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 DISCOVERY FUND
(Name of Registrant as Specified in its Charter)
KATHERINE P. FELD, ESQ.
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
/ / $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2)
or Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3). / / 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.: Schedule 14A
(3) Filing Party: Katherine P. Feld, Esq.
(4) Date Filed: June 30, 2000
<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 10, 2000
Dear Oppenheimer Discovery 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.
o Approval of Distribution and Service Plan for Class B Shares (Class B
shareholders only). You are asked to approve the Fund's Class B 12b-1
Distribution and Service Plan.
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
proxy\500letter
<PAGE>
Oppenheimer Discovery Fund Proxy for Shareholders Meeting To
Be Held August 28, 2000
Your shareholder Your prompt response can save your
vote is important! 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 Discovery Fund Proxy For Shareholders Meeting To
Be Held August 28, 2000
The undersigned shareholder of Proxy solicited on behalf of the
Oppenheimer Discovery Fund Board of Trustees, which
(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 11:00
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 Discovery Fund Proxy for Shareholders Meeting to 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) L. Levy G) K. Randall 1. / / For all
nominees
of Trustees B) R. Galli H) E. Regan listed except as marked
(Proposal No. 1) C) P. GriffithsI) R. Reynolds to
the contrary at left.
D) B. Lipstein J) D. Spiro Instruction: To withhold
E) B. Macaskill K) C. Yeutter authority to vote for
F) E. Moynihan 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 KPMG LLP as
independent auditors
(Proposal No. 2)
3. Approval of the Elimination of Certain
Fundamental Restrictions of the Fund
(Proposal No. 3)
a. Limits on Investing in other Investment
Companies / / For / / Against / / Abstain
b. Purchasing Securities on Margin or Engaging in Short Sales
/ / For / / Against / /Abstain
c. Purchasing Securities of Issuers in which Officers or Trustees
Have an interest in
/ / For / / Aainst / /Abstain
d. Investing in Unseasoned Issuers
/ / For / / Against / / Abstain
e. Investing in a Company for the Purpose of Acquiring Control
/ / For / / Against / / Abstain
f. Investing in Mineral-Related Programs or Leases
/ / For / / Against / / Abstain
g. Investments in Rights and Warrants
/ / For / / Against / / Abstain
h. Repurchase Agreements
/ / For / / Against / / Abstain
i. Pledging of Assets
/ / For / / Against / / Abstain
4. Approval of Changes to Certain
Fundamental Restrictions of the Fund
(Proposal No. 4)
a. Amend the Fund's investment restriction on foreign securities / /
For / / Against / / Abstain
b. Amend the Fund's investment restriction on diversification / /
For / / Against / / Abstain
c. Amend the Fund's investment restrictions on hedging strategies / / For
/ / Against / / Abstain
d. Amend the Fund's investment restriction on loans
/ / For / / Against / / Abstain
5. Authorization to permit the / / For / / Against /
/Abstain
Trustees to adopt an Amended
and Restated Declaration of Trust
(Proposal No. 5)
6. Approval of the Fund's Class B / / For / /
Against / /Abstain
12b-1 Distribution and Service Plan
and Agreement (Class B shareholders only)
(Proposal No. 6)
<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.
proxy\500BALLOT
<PAGE>
OPPENHEIMER DISCOVERY FUND
Two World Trade Center, New York, NY 10048-0203
Notice Of Meeting of Shareholders To Be Held
August 28, 2000
To The Shareholders of Oppenheimer Discovery Fund:
Notice is hereby given that a Meeting of the Shareholders (the "Meeting") of
Oppenheimer Discovery Fund (the "Fund"), will be held at 6803 South Tucson Way,
Englewood, Colorado 80112, at 11:00 A.M., Denver 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 KPMG LLP as the independent auditors 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 certain fundamental investment restrictions of
the Fund;
5. To adopt an Amended & Restated Declaration of Trust;
6. To approve the Fund's Class B 12b-1 Distribution and Service Plan (only
Class B shareholders may vote on this proposal); and
7. 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
PLEASE RETURN YOUR PROXY CARD PROMPTLY. YOUR VOTE IS IMPORTANT NO MATTER HOW
MANY SHARES YOU OWN.
500
<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 KPMG LLP as the
independent auditors for the Fund for the current fiscal year
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 certain fundamental investment
restrictions of the Fund.
Proposal 5: To authorize the Trustees to adopt an Amended and Restated
Declaration of Trust
Proposal 6: To approve the Fund's Class B 12b-1 Distribution and Service
Plan (only Class B shareholders may vote on this proposal)
Exhibits
A: Class B 12b-1 Distribution and Service Plan
B: Amended and Restated Declaration of Trust
<PAGE>
OPPENHEIMER DISCOVERY FUND
PROXY STATEMENT
QUESTIONS AND ANSWERS
Q. Who is asking for my vote?
A. The Trustees of Oppenheimer Discovery Fund (the "Fund") in
connection with the Special Meeting of Shareholders to be held on
August 28, 2000 (the "Meeting"), have asked that you vote on several
matters.
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 __,
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 a selection of KPMG LLP as the independent auditors for the
Fund;
3. To eliminate certain fundamental investment restrictions of the Fund;
4. To amend certain fundamental investment restrictions of the Fund;
5. To authorize the Trustees to adopt an Amended and Restated Declaration
of Trust;
6. To approve the Fund's Class B 12b-1 Distribution and Service Plan (only
Class B shareholders may vote on this proposal; and
7. To grant the proxyholders authority to vote on any other business
that may properly come before the Meeting or any adjournments
thereof.
R. 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 KPMG Peat Marwick LLP as
the independent auditors for the Fund;
3. FOR the elimination of each of the Fund's fundamental
investment restrictions proposed to be eliminated;
4. FOR amendment of each of the Fund's fundamental investment restrictions
proposed for amendment;
5. FOR authorization of the Trustees to adopt an Amended and Restated
Declaration of Trust;
6. FOR approval of the Fund's Amended Class B 12b-1 Distribution and
Service Plan by Class B shareholders; and
7. FOR the proxyholders to have discretion to vote on any other
business that may properly come before the Meeting or any
adjournments thereof.
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
simply sign and date the proxy card, but do not specify a vote for
any 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.
<PAGE>
Q. How can I get more information about the Fund?
A. A copy of the Fund's most recent annual report and semi-annual
report dated September 30, 1999 and March 31, 2000 respectively,
have previously been mailed to Shareholders. If you would like to
have copies 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 DISCOVERY FUND
PROXY STATEMENT
Meeting of Shareholders
To Be Held August 28, 2000
This statement is furnished to the shareholders of Oppenheimer Discovery 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
11:00 A.M., Denver 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
____, 2000.
SUMMARY OF PROPOSALS
-------------------------------------------------------------------------------
Proposal Shareholders Voting
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
1. To Elect a Board of Trustees All
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
2. To ratify the selection of KPMG LLP as the All
independent auditors for the Fund for the current
fiscal year
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
3 To approve the elimination of certain fundamental All
investment restrictions to the Fund.
