SCHEDULE 14A
Information Required in Proxy Statement
(Rule 14a-101)
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
(Amendment No. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/X/ Preliminary Proxy Statement
/ / Confidential,for Use of the Commission Only(as permitted by Rule 14a-6(e)(2)
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or 14a-12
OPPENHEIMER CAPITAL INCOME FUND
(Name of Registrant as Specified in its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No Fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is
calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE>
Bridget A. Macaskill
President and OppenheimerFunds Logo
Chief Executive Officer Two World Trade Center,34th Floor
New York, NY 10048-0203
800.525.7048
www.oppenheimerfunds.com
July 17, 2000
Dear Oppenheimer Capital Income Fund Shareholder,
We have scheduled a shareholder meeting on August 28, 2000 for you to
decide upon some important proposals for the Fund. Your ballot card and a
detailed statement of the issues are enclosed with this letter
Your Board of Trustees believes the matters being proposed for approval
are in the best interests of the Fund and its shareholders and recommends a vote
"for" the election of Trustees and for each Proposal. Regardless of the number
of shares you own, it is important that your shares be represented and voted. So
we urge you to consider these issues carefully and make your vote count.
How do you vote?
To cast your vote, simply mark, sign and date the enclosed proxy ballot
and return it in the postage-paid envelope today. Remember, it can be expensive
for the Fund--and ultimately for you as a shareholder--to remail ballots if not
enough responses are received to conduct the meeting.
What are the issues?
o Election of Trustees. You are being asked to consider and approve the
election of eleven Trustees. You will find detailed information on the
Trustees in the enclosed proxy statement.
o Ratification of Auditors. The Board is asking you to ratify the selection
of KPMG LLP as independent certified public accountants and auditors of the
Fund for the current fiscal year.
o Approval of Elimination of Certain Fundamental Investment Restrictions.
Your approval is requested to eliminate certain of the Fund's fundamental
investment restrictions.
o Approval of Changes to Certain Fundamental Investment Restrictions. Your
approval is requested to change certain of the Fund's fundamental
investment restrictions.
o Authorize the Trustees to adopt an Amended and Restated Declaration of Trust.
Please read the enclosed proxy statement for complete details on these
proposals. Of course, if you have any questions, please contact your financial
advisor, or call us at 1-800-525-7048. As always, we appreciate your confidence
in OppenheimerFunds and look forward to serving you for many years to come.
Sincerely,
Bridget A. Macaskill
Enclosures
proxies\CapIncome_BAMLtr
<PAGE>
Oppenheimer Capital Income Proxy for Shareholders Meeting To
Fund Be Held August 28, 2000
Your shareholder Your prompt response can save
vote is important! you Fund the expense of another
mailing. Please mark your proxy
on the reverse side, date and
sign it, and return it promptly
in the accompanying envelope,
which requires no postage if
mailed in the United States.
Please detach at perforation before mailing.
Oppenheimer Capital Income Proxy For Shareholders Meeting To
Fund Be Held August 28, 2000
The undersigned shareholder of Proxy solicited on behalf of the
Oppenheimer Capital Income Board of Trustees, which
Fund (the "Fund"), does hereby appoint recommends a vote FOR the election
Robert Bishop, Allan Adams and of all nominees for Trustee and FOR
Scott Farrar, and each of them, each Proposal on the reverse side.
as attorneys-in fact and proxies The shares represented hereby
of the undersigned, with full will be voted as indicated on the
power of substitution, to attend reverse side or FOR if no choice
the Meeting of Shareholders of is indicated.
the Fund to be held August 28, 2000,
at 6803 South Tucson Way,
Englewood, Colorado 80112 at 10:00
A.M., Denver time, and at all
adjournments thereof, and to vote
the shares held in the name of the
undersigned on the record date for
said meeting for the election of
Trustees and on the proposals
specified on the reverse side.
Said attorneys-in-fact shall vote
in accordance with their best
judgment as to any other matter.
OVER
<PAGE>
Oppenheimer Capital Income Proxy for Shareholders Meeting to
Fund be held August 28, 2000
Your shareholder Your prompt response can save your Fund money.
vote is important! Please vote, sign and mail your proxy
ballot (this card) in the enclosed
postage-paid envelope today, no matter how
many shares you own. A majority of the Fund's
shares must be represented in person or by
proxy. Please vote your proxy so your Fund can
avoid the expense of another mailing.
Please detach at perforation before mailing.
1.Election of A) W. Armstrong G) R. Kalinowski 1./ / For all nominees
of Trustees B) R. Avis H) C. Kast listed except as marked
(Proposal No.1) C) G. Bowen I) R. Kirchner to the contrary at left.
D) E. Cameron J) B. Macaskill Instruction: To withhold
E) J. Fossel K) F. Marshall authority to vote for
F) S. Freedman L) J. Swain any individual nominees,
line out that nominee's
name at left.
/ / Withhold authority
to vote for all nominees
listed at left.
2. Ratification of selection / / For / / Against / / Abstain
of Deloitte & Touche LLP as
independent auditors
(Proposal No. 2)
3. Approval of the Elimination of Certain
Fundamental Restrictions of the Fund
(Proposal No. 3)
a. Eliminate the Fund's fundamental / / For / / Against / / Abstain
restriction on purchasing
securities on margin or
engaging in short sales
b. Eliminate the Fund's fundamental / / For / / Against / / Abstain
restriction on investing in warrants
or rights
c. Eliminate the Fund's fundamental / / For / / Against / / Abstain
restriction on investing in securities
of issuers in which officers or trustees
have an interest
d. Eliminate the Fund's fundamental / / For / / Against / / Abstain
restriction on buying securities from or
selling securities to any officer or trustee
of the Fund or Manager
e. Eliminate the Fund's fundamental / / For / / Against / / Abstain
restriction on investing in a company
for the purpose of acquiring control
f. Eliminate the Fund's fundamental / / For / / Against / / Abstain
restriction on maintaining the Fund's
business as an investment company
h. Eliminate the Fund's fundamental / / For / / Against / / Abstain
investment restriction on acceptance
of share purchase price
4. Approval of Changes to Certain / / For / / Against / / Abstain
Fundamental Restrictions of the Fund
(Proposal No. 4)
5. Authorization to permit the / / For / / Against / / Abstain
Trustees to adopt an Amended
and Restated Declaration of Trust
(Proposal No. 5)
<PAGE>
NOTE: Please sign exactly as your name(s) appear hereon. When signing as
custodian, attorney, executor, administrator, trustee, etc., please give your
full title as such. All joint owners should sign this proxy. If the account is
registered in the name of a corporation, partnership or other entity, a duly
authorized individual must sign on its behalf and give title.
Dated: , 2000
-------------------------------------
(Month) (Day)
Signature(s)
-------------------------------------
Signature(s)
-------------------------------------
Please read both sides of this ballot.
CapIncome_2000Ballot
OPPENHEIMER CAPITAL INCOME FUND
6803 South Tucson Way, Englewood, CO 80112
Notice Of Meeting Of Shareholders
To Be Held [August 28, 2000]
To The Shareholders of Oppenheimer Capital Income Fund:
Notice is hereby given that a Meeting of the Shareholders (the "Meeting") of
Oppenheimer Champion Income Fund (the "Fund"), will be held at 6803 South Tucson
Way, Englewood, Colorado, 80112, at 10:00 A.M., Mountain time, on [August 28,
2000]. During the Meeting, shareholders of the Fund will vote on the following
proposals and sub-proposals:
1. To elect a Board of Trustees;
2 To ratify the selection of Deloitte & Touche LLP as the independent
auditor for the Fund for the current fiscal year;
3. To approve the elimination of certain fundamental
investment restrictions of the Fund;
4. To approve changes to four(4)fundamental investment restrictions of the Fund;
5. To authorize the Trustees to adopt an amended and restated
Declaration of Trust; and
6. To transact such other business as may properly come before the meeting,
or any adjournments thereof.
Shareholders of record at the close of business on [June 26, 2000], are entitled
to vote at the meeting. The Proposals are more fully discussed in the Proxy
Statement. Please read it carefully before telling us, through your proxy or in
person, how you wish your shares to be voted. The Board of Trustees of the Trust
recommends a vote to elect each of the nominees as Trustee and in favor of each
Proposal. WE URGE YOU TO MARK, SIGN, DATE AND MAIL THE ENCLOSED PROXY PROMPTLY.
By Order of the Board of Trustees,
Andrew J. Donohue, Secretary
July __, 2000
<PAGE>
PLEASE RETURN YOUR PROXY CARD PROMPTLY. YOUR VOTE IS IMPORTANT
NO MATTER HOW MANY SHARES YOU OWN.
190
<PAGE>
TABLE OF CONTENTS
Proxy Statement Page
Questions and Answers
Proposal 1: To Elect a Board of Trustees
Proposal 2: To ratify the selection of Deloitte & Touche LLP as
the independent auditor for the Fund for current fiscal year
Proposal 3 and 4: Approval of Changes to Certain Fundamental Policies of the
Fund Introduction to Proposals 3 and 4
Proposal 3: To approve the elimination of certain fundamental investment
restrictions of the Fund
Proposal 4: To approve changes to four (4) fundamental investment
restrictions of the Fund
Proposal 5: To authorize the Trustees to adopt an amended and restated
Declaration of Trust
EXHIBITS
A: Amended and Restated Declaration of Trust
<PAGE>
OPPENHEIMER CAPITAL INCOME FUND
PROXY STATEMENT
QUESTIONS AND ANSWERS
Q. Who is Asking for My Vote?
A. Trustees of Oppenheimer Capital Income Fund (the "Fund") have asked that you
vote on several matters at the Special Meeting of Shareholders to be held on
[August 28, 2000].
Q. Who is Eligible to Vote?
A. Shareholders of record at the close of business on [June 26, 2000] are
entitled to vote at the Meeting or any adjourned meeting. Shareholders are
entitled to cast one vote for each matter presented at the Meeting. The Notice
of Meeting, proxy card and proxy statement were mailed to shareholders of record
on or about [July 17, 2000].
Q. On What Matters Am I Being Asked to Vote?
A. You are being asked to vote on the following proposals:
1. To elect a Board of Trustees;
2. To ratify the selection of Deloitte & Touche
LLP as the independent auditor for the Fund;
3. To eliminate certain fundamental
investment restrictions of the Fund;
4. To amend certain fundamental investment restrictions of the Fund; and
5. To authorize the Trustees to adopt an amended and restated Declaration of
Trust.
Q. How do the Trustees Recommend that I Vote?
A. The Trustees unanimously recommend that you vote:
1. FOR election of all nominees as Trustees;
2. FOR ratification of the selection of Deloitte & Touche LLP as the independent
auditor for the Fund;
3. FOR the elimination of each of the Fund's fundamental investment restrictions
proposed to be eliminated;
4. FOR amendment of the Fund's fundamental investment restrictions proposed for
amendment; and
5. FOR authorization of the Trustees to adopt an amended and restated
Declaration of Trust.
Q. How Can I Vote?
A. You can vote in two (2) different ways:
o By mail, with the enclosed ballot o In person at the Meeting.
Whichever method you choose, please take the time to read the full text of the
proxy statement before you vote.
Q. How Will My Vote Be Recorded?
A. Proxy cards that are properly signed, dated and received at or prior to the
Meeting will be voted as specified. If you specify a vote for any of the
proposals, your proxy will be voted as indicated. If you sign and date the proxy
card, but do not specify a vote for one or more of the proposals, your shares
will be voted in favor of the Trustees recommendations.
Q. How Can I Revoke My Proxy?
A. You may revoke your proxy at any time before it is voted by forwarding a
written revocation or a later-dated proxy card to the Fund that is received at
or prior to the Meeting, or attending the Meeting and voting in person.
Q. How Can I Get More Information About the Fund?
A. A copy of the Fund's Annual and Semi-Annual Reports have previously been
mailed to Shareholders. If you would like to have copies of the Fund's most
recent Annual and Semi-Annual reports sent to you free of charge, please call us
toll-free at 1.800.525.7048 or write to the Fund at OppenheimerFunds Services,
P.O. Box 5270 Denver Colorado 80217-5270.
Q. Whom Do I Call If I Have Questions?
A. Please call us at 1.800.525.7048
THIS PROXY STATEMENT IS DESIGNED TO FURNISH SHAREHOLDERS WITH THE INFORMATION
NECESSARY TO VOTE ON THE MATTERS COMING BEFORE THE MEETING. IF YOU HAVE ANY
QUESTIONS, PLEASE CALL US AT 1.800.525.7048.
<PAGE>
OPPENHEIMER CAPITAL INCOME FUND
PROXY STATEMENT
Meeting of Shareholders
To Be Held [August 28, 2000]
This statement is furnished to the shareholders of Oppenheimer Capital Income
Fund (the "Fund"), in connection with the solicitation by the Fund's Board of
Trustees of proxies to be used at a special meeting of shareholders (the
"Meeting") to be held at 6803 South Tucson Way, Englewood, Colorado, 80112, at
10:00 A.M., Mountain time, on [August 28, 2000], or any adjournments thereof. It
is expected that the mailing of this Proxy Statement will be made on or about
[July 17, 2000].
SUMMARY OF PROPOSALS
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
------- ------------------------------------------------------------------------ -----------------------------------
Proposal Shareholder Voting
------- ------------------------------------------------------------------------ -----------------------------------
------- ------------------------------------------------------------------------ -----------------------------------
1. To Elect a Board of Trustees All
------- ------------------------------------------------------------------------ -----------------------------------
------- ------------------------------------------------------------------------ -----------------------------------
2. To Ratify the Selection of Deloitte & Touche LLP as Independent All
Auditors for the Fund for the current fiscal year
------- ------------------------------------------------------------------------ -----------------------------------
------- ------------------------------------------------------------------------ -----------------------------------
3. To approve the elimination of certain fundamental investment
restrictions for the Fund.
------- ------------------------------------------------------------------------ -----------------------------------
------- ------------------------------------------------------------------------ -----------------------------------
a. Purchasing Securities on Margin or Engaging in Short Sales All
------- ------------------------------------------------------------------------ -----------------------------------
------- ------------------------------------------------------------------------ -----------------------------------
b. Investing in Warrants or Rights All
------- ------------------------------------------------------------------------ -----------------------------------
------- ------------------------------------------------------------------------ -----------------------------------
c. Purchasing Securities of Issuers in which Officers or Trustees have All
an Interest
------- ------------------------------------------------------------------------ -----------------------------------
------- ------------------------------------------------------------------------ -----------------------------------
d. Buying Securities From or Selling Securities to any Officer or All
Trustee of the Fund or Manager
------- ------------------------------------------------------------------------ -----------------------------------
------- ------------------------------------------------------------------------ -----------------------------------
e. Investing in a Company for the Purpose of Acquiring Control All
------- ------------------------------------------------------------------------ -----------------------------------
------- ------------------------------------------------------------------------ -----------------------------------
f. Maintaining the Fund's Business as an Investment Company All
------- ------------------------------------------------------------------------ -----------------------------------
------- ------------------------------------------------------------------------ -----------------------------------
g. Acceptance of Share Purchase Price All
------- ------------------------------------------------------------------------ -----------------------------------
------- ------------------------------------------------------------------------ -----------------------------------
4. To approve changes to four (4) of the Fund's investment restrictions All
------- ------------------------------------------------------------------------ -----------------------------------
------- ------------------------------------------------------------------------ -----------------------------------
5. Authorize the Trustees to adopt an Amended and Restated Declaration of All
Trust
------- ------------------------------------------------------------------------ -----------------------------------
</TABLE>
PROPOSAL 1: ELECTION OF TRUSTEES
At the Meeting, twelve (12) Trustees are to be elected to hold office
until the next meeting of shareholders called for the purpose of electing
Trustees and until their successors are duly elected and shall have qualified.
