290 $159,464 $124,634 $118,888 Average net assets (in thousands) $279,949 $199,954 $139,011 $117,000 $123,231 Number of shares outstanding at end of period (in thousands) 22,620 18,026 12,792 10,421 10,908 Ratios to average net assets: Net investment income 4.90% 4.44% 4.63% 5.95% 6.53% Expenses .56% .48% .55% .54% .55% Portfolio turnover rate(4) 31.4% 32.4% 57.8% 80.3% 99.2%
OPPENHEIMER MULTIPLE STRATEGIES FUND --------------------------------------- 1989 1988 1987(1) --------------------------------------- PER SHARE OPERATING DATA: Net asset value, beginning of period $ 11.58 $ 10.04 $ 10.00 Income (loss) from investment operations: Net investment income .73 .66 .44 Net realized and unrealized gain (loss) on investments, options written and foreign currency transactions 1.04 1.53 .07 --------------------------------------- Total income (loss) from investment operations 1.77 2.19 .51 --------------------------------------- Dividends and distributions to shareholders: Dividends from net investment income (.68) (.65) (.43) Distributions from net realized gain on investments, options written and foreign currency transactions (.37) -- (.04) --------------------------------------- Total dividends and distributions to shareholders (1.05) (.65) (.47) ======================================= Net asset value, end of period $ 12.30 $ 11.58 $ 10.04 TOTAL RETURN, AT NET ASSET VALUE(2) 15.76% 22.15% 3.97% RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $121,286 $78,386 $53,291 Average net assets (in thousands) $101,057 $64,298 $34,256 Number of shares outstanding at end of period (in thousands) 9,860 6,766 5,306 Ratios to average net assets: Net investment income 6.36% 6.18% 6.12%(3) Expenses .57% .58% .65%(3) Portfolio turnover rate(4) 66.9% 110.0% 46.9%
1. For the period from February 9, 1987 (commencement of operations) to December 31, 1987. 2. Assumes a hypothetical initial investment on the business day before the first day of the fiscal period, with all dividends and distributions reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business day of the fiscal period. Total return information does not reflect expenses that apply at the separate account level or to related insurance products. Inclusion of these charges would reduce the total return figures for all periods shown. 3. Annualized. 4. The lesser of purchases or sales of portfolio securities for a period, divided by the monthly average of the market value of portfolio securities owned during the period. Securities with a maturity or expiration date at the time of acquisition of one year or less are excluded from the calculation. See accompanying Notes to Financial Statements. FINANCIAL HIGHLIGHTS Oppenheimer Variable Account Funds
OPPENHEIMER GLOBAL SECURITIES FUND --------------------------------------------------------------------- Year Ended December 31, 1994 1993 1992 1991 1990(1) --------------------------------------------------------------------- PER SHARE OPERATING DATA: Net asset value, beginning of period $ 16.30 $ 9.57 $ 10.38 $ 10.04 $ 10.00 Income (loss) from investment operations: Net investment income .04 (.02) .07 .04 -- Net realized and unrealized gain (loss) on investments and foreign currency transactions (.96) 6.75 (.80) .30 .04 --------------------------------------------------------------------- Total income (loss) from investment operations (.92) 6.73 (.73) .34 .04 --------------------------------------------------------------------- Dividends and distributions to shareholders: Dividends from net investment income (.04) -- (.04) -- -- Distributions from net realized gain on investments and foreign currency transactions (.25) -- (.04) -- -- --------------------------------------------------------------------- Total dividends and distributions to shareholders (.29) -- (.08) -- -- --------------------------------------------------------------------- Net asset value, end of period $ 15.09 $ 16.30 $ 9.57 $ 10.38 $ 10.04 ========================================================== =========== TOTAL RETURN, AT NET ASSET VALUE(2) (5.72)% 70.32% (7.11)% 3.39% .40% RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $297,842 $96,425 $13,537 $7,339 $ 432 Average net assets (in thousands) $214,545 $31,696 $11,181 $3,990 $ 263 Number of shares outstanding at end of period (in thousands) 19,743 5,917 1,415 707 43 Ratios to average net assets: Net investment income .54% .72% 1.04% .75% .08%(3) Expenses .91% .92% 1.06% 1.32% 6.84%(3) Portfolio turnover rate(4) 70.4% 65.1% 34.1% 29.5% 0.0%
1. For the period from November 12, 1990 (commencement of operations) to December 31, 1990. 2. Assumes a hypothetical initial investment on the business day before the first day of the fiscal period, with all dividends and distributions reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business day of the fiscal period. Total return information does not reflect expenses that apply at the separate account level or to related insurance products. Inclusion of these charges would reduce the total return figures for all periods shown. 3. Annualized. 4. The lesser of purchases or sales of portfolio securities for a period, divided by the monthly average of the market value of portfolio securities owned during the period. Securities with a maturity or expiration date at the time of acquisition of one year or less are excluded from the calculation. See accompanying Notes to Financial Statements. FINANCIAL HIGHLIGHTS Oppenheimer Variable Account Funds
OPPENHEIMER STRATEGIC BOND FUND -------------------------------- Year Ended December 31, 1994 1993(1) -------------------------------- PER SHARE OPERATING DATA: Net asset value, beginning of period $ 5.12 $ 5.00 Income (loss) from investment operations: Net investment income .35 .10 Net realized and unrealized gain (loss) on investments, options written and foreign currency transactions (.54) .11 -------------------------------- Total income (loss) from investment operations (.19) .21 -------------------------------- Dividends and distributions to shareholders: Dividends from net investment income (.32) (.09) Distributions from net realized gain on investments, options written and foreign currency transactions -- -- Distributions in excess of net realized gain on investments (.01) -- -------------------------------- Total dividends and distributions to shareholders (.33) (.09) -------------------------------- Net asset value, end of period $ 4.60 $ 5.12 ================================ TOTAL RETURN, AT NET ASSET VALUE(2) (3.78)% 4.25% RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $20,320 $9,887 Average net assets (in thousands) $15,389 $4,259 Number of shares outstanding at end of period (in thousands) 4,418 1,930 Ratios to average net assets: Net investment income 8.36% 5.67%(3) Expenses .87% .96%(3) Portfolio turnover rate(4) 136.6% 10.9%
1. For the period from May 3, 1993 (commencement of operations) to December 31, 1993. 2. Assumes a hypothetical initial investment on the business day before the first day of the fiscal period, with all dividends and distributions reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business day of the fiscal period. Total return information does not reflect expenses that apply at the separate account level or to related insurance products. Inclusion of these charges would reduce the total return figures for all periods shown. 3. Annualized. 4. The lesser of purchases or sales of portfolio securities for a period, divided by the monthly average of the market value of portfolio securities owned during the period. Securities with a maturity or expiration date at the time of acquisition of one year or less are excluded from the calculation. See accompanying Notes to Financial Statements. NOTES TO FINANCIAL STATEMENTS Oppenheimer Variable Account Funds 1. SIGNIFICANT ACCOUNTING POLICIES Oppenheimer Money Fund (OMF), Oppenheimer High Income Fund (OHIF), Oppenheimer Bond Fund (OBF), Oppenheimer Capital Appreciation Fund (OCAP), Oppenheimer Growth Fund (OGF), Oppenheimer Multiple Strategies Fund (OMSF), Oppenheimer Global Securities Fund (OGSF) and Oppenheimer Strategic Bond Fund (OSBF) (collectively, the Funds) are separate series of Oppenheimer Variable Account Funds (the Trust), a diversified, open-end management investment company registered under the Investment Company Act of 1940, as amended. The Trust's investment advisor is Oppenheimer Management Corporation (the Manager). The following is a summary of significant accounting policies consistently followed by the Funds. INVESTMENT VALUATION. Portfolio securities of OMF are valued on the basis of amortized cost, which approximates market value. Portfolio securities of OHIF, OBF, OCAP, OGF, OMSF, OGSF and OSBF are valued at 4:00 p.m. (New York time) on each trading day. Listed and unlisted securities for which such information is regularly reported are valued at the last sale price of the day or, in the absence of sales, at values based on the closing bid or asked price or the last sale price on the prior trading day. Long-term debt securities are valued by a portfolio pricing service approved by the Board of Trustees. Long-term debt securities which cannot be valued by the approved portfolio pricing service are valued using dealer-supplied valuations provided the Manager is satisfied that the firm rendering the quotes is reliable and that the quotes reflect current market value, or under consistently applied procedures established by the Board of Trustees to determine fair value in good faith. Short-term debt securities having a remaining maturity of 60 days or less are valued at cost (or last determined market value) adjusted for amortization to maturity of any premium or discount. Options are valued based upon the last sale price on the principal exchange on which the option is traded or, in the absence of any transactions that day, the value is based upon the last sale on the prior trading date if it is within the spread between the closing bid and asked prices. If the last sale price is outside the spread, the closing bid or asked price closest to the last reported sale price is used. Forward foreign currency exchange contracts (forward contracts) are valued at the closing price on the London foreign exchange market on a daily basis. SECURITY CREDIT RISK. OHIF, OMSF and OSBF invest in high yield securities, which may be subject to a greater degree of credit risk, greater market fluctuations and risk of loss of income and principal, and may be more sensitive to economic conditions than lower yielding, higher rated fixed income securities. The Funds may acquire securities in default, and are not obligated to dispose of securities whose issuers subsequently default. At December 31, 1994, securities with an aggregate market value of $4,260,529 for OHIF, $561,000 for OMSF and $52,077 for OSBF, representing 4.45%, 1.92% and .25% respectively, of the Funds' total assets, were in default. FOREIGN CURRENCY TRANSLATION. The accounting records of the Funds are maintained in U.S. dollars. Prices of securities purchased by OHIF, OBF, OGF, OMSF, OGSF and OSBF that are denominated in foreign currencies are translated into U.S. dollars at the closing rates of exchange. Amounts related to the purchase and sale of securities and investment income are translated at the rates of exchange prevailing on the respective dates of such transactions. The effect of changes in foreign currency exchange rates on investments is separately identified from fluctuations arising from changes in market values of securities held and reported with all other foreign currency gains and losses in the Funds' results of operations. REPURCHASE AGREEMENTS. The Funds require the custodian to take possession, to have legally segregated in the Federal Reserve Book Entry System or to have segregated within the custodian's vault, all securities held as collateral for repurchase agreements. The market value of the underlying securities is required to be at least 102% of the resale price at the time of purchase. If the seller of the agreement defaults and the value of the collateral declines, or if the seller enters an insolvency proceeding, realization of the value of the collateral by the Funds may be delayed or limited. FEDERAL INCOME TAXES. The Trust intends for each Fund to continue to comply with provisions of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its taxable income, including any net realized gain on investments not offset by loss carryovers, to shareholders. Therefore, no federal income tax provision is required. At December 31, 1994, the following Funds had available for federal income tax purposes unused capital loss carryovers expiring in 2002: OMF -- $5,000 OHIF -- $1,231,000 OBF -- $275,000 OSBF -- $596,000
NOTES TO FINANCIAL STATEMENTS (Continued) Oppenheimer Variable Account Funds EQUALIZATION. Prior to September 25, 1993, OHIF and OBF followed the accounting practice of equalization, by which a portion of the proceeds from sales and costs of redemptions of Fund shares equivalent on a per share basis to the amount of undistributed net investment income were credited or charged to undistributed income. The cumulative effect of the change in accounting practice resulted in a reclassification for OHIF and OBF of $2,119,310 and $1,577,200, respectively, from undistributed net investment income to paid-in capital. DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions to shareholders of OHIF, OBF, OCAP, OGF, OMSF, OGSF and OSBF are recorded on the ex-dividend date. OMF intends to declare dividends from net investment income each day the New York Stock Exchange is open for business and pay such dividends monthly. To effect its policy of maintaining a net asset value of $1.00 per share, OMF may withhold dividends or make distributions of net realized gains. CHANGE IN ACCOUNTING CLASSIFICATION OF DISTRIBUTIONS TO SHAREHOLDERS. Net investment income (loss) and net realized gain (loss) may differ for financial statement and tax purposes primarily because of premium amortization, paydown gains and losses and the recognition of certain foreign currency gains (losses) as ordinary income (loss) for tax purposes. The character of the distributions made during the 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 dividend distributions, the fiscal year in which amounts are distributed may differ from the year that the income or realized gain (loss) were recorded by the Funds. Effective January 1, 1994, the Funds adopted Statement of Position 93-2: Determination, Disclosure, and Financial Statement Presentation of Income, Capital Gain, and Return of Capital Distributions by Investment Companies. As a result, the Funds changed the classification of distributions to shareholders to better disclose the differences between financial statement amounts and distributions determined in accordance with income tax regulations. These changes, as well as similar changes in classification made during the fiscal year ending December 31, 1994 are shown below:
Cumulative Adjustments as of Adjustments for the Fiscal Year Ended December 31, 1993 December 31, 1994 - ----------------------------------------------------------------------------------------------------------------------- Undistributed Undistributed Undistributed Undistributed Net Net Net Net Investment Realized Paid-in Investment Realized Paid-in Income Gains/(Losses) Capital Income Gains/(Losses) Capital - ----------------------------------------------------------------------------------------------------------------------- Oppenheimer High Income Fund $203,008 $(293,507) $ 90,499 $(368,824) $368,824 -- - ----------------------------------------------------------------------------------------------------------------------- Oppenheimer Bond Fund (39,100) 474,282 (435,182) 10,134 (10,134) -- - ----------------------------------------------------------------------------------------------------------------------- Oppenheimer Capital Appreciation Fund (20,604) 14,186 6,418 (52,642) 52,642 -- - ----------------------------------------------------------------------------------------------------------------------- Oppenheimer Growth Fund (15,808) 15,808 -- (2,011) 2,011 -- - ----------------------------------------------------------------------------------------------------------------------- Oppenheimer Multiple Strategies Fund (203,319) 247,718 (44,399) (27,187) 27,187 -- - ----------------------------------------------------------------------------------------------------------------------- Oppenheimer Global Securities Fund 10,825 80,207 (91,032) (1,153,447) 1,153,447 -- - ----------------------------------------------------------------------------------------------------------------------- Oppenheimer Strategic Bond Fund 7,021 (7,021) -- (26,263) 26,263 -- - -----------------------------------------------------------------------------------------------------------------------
OTHER. Investment transactions are accounted for on the date the investments are purchased or sold (trade date) and dividend income is recorded on the ex-dividend date. Discount on securities purchased by OHIF, OBF, OCAP, OGF, OMSF, OGSF and OSBF is amortized over the life of the respective securities, in accordance with federal income tax requirements. Realized gains and losses on investments and unrealized appreciation and depreciation are determined on an identified cost basis, which is the same basis used for federal income tax purposes. Dividends in kind are recognized as income on the ex-dividend date, at the current market value of the underlying security. Interest on payment-in-kind debt instruments is accrued as income at the coupon rate and a market adjustment is made on the ex-date. NOTES TO FINANCIAL STATEMENTS (Continued) Oppenheimer Variable Account Funds 2. SHARES OF BENEFICIAL INTEREST The Funds have authorized an unlimited number of no par value shares of beneficial interest. Transactions in shares of beneficial interest were as follows:
OPPENHEIMER MONEY FUND ------------------------------------------------------------------ YEAR ENDED YEAR ENDED DECEMBER 31, 1994 DECEMBER 31, 1993 ------------------------------------------------------------------ SHARES AMOUNT SHARES AMOUNT ------------------------------------------------------------------ Sold 175,917,558 $175,917,558 102,985,240 $102,985,240 Dividends and distributions reinvested 3,640,684 3,640,684 1,805,107 1,805,107 Redeemed (151,084,269) (151,084,269) (101,836,198) (101,836,198) ------------------------------------------------------------------ Net increase 28,473,973 $ 28,473,973 2,954,149 $ 2,954,149 ========================================================== ========
OPPENHEIMER HIGH INCOME FUND ------------------------------------------------------------------ YEAR ENDED YEAR ENDED DECEMBER 31, 1994 DECEMBER 31, 1993 ------------------------------------------------------------------ SHARES AMOUNT SHARES AMOUNT ------------------------------------------------------------------ Sold 9,936,582 $81,477,904 10,942,819 $113,254,844 Dividends and distributions reinvested 841,101 8,686,931 743,446 7,814,552 Redeemed (9,441,490) (75,726,156) (7,432,492) (76,976,837) -------------------------------------------------------------------- Net increase 1,336,193 $14,438,679 4,253,773 $ 44,092,559 ========================================================== ==========
OPPENHEIMER BOND FUND ------------------------------------------------------------------ YEAR ENDED YEAR ENDED DECEMBER 31, 1994 DECEMBER 31, 1993 ------------------------------------------------------------------ SHARES AMOUNT SHARES AMOUNT ------------------------------------------------------------------ Sold 5,002,623 $ 56,466,171 4,694,025 $ 53,668,794 Dividends and distributions reinvested 666,678 7,384,654 518,084 5,957,407 Redeemed (2,744,016) (30,950,944) (1,375,924) (15,753,286) -------------------------------------------------------------------- Net increase 2,925,285 $ 32,899,881 3,836,185 $ 43,872,915 ========================================================== ==========
OPPENHEIMER CAPITAL APPRECIATION FUND ------------------------------------------------------------------ YEAR ENDED YEAR ENDED DECEMBER 31, 1994 DECEMBER 31, 1993 ------------------------------------------------------------------ SHARES AMOUNT SHARES AMOUNT ------------------------------------------------------------------ Sold 7,912,557 $ 173,453,586 4,925,361 $ 134,864,285 Dividends and distributions reinvested 614,575 17,331,023 151,099 3,652,073 Redeemed (5,695,411) (114,272,197) (3,951,312) (106,719,894) -------------------------------------------------------------------- Net increase 2,831,721 $ 76,512,412 1,125,148 $ 31,796,464 ========================================================== ==========
NOTES TO FINANCIAL STATEMENTS (Continued) Oppenheimer Variable Account Funds 2. SHARES OF BENEFICIAL INTEREST (Continued)
OPPENHEIMER GROWTH FUND ----------------------------------------------------------- YEAR ENDED YEAR ENDED DECEMBER 31, 1994 DECEMBER 31, 1993 ----------------------------------------------------------- SHARES AMOUNT SHARES AMOUNT ----------------------------------------------------------- Sold 2,577,268 $ 45,230,951 3,164,464 $ 53,547,991 Dividends and distributions reinvested 36,305 644,411 66,987 1,107,299 Redeemed (2,236,767) (38,999,875) (2,180,502) (36,823,721) ---------------------------------------------------------- Net increase 376,806 $ 6,875,487 1,050,949 $ 17,831,569 ==========================================================
OPPENHEIMER MULTIPLE STRATEGIES FUND ----------------------------------------------------------- YEAR ENDED YEAR ENDED DECEMBER 31, 1994 DECEMBER 31, 1993 ----------------------------------------------------------- SHARES AMOUNT SHARES AMOUNT ----------------------------------------------------------- Sold 9,807,084 $ 84,443,396 6,332,739 $ 84,477,261 Dividends and distributions reinvested 1,140,244 14,981,165 644,161 8,601,104 Redeemed (6,353,523) (37,006,732) (1,742,975) (23,415,881) ------------------------------------------------------------- Net increase 4,593,805 $ 62,417,829 5,233,925 $ 69,662,484 ========================================================== ===
OPPENHEIMER GLOBAL SECURITIES FUND -------------------------------------------------------------- YEAR ENDED YEAR ENDED DECEMBER 31, 1994 DECEMBER 31, 1993 -------------------------------------------------------------- SHARES AMOUNT SHARES AMOUNT -------------------------------------------------------------- Sold 22,151,454 $ 336,310,887 4,921,273 $ 68,947,505 Dividends and distributions reinvested 178,687 2,801,813 -- -- Redeemed (8,503,911) (112,426,012) (419,042) (5,789,067) -------------------------------------------------------------- Net increase 13,826,230 $ 226,686,688 4,502,231 $ 63,158,438 ========================================================== ====
OPPENHEIMER STRATEGIC BOND FUND -------------------------------------------------------------- YEAR ENDED YEAR ENDED DECEMBER 31, 1994 DECEMBER 31, 1993 -------------------------------------------------------------- SHARES AMOUNT SHARES AMOUNT -------------------------------------------------------------- Sold 3,749,500 $18,415,292 2,316,566 $ 11,749,598 Dividends and distributions reinvested 247,485 1,178,372 30,366 155,087 Redeemed (1,508,782) (7,350,665) (416,974) (2,133,050) -------------------------------------------------------------- Net increase 2,488,203 $12,242,999 1,929,958 $ 9,771,635 ========================================================== ====
1. For the period from May 3, 1993 (commencement of operations) to December 31, 1993. NOTES TO FINANCIAL STATEMENTS (Continued) Oppenheimer Variable Account Funds 3. UNREALIZED GAINS AND LOSSES ON INVESTMENTS AND OPTIONS WRITTEN At December 31, 1994, net unrealized appreciation or depreciation on investments and options written consisted of the following:
OPPENHEIMER OPPENHEIMER OPPENHEIMER OPPENHEIMER CAPITAL OPPENHEIMER MULTIPLE HIGH INCOME BOND APPRECIATION GROWTH STRATEGIES FUND FUND FUND FUND FUND ------------------------------------------------------------------------------------- Gross appreciation $ 2,552,277 $ 998,839 $23,149,613 $ 9,180,511 $ 24,352,704 Gross depreciation (6,244,151) (5,495,358) (7,216,695) (1,959,444) (22,166,686) ------------------------------------------------------------------------------------- Net unrealized appreciation (depreciation) $(3,691,874) $(4,496,519) $15,932,918 $ 7,221,067 $ 2,186,018 ------------------------------------------------------------------------------------- ------------------------------------------------------------------------------------- Purchases and sales of investment securities (excluding short-term securities) for the year ended December 31, 1994 were as follows: Purchases $112,258,989 $66,764,507 $179,543,692 $31,787,923 $144,299,360 ========================================================== ========================== Sales $100,322,621 $34,324,730 $127,358,246 $28,013,126 $ 82,139,044 ========================================================== ==========================
OPPENHEIMER OPPENHEIMER GLOBAL SECURITIES STRATEGIC BOND FUND FUND ------------------------------------------------------------------------------------- Gross appreciation $ 19,078,105 $ 124,895 Gross depreciation (26,920,862) (1,162,656) --------------------------------- Net unrealized appreciation (depreciation) $ (7,842,757) $ (1,037,761) ================================= Purchases and sales of investment securities (excluding short-term securities) for the year ended December 31, 1994 were as follows: Purchases $342,349,671 $29,385,446 ================================ Sales $141,562,451 $19,880,751 ================================
NOTES TO FINANCIAL STATEMENTS (Continued) Oppenheimer Variable Account Funds 4. OPTION ACTIVITY OHIF, OCAP, OGF, OMSF, OGSF and OSBF may buy and sell put and call options, or write covered call options on portfolio securities in order to produce incremental earnings or protect against changes in the value of portfolio securities. The Funds generally purchase put options or write covered call options to hedge against adverse movements in the value of portfolio holdings. When an option is written, the Funds receive a premium and become obligated to sell or purchase the underlying security at a fixed price, upon exercise of the option. The Funds segregate assets to cover their obligations under option contracts. Options are valued daily based upon the last sale price on the principal exchange on which the option is traded and unrealized appreciation or depreciation is recorded. The Funds will realize a gain or loss upon the expiration or closing of the option transaction. When an option is exercised, the proceeds on sales for a written call option, the purchase cost for a written put option, or the cost of the security for a purchased put or call option is adjusted by the amount of premium received or paid. In this report, securities segregated to cover outstanding call options are noted in the Statement of Investments. Shares subject to call, expiration date, exercise price, premium received and market value are detailed in a footnote to the Statement of Investments where applicable. Options written are reported as a liability in the Statement of Assets and Liabilities. Gains and losses are reported in the Statement of Operations. The risk in writing a call option is that the Funds give up the opportunity for profit if the market price of the security increases and the option is exercised. The risk in writing a put option is that the Funds may incur a loss if the market price of the security decreases and the option is exercised. The risk in buying an option is that the Funds pay a premium whether or not the option is exercised. The Funds also have the additional risk of not being able to enter into a closing transaction if a liquid secondary market does not exist. OHIF option activity for the period ended December 31, 1994 was as follows:
CALL OPTIONS ---------------------- NUMBER OF AMOUNT OF OPTIONS PREMIUMS ---------------------- Options outstanding at December 31, 1993 -- -- Options written 39,741 $ 50,381 Options cancelled in closing purchase transactions (39,741) (50,381) Options expired prior to exercise -- -- Options exercised -- -- ---------------------- Options outstanding at December 31, 1994 -- $ -- ======================
OCAP option activity for the period ended December 31, 1994 was as follows:
CALL OPTIONS ---------------------- NUMBER OF AMOUNT OF OPTIONS PREMIUMS ---------------------- Options outstanding at December 31, 1993 -- -- Options written 250 $ 200,618 Options cancelled in closing purchase transactions (250) (200,618) Options expired prior to exercise -- -- Options exercised -- -- ---------------------- Options outstanding at December 31, 1994 -- $ -- ======================
NOTES TO FINANCIAL STATEMENTS (Continued) Oppenheimer Variable Account Funds OMSF option activity for the year ended December 31, 1994 was as follows:
CALL OPTIONS ------------------------- NUMBER OF AMOUNT OF OPTIONS PREMIUMS ------------------------- Options outstanding at December 31, 1993 2,385 $ 654,848 Options written 4,394 1,285,996 Options cancelled in closing purchase transactions (1,425) (487,059) Options expired prior to exercise (1,932) (495,481) Options exercised (1,167) (350,622) ------------------------- Options outstanding at December 31, 1994 2,255 $ 607,682 ------------------------- -------------------------
OSBF option activity for the year ended December 31, 1994 was as follows:
PUT OPTIONS ------------------------- NUMBER OF AMOUNT OF OPTIONS PREMIUMS ------------------------- Options outstanding at December 31, 1993 -- $ -- Options written 279,064 4,348 Options cancelled in closing transactions -- -- Options expired prior to exercise (279,064) (4,348) Options exercised -- -- ------------------------- Options outstanding at December 31, 1994 -- $ -- ------------------------- -------------------------
CALL OPTIONS ------------------------- NUMBER OF AMOUNT OF OPTIONS PREMIUMS ------------------------- Options outstanding at December 31, 1993 -- $ -- Options written 1,288,535 26,046 Options cancelled in closing transactions (1,288,223) (16,321) Options expired prior to exercise (5) (8,125) Options exercised -- -- ------------------------- Options outstanding at December 31, 1994 307 $ 1,600 ------------------------- -------------------------
5. FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS A forward foreign currency exchange contract (forward contract) is a commitment to purchase or sell a foreign currency at a future date, at a negotiated rate. OHIF, OGSF and OSBF use forward contracts to seek to manage foreign currency risks. They may also be used to tactically shift portfolio currency risk. The Funds generally enter into forward contracts as a hedge upon the purchase or sale of a security denominated in a foreign currency. In addition, the Funds may enter into such contracts as a hedge against changes in foreign currency exchange rates on portfolio positions. Forward contracts are valued at the closing price on the London foreign exchange market on a daily basis. The Funds will realize a gain or loss upon the closing or settlement of the forward transaction. In this report, securities segregated to cover net exposure on outstanding forward contracts are noted in the Statement of Investments where applicable. Gains and losses on outstanding contracts (unrealized appreciation or depreciation on forward contracts) are reported in the Statement of Assets and Liabilities. Realized gains and losses are reported with all other foreign currency gains and losses in the Funds' results of operations. NOTES TO FINANCIAL STATEMENTS (Continued) Oppenheimer Variable Account Funds Risks include the potential inability of the counterparty to meet the terms of the contract and unanticipated movements in the value of a foreign currency relative to the U.S. dollar. At December 31, 1994, outstanding forward contracts to sell foreign currencies were as follows: OPPENHEIMER GLOBAL SECURITIES FUND
UNREALIZED EXPIRATION CONTRACT VALUATION AS OF APPRECIATION CONTRACTS TO SELL DATE AMOUNT DECEMBER 31, (DEPRECIATION) 1994 - -------------------------------------------------------------------------------- Austrian Schilling 1/30/95 $ 6,000,000 $ 6,104,867 $ (104,867) British Pound 1/30/95 7,800,000 7,895,404 (95,404) Deutsche Mark 1/30/95 11,000,000 11,190,341 (190,341) Finnish Markka 1/30/95 3,000,000 3,012,855 (12,855) French Franc 1/30/95 8,400,000 8,564,740 (164,740) Italian Lira 1/30/95 2,500,000 2,527,596 (27,596) Netherlands Guilder 1/30/95 6,000,000 6,104,844 (104,844) Norwegian Krone 1/30/95 6,800,000 6,916,652 (116,652) Portuguese Escudo 1/30/95 7,000,000 7,130,583 (130,583) Spanish Peseta 1/30/95 2,500,000 2,530,139 (30,139) Swedish Krona 1/30/95 13,783,574 13,879,376 (95,802) Swiss Franc 1/30/95 4,307,443 4,385,426 (77,983) -------------------------------------------- $79,091,017 $80,242,823 $(1,151,806) ============================================
6. FUTURES CONTRACTS OHIF, OGSF and OSBF may buy and sell interest rate futures contracts in order to gain exposure to or protect against changes in interest rates. The Funds may also buy or write put or call options on these futures contracts. The Funds generally sell futures contracts to hedge against increases in interest rates and the resulting negative effect on the value of fixed rate portfolio securities. The Funds may also purchase futures contracts to gain exposure to changes in interest rates as it may be more efficient or cost effective than actually buying fixed income securities. The Funds will segregate assets to cover their commitments under futures contracts. Upon entering into a futures contract, the Funds are required to deposit either cash or securities in an amount (initial margin) equal to a certain percentage of the contract value. Subsequent payments (variation margin) are made or received by the Funds each day. The variation margin payments are equal to the daily changes in the contract value and are recorded as unrealized gains and losses. The Funds recognize a realized gain or loss when the contract is closed or expires. NOTES TO FINANCIAL STATEMENTS (Continued) Oppenheimer Variable Account Funds In this report, the number of open futures contracts, face amount, market value and unrealized gain or loss are reported in a footnote to the Statement of Investments. In addition, securities segregated to cover initial margin requirements on open futures contracts are noted in the Statement of Investments. Gains and losses (unrealized appreciation or depreciation on futures contracts) are reported in the Statement of Assets and Liabilities. Risks of entering into futures contracts (and related options) include the possibility that there may be an illiquid market and that a change in the value of the contract or option may not correlate with changes in the value of the underlying securities. At December 31, 1994, outstanding futures contracts to purchase and sell debt securities were as follows: OPPENHEIMER STRATEGIC BOND FUND