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
a. Limits on Investing in other Investment All
Companies
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
b. Purchasing Securities on Margin or Engaging All
in Short
Sales
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
c. Purchasing Securities of Issuers in which All
Officers
or Trustees Have An Interest.
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
d. Investing in Unseasoned Issuers All
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
e. Investing in a Company for the Purpose of All
Acquiring
Control
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
f. Investing in Mineral-Related Programs or All
Leases
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
g. Investments in Rights and Warrants All
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
h. Repurchase Agreements All
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
i. Pledging of Assets All
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
4 To approve amendments to four (4) of the Fund's All
fundamental investment restrictions:
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
a. To amend the Fund's fundamental investment All
restriction on foreign securities
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
b. To amend the Fund's fundamental investment All
restriction
on diversification
-------------------------------------------------------------------------------
<PAGE>
-------------------------------------------------------------------------------
Proposal Shareholders Voting
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
c. To amend the Fund's fundamental investment All
restrictions on hedging strategies
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
d. To amend the Fund's fundamental investment All
restriction on loans
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
5 Authorize the Trustees to adopt an Amended and All
Restated Declaration of Trust
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
6 Approve the Class B 12b-1 Distribution and Class B Shareholders
Service Plan only
-------------------------------------------------------------------------------
<PAGE>
PROPOSAL 1: ELECTION OF TRUSTEES
THE ROLE OF THE TRUSTEES IS TO PROVIDE GENERAL OVERSIGHT
OF THE FUND'S BUSINESS AND TO ENSURE THAT THE FUND IS
OPERATED FOR THE BENEFIT OF SHAREHOLDERS. THE TRUSTEES
MEET SIX TIMES PER YEAR AND REVIEW THE FUND'S INVESTMENT PERFORMANCE. THE
TRUSTEES ALSO OVERSEE THE SERVICES FURNISHED TO THE FUND BY ITS INVESTMENT
ADVISER AND VARIOUS OTHER SERVICE PROVIDERS. THE BOARD OF TRUSTEES
RECOMMENDS THAT YOU VOTE FOR THE ELECTION OF EACH NOMINEE AS TRUSTEE.
At the Meeting, eleven (11) 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. Griffiths) 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 Funds due to the positions indicated
with the Fund's investment adviser, OppenheimerFunds, Inc. (the "Manager") or
its affiliates, or other positions described. The year given below indicates
when the nominee first became a Trustee or Director of any of the New York-based
Oppenheimer funds without a break in service. The beneficial ownership of Class
A shares listed below includes voting and investment control, unless otherwise
indicated below. 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. As of June 26, 2000, the Trustees and officers as a group beneficially
owned 12,850.780 shares or less than 1% of the Fund's outstanding shares. All of
the Trustees also own shares in various other funds in the OppenheimerFunds
complex.
<PAGE>
Name, Age, Address Fund Shares
And Five-Year Business Experience Beneficially Owned as of June 26, 2000
Leon Levy (74) None
280 Park Avenue
New York, NY 10017
Trustee since 1959
Chairman of the Board of Trustees, General Partner of Odyssey Partners, L.P.
(investment partnership) (since 1982) and Chairman of Avatar Holdings, Inc.
(real estate development).
Robert G. Galli (66) None
19750 Beach Road, Jupiter, FL 33469
Trustee since 1993
A Trustee or Director of other Oppenheimer funds. Formerly he held the following
positions: Vice Chairman of the Manager, OppenheimerFunds, Inc. (October 1995 -
December 1997); Executive Vice President of the Manager (December 1977 - October
1995); Executive Vice President and a director (April 1986 - October 1995) of
HarbourView Asset Management Corporation, an investment advisor subsidiary of
the Manager.
Phillip A. Griffiths (61) None
97 Olden Lane, Princeton, N. J. 08540
Trustee since 1999
The Director of the Institute for Advanced Study, Princeton, N.J. (since 1991)
and a member of the National Academy of Sciences (since 1979); formerly a
director of Bankers Trust Corporation (1994 through June, 1999), Provost and
Professor of Mathematics at Duke University (1983 - 1991), a director of
Research Triangle Institute, Raleigh, N.C. (1983 - 1991), and a Professor of
Mathematics at Harvard University (1972 - 1983).
Benjamin Lipstein (77) 355.973
591 Breezy Hill Road, Hillsdale, N.Y. 12529
Trustee since 1974
Professor Emeritus of Marketing, Stern Graduate School of Business
Administration, New York University.
<PAGE>
Name, Age, Address Fund Shares
And Five-Year Business Experience Beneficially Owned as of June 26, 2000
Bridget A. Macaskill (51) *# 4,440.630
Two World Trade Center, New York, New York 10048-0203
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 ("HarborView"), an
investment adviser subsidiary of the Manager; Chairman and a director of
Shareholder Services, Inc. ("SSI") (since August 1994) and Shareholder Financial
Services, Inc. ("SFSI") (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; President and a director of other Oppenheimer
funds; a director of Prudential Corporation plc (a U.K. financial service
company).
* A nominee who is an "interested person" of the Fund and the Manager under the
Investment Company Act. # Not a director of Oppenheimer Money Market Fund, Inc.
Elizabeth B. Moynihan (70) 41.451
801 Pennsylvania Avenue, N.W., Washington, D.C. 20004
Trustee since 1992
Author and architectural historian; a trustee of the Freer Gallery of Art
(Smithsonian Institute), Executive Committee of Board of Trustees of the
National Building Museum, and a member of the Trustees Council, Preservation
League of New York State.
Kenneth A. Randall (73) None
6 Whittaker's Mill, Williamsburg, Virginia 23185
Trustee since 1980
A director of Dominion Resources, Inc. (electric utility holding company),
Dominion Energy, Inc. (electric power and oil & gas producer), and Prime
Retail, Inc. (real estate investment trust); formerly President and Chief
Executive Officer of The Conference Board, Inc. (international economic and
business research) and a director of Lumbermens Mutual Casualty Company,
American Motorists Insurance Company and American Manufacturers Mutual
Insurance Company.
<PAGE>
Name, Age, Address Fund Shares
And Five-Year Business Experience Beneficially Owned as of June 26, 2000
Edward V. Regan (69) 52.293
40 Park Avenue, New York, New York 10016
Trustee since 1993
President of Baruch College, City University of New York; Chairman of Municipal
Assistance Corporation for the City of New York; Senior Fellow of Jerome Levy
Economics Institute, Bard College; a director of RBAsset (real estate manager);
a director of OffitBank; Trustee, Financial Accounting Foundation (FASB and
GASB); formerly New York State Comptroller and trustee, New York State and Local
Retirement Fund.