The persons named as attorneys-in-fact in the enclosed proxy have advised the
Fund that unless a proxy instructs them to withhold authority to vote for all
listed nominees or any individual nominee, all validly executed proxies will be
voted by them for the election of the nominees named below as Trustees of the
Fund. As a Massachusetts business trust, the Fund does not contemplate holding
annual shareholder meetings for the purpose of electing Trustees. Thus, the
Trustees will be elected for indefinite terms until a special shareholder
meeting is called for the purpose of voting for Trustees and until their
successors are properly elected and qualified.
Each of the nominees (except for Mr. Marshall) currently serves as a
Trustee of the Fund. All of the nominees have consented to serve as Trustees if
elected.
Each nominee indicated below by an asterisk (*) is an "interested
person" (as that term is defined in the Investment Company Act of 1940, referred
to in this Proxy Statement as the "1940 Act") of the Fund due to the positions
indicated with the Fund's investment adviser, OppenheimerFunds, Inc. (the
"Manager") or its affiliates, or other positions described. The beneficial
ownership of Class A shares listed below includes voting and investment control,
unless otherwise indicated below. All of the Trustees own shares in one or more
of the Denver-based funds in the OppenheimerFunds complex except William L.
Armstrong. If a nominee should be unable to accept election, the Board of
Trustees may, in its discretion, select another person to fill the vacant
position.
Name, Age, Address Fund Shares Beneficially Owned as of
And Five-Year Business Experience June 26, 2000 and % of Class Owned
William L. Armstrong (63) 0
1625 Broadway
Suite 780
Denver, CO 80202
Trustee since 1999.
Chairman of the following private mortgage banking companies: Cherry Creek
Mortgage Company (since 1991), Centennial State Mortgage Company (since 1994),
The El Paso Mortgage Company (since 1993), Transland Financial Services, Inc.
(since 1997), and Ambassador Media Corporation (since 1984); Chairman of the
following private companies: Frontier Real Estate, Inc. (residential real estate
brokerage) (since 1994), Frontier Title (title insurance agency) (since 1995)
and Great Frontier Insurance (insurance agency) (since 1995); Director of the
following public companies: Storage Technology Corporation (computer equipment
company) (since 1991), Helmerich & Payne, Inc. (oil and gas drilling/production
company) (since 1992), UNUMProvident (insurance company) (since 1991); formerly
Director of the following public companies: International Family Entertainment
(television channel) (1991 - 1997) and Natec Resources, Inc. (air pollution
control equipment and services company) (1991 - 1995); formerly U.S. Senator
(January 1979 - January 1991); Director/trustee of 13 investment companies in
the OppenheimerFunds complex.
<PAGE>
Name, Age, Address Fund Shares Beneficially Owned as of
And Five-Year Business Experience June 26, 2000 and % of Class Owned
Robert G. Avis (69)* 0
One North Jefferson
St. Louis, MO 63103
Trustee since 1993.
Chairman, President and Chief Executive Officer of A.G. Edwards Capital, Inc.
(general partnership of private equity funds), Director of A.G. Edwards & Sons,
Inc. (a broker-dealer) and Director of A.G. Edwards Trust Companies (trust
companies), formerly, Vice Chairman of A.G. Edwards & Sons, Inc. and A.G.
Edwards, Inc. (its parent holding company); Chairman of A.G.E. Asset Management
(an investment advisor). Director/trustee of 22 investment companies in the
OppenheimerFunds complex.
George C. Bowen (63) 2,190.813 Class A shares
9224 Bauer Ct. (.000011% of Class A shares)
Lone Tree, CO 80124
Trustee since 1998.
Formerly (until April 1999) Mr. Bowen held the following positions:
Senior Vice President (since September 1987) and Treasurer (since March 1985) of
the Manager; Vice President (since June 1983) and Treasurer (since March 1985)
of OppenheimerFunds Distributor, Inc. ("Distributor"); Vice President (since
October 1989) and Treasurer (since April 1986) of HarbourView Asset Management
Corporation; Senior Vice President (since February 1992), Treasurer (since July
1991) Assistant Secretary and a director (since December 1991) of Centennial
Asset Management Corporation; President, Treasurer and a director of Centennial
Capital Corporation (since June 1989); Vice President and Treasurer (since
August 1978) and Secretary (since April 1981) of Shareholder Services, Inc.;
Vice President, Treasurer and Secretary of Shareholder Financial Services, Inc.
(since November 1989); Assistant Treasurer of Oppenheimer Acquisition Corp.
(since March 1998); Treasurer of Oppenheimer Partnership Holdings, Inc. (since
November 1989); Vice President and Treasurer of Oppenheimer Real Asset
Management, Inc. (since July 1996); Treasurer of OppenheimerFunds International
Ltd. and Oppenheimer Millennium Funds plc (since October 1997). Director/trustee
of 17 investment companies in the OppenheimerFunds complex.
Edward L. Cameron (61) 0
Spring Valley Road
Morristown, NJ 07960
Trustee since 1999.
Formerly (from 1974-1999) a partner with PricewaterhouseCoopers LLC (an
accounting firm) and Chairman, Price Waterhouse LLP Global Investment management
Industry Services Group (from 1994-1998). Director/trustee of 7 investment
companies in the OppenheimerFunds complex.
Name, Age, Address Fund Shares Beneficially Owned as of
And Five-Year Business Experience June 26, 2000 and % of Class Owned
Jon S. Fossel (58) 0
810 Jack Creek Road
Ennis, MT 59729
Trustee since 1990.
Formerly (until October 1996) Chairman and a director of the Manager, President
and a director of Oppenheimer Acquisition Corp., the Manager's parent holding
company, and Shareholder Services, Inc. and Shareholder Financial Services,
Inc., transfer agent subsidiaries of the Manager. Director/trustee of 20
investment companies in the OppenheimerFunds complex.
Sam Freedman (59)
4975 Lakeshore Drive
Littleton, CO 80123
Trustee since 1996.
Formerly (until October 1994) Chairman and Chief Executive Officer of
OppenheimerFunds Services, Chairman, Chief Executive Officer and a director of
Shareholder Services, Inc., Chairman, Chief Executive Officer and director of
Shareholder Financial Services, Inc., Vice President and director of Oppenheimer
Acquisition Corp.; a director of OppenheimerFunds, Inc. Director/trustee of 22
investment companies in the OppenheimerFunds complex.
Raymond J. Kalinowski (70) 0
44 Portland Drive
St. Louis, MO 63131
Trustee since 1988.
Director of Wave Technologies International, Inc. (a computer products training
company), self-employed consultant (securities matters) and director/trustee of
22 investment companies in the OppenheimerFunds complex.
C. Howard Kast (78) 0
2552 East Alameda, #30
Denver, CO 80209
Trustee since 1987.
Formerly Managing Partner of Deloitte, Haskins & Sells (an accounting firm) and
director/trustee of 22 investment companies in the OppenheimerFunds complex.
<PAGE>
Name, Age, Address Fund Shares Beneficially Owned as of
And Five-Year Business Experience June 26, 2000 and % of Class Owned
Robert M. Kirchner (78) 7,301.864 Class A shares
7500 E. Arapohoe Road (.000038% of Class A shares)
Suite 250
Englewood, CO 80112
Trustee since 1967.
President of The Kirchner Company (management consultants) and director/trustee
of 22 investment companies in the OppenheimerFunds complex.
Bridget A. Macaskill* (51) 0
Two World Trade Center
New York, NY 10048
Trustee since 1995.
President (since June 1991), Chief Executive Officer (since September 1995) and
a Director (since December 1994) of the Manager; President and director (since
June 1991) of HarbourView Asset Management Corporation, an investment adviser
subsidiary of the Manager; Chairman and a director of Shareholder Services, Inc.
(since August 1994) and Shareholder Financial Services, Inc. (since September
1995), transfer agent subsidiaries of the Manager; President (since September
1995) and a director (since October 1990) of Oppenheimer Acquisition Corp., the
Manager's parent holding company; President (since September 1995) and a
director (since November 1989) of Oppenheimer Partnership Holdings, Inc., a
holding company subsidiary of the Manager; a director of Oppenheimer Real Asset
Management, Inc. (since July 1996); President and a director (since October
1997) of OppenheimerFunds International Ltd., an offshore fund management
subsidiary of the Manager and of Oppenheimer Millennium Funds plc; a director of
Prudential Corporation plc (a U.K. financial service company). President and
Director/trustee of 19 investment companies in the OppenheimerFunds complex.
F. William Marshall, Jr. (58) 0
1441 Main Street
Springfield, MA 01102
Chairman (since 1999) SIS & Family Bank, F.S.B. (formerly SIS Bank); President,
Chief Executive Officer and Director (1993-1999), SIS Bankcorp., Inc. and SIS
Bank (formerly, Springfield Institution for Savings); Director (since 1999),
Peoples Heritage Financial Group, Inc.; Chairman and Chief Executive Officer
(1990-1993), Bank of Ireland First Holdings, Inc. and First New Hampshire Banks;
Trustee (since 1996), MassMutual Institutional Funds (open-end investment
company); Trustee (since 1996), MML Series Investment Fund (open-end investment
company).
Name, Age, Address Fund Shares Beneficially Owned as of
And Five-Year Business Experience June 26, 2000 and % of Class Owned
James C. Swain* (66) 0
6803 South Tuscon Way
Englewood, CO 80112
Trustee since 1967.
Vice Chairman of the Manager (since September 1988); formerly President and a
director of Centennial Asset Management Corporation, an investment adviser
subsidiary of the Manager and Chairman of the Board of Shareholder Services,
Inc. Director/trustee of 22 investment companies in the OppenheimerFunds
complex.
Under the 1940 Act, the Board of Trustees may fill vacancies on the
Board of Trustees or appoint new Trustees only if, immediately thereafter, at
least two-thirds of the Trustees will have been elected by shareholders.
Currently, two of the Fund's thirteen Trustees have not been elected by
shareholders. In addition, the Board of Trustees has nominated Mr. Marshall to
become a Trustee of the Fund.
Under the 1940 Act, the Fund is also required to call a meeting of
shareholders promptly to elect Trustees if at any time less than a majority of
the Trustees have been elected by shareholders. By holding a meeting to elect
Trustees at this time, the Fund may be able to delay the time at which another
shareholder meeting is required for the election of Trustees, which will result
in a savings of the costs associated with holding a meeting.
The primary responsibility for the management of the Fund rests with
the Board of Trustees. The Trustees meet regularly to review the activities of
the Fund and of the Manager, which is responsible for its day-to-day operations.
Six regular meetings of the Trustees were held during the fiscal year ended
August 31, 1999. Each of the incumbent Trustees was present for at least 75% of
the meetings held of the Board and of all committees on which that Trustee
served. The Trustees have appointed an Audit Committee, comprised of Messrs.
Kast (Chairman), Kalinowski and Kirchner, none of whom is an "interested
person," as defined in the 1940 Act, of the Manager or the Fund. The Committee
met six times during the fiscal year ended August 31, 1999. The Board of
Trustees does not have a standing, nominating or compensation committee. The
Audit Committee furnishes the Board with recommendations regarding the selection
of the independent auditor. The other functions of the Committee include (i)
reviewing the methods, scope and results of audits and the fees charged; (ii)
reviewing the adequacy of the Fund's internal accounting procedures and
controls; (iii) establishing a separate line of communication between the Fund's
independent auditors and its independent Trustees, and selecting and nominating
the independent Trustees.
The Trustees who are not affiliated with the investment adviser
("Nonaffiliated Trustees") are paid a fixed fee from the Fund for serving on the
Board. Each of the current Trustees also serves as trustees or directors of
other Denver-based investment companies in the OppenheimerFunds complex.
Nonaffiliated Trustees are paid a retainer plus a fixed fee for attending each
meeting and are reimbursed for expenses incurred in connection with attending
such meetings. Each Fund in the OppenheimerFunds complex for which they serve as
a director or trustee pays a share of these expenses.
The officers of the Fund are affiliated with the Manager. They and the
Trustees of the Fund who are affiliated with the Manager (Ms. Macaskill and Mr.
Swain) receive no salary or fee from the Fund. The remaining Trustees of the
Fund received the compensation shown below from the Fund during the fiscal year
ended August 31, 1999, and from all of the Denver-based Oppenheimer funds
(including the Fund) for which they served as Trustee, Director or Managing
General Partner during the calendar year ended December 31, 1999. Compensation
is paid for services in the positions below their names:
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
---------------------------------------- ------------------- -------------------------------- -----------------------
Trustee's Name and Aggregate Number of Boards Within Total Compensation
Other Positions Compensation Denver-Board Oppenheimer Funds From all Denver-Based
From Fund 1 Complex on Which Trustee Oppenheimer Funds 2
Serves as of 12/31/99
---------------------------------------- ------------------- -------------------------------- -----------------------
---------------------------------------- ------------------- -------------------------------- -----------------------
William H. Armstrong $1,736 13 $14,542
---------------------------------------- ------------------- -------------------------------- -----------------------
---------------------------------------- ------------------- -------------------------------- -----------------------
Robert G. Avis $11,215 22 $67,998
---------------------------------------- ------------------- -------------------------------- -----------------------
---------------------------------------- ------------------- -------------------------------- -----------------------
William A. Baker4 $11,466 22 $67,998
---------------------------------------- ------------------- -------------------------------- -----------------------
---------------------------------------- ------------------- -------------------------------- -----------------------
George C. Bowen $1,859 17 $23,879
---------------------------------------- ------------------- -------------------------------- -----------------------
---------------------------------------- ------------------- -------------------------------- -----------------------
Edward Cameron $0 7 $ 2,430
---------------------------------------- ------------------- -------------------------------- -----------------------
---------------------------------------- ------------------- -------------------------------- -----------------------
Jon. S. Fossel3 $11,370 20 $66,586
Review Committee Member
---------------------------------------- ------------------- -------------------------------- -----------------------
---------------------------------------- ------------------- -------------------------------- -----------------------
Sam Freedman $12,205 22 $73,998
Review Committee Member
---------------------------------------- ------------------- -------------------------------- -----------------------
---------------------------------------- ------------------- -------------------------------- -----------------------
Raymond J. Kalinowski $12,086 22 $73,248
Audit Committee Member
---------------------------------------- ------------------- -------------------------------- -----------------------
---------------------------------------- ------------------- -------------------------------- -----------------------
C. Howard Kast $12,879 22 $78,873
Chairman, Audit and Review Committees
---------------------------------------- ------------------- -------------------------------- -----------------------
---------------------------------------- ------------------- -------------------------------- -----------------------
Robert M. Kirchner3 $11,335 22 $69,248
Audit Committee Member
---------------------------------------- ------------------- -------------------------------- -----------------------
---------------------------------------- ------------------- -------------------------------- -----------------------
Ned M. Steel4 $11,215 22 $67,998
---------------------------------------- ------------------- -------------------------------- -----------------------
1.For the Fund's fiscal year ended 8/31/99.