UNREALIZED EXPIRATION NUMBER OF VALUATION AS OF APPRECIATION CONTRACTS TO PURCHASE DATE CONTRACTS DECEMBER 31, 1994 (DEPRECIATION) - ------------------------------------------------------------------------------------------- German 10 Year Bond 3/95 25 $3,592,705 $(21,919) -------------------------------------------------- CONTRACTS TO SELL - ----------------------- French 10 Year Bond 3/95 38 3,912,655 41,055 -------------------------------------------------- (13) $ (319,950) $ 19,136 ==================================================
7. RESTRICTED SECURITIES The following Funds own securities purchased in private placement transactions, without registration under the Securities Act of 1933 (the Act). The securities are valued under methods approved by the Board of Trustees as reflecting fair value. Each Fund intends to invest no more than 10% of its net assets (determined at the time of purchase) in restricted and illiquid securities, excluding securities eligible for resale pursuant to Rule 144A of the Act that are determined to be liquid by the Board of Trustees or by the Manager under Board-approved guidelines. Illiquid and/or restricted securities, including those restricted securities that are transferable under Rule 144A of the Act are listed below. Oppenheimer High Income Fund
VALUATION ACQUISITION COST AS OF SECURITY DATE PER UNIT DECEMBER 31, 1994 - ---------------------------------------------------------------------------------------------------------------------------- Argentina Local Market Securities Trust, Series 1994-II, 11.30%, 4/1/00(1) 8/24/94 $ 100.00 $ 85.25 Berg Electronics Holdings Corp.(1) 4/28/93-8/11/93 $ 1.19 $ 4.50 Brazil (Federal Republic of) Bonds, 10.375%, 11/6/95(1) 4/26/93 $ 99.80 $ 99.00 Celcaribe SA(1) 5/17/94 $ 1.19 $ 1.15 Celcaribe SA, 0%/13.50% Sr. Sec. Nts., 03/15/04(1) 5/17/94 $ 60.78 $ 65.26 Dell Computer Corp., $7.00 Cv., Series A(1) 8/19/93-1/24/94 $ 103.11 $ 172.50 ECM Fund L.P.I. 4/14/92 $1,000.00 $1,000.00 ECM Fund L.P.I., 14% Sub. Nts., 6/10/02 4/14/92 $ 100.00 $ 110.00 GPA Holland, 9.50% Medium-Term Nts., Series A, 12/15/01 1/27/94 $ 79.96 $ 66.50 Gillett Holdings, Inc., Cl. 1 12/1/92 $ 10.50 $ 19.63 GSPI Corp., 10.15% Fst. Mtg. Bonds, 6/24/10(1) 1/29/93 $ 102.40 $ 106.13 Hillsborough Holding Corp., 7.50% Participation Agreement, 12/30/99 1/6/94 $ 128.50 $ 157.50 Icon Health & Fitness, Units(1) 11/4/94 $ 98.77 $ 98.50 Lehman Brothers Holdings, Inc., Standard & Poor's 500 Index-Linked Nts., 5.788%, 1/25/95 11/22/94 $ 144.40 $ 117.12 Merrill Lynch & Co., Inc., Standard & Poor's 500 Index-Linked Nts., 5.60%, 2/6/95 11/28/94 $ 143.80 $ 116.99 Mary Kay Corp., 12.75% Gtd. Sr. Nts., Series B, 12/6/00 12/11/92-3/22/93 $ 106.50 $ 104.50 PriCellular Wireless Corp., .50%/14% Sr. Sub. Disc. Nts., 11/15/01(1) 11/17/94 $ 66.83 $ 66.50 Purity Supreme, Inc. Wts., Exp. 8/97 7/29/92 $ 0.00 $ .02 Residential Funding Corp. Mtg. Pass-Through Certificates, 7.97%, Series 1993-J2, Cl. B1, 6/15/23(1) 6/29/93 $ 83.97 $ 70.95 SD Warren Co., 12% Sr. Sub. Nts., 12/15/04(1) 12/13/94 $ 100.00 $ 103.00 Subic Power Corp., 9.50% Sr. Sec. Nts., Series A, 12/28/08(1) 12/20/93 $ 99.93 $ 86.50 Terex Corp. Rts., Exp. 7/96(1) 6/29/94 $ 4.00 $ 0.75
NOTES TO FINANCIAL STATEMENTS (Continued) Oppenheimer Variable Account Funds Oppenheimer High Income Fund (Continued)
VALUATION ACQUISITION COST AS OF SECURITY DATE PER UNIT DECEMBER 31, 1994 - ---------------------------------------------------------------------------------------------------------------------------- Terex Corp., 13% Nts., 8/1/96(1) 10/19/94-11/15/94 $ 97.18 $91.74 Triangle Wire & Cable, Inc. 5/2/94 $ 9.50 $ 4.00 Tribasa Toll Road Trust, 10.50% Nts., Series 1993-A, 12/1/11(1) 11/8/93 $100.00 $86.50
Restricted and illiquid securities, excluding securities eligible for resale pursuant to Rule 144A of the Act amount to $4,206,558 or 4.4% of the Fund's net assets, at December 31, 1994. 1. Transferable under Rule 144A of the Act. Oppenheimer Bond Fund
VALUATION PER UNIT ACQUISITION COST AS OF SECURITY DATE PER UNIT DECEMBER 31, 1994 - ---------------------------------------------------------------------------------------------------------------------------- Corporacion Andina de Fomento Bonds, 6.625%, 10/14/98(1) 9/24/93 $ 99.95 $ 90.00 Corporacion Andina de Fomento Nts., 7.25%, 4/30/98(1) 4/16/93 $ 99.38 $ 91.88 Czechoslovakia National Bank Bonds, 7%, 4/6/96(1) 3/11/93 $ 99.93 $ 98.81 GSPI Corp., 10.15% Fst. Mtg. Bonds, 6/24/10(1) 1/29/93 $102.38 $106.13 FDIC Trust, Series 1994-C1, Cl. 2-D, 8.70%, 9/25/25 8/11/94 $ 98.00 $ 95.13 FDIC Trust, Series 1994-C1, Cl. 2-E, 8.70%, 9/25/25 8/11/94 $ 94.88 $ 91.66
Restricted and illiquid securities, excluding securities eligible for resale pursuant to Rule 144A of the Act amount to $2,801,719 or 2.1% of the Fund's net assets, at December 31, 1994. 1. Transferable under Rule 144A of the Act. Oppenheimer Capital Appreciation Fund
VALUATION ACQUISITION COST AS OF SECURITY DATE PER UNIT DECEMBER 31, 1994 - ---------------------------------------------------------------------------------------------------------------------------- Intelcom Group, Inc., 7% Cv. Sub. Nts., 10/30/98 11/2/93-10/28/94 $ 99.04 $ 80.44 Medaphis Corp., 6.50% Cv. Sub. Nts., 1/1/00(1) 12/22/92 $100.00 $167.25 PerSeptive Biosystems, Inc., 8.25% Cv. Sub. Debs., 8/15/01 8/19/94 $100.00 $ 68.50 Sierra On-Line, Inc., 6.50% Cv. Sub. Nts., 4/1/01(1) 11/16/94 $106.00 $127.50
Restricted and illiquid securities, excluding securities eligible for resale pursuant to Rule 144A of the Act amount to $1,545,666 or .83% of the Fund's net assets, at December 31, 1994. 1. Transferable under Rule 144A of the Act. Oppenheimer Multiple Strategies Fund
VALUATION ACQUISITION COST AS OF SECURITY DATE PER UNIT DECEMBER 31, 1994 - ---------------------------------------------------------------------------------------------------------------------------- Central Puerto SA, ADR(1) 7/20/94-7/22/94 $ 31.81 $24.75 PerSeptive Biosystems, Inc., 8.25% Cv. Sub. Debs., 8/15/01 8/19/94 $100.00 $68.50 PriCellular Wireless Corp., .50%/14% Sr. Sub. Disc. Nts., 11/15/01(1) 11/17/94 $ 67.00 $66.50 Samsung Electronics Co, GDR(1) 8/18/94 $ 38.28 $46.50 Santa Anita Realty Enterprises, Inc., Units 5/28/93-11/29/93 $ 17.96 $13.75 Turkiye Garanti Bankasi AS, Sponsored ADR(1) 7/20/94-7/22/94 $ 2.20 $ 2.53 YuKong Ltd., GDR(1) 9/29/94 $ 24.95 $15.75 YuKong Ltd., GDR(1) 10/18/94-12/22/94 $ 16.75 $15.00
Restricted and illiquid securities, excluding securities eligible for resale pursuant to Rule 144A of the Act amount to $755,000 or .26% of the Fund's net assets, at December 31, 1994. 1. Transferable under Rule 144A of the Act. NOTES TO FINANCIAL STATEMENTS (Continued) Oppenheimer Variable Account Funds Oppenheimer Global Securities Fund
VALUATION ACQUISITION COST AS OF SECURITY DATE PER UNIT DECEMBER 31, 1994 - ---------------------------------------------------------------------------------------------------------------------------- Capex SA, GDR(1) 6/13/94 $ 20.00 $ 16.38 Carulla SA(1) 6/23/94 $ 11.33 $ 11.54 Central Puerto SA, ADR(1) 11/23/93 $ 26.50 $ 24.75 First NIS Regional Fund(1) 11/23/94 $ 4.00 $ 4.25 Hindustan Development Corp. Ltd., Units(1) 9/19/94 $ 4.10 $ 2.13 Indian Rayon and Industries Ltd., GDR(1) 1/28/94 $ 22.51 $ 19.45 Indo Gulf Fertilizer, GDR(1) 1/17/94 $ 4.51 $ 2.99 Industrial Credit and Investment Corp. India Ltd., 2.50% Cv. Debs., 4/30/00(1) 2/3/94 $ 108.40 $ 75.00 Internacional de Ceramica SA, Series B, ADR(1) 2/10/93-2/11/93 $ 25.40 $ 17.77 JK Corp. Ltd., GDR(1) 10/17/94 $ 8.00 $ 6.73 Mavesa, ADR(1) 8/25/94 $ 5.88 $ 4.95 Pakistan Telecommunications, GDR(1) 9/19/94-10/4/94 $ 186.07 $ 135.50 Plant Genetics Systems International NV 5/27/92 $ 11.18 $ 7.55 President Enterprises Corp.(1) 10/11/94 $ 15.83 $ 20.25 PT Panin Bank(1) 7/2/93-9/22/94 $ 1.52 $ 1.39 Reliance Industries Ltd., GDS(1) 10/4/94-10/20/94 $ 28.57 $ 19.80 Samsung Electronics Co, GDR(1) 8/18/94 $ 38.28 $ 46.50 Scici Ltd., 3.50% Cv. Bonds, 4/1/04(1) 10/19/93-1/20/94 $ 117.00 $ 88.00 Taipei Fund, Cl. B, IDR 12/26/93 $80,000.00 $95,900.00 Tata Electric Cos.(1) 2/22/94 $ 710.00 $ 437.50 Tung Ho Steel Enterprise Corp., GDR(1) 9/9/94 $ 17.20 $ 15.50 Turkiye Garanti Bankasi AS, Sponsored ADR(1) 10/29/93-10/4/94 $ 2.24 $ 2.53 VA Technoligie AG(1) 5/19/94-9/13/94 $ 96.82 $ 100.66 YuKong Ltd., GDR(1) 9/9/94-10/18/94 $ 26.05 $ 15.00
Restricted and illiquid securities, excluding securities eligible for resale pursuant to Rule 144A of the Act amount to $644,114, or .22% of the Fund's net assets, at December 31, 1994. 1. Transferable under Rule 144A of the Act. Oppenheimer Strategic Bond Fund
VALUATION ACQUISITION COST AS OF SECURITY DATE PER UNIT DECEMBER 31, 1994 - ---------------------------------------------------------------------------------------------------------------------------- Argentina Local Market Securities Trust, Series 1994-II, 11.30%, 4/1/00(1) 8/24/94 $100.00 $ 85.25 Celcaribe SA, 0%/13.50% Sr. Sec. Nts., 3/15/04(1) 5/17/94 $ 60.78 $ 65.26 Celcaribe SA(1) 5/17/94 $ 1.19 $ 1.15 Ecuador (Republic of) Bonds, 12/29/49(1) 10/7/94 $ 60.50 $ 54.38 GPA Holland BV, 8.625% Medium-Term Nts., Series C, 1/15/99 1/10/94 $ 78.13 $ 71.50 Icon Health & Fitness, Inc., Units(1) 1/4/94 $ 98.79 $ 98.50 Lehman Brothers Holdings, Inc., Standard & Poor's Index- Linked Nts., 5.788%, 1/25/95 11/22/94 $144.40 $117.12 PriCellular Wireless Corp., .50%/14% Sr. Sub. Disc. Nts., 11/15/01(1) 11/17/94 $ 66.83 $ 66.50 SD Warren Co., 12% Sr. Sub. Nts., 12/15/04(1) 12/13/94 $100.00 $103.00 Subic Power Corp., 9.50% Sr. Sec. Nts., Series A, 12/28/08(1) 12/20/93 $ 99.93 $ 86.50 Terex Corp., 13% Sr. Nts., 8/1/96(1) 10/21/94 $ 97.25 $ 94.75 Terex Corp. Rts., Exp. 7/96(1) 6/29/94 $ 1.49 $ 0.75 Tribasa Toll Road Trust, 10.50% Nts., Series 1993-A, 12/1/11(1) 11/8/93 $100.00 $ 86.50 United Mexican States, Combined Facility 3, Loan Participation Agreement, 7.625%, 3/20/00 10/25/94 $ 89.00 $ 86.00 United Mexican States, Myra Old Money Loan Participation Agreement, 7.625%, 3/20/05 10/12/94 $ 82.88 $ 69.50
Restricted and illiquid securities, excluding securities eligible for resale pursuant to Rule 144A of the Act amount to $548,310 or 2.7% of the Fund's net assets, at December 31, 1994. 1. Transferable under Rule 144A of the Act. NOTES TO FINANCIAL STATEMENTS (Continued) Oppenheimer Variable Account Funds 8. MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES Management fees paid to the Manager were in accordance with the investment advisory agreements with the Trust. For OBF, OCAP, OGF, OMSF, OHIF, OGSF and OSBF, the annual fees are .75% of the first $200 million of net assets, .72% of the next $200 million, .69% of the next $200 million, .66% of the next $200 million and .60% of net assets in excess of $800 million. In addition, management fees for OHIF, OBF and OSBF are .50% of net assets in excess of $1 billion. Management fees for OMF are .45% of the first $500 million, .425% of the next $500 million, .40% of the next $500 million and .375% of net assets in excess of $1.5 billion. The Manager has agreed to reimburse any Fund if aggregate Fund expenses (with specified exceptions) exceed 2.5% of the first $30 million of the Fund's net assets, plus 2.0% of the next $70 million, plus 1.5% of net assets in excess of $100 million. For OSBF, the Manager has agreed to limit the management fee charged so that the ordinary operating expenses of the Fund will not exceed 1.0% of its average net assets in any fiscal year. Prior to September 1, 1994, management fees were as follows: except as stated below, the annual fees were .50% of the first $250 million of aggregate Trust net assets, .45% of the next $50 million, .40% of the next $100 million, .35% of the next $400 million and .30% of net assets in excess of $800 million. OMF fees were reduced by .05% of the first $250 million of Fund net assets, as well as on Fund net assets in excess of $4 billion. OHIF paid an additional management fee of .15% of its net assets annually. OGSF fees were .75% of the first $200 million of aggregate Trust net assets with a reduction of .03% of each $200 million thereafter to $800 million, and .60% of net assets in excess of $800 million. OSBF fees were .65% of net assets annually. Fees were allocated ratably to each Fund based on the relative value of Fund net assets to total Trust net assets as of the close of business each day. The Manager agreed to reimburse OMF, OHIF, OBF, OCAP, OGF, OMSF and OSBF if aggregate Fund expenses (with specified exceptions) exceeded 2% of the first $10 million of average annual net assets, 1.50% of the next $20 million and 1% of average annual net assets in excess of $30 million. Prior to September 1, 1994, the Manager and Monarch Life Insurance Company, Bankers Security Life Insurance Society (Bankers), Confederation Life Insurance and Annuity Company and Massachusetts Mutual Life Insurance Company had also voluntarily undertaken to limit the expenses of OMF, OHIF, OBF, OCAP, OGF and OMSF to .75% of average annual net assets, after any other reimbursement by the Manager. The reimbursement was based on the proportionate number of shares in the accounts of the respective insurance companies. The undertaking by Bankers extended to OMSF only. Investment Adviser Oppenheimer Management Corporation Two World Trade Center New York, New York 10048-0203 Transfer Agent Oppenheimer Shareholder Services P.O. Box 5270 Denver, Colorado 80217 1-800-525-7048 Custodian The Bank of New York One Wall Street New York, New York 10015 Independent Auditors Deloitte & Touche LLP 1560 Broadway Denver, Colorado 80202 Legal Counsel Myer, Swanson, Adams & Wolf, P.C. 1600 Broadway Denver, Colorado 80202-4918 OPPENHEIMER VARIABLE ACCOUNT FUNDS FORM N-1A PART C OTHER INFORMATION Item 24. Financial Statements and Exhibits --------------------------------- (a) Financial Statements 1. Financial Highlights (see Parts A and B): Filed herewith. 2. Independent Auditors' Report (see Part B): Filed herewith. 3. Statements of Investments (see Part B): Filed herewith. 4. Statements of Assets and Liabilities (see Part B): Filed herewith. 5. Statements of Operations (see Part B): Filed herewith. 6. Statements of Changes in Net Assets (see Part B): Filed herewith. 7. Notes to Financial Statements (see Part B): Filed herewith. 8. Independent Auditors' Consent: Filed herewith. (b) Exhibits -------- 1. Sixth Restated Declaration of Trust dated February 28, 1995: Filed herewith. 2. By-Laws, amended as of 6/26/90: Previously filed with Registrant's Post-Effective Amendment No. 26, 2/13/95, and incorporated herein by reference. 3. Not Applicable. 4. (i) Oppenheimer Money Fund specimen share certificate: Filed with Registrant's Post-Effective Amendment No. 25, 4/29/94, and incorporated herein by reference. (ii) Oppenheimer Bond Fund specimen share certificate: Filed with Registrant's Post-Effective Amendment No. 25, 4/29/94, and incorporated herein by reference. (iii) Oppenheimer Growth Fund specimen share certificate: Filed with Registrant's Post-Effective Amendment No. 25, 4/29/94, and incorporated herein by reference. (iv) Oppenheimer High Income Fund specimen share certificate: Filed with Registrant's Post-Effective Amendment No. 25, 4/29/94, and incorporated herein by reference. (v) Oppenheimer Capital Appreciation Fund specimen share certificate: Filed with Registrant's Post- Effective Amendment No. 25, 4/29/94, and incorporated herein by reference. (vi) Oppenheimer Multiple Strategies Fund specimen share certificate: Filed with Registrant's Post-Effective Amendment No. 25, 4/29/94, and incorporated herein by reference. (vii) Oppenheimer Global Securities Fund specimen share certificate: Filed with Registrant's Post-Effective Amendment No. 25, 4/29/94, and incorporated herein by reference. (viii) Oppenheimer Strategic Bond Fund specimen share certificate: Filed with Registrant's Post-Effective Amendment No. 25, 4/29/94, and incorporated herein by reference. (ix) Oppenheimer Growth & Income Fund specimen share certificate: Filed herewith. 5. (i) Investment Advisory Agreement for Oppenheimer Money Fund dated 9/1/94: Filed with Post-Effective Amendment No. 26, 2/13/95, and incorporated herein by reference. (ii) Investment Advisory Agreement for Oppenheimer High Income Fund dated 9/1/94: Filed with Post-Effective Amendment No. 26, 2/13/95, and incorporated herein by reference. (iii) Investment Advisory Agreement for Oppenheimer Bond Fund dated 9/1/94: Filed with Post-Effective Amendment No. 26, 2/13/95, and incorporated herein by reference. (iv) Investment Advisory Agreement for Oppenheimer Capital Appreciation Fund STGT 9/1/94: Filed with Post-Effective Amendment No. 26, 2/13/95, and incorporated herein by reference. (v) Investment Advisory Agreement for Oppenheimer Growth Fund dated 9/1/94: Filed with Post-Effective Amendment No. 26, 2/13/95, and incorporated herein by reference. (vi) Investment Advisory Agreement for Oppenheimer Multiple Strategies Fund dated 9/1/94: Filed with Post-Effective Amendment No. 26, 2/13/95, and incorporated herein by reference. (vii) Investment Advisory Agreement for Oppenheimer Global Securities Fund dated 9/1/94: Filed with Post-Effective Amendment No. 26, 2/13/95, and incorporated herein by reference. (viii) Investment Advisory Agreement for Oppenheimer Strategic Bond Fund dated 9/1/94: Filed with Post- Effective Amendment No. 26, 2/13/95, and incorporated herein by reference. (ix) Investment Advisory Agreement for Oppenheimer Growth & Income Fund dated 5/1/95: Filed herewith. 6. Not Applicable. 7. Not Applicable. 8. Custody Agreement between Oppenheimer Variable Account Funds and The Bank of New York, dated 11/12/92: Previously filed with Registrant's Post- Effective Amendment No. 21, 3/12/93, and refiled herewith pursuant to Item 102 of Regulation S-T. 9. Not Applicable. 10. (i) Opinion and Consent of Counsel, 3/14/85: Previously filed with Registrant's Pre-Effective Amendment No. 1, 3/20/85, and refiled herewith pursuant to Item 102 of Regulation S-T. (ii) Opinion and Consent of Counsel, 4/28/86: Previously filed with Registrant's Post-Effective Amendment No. 5, 8/12/86, and refiled herewith pursuant to Item 102 of Regulation S-T. (iii) Opinion and Consent of Counsel, 7/31/86: Previously filed with Registrant's Post-Effective Amendment No. 5, 8/12/86, and refiled herewith pursuant to Item 102 of Regulation S-T. (iv) Opinion and Consent of Counsel, 1/21/87: Previously filed with Registrant's Post-Effective Amendment No. 7, 2/6/87, and refiled herewith pursuant to Item 102 of Regulation S-T. (v) Opinion and Consent of Counsel, dated July 31, 1990: Previously filed with Registrant's Post- Effective Amendment No. 15, 9/19/90, and refiled herewith pursuant to Item 102 of Regulation S-T. (vi) Opinion and Consent of Counsel dated April 23, 1993: Previously filed with Registrant's Post- Effective Amendment No. 22, 4/30/93, and refiled herewith pursuant to Item 102 of Regulation S-T. (vii) Opinion and Consent of Counsel dated April 26, 1995: To be filed by amendment. 11. Not Applicable. 12. Not Applicable. 13. Not Applicable. 14. Not Applicable. 15. Not Applicable. 16. Performance computation schedules: Filed herewith. 17. Financial Data Schedules: Filed herewith. -- Powers of Attorney (and Certified Board Resolution): Previously filed with Registrant's Post-Effective Amendment No. 24, 2/25/94, and incorporated herein by reference. Item 25. Persons Controlled by or under Common Control with Registrant ------------------------------------------------------------- Registrant does not control any other person. Except that all of Registrant's issued and outstanding shares are held by certain separate accounts, as described in Part B of this Registration Statement, Registrant is not under common control with any other person. Item 26. Number of Holders of Securities No. of Record Holders as of Title of Class (Series) March 31, 1995 ----------------------- -------------- Oppenheimer Money Fund 5 Oppenheimer High Income Fund 5 Oppenheimer Bond Fund 6 Oppenheimer Capital Appreciation Fund 5 Oppenheimer Growth Fund 5 Oppenheimer Multiple Strategies Fund 6 Oppenheimer Global Securities Fund 4 Oppenheimer Strategic Bond Fund 3 Oppenheimer Growth & Income Fund 0 Item 27. Indemnification --------------- Reference is made to paragraphs (c) through (g) of Section 12 of Article SEVENTH of Registrant's Fifth Restated Declaration of Trust previously filed as an exhibit to this Registration Statement, incorporated herein by reference. Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of Registrant pursuant to the foregoing provisions or otherwise, Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by Registrant of expenses incurred or paid by a director, officer or controlling person of Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person, Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act of 1933 and will be governed by the final adjudication of such issue. Item 28. Business and Other Connections of Investment Adviser ---------------------------------------------------- (a) Oppenheimer Management Corporation is the investment adviser of the Registrant; it and certain subsidiaries and affiliates act in the same capacity to other registered investment companies as described in Parts A and B hereof and listed in Item 28(b) below. (b) There is set forth below information as to any other business, profession, vocation or employment of a substantial nature in which each officer and director of Oppenheimer Management Corporation is, or at any time during the past two fiscal years has been, engaged for his/her own account or in the capacity of director, officer, employee, partner or trustee.
Name & Current Position with Oppenheimer Other Business and Connections Management Corporation During the Past Two Years - ----------------------- ------------------------------ Lawrence Apolito, None. Vice President James C. Ayer, Jr., Vice President and Portfolio Manager of Assistant Vice President Oppenheimer Gold & Special Minerals Fund and Oppenheimer Global Emerging Growth Fund. Victor Babin, None. Senior Vice President Robert J. Bishop Assistant Treasurer of the OppenheimerFunds Assistant Vice President (listed below); previously a Fund Controller for Oppenheimer Management Corporation (the "Manager"). George Bowen Treasurer of the New York-based Senior Vice President OppenheimerFunds; Vice President, Secretary and Treasurer and Treasurer of the Denver-based OppenheimerFunds. Vice President and Treasurer of Oppenheimer Funds Distributor, Inc. (the "Distributor") and HarbourView Asset Management Corporation ("HarbourView"), an investment adviser subsidiary of OMC; Senior Vice President, Treasurer, Assistant Secretary and a director of Centennial Asset Management Corporation ("Centennial"), an investment adviser subsidiary of the Manager; Vice President, Treasurer and Secretary of Shareholder Services, Inc. ("SSI") and Shareholder Financial Services, Inc. ("SFSI"), transfer agent subsidiaries of OMC; President, Treasurer and Director of Centennial Capital Corporation; Vice President and Treasurer of Main Street Advisers; formerly Senior Vice President/ Comptroller and Secretary of Oppenheimer Asset Management Corporation ("OAMC"), an investment adviser which was a subsidiary of the OMC. Michael A. Carbuto, Vice President and Portfolio Manager of Vice President Oppenheimer Tax-Exempt Cash Reserves, Centennial California Tax Exempt Trust, Centennial New York Tax Exempt Trust and Centennial Tax Exempt Trust; Vice President of Centennial. William Colbourne, Formerly, Director of Alternative Staffing Assistant Vice President Resources, and Vice President of Human Resources, American Cancer Society. Lynn Coluccy, Vice President Formerly Vice President/Director of Internal Audit of the Manager. O. Leonard Darling, Formerly Co-Director of Fixed Income for Executive Vice President State Street Research & Management Co. Robert A. Densen, None. Vice President Robert Doll, Jr., Vice President and Portfolio Manager of Executive Vice President Oppenheimer Growth Fund and Oppenheimer Target Fund; Senior Vice President and Portfolio Manager of Strategic Income & Growth Fund. John Doney, Vice President Vice President and Portfolio Manager of Oppenheimer Equity Income Fund. Andrew J. Donohue, Secretary of the New York-based Executive Vice President OppenheimerFunds; Vice President of the & General Counsel Denver-based OppenheimerFunds; Executive Vice President, Director and General Counsel of the Distributor; formerly Senior Vice President and Associate General Counsel of the Manager and the Distributor. Kenneth C. Eich, Treasurer of Oppenheimer Acquisition Executive Vice President/ Corporation Chief Financial Officer George Evans, Vice President Vice President and Portfolio Manager of Oppenheimer Global Securities Fund. Scott Farrar, Assistant Treasurer of the OppenheimerFunds; Assistant Vice President previously a Fund Controller for the Manager. Katherine P.Feld Vice President and Secretary of Oppenheimer Vice President and Funds Distributor, Inc.; Secretary of Secretary HarbourView, Main Street Advisers, Inc. and Centennial; Secretary, Vice President and Director of Centennial Capital Corp. Jon S. Fossel, President and director of Oppenheimer Chairman of the Board, Acquisition Corp. ("OAC"), the Manager's Chief Executive Officer parent holding company; President, CEO and and Director a director of HarbourView; a director of SSI and SFSI; President, Director, Trustee, and Managing General Partner of the Denver- based OppenheimerFunds; formerly President of the Manager. President and Chairman of the Board of Main Street Advisers, Inc. Robert G. Galli, Trustee of the New York-based Vice Chairman OppenheimerFunds; Vice President and Counsel of OAC; formerly he held the following positions: a director of the Distributor, Vice President and a director of HarbourView and Centennial, a director of SFSI and SSI, an officer of other OppenheimerFunds and Executive Vice President & General Counsel of the Manager and the Distributor. Linda Gardner, None. Assistant Vice President Ginger Gonzalez, Formerly 1st Vice President/Director of Vice President Creative Services for Shearson Lehman Brothers. Dorothy Grunwager, None. Assistant Vice President Caryn Halbrecht, Vice President and Portfolio Manager of Vice President Oppenheimer Insured Tax-Exempt Bond Fund and Oppenheimer Intermediate Tax Exempt Bond Fund; an officer of other OppenheimerFunds; formerly Vice President of Fixed Income Portfolio Management at Bankers Trust. Barbara Hennigar, President and Director of Shareholder President and Chief Financial Service, Inc. Executive Officer of Oppenheimer Shareholder Services, a division of OMC. Alan Hoden, Vice President None. Merryl Hoffman, None. Vice President Scott T. Huebl, None. Assistant Vice President Jane Ingalls, Formerly a Senior Associate with Robinson, Assistant Vice President Lake/Sawyer Miller. Stephen Jobe, None. Vice President Avram Kornberg, Formerly a Vice President with Bankers Vice President Trust. Paul LaRocco, Portfolio Manager of Oppenheimer Capital Assistant Vice President Appreciation Fund; Associate Portfolio Manager of Oppenheimer Discovery Fund and Oppenheimer Time Fund. Formerly a Securities Analyst for Columbus Circle Investors. Mitchell J. Lindauer, None. Vice President Loretta McCarthy, None. Senior Vice President Bridget Macaskill, Director of HarbourView; Director of Main President and Director Street Advisers, Inc.; and Chairman of Shareholder Services, Inc. Sally Marzouk, None. Vice President Denis R. Molleur, None. Vice President Kenneth Nadler, None. Vice President David Negri, Vice President and Portfolio Manager of Vice President Oppenheimer Strategic Bond Fund, Oppenheimer Multiple Strategies Fund, Oppenheimer Strategic Investment Grade Bond Fund, Oppenheimer Asset Allocation Fund, Oppenheimer Strategic Diversified Income Fund, Oppenheimer Strategic Income Fund, Oppenheimer Strategic Income & Growth Fund, Oppenheimer Strategic Short-Term Income Fund, Oppenheimer High Income Fund and Oppenheimer Bond Fund; an officer of other OppenheimerFunds. Barbara Niederbrach, None. Assistant Vice President Stuart Novek, Formerly a Director Account Supervisor for Vice President J. Walter Thompson. Robert A. Nowaczyk, None. Vice President Julia O'Neal, None. Assistant Vice President Robert E. Patterson, Vice President and Portfolio Manager of Senior Vice President Oppenheimer Main Street California Tax- Exempt Fund, Oppenheimer Insured Tax- Exempt Bond Fund, Oppenheimer Intermediate Tax- Exempt Bond Fund, Oppenheimer Florida Tax- Exempt Fund, Oppenheimer New Jersey Tax- Exempt Fund, Oppenheimer Pennsylvania Tax- Exempt Fund, Oppenheimer California Tax- Exempt Fund, Oppenheimer New York Tax- Exempt Fund and Oppenheimer Tax-Free Bond Fund; Vice President of the New York Tax-Exempt Income Fund, Inc.; Vice President of Oppenheimer Multi-Sector Income Trust. Tilghman G. Pitts III, Chairman and Director of the Distributor. Executive Vice President and Director Jane Putnam, Associate Portfolio Manager of Oppenheimer Assistant Vice President Growth Fund and Oppenheimer Target Fund and Portfolio Manager for Oppenheimer Variable Account Funds-Growth Fund; Senior Investment Officer and Portfolio Manager with Chemical Bank. Russell Read, Formerly an International Finance Consultant Assistant Vice President for Dow Chemical. Thomas Reedy, Vice President of Oppenheimer Multi-Sector Vice President Income Trust and Oppenheimer Multi- Government Trust; an officer of other OppenheimerFunds; formerly a Securities Analyst for the Manager. David Rosenberg, Vice President and Portfolio Manager of Vice President Oppenheimer Limited-Term Government Fund and Oppenheimer U.S. Government Trust. Formerly Vice President and Senior Portfolio Manager for Delaware Investment Advisors. Richard H. Rubinstein, Vice President and Portfolio Manager of Vice President Oppenheimer Asset Allocation Fund, Oppenheimer Fund and Oppenheimer Multiple Strategies Fund; an officer of other OppenheimerFunds; formerly Vice President and Portfolio Manager/Security Analyst for Oppenheimer Capital Corp., an investment adviser. Lawrence Rudnick, Formerly Vice President of Dollar Dry Dock Assistant Vice President Bank. Ellen Schoenfeld, None. Assistant Vice President Nancy Sperte, None. Senior Vice President Donald W. Spiro, President and Trustee of the New York- based Chairman Emeritus OppenheimerFunds; formerly Chairman of the and Director Manager and the Distributor. Arthur Steinmetz, Vice President and Portfolio Manager of Senior Vice President Oppenheimer Strategic Diversified Income Fund, Oppenheimer Strategic Income Fund, Oppenheimer Strategic Income & Growth Fund, Oppenheimer Strategic Investment Grade Bond Fund, Oppenheimer Strategic Short-Term Income Fund; an officer of other OppenheimerFunds. Ralph Stellmacher, Vice President and Portfolio Manager of Senior Vice President Oppenheimer Champion High Yield Fund and Oppenheimer High Yield Fund; an officer of other OppenheimerFunds. John Stoma, Vice President Formerly Vice President of Pension Marketing with Manulife Financial. James C. Swain, Chairman, CEO and Trustee, Director or Vice Chairman of the Managing Partner of the Denver-based Board of Directors OppenheimerFunds; President and a Director and Director of Centennial; formerly President and Director of OAMC, and Chairman of the Board of SSI. James Tobin, Vice President None. Jay Tracey, Vice President Vice President of the Manager; Vice President and Portfolio Manager of Oppenheimer Time Fund and Oppenheimer Discovery Fund. Formerly Managing Director of Buckingham Capital Management. Gary Tyc, Vice President, Assistant Treasurer of the Distributor and Assistant Secretary SFSI. and Assistant Treasurer Ashwin Vasan, Vice President of Oppenheimer Multi-Sector Vice President Income Trust and Oppenheimer Multi- Government Trust: an officer of other OppenheimerFunds. Valerie Victorson, None. Vice President John Wallace, Vice President and Portfolio Manager of Vice President Oppenheimer Total Return Fund, and Oppenheimer Main Street Income and Growth Fund; an officer of other OppenheimerFunds; formerly a Securities Analyst and Assistant Portfolio Manager for the Manager. Dorothy Warmack, Vice President and Portfolio Manager of Vice President Daily Cash Accumulation Fund, Inc., Oppenheimer Cash Reserves, Centennial America Fund, L.P., Centennial Government Trust and Centennial Money Market Trust; Vice President of Centennial. Christine Wells, None. Vice President William L. Wilby, Vice President and Portfolio Manager of Senior Vice President Oppenheimer Global Fund and Oppenheimer Global Growth & Income Fund; Vice President of HarbourView; an officer of other OppenheimerFunds. Carol Wolf, Vice President and Portfolio Manager of Vice President Oppenheimer Money Market Fund, Inc., Centennial America Fund, L.P., Centennial Government Trust, Centennial Money Market Trust and Daily Cash Accumulation Fund, Inc.; Vice President of Oppenheimer Multi- Sector Income Trust; Vice President of Centennial. Robert G. Zack, Associate General Counsel of the Manager; Senior Vice President Assistant Secretary of the OppenheimerFunds; and Assistant Secretary Assistant Secretary of SSI, SFSI; an officer of other OppenheimerFunds. Eva A. Zeff, Vice President and Portfolio Manager of Assistant Vice President Oppenheimer Mortgage Income Fund; an officer of other OppenheimerFunds; formerly a Securities Analyst for the Manager. Arthur J. Zimmer, Vice President and Portfolio Manager of Vice President Centennial America Fund, L.P., Oppenheimer Money Fund, Centennial Government Trust, Centennial Money Market Trust and Daily Cash Accumulation Fund, Inc.; Vice President of Oppenheimer Multi-Sector Income Trust; Vice President of Centennial; an officer of other OppenheimerFunds.