Russell S. Reynolds, Jr. (68) None
8 Sound Shore Drive, Greenwich, Connecticut 06830
Trustee since 1989
Chairman of The Directorship Group, Inc. (corporate governance consulting and
executive recruiting); a director of Professional Staff Limited (a U.K.
temporary staffing company); a life trustee of International House
(non-profit educational organization), and a trustee of the Greenwich
Historical Society.
Donald W. Spiro (74) 7,724.048
399 Ski Trail, Smoke Rise, New Jersey 07405
Trustee since 1985
Vice Chairman and Trustee; formerly he held the following positions: Chairman
Emeritus (August 1991 - August 1999), Chairman (November 1987 - January 1991)
and a director (January 1969 - August 1999) of the Manager; President and
Director of the Distributor (July 1978 - January 1992).
Clayton K. Yeutter (69) None
10475 E. Laurel Lane, Scottsdale, Arizona 85259
Trustee since 1993
Of Counsel, Hogan & Hartson (a law firm); a director of Zurich Financial
Services (financial services), Zurich Allied AG and Allied Zurich p.l.c.
(insurance investment management); Caterpillar, Inc. (machinery), ConAgra,
Inc. (food and agricultural products), Farmers Insurance Company (insurance),
FMC Corp. (chemicals and machinery) and Texas Instruments, Inc.
(electronics); formerly (in descending chronological order), Counselor to the
President (Bush) for Domestic Policy, Chairman of the Republican National
Committee, Secretary of the U.S. Department of Agriculture, and U.S. Trade
Representative.
<PAGE>
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 investment companies in the OppenheimerFunds complex. The Board has
established an Audit Committee, which among other things, furnishes the Board
with recommendations regarding the selection of the independent auditors
(subject to shareholder ratification). 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; and (iii) establishing a separate line of communication
between the Fund's independent auditors and its independent Trustees.
The Board of Trustees meets six (6) times per year. Nonaffiliated Trustees
are paid a fixed fee 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.
As indicated above, each of the Fund's Nonaffiliated Trustees also serve
as directors or trustees of certain other investment companies in the
OppenheimerFunds complex. The Trustees and the Fund's Manager believe that
having the same individuals serving on the boards of many of the funds in the
OppenheimerFunds complex enhances the ability of each fund to obtain, at a
relatively modest cost to each separate fund, the services of high caliber,
experienced and knowledgeable independent trustees who can more effectively
oversee the management of the funds.
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
prior to August 1, 1999, Mr. Spiro) receive no salary or fee from the Fund. The
remaining Trustees of the Fund received the compensation shown below from the
Fund during the Fund's fiscal year ended September 30, 1999, and from all of the
New York-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:
-------------------------------------------------------------------------------
Retirement Total
Trustee's Name Aggregate Benefits Compensation
And Other Positions Compensation Accrued as Part from all
From Fund1 of Fund New York-based
Expenses Oppenheimer
Funds (24 Funds)2
--------------------------------------------------------------------------------
Leon Levy $13,185 $1,789 $166,700
Chairman
--------------------------------------------------------------------------------
Robert G. Galli $5,663 None $176,2153
Study Committee Member
--------------------------------------------------------------------------------
Benjamin Lipstein $11,902 $2,050 $144,100
Study Committee Chairman
Audit Committee Member
--------------------------------------------------------------------------------
Elizabeth B. Moynihan $7,091 $151 $101,500
Study Committee Member
--------------------------------------------------------------------------------
Kenneth A. Randall $7,468 $1,103 $93,100
Audit Committee Chairman
--------------------------------------------------------------------------------
Edward V. Regan $6,295 None $92,100
Proxy Committee
Chairman Audit
Committee Member
--------------------------------------------------------------------------------
Russell S. Reynolds, Jr. $5,046 $335 $68,900
Proxy Committee Member
--------------------------------------------------------------------------------
Donald W. Spiro4 $-0- $-0- $10,250
--------------------------------------------------------------------------------
Clayton K. Yeutter $4,7115 None $68,900
Proxy Committee Member
--------------------------------------------------------------------------------
1Aggregate compensation includes fees, deferred compensation, if any, and
retirement plan benefits accrued for a Trustee or Director.
2Total compensation for the 1999 calendar year includes compensation
received for serving as Trustee of 10 other Oppenheimer funds.
4Prior to August 1, 1999, Mr. Spiro was an Affiliated Trustee.
5Includes $1,227 deferred under the Deferred Compensation Plan described
below.
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, two Trustees of the New York-based Oppenheimer funds 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.
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
September 30, 1999. [Each of the 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. Randall
(Chairman), Regan and Lipstein, 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 September 30, 1999. The Board of Trustees does not
have a standing nominating or compensation committee.
Each officer of the Fund is elected by the Trustees to serve an indefinite
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. Ms. Macaskill and Messrs. Spiro, Donohue, Wixted, Bishop, Zack and Farrar
serve in a similar capacity with other funds in the OppenheimerFunds complex.
All officers serve at the pleasure of the Board.
Name, Age, Address and Five-Year Business Experience
Jayne M. Stevlingson, Vice President and Portfolio Manager since August 1999;
Age: 40. Two World Trade Center, New York, New York 10048-0203
Vice President of the Manager (since August 9, 1999); formerly a small-cap
growth fund portfolio manager with Morgan Stanley Dean Witter Advisors, Inc.
(October 1992- July 1999); prior to which she was a senior equity analyst with
Bankers Trust Corporation (December 1989 - September 1992).
Andrew J. Donohue, Secretary since 1996; Age: 49
Two World Trade Center, New York, NY 10048
Executive Vice President, General Counsel and a director of the Manager,
Oppenheimer Funds Distributor Inc. ("the Distributor"), HarbourView, SSI, SFSI,
Oppenheimer Partnership Holdings, Inc. and Oppenheimer Real Asset Management,
Inc.; President and a director of Centennial Asset Management Corporation, an
investment advisory subsidiary of the Manager; General Counsel and Secretary of
Oppenheimer Acquisition Corp.; 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); and Vice President and
Accounting Manager, Merrill Lynch Asset Management (1987-1991).
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 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 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.
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 Investment Company Act) of the Fund
or the Manager, at a meeting held December 8, 1999 selected KPMG LLP ("KPMG") as
independent auditors of the Fund for the fiscal year beginning October 1, 1999.
KPMG also serves as independent auditors for 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 KPMG as
independent auditors. Representatives of KPMG 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 KPMG LLP AS
INDEPENDENT AUDITORS OF THE FUND.
PROPOSALS 3 and 4: 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 policies 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." Policies 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 1986, 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 policies
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 policies are
considered by Fund management to be unnecessary or unwarranted. In addition,
other fundamental policies reflect federal regulatory requirements which remain
in effect, but which are not required to be stated as fundamental policies.