2.For the 1999 calendar year.
3.Committee position held during a portion of the period shown.
4.Effective July 1,2000, Messrs.Baker and Steel resigned as Trustees of the Fund.
</TABLE>
The Board of Trustees has also adopted a Deferred Compensation Plan for
Nonaffiliated Trustees that enables Trustees to elect to defer receipt of all or
a portion of the annual fees they are entitled to receive from the Fund. As of
December 31, 1999, none of the Trustees elected to do so. Under the plan, the
compensation deferred by a Trustee is periodically adjusted as though an
equivalent amount had been invested in shares of one or more Oppenheimer funds
selected by the Trustee. The amount paid to the Trustee under the plan will be
determined based upon the performance of the selected funds. Deferral of
Trustees' fees under the plan will not materially affect the Fund's assets,
liabilities or net income per share. The plan will not obligate the Fund to
retain the services of any Trustee or to pay any particular amount of
compensation to any Trustee.
Each officer of the Fund is elected by the Trustees to serve an annual
term. Information is given below about the executive officers who are not
Trustees of the Fund, including their business experience during the past five
years. Messrs. Donohue, Wixted, Bishop, Zack and Farrar serve in a similar
capacity with several other funds in the OppenheimerFunds complex.
Name, Age, Address and Five-Year Business Experience
John P. Doney, Vice President and Portfolio Manager since June 1992; Age: 70
Two World Trade Center, New York, New York 10048
Vice President of the Manager (since June 1992); an officer of other investment
companies in the OppenheimerFunds complex.
Michael S. Levine, Vice President and Portfolio Manager since April 1996; Age:34
Two World Trade Center, New York, New York 10048
Vice President of the Manager (since April 1996); formerly Assistant Portfolio
Manager of the Manager (from June 1994 - April 1996); an officer of other
investment companies in the OppenheimerFunds complex.
Andrew J. Donohue, Secretary since 1992; Age: 49
Two World Trade Center, New York, NY 10048
Executive Vice President, General Counsel and a director of the Manager, the
Distributor, HarbourView, SSI, SFSI, Oppenheimer Partnership Holdings, Inc. and
Oppenheimer Real Asset Management, Inc.; President and a director of Centennial;
General Counsel and Secretary of OAC; Vice President and a director of
OppenheimerFunds International Ltd. ("OFIL") and Oppenheimer Millennium Funds
plc; an officer of other investment companies in the OppenheimerFunds complex.
Brian W. Wixted, Treasurer since April, 1999; Age: 40.
6803 South Tucson Way, Englewood, Colorado 80112
Senior Vice President and Treasurer (since April 1999) of the Manager; an
officer of other investment companies in the OppenheimerFunds complex; formerly
Principal and Chief Operating Officer, Bankers Trust Company - Mutual Fund
Services Division (1995-1999); Vice President and Chief Financial Officer of CS
First Boston Investment Management Corp. (1991-1995).
Robert G. Zack, Assistant Secretary since 1988; Age: 51.
Two World Trade Center, New York, NY 10048
Senior Vice President and Associate General Counsel of the Manager; Assistant
Secretary of SSI and SFSI; Assistant Secretary of Oppenheimer Millennium Funds
plc and OFIL; an officer of other investment companies in the OppenheimerFunds
complex.
Robert J. Bishop, Assistant Treasurer since April 1994; Age: 41.
6803 South Tucson Way, Englewood, CO 80112
Vice President of the Manager/Mutual Fund Accounting; an officer of other
investment companies in the OppenheimerFunds complex; formerly an Assistant Vice
President of the Manager/Mutual Fund Accounting and a Fund Controller for the
Manager.
Scott T. Farrar, Assistant Treasurer since April 1994; Age: 34.
6803 South Tucson Way, Englewood, CO 80112
Vice President of the Manager/Mutual Fund Accounting; Assistant Treasurer of
Oppenheimer Millennium Funds plc; an officer of other investment companies in
the OppenheimerFunds complex; formerly an Assistant Vice President of the
Manager/Mutual Fund Accounting and a Fund Controller for the Manager.
All officers serve at the pleasure of the Board.
As of June 13, 2000, the Trustees and officers as a group beneficially owned
16,902.553 shares or less than 1% of the outstanding Class A, Class B or Class C
shares of the Fund.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR THE ELECTION OF EACH NOMINEE AS
TRUSTEE.
PROPOSAL 2: RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
The Board of Trustees of the Fund, including a majority of the Trustees
who are not "interested persons" (as defined in the 1940 Act) of the Fund or the
Manager selected Deloitte & Touche LLP ("Deloitte") as auditors of the Fund for
the fiscal year beginning September 1, 2000. Deloitte also serves as auditors
for the Manager and certain other funds for which the Manager acts as investment
adviser. At the Meeting, a resolution will be presented for the shareholders'
vote to ratify the selection of Deloitte as auditors. Representatives of
Deloitte are not expected to be present at the Meeting but will have the
opportunity to make a statement if they desire to do so and will be available
should any matter arise requiring their presence.
THE BOARD OF TRUSTEES RECOMMENDS APPROVAL OF THE SELECTION OF DELOITTE AS
AUDITORS OF THE FUND.
PROPOSALS 3and4: APPROVAL OF CHANGES TO CERTAIN FUNDAMENTAL POLICIES OF THE FUND
Introduction to Proposals 3 and 4
The Fund is subject to certain investment restrictions which govern the
Fund's investment activities. Under the 1940 Act, certain investment
restrictions are required to be "fundamental," which means that they can only be
changed by a shareholder vote. An investment company may designate additional
restrictions that are fundamental, and it may also adopt "non-fundamental"
restrictions, which may be changed by the Trustees without shareholder approval.
The Fund has adopted certain fundamental investment restrictions that are set
forth in its Statement of Additional Information, which cannot be changed
without the requisite shareholder approval described below under "Further
Information about Voting at the Meeting." Restrictions that the Fund has not
specifically designated as being fundamental are considered to be
"non-fundamental" and may be changed by the Trustees without shareholder
approval.
After the Fund was established in 1967, certain legal and regulatory
requirements applicable to registered investment companies (also referred to as
"funds") changed. For example, certain restrictions imposed by state laws and
regulations were preempted by the National Securities Markets Improvement Act of
1996 ("NSMIA") and therefore are no longer applicable to funds. As a result of
NSMIA, the Fund currently is subject to several fundamental investment
restrictions that are either more restrictive than required under current law,
or which are no longer required at all. A number of the fundamental restrictions
that the Fund has adopted in the past also reflect regulatory, business or
industry conditions, practices or requirements which at one time, for a variety
of reasons, led to the imposition of limitations on the management of the Fund's
investments. With the passage of time, the development of new practices and
changes in regulatory standards, several of these fundamental restrictions are
considered by Fund management to be unnecessary or unwarranted. In addition,
other fundamental restrictions reflect federal regulatory requirements which
remain in effect, but which are not required to be stated as fundamental
restrictions. Accordingly, the Trustees recommend that the Fund's shareholders
approve the amendment or elimination of certain of the Fund's current
fundamental investment restrictions. The purpose of each sub-proposal is to
provide the Fund with the maximum flexibility permitted by law to pursue its
investment objectives and policies and to standardize the Fund's policy in this
area to one which is expected to become standard for all Oppenheimer funds. The
proposed standardized restrictions satisfy current federal regulatory
requirements and are written to provide flexibility to respond to future legal,
regulatory, market or technical changes.
By both standardizing and reducing the total number of investment
restrictions that can be changed only by a shareholder vote, the Trustees
believe that it will assist the Fund and the Manager in maintaining compliance
with the various investment restrictions to which the Oppenheimer funds are
subject, and that the Fund will be able to minimize the costs and delays
associated with holding future shareholder meetings to revise fundamental
investment policies that have become outdated or inappropriate. The Trustees
also believe that the investment adviser's ability to manage the Fund's assets
in a changing investment environment will be enhanced, and that investment
management opportunities will be increased by these changes.
The proposed standardized changes will not affect the Fund's investment
objective. Although the proposed changes in fundamental investment restrictions
will provide the Fund greater flexibility to respond to future investment
opportunities, the Board does not anticipate that the changes, individually or
in the aggregate, will result in a material change in the level of investment
risk associated with investment in the Fund. The Board does not anticipate that
the proposed changes will materially affect the manner in which the Fund is
managed. If the Board determines in the future to change materially the manner
in which the Fund is managed, the prospectus will be amended.
The recommended changes are specified below. Shareholders are requested
to vote on each Sub-Proposal in Proposal 3 separately and each Sub-Proposal in
Proposal 4. If approved, the effective date of these Proposals may be delayed
until the Fund's updated Prospectus and/or Statement of Additional Information
can reflect the changes.
PROPOSAL 3: TO APPROVE THE ELIMINATION OF CERTAIN FUNDAMENTAL
INVESTMENT RESTRICTIONS OF THE FUND
A. Engaging in Short Sales or Purchasing Securities on Margin.
The Fund currently is subject to a fundamental investment restriction
concerning its ability to engage in short sales or purchase securities on
margin. The existing restriction is not required to be a fundamental investment
restriction under the 1940 Act. It is proposed that this current fundamental
restriction prohibiting purchases of securities on margin or engaging in short
sales be eliminated. The current fundamental investment restriction is set forth
below.
Current
The Fund cannot engage in short sales or purchase securities on
margin. However, the Fund can make margin deposits in connection
with its investments.
In a short sale, an investor sells a borrowed security with a
corresponding obligation to the lender to return the identical security. In an
investment technique known as a short sale "against-the-box," an investor sells
short while owning the same securities in the same amount, or having the right
to obtain equivalent securities. The investor could have the right to obtain
equivalent securities, for example, through ownership of options or convertible
securities.
Margin purchases involve the purchase of securities with money borrowed
from a broker. "Margin" is the cash or eligible securities that the borrower
places with a broker as collateral against the loan. The Fund's current
fundamental investment policy prohibits it from purchasing securities on margin,
except to obtain such short-term credits as may be necessary for the clearance
of transactions. Policies of the SEC also allow mutual funds to make initial and
variation margin payments in connection with the purchase and sale of futures
contracts and options on futures contracts. In the futures markets, "margin"
payments are akin to a "performance bond," rather than a loan to purchase
securities as is the case in the securities markets. As a result, futures
margins typically range from 2-5% of the value of the underlying contract and
are marked-to-market on a daily basis.
Elimination of this fundamental investment restriction is unlikely to
affect the management of the Fund. The 1940 Act prohibitions on short sales and
margin will continue to apply to the Fund. Accordingly, the Fund will be able to
sell securities short to the extent permitted by the 1940 Act, and any rule or
exemptive order granted by the SEC. Elimination of this restriction would not
affect the Fund's ability to purchase securities on margin.
B. Investing in Warrants or Rights.
The Fund is currently subject to a fundamental investment restriction
concerning its investment in warrants or rights. It is proposed that the current
fundamental policy be eliminated. However, the Trustees intend to retain this
restriction as a non-fundamental restriction to be complied with by the Fund in
managing its assets. The current fundamental restriction is set forth below:
<PAGE>
Current
The Fund cannot invest more than 5% of its total assets in
warrants or rights, and not more than 2% of its total assets
may be invested in warrants and rights that are not listed on
the New York Stock Exchange or American Stock Exchange.
Warrants basically are options to purchase equity securities at
specific prices valid for a specific period of time. Their prices do not
necessarily move parallel to the prices of the underlying securities. Rights are
similar to warrants, but normally have a short duration and are distributed
directly by the issuer to its shareholders. Rights and warrants have no voting
rights, receive no dividends and have no rights with respect to the assets of
the issuer.
The existing restriction is not required to be fundamental under the
1940 Act and the Board recommends that shareholders eliminate this fundamental
investment restriction. The purpose of this proposal is to provide the Fund with
the maximum flexibility permitted by law to pursue its investment objectives. If
adopted, the Fund would continue to limit its investments in warrants or rights
to 5% of total assets and 2% of total assets in those warrants not listed on the
New York Stock Exchange or American Stock Exchange. Therefore, the management of
the Fund would remain unchanged except that the non-fundamental policy on
investing in warrants and rights may be changed by the Board at any time without
shareholder approval. The adoption of this proposal would provide greater
flexibility for the Fund in the event of uncertain market environments. The
Trustees believe that the elimination of this fundamental investment restriction
will not produce additional or different risks for the Fund.
C. Purchasing Securities of Issuers in which Officers or Trustees Have An
Interest.
The Fund is currently subject to a fundamental investment restriction
concerning purchasing the securities of an issuer if the officers and directors
of the Fund or the Manager individually own 1/2 of 1% of such securities and
together own more than 5% of such securities. It is proposed that the current
fundamental restriction be eliminated. The current fundamental investment
restriction is set forth below.
Current
The Fund cannot invest in or hold securities of any issuer if
officers and Trustees of the Fund or the Manager individually
beneficially own more than 1/2 of 1% of the securities of that
issuer and together own more than 5% of the securities of that
issuer.
This restriction was originally adopted to address certain state or
"Blue Sky" requirements in connection with the registration of shares of the
Fund for sale in those particular states. The Board recommends that shareholders
eliminate this fundamental investment restriction. Under NSMIA, this restriction
no longer applies to the Fund. In addition, the Board believes that its
elimination could increase the Fund's flexibility when choosing investments in
the future.
D. Buying Securities From or Selling Securities to Any Officer or Trustee of the
Fund or Manager
The Fund is currently subject to a fundamental investment restriction
concerning buying securities from or selling securities to any officer or
Trustee of the Fund or any officer or director of the Manager, or any firms in
which they are members. It is proposed that the current fundamental restriction
be eliminated. The current fundamental investment restriction is set forth
below.
Current
The Fund cannot buy securities from, or sell securities to, any officer
or Trustee of the Fund, or any officer or director of the Manager, or
any firms of which any of them are members (although such persons may
act as brokers for the Fund). This restriction does not apply to
purchases and sales of the Fund's shares.
This restriction was originally adopted to address certain state or
"Blue Sky" requirements in connection with the registration of shares of the
Fund for sale in those particular states and to address the conflict of interest
that may arise with respect to these types of transactions. The Board recommends
that shareholders eliminate this fundamental investment restriction. If
eliminated as a fundamental investment restriction of the Fund, management of
the Fund will not change because this investment restriction will continue to be
followed as an operating policy. As a result of the passage of NSMIA, this
restriction no longer applies to the Fund and the Board believes that its
elimination could increase the Fund's flexibility when choosing among possible
investments.