The OppenheimerFunds include the New York-based OppenheimerFunds and the Denver-based OppenheimerFunds set forth below: New York-based OppenheimerFunds Oppenheimer Asset Allocation Fund Oppenheimer California Tax-Exempt Fund Oppenheimer Discovery Fund Oppenheimer Global Emerging Growth Fund Oppenheimer Global Fund Oppenheimer Global Growth & Income Fund Oppenheimer Gold & Special Minerals Fund Oppenheimer Growth Fund Oppenheimer Money Market Fund, Inc. Oppenheimer Mortgage Income Fund Oppenheimer Multi-Government Trust Oppenheimer Multi-Sector Income Trust Oppenheimer Multi-State Tax-Exempt Trust Oppenheimer New York Tax-Exempt Trust Oppenheimer Fund Oppenheimer Target Fund Oppenheimer Tax-Free Bond Fund Oppenheimer Time Fund Oppenheimer U.S. Government Trust Denver-based OppenheimerFunds Oppenheimer Cash Reserves Centennial America Fund, L.P. Centennial California Tax Exempt Trust Centennial Government Trust Centennial Money Market Trust Centennial New York Tax Exempt Trust Centennial Tax Exempt Trust Daily Cash Accumulation Fund, Inc. The New York Tax-Exempt Income Fund, Inc. Oppenheimer Champion High Yield Fund Oppenheimer Equity Income Fund Oppenheimer High Yield Fund Oppenheimer Integrity Funds Oppenheimer Limited-Term Government Fund Oppenheimer Main Street Funds, Inc. Oppenheimer Strategic Funds Trust Oppenheimer Strategic Income & Growth Fund Oppenheimer Strategic Investment Grade Bond Fund Oppenheimer Strategic Short-Term Income Fund Oppenheimer Tax-Exempt Bond Fund Oppenheimer Total Return Fund, Inc. Oppenheimer Variable Account Funds The address of Oppenheimer Management Corporation, the New York-based OppenheimerFunds, Oppenheimer Funds Distributor, Inc., Harbourview Asset Management Corp., Oppenheimer Partnership Holdings, Inc., and Oppenheimer Acquisition Corp. is Two World Trade Center, New York, New York 10048-0203. The address of the Denver-based OppenheimerFunds, Shareholder Financial Services, Inc., Shareholder Services, Inc., Oppenheimer Shareholder Services, Centennial Asset Management Corporation, Centennial Capital Corp., and Main Street Advisers, Inc. is 3410 South Galena Street, Denver, Colorado 80231. Item 29. Principal Underwriters ---------------------- Not Applicable. Item 30. Location of Accounts and Records -------------------------------- The accounts, books and other documents required to be maintained by Registrant pursuant to Section 31(a) of the Investment Company Act and rules promulgated thereunder are in possession of Oppenheimer Management Corporation at its offices at 3410 South Galena Street, Denver, Colorado 80231. Item 31. Management Services ------------------- Not Applicable. Item 32. Undertakings ------------ (a) Not Applicable. (b) Not Applicable. (c) Not Applicable. SIGNATURES Pursuant to the requirements of the Securities Act of 1933 and/or the Investment Company Act of 1940, the Registrant certifies that it meets all of the requirements for effectiveness of this Registration Statement pursuant to Rule 485(b) under the Securities Act of 1933 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Denver and State of Colorado on the 26th day of April, 1995. OPPENHEIMER VARIABLE ACCOUNT FUNDS /s/ James C. Swain * by: -------------------------- James C. Swain, Chairman Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed below by the following persons in the capacities and on the dates indicated: Signatures: Title Date - ----------- ----------------- -------------- /s/ James C. Swain* Chairman of the Board April 26, 1995 - --------------------- of Trustees and James C. Swain Principal Executive Officer /s/ Jon S. Fossel* President and Trustee April 26, 1995 - ---------------------- Jon S. Fossel /s/ George Bowen* Treasurer and April 26, 1995 - ---------------------- Principal Financial George Bowen and Accounting Officer /s/ Robert G. Avis* Trustee April 26, 1995 - ---------------------- Robert G. Avis /s/ William A. Baker* Trustee April 26, 1995 - ---------------------- William A. Baker /s/ Charles Conrad, Jr.* Trustee April 26, 1995 - ---------------------- Charles Conrad, Jr. /s/ Raymond J. Kalinowski* Trustee April 26, 1995 - ---------------------- Raymond J. Kalinowski /s/ C. Howard Kast* Trustee April 26, 1995 - ---------------------- C. Howard Kast /s/ Robert M. Kirchner* Trustee April 26, 1995 - ---------------------- Robert M. Kirchner /s/ Ned M. Steel* Trustee April 26, 1995 - ----------------------- Ned M. Steel *By: /s/ Robert G. Zack ------------------------------------- Robert G. Zack, Attorney-in-Fact OPPENHEIMER VARIABLE ACCOUNT FUNDS EXHIBIT INDEX Exhibit No. Description - ----------- ----------- 24(a)(8) Independent Auditors' Consent 24(b)(1) Sixth Restated Declaration of Trust dated 2/28/95 24(b)(4)(ix) Oppenheimer Growth & Income Fund Specimen Share Certificate 24(b)5(ix) Investment Advisory Agreement for Oppenheimer Growth & Income Fund dated 5/1/95 24(b)(8) Custody Agreement dated 11/12/92 24(b)(10)(i) Opinion and Consent of Counsel dated 3/14/85 24(b)(10)(ii) Opinion and Consent of Counsel dated 4/28/86 24(b)(10)(iii) Opinion and Consent of Counsel dated 7/31/86 24(b)(10)(iv) Opinion and Consent of Counsel dated 1/21/87 24(b)(10)(v) Opinion and Consent of Counsel dated 7/31/90 24(b)(10)(vi) Opinion and Consent of Counsel dated 4/23/93 24(b)(16) Performance Data Computation Schedule 24(b)(17) Financial Data Schedule EX-23 2 INDEPENDENT AUDITORS' CONSENT Oppenheimer Variable Account Funds: We consent to the use in this Post-Effective Amendment No. 27 to Registration Statement No. 2-93177 of our report dated January 23, 1995 on the financial statements of Oppenheimer Variable Account Funds appearing in the Statement of Additional Information, which is a part of such Registration Statement, and to the reference to us under the caption "Financial Highlights" appearing in the Prospectus, which is also a part of such Registration Statement. /s/ Deloitte & Touche LLP - ------------------------- DELOITTE & TOUCHE LLP Denver, Colorado April 26, 1995 EX-3 3 Exhibit No. 24(b)(1) SIXTH RESTATED DECLARATION OF TRUST OF OPPENHEIMER VARIABLE ACCOUNT FUNDS SIXTH RESTATED DECLARATION OF TRUST, made as of February 28, 1995 by and among the individuals executing this Sixth Restated Declaration of Trust as the initial Trustees. WHEREAS, (i) by Declaration of Trust dated August 28, 1984, the Trustees establish a Trust initially named Oppenheimer Variable Life Funds, a trust fund under the laws of the Commonwealth of Massachusetts, for the investment and reinvestments of fund contributed thereto, (ii) by the First Restated Declaration of Trust dated March 11, 1986, the Trustees amended and restated said Declaration of Trust to create two new Series of Shares, and (iii) by the Second Restated Declaration of Trust dated August 15, 1986, the Trustees further amended and restated said Declaration of Trust to change the Trust's name to Oppenheimer Variable Account Funds and to make certain other changes, (iv) by the Third Restated Declaration of Trust dated October 21, 1986, the Trustees amended and restated said Declaration of Trust to create a new Series of Shares, (v) by the Fourth Restated Declaration of Trust dated June 4, 1990, the Trustees amended and restated said Declaration of Trust to create a new Series of Shares, and (vi) by the Fifth Restated Declaration of Trust dated February 25, 1993, the Trustees amended and restated said Declaration of Trust to create a new series; WHEREAS, the Trustees desire to further amend such Declaration of Trust without shareholder approval, as permitted under ARTICLE FOURTH, to create an additional Series of Shares in addition to the eight Series previously established and designated, and to fix and determine the relative rights and preferences of such Additional Series of Shares as set forth in said ARTICLE FOURTH; NOW, THEREFORE, the Trustees declare that all money and property held or delivered to the Trust Fund hereunder shall be held and managed under this Sixth Restated Declaration of Trust IN TRUST as herein set forth below. FIRST: This Trust shall be known as OPPENHEIMER VARIABLE ACCOUNT FUNDS. The address of Oppenheimer Variable Account Funds is 3410 South Galena Street, Denver, Colorado 80231. The Registered Agent for service is Massachusetts Mutual Life Insurance Company, 1295 State Street, Springfield, Massachusetts 01111, Attention: Stephen L. Kuhn, Esq. SECOND: Whenever used herein, unless otherwise required by the context or specifically provided: 1. All terms used in this Declaration of Trust which are defined in the 1940 Act (defined below) shall have the meanings given to them in the 1940 Act. 2. "Board" or "Board of Trustees" or the "Trustees" means the Board of Trustees of the Trust. 3. "By-Laws" means the By-Laws of the Trust as amended from time to time. 4. "Commission" means the Securities and Exchange Commission. 5. "Declaration of Trust" shall mean this Declaration of Trust as amended or restated from time to time. 6. The "1940 Act" refers to the Investment Company Act of 1940 and the Rules and Regulations of the Commission thereunder, all as amended from time to time. 7. "Series" refers to Series of Shares established and designated under or in accordance with the provisions of Article FOURTH. 8. "Shareholder" means a record owner of Shares of the Trust. 9. "Shares" refers to the transferable units of interest into which the beneficial interest in the Trust or any Series of the Trust (as the context may require) shall be divided from time to time and includes fractions of Shares as well as whole Shares. 10. The "Trust" refers to the Massachusetts business trust created by this Declaration of Trust, as amended or restated from time to time. 11. "Trustees" refers to the individual trustees in their capacity as trustees hereunder of the Trust and their successor or successors for the time being in office as such trustees. THIRD: The purpose or purposes for which the Trust is formed and the business or objects to be transacted, carried on and promoted by it are as follows: 1. To hold, invest or reinvest its funds, and in connection therewith to hold part or all of its funds in cash, and to purchase or otherwise acquire, hold for investment or otherwise, sell, sell short, assign, negotiate, transfer, exchange or otherwise dispose of or turn to account or realize upon, securities (which term "securities" shall for the purposes of this Declaration of Trust, without limitation of the generality thereof, be deemed to include any stocks, shares, bonds, financial futures contracts, indexes, debentures, notes, mortgages or other obligations, and any certificates, receipts, warrants or other instruments representing rights to receive, purchase or subscribe for the same, or evidencing or representing any other rights or interests therein, or in any property or assets) created or issued by any issuer (which term "issuer" shall for the purposes of this Declaration of Trust, without limitation of the generality thereof be deemed to include any persons, firms, associations, corporations, syndicates, combinations, organizations, governments, or subdivisions thereof) and in financial instruments (whether they are considered as securities or commodities); and to exercise, as owner or holder of any securities or financial instruments, all rights, powers and privileges in respect thereof; and to do any and all acts and things for the preservation, protection, improvement and enhancement in value of any or all such securities or financial instruments. 2. To borrow money and pledge assets in connection with any of the objects or purposes of the Trust, and to issue notes or other obligations evidencing such borrowings, to the extent permitted by the 1940 Act and by the Trust's fundamental investment policies under the 1940 Act. 3. To issue and sell its Shares in such Series and amounts and on such terms and conditions, for such purposes and for such amount or kind of consideration (including without limitation thereto, securities) now or hereafter permitted by the laws of the Commonwealth of Massachusetts and by this Declaration of Trust, as the Trustees may determine. 4. To purchase or otherwise acquire, hold, dispose of, resell, transfer, reissue or cancel its Shares, or to classify or reclassify any unissued Shares or any Shares previously issued and reacquired of any Series into one or more series that may have been established and designated from time to time, all without the vote or consent of the Shareholders of the Trust, in any manner and to the extent now or hereafter permitted by this Declaration of Trust. 5. To conduct its business in all its branches at one or more offices in Colorado and elsewhere in any part of the world, without restriction or limit as to extent. 6. To carry out all or any of the foregoing objects and purposes as principal or agent, and alone or with associates or to the extent now or hereafter permitted by the laws of Massachusetts, as a member of, or as the owner or holder of any stock of, or share of interest in, any issuer, and in connection therewith or make or enter into such deeds or contracts with any issuers and to do such acts and things and to exercise such powers, as a natural person could lawfully make, enter into, do or exercise. 7. To do any and all such further acts and things and to exercise any and all such further powers as may be necessary, incidental, relative, conducive, appropriate or desirable for the accomplishment, carrying out or attainment of all or any of the foregoing purposes or objects. The foregoing objects and purposes shall, except as otherwise expressly provided, be in no way limited or restricted by reference to, or inference from, the terms of any other clause of this or any other Article of this Declaration of Trust, and shall each be regarded as independent and construed as powers as well as objects and purposes, and the enumeration of specific purposes, objects and powers shall not be construed to limit or restrict in any manner the meaning of general terms or the general powers of the Trust now or hereafter conferred by the laws of the Commonwealth of Massachusetts nor shall the expression of one thing be deemed to exclude another, though it be of a similar or dissimilar nature, not expressed; provided, however, that the Trust shall not carry on any business, or exercise any powers, in any state, territory, district or country except to the extent that the same may lawfully be carried on or exercised under the laws thereof. FOURTH: (A) The beneficial interest in the Trust shall be divided into Shares, all without par value, but the Trustees shall have the authority from time to time to create one or more Series of Shares in addition to the Series specifically established and designated in part (B) of this Article FOURTH, as they deem necessary or desirable, to establish and designate such Series, and to fix and determine the relative rights and preferences as between the different Series of Shares as to right of redemption and the price, terms and manner of redemption, special and relative rights as to dividends and other distributions and on liquidation, sinking or purchase fund provisions, conversion on liquidation, sinking or purchase fund provisions, conversion rights, and conditions under which the several Series shall have individual voting rights or no voting rights. Except as aforesaid, all Shares of the different Series shall be identical. The number of authorized Shares and the number of Shares of each Series that may be issued is unlimited, and the Trustees may issue Shares of any Series for such consideration and on such terms as they may determine (or for no consideration if pursuant to a Share dividend or split-up), all without action or approval of the Shareholders. All Shares when so issued on the terms determined by the Trustees shall be fully paid and non-assessable. The Trustees may classify or reclassify any unissued Shares or any Shares previously issued and reacquired of any Series into one or more Series that may be established and designated from time to time. The Trustees may hold as treasury Shares (of the same or some other Series), reissue for such consideration and on such terms as they may determine, or cancel, at their discretion from time to time, any Shares of any Series reacquired by the Trust. The establishment and designation of any Series of Shares in addition to that established and designated in part (B) of this Article FOURTH shall be effective upon the execution by a majority of the Trustees of an instrument setting forth such establishment and designation and the relative rights and preferences of such Series, or as otherwise provided in such instrument. At any time that there are no Shares outstanding of any particular Series previously established and designated, the Trustees may by an instrument executed by a majority of their number abolish that Series and the establishment and designation thereof. Each instrument referred to in this paragraph shall be an amendment to this Declaration of Trust, and may be made by the Trustees without shareholder approval. Any Trustee, officer or other agent of the Trust, and any organization in which any such person is interested may acquire, own, hold and dispose of Shares of any Series of the Trust to the same extent as if such person were not a Trustee, officer or other agent of the Trust; and the Trust may issue and sell or cause to be issued and sold and may purchase Shares of any Series from any such person or any such organization subject only to the general limitations, restrictions or other provisions applicable to the sale or purchase of Shares of such Series generally. (B) Without limiting the authority of the Trustees set forth in part (A) of this Article FOURTH to establish and designate any further Series, the Trustees hereby establish and designate nine Series of Shares: "Oppenheimer Money Fund," "Oppenheimer Bond Fund," and "Oppenheimer Growth Fund," established by the Declaration of Trust dated August 28, 1984; "Oppenheimer High Income Fund" and "Oppenheimer Capital Appreciation Fund," established by the First Restated Declaration of Trust dated March 11, 1986; "Oppenheimer Multiple Strategies Fund," established by the Third Restated Declaration of Trust dated October 21, 1986; "Oppenheimer Global Securities Fund" established by the Fourth Restated Declaration of Trust dated June 4, 1990; "Oppenheimer Strategic Bond Fund" established by the Fifth Restated Declaration of Trust dated February 25, 1993; and "Oppenheimer Growth & Income Fund" established by this Sixth Restated Declaration of Trust dated February 28, 1995. The Shares of Oppenheimer Money Market Fund, Oppenheimer Bond Fund, Oppenheimer Growth Fund, Oppenheimer High Income Fund, Oppenheimer Capital Appreciation Fund, Oppenheimer Multiple Strategies Fund, Oppenheimer Global Securities Fund, Oppenheimer Strategic Bond Fund and Oppenheimer Growth & Income Fund and any Shares of any further Series that may from time to time be established and designated by the Trustees shall (unless the Trustees otherwise determine with respect to some further Series at the time of establishing and designating the same) have the following relative rights and preferences: (i) Assets Belonging to Series. All consideration received by the Trust for the issue or sale of Shares of a particular Series, together with all assets in which such consideration is invested or reinvested, all income, earnings, profits, and proceeds thereof, including any proceeds derived from the sale, exchange or liquidation of such assets, and any funds or payments derived from any reinvestment of such proceeds in whatever form the same may be, shall irrevocably belong to that Series for all purposes, subject only to the rights of creditors, and shall be so recorded upon the books of account of the Trust. Such consideration, assets, income, earnings, profits, and proceeds thereof, including any proceeds derived from the sale, exchange or liquidation of such assets, and any funds or payments derived from any reinvestment of such proceeds, in whatever form the same may be, together with any General Items allocated to that Series as provided in the following sentence, are herein referred to as "assets belonging to" that Series. In the event that there are any assets, income, earnings, profits, and proceeds thereof, funds, or payments which are not readily identifiable as belonging to any particular Series (collectively "General Items"), the Trustees shall allocate such General Items to and among any one or more of the Series established and designated from time to time in such manner and on such basis as they, in their sole discretion, deem fair and equitable; and any General Items so allocated to a particular Series shall belong to that Series. Each such allocation by the Trustees shall be conclusive and binding upon the shareholders of all Series for all purposes. (ii) Liabilities Belonging to Series. The assets belonging to each particular Series shall be charged with the liabilities of the Trust in respect of that Series and all expenses, costs, charges and reserves attributable to that Series, and any general liabilities, expenses, costs, charges or reserves of the Trust which are not readily identifiable as belonging to any particular Series shall be allocated and charged by the Trustees to and among any one or more of the Series established and designated from time to time in such manner and on such basis as the Trustees in their sole discretion deem fair and equitable. The liabilities, expenses, costs, charges and reserves allocated and so charged to a Series are herein referred to as "liabilities belonging to" that Series. Each allocation of liabilities, expenses, costs, charges and reserves by the Trustees shall be conclusive and binding upon the holders of all Series for all purposes. (iii) Dividends. Dividends and distributions on Shares of a particular Series may be paid to the holders of Shares of that Series, with such frequency as the Trustees may determine, which may be daily or otherwise pursuant to a standing resolution or resolutions adopted only once or with such frequency as the Trustees may determine, from such of the income, and capital gains accrued or realized, from the assets belonging to that Series, as the Trustees may determine, after providing for actual and accrued liabilities belonging to that Series. All dividends and distributions on Shares of a particular Series shall be distributed pro rata to the holders of that Series in proportion to the number of Shares of that Series held by such holders at the date and time of record established for the payment of such dividends or distributions, except that in connection with any dividend or distribution program or procedure the Trustees may determine that no dividend or distribution shall be payable on Shares as to which the Shareholder's purchase order and/or payment have not been received by the time or times established by the Trustees under such program or procedure. Such dividends and distributions may be made in cash or Shares or a combination thereof as determined by the Trustees or pursuant to any program that the Trustees may have in effect at the time for the election by each Shareholder of the mode of the making of such dividend or distribution to that Shareholder. Any such dividend or distribution paid in Shares will be paid at the net asset value thereof as determined in accordance with paragraph 13 of Article SEVENTH. (iv) Liquidation. In the event of the liquidation or dissolution of the Trust, the Shareholders of each Series that has been established and designated shall be entitled to receive, as a Series, when and as declared by the Trustees, the excess of the assets belonging to that Series over the liabilities belonging to that Series. The assets so distributable to the Shareholders of any particular Series shall be distributed among such Shareholders in proportion to the number of Shares of that Series held by them and recorded on the books of the Trust. (v) Transfer. All Shares of each particular Series shall be transferable, but transfers of Shares of a particular Series will be recorded on the Share transfer records of the Trust applicable to that Series only at such times as Shareholders shall have the right to require the Trust to redeem Shares of that Series and at such other times as may be permitted by the Trustees. (vi) Equality. All Shares of each particular Series shall represent an equal proportionate interest in the assets belonging to that Series (subject to the liabilities belonging to that Series), and each Share of any particular Series shall be equal to each other Share of that Series; but the provisions of this sentence shall not restrict any distinctions permissible under subsection (iii) of part (B) of this Article FOURTH that may exist with respect to dividends and distributions on Shares of the same Series. The Trustees may from time to time divide or combine the Shares of any particular Series into a greater or lesser number of Shares of that Series without thereby changing the proportionate beneficial interest in the assets belonging to that Series or in any way affecting the rights of Shares of any other Series. (vii) Fractions. Any fractional Share of any Series, if any such fractional Share is outstanding, shall carry proportionately all the rights and obligations of a whole Share of that Series, including with respect to voting, receipt of dividends and distributions, redemption of Shares, and liquidation of the Trust. (viii) Conversion Rights. Subject to compliance with the requirements of the 1940 Act, the Trustees shall have the authority to provide that holders of Shares of any Series shall have the right to exchange said Shares into Shares of one or more other Series of Shares in accordance with such requirements and procedures as may be established by the Trustees. (ix) Ownership of Shares. The ownership of Shares shall be recorded on the books of the Trust or of a transfer or similar agent for the Trust, which books shall be maintained separately for the Shares of each Series that has been established and designated. No certification certifying the ownership of Shares need be issued except as the Trustees may otherwise determine from time to time. The Trustees may make such rules as they consider appropriate for the issuance of Share certificates, the use of facsimile signatures, the transfer of Shares and similar matters. The record books of the Trust as kept by the Trust or any transfer or similar agent, as the case may be, shall be conclusive as to who are the Shareholders and as to the number of Shares of each Series held from time to time by each such Shareholder. (x) Investments in the Trust. The Trustees may accept investments in the Trust from such persons and on such terms and for such consideration, not inconsistent with the provisions of the 1940 Act, as they from time to time authorize. The Trustees may authorize any distributor, principal underwriter, custodian, transfer agent or other person to accept orders for the purchase of Shares that conform to such authorized terms and to reject any purchase orders for Shares whether or not conforming to such authorized terms. FIFTH: The following provisions are hereby adopted with respect to voting Shares of the Trust and certain other rights: 1. The Shareholders shall have the power to vote (i) for the election of Trustees, when that issue is submitted to them, (ii) with respect to the amendment of this Declaration of Trust, except when the Trustees are granted authority to amend the Declaration of Trust without shareholder approval, (iii) to the same extent as the shareholders of a Massachusetts business corporation, as to whether or not a court action, proceeding or claim should be brought or maintained derivatively or as a class action on behalf of the Trust or the Shareholders, and (iv) with respect to such additional matters relating to the Trust as may be required by the 1940 Act or required by law, by this Declaration of Trust, or the By-Laws of the Trust or any registration statement of the Trust with the Commission or any State, or as the Trustees may consider desirable. 2. The Trust will not hold shareholder meetings of shareholders unless required to do so by the 1940 Act, the provisions of this Declaration of Trust or other applicable law, or unless such meeting is expressly authorized by the Trustees. 3. At all meetings of Shareholders, each Shareholder shall be entitled to one vote on each matter submitted to a vote of the Shareholders of the affected Series (as defined in Rule 18f-2 or its successor under the 1940 Act) for each Share standing in his name on the books of the Trust on the date, fixed in accordance with the By-Laws, for determination of Shareholders of the affected Series entitled to vote at such meeting (except, if the Board so determines, for Shares redeemed prior to the meeting), and each such Series shall vote as an individual class ("Individual Class Voting"); provided, however, that as to any matter with respect to which a vote of all Shareholders is required by the 1940 Act or other applicable law, such requirements as to a vote by all Shareholders shall apply in lieu of Individual Class Voting as described above. Any fractional Share shall carry proportionately all the rights of a whole Share, including the right to vote and the right to receive dividends. The presence of a quorum at any meeting of the Shareholders shall be determined in the manner provided for in the By-Laws. If at any meeting of the Shareholders there shall be less than a quorum present, the Shareholders present at such meeting may, without further notice, adjourn the same from time to time until a quorum shall attend, but no business shall be transacted at any such adjourned meeting except such as might have been lawfully transacted had the meeting not been adjourned. 4. Each Shareholder, upon request to the Trust in proper form determined by the Trust, shall be entitled to require the Trust to redeem from the net assets of that Series all or part of the Shares of such Series standing in the name of such Shareholder. The method of computing such net asset value, the time at which such net asset value shall be computed and the time within which the Trust shall make payment therefor, shall be determined as hereinafter provided in Article SEVENTH of this Declaration of Trust. Notwithstanding the foregoing, the Trustees, when permitted or required to do so by the 1940 Act, may suspend the right of the Shareholders to require the Trust to redeem Shares. 5. No Shareholder shall, as such holder, have any right to purchase or subscribe for any security of the Trust which it may issue or sell, other than such right, if any, as the Trustees, in their discretion, may determine. 6. All persons who shall acquire Shares shall acquire the same subject to the provisions of the Declaration of Trust. 7. Cumulative voting for the election of Trustees shall not be allowed. SIXTH: (A) The persons who shall act as initial Trustees until the first meeting or until their successors are duly chosen and qualify are the initial trustees who executed the Declaration of Trust as of August 28, 1984. However, the By-Laws of the Trust may fix the number of Trustees at a number greater than that of the number of initial Trustees and may authorize the Trustees to increase or decrease the number of Trustees, to fill the vacancies on the Board which may occur for any reason, including any vacancies created by any such increase in the number of Trustees, to set and alter the terms of office of the Trustees and to lengthen or lessen their own terms of office or make their terms of office of indefinite duration, all subject to the 1940 Act. Unless otherwise provided by the By-Laws of the Trust, the Trustees need not be Shareholders. (B) A Trustee at any time may be removed either with or without cause by resolution duly adopted by the affirmative vote of the holders of two-thirds of the outstanding Shares, present in person or by proxy at any meeting of Shareholders called for such purpose; such a meeting shall be called by the Trustees when requested in writing to do so by the record holders of not less than ten per cent of the outstanding Shares. A Trustee may also be removed by the Board of Trustees as provided in the By-Laws of the Trust. (C) The Trustees shall make available a list of names and addresses of all Shareholders as recorded on the books of the Trust, upon receipt of the request, in writing signed by not less than ten Shareholders who have been such for at least six months holding in the aggregate shares of the Trust valued at not less than $25,000 at current offering price (as defined in the Trust's Prospectus and/or Statement of Additional Information) or holding not less than 1% in amount of the entire amount of Shares issued and outstanding; such request must state that such Shareholders wish to communicate with other shareholders with a view to obtaining signatures to a request for a meeting to take action pursuant to part (B) of this Article SIXTH and be accompanied by a form of communication to the Shareholders. The Trustees may, in their discretion, satisfy their obligation under this part (C) by either making available the Shareholder list to such Shareholders at the principal offices of the Trust, or at the offices of the Trust's transfer agent, during regular business hours, or by mailing a copy of such communication and form of request, at the expense of such requesting Shareholders, to all other Shareholders and the Trustees may also take such action as may be permitted under Section 16(c) of the 1940 Act. (D) The Trust may at any time or from time to time apply to the Commission for one or more exemptions from all or part of said Section 16(c) and, if an exemptive order or orders are issued by the Commission, such order or orders shall be deemed part of Section 16(c) for the purposes of parts (B) and (C) of this Article SIXTH. SEVENTH: The following provisions are hereby adopted for the purpose of defining, limiting and regulating the powers of the Trust, the Trustees and the Shareholders. 1. As soon as any Trustee is duly elected by the Shareholders or the Trustees and shall have accepted this Trust, the Trust estate shall vest in the new Trustee or Trustees, together with the continuing Trustees, without any further act or conveyance, and he shall be deemed a Trustee hereunder. 2. The death, declination, resignation, retirement, removal, or incapacity of the Trustees, or any one of them shall not operate to annul or terminate the Trust; in such event the Trust shall continue in full force and effect pursuant to the terms of this Declaration of Trust. 3. The assets of the Trust shall be held separate and apart from any assets now or hereafter held in any capacity other than as Trustee hereunder by the Trustees or any successor Trustees. All of the assets of the Trust shall at all times be considered as vested in the Trustees. No Shareholder shall have, as such holder of beneficial interest in the Trust, any authority, power or right whatsoever to transact business for or on behalf of the Trust, or on behalf of the Trustees, in connection with the property or assets of the Trust, or in any part thereof, except the rights to receive the income and distributable amounts arising therefrom and of a particular Series as set forth herein. 4. The Trustees in all instances shall act as principals, and are and shall be free from the control of the Shareholders. The Trustees shall have full power and authority to do any and all acts and to make and execute, and to authorize the officers of the Trust to make and execute, any and all contracts and instruments that they may consider necessary or appropriate in connection with the management of the Trust. The Trustees shall not in any way be bound or limited by present or future laws or customs in regard to Trust investments, but shall have full authority and power to make any and all investments which they, in their uncontrolled discretion, shall deem proper to accomplish the purpose of this Trust. Subject to any applicable limitation in this Declaration of Trust or by the By-Laws of the Trust, the Trustees shall have power and authority: (a) to adopt By-Laws not inconsistent with this Declaration of Trust providing for the conduct of the business of the Trust and to amend and repeal them to the extent that they do not reserve that right to the Shareholders; (b) to elect and remove such officers and appoint and terminate such officers as they consider appropriate with or without cause, and (c) to employ a bank or trust company as custodian or any assets of the Trust subject to any conditions set forth in this Declaration of Trust or in the By-Laws; (d) to retain a transfer agent and shareholder servicing agent, or both; (e) to provide for the distribution of Shares either through a principal underwriter or the Trust itself or both; (f) to set record dates in the manner provided for in the By- Laws; (g) to delegate such authority as they consider desirable to any officers of the Trust and to any agent, custodian or underwriter; (h) to vote or give assent, or exercise any rights of ownership, with respect to stock or other securities or property held in Trust hereunder; and to execute and deliver powers of attorney to such person or persons as the Trustees shall deem proper, granting to such person or persons such power and discretion with relation to securities or property as the Trustees shall deem proper; (i) to exercise powers and rights of subscription or otherwise which in any manner arise out of ownership of securities held in trust hereunder; (j) to hold any security or property in a form not indicating any trust, whether in bearer, unregistered or other negotiable form, or either in its own name or in the name of a custodian or a nominee or nominees, subject in either case to proper safeguards according to the usual practice of Massachusetts business trusts or investment companies; (k) to consent to or participate in any plan for the reorganization, consolidation or merger of any corporation or concern, any security of which is held in the Trust; to consent to any contract, lease, mortgage, purchase, or sale of property by such corporation or concern, and to pay calls or subscriptions with respect to any security held in the Trust; (l) to compromise, arbitrate, or otherwise adjust claims in favor of or against the Trust or any matter in controversy including, but not limited to, claims for taxes; (m) to make, in the manner provided in the By-Laws, distributions of income and of capital gains to Shareholders; (n) to borrow money to the extent and in the manner permitted by the 1940 Act and the Trust's fundamental policy thereunder as to borrowing; (o) to enter into investment advisory or management contracts, subject to the 1940 Act, with any one or more corporations, partnerships, trusts, associations or other persons; if the other party or parties to any such contract are authorized to enter into securities transactions on behalf of the Trust, such transactions shall be deemed to have been authorized by all of the Trustees; (p) to change the name of the Trust or any of its Series, without shareholder approval, as they consider appropriate; and (q) to establish fees and/or compensation, for the Trustees and for committees of the Board of Trustees, to be paid by the Trust or any Series thereof in such manner and amount as the Trustees may determine. 5. No one dealing with the Trustees shall be under any obligation to make any inquiry concerning the authority of the Trustees, or to see to the application of any payments made or property transferred to the Trustees or upon their order. 6. (a) The Trustees shall have no power to bind any Shareholder personally or to call upon any Shareholder for the payment of any sum of money or assessment whatsoever, and the liability of a Shareholder for the acts, omissions to act or obligations of the Trust is hereby expressly disclaimed, other than such as the Shareholder may at any time personally agree to pay by way of subscription to any Shares or otherwise. Every note, bond, contract or other undertaking issued by or on behalf of the Trust or the Trustees relating to the Trust shall include a notice and provision limiting the obligation represented thereby to the Trust and its assets (but the omission of such notice and provision shall not operate to impose any liability or obligation on any Shareholder). (b) Whenever this Declaration of Trust calls for or permits any action to be taken by the Trustees hereunder, such action shall mean that taken by the Board of Trustees by vote of the majority of a quorum of Trustees as set forth from time to time in the By-Laws of the Trust or as required by the 1940 Act. (c) The Trustees shall possess and exercise any and all such additional powers as are reasonably implied from the powers herein contained such as may be necessary or convenient in the conduct of any business or enterprise of the Trust, to do and perform anything necessary, suitable, or proper for the accomplishment of any of the purposes, or the attainment of any one or more of the objects, herein enumerated, or which shall at any time appear conducive to or expedient for the protection or benefit of the Trust, and to do and perform all other acts and things necessary or incidental to the purposes herein before set forth, or that may be deemed necessary by the Trustees. (d) The Trustees shall have the power, to the extent not inconsistent with the 1940 Act, to determine conclusively whether any moneys, securities, or other properties of the Trust are, for the purposes of this Trust, to be considered as capital or income and in what manner any expenses or disbursements are to be borne as between capital and income whether or not in the absence of this provision such moneys, securities, or other properties would be regarded as capital or income and whether or not in the absence of this provision such expenses or disbursements would ordinarily be charged to capital or to income. 