Accordingly, the Trustees recommend that the Fund's shareholders approve the
amendment or elimination of certain of the Fund's current fundamental investment
restrictions. This will result in the Fund having a list of fundamental
investment restrictions that are standardized with those of the other funds in
the OppenheimerFunds complex. 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 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.
The recommended changes are specified below. Shareholders are requested to
vote on each Sub-Proposal in Proposal No. 3 and on each Sub-Proposal in Proposal
4 separately. 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. Limits on Investing in Other Investment Companies
The Fund currently is subject to a fundamental investment limitation concerning
its investments in other investment companies. It is proposed that this current
fundamental policy prohibiting the Fund's investments in other open-end
investment companies and limiting the Fund's investments in closed-end
investment companies and small business investment companies to no more than 5%
of its net assets be eliminated. The current fundamental investment policy is
set forth below.
Current
The Fund cannot invest in other open-end investment companies or
invest more than 5% of its net assets in closed-end investment
companies, including small business investment companies. The Fund
cannot make any such investment at commission rates in excess of
normal brokerage commissions.
The existing policy is not required to be a fundamental investment policy
under the 1940
Act, and is more restrictive than the requirements of the 1940 Act.
Elimination of this fundamental restriction will allow the Fund to purchase
securities of other investment companies to the extent permitted by law,
regulation and exemptions, subject to the approval by the Board of Trustees.
If this proposed change is approved by shareholders, the Fund would be
permitted,
subject to Board approval, to invest all its assets in one or more investment
companies
advised by the Manager or a subsidiary. Other than the possibility of
adopting this "fund
of funds" structure, which the Manager is not proposing at this time, the
Fund currently
has no plan to engage in significant purchases of shares of other investment
companies.
The purpose of this proposal is to provide the Fund with the maximum flexibility
permitted by law to pursue its investment objective and to conform the Fund's
policy in this area to one which is expected to become standard for all
Oppenheimer funds. The Board believes that standardized policies will assist the
Fund and the Manager in maintaining compliance with the various investment
restrictions to which the Oppenheimer funds are subject.
B. Purchasing Securities on Margin or Engaging in Short Sales.
The Fund currently is subject to a fundamental investment restriction
concerning its ability to purchase securities on margin or engage in short
sales. 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 purchase securities on margin. However, the Fund may
make margin deposits in connection with any of the hedging
instruments permitted by any of its other fundamental policies. The
Fund cannot make short sales of securities except "short sales
against the box."
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 restriction 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 U.S. Securities and Exchange
Commission ("SEC") 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.
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," which is permitted
under the 1940 Act, 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.
Elimination of this fundamental investment restriction is unlikely to
affect the management of the Fund. The 1940 Act prohibitions on margin, and on
short sales other than short sales against-the-box, 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.
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 trustees
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 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 state or "Blue Sky"
requirements in connection with the registration of shares of the Fund for sale
in a particular state or 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. Investing in Unseasoned Issuers.
The Fund is currently subject to a fundamental investment restriction
concerning its investment in securities of issuers that have been in operation
less than three years ("unseasoned issuers"). It is proposed that the current
fundamental restriction be eliminated. The current fundamental restriction is
set forth below.
Current
The Fund may invest no more than 20% of its total assets in
securities of issuers (including their predecessors) that have been
in operation less than three years.
This restriction was originally adopted to address state or "Blue Sky"
requirements in connection with the registration of shares of the Fund for sale
in a particular state or 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.
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 restriction 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, reduces 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 them.
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 control or management. 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 another company.
F. Investing in Mineral-Related Programs or Leases
The Fund currently is subject to a fundamental investment restriction
concerning its investment in mineral-related programs. It is proposed that the
current fundamental restriction be eliminated. The current fundamental
restriction is set forth below.
Current
The Fund cannot invest in interests in oil, gas or other mineral
exploration or development programs.
This restriction was originally adopted to address state or "Blue Sky"
requirements in connection with the registration of shares of the Fund for sale
in a particular state or 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.
G. Investments in Rights and Warrants
The Fund currently is subject to a fundamental investment restriction
limitation concerning its ability to invest in rights and warrants. It is
proposed that the current fundamental restriction be eliminated. The current
fundamental restriction is set forth below.
Current
The Fund can invest up to 5% of its total assets in warrants or rights.
This restriction was originally adopted to address state or "Blue Sky"
requirements in connection with the registration of shares of the Fund for sale
in a particular state or 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.
H. Repurchase Agreements
The Fund currently is subject to a fundamental investment
restriction regarding its investments in repurchase agreements maturing in more
than seven (7) days. It is proposed that the current fundamental investment
restriction be eliminated. The Fund believes that this restriction is
unnecessary and may, in fact, reduces possible investment opportunities. The
current fundamental investment restriction is set forth below.
C urrent
The Fund will not enter into a repurchase agreement that causes more than
10% of its net assets to be subject to repurchase agreements having a
maturity beyond seven days.
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 remains subject to its non-fundamental investment restriction
that it will not invest more than 10% of its net assets in illiquid or
restricted securities. Repurchase agreements maturing in more than seven (7)
days are generally considered to be illiquid securities.
I. Pledging of Assets.
The Fund is currently subject to a fundamental investment restriction
concerning the pledging of its assets. It is proposed that this current
fundamental investment restriction be eliminated. The current fundamental
investment restriction is set forth below.
Current
The Fund cannot pledge mortgage, hypothecate or pledge any of its
assets. However, this does not prohibit the escrow arrangements
contemplated by the put and call activities of the Fund or other
collateral or margin arrangements in connection with any of hedging
instruments permitted by any of its other policies.
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 (as reflected in the Fund's non-fundamental
policy on borrowing) would continue to apply, whereby the Fund may borrow from
banks - and invest the borrowed funds in portfolio securities - provided that
the value of the Fund's assets, less its liabilities other than borrowings, is
equal to at least 300% of all borrowings (including the proposed borrowing).
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 BOARD OF TRUSTEES UNANIMOUSLY RECOMMENDS THAT YOU APPROVE EACH
SUB-PROPOSAL OF THIS PROPOSAL NO. 3
PROPOSAL 4: TO APPROVE AMENDMENTS TO CERTAIN FUNDAMENTAL INVESTMENT
RESTRICTIONS OF THE FUND
A. Foreign Securities
The Fund currently is subject to a fundamental investment restriction
that limits its ability to purchase foreign securities. An investment policy
that has been designated as "fundamental" is one that cannot be changed without
the requisite shareholder approval as described below under "Further Information
About Voting and the Meeting." The Board proposes that the Fund's policy on
purchasing foreign securities be changed to a non-fundamental policy that would
permit the Fund to invest in foreign unregistered offerings, including those
offerings where the issuer commits to file a registration statement within a
short period and where the issuer may already have publicly-traded stock
outstanding.