E. Investing in a Company for the Purpose of Acquiring Control
The Fund currently is subject to a fundamental investment restriction
concerning its investment in portfolio companies for the purpose of acquiring
control. It is proposed that the current fundamental investment policy be
eliminated. Although the Fund has no intention of investing for the purpose of
acquiring control of a company, it believes that this restriction is unnecessary
and may, in fact, reduce possible investment opportunities. The current
fundamental investment restriction is set forth below.
Current
The Fund cannot invest in companies for the purpose of acquiring
control or management of those companies.
Elimination of the above fundamental investment restriction is not
expected to have a significant impact on the Fund's investment practices or
management because the Fund currently has no intention of investing in companies
for the purpose of obtaining or exercising management or control. A Fund might
be considered to be investing for control if it purchases a large percentage of
the securities of a single issuer. This restriction was intended to ensure that
a mutual fund would not be engaged in the business of managing other companies.
This restriction was originally adopted to address certain state or
"Blue Sky" requirements in connection with the registration of shares of the
Fund for sale in those particular states. The Board recommends that shareholders
eliminate this fundamental investment restriction. Under NSMIA, this restriction
no longer applies to the Fund, and, the Board believes that its elimination
could increase the Fund's flexibility when choosing investments in the future.
F. Maintaining the Fund's Business as an Investment Company
The Fund is currently subject to a fundamental investment restriction
that requires it to continue to maintain its business as an investment company.
Because this investment restriction is not required to be fundamental under the
1940 Act, it is proposed that it be eliminated. The current fundamental
investment restriction is set forth below.
Current
The Fund cannot cease to maintain its business as an
investment company, as defined in the Investment Company Act.
This restriction was originally adopted to address certain past
regulatory practices and state "Blue Sky" requirements in connection with
registration of shares of the Fund for sale in those particular states.
Elimination of this fundamental investment restriction would not result in any
change in the management or operation of the Fund. In addition, the requirements
of the 1940 Act do not require this restriction to be adopted by a fund as
fundamental or otherwise, and therefore, funds are not required to stay in
business indefinitely. A fundamental investment restriction requiring the Fund
to maintain its business as an investment company could also serve to harm
investors if the Board determines, based on business and economic factors, that
shareholders would be better off if the Fund ceased to operate in its present
form. Accordingly, the Board recommends that shareholders vote to eliminate this
fundamental investment restriction.
G. Acceptance of Share Purchase Price
The Fund is currently subject to a fundamental investment restriction
that requires it to immediately issue shares in connection with the acceptance
of purchase price monies. Because this investment restriction is not required to
be fundamental, it is proposed that it be eliminated. The current fundamental
investment restriction is set forth below.
Current
The Fund cannot accept the purchase price for any of its
shares without immediately thereafter issuing an appropriate
number of shares.
This investment restriction is not required to be fundamental under the
1940 Act or rules thereunder. This fundamental investment restriction was
originally adopted to address certain business and regulatory practices at that
time. In practice, the Fund immediately issues shares upon its acceptance of the
payment price in conformity with this fundamental investment restriction and the
rules regarding clearance and settlement of securities. Acceptance is predicated
on delivery of cash or settled funds for payment of fund shares and not merely
receiving a check or other similar negotiable instrument. Elimination of this
fundamental investment restriction would not result in any change in the
management or operation of the Fund. The Board recommends that shareholders
eliminate this fundamental investment restriction.
THE BOARD OF TRUSTEES UNANIMOUSLY RECOMMENDS THAT YOU APPROVE
EACH SUB-PROPOSAL DESCRIBED ABOVE
PROPOSAL 4: TO APPROVE CHANGES TO CERTAIN INVESTMENT RESTRICTIONS OF THE FUND
Proposal number 4 is composed of four separate proposed changes to the
Fund's current investment policies. The Board believes that under appropriate
circumstances, the Fund should be permitted to lend money to, and borrow money
from, other Oppenheimer mutual funds and pledge its assets as collateral for the
loan as explained in the following proposals. All four of these proposals must
be approved together if the inter-fund lending arrangements described below are
to be implemented, and shareholders are requested to vote to approve or
disapprove all three together.
A. Borrowing.
The 1940 Act imposes certain restrictions on the borrowing activities
of registered investment companies. The restrictions on borrowing are generally
designed to protect shareholders and their investment by restricting a fund's
ability to subject its assets to claims of creditors who might have a claim to
the fund's assets that would take priority over the claims of shareholders. A
fund's borrowing restriction must be a fundamental investment restriction.
Under the 1940 Act, a fund may borrow from banks up to one-third of its
total assets (including the amount borrowed). In addition, a fund may borrow up
to 5% of its total assets for temporary purposes from any person. Section 18 of
the 1940 Act deems a loan temporary if it is repaid within 60 days and not
extended or renewed. Funds typically borrow money to meet redemptions in order
to avoid forced, unplanned sales of portfolio securities. This technique allows
a fund greater flexibility to buy and sell portfolio securities for investment
or tax considerations, rather than for cash flow considerations.
The Fund currently is subject to a fundamental investment restriction
concerning borrowing which is more restrictive than required by the 1940 Act.
The Board recommends that the Fund's restriction on borrowing be amended to
permit the Fund to borrow from banks and/or affiliated investment companies up
to one-third of its total assets (including the amount borrowed). As amended,
the Fund's restriction on borrowing would remain a fundamental restriction
changeable only by the vote of a majority of the outstanding voting securities
of the Fund as defined in the 1940 Act.
<PAGE>
The current and proposed fundamental investment restrictions are set
forth below.
Current Proposed
The Fund cannot borrow money, except for The Fund cannot borrow money in
temporary emergency purposes or under excess of 33-1/3% of the value of
unusual circumstances. its total assets. The other
Fund may borrow only from banks
and/or affiliated investment
companies and only as a temporary
measure for extraordinary or
emergency purposes.
The Fund cannot make any investment
at a time during which its
borrowings exceed 5% of the
value of its total assets.
With respect to this fundamental
policy, the Fund can borrow only if
it maintains a 300% ratio of
assets to borrowings at all times
in the manner set forth in the
Investment Company Act of 1940.
The current restriction on borrowing is silent with respect to the
permissible entities that the Fund may borrow from. The Board recommends that
this restriction be amended to permit the Fund to borrow money from banks and/or
from affiliated investment companies as a temporary measure for extraordinary or
emergency purposes provided such borrowings do not exceed 33-1/3% of its total
assets.
Permitting the Fund to borrow money from affiliated funds (for example,
those funds in the OppenheimerFunds complex) would afford the Fund the
flexibility to use the most cost-effective alternative to satisfy its borrowing
requirements. The Trustees believe that the Fund may be able to obtain lower
interest rates on its borrowings from affiliated funds than it would through
traditional bank channels.
Current law prohibits the Fund from borrowing from other funds of the
OppenheimerFunds complex. Before an inter-fund lending arrangement can be
established, the Fund must obtain approval from the SEC. Implementation of
inter-fund lending would be accomplished consistent with applicable regulatory
requirements, including the provisions of any order the SEC might issue to the
Fund and other Oppenheimer funds. The Fund has not yet decided to apply for such
an order and there is no guarantee any such order would be granted, even if
applied for. Until the SEC has approved an inter-fund lending application, the
Fund will not engage in borrowing from affiliated investment companies.
The Fund will not borrow from affiliated funds unless the terms of the
borrowing arrangement are at least as favorable as the terms the Fund could
otherwise negotiate with a third party. To assure that the Fund will not be
disadvantaged by borrowing from an affiliated Fund, certain safeguards may be
implemented. An example of the types of safeguards which the SEC may require may
include some or all of the following: the fund will not borrow money from
affiliated funds unless the interest rate is more favorable than available bank
loan rates; the Fund's borrowing from affiliated funds must be consistent with
its investment objective and investment policies; the loan rates will be
determined by a pre-established formula based on quotations from independent
banks; if the Fund has outstanding borrowings from all sources greater than 10%
of its total assets, then the Fund must secure each additional outstanding
interfund loan by the pledge of segregated collateral (see paragraph C "Pledging
of Assets," below); the Fund cannot borrow from an affiliated fund in excess of
125% of its total redemptions for the preceding seven days; each interfund loan
may be repaid on any day by the Fund; and the Trustees will be provided with a
report of all interfund loans and the Trustees will monitor all such borrowings
to ensure that the Fund's participation is appropriate.
In determining to recommend the proposed amendment to shareholders for
approval, the Board considered the possible risks to the Fund from participation
in the inter-fund lending program. There is a risk that a borrowing fund could
have a loan recalled on one day's notice. In that circumstance, the borrowing
fund might have to borrow from a bank at a higher interest cost if money to lend
were not available from another Oppenheimer fund. The Board considered that the
benefits to the Fund of participating in the program outweigh the possible risks
to the Fund from such participation.
Shareholders are being asked to approve an amendment to the Fund's
fundamental policy on borrowing and are also being asked to approve an amendment
to the Fund's fundamental restriction on lending (paragraph B "Lending," below).
If this proposal 4 is adopted, the Fund, subject to its investment objectives
and policies, will be able to participate in the inter-fund lending program as
both a lender and a borrower.
B. Lending.
The Fund currently has an operating policy that prohibits the Fund from
lending money, except in cases where the Fund is purchasing debt securities,
entering into repurchase agreements or making loans of securities. Under the
1940 Act, a fund's restriction with respect to lending is required to be
fundamental so that it cannot be changed without the vote of a majority of the
outstanding voting securities of the Fund. The Board recommends that this
operating policy on lending be clearly stated as fundamental.
It is proposed that the current operating policy also be amended to
permit the Fund to lend its assets to affiliated investment companies (for
example, other funds in the OppenheimerFunds complex). Before an inter-fund
lending arrangement can be established, the Fund must obtain approval from the
SEC. Implementation of inter-fund lending would be accomplished consistent with
applicable regulatory requirements, including the provisions of any order the
SEC might issue to the Fund and other Oppenheimer funds. The Fund has not yet
applied for such an order and there is no guarantee any such order would be
granted, even if applied for. Until the SEC has approved an inter-fund lending
application, the Fund will not engage in lending with affiliated investment
companies. As amended, the restriction on lending for the Fund would be a
fundamental investment restriction changeable only by the vote of a majority of
the outstanding voting securities of the Fund as defined in the 1940 Act. The
current operating policy and fundamental investment restriction are set forth
below.
<PAGE>
Current
The Fund currently has an operating policy (which is not fundamental but will
not be changed without the approval of shareholders) that prohibits the Fund
from lending money, however, that policy does not prohibit the Fund from
purchasing debt securities, entering into repurchase agreements or making loans
of portfolio securities.
Proposed
The Fund cannot make loans except (a) through lending of securities, (b) through
the purchase of debt instruments or similar evidence of indebtedness, (c)
through an interfund lending program with other affiliated funds, provided that
no such loan may be made if, as a result, the aggregate of such loans would
exceed 33-1/3% of the value of its total assets (taken at market value at the
time of such loans), and (d) through repurchase agreements.
<PAGE>
The Fund is currently permitted to lend it portfolio securities in
fully collateralized loans to certain eligible borrowers approved by the Board
in amounts up to 10% of the value of total assets. Similarly, the Fund may also
engage in repurchase agreements in amounts up to 10% the value of net assets for
those repurchase agreements that have a maturity beyond seven days. For
shorter-term repurchase agreements, there is no limit on the amount of the
Fund's net assets that may be subject to the repurchase agreement. These
restrictions will continue to apply to the Fund.
The reason for lending money to an affiliated fund is that the lending
fund may be able to obtain a higher rate of return than it could from interest
rates on alternative short-term investments. To assure that the Fund will not be
disadvantaged by making loans to affiliated funds, certain safeguards will be
implemented. An example of the types of safeguards which the SEC may require may
include some or all of the following: the Fund will not lend money to affiliated
funds unless the interest rate on such loan is determined to be reasonable under
the circumstances; the Fund may not make interfund loans in excess of 7.5% of
its net assets; an interfund loan to any one affiliated fund shall not exceed 5%
of the Fund's net assets; an interfund loan may not be outstanding for more than
seven days; each interfund loan may be called on one business day's notice; and
the Manager will provide the Trustees reports on all inter-fund loans
demonstrating that the Fund's participation is appropriate and that the loan is
consistent with its investment objectives and policies.
When the Fund lends assets to another affiliated fund, the lending fund
is subject to credit risks if the borrowing fund fails to repay the loan. The
Trustees believe that the risk is minimal.
C. Pledging of Assets.
The Fund is currently subject to a fundamental investment restriction
concerning the pledging of Fund assets. It is proposed that this current
fundamental investment restriction be eliminated. The current fundamental
investment restriction is set forth below.
<PAGE>
Current
The Fund cannot pledge, mortgage or hypothecate its assets.
Collateral, escrow and margin arrangements in connection with
any of its investments is permitted.
The existing restriction is not required to be fundamental under the
1940 Act, and therefore, the Board believes that the Fund should be provided
with the maximum flexibility permitted by law to pursue its investment
objectives. The 1940 Act prohibitions on borrowing by the Fund would continue to
apply as discussed above in Paragraph A "Borrowing". Therefore, the Fund will be
able to pledge its assets for borrowing money and for other purposes in
compliance with the 1940 Act and any rule or exemptive order granted by the SEC.
The Trustees recommend that this restriction be eliminated so that the Fund may
enter into collateral arrangements entered into in connection with its borrowing
requirements and consistent with paragraph A "Borrowing."
D. Diversification
The Fund is currently subject to a fundamental investment restriction
concerning the diversification of Fund assets. It is proposed that this current
restriction be amended to exclude securities of other investment companies from
the restriction. As amended, the restriction would remain fundamental changeable
only by the vote of a majority of the outstanding voting securities of the Fund
as defined in the 1940 Act. The current and proposed fundamental investment
restrictions are set forth below.
Current
The Fund cannot buy securities issued
or guaranteed by any one issuer if more
than 5% of its total assets would be
invested in securities of that issuer or
ifit would then own more than 10% of
that issuer's voting securities.
This restriction applies to 75% of the Fund's
total assets. The limit does not apply to
securities issued by the U.S. government
or any of its agencies or instrumentalities.
Proposed
The Fund cannot buy securities issued or
guaranteed by any one issuer if more than
5% of its total assets would be invested in
securities of that issuer or if it would then
own more than 10% of that issuer's voting
securities.That restriction applies to 75%
of the Fund's total assets. The limit does
not apply to securities issued by the U.S.
government or any of its agencies or
instrumentalities or securities of other
investment companies.
<PAGE>
The percentage limits in the current and proposed fundamental
investment restrictions are imposed by the 1940 Act. It is proposed that the
current restriction be amended to permit the Fund to lend its assets to
affiliated investment companies (for example, other funds in the
OppenheimerFunds complex), as discussed previously in paragraph B of Proposal 4
"Lending," and to permit the Fund to enter into fund-of-funds arrangements. The
ability of the Fund to invest in other investment companies is restricted by
Section 12(d)(1) of the 1940 Act. Section 12 was amended in 1996 by NSMIA to
permit mutual funds to enter into fund of funds or master/feeder arrangements
with other mutual funds in a fund complex, and granted the SEC broad powers to
provide exemptive relief for these purposes. The Fund is a party to an exemptive
order from the SEC permitting it to enter into a fund of funds arrangement.