7. The By-Laws of the Trust may divide the Trustees into classes and prescribe the tenure of office of the several classes, but no class shall be elected for a period shorter than that from the time of the election following the division into classes until the next meeting at which Trustees are elected and thereafter for a period shorter than the interval between meetings or for a period longer than five years, and the term of office of at least one class shall expire each year. 8. The Shareholders shall have the right to inspect the records, documents, accounts and books of the Trust, subject to reasonable regulations of the Trustees, not contrary to Massachusetts law, as to whether and to what extent, and at what times and places, and under what conditions and regulations, such right shall be exercised. 9. Any officer elected or appointed by the Trustees, by the Shareholders or otherwise, may be removed at any time, with or without cause, in such lawful manner as may be provided in the By-Laws of the Trust. 10. If the By-Laws so provide, the Trustees, and any committee thereof shall have power to hold their meetings, to have an office or offices and, subject to the provisions of the laws of Massachusetts, to keep the books of the Trust outside of said Commonwealth at such places as may from time to time be designated by them, and to take action without a meeting by unanimous written consent or by telephone or similar method of communication. 11. Securities held by the Trust shall be voted in person or by proxy by the President or a Vice-President, or such officer or officers of the Trust as the Trustees shall designate for the purpose, or by a proxy or proxies thereunto duly authorized by the Trustees, except as otherwise ordered by vote of the holders of a majority of the Shares outstanding and entitled to vote in respect thereto. 12. (a) Subject to the provisions of the 1940 Act, any Trustee, officer or employee, individually, or any partnership of which any Trustee, officer or employee may be a member, or any corporation or association of which any Trustee, officer or employee may be an officer, director, trustee, employee or stockholder, may be a party to, or may be pecuniarily or otherwise interested in, any contract or transaction of the Trust, and in the absence of fraud no contract or other transaction shall be hereby affected or invalidated; provided that when a Trustee, or a partnership, corporation or association of which a Trustee is a member, officer, director, trustee, employee or stockholder is so interested, such fact shall be disclosed or shall have been known to the Trustees, including those Trustees who are neither "interested" nor "affiliated" persons as those terms are defined in the 1940 Act, or a majority thereof; and any Trustee who is so interested, or who is also a director, officer, trustee, employee or stockholder of such other corporation or a member of such partnership which is so interested, may be counted in determining the existence of a quorum at any meeting of the Trustees which shall authorize any such contract or transaction, and may vote thereat to authorize any such contract or transaction, with like force and effect as if he were not such director, officer, trustee, employee or stockholder of such other trust or corporation or association or a member of a partnership so interested. (b) Specifically, but without limitation of the foregoing, the Trust may enter into a management or investment advisory contract or underwriting contract and other contracts with, and may otherwise do business with any manager or investment adviser for the Trust and/or principal underwriter of the Shares of the Trust or any subsidiary or affiliate of any such manager or investment adviser and/or principal underwriter and may permit any such firm or corporation to enter into any contracts or other arrangements with any other firm or corporation relating to the Trust notwithstanding that the Trustee of the Trust may be composed in part of partners, directors, officers or employees of any such firm or corporation, and officers of the Trust may have been or may be or become partners, directors, officers or employees of any such firm or corporation, and in the absence of fraud the Trust and any such firm or corporation may deal freely with each other, and no such contract or transaction between the Trust and any such firm or corporation shall be invalidated or in any way affected thereby, nor shall any Trustee or officer of the Trust be liable to the Trust or to any Shareholder or creditor thereof or to any other person for any loss incurred by it or him solely because of the existence of any such contract or transaction; provided that nothing herein shall protect any director or officer of the Trust against any liability to the trust or to its security holders to which he would otherwise be subject by reason of willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of his office. (c) (1) As used in this paragraph the following terms shall have the meanings set forth below: (i) the term "indemnitee" shall mean any present or former Trustee, officer or employee of the Trust, any present or former Trustee, or officer of another trust or corporation whose securities are or were owned by the Trust or of which the Trust is or was a creditor and who served or serves in such capacity at the request of the Trust, any present or former investment advisor or principal underwriter of the Trust and the heirs, executors, administrators, successors and assigns of any of the foregoing; however, whenever conduct by an indemnitee is referred to, the conduct shall be that of the original indemnitee rather than that of the heir, executor, administrator, successor or assignee; (ii) the term "covered proceeding" shall mean any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, to which an indemnitee is or was a party or is threatened to be made a party by reason of the fact or facts under which he or it is an indemnitee as defined above; (iii) the term "disabling conduct" shall mean willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of the office in question; (iv) the term "covered expenses" shall mean expenses (including attorney's fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by an indemnitee in connection with a covered proceeding; and (v) the term "adjudication of liability" shall mean, as to any covered proceeding and as to any indemnitee, an adverse determination as to the indemnitee whether by judgment, order, settlement, conviction or upon a plea of nolo contendere or its equivalent. (d) The Trust shall not indemnify any indemnitee for any covered expenses in any covered proceeding if there has been an adjudication of liability against such indemnitee expressly based on a finding of disabling conduct. (e) Except as set forth in paragraph (d) above, the Trust shall indemnify any indemnitee for covered expenses in any covered proceeding, whether or not there is an adjudication of liability as to such indemnitee, if a determination has been made that the indemnitee was not liable by reason of disabling conduct by (i) a final decision on the merits of the court or other body before which the covered proceeding was brought; or (ii) in the absence of such decision, a reasonable determination, based on a review of the facts, by either (a) the vote of a majority of a quorum of Trustees who are neither "interested persons", as defined in the 1940 Act nor parties to the covered proceedings, or (b) an independent legal counsel in a written opinion; provided that such Trustees or counsel, in reaching such determination, may but need not presume the absence of disabling conduct on the part of the indemnitee by reason of the manner in which the covered proceeding was terminated. (f) Covered expenses incurred by an indemnitee in connection with a covered proceeding shall be advanced by the Trust to an indemnitee prior to the final disposition of a covered proceeding upon the request of the indemnitee for such advance and the undertaking by or on behalf of the indemnitee to repay the advance unless it is ultimately determined that the indemnitee is entitled to indemnification thereunder, but only if one or more of the following is the case: (i) the indemnitee shall provide a security for such undertaking; (ii) the Trust shall be insured against losses arising out of any lawful advances; or (iii) there shall have been a determination, based on a review of the readily available facts (as opposed to a full trial-type inquiry) that there is a reason to believe that the indemnitee ultimately will be found entitled to indemnification, by either independent legal counsel in a written opinion or by the vote of a majority of a quorum of trustees who are neither "interested persons" as defined in the 1940 Act nor parties to the covered proceeding. (g) Nothing herein shall be deemed to affect the right of the Trust and/or any indemnitee to acquire and pay for any insurance covering any or all indemnitees to the extent permitted by the 1940 Act or to affect any other indemnification rights to which any indemnitee may be entitled to the extent permitted by the 1940 Act. 13. For purposes of the computation of net asset value, as in this Declaration of Trust referred to, the following rules shall apply: (a) The net asset value per Share of any Series, as of the time of valuation on any day, shall be the quotient obtained by dividing the value, as at such time, of the net assets of that Series (i.e., the value of the assets of that Series less its liabilities exclusive of its surplus) by the total number of Shares of that Series outstanding at such time. The assets and liabilities of any Series shall be determined in accordance with generally accepted accounting principles; provided, however, that in determining the liabilities of any Series there shall be included such reserves as may be authorized or approved by the Trustees, and provided further that in connection with the accrual of any fee or refund payable to or by an investment adviser of the Trust for such Series, the amount of which accrual is not definitely determinable as of any time at which the net asset value of each Share of that Series is being determined due to the contingent nature of such fee or refund, the Trustees are authorized to establish from time to time formulae for such accrual, on the basis of the contingencies in question to the date of such determination, or on such other basis as the Trustees may establish. (1) Shares of a Series to be issued shall be deemed to be outstanding as of the time of the determination of the net asset value per Share applicable to such issuance and the net price thereof shall be deemed to be an asset of that Series; (2) Shares of a Series to be redeemed by the Trust shall be deemed to be outstanding until the time of the determination of the net asset value applicable to such redemption and thereupon and until paid the redemption price thereof shall be deemed to be a liability of that Series; and (3) Shares of a Series voluntarily purchased or contracted to be purchased by the Trust pursuant to the provisions of paragraph 4 of Article FIFTH shall be deemed to be outstanding until whichever is the later of (i) the time of the making of such purchase or contract of purchase, and (ii) the time of which the purchase price is determined, and thereupon and until paid, the purchase price thereof shall be deemed to be a liability of that Series. (b) The Trustees are empowered, in their absolute discretion, to establish bases or times, or both, for determining the net asset value per Share of any Series in accordance with the 1940 Act and to authorize the voluntary purchase by any Series, either directly or through an agent, of Shares of any Series upon such terms and conditions and for such consideration as the Trustees shall deem advisable in accordance with the 1940 Act. 14. Payment of the net asset value per Share of any Series properly surrendered to it for redemption shall be made by the Trust within seven days after tender of such shares to the Trust for such purpose plus any period of time during which the right of the holders of the shares of that Series to require the Trust to redeem such shares has been suspended, or as specified in any applicable law or regulation. Any such payment may be made in portfolio securities of that Series and/or in cash, as the Trustees shall deem advisable, and no Shareholder shall have a right, other than as determined by the Trustees, to have his Shares redeemed in kind. 15. The Trust shall have the right, at any time and without prior notice to the Shareholder, to redeem Shares of the Series held by such Shareholder held in any account registered in the name of such Shareholder for its current net asset value, if and to the extent that such redemption is necessary to reimburse either that Series of the Trust or the distributor (i.e., principal underwriter) of the Shares for any loss either has sustained by reason of the failure of such Shareholder to make timely and good payment for Shares purchased or subscribed for by such Shareholder, regardless of whether such Shareholder was a Shareholder at the time of such purchase or subscription; subject to and upon such terms and conditions as the Trustees may from time to time prescribe. EIGHTH: The name "Oppenheimer" included in the name of the Trust and of any Series shall be used pursuant to a royalty-free, non-exclusive license from Oppenheimer Management Corporation, incidental to and as part of an advisory, management or supervisory contract which may be entered into by the Trust with Oppenheimer Management Corporation. The license may be terminated by Oppenheimer Management Corporation upon termination of such advisory management or supervisory contract or without cause upon 60 days' notice, in which case neither the Trust nor any Series shall have any further right to use the name "Oppenheimer" in its name or otherwise and the Trust, the Shareholders and its officers and Trustees shall promptly take whatever action may be necessary to change its name accordingly. NINTH: 1. In case any Shareholder or former Shareholder shall be held to be personally liable solely by reason of his being or having been a Shareholder and not because of his acts or omissions or for some other reason, the Shareholder or former Shareholder (or his heirs, executors, administrators or other legal representatives or in the case of a corporation or other entity, its corporate or other general successor) shall be entitled out of the Trust estate to be held harmless from and indemnified against all loss and expense arising from such liability. The Trust shall, upon request by the Shareholder, assume the defense of any such claim made against any Shareholder for any act or obligation of the Trust and satisfy any judgment thereon. 2. It is hereby expressly declared that a trust and not a partnership is created hereby. No individual Trustee hereunder shall have any power to bind the Trust, the Trust's officers or any Shareholder. All persons extending credit to, doing business with, contracting with or having or asserting any claim against the Trust or the Trustees shall look only to the assets of the Trust for payment under such credit, transaction, contract or claim; and neither the Shareholders nor the Trustees, nor any of their agents, whether past, present or future, shall be personally liable therefor; notice of such disclaimer shall be given in each agreement, obligation or instrument entered into or executed by the Trust or the Trustees. Nothing in this Declaration of Trust shall protect a Trustee against any liability to which such Trustee would otherwise be subject by reason of willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of the office of Trustee hereunder. 3. The exercise by the Trustees of their powers and discretion hereunder in good faith and with reasonable care under the circumstances then prevailing, shall be binding upon everyone interested. Subject to the provisions of paragraph 2 of this Article NINTH, the Trustees shall not be liable for errors of judgment or mistakes of fact or law. The Trustees may take advice of counsel or other experts with respect to the meaning and operations of this Declaration of Trust, applicable laws, contracts, obligations, transactions, or any business or dealings the Trust may enter into, and subject to the provisions of paragraph 2 of this Article NINTH, shall be under no liability for any act or omission in accordance with such advice or for failing to follow such advice. The Trustees shall not be required to give any bond as such, nor any surety if a bond is required. 4. This Trust shall continue without limitation of time but subject to the provisions of sub-sections (a), (b), (c) and (d) of this paragraph 4. (a) The Trustees, with the favorable vote of the holders of a majority of the outstanding voting securities, as defined in the 1940 Act, of any one or more Series entitled to vote, may sell and convey the assets of that Series (which sale may be subject to the retention of assets for the payment of liabilities and expenses) to another issuer for a consideration which may be or include securities of such issuer. Upon making provision for the payment of liabilities, by assumption by such issuer or otherwise, the Trustees shall distribute the remaining proceeds ratably among the holders of the outstanding Shares of the Series the assets of which have been so transferred. (b) The Trustees, with the favorable vote of the holders of a majority of the outstanding voting securities, as defined in the 1940 Act, of any one or more Series entitled to vote, may at any time sell and convert into money all the assets of that Series. Upon making provisions for the payment of all outstanding obligations, taxes and other liabilities, accrued or contingent, of that Series, the Trustees shall distribute the remaining assets of that Series ratably among the holders of the outstanding Shares of that Series. (c) The Trustees, with the favorable vote of the holders of a majority of the outstanding voting securities, as defined in the 1940 Act, of any one or more Series entitled to vote, may at any time otherwise alter, transfer or convert the assets of such Series. (d) Upon completion of the distribution of the remaining proceeds or the remaining assets as provided in sub-sections (a), (b), and (c), whenever applicable, the Series the assets of which have been so transferred shall terminate, and if all the assets of the Trust have been so transferred, the Trust shall terminate and the Trustees shall be discharged of any and all further liabilities and duties hereunder and the right, title and interest of all parties shall be cancelled and discharged. 5. The original or a copy of this instrument and of each declaration of trust supplemental hereto shall be kept at the office of the Trust where it may be inspected by any Shareholder. A copy of this instrument and of each supplemental or restated declaration of trust shall be filed with the Massachusetts Secretary of State, as well as any other governmental office where such filing may from time to time be required. Anyone dealing with the Trust may rely on a certificate by an officer of the Trust as to whether or not any such supplemental or restated declarations of trust have been made and as to any matters in connection with the Trust hereunder, and, with the same effect as if it were the original, may rely on a copy certified by an officer of the Trust to be a copy of this instrument or of any such restated or supplemental declaration of trust. In this instrument or in any such supplemental or restated declaration of trust, references to this instrument, and all expressions like "herein", "hereof" and "hereunder" shall be deemed to refer to this instrument as amended or affected by any such restated or supplemental declaration of trust. This instrument may be executed in any number of counterparts, each of which shall be deemed as original. 6. The Trust set forth in this instrument is created under and is to be governed by and construed and administered according to the laws of the Commonwealth of Massachusetts. The Trust shall be of the type commonly called a Massachusetts business trust, and without limiting the provisions hereof, the Trust may exercise all powers which are ordinarily exercised by such a trust. 7. The Board of Trustees is empowered to cause the redemption of the Shares held in any account if the aggregate net asset value of such Shares (taken at cost or value, as determined by the Board) has been reduced to $200 or less upon such notice to the shareholder in question, with such permission to increase the investment in question and upon such other terms and conditions as may be fixed by the Board of Trustees in accordance with the 1940 Act. 8. In the event that any person advances the organizational expenses of the Trust, such advances shall become an obligation of the Trust subject to such terms and conditions as may be fixed by, and on a date fixed by, or determined with criteria fixed by the Board of Trustees, to be amortized over a period or periods to be fixed by the Board. 9. Whenever any action is taken under this Declaration of Trust under any authorization to take action which is permitted by the 1940 Act or other applicable law, such action shall be deemed to have been properly taken if such action is in accordance with the construction of the 1940 Act then in effect as expressed in "no action" letters of the staff of the Commission or any release, rule, regulation or order under the 1940 Act or any decision of a court of competent jurisdiction, notwithstanding that any of the foregoing shall later be found to be invalid or otherwise reversed or modified by any of the foregoing. 10. Any action which may be taken by the Board of Trustees under this Declaration of Trust or its By-Laws may be taken by the description thereof in the then effective prospectus or statement of additional information relating to the Shares under the Securities Act of 1933 or in any proxy statement of the Trust rather than by formal resolution of the Board. 11. Whenever under this Declaration of Trust, the Board of Trustees is permitted or required to place a value on assets of the Trust, such action may be delegated by the Board, and/or determined in accordance with a formula determined by the Board, to the extent permitted by the 1940 Act. 12. If authorized by vote of the Trustees and the favorable vote of the holders of a majority of the outstanding voting securities, as defined in the 1940 Act, entitled to vote, or by any larger vote which may be required by applicable law in any particular case, the Trustees shall amend or otherwise supplement this instrument, by making a Restated Declaration of Trust or a Declaration of Trust supplemental hereto, which thereafter shall form a part hereof; any such Supplemental or Restated Declaration of Trust may be executed by and on behalf of the Trust and the Trustees by an officer or officers of the Trust. IN WITNESS WHEREOF, the undersigned have executed this instrument as of the 28th day of February, 1995. /s/ William A. Baker /s/ Charles Conrad, Jr. William A. Baker, Trustee Charles Conrad, Jr., Trustee 197 Desert Lakes Drive 19411 Merion Court Palm Springs, California, 92264 Huntington Beach, California 92648 /s/ Ned M. Steel /s/ Robert M. Kirchner Ned M. Steel, Trustee Robert M. Kirchner, Trustee 3236 S. Steele Street 2800 S. University Boulevard Denver, Colorado Denver, Colorado 80210 /s/ Raymond J. Kalinowski /s/ C. Howard Kast Raymond J. Kalinowski, Trustee C. Howard Kast, Trustee 44 Portland Drive 2252 East Alameda St. Louis, Missouri Denver, Colorado 80209 /s/ James C. Swain /s/ Jon S. Fossel James C. Swain, Trustee Jon S. Fossel, Trustee 23544 Wayne's Way Box 44-Mead Street Golden, California 80401 Waccabuc, New York 10597 /s/ Robert G. Avis Robert G. Avis, Trustee 1706 Warson Estates Drive St. Louis, MO 63124 orgzn\600#3 EX-99 4 OPPENHEIMER GROWTH & INCOME FUND Share Certificate (8-1/2" x 11") I. FACE OF CERTIFICATE (All text and other matter lies within 8-1/4" x 10-3/4" decorative border, 5/16" wide) (upper left corner, box with heading: NUMBER [of shares] (upper right corner) shares (centered below boxes) OPPENHEIMER VARIABLE ACCOUNT FUNDS A MASSACHUSETTS BUSINESS TRUST SERIES: OPPENHEIMER GROWTH & INCOME FUND (at left) THIS IS TO CERTIFY THAT (at right) SEE REVERSE FOR CERTAIN DEFINITIONS (box with number) CUSIP (at left) is the owner of (centered) FULLY PAID SHARES OF BENEFICIAL INTEREST OF OPPENHEIMER GROWTH & INCOME FUND a series of OPPENHEIMER VARIABLE ACCOUNT FUNDS (hereinafter called the "Fund"), transferable only on the books of the Fund by the holder hereof in person or by duly authorized attorney, upon surrender of this certificate properly endorsed. This certificate and the shares represented hereby are issued and shall be held subject to all of the provisions of the Declaration of Trust of the Fund to all of which the holder by acceptance hereof assents. This certificate is not valid until countersigned by the Transfer Agent. WITNESS the facsimile seal of the Fund and the signatures of its duly authorized officers. (signature Dated: (signature at left of seal) at right of seal) _______________________ ___________________ SECRETARY PRESIDENT (centered at bottom) 1-1/2" diameter facsimile seal with legend OPPENHEIMER VARIABLE ACCOUNT FUNDS SEAL 1995 COMMONWEALTH OF MASSACHUSETTS (at lower right, printed vertically) Countersigned OPPENHEIMER SHAREHOLDER SERVICES, INC. Denver (Colo.) Transfer Agent By ____________________________ Authorized Signature II. BACK OF CERTIFICATE (text reads from top to bottom of 11" dimension) The following abbreviations, when used in the inscription on the face of this certificate, shall be construed as though they were written out in full according to applicable laws or regulations. TEN COM - as tenants in common TEN ENT - as tenants by the entirety JT TEN WROS NOT TC - as joint tenants with rights of survivorship and not as tenants in common UNIF GIFT/TRANSFER MIN ACT - __________________ Custodian _______________ (Cust) (Minor) UNDER UGMA/UTMA ___________________ (State) Additional abbreviations may also be used though not in the above list. For Value Received ................ hereby sell(s), assign(s), and transfer(s) unto PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE AND PROVIDE CERTIFICATION BY TRANSFEREE (box for identifying number) _______________________________________________________________________ (Please print or type name and address of assignee) ______________________________________________________ ________________________________________________Shares of the beneficial interest represented by the within Certificate, and do hereby irrevocably constitute and appoint ___________________________ Attorney to transfer the said shares on the books of the within named Fund with full power of substitution in the premises. Dated: ______________________ Signed: __________________________ ___________________________________ (Both must sign if joint owners) Signature(s) __________________________ guaranteed Name of Firm/Bank by: _____________________________ Signature of Officer (text printed NOTICE: The signature(s) to this assignment must vertically to right correspond with the name(s) as written upon the of above paragraph) face of the certificate in every particular without alteration or enlargement or any change whatever. (text printed in Signatures must be guaranteed by a U.S. box to left of commercial bank or trust company, a Federally signature(s)) chartered savings and loan association, a foreign bank having a U.S. correspondent bank or member firm of a national securities exchange. edgar\600CERTA EX-10 5 INVESTMENT ADVISORY AGREEMENT AGREEMENT made the 1st day of May, 1995, by and between OPPENHEIMER VARIABLE ACCOUNT FUNDS (hereinafter referred to as the "Trust"), and OPPENHEIMER MANAGEMENT CORPORATION (hereinafter referred to as "OMC"). WHEREAS, the Trust is an open-end, diversified series management investment company registered as such with the Securities and Exchange Commission (the "Commission") pursuant to the Investment Company Act of 1940 (the "Investment Company Act"), and OMC is a registered investment adviser; and WHEREAS, OPPENHEIMER GROWTH & INCOME FUND (the "Fund") is a series of the Trust having a separate portfolio, investment policies and investment restrictions; and NOW, THEREFORE, in consideration of the mutual promises and covenants hereinafter set forth, it is agreed by and between the parties, as follows: 1. General Provision. a. The Trust hereby employs OMC and OMC hereby undertakes to act as the investment adviser of the Fund and to perform for the Fund such other duties and functions as are hereinafter set forth. OMC shall, in all matters, give to the Fund and the Trust's Board of Trustees the benefit of its best judgment, effort, advice and recommendations and shall, at all times conform to, and use its best efforts to enable the Fund to conform to: (i) the provisions of the Investment Company Act and any rules or regulations thereunder; (ii) any other applicable provisions of state or Federal law; (iii) the provisions of the Declaration of Trust and By-Laws of the Trust as amended from time to time; (iv) policies and determinations of the Board of Trustees of the Trust; (v) the fundamental policies and investment restrictions of the Fund as reflected in the Trust's registration statement under the Investment Company Act or as such policies may, from time to time, be amended by the Fund's shareholders; and (vi) the Prospectus and Statement of Additional Information of the Trust in effect from time to time. The appropriate officers and employees of OMC shall be available upon reasonable notice for consultation with any of the trustees and officers of the Trust with respect to any matters dealing with the business and affairs of the Trust including the valuation of portfolio securities of the Fund which securities are either not registered for public sale or not traded on any securities market. 2. Investment Management. a. OMC shall, subject to the direction and control by the Trust's Board of Trustees: (i) regularly provide investment advice and recommendations to the Fund with respect to its investments, investment policies and the purchase and sale of securities; (ii) supervise continuously the investment program of the Fund and the composition of its portfolio and determine what securities shall be purchased or sold by the Fund; and (iii) arrange, subject to the provisions of paragraph 7 hereof, for the purchase of securities and other investments for the Fund and the sale of securities and other investments held in the portfolio of the Fund. b. Provided that the Trust shall not be required to pay any compensation other than as provided by the terms of this Agreement and subject to the provisions of paragraph 7 hereof, OMC may obtain investment information, research or assistance from any other person, firm or corporation to supplement, update or otherwise improve its investment management services. c. OMC shall not be liable for any loss sustained by the Trust and/or the Fund in connection with matters to which this Agreement relates, except a loss resulting by reason of OMC's willful misfeasance, bad faith or gross negligence in the performance of its duties; or by reason of its reckless disregard of its obligations and duties under this Agreement. d. Nothing in this Agreement shall prevent OMC or any officer thereof from acting as investment adviser for any other person, firm or corporation and shall not in any way limit or restrict OMC or any of its directors, officers, stockholders or employees from buying, selling or trading any securities for its or their own account or for the account of others for whom it or they may be acting, provided that such activities will not adversely affect or otherwise impair the performance by OMC of its duties and obligations under this Agreement. 3. Other Duties of OMC. OMC shall, at its own expense, provide and supervise the activities of all administrative and clerical personnel as shall be required to provide effective administration for the Fund, including the compilation and maintenance of such records with respect to its operations as may reasonably be required; the preparation and filing of such reports with respect thereto as shall be required by the Commission; composition of periodic reports with respect to operations of the Fund for its shareholders; composition of proxy materials for meetings of the Fund's shareholders, and the composition of such registration statements as may be required by Federal securities laws for continuous public sale of shares of the Fund. OMC shall, at its own cost and expense, also provide the Trust with adequate office space, facilities and equipment. OMC shall, at its own expense, provide such officers for the Fund as the Fund's Board may request. 4. Allocation of Expenses. All other costs and expenses of the Fund not expressly assumed by OMC under this Agreement, shall be paid by the Trust, including, but not limited to: (i) interest and taxes; (ii) brokerage commissions; (iii) insurance premiums for fidelity and other coverage requisite to its operations; (iv) compensation and expenses of its trustees other than those associated or affiliated with OMC; (v) legal and audit expenses; (vi) custodian and transfer agent fees and expenses; (vii) expenses incident to the redemption of its shares; (viii) expenses incident to the issuance of its shares against payment therefor by or on behalf of the subscribers thereto; (ix) fees and expenses, other than as hereinabove provided, incident to the registration under Federal securities laws of shares of the Fund for public sale; (x) expenses of printing and mailing reports, notices and proxy materials to shareholders of the Fund; (xi) except as noted above, all other expenses incidental to holding meetings of the Fund's shareholders; and (xii) such extraordinary non-recurring expenses as may arise, including litigation, affecting the Fund and any legal obligation which the Trust may have on behalf of the Fund to indemnify its officers and trustees with respect thereto. Any officers or employees of OMC or any entity controlling, controlled by or under common control with OMC, who may also serve as officers, trustees or employees of the Trust shall not receive any compensation from the Trust for their services. The expenses with respect to any two or more series of the Trust shall be allocated in proportion to the net assets of the respective series except where allocations of direct expenses can be made. 5. Compensation of OMC. The Trust agrees to pay OMC on behalf of the Fund and OMC agrees to accept as full compensation for the performance of all functions and duties on its part to be performed pursuant to the provisions hereof, a fee computed on the aggregate net asset value of the Fund as of the close of each business day and payable monthly at the annual rate of: .75% of the first $200 million of average annual net assets; .72% of the next $200 million; .69% of the next $200 million; .66% of the next $200 million; and .60% of average annual net assets in excess of $800 million. 6. Use of Name "Oppenheimer." OMC hereby grants to the Trust a royalty-free, non-exclusive license to use the name "Oppenheimer" in the name of the Trust and the Fund for the duration of this Agreement and any extensions or renewals thereof. To the extent necessary to protect OMC's rights to the name "Oppenheimer" under applicable law, such license shall allow OMC to inspect, and subject to control by the Trust's Board, control the name and quality of services offered by the Fund under such name. Such license may, upon termination of this Agreement, be terminated by OMC, in which event the Trust shall promptly take whatever action may be necessary to change its name and the name of the Fund and discontinue any further use of the name "Oppenheimer" in the name of the Trust or the Fund or otherwise. The name "Oppenheimer" may be used or licensed by OMC in connection with any of its activities, or licensed by OMC to any other party. 7. Portfolio Transactions and Brokerage. a. OMC is authorized, in arranging the purchase and sale of the Fund's portfolio securities, to employ or deal with such members of securities or commodities exchanges, brokers or dealers (hereinafter "broker-dealers"), including "affiliated" broker-dealers (as that term is defined in the Investment Company Act), as may, in its best judgment, implement the policy of the Fund to obtain, at reasonable expense, the "best execution" (prompt and reliable execution at the most favorable security price obtainable) of the Fund's portfolio transactions as well as to obtain, consistent with the provisions of subparagraph (c) of this paragraph 7, the benefit of such investment information or research as will be of significant assistance to the performance by OMC of its investment management functions. b. OMC shall select broker-dealers to effect the Fund's portfolio transactions on the basis of its estimate of their ability to obtain best execution of particular and related portfolio transactions. The abilities of a broker-dealer to obtain best execution of particular portfolio transaction(s) will be judged by OMC on the basis of all relevant factors and considerations including, insofar as feasible, the execution capabilities required by the transaction or transactions; the ability and willingness of the broker-dealer to facilitate the Fund's portfolio transactions by participating therein for its own account; the importance to the Fund of speed, efficiency or confidentiality; the broker-dealer's apparent familiarity with sources from or to whom particular securities might be purchased or sold; as well as any other matters relevant to the selection of a broker-dealer for particular and related transactions of the Fund. c. OMC shall have discretion, in the interests of the Fund, to allocate brokerage on the Fund's portfolio transactions to broker-dealers, other than an affiliated broker-dealer, qualified to obtain best execution of such transactions who provide brokerage and/or research services (as such services are defined in Section 28(e)(3) of the Securities Exchange Act of 1934) for the Fund and/or other accounts for which OMC or its affiliates exercise "investment discretion" (as that term is defined in Section 3(a)(35) of the Securities Exchange Act of 1934) and to cause the Trust to pay such broker-dealers a commission for effecting a portfolio transaction for the Fund that is in excess of the amount of commission another broker-dealer adequately qualified to effect such transaction would have charged for effecting that transaction, if OMC determines, in good faith, that such commission is reasonable in relation to the value of the brokerage and/or research services provided by such broker-dealer, viewed in terms of either that particular transaction or the overall responsibilities of OMC or its affiliates with respect to the accounts as to which they exercise investment discretion. In reaching such determination, OMC will not be required to place or attempt to place a specific dollar value on the brokerage and/or research services provided or being provided by such broker-dealer. In demonstrating that such determinations were made in good faith, OMC shall be prepared to show that all commissions were allocated for purposes contemplated by this Agreement and that the total commissions paid by the Trust over a representative period selected by the Trust's trustees were reasonable in relation to the benefits to the Fund. d. OMC shall have no duty or obligation to seek advance competitive bidding for the most favorable commission rate applicable to any particular portfolio transactions or to select any broker-dealer on the basis of its purported or "posted" commission rate but will, to the best of its ability, endeavor to be aware of the current level of the charges of eligible broker-dealers and to minimize the expense incurred by the Fund for effecting its portfolio transactions to the extent consistent with the interests and policies of the Fund as established by the determinations of the Board of Trustees of the Trust and the provisions of this paragraph 7. e. The Trust recognizes that an affiliated broker-dealer: (i) may act as one of the Fund's regular brokers so long as it is lawful for it so to act; (ii) may be a major recipient of brokerage commissions paid by the Trust; and (iii) may effect portfolio transactions for the Fund only if the commissions, fees or other remuneration received or to be received by it are determined in accordance with procedures contemplated by any rule, regulation or order adopted under the Investment Company Act for determining the permissible level of such commissions. f. Subject to the foregoing provisions of this paragraph 7, OMC may also consider sales of shares of the Fund and the other funds advised by OMC and its affiliates as a factor in the selection of broker-dealers for its portfolio transactions. 8. Duration. This Agreement will take effect on the date first set forth above. Unless earlier terminated pursuant to paragraph 10 hereof, this Agreement shall continue in effect until December 31, 1995, and thereafter will continue in effect from year to year, so long as such continuance shall be approved at least annually by the Trust's Board of Trustees, including the vote of the majority of the trustees of the Trust who are not parties to this Agreement or "interested persons" (as defined in the Investment Company Act) of any such party, cast in person at a meeting called for the purpose of voting on such approval, or by the holders of a "majority" (as defined in the Investment Company Act) of the outstanding voting securities of the Fund and by such a vote of the Trust's Board of Trustees. 9. Disclaimer of Trustee or Shareholder Liability. OMC understands and agrees that the obligations of the Trust under this Agreement are not binding upon any Trustee or shareholder of the Trust or Fund personally, but bind only the Trust and the Trust's property. OMC represents that it has notice of the provisions of the Declaration of Trust of the Trust disclaiming Trustee or shareholder liability for acts or obligations of the Trust. 