The existing policy is not required to be a fundamental investment policy
under the 1940 Act and the Board recommends that shareholders delete this
fundamental investment restriction and replace it with the non-fundamental
policy stated below. A non-fundamental policy may be changed by the Trustees
without shareholder approval. The purpose of this proposal is to provide the
Fund with the maximum flexibility permitted by law to pursue its investment
objective and to conform the Fund's policy in this area to one which is expected
to become standard for all Oppenheimer funds. The Board believes that
standardized policies will assist the Fund and the Manager in maintaining
compliance with the various investment restrictions to which the Oppenheimer
funds are subject.
The current fundamental investment policy and the proposed non-fundamental
investment policy are set forth below.
Current Proposed
------- --------
The Fund can purchase foreign The Fund may buy securities or
securities only if they are other instruments issued by
traded on a domestic or foreign companies, governments or other
securities exchange or entities in any country,
represented by American including developed and
Depository Receipts listed on a emerging countries or markets.
domestic securities exchange or
traded in the U.S.
over-the-counter market.
The Fund would retain its non-fundamental operating policy that it does
not intend to invest more than 25% of its total assets in foreign securities.
B. Diversification
Under the 1940 Act, a fund's policy regarding diversification must be
fundamental. Currently, the Fund's policy with respect to diversification
applies to 100% of the Fund's total assets. Specifically, the Fund cannot buy
securities of 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. The limit does not apply to securities issued
by the U.S. government or any of its agencies or instrumentalities. The Board
proposes that the Fund's policy with respect to diversification be amended to
apply to 75% of the Fund's total assets. This change would be consistent with
the requirements of the 1940 Act and would promote the standardization of
fundamental investment restrictions among all the funds in the OppenheimerFunds
complex.
As amended, the policy on diversification for the Fund would remain a
fundamental policy changeable only by the vote of a majority of the outstanding
voting securities as defined in the 1940 Act of that Fund. The current and
proposed fundamental investment policies are set forth below.
Current Proposed
------- --------
The Fund cannot buy securities The Fund cannot buy securities
of any one issuer if more than or other instruments issued or
5% of its total assets would guaranteed by any one issuer
be invested in securities of if more than 5% of its total
that issuer or if it would assets would be invested in
then own more than 10% of the securities or other
issuer's voting securities. instruments of that issuer or
The limit does not apply to if it would then own more than
securities issued by the U.S. 10% of that issuer's voting
government or any of its securities. This limitation
agencies or instrumentalities. 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.
C. Hedging Strategies
The Fund currently is subject to several fundamental investment
restriction limitations concerning hedging strategies. An investment policy that
has been designated as "fundamental" is one that cannot be changed without the
requisite shareholder approval as described below under "Further Information
About Voting and the Meeting." The Board proposes that several of the Fund's
fundamental policies with respect to various hedging strategies be changed to
non-fundamental policies and amended as indicated below.
The current fundamental investment policies and proposed non-fundamental
investment policies are set forth below.
Current Proposed
The |_| Fund cannot write |_| The Fund can write (that is,
calls other than covered calls sell) covered calls on
listed on a securities or securities, indices or
commodities exchange or quoted futures. A call is covered if
on NASDAQ, or calls on futures the Fund owns the security
contracts that are covered by subject to the call while the
other futures contracts or call is outstanding, or, for
segregated liquid assets. certain types of calls, the
call may be covered by segregating
liquid assets to enable the Fund to
satisfy its obligation if the call is
exercised. Up to 25% of the Fund's
total assets may be subject to calls
the Fund writes.
|_| The Fund cannot invest in |_| The Fund cannot invest in
commodities physical commodities or
or commodity contracts other commodity contracts; however,
than the the Fund may: (1) buy and sell
hedging instruments permitted hedging instruments permitted
by its by any of its other investment
other fundamental policies, policies, and (2) buy and sell
even if a options, futures, securities
hedging instrument is or other instruments backed
considered to be by, or the investment return
a commodity or a commodity from which is linked to
contract. changes in the price of,
physical commodities.
|_| The Fund cannot buy calls |_| The Fund can buy calls on
unless (1) the investment to securities, on indices, or on
which the calls relate are futures permitted by the
securities, broadly-based stock Fund's other investment
indices or stock index futures policies. The Fund can buy
on broadly-based stock indices, and sell futures contracts
or (2) the calls are purchased that relate to (1) stock
to effect closing transactions indices (these are referred to
to terminate an obligation the as "stock index futures"), (2)
Fund has under a call the Fund securities indices (these are
previously wrote. referred to as "financial
futures"), (3) debt securities
(these are referred to as "interest
rate futures"), (4) foreign
currencies (these are referred to as
"forward contracts"), and (5)
commodities (these are referred to
as "commodity futures").
|_| The Fund cannot write puts. |_| The
Fund can write (that is, sell) puts.
The Fund will not write puts
if, as
a result, more than 50% of
the
Fund's net assets would be
required
to be segregated to cover
such
put options.
|_| The Fund cannot buy puts other |_| The Fund can buy puts on than securities,
on indices, or on puts on (1) securities it owns, (2) futures stock index
futures, or (3) broadly that are permitted by the based stock indices.
Fund's other
Puts may be purchased only to investment policies.
protect against the decline in
value of
the Fund's entire portfolio or a
specific security or stock index
future
the Fund owns. After buying a
put, the
value of all put and call
options held
by the Fund must not exceed 5%
of the
Fund's total assets (measured at
the time
of purchase).
|_| The Fund can buy a call or put |_| The Fund can buy a put or call
only if only
after the purchase, the value if, after the purchase, the
of all call value of all
and put options held by the call and put options held by
Fund will the Fund
not exceed 5% of the Fund's will not exceed 5% of the
total Fund's
assets. total assets.
The |_| The Fund limits the sum The |_| The Fund limits the
of all sum of all margin
margin deposits on deposits on
futures and futures and premiums
premiums paid on paid on related
related options options to 5% of the
to 5% of the Fund's Fund's total
total assets. assets.
The existing policies are not required to be fundamental investment policies
under the 1940 Act. The purpose of this proposal is to provide the Fund with the
maximum flexibility permitted by law to pursue its investment objective and to
conform the Fund's policy in this area to one which is expected to become
standard for all Oppenheimer funds. The proposed non-fundamental hedging
policies are substantially similar to the Fund's current fundamental policies
with the exception of (1) expanding the types of futures that may be traded, (2)
permitting options on sector indices as well as on broadly-based indices, and
(3) removing the prohibition on writing puts.
Regarding futures, a futures contract obligates the seller to deliver (and
the purchaser to take) cash or a specific type of security to settle the futures
transaction. Participants in the futures market may decide, however, to enter
into offsetting transactions rather than making or taking delivery.
If the Fund is permitted to trade options on sector indices, this may enable
the Fund to better hedge industry sector risks within its portfolio. If the Fund
is permitted to write puts, the put must be covered by segregated liquid assets.