While the Fund does not yet participate in a fund of funds arrangement, it may
do so in the future.
THE BOARD OF TRUSTEES UNANIMOUSLY RECOMMENDS THAT YOU APPROVE EACH SUB-PROPOSAL
PROPOSAL 5: TO AUTHORIZE THE TRUSTEES TO ADOPT AN AMENDED AND
RESTATED DECLARATION OF TRUST
The Board of Trustees has approved and recommends that the shareholders
of the Fund authorize them to adopt and execute the Amended and Restated
Declaration of Trust for the Fund in the form attached to this Proxy Statement
as Exhibit A (New Declaration of Trust). The attached New Declaration of Trust
has been marked to show changes from the Fund's existing Declaration of Trust
(Current Declaration of Trust). The New Declaration of Trust is a more modern
form of trust instrument for a Massachusetts business trust, and going forward,
will be used as the standard Declaration of Trust for all new OppenheimerFunds
Massachusetts business trusts.
Adoption of the New Declaration of Trust will not result in any changes
in the Fund's Trustees or officers or in the investment policies and shareholder
services described in the Fund's current prospectus.
Generally, a majority of the Trustees may amend the Current Declaration
of Trust when authorized by a "majority of the outstanding voting securities"
(as defined in the 1940 Act) of the trust. On April 25, 2000, the Trustees
approved the form of the New Declaration of Trust and authorized the submission
of the New Declaration of Trust to the Fund's shareholders for their
authorization at this Meeting.
The New Declaration of Trust amends the Current Declaration of Trust in
a number of significant ways. The following discussion summarizes some of the
more significant amendments to the Current Declaration of Trust effected by the
New Declaration of Trust.
In addition to the changes described below, there are other substantive and
stylistic differences between the New Declaration of Trust and the Current
Declaration of Trust. The following summary is qualified in its entirety by
reference to the New Declaration of Trust itself, which is attached as Exhibit A
to this Proxy Statement.
Significant Changes Effected by the New Declaration of Trust.
Reorganization of the Trust or Its Series or Classes. Unlike the Current
Declaration of Trust, the New Declaration of Trust generally permits the
Trustees, subject to applicable Federal and state law, to reorganize the Trust
or any of its series or classes into a newly formed entity without shareholder
approval. The Current Declaration of Trust requires shareholder approval in
order to reorganize the Trust or any of its series. Currently, the Fund is the
sole series of the Trust.
Under certain circumstances, it may not be in the shareholders'
interest to require a shareholder meeting to permit the Trust or a series of the
Trust to reorganize into a newly formed entity. For example, in order to reduce
the cost and scope of state regulatory constraints or to take advantage of a
more favorable tax treatment offered by another state, the Trustees may
determine that it would be in the shareholders' interests to reorganize the
Trust or a series of the Trust to domicile it in another state or to change its
legal form. Under the Current Declaration of Trust, the Trustees cannot
effectuate such a potentially beneficial reorganization without first conducting
a shareholder meeting and incurring the attendant costs and delays. In contrast,
the New Declaration of Trust gives the Trustees the flexibility to reorganize
the Trust or any of its series into a newly formed entity and achieve potential
shareholder benefits without incurring the delay and potential costs of a proxy
solicitation. Such flexibility should help to assure that the Trust operates
under the most appropriate form of organization.
Before allowing a trust or a series reorganization to proceed without
shareholder approval, the Trustees have a fiduciary responsibility to first
determine that the proposed transaction is in the shareholders' interest. Any
exercise of the Trustees' increased authority under the New Declaration of Trust
is also subject to any applicable requirements of the 1940 Act and Massachusetts
law. Of course, in all cases, the New Declaration of Trust would require that
shareholders receive written notification of any transaction.
The New Declaration of Trust does not give the Trustees the authority
to merge a series with another operating mutual fund or sell all of a series'
assets to another operating mutual fund without first seeking shareholder
approval. Under the New Declaration of Trust, shareholder approval is still
required for these transactions.
Termination of the Trust or its Series or Classes. Under the Current Declaration
of Trust, the Amended and Restated Declaration of Trust generally permits the
Trustees, subject to applicable Federal and state law, to terminate the Trust or
any of its series or classes of shares without shareholder approval.
Under certain circumstances, it may not be in the shareholders'
interest to require a shareholder meeting to permit the Trustees to terminate
the Trust or a series or class of shares. For example, a series may have
insufficient assets to invest effectively or a series or a class of shares may
have excessively high expense levels due to operational needs. Under such
circumstances, absent viable alternatives, the Trustees may determine that
terminating the series or class of shares is in the shareholders' interest and
the only appropriate course of action. The process of obtaining shareholder
approval of the series' or classes' termination may, however, make it more
difficult to complete the series' or classes' liquidation and termination and,
in general, will increase the costs associated with the termination. In such a
case, it may be in the shareholders' interest to permit the series' or classes'
termination without incurring the costs and delays of a shareholder meeting.
As discussed above, before allowing the Trust or a series or class to
terminate without shareholder approval, the Trustees have a fiduciary
responsibility to first determine that the proposed transaction is in the
shareholders' interest. Any exercise of the Trustees' increased authority under
the New Declaration of Trust is also subject to any applicable requirements of
the 1940 Act and Massachusetts law, and shareholders' receipt of written
notification of the transaction.
Future Amendments of the Declaration of Trust. The New Declaration of Trust
permits the Trustees, with certain exceptions, to amend the Declaration of Trust
without shareholder approval. Under the New Declaration of Trust, shareholders
generally have the right to vote on any amendment affecting their right to vote,
on any amendment affecting the New Declaration of Trust's amendment provisions,
on any amendment affecting the shareholders' rights to indemnification, and on
any amendment affecting the shareholders' rights to vote on the merger or sale
of the trusts, series, or classes' assets to an operating mutual fund. The
Current Declaration of Trust, on the other hand, generally gives shareholders
the exclusive power to amend the Declaration of Trust with certain limited
exceptions. By allowing amendment of the Declaration of Trust without
shareholder approval, the New Declaration of Trust gives the Trustees the
necessary authority to react quickly to future contingencies. As mentioned
above, such increased authority remains subordinate to the Trustees' continuing
fiduciary obligations to act with due care and in the shareholders' interest.
Other Changes Effected by the Amended and Restated Declaration of Trust
In addition to the significant changes described above, the Amended
and Restated Declaration of Trust modifies the current Declaration of Trust in a
number of important ways, including, but not limited to, the following:
a. The Amended and Restated Declaration of Trust clarifies that no
shareholders of any series or class shall have a claim on the assets of
another series or class.
b. As a general matter, the Amended and Restated Declaration of Trust
modifies the current Declaration of Trust to incorporate appropriate
references to classes of shares.
c. The Amended and Restated Declaration of Trust modifies the current
Declaration of Trust by changing the par value of the Trust's shares from
no par value to $.001 par value.
d. The Amended and Restated Declaration of Trust modifies the current
Declaration of Trust by giving the Trustees the power to effect a reverse
stock split, and to make distributions in-kind.
e. The Amended and Restated Declaration of Trust modifies the current
Declaration of Trust so that all Shares of all Series vote together on
issues to be voted on unless (i) separate Series or Class voting is
otherwise required by the 1940 Act or the instrument establishing such
Shares, in which case the provisions of the 1940 Act or such instrument, as
applicable, will control, or (ii) unless the issue to be voted on affects
only particular Series or Classes, in which case only Series or Classes so
affected will be entitled to vote.
f. The Amended and Restated Declaration of Trust clarifies that proxies may
be voted pursuant to any computerized, telephonic or mechanical data
gathering device, that Shareholders receive one vote per Share and a
proportional fractional vote for each fractional share, and that, at a
meeting, Shareholders may vote on issues with respect to which a quorum is
present, while adjourning with respect to issues for which a quorum is not
present.
g. The Amended and Restated Declaration of Trust clarifies various existing
trustee powers. For example, the Amended and Restated Declaration of Trust
clarifies that the Trustees may appoint and terminate agents and
consultants and hire and terminate employees; in addition to banks and
trust companies, the Trustees may employ as fund custodian companies that
are members of a national securities exchange or other entities permitted
under the 1940 Act; to retain one or more transfer agents and employ
sub-agents; delegate authority to investment advisers and other agents or
independent contractors; pledge, mortgage or hypothecate the assets of the
Trust; and operate and carry on the business of an investment company. The
Amended and Restated Declaration of Trust clarifies or adds to the list of
trustee powers. For example, the Trustees may sue or be sued in the name of
the Trust; make loans of cash and/or securities; enter into joint ventures,
general or limited partnerships and other combinations or associations;
endorse or guarantee the payment of any notes or other obligations of any
person or make contracts of guarantee or suretyship or otherwise assume
liability for payment; purchase insurance and/or bonding; pay pensions and
adopt retirement, incentive and benefit plans; and adopt 12b-1 plans.
h. The Amended and Restated Declaration of Trust clarifies that the Trust
may redeem shares of a class or series held by a shareholder for any
reason, including but not limited to reimbursing the Trust or the
distributor for the shareholder's failure to make timely and good payment;
failure to supply a tax identification number; and failure to maintain a
minimum account balance as established by the Trustees from time to time.
i. The Amended and Restated Declaration of Trust clarifies that a trust is
created and not a partnership, joint stock association, corporation,
bailment, or any other form of legal relationship, and expressly disclaims
shareholder and trustee liability for the acts and obligations of the
trust.
j. The Amended and Restated Declaration of Trust clarifies that the
Trustees shall not be responsible or liable for any neglect or wrongdoing
of any officer, agent, employee, consultant, adviser, administrator,
distributor or principal underwriter, custodian or transfer agent of the
trust nor shall a trustee be responsible for the act or omission of any
other trustee.
THE BOARD OF TRUSTEES UNANIMOUSLY RECOMMENDS YOU APPROVE THIS PROPOSAL
INFORMATION ABOUT THE FUND
The SEC requires that the following information be provided to the
Fund's shareholders.
Fund Information. As of June 26, 2000, the Fund had 235,556,508.194 shares
outstanding, consisting of 190,818,418.001 Class A, 38,881,577.564 Class B and
5,856,512.629 Class C shares. Each share has voting rights as stated in this
Proxy Statement and is entitled to one vote for each share (and a fractional
vote for a fractional share).
Beneficial Owners. Occasionally, the number of shares of the Fund held in
"street name" accounts of various securities dealers for the benefit of their
clients may exceed 5% of the total shares outstanding. As of June 26, 2000,
there were none.
The Manager, the Distributor and the Transfer Agent. Subject to the authority of
the Board of Trustees, the Manager is responsible for the day-to-day management
of the Fund's business, pursuant to its investment advisory agreement with the
Fund. OppenheimerFunds Distributor, Inc., a wholly-owned subsidiary of the
Manager, is the general distributor (the "Distributor") of the Fund's shares.
OppenheimerFunds Services, a division of the Manager, located at 6803 South
Tucson Way, Englewood, CO 80112, serves as the transfer and shareholder
servicing agent (the "Transfer Agent") for the Funds on an "at cost" basis, for
which it was paid $1,978,856 by the Fund during the fiscal year ended September
30, 1999.
The Manager (including subsidiaries and affiliates) currently manages
investment companies, including other Oppenheimer funds, with assets of more
than $125 billion as of March 31, 2000, and with more than 5 million shareholder
accounts. The Manager is a wholly-owned subsidiary of Oppenheimer Acquisition
Corp. ("OAC"), a holding company controlled by Massachusetts Mutual Life
Insurance Company ("MassMutual"). The Manager, the Distributor and OAC are
located at Two World Trade Center, New York, New York 10048. MassMutual is
located at 1295 State Street, Springfield, Massachusetts 01111. OAC acquired the
Manager on October 22, 1990. As indicated below, the common stock of OAC is
owned by (i) certain officers and/or directors of the Manager, (ii) MassMutual
and (iii) another investor. No institution or person holds 5% or more of OAC's
outstanding common stock except MassMutual. MassMutual has engaged in the life
insurance business since 1851.
The common stock of OAC is divided into three classes. Effective as of
August 1, 1997, OAC declared a ten for one stock split. At December 31, 1999, on
a post-split basis, MassMutual held (i) all of the 21,600,000 shares of Class A
voting stock, (ii) 8,667,670 shares of Class B voting stock, and (iii)
15,022,072 shares of Class C non-voting stock. This collectively represented
89.5% of the outstanding common stock and 85% of the voting power of OAC as of
that date. Certain officers and/or directors of the Manager held (i) 3,660,540
shares of the Class B voting stock, representing 7.2% of the outstanding common
stock and 10.3% of the voting power, and (ii) options acquired without cash
payment which, when they become exercisable, allow the holders to purchase up to
5,170,889 shares of Class C non-voting stock. That group includes persons who
serve as officers of the Fund and Bridget A. Macaskill, who serves as a Trustee
of the Fund.
Holders of OAC Class B and Class C common stock may put (sell) their
shares and vested options to OAC or MassMutual at a formula price (based on
earnings of the Manager). MassMutual may exercise call (purchase) options on all
outstanding shares of both such classes of common stock and vested options at
the same formula price. From the period October 1, 1998 to September 31, 1999,
the only transactions on a post-split basis by persons who serve as Trustees of
the Fund were by Mr. Swain who exercised 80,000 options to Mass Mutual for a
cash payment of $2,621,900, Ms. Macaskill who exercised 434,873 options to Mass
Mutual for a cash payment of $14,770,051 and Mr. Bowen who sold 11,420 shares of
Class B OAC common stock to Mass Mutual and exercised 65,880 options to Mass
Mutual for a cash payment of $2,335,909.
The names and principal occupations of the executive officers and directors
of the Manager are as follows: Bridget A. Macaskill, President, Chief Executive
Officer and a director; James C. Swain, Vice Chairman; Jeremy Griffiths,
Executive Vice President and Chief Financial Officer; O. Leonard Darling,
Executive Vice President and Chief Investment Officer; Andrew J. Donohue,
Executive Vice President, General Counsel and a director; George Batejan,
Executive Vice President and Chief Information Officer; Craig Dinsell, Loretta
McCarthy, James Ruff and Andrew Ruotolo, Executive Vice Presidents; Brian W.
Wixted, Senior Vice President and Treasurer; Charles Albers, Peter M. Antos,
Victor Babin, Bruce Bartlett, Richard Bayha, Robert A. Densen, Ronald H.
Fielding, Robert B. Grill, Robert Guy Thomas W. Keffer, Avram Kornberg, John S.