10. Termination. This Agreement may be terminated: (i) by OMC at any time without penalty upon sixty days' written notice to the Trust (which notice may be waived by the Trust); or (ii) by the Trust at any time without penalty upon sixty days' written notice to OMC (which notice may be waived by OMC) provided that such termination by the Trust shall be directed or approved by the vote of a majority of all of the trustees of the Trust then in office or by the vote of the holders of a "majority" of the outstanding voting securities of the Fund (as defined in the Investment Company Act). 11. Assignment or Amendment. This Agreement may not be amended or the rights of OMC hereunder sold, transferred, pledged or otherwise in any manner encumbered without the affirmative vote or written consent of the holders of the "majority" of the outstanding voting securities of the Trust. This Agreement shall automatically and immediately terminate in the event of its "assignment," as defined as stated below. 12. Definitions. The terms and provisions of this Agreement shall be interpreted and defined in a manner consistent with the provisions and definitions of the Investment Company Act. OPPENHEIMER VARIABLE ACCOUNT FUNDS for OPPENHEIMER GROWTH & INCOME FUND By: /s/ Andrew J. Donohue _________________________________ Andrew J. Donohue, Vice President OPPENHEIMER MANAGEMENT CORPORATION By: /s/ Mitchell J. Lindauer _______________________________ Mitchell J. Lindauer Vice President advisory\6009 EX-10 6 OPPENHEIMER VARIABLE ACCOUNT FUNDS CUSTODY AGREEMENT Agreement made as of this 12th day of November, 1992, between OPPENHEIMER VARIABLE ACCOUNT FUNDS, a business trust organized and exist- ing under the laws of the Commonwealth of Massachusetts, having its prin- cipal office and place of business at 3410 South Galena Street, Denver, Colorado 80231 (hereinafter called the "Fund"), and THE BANK OF NEW YORK, a New York corporation authorized to do a banking business, having its principal office and place of business at 48 Wall Street, New York, New York 10286 (hereinafter called the "Custodian"). W I T N E S S E T H that for and in consideration of the mutual promises hereinafter set forth, the Fund and the Custodian agree as follows: ARTICLE I DEFINITIONS Whenever used in this Agreement, the following words and phrases, shall have the following meanings: 1. "Agreement" shall mean this Custody Agreement and all Appendices and Certifications described in the Exhibits delivered in connection herewith. 2. "Authorized Person" shall mean any person, whether or not such person is an Officer or employee of the Fund, duly authorized by the Board of Trustees of the Fund to give Oral Instructions and Written Instructions on behalf of the Fund and listed in the Certificate annexed hereto as Appendix A or such other Certificate as may be received by the Custodian from time to time, provided that each person who is designated in any such Certificate as an "Officer of OSS" shall be an Authorized Person only for purposes of Articles XII and XIII hereof. 3. "Book-Entry System" shall mean the Federal Reserve/Treasury book- entry system for United States and federal agency securities, its successor or successors and its nominee or nominees. 4. "Call Option" shall mean an exchange traded Option with respect to Securities other than Index, Futures Contracts, and Futures Contract Options entitling the holder, upon timely exercise and payment of the exercise price, as specified therein, to purchase from the writer thereof the specified underlying instruments, currency, or Securities. 5. "Certificate" shall mean any notice, instruction, or other instrument in writing, authorized or required by this Agreement to be given to the Custodian which is actually received (irrespective of constructive receipt) by the Custodian and signed on behalf of the Fund by any two Officers. The term Certificate shall also include instructions by the Fund to the Custodian communicated by a Terminal Link. 6. "Clearing Member" shall mean a registered broker-dealer which is a clearing member under the rules of O.C.C. and a member of a national securities exchange qualified to act as a custodian for an investment company, or any broker-dealer reasonably believed by the Custodian to be such a clearing member. 7. "Collateral Account" shall mean a segregated account so de- nominated which is specifically allocated to a Series and pledged to the Custodian as security for, and in consideration of, the Custodian's issuance of any Put Option guarantee letter or similar document described in paragraph 8 of Article V herein. 8. "Covered Call Option" shall mean an exchange traded Option entitling the holder, upon timely exercise and payment of the exercise price, as specified therein, to purchase from the writer thereof the specified underlying instruments, currency, or Securities (excluding Futures Contracts) which are owned by the writer thereof. 9. "Depository" shall mean The Depository Trust Company ("DTC"), a clearing agency registered with the Securities and Exchange Commission, its successor or successors and its nominee or nominees. The term "Depository" shall further mean and include any other person authorized to act as a depository under the Investment Company Act of 1940, its successor or successors and its nominee or nominees, specifically identified in a certified copy of a resolution of the Fund's Board of Trustees specifically approving deposits therein by the Custodian, including, without limitation, a Foreign Depository. 10. "Financial Futures Contract" shall mean the firm commitment to buy or sell financial instruments on a U.S. commodities exchange or board of trade at a specified future time at an agreed upon price. 11. "Foreign Subcustodian" shall mean an "Eligible Foreign Custodian" as defined in Rule 17-5 which is appointed by the Custodian to perform or coordinate the receipt, custody and delivery of Foreign Property of the Fund outside the United States in a manner consistent with the provisions of this Agreement and whose written contract is approved by the Board of Trustees of the Fund in accordance with Rule 17f-5. References to the Custodian herein shall, when appropriate, include reference to its Foreign Subcustodians. 12. "Foreign Depository" shall mean an entity organized under the laws of a foreign country which operates a system outside the United States in general use by foreign banks and securities brokers for the central or transnational handling of securities or equivalent book-entries which is regulated by a foreign government or agency thereof and which is an "Eligible Foreign Custodian" as defined in Rule 17f-5. 13. "Foreign Securities" shall mean securities and/or short term paper as defined in Rule 17f-5 under the Act, whether issued in registered or bearer form. 14. "Foreign Property" shall mean Foreign Securities and money of any currency which is held outside of the United States. 15. "Futures Contract" shall mean a Financial Futures Contract and/or Index Futures Contracts. 16. "Futures Contract Option" shall mean an Option with respect to a Futures Contract. 17. "Investment Company Act of 1940" shall mean the Investment Company Act of 1940, as amended, and the rules and regulations thereunder. 18. "Index Futures Contract" shall mean a bilateral agreement pursuant to which the parties agree to take or make delivery of an amount of cash equal to a specified dollar amount times the difference between the value of a particular index at the close of the last business day of the contract and the price at which the futures contract is originally struck. 19. "Index Option" shall mean an exchange traded Option entitling the holder, upon timely exercise, to receive an amount of cash determined by reference to the difference between the exercise price and the value of the index on the date of exercise. 20. "Margin Account" shall mean a segregated account in the name of a broker, dealer, futures commission merchant, or a Clearing Member, or in the name of the Fund for the benefit of a broker, dealer, futures commission merchant, or Clearing Member, or otherwise, in accordance with an agreement between the Fund, the Custodian and a broker, dealer, futures commission merchant or a Clearing Member (a "Margin Account Agreement"), separate and distinct from the custody account, in which certain Securities and/or money of the Fund shall be deposited and withdrawn from time to time in connection with such transactions as the Fund may from time to time determine. Securities held in the Book-Entry System or a Depository shall be deemed to have been deposited in, or withdrawn from, a Margin Account upon the Custodian's effecting an appropriate entry in its books and records. 21. "Money Market Security" shall mean all instruments and ob- ligations commonly known as a money market instruments, where the purchase and sale of such securities normally requires settlement in federal funds on the same day as such purchase or sale, including, without limitation, certain Reverse Repurchase Agreements, debt obligations issued or guaranteed as to interest and/or principal by the government of the United States or agencies or instrumentalities thereof, any tax, bond or revenue anticipation note issued by any state or municipal government or public authority, commercial paper, certificates of deposit and bankers' acceptances, repurchase agreements with respect to Securities and bank time deposits. 22. "Nominee" shall mean, in addition to the name of the registered nominee of the Custodian, (i) a partnership or other entity of a Foreign Subcustodian which is used solely for the assets of its customers other than the Custodian and the Foreign Subcustodian, if any, by which it was appointed; or (ii) the nominee of a Foreign Depository which is used for the securities and other assets of its customers, members or participants. 23. "O.C.C." shall mean the Options Clearing Corporation, a clearing agency registered under Section 17A of the Securities Exchange Act of 1934, its successor or successors, and its nominee or nominees. 24. "Officers" shall mean the President, any Vice President, the Secretary, the Treasurer, the Controller, any Assistant Secretary, any Assistant Treasurer, and any other person or persons, whether or not any such other person is an officer or employee of the Fund, but in each case only if duly authorized by the Board of Trustees of the Fund to execute any Certificate, instruction, notice or other instrument on behalf of the Fund and listed in the Certificate annexed hereto as Appendix B or such other Certificate as may be received by the Custodian from time to time; provided that each person who is designated in any such Certificate as holding the position of "Officer of OSS" shall be an Officer only for purposes of Articles XII and XIII hereof. 25. "Option" shall mean a Call Option, Covered Call Option, Index Option and/or a Put Option. 26. "Oral Instructions" shall mean verbal instructions actually received (irrespective of constructive receipt) by the Custodian from an Authorized Person or from a person reasonably believed by the Custodian to be an Authorized Person. 27. "Put Option" shall mean an exchange traded Option with respect to instruments, currency, or Securities other than Index Options, Futures Contracts, and Futures Contract Options entitling the holder, upon timely exercise and tender of the specified underlying instruments, currency, or Securities, to sell such instruments, currency, or Securities to the writer thereof for the exercise price. 28. "Repurchase Agreement" shall mean an agreement pursuant to which the Fund buys Securities and agrees to resell such Securities at a described or specified date and price. 29. "Reverse Repurchase Agreement" shall mean an agreement pursuant to which the Fund sells Securities and agrees to repurchase such Securities at a described or specified date and price. 30. "Rule 17f-5" shall mean Rule 17f-5 (Reg. 270.17f-5) promulgated by the Securities and Exchange Commission under the Investment Company Act of 1940, as amended. 31. "Security" shall be deemed to include, without limitation, Money Market Securities, Call Options, Put Options, Index Options, Index Futures Contracts, Index Futures Contract Options, Financial Futures Contracts, Financial Futures Contract Options, Reverse Repurchase Agreements, over the counter Options on Securities, common stocks and other securities having characteristics similar to common stocks, preferred stocks, debt obligations issued by state or municipal governments and by public authorities, (including, without limitation, general obligation bonds, revenue bonds, industrial bonds and industrial development bonds), bonds, debentures, notes, mortgages or other obligations, and any certificates, receipts, warrants or other instruments representing rights to receive, purchase, sell or subscribe for the same, or evidencing or representing any other rights or interest therein, or rights to any property or assets. 32. "Senior Security Account" shall mean an account maintained and specifically allocated to a Series under the terms of this Agreement as a segregated account, by recordation or otherwise, within the custody account in which certain Securities and/or other assets of the Fund specifically allocated to such Series shall be deposited and withdrawn from time to time in accordance with Certificates received by the Custodian in connection with such transactions as the Fund may from time to time determine. 33. "Series" shall mean the various portfolios, if any, of the Fund as described from time to time in the current and effective prospectus for the Fund, except that if the Fund does not have more than one portfolio, "Series" shall mean the Fund or be ignored where a requirement would be imposed on the Fund or the Custodian which is unnecessary if there is only one portfolio. 34. "Shares" shall mean the shares of beneficial interest of the Fund and its Series. 35. "Terminal Link" shall mean an electronic data transmission link between the Fund and the Custodian requiring in connection with each use of the Terminal Link the use of an authorization code provided by the Custodian and at least two access codes established by the Fund, provided, that the Fund shall have delivered to the Custodian a Certificate substantially in the form of Appendix C. 36. "Transfer Agent" shall mean Oppenheimer Shareholder Services, a division of Oppenheimer Management Corporation, its successors and as- signs. 37. "Transfer Agent Account" shall mean any account in the name of the Fund, or the Transfer Agent, as agent for the Fund, maintained with United Missouri Bank or such other Bank designated by the Fund in a Certificate. 38. "Written Instructions" shall mean written communications actually received (irrespective of constructive receipt) by the Custodian from an Authorized Person or from a person reasonably believed by the Custodian to be an Authorized Person by telex or any other such system whereby the receiver of such communications is able to verify by codes or otherwise with a reasonable degree of certainty the identity of the sender of such communication. ARTICLE II APPOINTMENT OF CUSTODIAN 1. The Fund hereby constitutes and appoints the Custodian as custodian of the Securities and moneys at any time owned or held by the Fund during the period of this Agreement. 2. The Custodian hereby accepts appointment as such custodian and agrees to perform the duties thereof as hereinafter set forth. ARTICLE III CUSTODY OF CASH AND SECURITIES 1. Except for monies received and maintained in the Transfer Agent Account, or as otherwise provided in paragraph 7 of this Article or in Article VIII or XV, the Fund will deliver or cause to be delivered to the Custodian all Securities and all moneys owned by it, at any time during the period of this Agreement, and shall specify with respect to such Securities and money the Series to which the same are specifically allocated, and the Custodian shall not be responsible for any Securities or money not so delivered. Except for assets held at DTC, the Custodian shall physically segregate, keep and maintain the Securities of the Series separate and apart from each other Series and from other assets held by the Custodian. Except as otherwise expressly provided in this Agreement, the Custodian will not be responsible for any Securities and moneys not actually received by it, unless the Custodian has been negligent or has engaged in willful misconduct with respect thereto. The Custodian will be entitled to reverse any credit of money made on the Fund's behalf where such credits have been previously made and moneys are not finally col- lected, unless the Custodian has been negligent or has engaged in willful misconduct with respect thereto; provided that if such reversal is thirty (30) days or more after the credit was issued, the Custodian will give five (5) days' prior notice of such reversal. The Fund shall deliver to the Custodian a certified resolution of the Board of Trustees of the Fund, substantially in the form of Exhibit A hereto, approving, authorizing and instructing the Custodian on a continuous and on-going basis to deposit in the Book-Entry System all Securities eligible for deposit therein, regardless of the Series to which the same are specifically allocated and to utilize the Book-Entry System to the extent possible in connection with its performance hereunder, including, without limitation, in connection with settlements of purchases and sales of Securities, loans of Securities and deliveries and returns of Securities collateral. Prior to a deposit of Securities specifically allocated to a Series in any Depository, the Fund shall deliver to the Custodian a certified resolution of the Board of Trustees of the Fund, substantially in the form of Exhibit B hereto, approving, authorizing and instructing the Custodian on a continuous and ongoing basis until instructed to the contrary by a Certificate to deposit in such Depository all Securities specifically allocated to such Series eligible for deposit therein, and to utilize such Depository to the extent possible with respect to such Securities in connection with its per- formance hereunder, including, without limitation, in connection with settlements of purchases and sales of Securities, loans of Securities, and deliveries and returns of Securities collateral. Securities and moneys deposited in either the Book-Entry System or a Depository will be represented in accounts which include only assets held by the Custodian for customers, including, but not limited to, accounts in which the Custo- dian acts in a fiduciary or representative capacity and will be specifically allocated on the Custodian's books to the separate account for the applicable Series. Prior to the Custodian's accepting, utilizing and acting with respect to Clearing Member confirmations for Options and transactions in Options for a Series as provided in this Agreement, the Custodian shall have received a certified resolution of the Fund's Board of Trustees, substantially in the form of Exhibit C hereto, approving, authorizing and instructing the Custodian on a continuous and on-going basis, until instructed to the contrary by a Certificate to accept, utilize and act in accordance with such confirmations as provided in this Agreement with respect to such Series. All Securities are to be held or disposed of by the Custodian for, and subject at all times to the instructions of, the Fund pursuant to the terms of this Agreement. The Custodian shall have no power or authority to assign, hypothecate, pledge or otherwise dispose of any Securities except as provided by the terms of this Agreement, and shall have the sole power to release and deliver Securities held pursuant to this Agreement. 2. The Custodian shall establish and maintain separate accounts, in the name of each Series, and shall credit to the separate account for each Series all moneys received by it for the account of the Fund with respect to such Series. Money credited to a separate account for a Series shall be subject only to drafts, orders, or charges of the Custodian pursuant to this Agreement and shall be disbursed by the Custodian only: (a) As hereinafter provided; (b) Pursuant to Certificates or Resolutions of the Fund's Board of Trustees certified by an Officer and by the Secretary or Assistant Secretary of the Fund setting forth the name and address of the person to whom the payment is to be made, the Series account from which payment is to be made, the purpose for which payment is to be made, and declaring such purpose to be a proper corporate purpose; provided, however, that amounts representing dividends, distributions, or redemptions proceeds with respect to Shares shall be paid only to the Transfer Agent Account; (c) In payment of the fees and in reimbursement of the expenses and liabilities of the Custodian attributable to such Series and authorized by this Agreement; or (d) Pursuant to Certificates to pay interest, taxes, management fees or operating expenses (including, without limitation thereto, Board of Trustees' fees and expenses, and fees for legal accounting and auditing services), which Certificates set forth the name and address of the person to whom payment is to be made, state the purpose of such payment and designate the Series for whose account the payment is to be made. 3. Promptly after the close of business on each day, the Custodian shall furnish the Fund with confirmations and a summary, on a per Series basis, of all transfers to or from the account of the Fund for a Series, either hereunder or with any co-custodian or subcustodian appointed in accordance with this Agreement during said day. Where Securities are transferred to the account of the Fund for a Series but held in a Depository, the Custodian shall upon such transfer also by book-entry or otherwise identify such Securities as belonging to such Series in a fungible bulk of Securities registered in the name of the Custodian (or its nominee) or shown on the Custodian's account on the books of the Book- Entry System or the Depository. At least monthly and from time to time, the Custodian shall furnish the Fund with a detailed statement, on a per Series basis, of the Securities and moneys held under this Agreement for the Fund. 4. Except as otherwise provided in paragraph 7 of this Article and in Article VIII, all Securities held by the Custodian hereunder, which are issued or issuable only in bearer form, except such Securities as are held in the Book-Entry System, shall be held by the Custodian in that form; all other Securities held hereunder may be registered in the name of the Fund, in the name of any duly appointed registered nominee of the Custodian as the Custodian may from time to time determine, or in the name of the Book- Entry System or a Depository or their successor or successors, or their nominee or nominees. The Fund agrees to furnish to the Custodian appropriate instruments to enable the Custodian to hold or deliver in proper form for transfer, or to register in the name of its registered nominee or in the name of the Book-Entry System or a Depository any Securities which it may hold hereunder and which may from time to time be registered in the name of the Fund. The Custodian shall hold all such Securities specifically allocated to a Series which are not held in the Book-Entry System or in a Depository in a separate account in the name of such Series physically segregated at all times from those of any other person or persons. 5. Except as otherwise provided in this Agreement and unless otherwise instructed to the contrary by a Certificate, the Custodian by itself, or through the use of the Book-Entry System or a Depository with respect to Securities held hereunder and therein deposited, shall with respect to all Securities held for the Fund hereunder in accordance with preceding paragraph 4: (a) Promptly collect all income, dividends and dis- tributions due or payable; (b) Promptly give notice to the Fund and promptly present for payment and collect the amount of money or other consideration payable upon such Securities which are called, but only if either (i) the Custodian receives a written notice of such call, or (ii) notice of such call appears in one or more of the publications listed in Appendix D annexed hereto, which may be amended at any time by the Custodian without the prior consent of the Fund, provided the Custodian gives prior notice of such amendment to the Fund; (c) Promptly present for payment and collect for the Fund's account the amount payable upon all Securities which mature; (d) Promptly surrender Securities in temporary form in exchange for definitive Securities; (e) Promptly execute, as custodian, any necessary de- clarations or certificates of ownership under the Federal Income Tax Laws or the laws or regulations of any other taxing authority now or hereafter in effect; (f) Hold directly, or through the Book-Entry System or the Depository with respect to Securities therein deposited, for the account of a Series, all rights and similar securities issued with respect to any Securities held by the Custodian for such Series hereunder; and (g) Promptly deliver to the Fund all notices, proxies, proxy soliciting materials, consents and other written information (including, without limitation, notices of tender offers and exchange offers, pendency of calls, maturities of Securities and expiration of rights) relating to Securities held pursuant to this Agreement which are actually received by the Custodian, such proxies and other similar materials to be executed by the registered holder (if Securities are registered otherwise than in the name of the Fund), but without indicating the manner in which proxies or consents are to be voted. 6. Upon receipt of a Certificate and not otherwise, the Custodian, directly or through the use of the Book-Entry System or the Depository, shall: (a) Promptly execute and deliver to such persons as may be designated in such Certificate proxies, consents, authorizations, and any other instruments whereby the authority of the Fund as owner of any Securities held hereunder for the Series specified in such Certificate may be exercised; (b) Promptly deliver any Securities held hereunder for the Series specified in such Certificate in exchange for other Securities or cash issued or paid in connection with the liquidation, reorganization, refinancing, merger, consolidation or recapitalization of any corporation, or the exercise of any right, warrant or conversion privilege and receive and hold hereunder specifically allocated to such Series any cash or other Securities received in exchange; (c) Promptly deliver any Securities held hereunder for the Series specified in such Certificate to any protective committee, reorganization committee or other person in connection with the reorganization, refinancing, merger, consolidation, recapitalization or sale of assets of any corporation, and receive and hold hereunder specifically allocated to such Series in exchange therefor such certificates of deposit, interim receipts or other instruments or documents as may be issued to it to evidence such delivery or such Securities as may be issued upon such delivery; and (d) Promptly present for payment and collect the amount payable upon Securities which may be called as specified in the Certificate. 7. Notwithstanding any provision elsewhere contained herein, the Custodian shall not be required to obtain possession of any instrument or certificate representing any Futures Contract, any Option, or any Futures Contract Option until after it shall have determined, or shall have received a Certificate from the Fund stating, that any such instruments or certificates are available. The Fund shall deliver to the Custodian such a Certificate no later than the business day preceding the availability of any such instrument or certificate. Prior to such availability, the Custodian shall comply with Section 17(f) of the Investment Company Act of 1940 in connection with the purchase, sale, settlement, closing out or writing of Futures Contracts, Options, or Futures Contract Options by making payments or deliveries specified in Certificates in connection with any such purchase, sale, writing, settlement or closing out upon its receipt from a broker, dealer, or futures commission merchant of a statement or confirmation reasonably believed by the Custodian to be in the form customarily used by brokers, dealers, or future commission merchants with respect to such Futures Contracts, Options, or Futures Contract Options, as the case may be, confirming that such Security is held by such broker, dealer or futures commission merchant, in book-entry form or otherwise in the name the Custodian (or any nominee of the Custodian) as custodian for the Fund; provided, however, that notwithstanding the foregoing, payments to or deliveries from the Margin Account and payments with respect to Securities to which a Margin Account relates, shall be made in accordance with the terms and conditions of the Margin Account Agreement. Whenever any such instruments or certificates are available, the Custodian shall, notwithstanding any provision in this Agreement to the contrary, make payment for any Futures Contract, Option, or Futures Contract Option for which such instruments or such certificates are available only against the delivery to the Custodian of such instrument or such certificate, and deliver any Futures Contract, Option or Futures Contract Option for which such instruments or such certificates are available only against receipt by the Custodian of payment therefor. Any such instrument or certificate delivered to the Custodian shall be held by the Custodian hereunder in accordance with, and subject to, the provisions of this Agreement. ARTICLE IV PURCHASE AND SALE OF INVESTMENTS OF THE FUND OTHER THAN OPTIONS, FUTURES CONTRACTS, FUTURES CONTRACT OPTIONS, REPURCHASE AGREEMENTS, REVERSE REPURCHASE AGREEMENTS AND SHORT SALES 1. Promptly after each execution of a purchase of Securities by the Fund, other than a purchase of an Option, a Futures Contract, a Futures Contract Option, a Repurchase Agreement, a Reverse Repurchase Agreement or a Short Sale, the Fund shall deliver to the Custodian (i) with respect to each purchase of Securities which are not Money Market Securities, a Certificate, and (ii) with respect to each purchase of Money Market Securities, a Certificate, oral Instructions or Written Instructions, specifying with respect to each such purchase: (a) the Series to which such Securities are to be specifically allocated; (b) the name of the issuer and the title of the Securities; (c) the number of shares or the principal amount purchased and accrued interest, if any; (d) the date of purchase and settlement; (e) the purchase price per unit; (f) the total amount payable upon such purchase; (g) the name of the person from whom or the broker through whom the purchase was made, and the name of the clearing broker, if any; and (h) the name of the broker or other party to whom payment is to be made. Custodian shall, upon receipt of such Securities purchased by or for the Fund, pay to the broker specified in the Certificate out of the moneys held for the account of such Series the total amount payable upon such purchase, provided that the same conforms to the total amount payable as set forth in such Certificate, oral Instructions or Written Instructions. 2. Promptly after each execution of a sale of Securities by the Fund, other than a sale of any Option, Futures Contract, Futures Contract Option, Repurchase Agreement, Reverse Repurchase Agreement or Short Sale, the Fund shall deliver such to the Custodian (i) with respect to each sale of Securities which are not Money Market Securities, a Certificate, and (ii) with respect to each sale of Money Market Securities, a Certificate, Oral Instructions or Written Instructions, specifying with respect to each such sale: (a) the Series to which such Securities were specifically allocated; (b) the name of the issuer and the title of the Security; (c) the number of shares or principal amount sold, and accrued interest, if any; (d) the date of sale and settlement; (e) the sale price per unit; (f) the total amount payable to the Fund upon such sale; (g) the name of the broker through whom or the person to whom the sale was made, and the name of the clearing broker, if any; and (h) the name of the broker to whom the Securities are to be delivered. On the settlement date, the Custodian shall deliver the Securities specifically allocated to such Series to the broker in accordance with generally accepted street practices and as specified in the Certificate upon receipt of the total amount payable to the Fund upon such sale, provided that the same conforms to the total amount payable as set forth in such Certificate, oral Instructions or Written Instructions. ARTICLE V OPTIONS 1. Promptly after each execution of a purchase of any Option by the Fund other than a closing purchase transaction, the Fund shall deliver to the Custodian a Certificate specifying with respect to each Option purchased: (a) the Series to which such Option is specifically allocated; (b) the type of Option (put or call); (c) the instrument, currency, or Security underlying such Option and the number of Options, or the name of the in the case of an Index Option, the index to which such Option relates and the number of Index Options purchased; (d) the expiration date; (e) the exercise price; (f) the dates of purchase and settlement; (g) the total amount payable by the Fund in connection with such purchase; and (h) the name of the Clearing Member through whom such Option was purchased. The Custodian shall pay, upon receipt of a Clearing Member's written statement confirming the purchase of such Option held by such Clearing Member for the account of the Custodian (or any duly appointed and registered nominee of the Custodian) as Custodian for the Fund, out of moneys held for the account of the Series to which such Option is to be specifically allocated, the total amount payable upon such purchase to the Clearing Member through whom the purchase was made, provided that the same conforms to the amount payable as set forth in such Certificate. 2. Promptly after the execution of a sale of any Option purchased by the Fund, other than a closing sale transaction, pursuant to paragraph 1 hereof, the Fund shall deliver to the Custodian a Certificate specifying with respect to each such sale: (a) the Series to which such Option was specifically allocated; (b) the type of Option (put or call); (c) the instrument, currency, or Security underlying such Option and the number of Options, or the name of the issuer and the title and number of shares subject to such Option or, in the case of a Index Option, the index to which such Option relates and the number of Index Options sold; (d) the date of sale; (e) the sale price; (f) the date of settlement; (g) the total amount payable to the Fund upon such sale; and (h) the name of the Clearing Member through whom the sale was made. The Custodian shall consent to the delivery of the Option sold by the Clearing Member which previously supplied the confirmation described in preceding paragraph of this Article with respect to such Option upon receipt by the Custodian of the total amount payable to the Fund, provided that the same conforms to the total amount payable as set forth in such Certificate. 3. Promptly after the exercise by the Fund of any Call Option purchased by the Fund pursuant to paragraph 1 hereof, the Fund shall deliver to the Custodian a Certificate specifying with respect to such Call Option: (a) the Series to which such Call Option was specifically allocated; (b) the name of the issuer and the title and number of shares subject to the Call Option; (c) the expiration date; (d) the date of exercise and settlement; (e) the exercise price per share; (f) the total amount to be paid by the Fund upon such exercise; and (g) the name of the Clearing Member through whom such Call Option was exercised. The Custo- dian shall, upon receipt of the Securities underlying the Call Option which was exercised, pay out of the moneys held for the account of the Series to which such Call Option was specifically allocated the total amount payable to the Clearing Member through whom the Call Option was ex- ercised, provided that the same conforms to the total amount payable as set forth in such Certificate. 4. Promptly after the exercise by the Fund of any Put Option purchased by the Fund pursuant to paragraph 1 hereof, the Fund shall deliver to the Custodian a Certificate specifying with respect to such Put Option: (a) the Series to which such Put Option was specifically allocated; (b) the name of the issuer and the title and number of shares subject to the Put Option; (c) the expiration date; (d) the date of exercise and settlement; (e) the exercise price per share; (f) the total amount to be paid to the Fund upon such exercise; and (g) the name of the Clearing Member through whom such Put Option was exercised. The Custodian shall, upon receipt of the amount payable upon the exercise of the Put Option, deliver or direct a Depository to deliver the Securities specifically allocated to such Series, provided the same conforms to the amount payable to the Fund as set forth in such Certificate. 5. Promptly after the exercise by the Fund of any Index Option purchased by the Fund pursuant to paragraph 1 hereof, the Fund shall deliver to the Custodian a Certificate specifying with respect to such Index Option: (a) the Series to which such Index Option was specifically allocated; (b) the type of Index Option (put or call) (c) the number of Options being exercised; (d) the index to which such Option relates; (e) the expiration date; (f) the exercise price; (g) the total amount to be received by the Fund in connection with such exercise; and (h) the Clearing Member from whom such payment is to be received. 6. Whenever the Fund writes a Covered Call Option, the Fund shall promptly deliver to the Custodian a Certificate specifying with respect to such Covered Call Option: (a) the Series for which such Covered Call Option was written; (b) the name of the issuer and the title and number of shares for which the Covered Call Option was written and which underlie the same; (c) the expiration date; (d) the exercise price; (e) the premium to be received by the Fund; (f) the date such Covered Call Option was written; and (g) the name of the Clearing Member through whom the premium is to be received. The Custodian shall deliver or cause to be delivered, upon receipt of the premium specified in the Certificate with respect to such Covered Call Option, such receipts as are required in accordance with the customs prevailing among Clearing Members dealing in Covered Call Options and shall impose, or direct a Depository to impose, upon the underlying Securities specified in the Certificate specifically allocated to such Series such restrictions as may be required by such receipts. Notwithstanding the foregoing, the Custodian has the right, upon prior written notification to the Fund, at any time to refuse to issue any receipts for Securities in the possession of the Custodian and not deposited with a Depository underlying a Covered Call Option. 7. Whenever a Covered Call Option written by the Fund and described in the preceding paragraph of this Article is exercised, the Fund shall promptly deliver to the Custodian a Certificate instructing the Custodian to deliver, or to direct the Depository to deliver, the Securities subject to such Covered Call Option and specifying: (a) the Series for which such Covered Call Option was written; (b) the name of the issuer and the title and number of shares subject to the Covered Call Option; (c) the Clearing Member to whom the underlying Securities are to be delivered; and (d) the total amount payable to the Fund upon such delivery. Upon the return and/or cancellation of any receipts delivered pursuant to paragraph 6 of this Article, the Custodian shall deliver, or direct a Depository to deliver, the underlying Securities as specified in the Certificate upon payment of the amount to be received as set forth in such Certificate. 8. Whenever the Fund writes a Put Option, the Fund shall promptly deliver to the Custodian a Certificate specifying with respect to such Put Option: (a) the Series for which such Put Option was written; (b) the name of the issuer and the title and number of shares for which the Put Option is written and which underlie the same; (c) the expiration date; (d) the exercise price; (e) the premium to be received by the Fund; (f) the date such Put Option is written; (g) the name of the Clearing Member through whom the premium is to be received and to whom a Put Option guarantee letter is to be delivered; (h) the amount of cash, and/or the amount and kind of Securities, if any, specifically allocated to such Series to be deposited in the Senior Security Account for such Series; and (i) the amount of cash and/or the amount and kind of Securities specifically allocated to such Series to be deposited into the Collateral Account for such Series. The Custodian shall, after making the deposits into the Collateral Account specified in the Certificate, issue a Put Option guarantee letter substantially in the form utilized by the Custodian on the date hereof, and deliver the same to the Clearing Member specified in the Certificate upon receipt of the premium specified in said Certificate. Notwithstanding the foregoing, the Custodian shall be under no obligation to issue any Put Option guarantee letter or similar document if it is unable to make any of the representations contained therein. 