When a fund writes a put, it receives a premium. That premium represents a
profit, as long as the price of the underlying instrument remains equal to or
above the exercise price of the put. The fund also assumes the obligation during
the option period to buy the underlying instrument from the buyer of the put at
the exercise price, even if the value of the underlying instrument falls below
the exercise price. If a put written by a fund expires, the fund realizes a gain
in the amount of the premium less the transaction costs incurred.
The Board believes that standardized policies will assist the Fund and the
Manager in maintaining compliance with the various investment restrictions to
which the Oppenheimer funds are subject.
D. Loans
Under the 1940 Act, a fund's restriction regarding lending must be
fundamental. Under its current restriction, the Fund may invest in debt
securities and may enter into repurchase agreements, which may be considered a
loan, and is permitted to lend its portfolio securities.
It is proposed that the current fundamental restriction 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
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 lending with affiliated
investment companies. As amended, the restriction on lending for the Fund would
remain a fundamental restriction changeable only by the vote of a majority of
the outstanding voting securities as defined in the 1940 Act of the Fund. The
current and proposed fundamental investment restrictions are set forth below.
<PAGE>
Current Proposed
The Fund cannot lend money. The Fund cannot make loans except However, it can
invest in (a) through lending of securities publicly-distributed debt securities
in an amount not to exceed 25% of that the Fund's investment policies its total
assets, (b) through the and purchase of debt securities or restrictions permit
it to purchase. similar evidences of indebtedness, The Fund may also lend its
(c) through an interfund lending portfolio securities (in an amount program (if
applicable) with other not affiliated funds, provided that no to exceed 25% of
the its total such loan may be made if, as a assets) result, the aggregate of
such loans and may enter into repurchase would exceed 33-1/3% of the value
agreements. of its total assets (taken at
market value at the time of such
loans), and (d) through repurchase
agreements.
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.
THE BOARD OF TRUSTEES UNANIMOUSLY RECOMMENDS THAT YOU APPROVE EACH
SUB-PROPOSAL OF PROPOSAL NO. 4
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 1
(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, such as the Fund, 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 13, 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 approval 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 1
to this Proxy Statement.
Significant Changes Effected by the New Declaration of Trust.
Reorganization of the Trust or Its Series or Classes. 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 $0.001 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 THAT YOU APPROVE THIS PROPOSAL
PROPOSAL 6: APPROVAL OF THE FUND'S CLASS B 12b-1 DISTRIBUTION AND SERVICE
PLAN AND AGREEMENT
Class B shares were first offered to the public on April 4, 1994. In
connection with the initial public offering of these shares, the Fund adopted a
Distribution and Service Plan and Agreement (the "Distribution and Service
Plan") for Class B shares pursuant to Rule 12b-1 of the 1940 Act, in conformity
with the National Association of Securities Dealers, Inc. ("NASD") Rule which
permits the Fund to pay on an annual basis up to 0.25% of its average annual net
assets as a service fee and up to 0.75% of its average annual net assets as an
asset-based sales charge. The Manager, as the sole initial shareholder of the
Fund's Class B shares, approved the Distribution and Service Plan for the Class
B shares of the Fund dated April 1, 1994.
At a meeting of the Board of Trustees held April 13, 2000, the Manager
proposed the adoption of a new Distribution and Service Plan (the "Proposed
Plan") which is a "compensation type plan" instead of the current "reimbursement
type plan." The Fund's Board of Trustees, including a majority of the
Independent Trustees, approved the new Distribution and Service Plan, subject to
shareholder approval, and determined to recommend the Distribution and Service
Plan and Agreement for approval by the shareholders. A copy of the Proposed
Distribution and Service Plan is attached as Exhibit A to this proxy statement.
Description of the Distribution and Service Plans. Under both the Proposed Plan
and the current Distribution and Service Plan and Agreement (the "Current
Plan"), the Fund makes payments to the Distributor in connection with the
distribution of Class B Shares and the personal service and maintenance of
accounts that hold Class B shares. The Fund pays the Distributor an asset-based
sales charge of 0.75% per annum of Class B shares, and also pays the Distributor
a service fee of 0.25% per annum, each of which is computed on the average
annual net assets of Class B shares of the Fund.
Service Fee. Under the Proposed Plan and the Current Plan, the Distributor
pays certain brokers, dealers, banks or other persons or entities ("Recipients")
a service fee of 0.25% for providing personal services to Class B shareholders
and for maintenance of shareholder accounts by those Recipients. The services
rendered by Recipients in connection with personal services and the maintenance
of Class B shareholder accounts may include but shall not be limited to, the
following: answering routine inquiries from the Recipient's customers concerning
the Fund, assisting in the establishment and maintenance of accounts or
sub-accounts in the Fund and processing share redemption transactions, making
the Fund's investment plans and dividend payment options available, and
providing such other information and services in connection with the rendering
of personal services and/or the maintenance of accounts, as the Distributor or
the Fund may reasonably request.
Service fee payments under the Proposed and Current Plans by the
Distributor to Recipients are made on a quarterly basis, computed as of the
close of business each day at an annual rate of 0.25% of the net asset value of
Class B shares held in accounts of the Recipient or its customers. In the event
Class B shares are redeemed less than one year after the date such shares were
sold, the Recipient is obligated to repay to the Distributor on demand a pro
rata portion of such advance service fee payments, based on the ratio of the
remaining period to one year.
Asset-Based Sales Charge. The Current Plan, a reimbursement type plan,
provides that the Fund will pay the Distributor on a monthly basis an
asset-based sales charge at an annual rate of 0.75% of the net asset value of
Class B Shares outstanding to reimburse the Distributor for its expenses in
rendering other services in connection with the distribution of the Fund's Class
B shares. Under the Current Plan, the distribution assistance and administrative
support services rendered by the Distributor in connection with the sales of
Class B shares may include: (I) paying sales commissions to any broker, dealer,
bank or other institution that sells the Fund's Class B shares; (ii) paying
compensation to and expenses of personnel of the Distributor who support
distribution of Class B shares by Recipients; (iii) paying or reimbursing the
Distributor for interest and other borrowing costs incurred on any unreimbursed
expenses carried forward to subsequent fiscal quarters; (iv) other direct
distribution costs of the type approved by the Board, including without
limitation the costs of sales literature, advertising and prospectuses (other
than those furnished to current shareholders) and state "blue sky" registration
expenses; and (v) any services rendered by the Distributor that a Recipient may
render as described above.
The Proposed Plan, a compensation type plan, provides that the Fund will
pay the Distributor on a monthly basis an asset-based sales charge at an annual
rate of 0.75% of the net asset value of Class B Shares outstanding to compensate
the Distributor for providing distribution assistance in connection with the
distribution of the Fund's Class B Shares. Under the Proposed Plan, the
distribution assistance and administrative support services rendered by the
Distributor in connection with the distribution of Class B Shares may include:
(i) paying sales commissions to any broker, dealer, bank or other person or
entity that sells and services the Fund's Class B Shares, (ii) paying
compensation to and expenses of personnel of the Distributor who support
distribution of Class B Shares by Recipients, (iii) obtaining financing or
providing such financing from its own resources, or from an affiliate, for
interest and other borrowing costs of the Distributor's unreimbursed expenses,
incurred in rendering distribution assistance for Class B Shares, and (iv)
paying certain other distribution expenses.