Kowalik, Andrew J. Mika, David Negri, Robert E. Patterson, Russell Read, Richard
Rubinstein, Christian D. Smith, Arthur Steinmetz, John Stoma, Jerry A. Webman,
William L. Wilby, Donna Winn, Robert G. Zack, and Arthur J. Zimmer, Senior Vice
Presidents; and Barbara Hennigar, Chairman of OppenheimerFunds Services, a
division of the Manager. These officers are located at one of the four offices
of the Manager: Two World Trade Center, New York, NY 10048-0203; 6803 South
Tucson Way, Englewood, CO 80112; 350 Linden Oaks, Rochester, NY 14625-2807 and
One Financial Plaza, 755 Main Street, Hartford, CT 06103.
Custodian. The Bank of New York, Mutual Funds Division, 90 Washington Street,
New York, NY 10286, acts as custodian of the Fund's securities and other assets.
Reports to Shareholders and Financial Statements. The Annual Report to
Shareholders of the Fund for the fiscal year ended August 31, 1999 and
Semi-Annual Report to Shareholders for the period ended February 23, 2000, have
previously been sent to all shareholders. Upon request, shareholders may obtain
without charge a copy of the Annual and Semi-Annual Reports by writing the Fund
at the address above or calling the Fund at 1.800.525.7048.
FURTHER INFORMATION ABOUT VOTING AND THE MEETING
Solicitation of Proxies. The cost of soliciting these proxies will be borne by
the Fund. In addition to solicitations by mail, proxies may be solicited by
officers or employees of the Fund's transfer agent or by officers or employees
of the Fund's investment adviser, personally or by telephone or telegraph;
without extra compensation. Proxies may also be solicited by a proxy
solicitation firm hired at the Fund's expense for such purpose. Brokers, banks
and other fiduciaries may be required to forward soliciting material to their
principals and to obtain authorization for the execution of proxies. It is
anticipated that the cost of engaging a proxy solicitation firm would not exceed
$3,500 plus the additional costs which would be incurred in connection with
contacting those shareholders who have not voted. For those services they will
be reimbursed by the Fund for their out-of-pocket expenses.
Voting By Broker-Dealers. Shares owned of record by broker-dealers for the
benefit of their customers ("street account shares") will be voted by the
broker-dealer based on instructions received from its customers. If no
instructions are received, the broker-dealer may (if permitted by applicable
stock exchange rules) as record holder vote such shares for the election of
Trustees and on the Proposals in the same proportion as that broker-dealer votes
street account shares for which voting instructions were received in time to be
voted. A "broker non-vote" is deemed to exist when a proxy received from a
broker indicates that the broker does not have discretionary authority to vote
the shares on that matter.
Quorum. A majority of the shares outstanding and entitled to vote, present in
person or represented by proxy, constitutes a quorum at the Meeting. Shares over
which broker-dealers have discretionary voting power, shares that represent
broker non-votes and shares whose proxies reflect an abstention on any item are
all counted as shares present and entitled to vote for purposes of determining
whether the required quorum of shares exists.
Required Vote. Approval of Proposals 1 and 2 require a majority vote of the
outstanding shares present at the meeting. Approval of Proposals 3 through 5
requires the affirmative vote of a majority of the outstanding voting securities
of the Fund voting in the aggregate and not by class. As defined in the 1940
Act, the vote of a majority of the outstanding shares means the vote of (1) 67%
or more of the Fund's outstanding shares present at a meeting, if the holders of
more than 50% of the outstanding shares of the Fund are present or represented
by proxy; or (2) more than 50% of the Fund's outstanding shares, whichever is
less.
If a shareholder executes and returns a proxy but fails to indicate how
the votes should be cast, the proxy will be voted in favor of the election of
each of the nominees named in this Proxy Statement for Trustee and in favor of
each Proposal.
You may revoke your previously granted proxy at any time before it is
exercised (1) by delivering a written notice to the Fund expressly revoking your
proxy, (2) by signing and forwarding to the Fund a later-dated proxy, or (3) by
attending the Meeting and casting your votes in person.
Shareholder Proposals. The Fund is not required to hold shareholder meetings on
a regular basis. Special meetings of shareholders may be called from time to
time by either the Fund or the shareholders (under special conditions described
in the Statement of Additional Information). Under the proxy rules of the
Securities and Exchange Commission, shareholder proposals which meet certain
conditions may be included in a Fund's proxy statement for a particular meeting.
Those rules require that for future meetings, the shareholder must be a record
or beneficial owner of Fund shares either (i) with a value of at least $2,000 or
(ii) in an amount representing at least 1% of the Fund's securities to be voted,
at the time the proposal is submitted and for one year prior thereto, and must
continue to own such shares through the date on which the meeting is held.
Another requirement relates to the timely receipt by the Fund of any such
proposal. Under those rules, a proposal submitted for inclusion in the Fund's
proxy material for the next meeting after the meeting to which this proxy
statement relates must be received by the Fund a reasonable time before the
solicitation is made. The fact that the Fund receives a proposal from a
qualified shareholder in a timely manner does not ensure its inclusion in the
proxy material, since there are other requirements under the proxy rules for
such inclusion.
<PAGE>
OTHER MATTERS
Management of the Fund knows of no business other than the Proposals
specified above that will be presented at the Meeting. Since matters not known
at the time of the solicitation may come before the Meeting, the proxy as
solicited confers discretionary authority with respect to such matters as
properly come before the Meeting, including any adjournment or adjournments
thereof, and it is the intention of the persons named as attorneys-in-fact in
the proxy to vote the proxy in accordance with their judgment on such matters.
The Board does not intend to bring any matters before the Meeting other
than Proposals 1 through 5 and is not aware of any other matters to be brought
before the Meeting by others. If any other matters do properly come before the
Meeting, the persons named in the enclosed proxy will use their best judgment in
voting on such matters.
In the event sufficient votes in favor of one or more Proposals set
forth in the Notice of Meeting of Shareholders are not received by the date of
the Meeting, the persons named in the enclosed proxy may propose one or more
adjournments of the Meeting. If a quorum is present but sufficient votes in
favor of one or more of the Proposals have not been received, the persons named
as proxies may propose one or more adjournments of the Meeting to permit further
solicitation of proxies with respect to any such proposal. All such adjournments
will require the affirmative vote of a majority of the shares present in person
or by proxy at the session of the Meeting to be adjourned. A vote may be taken
on one or more of the proposals in this proxy statement prior to any such
adjournment if sufficient votes for its approval have been received and it is
otherwise appropriate.
By Order of the Board of Trustees,
Andrew J. Donohue, Secretary
July __, 2000
burns\proxies\CapitalIncome_2000
<PAGE>
EXHIBIT A
AMENDED AND RESTATED DECLARATION OF TRUST
OF
OPPENHEIMER CAPITAL INCOME FUND
This DECLARATION OF TRUST, made as of the 4TH day of August, 1995, by
and among the individuals executing this Declaration of Trust as the Trustees,
and amended and restated this ___ day of ___________, 2000.
WHEREAS, the Trustees wish to establish a trust fund under the laws of
the Commonwealth of Massachusetts, for the investment and reinvestment of funds
contributed thereto;
NOW, THEREFORE, the Trustees declare that all money and property
contributed to the trust fund hereunder shall be held and managed under this
Declaration of Trust in trust as herein set forth below.
ARTICLE FIRST - NAME
------------- ----
This Trust shall be known as OPPENHEIMER CAPITAL INCOME FUND. The
address of Oppenheimer Capital Income Fund is Two World Trade Center, New York,
NY 10048. The Registered Agent for Service is Massachusetts Mutual Life
Insurance Company, 1295 State Street, Springfield, Massachusetts 01111,
Attention: Stephen Kuhn, Esq.
ARTICLE SECOND - DEFINITIONS
-------------- -----------
Whenever used herein, unless otherwise required by the context or
specifically provided:
1. All terms used in this Declaration of Trust that are defined in the 1940
Act (defined below) shall have the meanings given to them in the 1940 Act.
2. "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.
3. "Board" or "Board of Trustees" or the "Trustees" means the Board of
Trustees of the Trust.
4. "By-Laws" means the By-Laws of the Trust as amended from time to time.
5. "Class" means a class of a series of shares of the Trust established and
designated under or in accordance with the provisions of Article FOURTH.
6. "Commission" means the Securities and Exchange Commission.
7. "Declaration of Trust" shall mean this Amended and Restated Declaration
of Trust as it may be amended or restated from time to time.
8. "Majority Vote of Shareholders" shall mean, with respect to any matter
on which the Shares of the Trust or of a Series or Class thereof, as the
case may be, may be voted, the "vote of a majority of the outstanding
voting securities" (as defined in the 1940 Act or the rules and regulations
of the Commission thereunder) of the Trust or such Series or Class, as the
case may be.
9. "Net asset value" means, with respect to any Share of any Series, (i) in
the case of a Share of a Series whose Shares are not divided into Classes,
the quotient obtained by dividing the value of the net assets of that
Series (being the value of the assets belonging to that Series less the
liabilities belonging to that Series) by the total number of Shares of that
Series outstanding, and (ii) in the case of a Share of a Class of Shares of
a Series whose Shares are divided into Classes, the quotient obtained by
dividing the value of the net assets of that Series allocable to such Class
(being the value of the assets belonging to that Series allocable to such
Class less the liabilities belonging to such Class) by the total number of
Shares of such Class outstanding; all determined in accordance with the
methods and procedures, including without limitation those with respect to
rounding, established by the Trustees from time to time.
10. "Series" refers to series of shares of the Trust established and
designated under or in accordance with the provisions of Article FOURTH.
11. "Shareholder" means a record owner of Shares of the Trust.
12. "Shares" refers to the transferable units of interest into which the
beneficial interest in the Trust or any Series or Class 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.
13. "Trust" refers to the Massachusetts business trust created by this
Declaration of Trust, as amended or restated from time to time.
14. "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.
ARTICLE THIRD - PURPOSE OF TRUST
------------- ----------------
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, lend, pledge, mortgage, write options
on, lease, 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, business trusts, partnerships, investment companies,
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 Classes 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, redeem or cancel its Shares, or to classify or reclassify any
unissued Shares or any Shares previously issued and reacquired of any Series or
Class into one or more Series or Classes 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 New York, 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 securities or other instruments 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.
ARTICLE FOURTH - SHARES
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1. The beneficial interest in the Trust shall be divided into Shares,
all with $.001 par value per share, but the Trustees shall have the authority
from time to time, without obtaining shareholder approval, to create one or more
Series of Shares in addition to the Series specifically established and
designated in part 3 of this Article FOURTH, and to divide the shares of any
Series into two or more Classes pursuant to part 2 of this Article FOURTH, all
as they deem necessary or desirable, to establish and designate such Series and
Classes, and to fix and determine the relative rights and preferences as between
the different Series of Shares or Classes as to right of redemption and the
price, terms and manner of redemption, liabilities and expenses to be borne by
any Series or Class, special and relative rights as to dividends and other
distributions and on liquidation, sinking or purchase fund provisions,
conversion on liquidation, conversion rights, and conditions under which the
several Series or Classes shall have individual voting rights or no voting
rights. Except as established by the Trustees with respect to such Series or
Classes, pursuant to the provisions of this Article FOURTH, and except as
otherwise provided herein, all Shares of the different Series and Classes of a
Series, if any, shall be identical.
(a) The number of authorized Shares and the number of Shares
of each Series and each Class of a Series that may be issued is unlimited, and
the Trustees may issue Shares of any Series or Class 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), or may reduce the number of issued
Shares of a Series or Class in proportion to the relative net asset value of the
Shares of such Series or Class, 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 or Classes of 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
reacquired by the Trust.
(b) The establishment and designation of any Series or any
Class of any Series in addition to that established and designated in part 3 of
this Article FOURTH shall be effective upon either (i) 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 such Class
of such Series, whether directly in such instrument or by reference to, or
approval of, another document that sets forth such relative rights and
preferences of the Series or any Class of any Series including, without
limitation, any registration statement of the Trust, (ii) upon the execution of
an instrument in writing by an officer of the Trust pursuant to the vote of a
majority of the Trustees, or (iii) as otherwise provided in either such
instrument. At any time that there are no Shares outstanding of any particular
Series or Class previously established and designated, the Trustees may by an
instrument executed by a majority of their number or by an officer of the Trust
pursuant to a vote of a majority of the Trustees abolish that Series or Class
and the establishment and designation thereof. Each instrument referred to in
this paragraph shall be an amendment to this Declaration of Trust, and the
Trustees may make any such amendment without shareholder approval.
(c) 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 or Class 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 or Class 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 or Class
generally.
2. (a) Classes. The Trustees shall have the exclusive authority from time to
time, without obtaining shareholder approval, to divide the Shares of any Series
into two or more Classes as they deem necessary or desirable, and to establish
and designate such Classes. In such event, each Class of a Series shall
represent interests in the designated Series of the Trust and have such voting,
dividend, liquidation and other rights as may be established and designated by
the Trustees. Expenses and liabilities related directly or indirectly to the
Shares of a Class of a Series may be borne solely by such Class (as shall be
determined by the Trustees) and, as provided in this Article FOURTH. The bearing
of expenses and liabilities solely by a Class of Shares of a Series shall be
appropriately reflected (in the manner determined by the Trustees) in the net
asset value, dividend and liquidation rights of the Shares of such Class of a
Series. The division of the Shares of a Series into Classes and the terms and
conditions pursuant to which the Shares of the Classes of a Series will be
issued must be made in compliance with the 1940 Act. No division of Shares of a
Series into Classes shall result in the creation of a Class of Shares having a
preference as to dividends or distributions or a preference in the event of any
liquidation, termination or winding up of the Trust, to the extent such a
preference is prohibited by Section 18 of the 1940 Act as to the Trust. The fact
that a Series shall have initially been established and designated without any
specific establishment or designation of Classes (i.e., that all Shares of such
Series are initially of a single Class), or that a Series shall have more than
one established and designated Class, shall not limit the authority of the
Trustees to establish and designate separate Classes, or one or more additional
Classes, of said Series without approval of the holders of the initial Class
thereof, or previously established and designated Class or Classes thereof.
(b) Class Differences. The relative rights and preferences of
the Classes of any Series may differ in such other respects as the Trustees may
determine to be appropriate in their sole discretion, provided that such
differences are set forth in the instrument establishing and designating such
Classes and executed by a majority of the Trustees (or by an instrument executed
by an officer of the Trust pursuant to a vote of a majority of the Trustees).
The relative rights and preferences of each Class of Shares shall be
the same in all respects except that, and unless and until the Board of Trustees
shall determine otherwise: (i) when a vote of Shareholders is required under
this Declaration of Trust or when a meeting of Shareholders is called by the
Board of Trustees, the Shares of a Class shall vote exclusively on matters that
affect that Class only; (ii) the expenses and liabilities related to a Class
shall be borne solely by such Class (as determined and allocated to such Class
by the Trustees from time to time in a manner consistent with parts 2 and 3 of
this Article FOURTH); and (iii) pursuant to part 10 of Article NINTH, the Shares
of each Class shall have such other rights and preferences as are set forth from
time to time in the then effective prospectus and/or statement of additional
information relating to the Shares. Dividends and distributions on each Class of
Shares may differ from the dividends and distributions on any other such Class,
and the net asset value of each Class of Shares may differ from the net asset
value of any other such Class.