9. Whenever a Put Option written by the Fund and described in the preceding paragraph is exercised, the Fund shall promptly deliver to the Custodian a Certificate specifying: (a) the Series to which such Put Option was written; (b) the name of the issuer and title and number of shares subject to the Put Option; (c) the Clearing Member from whom the underlying Securities are to be received; (d) the total amount payable by the Fund upon such delivery; (e) the amount of cash and/or the amount and kind of Securities specifically allocated to such Series to be withdrawn from the Collateral Account for such Series and (f) the amount of cash and/or the amount and kind of Securities, specifically allocated to such series, if any, to be withdrawn from the Senior Security Account. Upon the return and/or cancellation of any Put Option guarantee letter or similar document issued by the Custodian in connection with such Put Option, the Custodian shall pay out of the moneys held for the account of the series to which such Put Option was specifically allocated the total amount payable to the Clearing Member specified in the Certificate as set forth in such Certificate, upon delivery of such Securities, and shall make the withdrawals specified in such Certificate. 10. Whenever the Fund writes an Index Option, the Fund shall promptly deliver to the Custodian a Certificate specifying with respect to such Index Option: (a) the Series for which such Index Option was written; (b) whether such Index Option is a put or a call; (c) the number of Options written; (d) the index to which such Option relates; (e) the expiration date; (f) the exercise price; (g) the Clearing Member through whom such Option was written; (h) the premium to be received by the Fund; (i) the amount of cash and/or the amount and kind of Securities, if any, specifically allocated to such Series to be deposited in the Senior Security Account for such Series; (j) the amount of cash and/or the amount and kind of Securities, if any, specifically allocated to such Series to be deposited in the Collateral Account for such Series; and (k) the amount of cash and/or the amount and kind of Securities, if any, specifically allocated to such Series to be deposited in a Margin Account, and the name in which such account is to be or has been established. The Custodian shall, upon receipt of the premium specified in the Certificate, make the deposits, if any, into the Senior Security Account specified in the Certificate, and either (1) deliver such receipts, if any, which the Custodian has specifically agreed to issue, which are in accordance with the customs prevailing among Clearing Members in Index Options and make the deposits into the Collateral Account specified in the Certificate, or (2) make the deposits into the Margin Account specified in the Certi- ficate. 11. Whenever an Index Option written by the Fund and described in the preceding paragraph of this Article is exercised, the Fund shall promptly deliver to the Custodian a Certificate specifying with respect to such Index Option: (a) the Series for which such Index Option was written; (b) such information as may be necessary to identify the Index Option being exercised; (c) the Clearing Member through whom such Index Option is being exercised; (d) the total amount payable upon such exercise, and whether such amount is to be paid by or to the Fund; (e) the amount of cash and/or amount and kind of Securities, if any, to be with- drawn from the Margin Account; and (f) the amount of cash and/or amount and kind of Securities, if any, to be withdrawn from the Senior Security Account for such Series; and the amount of cash and/or the amount and kind of Securities, if any, to be withdrawn from the Collateral Account for such Series. Upon the return and/or cancellation of the receipt, if any, delivered pursuant to the preceding paragraph of this Article, the Custodian shall pay out of the moneys held for the account of the Series to which such Stock Index Option was specifically allocated to the Clear- ing Member specified in the Certificate the total amount payable, if any, as specified therein. 12. Promptly after the execution of a purchase or sale by the Fund of any Option identical to a previously written Option described in paragraphs, 6, 8 or 10 of this Article in a transaction expressly designated as a "Closing Purchase Transaction" or a "Closing Sale Transaction", the Fund shall promptly deliver to the Custodian a Certificate specifying with respect to the Option being purchased: (a) that the transaction is a Closing Purchase Transaction or a Closing Sale Transaction; (b) the Series for which the Option was written; (c) the instrument, currency, or Security subject to the Option, or, in the case of an Index Option, the index to which such Option relates and the number of Options held; (d) the exercise price; (e) the premium to be paid by or the amount to be paid to the Fund; (f) the expiration date; (g) the type of Option (put or call); (h) the date of such purchase or sale; (i) the name of the Clearing Member to whom the premium is to be paid or from whom the amount is to be received; and (j) the amount of cash and/or the amount and kind of Securities, if any, to be withdrawn from the Collateral Account, a specified Margin Account, or the Senior Security Account for such Series. Upon the Custodian's payment of the premium or receipt of the amount, as the case may be, specified in the Certificate and the return and/or cancellation of any receipt issued pursuant to paragraphs 6, 8 or 10 of this Article with respect to the Option being liquidated through the Closing Purchase Transaction or the Closing Sale Transaction, the Custodian shall remove, or direct a Depository to remove, the pre- viously imposed restrictions on the Securities underlying the Call Option. 13. Upon the expiration, exercise or consummation of a Closing Purchase Transaction with respect to any Option purchased or written by the Fund and described in this Article, the Custodian shall delete such Option from the statements delivered to the Fund pursuant to paragraph 3 Article III herein, and upon the return and/or cancellation of any receipts issued by the Custodian, shall make such withdrawals from the Collateral Account, and the Margin Account and/or the Senior Security Account as may be specified in a Certificate received in connection with such expiration, exercise, or consummation. 14. Securities acquired by the Fund through the exercise of an Option described in this Article shall be subject to Article IV hereof. ARTICLE VI FUTURES CONTRACTS 1. Whenever the Fund shall enter into a Futures Contract, the Fund shall deliver to the Custodian a Certificate specifying with respect to such Futures Contract, (or with respect to any number of identical Futures Contract (s)): (a) the Series for which the Futures Contract is being entered; (b) the category of Futures Contract (the name of the underlying index or financial instrument); (c) the number of identical Futures Contracts entered into; (d) the delivery or settlement date of the Futures Contract(s); (e) the date the Futures Contract(s) was (were) entered into and the maturity date; (f) whether the Fund is buying (going long) or selling (going short) such Futures Contract(s); (g) the amount of cash and/or the amount and kind of Securities, if any, to be deposited in the Senior Security Account for such Series; (h) the name of the broker, dealer, or futures commission merchant through whom the Futures Contract was entered into; and (i) the amount of fee or commission, if any, to be paid and the name of the broker, dealer, or futures commission merchant to whom such amount is to be paid. The Custodian shall make the deposits, if any, to the Margin Account in accordance with the terms and conditions of the Margin Account Agreement. The Custodian shall make payment out of the moneys specifically allocated to such Series of the fee or commission, if any, specified in the Certificate and deposit in the Senior Security Account for such Series the amount of cash and/or the amount and kind of Securities specified in said Certificate. 2. (a) Any variation margin payment or similar payment required to be made by the Fund to a broker, dealer, or futures commission merchant with respect to an outstanding Futures Contract shall be made by the Custodian in accordance with the terms and conditions of the Margin Account Agreement. (b) Any variation margin payment or similar payment from a broker, dealer, or futures commission merchant to the Fund with respect to an outstanding Futures Contract shall be received and dealt with by the Custodian in accordance with the terms and conditions of the Margin Account Agreement. 3. Whenever a Futures Contract held by the Custodian hereunder is retained by the Fund until delivery or settlement is made on such Futures Contract, the Fund shall deliver to the Custodian prior to the delivery or settlement date a Certificate specifying: (a) the Futures Contract and the Series to which the same relates; (b) with respect to an Index Futures Contract, the total cash settlement amount to be paid or received, and with respect to a Financial Futures Contract, the Securities and/or amount of cash to be delivered or received; (c) the broker, dealer, or futures commission merchant to or from whom payment or delivery is to be made or received; and (d) the amount of cash and/or Securities to be withdrawn from the Senior Security Account for such Series. The Custodian shall make the payment or delivery specified in the Certificate, and delete such Futures Contract from the statements delivered to the Fund pursuant to paragraph 3 of Article III herein. 4. Whenever the Fund shall enter into a Futures Contract to offset a Futures Contract held by the Custodian hereunder, the Fund shall deliver to the Custodian a Certificate specifying: (a) the items of information required in a Certificate described in paragraph 1 of this Article, and (b) the Futures Contract being offset. The Custodian shall make payment out of the money specifically allocated to such Series of the fee or commission, if any, specified in the Certificate and delete the Futures Contract being offset from the statements delivered to the Fund pursuant to paragraph 3 of Article III herein, and make such withdrawals from the Senior Security Account for such Series as may be specified in the Cer- tificate. The withdrawals, if any, to be made from the Margin Account shall be made by the Custodian in accordance with the terms and conditions of the Margin Account Agreement. ARTICLE VII FUTURES CONTRACT OPTIONS 1. Promptly after the execution of a purchase of any Futures Contract Option by the Fund, the Fund shall deliver to the Custodian a Certificate specifying with respect to such Futures Contract Option: (a) the Series to which such Option is specifically allocated; (b) the type of Futures Contract Option (put or call); (c) the type of Futures Contract and such other information as may be necessary to identify the Futures Contract underlying the Futures Contract Option purchased; (d) the expiration date; (e) the exercise price; (f) the dates of purchase and settlement; (g) the amount of premium to be paid by the Fund upon such purchase; (h) the name of the broker or futures commission merchant through whom such Option was purchased; and (i) the name of the broker, or futures commission merchant, to whom payment is to be made. The Cus- todian shall pay out of the moneys specifically allocated to such Series the total amount to be paid upon such purchase to the broker or futures commissions merchant through whom the purchase was made, provided that the same conforms to the amount set forth in such Certificate. 2. Promptly after the execution of a sale of any Futures Contract Option purchased by the Fund pursuant to paragraph 1 hereof, the Fund shall deliver to the Custodian a Certificate specifying with respect to each such sale: (a) Series to which such Futures Contract Option was specifically allocated; (b) the type of Future Contract Option (put or call); (c) the type of Futures Contract and such other information as may be necessary to identify the Futures Contract underlying the Futures Contract Option; (d) the date of sale; (e) the sale price; (f) the date of settlement; (g) the total amount payable to the Fund upon such sale; and (h) the name of the broker of futures commission merchant through whom the sale was made. The Custodian shall consent to the cancellation of the Futures Contract Option being closed against payment to the Custodian of the total amount payable to the Fund, provided the same conforms to the total amount payable as set forth in such Certificate. 3. Whenever a Futures Contract Option purchased by the Fund pursuant to paragraph 1 is exercised by the Fund, the Fund shall promptly deliver to the Custodian a Certificate specifying: (a) the Series to which such Futures Contract Option was specifically allocated; (b) the particular Futures Contract Option (put or call) being exercised; (c) the type of Futures Contract underlying the Futures Contract Option; (d) the date of exercise; (e) the name of the broker or futures commission merchant through whom the Futures Contract Option is exercised; (f) the net total amount, if any, payable by the Fund; (g) the amount, if any, to be received by the Fund; and (h) the amount of cash and/or the amount and kind of Securities to be deposited in the Senior Security Account for such Series. The Custodian shall make, out of the moneys and Securities specifically allocated to such Series, the payments of money, if any, and the deposits of Securities, if any, into the Senior Security Account as specified in the Certificate. The deposits, if any, to be made to the Margin Account shall be made by the Custodian in accordance with the terms and conditions of the Margin Account Agreement. 4. Whenever the Fund writes a Futures Contract Option, the Fund shall promptly deliver to the Custodian a Certificate specifying with respect to such Futures Contract Option: (a) the Series for which such Futures Contract Option was written; (b) the type of Futures Contract Option (put or call); (c) the type of Futures Contract and such other information as may be necessary to identify the Futures Contract underlying the Futures Contract Option; (d) the expiration date; (e) the exercise price; (f) the premium to be received by the Fund; (g) the name of the broker or futures commission merchant through whom the premium is to be received; and (h) the amount of cash and/or the amount and kind of Securities, if any, to be deposited in the Senior Security Account for such Series. The Custodian shall, upon receipt of the premium specified in the Certificate, make out of the moneys and Securities specifically allocated to such Series the deposits into the Senior Security Account, if any, as specified in the Certificate. The deposits, if any, to be made to the Margin Account shall be made by the Custodian in accordance with the terms and conditions of the Margin Account Agreement. 5. Whenever a Futures Contract Option written by the Fund which is a call is exercised, the Fund shall promptly deliver to the Custodian a Certificate specifying: (a) the Series to which such Futures Contract Option was specifically allocated; (b) the particular Futures Contract Option exercised; (c) the type of Futures Contract underlying the Futures Contract Option; (d) the name of the broker or futures commission merchant through whom such Futures Contract Option was exercised; (e) the net total amount, if any, payable to the Fund upon such exercise; (f) the net total amount, if any, payable by the Fund upon such exercise; and (g) the amount of cash and/or the amount and kind of Securities to be deposited in the Senior Security Account for such Series. The Custodian shall, upon its receipt of the net total amount payable to the Fund, if any, specified in such Certificate make the payments, if any, and the deposits, if any, into the Senior Security Account as specified in the Certificate. The de- posits, if any, to be made to the Margin Account shall be made by the Custodian in accordance with the terms and conditions of the Margin Account Agreement. 6. Whenever a Futures Contract Option which is written by the Fund and which is a put is exercised, the Fund shall promptly deliver to the Custodian a Certificate specifying: (a) the Series to which such Option was specifically allocated; (b) the particular Futures Contract Option exercised; (c) the type of Futures Contract underlying such Futures Contract Option; (d) the name of the broker or futures commission merchant through whom such Futures Contract Option is exercised; (e) the net total amount, if any, payable to the Fund upon such exercise; (f) the net total amount, if any, payable by the Fund upon such exercise; and (g) the amount and kind of Securities and/or cash to be withdrawn from or deposited in, the Senior Security Account for such Series, if any. The Custodian shall, upon its receipt of the net total amount payable to the Fund, if any, specified in the Certificate, make out of the moneys and Securities specifically allocated to such Series, the payments, if any, and the deposits, if any, into the Senior Security Account as specified in the Certificate. The deposits to and/or withdrawals from the Margin Account, if any, shall be made by the Custodian in accordance with the terms and conditions of the Margin Account Agreement. 7. Promptly after the execution by the Fund of a purchase of any Futures Contract Option identical to a previously written Futures Contract Option described in this Article in order to liquidate its position as a writer of such Futures Contract Option, the Fund shall deliver to the Custodian a Certificate specifying with respect to the Futures Contract Option being purchased: (a) the Series to which such Option is specifically allocated; (b) that the transaction is a closing transaction; (c) the type of Future Contract and such other information as may be necessary to identify the Futures Contract underlying the Futures Option Contract; (d) the exercise price; (e) the premium to be paid by the Fund; (f) the expiration date; (g) the name of the broker or futures commission merchant to whom the premium is to be paid; and (h) the amount of cash and/or the amount and kind of Securities, if any, to be withdrawn from the Senior Security Account for such Series. The Custodian shall effect the withdrawals from the Senior Security Account specified in the Certificate. The withdrawals, if any, to be made from the Margin Account shall be made by the Custodian in accordance with the terms and conditions of the Margin Account Agreement. 8. Upon the expiration, exercise, or consummation of a closing transaction with respect to, any Futures Contract Option written or purchased by the Fund and described in this Article, the Custodian shall (a) delete such Futures Contract Option from the statements delivered to the Fund pursuant to paragraph 3 of Article III herein and (b) make such withdrawals from and/or in the case of an exercise such deposits into the Senior Security Account as may be specified in a Certificate. The deposits to and/or withdrawals from the Margin Account, if any, shall be made by the Custodian in accordance with the terms and conditions of the Margin Account Agreement. 9. Futures Contracts acquired by the Fund through the exercise of a Futures Contract Option described in this Article shall be subject to Article VI hereof. ARTICLE VIII SHORT SALES 1. Promptly after the execution of any short sales of Securities by any Series of the Fund, the Fund shall deliver to the Custodian a Certificate specifying: (a) the Series for which such short sale was made; (b) the name of the issuer-and the title of the Security; (c) the number of shares or principal amount sold, and accrued interest or dividends, if any; (d) the dates of the sale and settlement; (e) the sale price per unit; (f) the total amount credited to the Fund upon such sale, if any, (g) the amount of cash and/or the amount and kind of Securities, if any, which are to be deposited in a Margin Account and the name in which such Margin Account has been or is to be established; (h) the amount of cash and/or the amount and kind of Securities, if any, to be deposited in a Senior Security Account, and (i) the name of the broker through whom such short sale was made. The Custodian shall upon its receipt of a statement from such broker confirming such sale and that the total amount credited to the Fund upon such sale, if any, as specified in the Certificate is held by such broker for the account of the Custodian (or any nominee of the Custodian) as custodian of the Fund, issue a receipt or make the deposits into the Margin Account and the Senior Security Account specified in the Certificate. 2. Promptly after the execution of a purchase to close-out any short sale of Securities, the Fund shall promptly deliver to the Custodian a Certificate specifying with respect to each such closing out: (a) the Series for which such transaction is being made; (b) the name of the issuer and the title of the Security; (c) the number of shares or the principal amount, and accrued interest or dividends, if any, required to effect such closing-out to be delivered to the broker; (d) the dates of closing-out and settlement; (e) the purchase price per unit; (f) the net total amount payable to the Fund upon such closing-out; (g) the net total amount payable to the broker upon such closing-out; (h) the amount of cash and the amount and kind of Securities to be withdrawn, if any, from the Margin Account; (i) the amount of cash and/or the amount and kind of Securities, if any, to be withdrawn from the Senior Security Account; and (j) the name of the broker through whom the Fund is effecting such closing-out. The Custodian shall, upon receipt of the net total amount payable to the Fund upon such closing-out, and the return and/or cancellation of the receipts, if any, issued by the Custodian with respect to the short sale being closed-out, pay out of the moneys held for the account of the Fund to the broker the net total amount payable to the broker, and make the withdrawals from the Margin Account and the Senior Security Account, as the same are specified in the Certificate. ARTICLE IX REPURCHASE AND REVERSE REPURCHASE AGREEMENTS 1. Promptly after the Fund enters a Repurchase Agreement or a Reverse Repurchase Agreement with respect to Securities and money held by the Custodian hereunder, the Fund shall deliver to the Custodian a Certi- ficate, or in the event such Repurchase Agreement or Reverse Repurchase Agreement is a Money Market Security, a Certificate, Oral Instructions, or Written Instructions specifying: (a) the Series for which the Repurchase Agreement or Reverse Repurchase Agreement is entered; (b) the total amount payable to or by the Fund in connection with such Repurchase Agreement or Reverse Repurchase Agreement and specifically allocated to such Series; (c) the broker, dealer, or financial institution with whom the Repurchase Agreement or Reverse Repurchase Agreement is entered; (d) the amount and kind of Securities to be delivered or received by the Fund to or from such broker, dealer, or financial institution; (e) the date of such Repurchase Agreement or Reverse Repurchase Agreement; and (f) the amount of cash and/or the amount and kind of Securities, if any, specifi- cally allocated to such Series to be deposited in a Senior Security Ac- count for such Series in connection with such Reverse Repurchase Agreement. The Custodian shall, upon receipt of the total amount payable to or by the Fund specified in the Certificate, Oral Instructions, or Written Instructions make or accept the delivery to or from the broker, dealer, or financial institution and the deposits, if any, to the Senior Security Account, specified in such Certificate, Oral Instructions, or Written Instructions. 2. Upon the termination of a Repurchase Agreement or a Reverse Repurchase Agreement described in preceding paragraph 1 of this Article, the Fund shall promptly deliver a Certificate or, in the event such Repurchase Agreement or Reverse Repurchase Agreement is a Money Market Security, a Certificate, Oral Instructions, or Written Instructions to the Custodian specifying: (a) the Repurchase Agreement or Reverse Repurchase Agreement being terminated and the Series for which same was entered; (b) the total amount payable to or by the Fund in connection with such termination; (c) the amount and kind of Securities to be received or delivered by the Fund and specifically allocated to such Series in connection with such termination; (d) the date of termination; (e) the name of the broker, dealer, or financial institution with whom the Repur- chase Agreement or Reverse Repurchase Agreement is to be terminated; and (f) the amount of cash and/or the amount and kind of Securities, if any, to be withdrawn from the Senior Securities Account for such Series. The Custodian shall, upon receipt or delivery of the amount and kind of Securities or cash to be received or delivered by the Fund specified in the Certificate, Oral Instructions, or Written Instructions, make or receive the payment to or from the broker, dealer, or financial institution and make the withdrawals, if any, from the Senior Security Account, specified in such Certificate, Oral Instructions, or Written Instructions. 3. The Certificates, Oral Instructions, or Written Instructions described in paragraphs 1 and 2 of this Article may with respect to any particular Repurchase Agreement or Reverse Repurchase Agreement be combined and delivered to the Custodian at the time of entering into such Repurchase Agreement or Reverse Repurchase Agreement. ARTICLE X LOANS OF PORTFOLIO SECURITIES OF THE FUND 1. Promptly after each loan of portfolio Securities specifically allocated to a Series held by the Custodian hereunder, the Fund shall deliver or cause to be delivered to the Custodian a Certificate specifying with respect to each such loan: (a) the Series to which the loaned Securities are specifically allocated; (b) the name of the issuer and the title of the Securities, (c) the number of shares or the principal amount loaned, (d) the date of loan and delivery, (e) the total amount to be delivered to the Custodian against the loan of the Securities, including the amount of cash collateral and the premium, if any, separately iden- tified, and (f) the name of the broker, dealer, or financial institution to which the loan was made. The Custodian shall deliver the Securities thus designated to the broker, dealer or financial institution to which the loan was made upon receipt of the total amount designated in the Certificate as to be delivered against the loan of Securities. The Custodian may accept payment in connection with a delivery otherwise than through the Book-Entry System or a Depository only in the form of a certified or bank cashier's check payable to the order of the Fund or the Custodian drawn on New York Clearing House funds. 2. In connection with each termination of a loan of Securities by the Fund, the Fund shall deliver or cause to be delivered to the Custodian a Certificate specifying with respect to each such loan termination and return of Securities: (a) the Series to which the loaned Securities are specifically allocated; (b) the name of the issuer and the title of the Securities to be returned, (c) the number of shares or the principal amount to be returned, (d) the date of termination, (e) the total amount to be delivered by the Custodian (including the cash collateral for such Securities minus any offsetting credits as described in said Certificate), and (f) the name of the broker, dealer, or financial institution from which the Securities will be returned. The Custodian shall receive all Securities returned from the broker, dealer, or financial institution to which such Securities were loaned and upon receipt thereof shall pay, out of the moneys held for the account of the Fund, the total amount payable upon such return of Securities as set forth in the Certificate. ARTICLE XI CONCERNING MARGIN ACCOUNTS, SENIOR SECURITY ACCOUNTS, AND COLLATERAL ACCOUNTS 1. The Custodian shall establish a Senior Security Account and from time to time make such deposits thereto, or withdrawals therefrom, as specified in a Certificate. Such Certificate shall specify the Series for which such deposit or withdrawal is to be made and the amount of cash and/or the amount and kind of Securities specifically allocated to such Series to be deposited in, or withdrawn from, such Senior Security Account for such Series. In the event that the Fund fails to specify in a Certificate the Series, the name of the issuer, the title and the number of shares or the principal amount of any particular Securities to be deposited by the Custodian into, or withdrawn from, a Senior Securities Account, the Custodian shall be under no obligation to make any such deposit or withdrawal and shall promptly notify the Fund that no such deposit has been made. 2. The Custodian shall make deliveries or payments from a Margin Account to the broker, dealer, futures commission merchant or Clearing Member in whose name, or for whose benefit, the account was established as specified in the Margin Account Agreement. 3. Amounts received by the Custodian as payments or distributions with respect to Securities deposited in any Margin Account shall be dealt with in accordance with the terms and conditions of the Margin Account Agreement. 4. The Custodian shall to the extent permitted by the Fund's Declaration of Trust, investment restrictions and the Investment Company Act of 1940 have a continuing lien and security interest in and to any property at any time held by the Custodian in any Collateral Account described herein. In accordance with applicable law the Custodian may enforce its lien and realize on any such property whenever the Custodian has made payment or delivery pursuant to any Put Option guarantee letter or similar document or any receipt issued hereunder by the Custodian; provided, however, that the Custodian shall not be required to issue any Put Option guarantee letter unless it shall have received an opinion of counsel to the Fund or its investment adviser that the issuance of such letters is authorized by the Fund and that the Custodian's continuing lien and security interest is valid, enforceable and not limited by the Declaration of Trust, any investment restrictions or the Investment Company Act of 1940. In the event the Custodian should realize on any such property net proceeds which are less than the Custodian's obligations under any Put Option guarantee letter or similar document or any receipt, such deficiency shall be a debt owed the Custodian by the Fund within the scope of Article XIV herein. 5. On each business day the Custodian shall furnish the Fund with a statement with respect to each Margin Account in which money or Securities are held specifying as of the close of business on the previous business day: (a) the name of the Margin Account; (b) the amount and kind of Securities held therein; and (c) the amount of money held therein. The Custodian shall make available upon request to any broker, dealer, or futures commission merchant specified in the name of a Margin Account a copy of the statement furnished the Fund with respect to such Margin Account. 6. The Custodian shall establish a Collateral Account and from time to time shall make such deposits thereto as may be specified in a Certificate. Promptly after the close of business on each business day in which cash and/or Securities are maintained in a Collateral Account for any Series, the Custodian shall furnish the Fund with a statement with respect to such Collateral Account specifying the amount of cash and/or the amount and kind of Securities held therein. No later than the close of business next succeeding the delivery to the Fund of such statement, the Fund shall furnish to the Custodian a Certificate or Written Instructions specifying the then market value of the Securities described in such statement. In the event such then market value is indicated to be less than the Custodian's obligation with respect to any outstanding Put Option guarantee letter or similar document, the Fund shall promptly specify in a Certificate the additional cash and/or Securities to be deposited in such Collateral Account to eliminate such deficiency. ARTICLE XII PAYMENT OF DIVIDENDS OR DISTRIBUTIONS 1. The Fund shall furnish to the Custodian a copy of the resolution of the Board of Trustees of the Fund, certified by the Secretary or any Assistant Secretary, either (i) setting forth with respect to the Series specified therein the date of the declaration of a dividend or distribu- tion, the date of payment thereof, the record date as of which shareholders entitled to payment shall be determined, the amount payable per Share of such Series to the shareholders of record as of that date and the total amount payable to the Transfer Agent Account and any sub- dividend agent or co-dividend agent of the Fund on the payment date, or (ii) authorizing with respect to the Series specified therein and the declaration of dividends and distributions thereon the Custodian to rely on Oral Instructions, Written Instructions, or a Certificate setting forth the date of the declaration of such dividend or distribution, the date of payment thereof, the record date as of which shareholders entitled to payment shall be determined, the amount payable per Share of such Series to the shareholders of record as of that date and the total amount payable to the Transfer Agent Account on the payment date. 2. Upon the payment date specified in such resolution, Oral Instructions, Written Instructions, or Certificate, as the case may be, the Custodian shall pay to the Transfer Agent Account out of the moneys held for the account of the Series specified therein the total amount payable to the Transfer Agent Account and with respect to such Series. ARTICLE XIII SALE AND REDEMPTION OF SHARES 1. Whenever the Fund shall sell any Shares, it shall deliver or cause to be delivered, to the Custodian a Certificate duly specifying: (a) The Series, the number of Shares sold, trade date, and price; and (b) The amount of money to be received by the Custodian for the sale of such Shares and specifically allocated to the separate account in the name of such Series. 2. Upon receipt of such money from the Fund's General Distributor, the Custodian shall credit such money to the separate account in the name of the Series for which such money was received. 3. Upon issuance of any Shares of any Series the Custodian shall pay, out of the money held for the account of such Series, all original issue or other taxes required to be paid by the Fund in connection with such issuance upon the receipt of a Certificate specifying the amount to be paid. 4. Except as provided hereinafter, whenever the Fund desires the Custodian to make payment out of the money held by the Custodian hereunder in connection with a redemption of any Shares, it shall furnish, or cause to be furnished, to the Custodian a Certificate specifying: (a) The number and Series of Shares redeemed; and (b) The amount to be paid for such Shares. 5. Upon receipt of an advice from an Authorized Person setting forth the Series and number of Shares received by the Transfer Agent for redemption and that such Shares are in good form for redemption, the Custodian shall make payment to the Transfer Agent Account out of the moneys held in the separate account in the name of the Series the total amount specified in the Certificate issued pursuant to the foregoing paragraph 4 of this Article. ARTICLE XIV OVERDRAFTS OR INDEBTEDNESS 1. If the Custodian should in its sole discretion advance funds on behalf of any Series which results in an overdraft because the moneys held by the Custodian in the separate account for such Series shall be insuffi- cient to pay the total amount payable upon a purchase of Securities specifically allocated to such Series, as set forth in a Certificate, Oral Instructions, or Written Instructions or which results in an overdraft in the separate account of such Series for some other reason, or if the Fund is for any other reason indebted to the Custodian with respect to a Ser- ies, (except a borrowing for investment or for temporary or emergency purposes using Securities as collateral pursuant to a separate agreement and subject to the provisions of paragraph 2 of this Article), such overdraft or indebtedness shall be deemed to be a loan made by the Custodian to the Fund for such Series payable on demand and shall bear interest from the date incurred at a rate per annum (based on a 360-day year for the actual number of days involved) equal to the Federal Funds Rate plus 1/2%, such rate to be adjusted on the effective date of any change in such Federal Funds Rate but in no event to be less than 6% per annum. In addition, unless the Fund has given a Certificate that the Custodian shall not impose a lien and security interest to secure such overdrafts (in which event it shall not do so), the Custodian shall have a continuing lien and security interest in the aggregate amount of such overdrafts and indebtedness as may from time to time exist in and to any property specifically allocated to such Series at any time held by it for the benefit of such Series or in which the Fund may have an interest which is then in the Custodian's possession or control or in possession or control of any third party acting in the Custodian's behalf. The Fund authorizes the Custodian, in its sole discretion, at any time to charge any such overdraft or indebtedness together with interest due thereon against any money balance in an account standing in the name of such Series' credit on the Custodian's books. In addition, the Fund hereby covenants that on each Business Day on which either it intends to enter a Reverse Repurchase Agreement and/or otherwise borrow from a third party, or which next succeeds a Business Day on which at the close of business the Fund had outstanding a Reverse Repurchase Agreement or such a borrowing, it shall prior to 9 a.m., New York City time, advise the Custodian, in writing, of each such borrowing, shall specify the Series to which the same relates, and shall not incur any indebtedness, including pursuant to any Reverse Repurchase Agreement, not so specified other than from the Custodian. 2. The Fund will cause to be delivered to the Custodian by any bank (including, if the borrowing is pursuant to a separate agreement, the Custodian) from which it borrows money for investment or for temporary or emergency purposes using Securities held by the Custodian hereunder as collateral for such borrowings, a notice or undertaking in the form currently employed by any such bank setting forth the amount which such bank will loan to the Fund against delivery of a stated amount of collateral. The Fund shall promptly deliver to the Custodian a Certificate specifying with respect to each such borrowing: (a) the Series to which such borrowing relates; (b) the name of the bank, (c) the amount and terms of the borrowing, which may be set forth by incorporating by reference an attached promissory note, duly endorsed by the Fund, or other loan agreement, (d) the time and date, if known, on which the loan is to be entered into, (e) the date on which the loan becomes due and payable, (f) the total amount payable to the Fund on the borrowing date, (g) the market value of Securities to be delivered as collateral for such loan, including the name of the issuer, the title and the number of shares or the principal amount of any particular Securities, and (h) a statement specifying whether such loan is for investment purposes or for temporary or emergency purposes and that such loan is in conformance with the Investment Company Act of 1940 and the Fund's prospectus and Statement of Additional Information. The Custodian shall deliver on the borrowing date specified in a Certificate the specified collateral and the executed promissory note, if any, against delivery by the lending bank of the total amount of the loan payable, provided that the same conforms to the total amount payable as set forth in the Certificate. The Custodian may, at the option of the lending bank, keep such collateral in its possession, but such collateral shall be subject to all rights therein given the lending bank by virtue of any promissory note or loan agreement. The Custodian shall deliver such Securities as additional collateral as may be specified in a Certificate to collateralize further any transaction described in this paragraph. The Fund shall cause all Securities released from collateral status to be returned directly to the Custodian, and the Custodian shall receive from time to time such return of collateral as may be tendered to it. In the event that the Fund fails to specify in a Certificate the Series, the name of the issuer, the title and number of shares or the principal amount of any particular Securities to be delivered as collateral by the Custodian, to any such bank, the Custodian shall not be under any obligation to deliver any Securities. ARTICLE XV CUSTODY OF ASSETS OUTSIDE THE U.S. 1. The Custodian is authorized and instructed to employ, as its agent, as subcustodians for the securities and other assets of the Fund maintained outside of the United States the Foreign Subcustodians and For- eign Depositories designated on Schedule A hereto. Except as provided in Schedule A, the Custodian shall employ no other Foreign Custodian or Foreign Depository. The Custodian and the Fund may amend Schedule A hereto from time to time to agree to designate any additional Foreign Subcustodian or Foreign Depository with which the Custodian has an agreement for such entity to act as the Custodian's agent, as subcus- todian, and which the Custodian in its absolute discretion proposes to utilize to hold any of the Fund's Foreign Property. Upon receipt of a Certificate or Written Instructions from the Fund, the Custodian shall cease the employment of any one or more of such subcustodians for maintaining custody of the Fund's assets and such custodian shall be deemed deleted from Schedule A. 2. The Custodian shall limit the securities and other assets maintained in the custody of the Foreign Subcustodians to: (a) "foreign securities," as defined in paragraph (c)(1) of Rule 17f-5 under the Investment Company Act of 1940, and (b) cash and cash equivalents in such amounts as the Fund may determine to be reasonably necessary to effect the foreign securities transactions of the Fund. 3. The Custodian shall identify on its books as belonging to the Fund, the Foreign Securities held by each Foreign Subcustodian. 