[Federal Register Volume 63, Number 91 (Tuesday, May 12, 1998)]
[Notices]
[Pages 26223-26225]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-12455]
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SECURITIES AND EXCHANGE COMMISSION
[Investment Company Act Release No. 23172; 812-11074]
Oppenheimer Series Fund, Inc., et al.; Notice of Application
May 5, 1998.
AGENCY: Securities and Exchange Commission (``Commission'').
ACTION: Notice of an application under section 17(b) of the Investment
Company Act of 1940 (the ``Act'') for an exemption from section 17(a)
of the Act.
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SUMMARY OF THE APPLICATION: Applicants seek an order to allow certain
series of Oppenheimer Series Fund, Inc. and Oppenheimer Integrity
Funds, both registered open-end management investment companies, to
acquire the assets and liabilities of certain series of Oppenheimer
Series Fund, Inc. Because of certain affiliations, applicants may not
rely on rule 17a-8 under the Act.
APPLICANTS: Oppenheimer Series Fund, Inc. (the ``Company''),
Oppenheimer Integrity Funds (the ``Trust''), and Oppenheimer Funds,
Inc. (``OFI'').
FILING DATES: The application was filed on March 18, 1998. Applicants
have agreed to file an amendment to the application, the substance of
which is
[[Page 26224]]
included in this notice, during the notice period.
HEARING OR NOTIFICATION OF HEARING: An order granting the application
will be issued unless the Commission orders a hearing. Interested
persons may request a hearing by writing to the Commission's Secretary
and serving the applicants with a copy of the request, personally or by
mail. Hearing requests should be received by the Commission by 5:30
p.m. on June 1, 1998, and should be accompanied by proof of service on
the applicants in the form of an affidavit or, for lawyers, a
certificate of service. Hearing requests should state the nature of the
writer's interest, the reason for the request, and the issues
contested. Persons who wish to be notified of a hearing may request
notification by writing to the Commission's Secretary.
ADDRESSES: Secretary, Securities and Exchange Commission, 450 Fifth
Street, NW., Washington, DC 20549. Applicants: Oppenheimer Series Fund,
Inc., Oppenheimer Integrity Funds, and OppenheimerFunds, Inc., c/o
Denis R. Molleur, Esq., Two World Trade Center, 34th Floor, New York,
New York 10048-0203.
FOR FURTHER INFORMATION CONTACT:
Emerson S. Davis, Senior Counsel, at (202) 942-0714, or George J.
Zornada, Branch Chief, at (202) 942-0564 (Division of Investment
Management, Office of Investment Company Regulation).
SUPPLEMENTARY INFORMATION: The following is a summary of the
application. The complete application may be obtained for a fee from
the Commission's Public Reference Branch, 450 Fifth Street, NW.,
Washington, DC 20549 (telephone (202) 942-8090).
Applicants' Representations
1. The Company, a Maryland corporation, is registered under the Act
as an open-end management investment company and is organized as a
series company. The Company offers five portfolios, Oppenheimer
Disciplined Value Fund and Oppenheimer Disciplined Allocation Fund
(each an ``Acquiring fund''), and Oppenheimer LifeSpan Growth Fund,
Oppenheimer LifeSpan Balanced Fund and Oppenheimer LifeSpan Income Fund
(collectively, the ``Acquired Funds'').
2. The Trust, a Massachusetts business trust, is registered under
the Act as an open-end management investment company and is organized
as a series company. Oppenheimer Bond Fund is the only portfolio of the
Trust (together with Oppenheimer Disciplined Value Fund and Oppenheimer
Disciplined Allocation Fund, the ``Acquiring Funds'').
3. OFI is an investment adviser registered under the Investment
Advisers Act of 1940 (the ``Advisers Act''), and is the adviser to the
Acquired Funds and the Acquiring Funds. It is a subsidiary of
Oppenheimer Acquisition Corp., a holding company controlled by
Massachusetts Mutual Life Insurance Company (``MassMutual''). As of
March 2, 1998, MassMutual held of record of 21% of the outstanding
shares of the Disciplined Value Fund; 63% of the LifeSpan Growth Fund;
70% of the LifeSpan Balanced Fund; and 86% of the LifeSpan Income Fund.
MassMutual also is an investment adviser registered under the Advisers
Act.
4. Each Acquired Fund currently has Class A, B, and C shares. Class
A shares are subject to a front-end sales charge, except for certain
large purchases that are subject to a 1% contingent deferred sales
charge (``CDSC'') if redeemed within one year. Class B and C shares may
be subject to a CDSC depending on the length of time held, and are
subject to a .75% asset-based sales charge. Each Acquiring Fund has
identical Class A, B, and C shares.
5. On December 11, 1997, the board of directors of the Company (the
``Board''), including a majority of the distinterested directors,
approved proposed plans of reorganization (each a ``Plan'' and
collectively, the ``Plans''). Under the Plans, each Acquiring Fund will
acquire all of the assets, less cash reserves,\1\ and liabilities, as
set out in the Plans, of the corresponding Acquired Fund in exchange
for Class A, B, and C shares of the Acquiring Fund equal in value as
computed at 4:00 p.m. New York, NY time (``Valuation Time'') on the
date of the transaction (the ``Exchange Date'') to the net value of the
assets of the corresponding Acquired Fund at the Valuation Time on the
Exchange Date.\2\ Each Acquired Fund will distribute pro rata to its
shareholders as of the close of business on the Exchange Date the
Acquiring Fund Class A, B, and C shares that were issued in exchange
for the Acquired Fund's assets. All issued and outstanding
corresponding Class A, B, and C shares of the Acquired Fund will
simultaneously be canceled and the Acquired Fund subsequently will
liquidate.