3. Without limiting the authority of the Trustees set forth in parts 1
and 2 of this Article FOURTH to establish and designate any further Series or
Classes of Series, the Trustees hereby establish one Series of Shares having the
same name as the Trust, and said Shares shall be divided into four Classes,
which shall be designated Class A, Class B, Class C and Class Y. In addition to
the rights and preferences described in parts 1 and 2 of this Article FOURTH
with respect to Series and Classes, the Series and Classes established hereby
shall have the relative rights and preferences described in this part 3 of this
Article FOURTH. The Shares of any Series or Class that may from time to time be
established and designated by the Trustees shall (unless the Trustees otherwise
determine with respect to some Series or Classes at the time of establishing and
designating the same) have the following relative rights and preferences:
(a) Assets Belonging to Series or Class. All consideration
received by the Trust for the issue or sale of Shares of a particular Series or
any Class thereof, 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 (and
may be allocated to any Classes thereof) 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 (and be allocable to any Classes thereof). Each such
allocation by the Trustees shall be conclusive and binding upon the Shareholders
of all Series (and any Classes thereof) for all purposes. No Shareholder or
former Shareholder of any Series or Class shall have a claim on or any right to
any assets allocated or belonging to any other Series or Class.
(b) (1) Liabilities Belonging to Series. The liabilities,
expenses, costs, charges and reserves attributable to each Series shall be
charged and allocated to the assets belonging to each particular Series. Any
general liabilities, expenses, costs, charges and reserves of the Trust which
are not 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 each 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 shareholders of all Series for all
purposes.
(2) Liabilities Belonging to a Class. If a Series is divided into more than one
Class, the -----------------------------------
liabilities, expenses, costs, charges and reserves attributable to a Class shall
be charged and allocated to the Class to which such liabilities, expenses,
costs, charges or reserves are attributable. Any general liabilities, expenses,
costs, charges or reserves belonging to the Series which are not identifiable as
belonging to any particular Class shall be allocated and charged by the Trustees
to and among any one or more of the Classes 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 each Class are herein referred to as
"liabilities belonging to" that Class. Each allocation of liabilities, expenses,
costs, charges and reserves by the Trustees shall be conclusive and binding upon
the holders of all Classes for all purposes.
(c) Dividends. Dividends and distributions on Shares of a
particular Series or Class may be paid to the holders of Shares of that Series
or Class, 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,
capital gains accrued or realized, and capital and surplus, from the assets
belonging to that Series, or in the case of a Class, belonging to such Series
and being allocable to such Class, as the Trustees may determine, after
providing for actual and accrued liabilities belonging to such Series or Class.
All dividends and distributions on Shares of a particular Series or Class shall
be distributed pro rata to the Shareholders of such Series or Class in
proportion to the number of Shares of such Series or Class held by such
Shareholders 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 of that Series or Class 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 part 13 of Article SEVENTH.
Notwithstanding anything in this Declaration of Trust to the contrary, the
Trustees may at any time declare and distribute a dividend of stock or other
property pro rata among the Shareholders of a particular Series or Class at the
date and time of record established for the payment of such dividends or
distributions.
(d) Liquidation. In the event of the liquidation or
dissolution of the Trust or any Series or Class thereof, the Shareholders of
each Series and all Classes of each Series that have been established and
designated and are being liquidated and dissolved shall be entitled to receive,
as a Series or Class, when and as declared by the Trustees, the excess of the
assets belonging to that Series or, in the case of a Class, belonging to that
Series and allocable to that Class, over the liabilities belonging to that
Series or Class. Upon the liquidation or dissolution of the Trust or any Series
or Class pursuant to this part 3(d) of this Article FOURTH the Trustees shall
make provisions for the payment of all outstanding obligations, taxes and other
liabilities, accrued or contingent, of the Trust or that Series or Class. The
assets so distributable to the Shareholders of any particular Class and Series
shall be distributed among such Shareholders in proportion to the relative net
asset value of such Shares. The liquidation of the Trust or any particular
Series or Class thereof may be authorized at any time by vote of a majority of
the Trustees or instrument executed by a majority of their number then in
office, provided the Trustees find that it is in the best interest of the
Shareholders of such Series or Class or as otherwise provided in this
Declaration of Trust or the instrument establishing such Series or Class. The
Trustees shall provide written notice to affected shareholders of a termination
effected under this part 3(d) of this Article FOURTH.
(e) Transfer. All Shares of each particular Series or Class
shall be transferable, but transfers of Shares of a particular Class and Series
will be recorded on the Share transfer records of the Trust applicable to such
Series or Class of that Series, as kept by the Trust or by any transfer or
similar agent, as the case may be, only at such times as Shareholders shall have
the right to require the Trust to redeem Shares of such Series or Class of that
Series and at such other times as may be permitted by the Trustees.
(f) Equality. Except as provided herein or in the instrument
designating and establishing any Series or Class, all Shares of a particular
Series or Class shall represent an equal proportionate interest in the assets
belonging to that Series, or in the case of a Class, belonging to that Series
and allocable to that Class, (subject to the liabilities belonging to that
Series or that Class), and each Share of any particular Series or Class shall be
equal to each other Share of that Series or Class; but the provisions of this
sentence shall not restrict any distinctions permissible under this Article
FOURTH that may exist with respect to Shares of the different Classes of a
Series. The Trustees may from time to time divide or combine the Shares of any
particular Class or Series into a greater or lesser number of Shares of that
Class or Series provided that such division or combination does not change the
proportionate beneficial interest in the assets belonging to that Series or
allocable to that Class or in any way affect the rights of Shares of any other
Class or Series.
(g) Fractions. Any fractional Share of any Class or Series, if
any such fractional Share is outstanding, shall carry proportionately all the
rights and obligations of a whole Share of that Class and Series, including
those rights and obligations with respect to voting, receipt of dividends and
distributions, redemption of Shares, and liquidation of the Trust.
(h) Conversion Rights. Subject to compliance with the
requirements of the 1940 Act, the Trustees shall have the authority to provide
that (i) holders of Shares of any Series shall have the right to exchange said
Shares into Shares of one or more other Series of Shares, (ii) holders of shares
of any Class shall have the right to exchange said Shares into Shares of one or
more other Classes of the same or a different Series, and/or (iii) the Trust
shall have the right to carry out exchanges of the aforesaid kind, in each case
in accordance with such requirements and procedures as may be established by the
Trustees.
(i) 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 Class
and 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 Class and Series held from time to time by each such Shareholder.
(j) 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 or determine. Such investments may be in the form of
cash, securities or other property in which the appropriate Series is authorized
to invest, hold or own, valued as provided in part 13, Article SEVENTH. The
Trustees may authorize any distributor, principal underwriter, custodian,
transfer agent or other person to accept orders for the purchase or sale of
Shares that conform to such authorized terms and to reject any purchase or sale
orders for Shares whether or not conforming to such authorized terms.
ARTICLE FIFTH - SHAREHOLDERS' VOTING POWERS AND MEETINGS
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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 only (a) for the election of
Trustees when that issue is submitted to Shareholders, or removal of Trustees to
the extent and as provided in Article SIXTH, (b) with respect to the amendment
of this Declaration of Trust to the extent and as provided in part 12, Article
NINTH, (c) with respect to transactions with respect to the Trust, a Series or
Class as provided in part 4(a), Article NINTH, (d) 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 any Series, Class or the
Shareholders, (e) with respect to those 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 filed with
the Commission or any State, or as the Trustees may consider desirable, and (f)
with respect to any other matter as to which the Trustees, in their sole
discretion, shall submit to the Shareholders.
2. The Trust will not hold shareholder meetings unless required by the
1940 Act, the provisions of this Declaration of Trust, or any other applicable
law. The Trustees may call a meeting of shareholders from time to time.
3. As to each matter submitted to a vote of Shareholders, each
Shareholder shall be entitled to one vote for each whole Share and to a
proportionate fractional vote for each fractional Share standing in such
Shareholder's name on the books of the Trust irrespective of the Series thereof
or the Class thereof and all Shares of all Series and Classes shall vote
together as a single Class; provided, however, that (i) as to any matter with
respect to which a separate vote of one or more Series or Classes thereof is
required by the 1940 Act or the provisions of the writing establishing and
designating the Series or Class, such requirements as to a separate vote by such
Series or Class thereof shall apply in lieu of all Shares of all Series and
Classes thereof voting together as a single Class; and (ii) as to any matter
which affects only the interests of one or more particular Series or Classes
thereof, only the holders of Shares of the one or more affected Series or
Classes thereof shall be entitled to vote, and each such Series or Class shall
vote as a separate Class. All Shares of a Series shall have identical voting
rights, and all Shares of a Class of a Series shall have identical voting
rights. Shares may be voted in person or by proxy. Proxies may be given by or on
behalf of a Shareholder orally or in writing or pursuant to any computerized,
telephonic, or mechanical data gathering process.
4. Except as required by the 1940 Act or other applicable law, the
presence in person or by proxy of one-third of the Shares entitled to vote shall
be a quorum for the transaction of business at a Shareholders' meeting,
provided, however, that if any action to be taken by the Shareholders of a
Series or Class requires an affirmative vote of a majority, or more than a
majority, of the Shares outstanding and entitled to vote, then with respect to
voting on that particular issue the presence in person or by proxy of the
holders of a majority of the Shares outstanding and entitled to vote at such a
meeting shall constitute a quorum for the transaction of business with respect
to such issue. Any number less than a quorum shall be sufficient for
adjournments. If at any meeting of the Shareholders there shall be less than a
quorum present with respect to a particular issue to be voted on, such meeting
may be adjourned, without further notice, with respect to such issue from time
to time until a quorum shall be present with respect to such issue, but voting
may take place with respect to issues for which a quorum is present. Any meeting
of Shareholders, whether or not a quorum is present, may be adjourned with
respect to any one or more items of business for any lawful purpose, provided
that no meeting shall be adjourned for more than six months beyond the
originally scheduled date. Any adjourned session or sessions may be held, within
a reasonable time after the date for the original meeting without the necessity
of further notice. A majority of the Shares voted at a meeting at which a quorum
is present shall decide any questions and a plurality shall elect a Trustee,
except when a different vote is required by any provision of the 1940 Act or
other applicable law or by this Declaration of Trust or By-Laws.
5. 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 and Class
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.
6. No Shareholder shall, as such holder, have any right to purchase or subscribe
for any Shares of the Trust which it may issue or sell, other than such right,
if any, as the Trustees, in their discretion, may determine.
7. All persons who shall acquire Shares shall acquire the same subject to the
provisions of the Declaration of Trust.
8. Cumulative voting for the election of Trustees shall not be allowed.
ARTICLE SIXTH - THE TRUSTEES
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1. The persons who shall act as Trustees until their successors are
duly chosen and qualify are the trustees executing this Declaration of Trust or
any counterpart thereof. However, the By-Laws of the Trust may fix the number of
Trustees at a number greater or lesser than the number of initial Trustees and
may authorize the Trustees to increase or decrease the number of Trustees, to
fill any 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, as amended from time to time, and to this Article
SIXTH. Unless otherwise provided by the By-Laws of the Trust, the Trustees need
not be Shareholders.
2. 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 centum of the outstanding Shares. A Trustee may also be removed by
the Board of Trustees, as provided in the By-Laws of the Trust.
3. 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
shareholders 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 then effective Prospectus and/or Statement of Additional Information
relating to the Shares under the Securities Act of 1933, as amended from time to
time) 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 2 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 3 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 other action as may be
permitted under Section 16(c) of the 1940 Act.
ARTICLE SEVENTH - POWERS OF TRUSTEES
--------------- ------------------
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 or she 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 or any Series but 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
a 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.
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 and agents 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. Except as otherwise provided herein or in the
1940 Act, 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 and to the same extent as if the Trustees were the sole
owners of the assets of the Trust and the business in their own right, 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, and in
addition to the powers otherwise granted herein, 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, including meetings
of the Shareholders and Trustees, and other related matters, 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
to appoint and terminate agents and consultants and hire and terminate
employees, any one or more of the foregoing of whom may be a Trustee, and may
provide for the compensation of all of the foregoing; to appoint and designate
from among the Trustees or other qualified persons such committees as the
Trustees may determine and to terminate any such committee and remove any member
of such committee;
(c) to employ as custodian of any assets of the Trust one or
more banks, trust companies, companies that are members of a national securities
exchange, or any other entity qualified and eligible to act as a custodian under
the 1940 Act, as modified by or interepreted by any applicable order or orders
of the Commission or any rules or regulations adopted or intrepretive releases
of the Commission thereunder, subject to any conditions set forth in this
Declaration of Trust or in the By-Laws, and may authorize such depository or
custodian to employ subcustodians or agents;
(d) to retain one or more transfer agents and shareholder servicing agents, or
both, and may authorize such transfer agents or servicing agents to employ
sub-agents;
(e) to provide for the distribution of Shares either through a principal
underwriter or the Trust itself or both or otherwise;
(f) to set record dates by resolution of the Trustees or in the manner provided
for in the By-Laws of the Trust;
(g) to delegate such authority as they consider desirable to
any officers of the Trust and to any investment adviser, manager, custodian or
underwriter, or other agent or independent contractor;
(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 or otherwise
authorize by standing policies adopted by the Trustees, 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, either in
its own name or in the name of a custodian, subcustodian or a nominee or
nominees or otherwise;
(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 or instrument held in
the Trust;
(l) to join with other holders of any security or instrument
in acting through a committee, depositary, voting trustee or otherwise, and in
that connection to deposit any security or instrument with, or transfer any
security to, any such committee, depositary or trustee, and to delegate to them
such power and authority with relation to any security (whether or not so
deposited or transferred) as the Trustees shall deem proper, and to agree to
pay, and to pay, such portion of the expenses and compensation of such
committee, depositary or trustee as the Trustees shall deem proper;
(m) to sue or be sued in the name of the Trust;
(n) 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;
(o) to make, by resolutions adopted by the Trustees or in the manner provided in
the By-Laws, distributions of income and of capital gains to Shareholders;
(p) to borrow money and to pledge, mortgage or hypothecate the assets of the
Trust or any part thereof, to the extent and in the manner permitted by the 1940
Act;
(q) 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;
(r) to make loans of cash and/or securities or other assets of the Trust;
(s) to change the name of the Trust or any Class or Series of the Trust as they
consider appropriate without prior shareholder approval;
(t) to establish officers' and Trustees' fees or compensation and fees or
compensation for committees of the Trustees to be paid by the Trust or each
Series thereof in such manner and amount as the Trustees may determine;
(u) to invest all or any portion of the Trust's assets in any one or more
registered investment companies, including investment by means of transfer of
such assets in exchange for an interest or interests in such investment company
or investment companies or by any other means approved by the Trustees;
(v) to determine whether a minimum and/or maximum value should
apply to accounts holding shares, to fix such values and establish the
procedures to cause the involuntary redemption of accounts that do not satisfy
such criteria; and
(w) to enter into joint ventures, general or limited partnerships and any other
combinations or associations;
(x) to endorse or guarantee the payment of any notes or other obligations of any
person; to make contracts of
guaranty or suretyship, or otherwise assume liability for payment thereof;
(y) to purchase and pay for entirely out of Trust property
such insurance and/or bonding as they may deem necessary or appropriate for the
conduct of the business, including, without limitation, insurance policies
insuring the assets of the Trust and payment of distributions and principal on
its portfolio investments, and insurance policies insuring the Shareholders,
Trustees, officers, employees, agents, consultants, investment advisers,
managers, administrators, distributors, principal underwriters, or independent
contractors, or any thereof (or any person connected therewith), of the Trust
individually against all claims and liabilities of every nature arising by
reason of holding, being or having held any such office or position, or by
reason of any action alleged to have been taken or omitted by any such person in
any such capacity, including any action taken or omitted that may be determined
to constitute negligence, whether or not the Trust would have the power to
indemnify such person against such liability;
(z) to pay pensions for faithful service, as deemed
appropriate by the Trustees, and to adopt, establish and carry out pension,
profit-sharing, share bonus, share purchase, savings, thrift and other
retirement, incentive and benefit plans, trusts and provisions, including the
purchasing of life insurance and annuity contracts as a means of providing such
retirement and other benefits, for any or all of the Trustees, officers,
employees and agents of the Trust;
(aa) to adopt on behalf of the Trust or any Series with respect to any Class
thereof a plan of distribution and related agreements thereto pursuant to the
terms of Rule 12b-1 of the 1940 Act and to make payments from the assets of the
Trust or the relevant Series pursuant to said Rule 12b-1 Plan;
(bb) to operate as and carry on the business of an investment company and to
exercise all the powers necessary
and appropriate to the conduct of such operations;
(cc) to issue, sell, repurchase, redeem, retire, cancel,
acquire, hold, resell, reissue, dispose of, and otherwise deal in Shares and,
subject to the provisions set forth in Article FOURTH and part 4, Article FIFTH,
to apply to any such repurchase, redemption, retirement, cancellation or
acquisition of Shares any funds or property of the Trust, or the particular
Series of the Trust, with respect to which such Shares are issued;
(dd) in general to carry on any other business in connection with or incidental
to any of the foregoing powers, to do everything necessary, suitable or proper
for the accomplishment of any purpose or the attainment of any object or the
furtherance of any power hereinbefore set forth, either alone or in association
with others, and to do every other act or thing incidental or appurtenant to or
growing out of or connected with the aforesaid business or purposes, objects or
powers.