Other distribution assistance rendered by the Distributor and Recipients
under either Plan may include, but shall not be limited to, the following:
distributing sales literature and prospectuses other than those furnished to
current Class B shareholders, providing compensation to and paying expenses of
personnel of the Recipient who support the distribution of Class B shares by the
Recipient, and providing such other information and services in connection with
the distribution of Class B shares as the Distributor or the Fund may reasonably
request. The Proposed Plan further provides that such other distribution
assistance may include distribution assistance and administrative support
services rendered in connection with Class B Shares acquired (i) by purchase,
(ii) in exchange for shares of another investment company for which the
Distributor serves as distributor or sub-distributor, or (iii) pursuant to a
plan of reorganization to which the Fund is a party.
Under both Plans, the Distributor pays sales commissions from its own
resources to Recipients at the time of sale currently equal to 3.75% of the
purchase price of Fund shares sold by such Recipient, and advances the first
year service fee of 0.25%. The Distributor retains the asset-based sales charge
to recoup the sales commissions it pays, the advances of service fee payments it
makes, and its financing costs. Asset-based sales charge payments are designed
to permit an investor to purchase shares of the Fund without paying a front-end
sales load and at the same time permit the Distributor to compensate Recipients
in connection with the sale of Class B shares of the Fund.
The Proposed and Current Plans contain a provision which provides that the
Board may allow the Fund to continue payments to the Distributor for Class B
shares sold prior to termination of the Distribution and Service Plan. Pursuant
to this provision, payment of the service fee and the asset-based sales charge
could be continued by the Board after termination.
Additional Information. Both Plans have the effect of increasing annual
expenses of Class B Shares of the Fund by up to 1.00% of the class's average
annual net assets from what those expenses would otherwise be. Payments by the
Fund to the Distributor under the Current Plan for the fiscal year ended
September 30, 1999 were $2,569,116 (1.00% of the Fund's average net assets
represented by Class B Shares during that period), of which the Distributor
retained $2,051,837 as reimbursement for Class B sales commissions and service
fee advances, as well as financing costs; the balance was paid to Recipients not
affiliated with the Distributor.
If the Class B shareholders approve this Proposal, the Proposed Plan
shall, unless terminated as described below, become effective upon shareholder
approval and continue in effect until December 31, 2000 and from year to year
thereafter only so long as such continuance is specifically approved, at least
annually, by the Fund's Board of Trustees and its Independent Trustees by a vote
cast in person at a meeting called for the purpose of voting on such
continuance. Either Plan may be terminated at any time by a vote of a majority
of the Independent Trustees or by a vote of the holders of a majority (as
defined in the 1940 Act) of the Fund's outstanding Class B shares. Each Plan may
not be amended to increase materially the amount of payments to be made without
approval by Class B shareholders. All material amendments must be approved by a
majority of the non-interested Trustees.
Each of the Proposed Plan and the Current Plan provides that while it is
in effect, the selection and nomination of those Trustees of the Fund who are
not "interested persons" of the Fund is committed to the discretion of the
non-interested Trustees. This does not prevent the involvement of others in such
selection and nomination if the final decision on any such selection or
nomination is approved by a majority of the non-interested Trustees.
Under either Plan, the Board of Trustees may determine that no payment for
service fees will be made to any Recipient in any quarter if the aggregate net
asset value of all Fund shares held by the Recipient for itself and its
customers does not exceed a minimum amount, if any, that may be fixed from time
to time by a majority of the Independent Trustees. Initially, the Board of
Trustees has set the fee at the maximum rate and set no minimum amount. Each
Plan permits the Distributor and the Manager to make additional distribution
payments to Recipients from their own resources (including profits from
management fees) at no cost to the Fund. The Distributor and the Manager may, in
their sole discretion, increase or decrease the amount of distribution
assistance payments they make to Recipients from their own assets.
Analysis of the Proposed Plan by the Board of Trustees. In considering whether
to recommend the Proposed Plan for approval, the Board requested and evaluated
information it deemed necessary to make an informed determination. The Board
found that there is a reasonable likelihood that the Proposed Plan benefits the
Fund and its Class B shareholders by providing financial incentives to financial
intermediaries to attract new Class B shareholders to the Fund and by assisting
the efforts of the Fund and the Distributor to service and retain existing
shareholders and attract new investors. The Proposed Plan enables the Fund and
the Distributor to offer investors in the Fund alternative ways to purchase
shares. This arrangement allows the Fund to be competitive with similar funds,
including funds that impose sales charges, provide financial incentives to
institutions that direct investors to such funds, and provide shareholder
servicing and administrative services.
The Distributor identified two main difficulties with the Current Plan.
These involve accurately following certain distribution expenses when exchanges
among the funds occur, and the Distributor's inability to recover its
distribution-related expenses incurred when funds enter into reorganization
agreements.
The Fund and the other mutual funds in the OppenheimerFunds complex have
arrangements so that a shareholder of one fund may exchange his or her shares
for the shares of one or more other Oppenheimer funds. Frequently, a shareholder
will enter into a number of exchanges.
The Distributor advised the Board that the Distributor could not at this
time design and implement an expedient and cost-effective accounting system to
follow expenses of the sales commission, service fee payment and other
distribution-related expenses among the funds as exchanges occur. Under a
reimbursement type plan, accurate recording of such expenses may be important so
that one Fund is not burdened with expenses for which it no longer has the
assets.
It occasionally happens that, for various reasons, it is desirable for one
fund to reorganize into another fund when it is anticipated that such
reorganization will benefit the funds involved. When reorganizations occur, the
Distributor currently must write off and thus is unable to recover previously
spent, but unrecovered, distribution expenses for the fund which will go out of
existence.
The compensation type Plan proposed for approval will eliminate the
foregoing difficulties and allow the Distributor to continue to provide
exchanges and reorganizations without having to risk the loss of, in some cases,
substantial amounts of money previously spent for distribution. The Proposed
Plan expressly provides that the distribution and administrative support
services under the plan may be rendered in connection with Class B shares issued
by the Fund in exchanges for other Oppenheimer funds and in reorganization with
another mutual fund.
The Distributor advised the Board that under the Proposed Plan, it will be
able to track its expenses of distribution for the Oppenheimer Funds complex,
and that it will also be able reasonably to identify its distribution costs with
respect to the Fund and each other Oppenheimer fund by allocating the
Distributor's distribution expenses among the funds in the complex according to
sales. While not a precise method, the Board concluded that this method of
allocating distribution expenses to the Fund is a reasonable manner by which to
identify the Distributor's expenses in distributing the Fund's shares. The
payments under the proposed Plan will remain subject to the limits imposed on
asset-based sales charges by the NASD.