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\1\ Assets will be retained by the Acquired Funds deemed
sufficient in the discretion of the Board for the payment of the
expenses of liquidation and liabilities not assumed by the Acquiring
Fund.
\2\ The Acquiring Funds and the corresponding Acquired Funds
are:
(i) Disciplined Value Fund and LIfeSpan Growth Fund
(ii) Disciplined Allocation Fund and LifeSpan Balanced Fund
(iii) Oppenheimer Bond Fund and LifeSpan Income Fund.
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6. Shareholders of the Acquired Funds will not incur any sales
charges in connection with the reorganization. Any CDSC, however, that
currently applies to Acquired Fund shares will continue to apply to
Acquiring Fund shares received in the transaction. Each Acquiring Fund
and Acquired Fund will bear its own expenses incurred in connection
with the reorganization. The investment objectives of each Acquired
Fund and its corresponding Acquiring Fund are similar.
7. In approving the reorganization, the Board considered the terms
and conditions of the Plans, including (a) that the exchange of
Acquired Fund assets for Acquiring Fund shares will take place on a net
asset value basis; (b) that no sales charge will be incurred by
Acquired Fund shareholders in connection with their acquisition of
Acquiring Fund shares; (c) the allocation of the expenses to each Fund;
(d) the tax-free status of the reorganization; (e) the advantages that
may be realized by the Acquired funds and the Acquiring Funds,
including economies of scale which will result in reduced expense
ratios; and (f) the comparability of the investment objectives,
policies and restrictions of each Acquiring Fund with those of the
corresponding Acquired fund. The Board and the Trustees of the Trust,
including the disinterested members of each, also found that the Plans
were fair and in the best interests of the shareholders of the Acquired
Funds and the Acquiring Funds, and that the interests of existing
shareholders will not be diluted as a result of the reorganization.
8. Amendments on Form N-14 to the Company's and Trust's
registration statements under the Securities Act of 1933 were filed
with the Commission on February 27, 1998 to register shares to be
issued in the proposed reorganization. A special meeting for
shareholder consideration of the Plans is scheduled for June 9, 1998.
9. Each Acquiring or Acquired Fund may abandon and terminate the
Plan at any time prior to the Exchange Date without liability if a
material breach of the terms of the Plan occurs or if a material legal,
administrative, or other proceeding is instituted. In addition, each
Acquiring or Acquired fund may, at its election, terminate the Plan in
the event that any condition for the Plan to close has not been met or
waived and if the transactions have not become effective on or before
July 30, 1998.
[[Page 26225]]
10. The consummation of the reorganization will be subject to the
following conditions: (a) the shareholders of each Acquired Fund will
have approved the Plan; (b) applicants will have received the exemptive
relief which is the subject of the application; and (c) applicants will
have received an opinion of counsel or independent auditors with
respect to the federal income tax aspects of the reorganization.
Applicants agree not to make any material changes to the proposed Plans
that affect the application without prior Commission approval.
Applicants' Legal Analysis
1. Section 17(a) of the Act prohibits an affiliated person of a
registered investment company, or any affiliated person of such person,
acting as principal, from selling any security to, or purchasing any
security from, such registered company. Section 2(a)(3) of the Act
defines an ``affiliated person'' of another person to include (a) any
person that owns 5% or more of the outstanding voting securities of
such other person, (b) any person 5% or more of whose outstanding
voting securities are directly or indirectly owned, controlled, or held
with power to vote by such other person, (c) any person directly or
indirectly controlling, controlled by, or under common control with
such other person, and (d) if such other person is an investment
company, any investment adviser of that investment company.
2. Rule 17a-8 under the Act exempts from the prohibitions of
section 17(a) mergers, consolidations, or purchases or sales of
substantially all of the assets of registered investment companies that
are affiliated persons solely by reasons of having a common investment
adviser, common directors/trustees, and/or common officers, provided
that certain conditions set forth in the rule are satisfied.
3. Applicants believe that they may not rely upon rule 17a-8
because they may be affiliated for reasons other than those set forth
in the rule. The Acquiring and Acquired Funds have a common investment
adviser, OFI. Mass Mutual indirectly owns more than 5% of OFI. Mass
Mutual also holds of record 5% or more of the outstanding voting
securities of one Acquiring Fund, the Oppenheimer Disciplined Value
Fund, and controls each of the Acquired Funds. Because of this
ownership, each Acquiring Fund and OFI may be deemed affiliated persons
of an affiliated person of the Acquired Funds. Therefore, the proposed
reorganization may not meet the ``solely by reason of'' requirement of
rule 17a-8. Applicants request an order pursuant to section 17(b) of
the Act exempting them from section 17(a) to the extent necessary to
consummate the proposed reorganization.
4. Section 17(b) of the Act provides that the Commission may exempt
a transaction from the provisions of section 17(a) if the terms of the
proposed transaction, including the consideration to be paid or
received, are reasonable and fair and do not involve overreaching on
the part of any person concerned; the proposed transaction is
consistent with the policy of each registered investment company
concerned; and the proposed transaction is consistent with the general
purposes of the Act.
5. Applicants submit that the terms of the Plans satisfy the
standards set forth in section 17(b) in that the terms are fair and
reasonable and do not involve overreaching on the part of any person.
Applicants note that the Board and the Trustees of the Trust, including
the disinterested directors and trustees, have reviewed the terms of
the Plans, including the consideration paid or received, and have found
that the participation in the reorganization is in the best interests
of each Acquiring and Acquired fund and that the interests of the
existing shareholders will not be diluted as a result of the
reorganization. Applicants also note that the exchange of the Acquired
Funds' assets and liabilities for the shares of the Acquiring Funds
will be based on the Funds' relative net asset values.
For the Commission, by the Division of Investment Management,
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 98-12455 Filed 5-11-98; 8:45 am]
BILLING CODE 8010-01-M