The foregoing clauses shall be construed both as objectives and powers,
and the foregoing enumeration of specific powers shall not be held to limit or
restrict in any manner the general powers of the Trustees. Any action by one or
more of the Trustees in their capacity as such hereunder shall be deemed an
action on behalf of the Trust or the applicable Series and not an action in an
individual capacity.
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 other than such as the Shareholder may at any time
personally agree to pay by way of subscription to any Shares or otherwise. This
paragraph shall not limit the right of the Trustees to assert claims against any
shareholder based upon the acts or omissions of such shareholder or for any
other reason.
(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.
Without limiting the generality of the foregoing, except as otherwise provided
herein or in the 1940 Act, 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 that they, in
their discretion, shall deem proper to accomplish the purpose of this Trust.
(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 of Trustee
shall be elected for a period shorter than that from the time of the election
following the division into classes until the next meeting of Trustees and
thereafter for a period shorter than the interval between meetings of Trustees
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, for any lawful purpose, 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 or by the Shareholders
or otherwise, may be removed at any time,
with or without cause.
10. The Trustees 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. Action may be taken by the Trustees 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
or such other agent of the Trust as the Trustees shall designate or otherwise
authorize by standing policies adopted by the Trustees for the purpose, or by a
proxy or proxies thereunto duly authorized by the Trustees.
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, partner, director, trustee,
employee or stockholder, or otherwise may have an interest, 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
thereby affected or invalidated; provided that in such case a Trustee, officer
or employee or a partnership, corporation or association of which a Trustee,
officer or employee 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 not so interested and 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, partner, trustee, employee or stockholder of
such other corporation or a member of such partnership or association 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 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 Trustees 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) 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, partner, Director or officer of another trust,
partnership, corporation or association 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, 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 orreckless 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 anyindemnitee, 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, such
indemnification by the Trust to be to the fullest extent now or hereafter
permitted by any applicable law unless the By-laws limit or restrict the
indemnification to which any indemnitee may be entitled. The Board of Trustees
may adopt by-law provisions to implement subparagraphs (c), (d) and (e) hereof.
(f) 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 indemnities
to the extent permitted by applicable law or to affect any other indemnification
rights to which any indemnitee may be entitled to the extent permitted by
applicable law. Such rights to indemnification shall not, except as otherwise
provided by law, be deemed exclusive of any other rights to which such
indemnitee may be entitled under any statute, By-Law, contract or otherwise.
13. The Trustees are empowered, in their absolute discretion, to
establish the bases or times, or both, for determining the net asset value per
Share of any Class and Series in accordance with the 1940 Act and to authorize
the voluntary purchase by any Class and Series, either directly or through an
agent, of Shares of any Class and 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 Class and Series
properly surrendered to it for redemption shall be made by the Trust within
seven days, or as specified in any applicable law or regulation, after tender of
such stock or request for redemption to the Trust for such purpose together with
any additional documentation that may be reasonably required by the Trust or its
transfer agent to evidence the authority of the tenderor to make such request,
plus any period of time during which the right of the holders of the shares of
such Class of that Series to require the Trust to redeem such shares has been
suspended. Any such payment may be made in portfolio securities of such Class 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 Shares redeemed in kind. 15. The Trust shall have the right, at any time,
without prior notice to the Shareholder to redeem Shares of the Class and Series
held by a Shareholder held in any account registered in the name of such
Shareholder for its current net asset value, for any reason, including, but not
limited to, (i) the determination that such redemption is necessary to reimburse
either that Series or Class 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, (ii) the failure
of a Shareholder to supply a tax identification number if required to do so,
(iii) the failure of a Shareholder to pay when due for the purchase of Shares
issued to him and subject to and upon such terms and conditions as the Trustees
may from time to time prescribe, (iv) pursuant to authorization by a Shareholder
to pay fees or make other payments to one or more third parties, including,
without limitation, any affiliate of the investment adviser of the Trust or any
Series thereof, or (v) if the aggregate net asset value of all Shares of such
Shareholder (taken at cost or value, as determined by the Board) has been
reduced below an amount established by the Board of Trustees from time to time
as the minimum amount required to be maintained by Shareholders.
ARTICLE EIGHTH - LICENSE
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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
OppenheimerFunds, Inc. ("OFI"), incidental to and as part of any one or more
advisory, management or supervisory contracts which may be entered into by the
Trust with OFI. Such license shall allow OFI to inspect and subject to the
control of the Board of Trustees to control the nature and quality of services
offered by the Trust under such name. The license may be terminated by OFI upon
termination of such advisory, management or supervisory contracts or without
cause upon 60 days' written notice, in which case neither the Trust nor any
Series or Class 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
and the names of any Series or Classes accordingly.
ARTICLE NINTH - MISCELLANEOUS:
------------- -------------
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 the Shareholders' 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 is created hereby and not a
partnership, joint stock association, corporation, bailment, or any other form
of a legal relationship other than a trust, as contemplated in Massachusetts
General Laws Chapter 182. No individual Trustee hereunder shall have any power
to bind the Trust unless so authorized by the Trustees, or to personally bind
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 appropriate Series
for payment under any 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 and agreement thereto shall be given in each agreement, obligation or
instrument entered into or executed by Trust or the Trustees. There is hereby
expressly disclaimed Shareholder and Trustee liability for the acts and
obligations of the Trust. Nothing in this Declaration of Trust shall protect a
Trustee or officer against any liability to which such Trustee or officer 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 or of such officer 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 part 2 of this Article NINTH, the Trustees shall not be liable for errors of
judgment or mistakes of fact or law. Subject to the foregoing, (a) Trustees
shall not be responsible or liable in any event for any neglect or wrongdoing of
any officer, agent, employee, consultant, adviser, administrator, distributor or
principal underwriter, custodian or transfer, dividend disbursing, Shareholder
servicing or accounting agent of the Trust, nor shall any Trustee be responsible
for the act or omission of any other Trustee; (b) 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 other business the Trust may enter into, and subject to the provisions of
part 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;
and (c) in discharging their duties, the Trustees, when acting in good faith,
shall be entitled to rely upon the books of account of the Trust and upon
written reports made to the Trustees by any officer appointed by them, any
independent public accountant, and (with respect to the subject matter of the
contract involved) any officer, partner or responsible employee of a party who
has been appointed by the Trustees or with whom the Trust has entered into a
contract pursuant to Article SEVENTH. 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) and (b) of this part 4.
(a) Subject to applicable Federal and State law, and except as otherwise
provided in part 5 of this Article NINTH, the Trustees, with the Majority Vote
of Shareholders of an affected Series or Class, may sell and convey all or
substantially all the assets of that Series or Class (which sale may be subject
to the retention of assets for the payment of liabilities and expenses and may
be in the form of a statutory merger to the extent permitted by applicable law)
to another issuer or to another Series or Class of the Trust for a consideration
which may be or include securities of such issuer or may merge or consolidate
with any other corporation, association, trust, or other organization or may
sell, lease, or exchange all or a portion of the Trust property or Trust
property allocated or belonging to such Series or Class, upon such terms and
conditions and for such consideration when and as authorized by such vote. Such
transactions may be effected through share-for-share exchanges, transfers or
sale of assets, shareholder in-kind redemptions and purchases, exchange offers,
or any other method approved by the Trustees. Upon making provision for the
payment of liabilities, by assumption by such issuer or otherwise, the Trustees
shall distribute the remaining proceeds among the holders of the outstanding
Shares of the Series or Class, the assets of which have been so transferred, in
proportion to the relative net asset value of such Shares.
(b) Upon completion of the distribution of the remaining
proceeds or the remaining assets as provided in sub-section (a) hereof or
pursuant to part 3(d) of Article FOURTH, as 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 canceled and discharged.
5. Subject to applicable Federal and state law, the Trustees may
without the vote or consent of Shareholders cause to be organized or assist in
organizing one or more corporations, trusts, partnerships, limited liability
companies, associations, or other organization, under the laws of any
jurisdiction, to take over all or a portion of the Trust property or all or a
portion of the Trust property allocated or belonging to such Series or Class or
to carry on any business in which the Trust shall directly or indirectly have
any interest, and to sell, convey and transfer the Trust property or the Trust
property allocated or belonging to such Series or Class to any such corporation,
trust, limited liability company, partnership, association, or organization in
exchange for the shares or securities thereof or otherwise, and to lend money
to, subscribe for the shares or securities of, and enter into any contracts with
any such corporation, trust, partnership, limited liability company,
association, or organization or any corporation, partnership, limited liability
company, trust, association, or organization in which the Trust or such Series
or Class holds or is about to acquire shares or any other interest. Subject to
applicable Federal and state law, the Trustees may also cause a merger or
consolidation between the Trust or any successor thereto or any Series or Class
thereof and any such corporation, trust, partnership, limited liability company,
association, or other organization. Nothing contained herein shall be construed
as requiring approval of shareholders for the Trustees to organize or assist in
organizing one or more corporations, trusts, partnerships, limited liability
companies, associations, or other organizations and selling, conveying, or
transferring the Trust property or a portion of the Trust property to such
organization or entities; provided, however, that the Trustees shall provide
written notice to the affected Shareholders of any transaction whereby, pursuant
to this part 5, Article NINTH, the Trust or any Series or Class thereof sells,
conveys, or transfers all or a substantial portion of its assets to another
entity or merges or consolidates with another entity. Such transactions may be
effected through share-for-share exchanges, transfer or sale of assets,
shareholder in-kind redemptions and purchases, exchange offers, or any other
approved by the Trustees.
6. The original or a copy of this instrument and of each restated
declaration of trust or instrument 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 Secretary of the Commonwealth of Massachusetts, 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 supplemental or restated 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
supplemental or restated declaration of trust. This instrument may be executed
in any number of counterparts, each of which shall be deemed an original.
7. 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.
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
including action which is required or permitted by the 1940 Act or any 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 or such other
applicable law 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 and/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. The Trustee may, without the vote or consent of the Shareholders, amend
or otherwise supplement this Declaration of Trust by executing or authorizing an
officer of the Trust to execute on their behalf a Restated Declaration of Trust
or a Declaration of Trust supplemental hereto, which thereafter shall form a
part hereof, provided, however, that none of the following amendments shall be
effective unless also approved by a Majority Vote of Shareholders: (i) any
amendment to parts 1, 3 and 4, Article FIFTH; (ii) any amendment to this part
12, Article NINTH; (iii) any amendment to part 1, Article NINTH; and (iv) any
amendment to part 4(a), Article NINTH that would change the voting rights of
Shareholders contained therein. Any amendment required to be submitted to the
Shareholders that, as the Trustees determine, shall affect the Shareholders of
any Series or Class shall, with respect to the Series or Class so affected, be
authorized by vote of the Shareholders of that Series or Class and no vote of
Shareholders of a Series or Class not affected by the amendment with respect to
that Series or Class shall be required. Notwithstanding anything else herein,
any amendment to Article NINTH, part 1 shall not limit the rights to
indemnification or insurance provided therein with respect to action or omission
or indemnities or Shareholder indemnities prior to such amendment.
13. The captions used herein are intended for convenience of
reference only, and shall not modify or affect in any manner the meaning or
interpretation of any of the provisions of this Agreement. As used herein, the
singular shall include the plural, the masculine gender shall include the
feminine and neuter, and the neuter gender shall include the masculine and
feminine, unless the context otherwise requires.
[Remainder of Page Intentionally Left Blank]
<PAGE>
IN WITNESS WHEREOF, the undersigned have executed this instrument as of
the ____ day of _________, 2000.
-------------------------- ---------------------------
Robert G. Avis Robert M. Kirchner
1706 Warson Estates Drive 2800 S. University Blvd.
St. Louis, Missouri 63124 Denver, Colorado 80210
-------------------------- ---------------------------
Edward L. Cameron C. Howard Kast
Spring Valley Road 2552 East Alameda
Morristown, NJ 07960 Denver, Colorado 80209
-------------------------- ----------------------------
William L. Armstrong Jon S. Fossel
1625 Broadway 810 Jack Creek Road
Suite 780 Ennis, Montana 59729
Denver, CO 80202
-------------------------- ------------------------------
Raymond J. Kalinowski Sam Freedman
44 Portland Drive 4975 Lakeshore Drive
St. Louis, Missouri 63131 Littleton, Colorado 80123
-------------------------- ------------------------------
James C. Swain Bridget A. Macaskill
355 Adams Street 160 East 81st Street
Denver, Colorado 80206 New York, New York 10028
-------------------------- ------------------------------
George C. Bowen F. William Marshall, Jr.
9224 Bauer Court 1441 Main Street
Lone Tree, Colorado 80124 Springfield, MA 01102