4. Each agreement pursuant to which the Custodian employs a Foreign Subcustodian shall be substantially in the form reviewed and approved by the Fund and will not be amended in a way that materially affects the Fund without the Fund's prior written consent and shall: (a) require that such institution establish custody account(s) for the Custodian on behalf of the Fund and physically segregate in each such account securities and other assets of the fund, and, in the event that such institution deposits the securities of the Fund in a Foreign Depository, that it shall identify on its books as belonging to the Fund or the Custodian, as agent for the Fund, the securities so deposited; (b) provide that: (1) the assets of the Fund will not be subject to any right, charge, security interest, lien or claim of any kind in favor of the Foreign Subcustodian or its creditors, except a claim of payment for their safe custody or administration; (2) beneficial ownership for the assets of the Fund will be freely transferable without the payment of money or value other than for custody or administration; (3) adequate records will be maintained identifying the assets as belonging to the Fund; (4) the independent public accountants for the Fund will be given access to the books and records of the Foreign Subcustodian relating to its actions under its agreement with the Custodian or confirmation of the contents of those records; (5) the Fund will receive periodic reports with respect to the safekeeping of the Fund's assets, including, but not necessarily limited to, notification of any transfer to or from the custody account(s); and (6) assets of the Fund held by the Foreign Subcustodian will be subject only to the instructions of the Custodian or its agents. (c) Require the institution to exercise reasonable care in the performance of its duties and to indemnify, and hold harmless, the Custodian from and against any loss, damage, cost, expense, liability or claim arising out of or in connection with the institution's performance of such obligations, with the exception of any such losses, damages, costs, expenses, liabilities or claims arising as a result of an act of God. At the election of the Fund, it shall be entitled to be subrogated to the rights of the Custodian with respect to any claims against a Foreign Subcustodian as a consequence of any such loss, damage, cost, expense, liability or claim of or to the Fund, if and to the extent that the Fund has not been made whole for any such loss, damage, cost, expense, liability or claim. 5. Upon receipt of a Certificate or Written Instructions, which may be continuing instructions when deemed appropriate by the parties, the Custodian shall on behalf of the Fund make or cause its Foreign Subcustodian to transfer, exchange or deliver securities owned by the Fund, except to the extent explicitly prohibited therein. Upon receipt of a Certificate or Written Instructions, which may be continuing instructions when deemed appropriate by the parties, the Custodian shall on behalf of the fund pay out or cause its Foreign Subcustodians to pay out monies of the Fund. The Custodian shall use all means reasonably available to it, including, if specifically authorized by the Fund in a Certificate, any necessary litigation at the cost and expense of the Fund (except as to matters for which the Custodian is responsible hereunder) to require or compel each Foreign Subcustodian or Foreign Depository to perform the services required of it by the agreement between it and the Custodian authorized pursuant to this Agreement. 6. The Custodian shall maintain all books and records as shall be necessary to enable the Custodian readily to perform the services required of it hereunder with respect to the Fund's Foreign Properties. The Custodians shall supply to the Fund from time to time, as mutually agreed upon, statements in respect of the Foreign Securities and other Foreign Properties of the Fund held by Foreign Subcustodians, directly or through Foreign Depositories, including but not limited to an identification of entities having possession of the Fund's Foreign Securities and other assets, an advice or other notification of any transfers of securities to or from each custodial account maintained for the Fund or the Custodian on behalf of the Fund indicating, as to securities acquired for the Fund, the identity of the entity having physical possession of such securities. The Custodian shall promptly and faithfully transmit all reports and information received pertaining to the Foreign Property of the Fund, including, without limitation, notices or reports of corporate action, proxies and proxy soliciting materials. 7. Upon request of the Fund, the Custodian shall use reasonable efforts to arrange for the independent accountants of the Fund to be afforded access to the books and records of any Foreign Subcustodian, or confirmation of the contents thereof, insofar as such books and records relate to the Foreign Property of the Fund or the performance of such Foreign Subcustodian under its agreement with the Custodian; provided that any litigation to afford such access shall be at the sole cost and expense of the Fund. 8. The Custodian recognizes that employment of a Foreign Sub- custodian or Foreign Depository for the Fund's Foreign Securities and Foreign Property is permitted by Section 17(f) of the Investment Company Act of 1940 only upon compliance with Section (a) of Rule 17f-5 promulgated thereunder. With respect to the Foreign Subcustodians and Foreign Depositories identified on Schedule A, the Custodian represents that it has furnished the Fund with certain materials prepared by the Custodian and with such other information in the possession of the Cus- todian as the Fund advised the Custodian was reasonably necessary to assist the Board of Trustees of the Fund in making the determinations required of the Board of Trustees by Rule 17f-5, including, without limitation, consideration of the matters set forth in the Notes to Rule 17f-5. If the Custodian recommends any additional Foreign Subcustodian or Foreign Depository, the Custodian shall supply information similar in kind and scope to that furnished pursuant to the preceding sentence. Fur- ther, the Custodian shall furnish annually to the Fund, at such time as the Fund and Custodian shall mutually agree, information concerning each Foreign Subcustodian and Foreign Depository then identified on Schedule A similar in kind and scope to that furnished pursuant to the preceding two sentences. 9. The Custodian's employment of any Foreign Subcustodian or Foreign Depository shall constitute a representation that the Custodian believes in good faith that such Foreign Subcustodian or Foreign Depository provides a level of safeguards for maintaining the Fund's assets not materially different from that provided by the Custodian in maintaining the Fund's securities in the United States. In addition, the Custodian shall monitor the financial condition and general operational performance of the Foreign Subcustodians and Foreign Depositories and shall promptly inform the Fund in the event that the Custodian has actual knowledge of a material adverse change in the financial condition thereof or that there appears to be a substantial likelihood that the share- holders' equity of any Foreign Subcustodian will decline below $200 million (U.S. dollars or the equivalent thereof) or that its shareholders' equity has declined below $200 million , or that the Foreign Subcustodian or Foreign Depository has breached the agreement between it and the Custodian in a way that the Custodian believes adversely affects the Fund. Further, the Custodian shall advise the Fund if it believes that there is a material adverse change in the operating environment of any Foreign Subcustodian or Foreign Depository. ARTICLE XVI CONCERNING THE CUSTODIAN 1. The Custodian shall use reasonable care in the performance of its duties hereunder, and, except as hereinafter provided, neither the Custodian nor its nominee shall be liable for any loss or damage, including counsel fees, resulting from its action or omission to act or otherwise, either hereunder or under any Margin Account Agreement, except for any such loss or damage arising out of its own negligence, bad faith, or willful misconduct or that of the subcustodians or co-custodians appointed by the Custodian or of the officers, employees, or agents of any of them. The Custodian may, with respect to questions of law arising hereunder or under any Margin Account Agreement, apply for and obtain the advice and opinion of counsel to the Fund, at the expense of the Fund, or of its own counsel, at its own expense, and shall be fully protected with respect to anything done or omitted by it in good faith in conformity with such advice or opinion. The Custodian shall be liable to the Fund for any loss or damage resulting from the use of the Book-Entry System or any Depository arising by reason of any negligence, bad faith or willful mis- conduct on the part of the Custodian or any of its employees or agents. 2. Notwithstanding the foregoing, the Custodian shall be under no obligation to inquire into, and shall not be liable for: (a) The validity (but not the authenticity) of the issue of any Securities purchased, sold, or written by or for the Fund, the legality of the purchase, sale or writing thereof, or the propriety of the amount paid or received therefor, as specified in a Certificate, Oral Instructions, or Written Instructions; (b) The legality of the sale or redemption of any Shares, or the propriety of the amount to be received or paid therefor, as specified in a Certificate; (c) The legality of the declaration or payment of any dividend by the Fund, as specified in a resolution, Certificate, Oral Instructions, or Written Instructions; (d) The legality of any borrowing by the Fund using Securities as collateral; (e) The legality of any loan of portfolio Securities, nor shall the Custodian be under any duty or obligation to see to it that the cash collateral delivered to it by a broker, dealer, or financial institution or held by it at any time as a result of such loan of portfolio Securities of the Fund is adequate collateral for the Fund against any loss it might sustain as a result of such loan, except that this subparagraph shall not excuse any liability the Custodian may have for failing to act in accor- dance with Article X hereof or any Certificate, Oral Instructions or Written Instructions given in accordance with this Agreement. The Custo- dian specifically, but not by way of limitation, shall not be under any duty or obligation periodically to check or notify the Fund that the amount of such cash collateral held by it for the Fund is sufficient collateral for the Fund, but such duty or obligation shall be the sole responsibility of the Fund. In addition, the Custodian shall be under no duty or obligation to see that any broker, dealer or financial institution to which portfolio Securities of the Fund are lent pursuant to Article X of this Agreement makes payment to it of any dividends or interest which are payable to or for the account of the Fund during the period of such loan or at the termination of such loan, provided, however, that the Custodian shall promptly notify the Fund in the event that such dividends or interest are not paid and received when due; or (f) The sufficiency or value of any amounts of money and/or Securities held in any Margin Account, Senior Security Account or Collateral Account in connection with transactions by the Fund, except that this subparagraph shall not excuse any liability the Custodian may have for failing to establish, maintain, make deposits to or withdrawals from such accounts in accordance with this Agreement. In addition, the Custodian shall be under no duty or obligation to see that any broker, dealer, futures commission merchant or Clearing Member makes payment to the Fund of any variation margin payment or similar payment which the Fund may be entitled to receive from such broker, dealer, futures commission merchant or Clearing Member, to see that any payment received by the Custodian from any broker, dealer, futures commission merchant or Clearing Member is the amount the Fund is entitled to receive, or to notify the Fund of the Custodian's receipt or non-receipt of any such payment. 3. The Custodian shall not be liable for, or considered to be the Custodian of, any money, whether or not represented by any check, draft, or other instrument for the payment of money, received by it on behalf of the Fund until the Custodian actually receives such money directly or by the final crediting of the account representing the Fund's interest at the Book-Entry System or the Depository. 4. With respect to Securities held in a Depository, except as otherwise provided in paragraph 5(b) of Article III hereof, the Custodian shall have no responsibility and shall not be liable for ascertaining or acting upon any calls, conversions, exchange offers, tenders, interest rate changes or similar matters relating to such Securities, unless the Custodian shall have actually received timely notice from the Depository in which such Securities are held. In no event shall the Custodian have any responsibility or liability for the failure of a Depository to collect, or for the late collection or late crediting by a Depository of any amount payable upon Securities deposited in a Depository which may mature or be redeemed, retired, called or otherwise become payable. How- ever, upon receipt of a Certificate from the Fund of an overdue amount on Securities held in a Depository the Custodian shall make a claim against the Depository on behalf of the Fund, except that the Custodian shall not be under any obligation to appear in, prosecute or defend any action suit or proceeding in respect to any Securities held by a Depository which in its opinion may involve it in expense or liability, unless indemnity satisfactory to it against all expense and liability be furnished as often as may be required, or alternatively, the Fund shall be subrogated to the rights of the Custodian with respect to such claim against the Depository should it so request in a Certificate. This paragraph shall not, however, excuse any failure by the Custodian to act in accordance with a Certificate, Oral Instructions, or Written Instructions given in accordance with this Agreement. 5. The Custodian shall not be under any duty or obligation to take action to effect collection of any amount due the Fund from the Transfer Agent of the Fund nor to take any action to effect payment or distribution by the Transfer Agent of the Fund of any amount paid by the Custodian to the Transfer Agent of the Fund in accordance with this Agreement. 6. The Custodian shall not be under any duty or obligation to take action to effect collection of any amount if the Securities upon which such amount is payable are in default, or if payment is refused after the Custodian has timely and properly, in accordance with this Agreement, made due demand or presentation, unless and until (i) it shall be directed to take such action by a Certificate and (ii) it shall be assured to its satisfaction of reimbursement of its costs and expenses in connection with any such action, but the Custodian shall have such a duty if the Secu- rities were not in default on the payable date and the Custodian failed to timely and properly make such demand for payment and such failure is the reason for the non-receipt of payment. 7. The Custodian may, with the prior approval of the Board of Trustees of the Fund, appoint one or more banking institutions as subcustodian or subcustodians, or as co-Custodian or co-Custodians, of Securities and moneys at any time owned by the Fund, upon such terms and conditions as may be approved in a Certificate or contained in an agreement executed by the Custodian, the Fund and the appointed institution; provided, however, that appointment of any foreign banking institution or depository shall be subject to the provisions of Article XV hereof. 8. The Custodian agrees to indemnify the Fund against and save the Fund harmless from all liability, claims, losses and demands whatsoever, including attorney's fees, howsoever arising or incurred because of the negligence, bad faith or willful misconduct of any subcustodian of the Securities and moneys owned by the Fund. 9. The Custodian shall not be under any duty or obligation (a) to ascertain whether any Securities at any time delivered to, or held by it, for the account of the Fund and specifically allocated to a Series are such as properly may be held by the Fund or such Series under the provisions of its then current prospectus, or (b) to ascertain whether any transactions by the Fund, whether or not involving the Custodian, are such transactions as may properly be engaged in by the Fund. 10. The Custodian shall be entitled to receive and the Fund agrees to pay to the Custodian all reasonable out-of-pocket expenses and such compensation as may be agreed upon in writing from time to time between the Custodian and the Fund. The Custodian may charge such compensation, and any such expenses with respect to a Series incurred by the Custodian in the performance of its duties under this Agreement against any money specifically allocated to such Series. The Custodian shall also be entitled to charge against any money held by it for the account of a Series the amount of any loss, damage, liability or expense, including counsel fees, for which it shall be entitled to reimbursement under the provisions of this Agreement attributable to, or arising out of, its serving as Custodian for such Series. The expenses for which the Custodian shall be entitled to reimbursement hereunder shall include, but are not limited to, the expenses of subcustodians and foreign branches of the Custodian incurred in settling outside of New York City transactions involving the purchase and sale of Securities of the Fund. Notwithstanding the foregoing or anything else contained in this Agreement to the contrary, the Custodian shall, prior to effecting any charge for compensation, expenses, or any overdraft or indebtedness or interest thereon, submit an invoice therefor to the Fund. 11. The Custodian shall be entitled to rely upon any Certificate, notice or other instrument in writing, Oral Instructions, or Written Instructions received by the Custodian and reasonably believed by the Custodian to be genuine. The Fund agrees to forward to the Custodian a Certificate or facsimile thereof confirming Oral Instructions or Written Instructions in such manner so that such Certificate or facsimile thereof is received by the Custodian, whether by hand delivery, telecopier or other similar device, or otherwise, by the close of business of the same day that such Oral Instructions or Written Instructions are given to the Custodian. The Fund agrees that the fact that such confirming instructions are not received by the Custodian shall in no way affect the validity of the transactions or enforceability of the transactions thereby authorized by the Fund. The Fund agrees that the Custodian shall incur no liability to the Fund in acting upon Oral Instructions or Written Instructions given to the Custodian hereunder concerning such transactions provided such instructions reasonably appear to have been received from an Authorized Person. 12. The Custodian shall be entitled to rely upon any instrument, instruction or notice received by the Custodian and reasonably believed by the Custodian to be given in accordance with the terms and conditions of any Margin Account Agreement. Without limiting the generality of the foregoing, the Custodian shall be under no duty to inquire into, and shall not be liable for, the accuracy of any statements or representations contained in any such instrument or other notice including, without limi- tation, any specification of any amount to be paid to a broker, dealer, futures commission merchant or Clearing Member. This paragraph shall not excuse any failure by the Custodian to have acted in accordance with any Margin Agreement it has executed or any Certificate, Oral Instructions, or Written Instructions given in accordance with this Agreement. 13. The books and records pertaining to the Fund, as described in Appendix E hereto, which are in the possession of the Custodian shall be the property of the Fund. Such books and records shall be prepared and maintained by the Custodian as required by the Investment Company Act of 1940, as amended, and other applicable Securities laws and rules and regulations. The Fund, or the Fund's authorized representatives, shall have access to such books and records during the Custodian's normal business hours. Upon the reasonable request of the Fund, copies of any such books and records shall be provided by the Custodian to the Fund or the Fund's authorized representative, and the Fund shall reimburse the Custodian its expenses of providing such copies. Upon reasonable request of the Fund, the Custodian shall provide in hard copy or on micro-film, whichever the Custodian elects, any records included in any such delivery which are maintained by the Custodian on a computer disc, or are similarly maintained, and the Fund shall reimburse the Custodian for its expenses of providing such hard copy or micro-film. 14. The Custodian shall provide the Fund with any report obtained by the Custodian on the system of internal accounting control of the Book- Entry system, each Depository or O.C.C., and with such reports on its own systems of internal accounting control as the Fund may reasonably request from time to time. 15. The Custodian shall furnish upon request annually to the Fund a letter prepared by the Custodian's accountants with respect to the Custodian's internal systems and controls in the form generally provided by the Custodian to other investment companies for which the Custodian acts as custodian. 16. The Fund agrees to indemnify the Custodian against and save the Custodian harmless from all liability, claims, losses and demands whatsoever, including attorney's fees, howsoever arising out of, or related to, the Custodian's performance of its obligations under this Agreement, except for any such liability, claim, loss and demand arising out of the negligence, bad faith, or willful misconduct of the Custodian, any co-Custodian or subcustodian appointed by the Custodian, or that of the officers, employees, or agents of any of them. 17. Subject to the foregoing provisions of this Agreement, the Custodian shall deliver and receive Securities, and receipts with respect to such Securities, and shall make and receive payments only in accordance with the customs prevailing from time to time among brokers or dealers in such Securities and, except as may otherwise be provided by this Agreement or as may be in accordance with such customs, shall make payment for Securities only against delivery thereof and deliveries of Securities only against payment therefor. 18. The Custodian will comply with the procedures, guidelines or restrictions ("Procedures") adopted by the Fund from time to time for par- ticular types of investments or transactions, e.g., Repurchase Agreements and Reverse Repurchase Agreements, provided that the Custodian has received from the Fund a copy of such Procedures. If within ten days after receipt of any such Procedures, the Custodian determines in good faith that it is unreasonable for it to comply with any new procedures, guidelines or restrictions set forth therein, it may within such ten day period send notice to the Fund that it does not intend to comply with those new procedures, guidelines or restrictions which it identifies with particularity in such notice, in which event the Custodian shall not be required to comply with such identified procedures, guidelines or restrictions; provided, however, that, anything to the contrary set forth herein or in any other agreement with the Fund, if the Custodian identi- fies procedures, guidelines or restrictions with which it does not intend to comply, the Fund shall be entitled to terminate this Agreement without cost or penalty to the Fund upon thirty days' written notice. 19. Whenever the Custodian has the authority to deduct monies from the account for a series without a Certificate, it shall notify the Fund within one business day of such deduction and the reason for it. Whenever the Custodian has the authority to sell Securities or any other property of the Fund on behalf of any Series without a Certificate, the Custodian will notify the Fund of its intention to do so and afford the Fund the reasonable opportunity to select which Securities or other property it wishes to sell on behalf of such Series. If the Fund does not promptly sell sufficient Securities or Deposited Property on behalf of the Series, then, after notice, the Custodian may proceed with the intended sale. 20. The Custodian shall have no duties or responsibilities whatsoever except such duties and responsibilities as are specifically set forth or referred to in this Agreement, and no covenant or obligation shall be implied in this Agreement against the Custodian. ARTICLE XVII TERMINATION 1. Except as provided in paragraph 3 of this Article, this Agreement shall continue until terminated by either the Custodian giving to the Fund, or the Fund giving to the Custodian, a notice in writing specifying the date of such termination, which date shall be not less than 60 days after the date of the giving of such notice. In the event such notice or a notice pursuant to paragraph 3 of this Article is given by the Fund, it shall be accompanied by a copy of a resolution of the Board of Trustees of the Fund, certified by an Officer and the Secretary or an Assistant Secretary of the Fund, electing to terminate this Agreement and designating a successor custodian or custodians, each of which shall be eligible to serve as a custodian for the Securities of a management investment company under the Investment Company Act of 1940. In the event such notice is given by the Custodian, the Fund shall, on or before the termination date, deliver to the Custodian a copy of a resolution of the Board of Trustees of the Fund, certified by the Secretary or any Assistant Secretary, designating a successor custodian or custodians. In the ab- sence of such designation by the Fund, the Custodian may designate a successor custodian which shall be a bank or trust company eligible to serve as a custodian for Securities of a management investment company under the Investment Company Act of 1940 and which is acceptable to the Fund. Upon the date set forth in such notice this Agreement shall terminate, and the Custodian shall upon receipt of a notice of acceptance by the successor custodian on that date deliver directly to the successor custodian all Securities and moneys then owned by the Fund and held by it as Custodian, after deducting all fees, expenses and other amounts for the payment or reimbursement of which it shall then be entitled. 2. If a successor custodian is not designated by the Fund or the Custodian in accordance with the preceding paragraph, the Fund shall upon the date specified in the notice of termination of this Agreement and upon the delivery by the Custodian of all Securities (other than Securities held in the Book-Entry System which cannot be delivered to the Fund) and moneys then owned by the Fund be deemed to be its own custodian and the Custodian shall thereby be relieved of all duties and responsibilities pursuant to this Agreement arising thereafter, other than the duty with respect to Securities held in the Book Entry System which cannot be deliv- ered to the Fund to hold such Securities hereunder in accordance with this Agreement. 3. Notwithstanding the foregoing, the Fund may terminate this Agreement upon the date specified in a written notice in the event of the "Bankruptcy" of The Bank of New York. As used in this sub-paragraph, the term "Bankruptcy" shall mean The Bank of New York's making a general assignment, arrangement or composition with or for the benefit of its creditors, or instituting or having instituted against it a proceeding seeking a judgment of insolvency or bankruptcy or the entry of a order for relief under any applicable bankruptcy law or any other relief under any bankruptcy or insolvency law or other similar law affecting creditors rights, or if a petition is presented for the winding up or liquidation of the party or a resolution is passed for its winding up or liquidation, or it seeks, or becomes subject to, the appointment of an administrator, receiver, trustee, custodian or other similar official for it or for all or substantially all of its assets or its taking any action in furtherance of, or indicating its consent to approval of, or acquiescence in, any of the foregoing. ARTICLE XVIII TERMINAL LINK 1. At no time and under no circumstances shall the Fund be obligated to have or utilize the Terminal Link, and the provisions of this Article shall apply if, but only if, the Fund in its sole and absolute discretion elects to utilize the Terminal Link to transmit Certificates to the Custodian. 2. The Terminal Link shall be utilized only for the purpose of the Fund providing Certificates to the Custodian and the Custodian providing notices to the Fund and only after the Fund shall have established access codes and internal safekeeping procedures to safeguard and protect the confidentiality and availability of such access codes. Each use of the Terminal Link by the Fund shall constitute a representation and warranty that at least two officers have each utilized an access code that such internal safekeeping procedures have been established by the Fund, and that such use does not contravene the Investment Company Act of 1940 and the rules and regulations thereunder. 3. Each party shall obtain and maintain at its own cost and expense all equipment and services, including, but not limited to communications services, necessary for it to utilize the Terminal Link, and the other party shall not be responsible for the reliability or availability of any such equipment or services, except that the Custodian shall not pay any communications costs of any line leased by the Fund, even if such line is also used by the Custodian. 4. The Fund acknowledges that any data bases made available as part of, or through the Terminal Link and any proprietary data, software, processes, information and documentation (other than any such which are or become part of the public domain or are legally required to be made available to the public) (collectively, the "Information"), are the exclusive and confidential property of the Custodian. The Fund shall, and shall cause others to which it discloses the Information, to keep the Information confidential by using the same care and discretion it uses with respect to its own confidential property and trade secrets, and shall neither make nor permit any disclosure without the express prior written consent of the Custodian. 5. Upon termination of this Agreement for any reason, each Fund shall return to the Custodian any and all copies of the Information which are in the Fund's possession or under its control, or which the Fund distributed to third parties. The provisions of this Article shall not affect the copyright status of any of the Information which may be copyrighted and shall apply to all Information whether or not copyrighted. 6. The Custodian reserves the right to modify the Terminal Link from time to time without notice to the Fund, except that the Custodian shall give the Fund notice not less than 75 days in advance of any modification which would materially adversely affect the Fund's operation, and the Fund agrees not to modify or attempt to modify the Terminal Link without the Custodian's prior written consent. The Fund acknowledges that any software provided by the Custodian as part of the Terminal Link is the property of the Custodian and, accordingly, the Fund agrees that any modifications to the same, whether by the Fund or the Custodian and whether with or without the Custodian's consent, shall become the property of the Custodian. 7. Neither the Custodian nor any manufacturers and suppliers it utilizes or the Fund utilizes in connection with the Terminal Link makes any warranties or representations, express or implied, in fact or in law, including but not limited to warranties of merchantability and fitness for a particular purpose. 8. Each party will cause its officers and employees to treat the authorization codes and the access codes applicable to Terminal Link with extreme care, and irrevocably authorizes the other to act in accordance with and rely on Certificates and notices received by it through the Terminal Link. Each party acknowledges that it is its responsibility to assure that only its authorized persons use the Terminal Link on its behalf, and that a party shall not be responsible nor liable for use of the Terminal Link on behalf of the other party by unauthorized persons of such other party. 9. Notwithstanding anything else in this Agreement to the contrary, neither party shall have any liability to the other for any losses, damages, injuries, claims, costs or expenses arising as a result of a delay, omission or error in the transmission of a Certificate or notice by use of the Terminal Link except for money damages for those suffered as the result of the negligence, bad faith or willful misconduct of such party or its officers, employees or agents in an amount not exceeding for any incident $100,000; provided, however, that a party shall have no liability under this Section 9 if the other party fails to comply with the provisions of Section 11. 10. Without limiting the generality of the foregoing, in no event shall either party or any manufacturer or supplier of its computer equipment, software or services relating to the Terminal Link be responsible for any special, indirect, incidental or consequential damages which the other party may incur or experience by reason of its use of the Terminal Link even if such party, manufacturer or supplier has been advised of the possibility of such damages, nor with respect to the use of the Terminal Link shall either party or any such manufacturer or supplier be liable for acts of God, or with respect to the following to the extent beyond such person's reasonable control: machine or computer breakdown or malfunction, interruption or malfunction of communication facilities, labor difficulties or any other similar or dissimilar cause. 11. The Fund shall notify the Custodian of any errors, omissions or interruptions in, or delay or unavailability of, the Terminal Link as promptly as practicable, and in any event within 24 hours after the earliest of (i) discovery thereof, and (ii) in the case of any error, the date of actual receipt of the earliest notice which reflects such error, it being agreed that discovery and receipt of notice may only occur on a business day. The Custodian shall promptly advise the Fund whenever the Custodian learns of any errors, omissions or interruption in, or delay or unavailability of, the Terminal Link. 12. Each party shall, as soon as practicable after its receipt of a Certificate or a notice transmitted by the Terminal Link, verify to the other party by use of the Terminal Link its receipt of such Certificate or notice, and in the absence of such verification the party to which the Certificate or notice is sent shall not be liable for any failure to act in accordance with such Certificate or notice and the sending party may not claim that such Certificate or notice was received by the other party. ARTICLE XIX MISCELLANEOUS 1. Annexed hereto as Appendix A is a Certificate signed by two of the present Officers of the Fund under its seal, setting forth the names and the signatures of the present Authorized Persons. The Fund agrees to furnish to the Custodian a new Certificate in similar form in the event that any such present Authorized Person ceases to be an Authorized Person or in the event that other or additional Authorized Persons are elected or appointed. Until such new Certificate shall be received, the Custodian shall be entitled to rely and to act upon Oral Instructions, Written Instructions, or signatures of the present Authorized Persons as set forth in the last delivered Certificate to the extent provided by this Agreement. 2. Annexed hereto as Appendix B is a Certificate signed by two of the present Officers of the Fund under its seal, setting forth the names and the signatures of the present Officers of the Fund. The Fund agrees to furnish to the Custodian a new Certificate in similar form in the event any such present officer ceases to be an officer of the Fund, or in the event that other or additional officers are elected or appointed. Until such new Certificate shall be received, the Custodian shall be entitled to rely and to act upon the signatures of the officers as set forth in the last delivered Certificate to the extent provided by this Agreement. 3. Any notice or other instrument in writing, authorized or required by this Agreement to be given to the Custodian, other than any Certificate or Written Instructions, shall be sufficiently given if addressed to the Custodian and mailed or delivered to it at its offices at 90 Washington Street, New York, New York 10286, or at such other place as the Custodian may from time to time designate in writing. 4. Any notice or other instrument in writing, authorized or rehired by this Agreement to be given to the Fund shall be sufficiently given if addressed to the Fund and mailed or delivered to it at its office at the address for the Fund first above written, or at such other place as the Fund may from time to time designate in writing. 5. This Agreement constitutes the entire agreement between the parties, replaces all prior agreements and may not be amended or modified in any manner except by a written agreement executed by both parties with the same formality as this Agreement and approved by a resolution of the Board of Trustees of the Fund, except that Appendices A and B may be amended unilaterally by the Fund without such an approving resolution. 6. This Agreement shall extend to and shall be binding upon the parties hereto, and their respective successors and assigns; provided, however, that this Agreement shall not be assignable by the Fund without the written consent of the Custodian, or by the Custodian or The Bank of New York without the written consent of the Fund, authorized or approved by a resolution of the Fund's Board of Trustees. For purposes of this paragraph, no merger, consolidation, or amalgamation of the Custodian, The Bank of New York, or the Fund shall be deemed to constitute an assignment of this Agreement. 7. This Agreement shall be construed in accordance with the laws of the State of New York without giving effect to conflict of laws principles thereof. Each party hereby consents to the jurisdiction of a state or federal court situated in New York City, New York in connection with any dispute arising hereunder and hereby waives its right to trial by jury. 8. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but such counterparts shall, together, constitute only one instrument. 9. A copy of the Declaration of Trust of the Fund is on file with the Secretary of The Commonwealth of Massachusetts, and notice is hereby given that this instrument is executed on behalf of the Board of Trustees of the Fund as Trustees and not individually and that the obligations of the instrument are not binding upon any of the Trustees or shareholders individually but are binding upon the assets and property of the Fund; provided, however, that the Declaration of Trust of the Fund provides that the assets of a particular series of the Fund shall under no circumstances be charges with liabilities attributable to any other series of the Fund and that all persons extending credit to, or contracting with or having any claim against a particular series of the Fund shall look only to the assets of that particular series for payment of such credit, contract or claim. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective Officers, thereunto duly authorized and their respective seals to be hereunto affixed, as of the day and year first above written. OPPENHEIMER VARIABLE ACCOUNT FUNDS By: /s/ Robert G. Galli Robert G. Galli, Vice President [SEAL] Attest: /s/ Robert G. Zack Robert G. Zack, Assistant Secretary THE BANK OF NEW YORK [SEAL] By__________________________________ Attest: ___________________________________ APPENDIX A I, President and I, , of Oppenheimer Fund, a Massachusetts business trust (the "Fund") do hereby certify that: The following individuals have been duly authorized by the Board of Trustees of the Fund in conformity with the Fund's Declaration of Trust and By-Laws to give Oral Instructions and Written Instructions on behalf of the Fund, except that those persons designated as being an "Officer of OSS" shall be an Authorized Person only for purposes of Articles XII and XIII. The signatures set forth opposite their respective names are their true and correct signatures: Name Position Signature __________________ _______________________ __________________ APPENDIX B I, President and I, , of Oppenheimer Fund, a Massachusetts business trust (the "Fund"), do hereby certify that: The following individuals for whom a position other than "Officer of OSS" is specified serve in the following positions with the Fund and each has been duly elected or appointed by the Board of Trustees of the Fund to each such position and qualified therefor in conformity with the Fund's Declaration of Trust and By-Laws. With respect to the following individuals for whom a position of "Officer of OSS" is specified, each such individual has been designated by a resolution of the Board of Trustees of the Fund to be an Officer for purposes of the Fund's Custody Agreement with The Bank of New York, but only for purposes of Articles XII and XIII thereof and a certified copy of such resolution is attached hereto. The signatures of each individual below set forth opposite their respective names are their true and correct signatures: Name Position Signature __________________ _______________________ __________________ APPENDIX C The undersigned, hereby certifies that he or she is the duly elected and acting of Oppenheimer Fund (the "Fund"), further certifies that the following resolutions were adopted by the Board of Trustees of the Fund at a meeting duly held on __________________, 199 , at which a quorum at all times present and that such resolutions have not been modified or rescinded and are in full force an effect as of the date hereof. RESOLVED, that The Bank New York, as Custodian pursuant to a Custody Agreement between The Bank of New York and the Fund dated as of 199 (the "Custody Agreement") is authorized and instructed on a continuous and ongoing basis to act in accordance with, and to rely on instructions by the Fund to the Custodian communicated by a Terminal Link as defined in the Custody Agreement. RESOLVED, that the Fund shall establish access codes and grant use of such access codes only to officers of the Fund as defined in the Custody Agreement, and shall establish internal safekeeping procedures to safeguard and protect the confidentiality and availability of such access codes. RESOLVED, that Officers of the Fund as defined in the Custody Agreement shall, following the establishment of such access codes and such internal safekeeping procedures, advise the Custodian that the same have been established by delivering a Certificate, as defined in the Custody Agreement, and the Custodian shall be entitled to rely upon such advice. IN WITNESS WHEREOF, I hereunto set my hand in the seal of , as of the day of , 199 . APPENDIX D I, Richard P. Lando, an Assistant Vice President with THE BANK OF NEW YORK do hereby designate the following publications: The Bond Buyer Depository Trust Company Notices Financial Daily Card Service JJ Kenney Municipal Bond Service London Financial Times New York Times Standard & Poor's Called Bond Record Wall Street Journal APPENDIX E The following books and records pertaining to Fund shall be prepared and maintained by the Custodian and shall be the property of the Fund: EXHIBIT A CERTIFICATION The undersigned, , hereby certifies that he or she is the duly elected and acting of Oppenheimer Fund, a Massachusetts business trust (the "Fund"), and further certifies that the following resolution was adopted by the Board of Trustees of the Fund at a meeting duly held on 199 , at which a quorum was at all times present and that such resolution has not been modified or rescinded and is in full force and effect as of the date hereof. RESOLVED, that The Bank of New York, as Custodian pursuant to a Custody Agreement between The Bank of New York and the Fund dated as of , 199 (the "Custody Agreement") is authorized and instructed on a continuous and ongoing basis to deposit in the Book-Entry System, as defined in the Custody Agreement, all Securities eligible for deposit therein, regardless of the Series to which the same are specifically allocated, and to utilize the Book-Entry System to the extent possible in connection with its performance thereunder, including, without limitation, In connection with settlements of purchases and sales of Securities, loans of Securities, and deliveries and returns of Securities col- lateral. IN WITNESS WHEREOF, I have hereunto set my hand and the seal of , as of the day of , 199 . __________________________ [SEAL] EXHIBIT B CERTIFICATION The undersigned , hereby certifies that he or she is the duly elected and acting of Oppenheimer Fund, a Massachusetts business trust (the "Fund"), and further certifies that the following resolution was adopted by the Board of Trustees of the Fund at a meeting duly held on , 199 , at which a quorum was at all times present and that such resolution has not been modified or rescinded and is in full force and effect as of the date hereof. RESOLVED, that The Bank of New York, as Custodian pursuant to a Custody Agreement between The Bank of New York and the Fund dated as of , 199 (the "Custody Agreement") is authorized and instructed on a continuous and ongoing basis until such time as it receives a Certificate, as defined in the Custody Agreement, to the contrary to deposit in The Depository Trust Company ("DTC") as a "Depository" as defined in the Custody Agreement, all Securities eligible for deposit therein, regardless of the Series to which the same are specifically allocated, and to utilize DTC to the extent possible in connection with its performance there- under, including, without limitation, in connection with settlements of purchases and sales of Securities, loans of Securities, and deliveries and returns of Securities collateral. IN WITNESS WHEREOF, I have hereunto set my hand and the seal of as of the day of , 199 . ___________________________ [SEAL] EXHIBIT B-1 CERTIFICATION The undersigned, hereby certifies that he or she is the duly elected and acting of Oppenheimer Fund, a Massachusetts business trust (the "Fund"), and further certifies that the following resolution was adopted by the Board of Trustees of the Fund at a meeting duly held on , 199 , at which a quorum was at all times present and that such resolution has not been modified or rescinded and is in full force and effect as of the date hereof. RESOLVED, that The Bank of New York, as Custodian pursuant to a Custody Agreement between The Bank of New York and the Fund dated as of 199 , (the "Custody Agreement") is authorized and instructed on a continuous and ongoing basis until such time as it receives a Certificate, as defined in the Custody Agreement, to the contrary to deposit in the Participants Trust Company as a Depository, as defined in the Custody Agreement, all Securities eligible for deposit therein, regardless of the Series to which the same are specifically allocated, and to utilize the Participants Trust Company to the extent possible in connection with its performance thereunder, including, without limitation, in connection with settlements of purchases and sales of Securities, loans of Securities, and deliveries and returns of Securities collateral. IN WITNESS WHEREOF, I have hereunto set my hand and the seal of , as of the day of , 199 . _______________________ [SEAL] EXHIBIT C CERTIFICATION The undersigned, , hereby certifies that he or she is the duly elected and acting of Oppenheimer Fund, a Massachusetts business trust (the "Fund"), and further certifies that the following resolution was adopted by the Board of Trustees of the Fund at a meeting duly held on , 199 , at which a quorum was at all times present and that such resolution has not been modified or rescinded and is in full force and effect as of the date hereof. RESOLVED, that The Bank of New York, as Custodian pursuant to a Custody Agreement between The Bank of New York and the Fund dated as of , 199 (the "Custody Agreement") is authorized and instructed on a continuous and ongoing basis until such time as it receives a Certificate, as defined in the Custody Agreement, to the contrary, to ac- cept, utilize and act with respect to Clearing Member confirmations for Options and transaction in Options, regardless of the Series to which the same are specifically allocated, as such terms are defined in the Custody Agreement, as provided in the Custody Agreement. IN WITNESS WHEREOF, I have hereunto set my hand and the seal of , as of the day of , 199 . ____________________________ [SEAL] EXHIBIT D [FORM OF FOREIGN SUBCUSTODIAN AGREEMENT] Appendix A Article XIX.1 49 Appendix B Article XIX.2 50 Exhibit A Article III.1 7 Exhibit B Article III.1 8 Exhibit C Article III.1 8 Exhibit D34 Article XV.4 34 Schedule A Article XV.1 33 CUSTODY\600 EX-23 7 NEEF, SWANSON, MYER & CLARK ATTORNEYS AT LAW SUITE 600 THE COLORADO STATE BANK BUILDING 1600 BROADWAY DENVER, COLORADO 80202-4988 March 14, 1985 Oppenheimer Variable Life Funds 3410 South Galena Street Denver, Colorado 80231 Gentlemen: In connection with the proposed public offering of shares of beneficial interest of Oppenheimer Growth Fund, Oppenheimer Money Fund and Oppenheimer Bond Fund (collectively, the "Funds"), each being a series of Oppenheimer Variable Life Funds (the "Trust"), we have examined such records and documents as we deem necessary for the purpose of this opinion. The Trust is a business trust duly organized and validly existing under the laws of the Commonwealth of Massachusetts. As of the date of this letter, it is our opinion that the indefinite number of shares of each Fund covered by the Trust's Registration Statement on Form N-1A (SEC Reg. No. 2-93177), when issued and paid for in accordance with the terms of the offering, as set forth in the Prospectus and Statement of Additional Information forming a part of the Registration Statement, will be, when such Registration Statement shall have become effective, legally issued, fully paid and non-assessable by the Trust tot he extent set forth in such Registration Statement. We hereby consent to the filing of this opinion as an Exhibit to such Registration Statement and to the reference to Counsel in such Prospectus and/or Statement of Additional Information. We also consent to the filing of this opinion with the authorities administering the securities or insurance law of any jurisdiction in connection with the registration or qualification under such law of the Trust, the Fund's shares and/or policies for which such shares are the underlying investment. Very truly yours, NEEF, SWANSON, MYER & CLARK By: /s/ Rendle Myer Rendle Myer, Partner opinion\600#1 EX-23 8 HAMILTON, MYER, SWANSON, FAATZ & CLARK ATTORNEYS AT LAW THE COLORADO STATE BANK BUILDING 1600 BROADWAY-SUITE 600 DENVER, COLORADO 80202-4988 TELEPHONE: (303) 830-0500 April 28, 1986 Oppenheimer Variable Life Funds 3410 South Galena Street Denver, Colorado 80231 Gentlemen: In connection with the proposed public offering of shares of beneficial interest of Oppenheimer High Income Fund (the "Fund"), which is a series of Oppenheimer Variable Life Funds (the "Trust"), we have examined such records and documents as we deem necessary for the purpose of this opinion. The Trust is a business trust duly organized and validly existing under the laws of the Commonwealth of Massachusetts. As of the date of this letter, it is our opinion that the indefinite number of shares of the Fund covered by the Trust's post-effective Registration Statement No. 3 on Form N-1A (SEC Reg. No. 2-93177), when issued and paid for in accordance with the terms of the offering, as set forth in the Prospectus and Statement of Additional Information forming a part of the Registration Statement, will be, when such Registration Statement shall have become effective, legally issued, fully paid and, except as set forth in the next paragraph, non-assessable by the Trust. Under Massachusetts law, shareholders of the Trust may, under certain circumstances, be held personally liable as partners for the obligations of the Trust. The Declaration of Trust does, however, contain an express disclaimer of shareholder liability for acts or obligations of the Trust and requires that notice of such disclaimer be given in each agreement, obligation, or instrument entered into or executed by the Trust or the Trustees. The Declaration of Trust provides for indemnification out of the trust property of any shareholder held personally liable for the obligations of the Trust shall, upon request, assume the defense of any claim made against any shareholder for any act or obligation of the Trust and satisfy any judgment thereon. OPINION\600#2 EX-23 9 HAMILTON, MYER, SWANSON, FAATZ & CLARK ATTORNEYS AT LAW THE COLORADO STATE BANK BUILDING TELEPHONE: (303) 830-0500 January 21, 1987 Oppenheimer Variable Account Funds 3410 South Galena Street Denver, Colorado 80231 Gentlemen: In connection with the proposed public offering of shares of beneficial interest of Oppenheimer Multiple Strategies Fund (the "Fund"), which is a series of Oppenheimer Variable Account Funds (the "Trust"), we have examined such records and documents as we deem necessary for the purpose of this opinion. The Trust is a business trust duly organized and validly existing under the laws of the Commonwealth of Massachusetts. As of the date of this letter, it is our opinion that the indefinite number of shares of the Fund covered by the Trust's post-effective Registration Statement No. 7 under the Securities Act of 1933 on Form N-1A (SEC Reg. No. 2-93177), when issued and paid for in accordance with the terms of the offering, as set forth in the Prospectus and Statement of Additional Information forming a part of the Registration Statement, will be, when such Registration Statement shall have become effective, legally issued, fully paid and, except as set forth in the next paragraph, non-assessable by the Trust. Under Massachusetts law, shareholders of the Trust may, under certain circumstances, be held personally liable as partners for the obligations of the Trust. The Declaration of Trust does, however, contain an express disclaimer of shareholder liability for acts or obligations of the Trust and requires that notice of such disclaimer be given in each agreement, obligation, or instrument entered into or executed by the Trust or the Trustees. The Declaration of Trust provides for indemnification out of the trust property of any shareholder held personally liable for the obligations of the Trust. The Declaration of Trust also provides that the Trust shall, upon request, assume the defense of any claim made against any shareholder for any act or obligation of the Trust and satisfy any judgment thereon. The shares of the Fund are sold to separate accounts offered by Bankers Security Life Insurance Society and Monarch Life Insurance Company. We have not reviewed, and express no opinion on the sufficiency of, any registration statements filed by any such insurance company in connection with the offering of separate accounts. We hereby consent to the filing of this opinion as an Exhibit to such Registration Statement and to the reference to Counsel in such Prospectus and/or Statement of Additional Information. We also consent to the filing of this opinion with the authorities administering the securities or insurance law of any jurisdiction in connection with the registration or qualification under such law of the Trust, the Fund's shares and/or policies for which such shares are the underlying investment. Very truly yours, HAMILTON, MYER, SWANSON, FAATZ & CLARK By:/s/ Allan B. Adams Allan B. Adams, Partner opinion\600#3 EX-23 10 MYER, SWANSON & ADAMS, P.C. ATTORNEYS AT LAW THE COLORADO STATE BANK BUILDING 1600 BROADWAY-SUITE 1850 DENVER, COLORADO 80202-4918 TELEPHONE: (303) 866-9800 FACSIMILE (303) 866-9818 April 23, 1993 Oppenheimer Variable Account Funds 3410 South Galena Street Denver, Colorado 80231 Gentlemen: In connection with the proposed public offering of shares of the Oppenheimer Strategic Bond Fund Series (the "Fund") of Oppenheimer Variable Account Funds, we have examined such records and documents as we deem necessary for the purposes of this opinion. The Fund is a duly organized and validly existing Series of Oppenheimer Variable Account Funds, a Massachusetts business trust (the "Trust"). As of the date of this letter, it is our opinion that the shares of the Fund covered by the Registration Statement for an indefinite number of shares of the Fund on Form N-1A, when issued and paid for in accordance with the terms of the offering, as set forth in the Prospectus and Statement of Additional Information forming a part of the Registration Statement, will be, when such Registration Statement shall have become effective, legally issued and, except as set forth in the next paragraph, fully paid and non- assessable. Under Massachusetts law, shareholders of the Trust may, under certain circumstances, be held personally liable as partners for the obligations of the Trust. The Declaration of Trust does, however, contain an express disclaimer of shareholder liability for acts or obligations oft he Trust and requires that notice of such disclaimer be given in each agreement, obligation, or instrument entered into or executed by the Trust or the Trustees. The Declaration of Trust also provides that the Trust shall, upon request, assume the defense of any claim made against any shareholder for any act or obligation of the Trust and satisfy any judgment thereon. The shares of the Oppenheimer Strategic Bond Fund Series are sold only to separate accounts of certain insurance companies to provide benefits under variable life insurance policies and variable annuity contracts. We have not reviewed, and express no opinion on the sufficiency of, any registration statements filed by any such insurance company in connection with the offering of separate accounts. We hereby consent to the filing of this opinion as an Exhibit to such Registration Statement and to the reference to Counsel in such Prospectus and/or Statement of Additional Information. We also consent tot the filing of this opinion with the authorities administering the securities laws of any jurisdiction in connection with the registration or qualification under such laws of Oppenheimer Variable Account Funds and its shares. Very truly yours, MYER, SWANSON & ADAMS, P.C. By: /s/ Allan B. Adams Allan B. Adams opinion\600#4 EX-23 11 HAMILTON, MYER, SWANSON & FAATZ, P.C. ATTORNEYS AT LAW THE COLORADO STATE BANK BUILDING 1600 BROADWAY-SUITE 600 DENVER, COLORADO 80202-4988 TELEPHONE: (303) 830-0500 FACSIMILE: (303) 860-7855 July 31, 1990 Oppenheimer Variable Account Funds 3410 South Galena Street Denver, Colorado 80231 Gentlemen: In connection with the proposed public offering of shares of the Oppenheimer Global Securities Fund Series (the "Fund") of Oppenheimer Variable Account Funds, we have examined such records and documents as we deem necessary for the purpose of this opinion. The Fund is a duly organized and validly existing Series of Oppenheimer Variable Account Funds, a Massachusetts business trust. As of the date of this letter, it is our opinion the indefinite number of shares of the Fund covered by the Registration Statement for the Fund on Form N-1A, when issued and paid for in accordance with the terms of the offering, as set forth in the Prospectus and Statement of Additional Information forming a part of the Registration Statement, will be, when such Registration Statement shall have become effective, legally issued and, except as set forth in the next paragraph, fully paid and non-assessable by the Fund. Under Massachusetts law, shareholders of the Trust may, under certain circumstances, be held personally liable as partners for the obligations of the Trust. The Declaration of Trust does, however, contain an express disclaimer of shareholder liability for acts or obligations of the Trust and requires that notice of such disclaimer be given in each agreement, obligation, or instrument entered into or executed by the Trust or the Trustees. The Declaration of Trust provides for indemnification out of the trust property of any shareholder held personally liable for the obligations forth the Trust. The Declaration of Trust also provides that the Trust shall, upon request, assume the defense of any claim made against any shareholder for any act or obligation of the Trust and satisfy any judgment thereon. The shares of the Oppenheimer Global Securities Fund Series are sold only to separate accounts of certain insurance companies to provide benefits under variable life insurance policies and variable annuity contracts. We have not reviewed, and express no opinion on the sufficiency of, any registration statements filed by any such insurance company in connection with the offering of separate accounts. We hereby consent to the filing of this opinion as an Exhibit to such Registration Statement and to the reference to Counsel in such Prospectus and/or Statement of Additional Information. We also consent to the filing of this opinion with the authorities administering the securities laws of any jurisdiction in connection with the registration or qualification under such laws of Oppenheimer Variable Account Funds and its shares. Very truly yours, HAMILTON, MYER, SWANSON, & FAATZ, P.C. By: /s/ Allan B. Adams Allan B. Adams opinion\600#5 EX-23 12 HAMILTON, MYER, SWANSON, FAATZ & CLARK ATTORNEYS AT LAW THE COLORADO STATE BANK BUILDING 1600 BROADWAY-SUITE 600 DENVER, COLORADO 80202-4988 TELEPHONE (303) 830-0500 July 31, 1986 Oppenheimer Variable Life Funds 3410 South Galena Street Denver, Colorado 80231 Gentlemen: In connection with the proposed public offering of shares of beneficial interest of Oppenheimer Capital Appreciation Fund (the "Fund"), which is a series of Oppenheimer Variable Life Funds (the "Trust"), we have examined such records and documents as we deem necessary for the purpose of this opinion. The Trust is a business trust duly organized and validly existing under the laws of the Commonwealth of Massachusetts. As of the date of this letter, it is our opinion that the indefinite number of shares of the Fund covered by the Trust's post-effective Registration Statement No. 4 on Form N-1A (SEC Reg. No. 2-93177), when issued and paid for in accordance with the terms of the offering, as set forth in the Prospectus and Statement of Additional Information forming a part of the Registration Statement, will be, when such Registration Statement shall have become effective, legally issued, fully paid and, except as set forth in the next paragraph, non-assessable by the Trust. Under Massachusetts law, shareholders of the Trust may, under certain circumstances, be held personally liable as partners for the obligations of the Trust. The Declaration of Trust does, however, contain an express disclaimer of shareholder liability for acts or obligations of the Trust and requires that notice of such disclaimer be given in each agreement, obligation, or instrument entered into or executed by the Trust or the Trustees. The Declaration of Trust provides for indemnification out of the trust property of any shareholder held personally liable for the obligations of the Trust. The Declaration of Trust also provides that the Trust shall, upon request, assume the defense of any claim made against any shareholder for any act or obligation of the Trust and satisfy any judgment thereon. The shares of the Fund are sold only to separate accounts of certain insurance companies in connection with variable annuity, variable life, or similar life insurance policies. We have not reviewed, and express no opinion on the sufficiency of, any registration statements filed by any such insurance company in connection with the offering of separate accounts. We hereby consent to the filing of this opinion as an Exhibit to such Registration Statement and amendments thereto, and to the reference to Counsel in such Prospectus and/or Statement of Additional Information. We also consent to the filing of this opinion with the authorities administering the securities or insurance law of any jurisdiction in connection with the registration or qualification under such law of the Trust, the Fund's shares and/or policies for which such shares are the underlying investment. Very truly yours, Hamilton, Myer, Swanson, Faatz & Clark /s/ Allan B. Adams Allan B. Adams, Partner opinion\600#7 EX-99 13 Oppenheimer Variable Account Funds Exhibit 24(b)(16) to Form N-1A Performance Data Computation Schedule The Fund's average annual total returns and total returns are calculated as described below, on the basis of the Fund's distributions, for the past 10 years which are as follows: Distribution Amount From Amount From Reinvestment Investment Long or Short-Term Reinvestment (Ex)Date Income Capital Gains Price Oppenheimer Bond Fund 07/05/85 0.2900 0.0000 10.690 10/07/85 0.2900 0.0000 10.560 01/06/86 0.2900 0.0750 10.930 04/07/86 0.2700 0.0000 11.020 07/05/86 0.2420 0.0780 10.880 10/06/86 0.2300 0.0000 10.800 01/09/87 0.2450 0.0480 10.900 04/03/87 0.2150 0.0000 10.810 07/10/87 0.2600 0.0000 10.460 10/09/87 0.2500 0.0000 10.010 12/24/87 0.2000 0.0000 10.140 03/25/88 0.2300 0.0000 10.310 06/24/88 0.2200 0.0000 10.210 09/23/88 0.2400 0.0000 10.280 12/23/88 0.2400 0.0000 10.150 03/23/89 0.2400 0.0000 10.020 06/23/89 0.2400 0.0000 10.360 09/22/89 0.2400 0.0000 10.340 12/22/89 0.2400 0.0000 10.500 03/23/90 0.2400 0.0000 10.270 06/25/90 0.2400 0.0000 10.300 09/21/90 0.2400 0.0000 10.130 12/21/90 0.2300 0.0000 10.330 03/22/91 0.2400 0.0000 10.430 06/21/91 0.2400 0.0000 10.530 09/20/91 0.2300 0.0000 10.860 12/20/91 0.2200 0.0000 11.050 03/27/92 0.2400 0.0000 10.840 06/26/92 0.2400 0.0000 11.040 09/25/92 0.2100 0.0000 11.180 12/18/92 0.1700 0.0000 10.940 03/26/93 0.1500 0.0000 11.400 06/25/93 0.1800 0.0000 11.550 09/24/93 0.2100 0.0000 11.760 12/27/93 0.2120 0.0000 11.660 03/25/94 0.0110 0.0280 11.460 06/24/94 0.2000 0.0000 11.190 09/23/94 0.2000 0.0000 11.060 12/16/94 0.2100 0.0000 10.940 Oppenheimer Variable Account Funds Page 2 April 25, 1995 Distribution Amount From Amount From Reinvestment Investment Long or Short-Term Reinvestment (Ex)Date Income Capital Gains Price Oppenheimer High Income Fund 10/06/86 0.4400 0.0000 9.740 01/09/87 0.3100 0.0580 9.790 04/03/87 0.2800 0.0000 10.150 07/10/87 0.3200 0.0000 9.830 10/09/87 0.3200 0.0000 9.730 12/24/87 0.3220 0.0780 9.100 03/25/88 0.3000 0.1180 9.110 06/24/88 0.2620 0.0000 9.280 09/23/88 0.2500 0.0000 9.200 12/23/88 0.2600 0.0000 9.180 03/23/89 0.2700 0.0700 9.110 06/23/89 0.2700 0.0000 9.060 09/22/89 0.2700 0.0000 8.970 12/22/89 0.2700 0.0000 8.560 03/23/90 0.2700 0.0000 8.250 06/25/90 0.2700 0.0000 8.510 09/21/90 0.2700 0.0000 8.290 12/21/90 0.2700 0.0000 7.880 03/22/91 0.2700 0.0000 8.590 06/21/91 0.2700 0.0000 8.880 09/20/91 0.2700 0.0000 9.270 12/20/91 0.2700 0.0000 9.320 03/27/92 0.4700 0.0000 9.640 06/26/92 0.2700 0.0000 9.730 09/25/92 0.2700 0.0000 9.920 12/18/92 0.2700 0.0000 9.690 03/26/93 0.2700 0.0000 10.380 06/25/93 0.3900 0.0000 10.560 09/24/93 0.2700 0.0000 10.660 12/27/93 0.2600 0.0000 11.010 03/25/94 0.0200 0.2390 10.800 06/24/94 0.2100 0.0000 10.430 09/23/94 0.2100 0.0000 10.260 12/16/94 0.2200 0.0000 9.820 Oppenheimer Variable Account Funds Page 3 April 25, 1995 Distribution Amount From Amount From Reinvestment Investment Long or Short-Term Reinvestment (Ex)Date Income Capital Gains Price Oppenheimer Growth Fund 01/27/86 0.1470 0.1630 10.660 01/09/87 0.1500 0.4670 12.490 12/24/87 0.1850 0.9550 11.350 06/24/88 0.0000 0.0450 13.120 03/23/89 0.3500 0.0700 14.420 03/23/90 0.6200 1.9900 13.120 03/22/91 0.4900 0.0000 12.980 03/27/92 0.3600 0.0000 14.740 03/26/93 0.1400 0.3170 16.530 03/25/94 0.1540 0.0380 17.750 Oppenheimer Capital Appreciation Fund 01/09/87 0.1500 0.0000 13.780 12/24/87 0.1870 0.2680 14.560 06/24/88 0.0000 0.0100 16.280 03/23/89 0.3400 0.0000 17.070 03/23/90 0.5100 1.3350 17.120 06/25/90 0.0200 0.0700 17.600 03/22/91 0.2600 0.0000 17.830 03/27/92 0.1350 0.5500 22.750 03/26/93 0.0550 1.1020 24.170 03/25/94 0.0450 3.5280 28.200 Oppenheimer Multiple Strategies Fund 04/03/87 0.0350 0.0000 10.690 07/10/87 0.1300 0.0000 10.850 10/09/87 0.1400 0.0000 11.130 12/24/87 0.1250 0.0400 10.100 03/25/88 0.1400 0.0000 10.830 06/24/88 0.1400 0.0000 11.320 09/23/88 0.1900 0.0000 11.350 12/23/88 0.1800 0.0000 11.430 03/23/89 0.1000 0.3725 11.750 06/23/89 0.1800 0.0000 12.320 09/22/89 0.2000 0.0000 12.540 12/22/89 0.2000 0.0000 12.200 03/23/90 0.1000 0.4600 11.440 06/25/90 0.2000 0.0000 11.380 09/21/90 0.2000 0.0000 10.980 12/21/90 0.2000 0.0000 10.810 03/22/91 0.2000 0.0000 11.290 06/21/91 0.2000 0.0000 11.200 09/20/91 0.2000 0.0000 11.450 12/20/91 0.1800 0.0000 11.380 Oppenheimer Variable Account Funds Page 4 April 25, 1995 Distribution Amount From Amount From Reinvestment Investment Long or Short-Term Reinvestment (Ex)Date Income Capital Gains Price Oppenheimer Multiple Strategies Fund (Continued) 03/27/92 0.1300 0.0000 12.080 06/26/92 0.1300 0.0000 11.910 09/25/92 0.1500 0.0000 12.100 12/18/92 0.1300 0.0000 12.420 03/26/93 0.1000 0.0000 12.870 06/25/93 0.1700 0.0000 13.050 09/24/93 0.1300 0.0000 13.470 12/27/93 0.1470 0.0000 13.840 03/25/94 0.0110 0.0980 13.830 06/24/94 0.2000 0.0000 12.990 09/23/94 0.2000 0.0000 13.290 12/16/94 0.1900 0.0000 12.810 Oppenheimer Global Securities Fund 03/27/92 0.0400 0.0400 10.600 03/25/94 0.0370 0.2510 15.680 Oppenheimer Strategic Bond Fund 09/24/93 0.0200 0.0000 5.030 12/27/93 0.0720 0.0000 5.120 03/25/94 0.0050 0.0060 5.010 06/24/94 0.1050 0.0000 4.850 09/23/94 0.1100 0.0000 4.800 12/16/94 0.1050 0.0000 4.650 Oppenheimer Money Fund 12/31/85 0.0500 0.0000 1.000 12/31/86 0.0600 0.0000 1.000 01/16/87 0.0054373 0.0000 1.000 02/19/87 0.0054789 0.0000 1.000 03/19/87 0.0044160 0.0000 1.000 04/16/87 0.0044382 0.0000 1.000 05/21/87 0.0057474 0.0000 1.000 06/18/87 0.0049028 0.0000 1.000 07/16/87 0.0046062 0.0000 1.000 08/20/87 0.0060240 0.0000 1.000 09/17/87 0.0048762 0.0000 1.000 10/15/87 0.0051410 0.0000 1.000 11/19/87 0.0065051 0.0000 1.000 12/17/87 0.0051295 0.0000158 1.000 12/31/87 0.0027197 0.0000 1.000 01/21/88 0.0033977 0.0000 1.000 02/18/88 0.0050790 0.0000 1.000 03/17/88 0.0047712 0.0000 1.000 Oppenheimer Variable Account Funds Page 5 April 25, 1995 Distribution Amount From Amount From Reinvestment Investment Long or Short-Term Reinvestment (Ex)Date Income Capital Gains Price Oppenheimer Money Fund (Continued) 04/21/88 0.0059210 0.0000 1.000 05/19/88 0.0048993 0.0000 1.000 06/16/88 0.0051694 0.0000 1.000 07/21/88 0.0067519 0.0000 1.000 08/18/88 0.0056709 0.0000 1.000 09/15/88 0.0059928 0.0000 1.000 10/20/88 0.0075103 0.0000 1.000 11/17/88 0.0059949 0.0000 1.000 12/15/88 0.0062877 0.0000 1.000 01/19/89 0.0084978 0.0000 1.000 02/16/89 0.0066960 0.0000 1.000 03/16/89 0.0069414 0.0000 1.000 04/20/89 0.0091675 0.0000 1.000 05/18/89 0.0072792 0.0000 1.000 06/15/89 0.0071145 0.0000 1.000 07/20/89 0.0085670 0.0000 1.000 08/17/89 0.0066242 0.0000 1.000 09/21/89 0.0080937 0.0000 1.000 10/19/89 0.0065014 0.0000 1.000 11/16/89 0.0063813 0.0000 1.000 12/21/89 0.0077824 0.0000 1.000 01/18/90 0.0061815 0.0000 1.000 02/15/90 0.0060100 0.0000 1.000 03/15/90 0.0059834 0.0000 1.000 04/19/90 0.0075221 0.0000 1.000 05/17/90 0.0060544 0.0000 1.000 06/21/90 0.0075619 0.0000 1.000 07/19/90 0.0060056 0.0000 1.000 08/16/90 0.0059027 0.0000 1.000 09/20/90 0.0072873 0.0000 1.000 10/18/90 0.0058596 0.0000 1.000 11/15/90 0.0058956 0.0000 1.000 12/20/90 0.0074544 0.0000 1.000 01/17/91 0.0058222 0.0000 1.000 02/21/91 0.0068625 0.0000 1.000 03/21/91 0.0050839 0.0000 1.000 04/19/91 0.0051499 0.0000 1.000 05/17/91 0.0046004 0.0000 1.000 06/21/91 0.0054765 0.0000 1.000 07/19/91 0.0043019 0.0000 1.000 08/16/91 0.0043041 0.0000 1.000 09/20/91 0.0053577 0.0000 1.000 10/18/91 0.0040952 0.0000 1.000 11/15/91 0.0040785 0.0000 1.000 12/20/91 0.0049789 0.0000 1.000 01/17/92 0.0034853 0.0000 1.000 02/21/92 0.0040293 0.0000 1.000 Oppenheimer Variable Account Funds Page 6 April 25, 1995 Distribution Amount From Amount From Reinvestment Investment Long or Short-Term Reinvestment (Ex)Date Income Capital Gains Price Oppenheimer Money Fund (Continued) 03/20/92 0.0032580 0.0000 1.000 04/16/92 0.0031515 0.0000 1.000 05/15/92 0.0030720 0.0000 1.000 06/19/92 0.0038373 0.0000 1.000 07/17/92 0.0029314 0.0000 1.000 08/21/92 0.0034187 0.0000 1.000 09/18/92 0.0032203 0.0000 1.000 10/16/92 0.0024655 0.0000 1.000 11/20/92 0.0030929 0.0000 1.000 12/18/92 0.0025495 0.0000 1.000 01/15/93 0.0022736 0.0002562 1.000 02/19/93 0.0031033 0.0000 1.000 03/19/93 0.0024019 0.0000 1.000 04/16/93 0.0024112 0.0000 1.000 05/21/93 0.0027481 0.0000 1.000 06/18/93 0.0023439 0.0000 1.000 07/16/93 0.0025210 0.0000 1.000 08/20/93 0.0022698 0.0000 1.000 09/17/93 0.0023572 0.0000 1.000 10/15/93 0.0023719 0.0000 1.000 11/19/93 0.0030108 0.0000 1.000 12/17/93 0.0024067 0.0000 1.000 01/21/94 0.0030030 0.0000 1.000 02/18/94 0.0028958 0.0000 1.000 03/18/94 0.0023556 0.0000 1.000 04/15/94 0.0025930 0.0000 1.000 05/20/94 0.0035061 0.0000 1.000 06/17/94 0.0030087 0.0000 1.000 07/15/94 0.0032125 0.0000 1.000 08/19/94 0.0041195 0.0000 1.000 09/16/94 0.0034908 0.0000 1.000 10/21/94 0.0044305 0.0000 1.000 11/18/94 0.0036514 0.0000 1.000 12/15/94 0.0040261 0.0000 1.000 Oppenheimer Variable Account Funds Page 7 April 25, 1995 1. Average Annual Total Returns for the Periods Ended 12/31/94: The formula for calculating average annual total return is as follows: 1 ERV n --------------- = n (---) - 1 = average annual total return number of years P Where: ERV = ending redeemable value of a hypothetical $1,000 payment made at the beginning of the period P = hypothetical initial investment of $1,000 Examples at NAV: Oppenheimer Bond Fund One Year Five Year $ 980.62 1 $1,498.60 .2 (---------) - 1 = -1.94% (---------) - 1 = 8.43% $1,000 $1,000 Inception $2,482.50 .1026 (---------) - 1 = 9.78% $1,000 Oppenheimer High Income Fund One Year Five Year $ 968.22 1 $2,021.36 .2 (---------) - 1 = -3.18% (---------) - 1 = 15.11% $1,000 $1,000 Inception $2,772.24 .1153 (---------) - 1 = 12.48% $1,000 Oppenheimer Variable Account Funds Page 8 April 25, 1995 1. Average Annual Total Returns for the Periods Ended 12/31/94 (Continued): Examples at NAV: Oppenheimer Growth Fund One Year Five Year $1,009.67 1 $1,429.06 .2 (---------) - 1 = 0.97% (---------) - 1 = 7.40% $1,000 $1,000 Inception $2,872.62 .10265 (---------) - 1 = 11.44% $1,000 Oppenheimer Capital Appreciation Fund One Year Five Year $ 924.08 1 $1,747.67 .2 (---------) - 1 = -7.59% (---------) - 1 = 11.81% $1,000 $1,000 Inception $2,843.35 .1194 (---------) - 1 = 13.29% $1,000 Oppenheimer Multiple Strategies Fund One Year Five Year $ 980.53 1 $1,427.90 .2 (---------) - 1 = -1.95% (---------) - 1 = 7.38% $1,000 $1,000 Inception $2,099.12 .1267 (---------) - 1 = 9.85% $1,000 Oppenheimer Variable Account Funds Page 9 April 25, 1995 1. Average Annual Total Returns for the Periods Ended 12/31/94 (Continued): Examples at NAV: Oppenheimer Global Securities Fund One Year Inception $ 942.77 1 $1,548.31 .24175 (---------) - 1 = -5.72% (---------) - 1 = 11.15% $1,000 $1,000 Oppenheimer Strategic Bond Fund One Year Inception $ 962.23 1 $1,003.16 .6003 (---------) - 1 = -3.78% (---------) - 1 = 0.19% $1,000 $1,000 Oppenheimer Money Fund One Year Five Year $1,042.01 1 $1,279.54 .2 (---------) - 1 = 4.20% (---------) - 1 = 5.05% $1,000 $1,000 Inception $1,781.34 .1026 (---------) - 1 = 6.10% $1,000 Oppenheimer Variable Account Funds Page 10 April 25, 1995 2. Cumulative Total Returns for the Periods Ended 12/31/94: The formula for calculating cumulative total return is as follows: ERV - P ------- = Cumulative Total Return P Examples at NAV: Oppenheimer Bond Fund One Year Five Year $ 980.62 - $1,000 $1,498.60 - $1,000 ------------------ = -1.94% ------------------ = 49.86% $1,000 $1,000 Inception $2,482.50 - $1,000 ------------------ = 148.25% $1,000 Oppenheimer High Income Fund One Year Five Year $ 968.22 - $1,000 $2,021.36 - $1,000 ------------------ = -3.18% ------------------ = 102.14% $1,000 $1,000 Inception $2,772.24 - $1,000 ------------------ = 177.22% $1,000 Oppenheimer Growth Fund One Year Five Year $1,009.67 - $1,000 $1,429.06 - $1,000 ------------------ = 0.97% ------------------ = 42.91% $1,000 $1,000 Inception $2,872.62 - $1,000 ------------------ = 187.26% $1,000 Oppenheimer Variable Account Funds Page 11 April 25, 1995 2. Cumulative Total Returns for the Periods Ended 12/31/94 (Continued): Examples at NAV: Oppenheimer Capital Appreciation Fund One Year Five Year $ 924.08 - $1,000 $1,747.67 - $1,000 ------------------ = -7.59% ------------------ = 74.77% $1,000 $1,000 Inception $2,843.35 - $1,000 ------------------ = 184.34% $1,000 Oppenheimer Multiple Strategies Fund One Year Five Year $ 980.53 - $1,000 $1,427.90 - $1,000 ------------------ = -1.95% ------------------ = 42.79% $1,000 $1,000 Inception $2,099.12 - $1,000 ------------------ = 109.91% $1,000 Oppenheimer Global Securities Fund One Year Inception $ 942.77 - $1,000 $1,548.31 - $1,000 ------------------ = -5.72% ------------------ = 54.83% $1,000 $1,000 Oppenheimer Strategic Bond Fund One Year Inception $ 962.23 - $1,000 $1,003.16 - $1,000 ------------------ = -3.78% ------------------ = 0.32% $1,000 $1,000 Oppenheimer Variable Account Funds Page 12 April 25, 1995 2. Cumulative Total Returns for the Periods Ended 12/31/94 (Continued): Examples at NAV: Oppenheimer Money Fund One Year Five Year $1,042.01 - $1,000 $1,279.54 - $1,000 ------------------ = 4.20% ------------------ = 27.95% $1,000 $1,000 Inception $1,781.34 - $1,000 ------------------ = 78.13% $1,000 Oppenheimer Variable Account Funds Page 13 April 25, 1995 3. Standardized Yield for the 30-Day Period Ended 12/31/94: The Fund's standardized yields are calculated using the following formula set forth in the SEC rules: a - b 6 Yield = 2 { (-------- + 1 ) - 1 } cd The symbols above represent the following factors: a = Dividends and interest earned during the 30-day period. b = Expenses accrued for the period (net of any expense reimbursements). c = The average daily number of Fund shares outstanding during the 30-day period that were entitled to receive dividends. d = The Fund's net asset value (excluding contingent deferred sales charge) per share on the last day of the period. Examples at NAV: Oppenheimer Bond Fund $956,614.69 - $90,000.00 6 2{(------------------------ + 1) - 1} = 8.07% 12,153,596 x $10.78 Oppenheimer High Income Fund $839,129.34 - $68,000.00 6 2{(------------------------ + 1) - 1} = 10.00% 9,651,505 x $9.79 Oppenheimer Strategic Bond Fund $167,980.40 - $9,000.00 6 2{(----------------------- + 1) - 1} = 10.00% 4,233,706 x $4.60 Oppenheimer Variable Account Funds Page 14 April 25, 1995 4. DIVIDEND YIELDS FOR THE 30-DAY PERIOD ENDED 12/31/94: The Fund's dividend yields are calculated using the following formula: Dividend Yield = ( a x b ) / c The symbols above represent the following factors: a = The last declared dividend during the period. b = Number of quarters in the year. c = The Fund's net asset value (excluding sales charge) per share on the last day of the period. Examples: Oppenheimer Bond Fund Oppenheimer High Income Fund $0.2100 x 4 / $10.78 = 7.79% $0.2200 x 4 / $9.79 = 8.99% Oppenheimer Strategic Bond Fund $0.1050 x 4 / $4.60 = 9.13% Oppenheimer Variable Account Funds Page 15 April 25, 1995 5. YIELD AND EFFECTIVE YIELD FOR 7-DAY PERIOD ENDED 12/31/94: Calculations of the Fund's "Yield" and "Compounded Effective Yield" set forth in the section entitled "Yield Information" in the Statement of Additional Information were made as follows: Oppenheimer Money Fund Date Daily Accrual Per Share (in $) 12/25/94 .0001504 12/26/94 .0001504 12/27/94 .0001491 12/28/94 .0001561 12/29/94 .0001488 12/30/94 .0001452 12/31/94 .0001452 Seven Day Total: .0010452 Current Yield: $0.0010452/7 x 365 = 5.45% 365/7 Effective Yield: (.0010452 + 1) - 1 = 5.60% EX-27 14 WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
6 0000752737 OPPENHEIMER STRATEGIC BOND FUND 12-MOS DEC-31-1994 JAN-01-1994 DEC-31-1994 21584405 20527457 539774 15259 198422 21280912 937797 0 22800 960597 0 22014634 4418161 1929958 111729 0 (769757) 0 (1036291) 20320315 32822 1387029 0 133694 1286157 (796115) 1120872 (630830) 0 1161570 16802 0 3749500 1508782 247485 10433797 6384 23918 0 0 105760 0 133694 15389000 5.12 .36 (.55) .32 .01 0 4.60 .87 0 0
EX-27 15 WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
6 0000752737 OPPENHEIMER GLOBAL SECURITIES FUND 12-MOS DEC-31-1994 JAN-01-1994 DEC-31-1994 303776414 297097313 2538088 9748 436640 300081789 919245 0 1320623 2239868 0 304182420 19743343 5917113 0 1069 1503327 0 (7842757) 297841921 2456123 658349 0 1952398 1162074 385837 (24015375) (22467464) 0 516871 127540 0 22151454 8503911 178687 201417410 339434 2325694 0 0 1517234 0 1952398 215545000 16.30 .04 (.96) .04 .25 0 15.09 .91 0 0
EX-27 16 WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
6 0000752737 OPPENHEIMER GROWTH FUND (VA) 12-MOS DEC-31-1994 JAN-01-1994 DEC-31-1994 53046300 60267367 3208903 0 298128 3507031 469945 0 21279 491224 0 54399542 3579510 3202704 814551 0 848014 0 7221067 63283174 835252 334611 0 344887 824976 1441127 (1915053) 351050 0 516871 127540 0 2577268 2236767 36305 6582126 524266 (483393) 0 0 307904 0 344887 59953000 17.70 .26 (.09) .15 .04 0 17.68 .58 0 0
EX-27 17 WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
6 0000752737 OPPENHEIMER CAPITAL APPRECIATION FUND 12-MOS DEC-31-1994 JAN-01-1994 DEC-31-1994 166985520 182918438 6943336 8710 23807 189894291 0 0 4077624 4077624 0 170177063 7157574 4325853 711671 0 (1048111) 0 15932918 185773541 376542 1275631 0 883139 769034 (1045951) (10016034) (10292951) 0 218275 17112748 0 7912557 5695411 614575 48888438 234158 17043751 0 0 803231 0 883139 153832000 31.64 .10 (2.22) .04 3.53 0 25.95 .57 0 0
EX-27 18 WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
6 0000752737 OPPENHEIMER BOND FUND 12-MOS DEC-31-1994 JAN-01-1994 DEC-31-1994 137008816 132512297 2701111 7049 170380 135390837 280624 0 42829 323453 0 140125237 12527081 9601796 1832232 0 (2398141) 0 (4491944) 135067384 14021 9585487 0 698586 8900922 (11194886) 0 (2293964) 0 6580907 2106023 0 5002623 2744016 666678 23221263 61656 (208860) 0 0 630514 0 698586 121884000 11.65 .76 (.98) .62 .03 0 10.78 .57 0 0
EX-27 19 WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
6 0000752737 OPPENHEIMER HIGH INCOME FUND 12-MOS DEC-31-1994 JAN-01-1994 DEC-31-1994 97920437 94228680 3679357 1251 426475 98335763 1190212 0 1447242 2637454 0 101247704 9779151 8442958 1981784 0 (3843420) 0 (3687759) 95698309 418776 9509093 0 673881 9253988 (12318761) 0 (3064773) 0 1795672 0 0 9936582 9441490 841101 (2686976) 0 1876672 525482 0 617198 0 673881 101096000 11.02 .94 (1.27) .66 .24 0 9.79 .67 0 0
EX-27 20 WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
6 0000752737 OPPENHEIMER MONEY FUND 12-MOS DEC-31-1994 JAN-01-1994 DEC-31-1994 89427110 89427110 462256 5623 32522 89927511 0 0 256594 256594 0 89694620 89694620 61220647 0 0 (23703) 0 0 89670917 0 4161100 0 386636 3774464 (5168) 0 3769296 0 3793971 0 0 175917558 151084269 3640684 28449298 0 972 0 0 341324 0 386636 90264 1.00 .04 0 .04 0 0 1.00 .43 0 0
EX-27 21
6 0000752737 OPPENHEIMER MULTIPLE STRATEGIES FUND 12-MOS DEC-31-1994 JAN-01-1994 DEC-31-1994 285911280 287971910 5396409 2303 93979 293464601 841544 0 555853 1397397 0 280209466 22619777 18025972 1038677 0 8636344 0 2182717 292067204 2252337 13042562 0 1567780 13727119 8803106 28189733 (5659508) 0 13056112 1925053 0 9807084 6353523 1140244 41777156 598176 1483386 0 0 1433107 0 1567780 279949000 13.88 .63 (.90) .60 .10 0 12.91 .56 0 0
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