The Board considered that a wide range of different situations might occur
in the future regarding the sale and redemption of Fund shares. It is possible
under the current reimbursement Plan for the Fund's payments to be substantially
reduced or cease when limited to reimbursement to the Distributor for its costs.
The Board concluded that this type of situation is unlikely to occur. The Board
also recognized that superior investment performance could result in larger
amounts paid by the Fund under the Proposed Plan and the Distributor's recovery
of more Plan payments from the Fund than the Distributor had expended on the
Fund. Other differing scenarios were also discussed.
The level of annual payments by the Fund under the Proposed Plan will not
increase over the amounts currently paid by the Fund. Under the Proposed Plan,
however, over time, the Fund's Plan payments may exceed the amount which the
Fund might pay under the Current Plan. The length of time over which the Fund's
payments will continue under the Proposed Plan is not limited by any
reimbursement factor, and the Fund's payments may thus continue for a longer
period of time than under the Current Plan, thus potentially increasing the
amount of Plan payments which reduce the dividends and total return on Fund
shares.
The Board concluded that it is extremely difficult to predict purchases,
sales and exchanges by shareholders, and how future individual, market and
economic events may influence individual investor decisions. The Board thus
concluded that it is not reasonably possible to determine with any degree of
certainty at this time whether the Fund will pay more under the Proposed Plan
than it would under the Current Plan. The Distributor has agreed to provide the
Board with certain quarterly reports as to the amount of payments made by the
Fund under the Proposed Plan and the purpose for which payments were made. The
Distributor will provide more extensive annual reports to the Board which set
forth the Distributor's allocated expenses and recovery of money by the
Distributor from the asset-based sales charges and contingent deferred sales
charges, and information on sales, redemption's and exchanges of Fund shares and
related data. The Board determined that under these quarterly and annual
reports, the Board will be provided with adequate information about the payments
which the Fund makes to the Distributor, about the payments which the
Distributor makes and receives in connection with the distribution of the Fund's
shares, and about the Distributor's other distribution expenses. The Board
anticipates that with this information, the Board will be able to review each
year the benefits which the Fund is receiving from the Plan payments it makes to
determine if the Fund is benefiting at a level commensurate with those payments.
Stimulation of distribution of mutual fund shares and providing for
shareholder services and account maintenance services by payments to a mutual
fund's distributor and to brokers, dealers, banks and other financial
institutions has become common in the mutual fund industry. Competition among
brokers and dealers for these types of payments has intensified. The Trustees
concluded that promotion, sale and servicing of mutual fund shares and
shareholders through various brokers, dealers, banks and other financial
institutions is a successful way of distributing shares of a mutual fund. The
Trustees concluded that without an effective means of selling and distributing
Fund shares and servicing shareholders and providing account maintenance,
expenses may remain higher on a per share basis. By providing an alternative
means of acquiring Fund shares, the Distribution and Service Plan proposed for
shareholder approval is designed to stimulate sales by and services from many
types of financial institutions.
The Trustees recognize that the Manager will benefit from the Proposed
Plan through larger investment advisory fees resulting from an increase in Fund
assets, since its investment advisory fees are based upon a percentage of net
assets of the Fund. The Board was also advised by the Manager that a
compensation plan could possibly decrease the time necessary for the Distributor
to recover, and could possibly increase the likelihood that the Distributor
might actually recover, the costs of distributing Class B shares. If either were
to occur, the profits of the Manager, which is the parent company of the
Distributor, would be increased. The Board, including each of the Independent
Trustees, determined that the Proposed Plan is in the best interests of the
Fund, and that its adoption has a reasonable likelihood of benefiting the Fund
and its Class B shareholders. In its annual review of the Proposed Plan, the
Board will consider the continued appropriateness of the Distribution and
Service Plan, including the level of payments provided for therein.
INFORMATION ABOUT THE FUND
The SEC requires that the following information be provided to the Fund's
shareholders even though not directly related to the proposals you are being
asked to consider.
Fund Information. As of June 26, 2000 the Fund had 27,996,857.416 shares
outstanding, consisting of 19,054,451.685 Class A, 6,563,233.006 Class B,
1,064,781.060 Class C shares and 1,314,391.665 Class Y Shares. Each share has
voting rights as stated in this Proxy Statement and 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
the "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, no person owned of record or was known by the Fund to own beneficially 5%
or more of the Fund's outstanding Class A, Class B, Class C or Class Y shares
except the following:
Merrill Lynch Pierce Fenner & Smith Inc., 4800 Deer Lake Drive E., Floor
3, Jacksonville, Florida 32246, which owned 1,738,659.927 Class A shares
(9.11% of the Class A shares then outstanding), for the benefit of its
customers.
American Express Trust Co., FBO American Express Trust, Retirement
Service Plans, P.O. Box 534, Minneapolis, Minnesota 55440-0534, which
owned 1,089,260.553 Class A shares (5.71% of the Class A shares then
outstanding).
Merrill Lynch Pierce Fenner & Smith Inc., 4800 Deer Lake Drive E., Floor
3, Jacksonville, Florida 32246, which owned 69,485.764 Class C shares
(6.51% of the Class C shares then outstanding), for the benefit of its
customers.
MassMutual Life Insurance Company, 1295 State Street, Springfield, MA
01111, which owned 1,313,691.277 Class Y shares (99.94% of the Class Y
shares then outstanding).
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 each Fund's business, pursuant to its investment advisory agreement with that
Fund. OppenheimerFunds Distributor, Inc., a wholly owned subsidiary of the
Manager, is the general distributor (the "Distributor") of the Funds' shares.
OppenheimerFunds Services, a division of the Manager, serves as the transfer and
shareholder servicing agent (the "Transfer Agent") for the Funds on an "at cost"
basis, for which it was paid $3,741,542 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 30, 1999,
the only transactions on a post-split basis by persons who serve as Trustees of
the Fund were by Mr. Spiro who sold 30,000 shares of Class B OAC common stock to
Mass Mutual for a cash payment of $9,399,000, 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, Victor Babin, Bruce Bartlett, 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, Kurt Wolfgruber, 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 three offices of the Manager: Two World Trade Center,
New York, NY 10048-0203; 6803 South Tucson Way, Englewood, CO 80112; and 350
Linden Oaks, Rochester, NY 14625-2807.
Custodian. The Bank of New York, Mutual Funds Division, 100 Church 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 and most
recent Semi-Annual Report to Shareholders of the Fund, including audited
financial statements of the Fund for the fiscal year ended September 30, 1999
and unaudited financial statements of the Fund for the six months ended March
31, 2000, respectively, have previously been sent to all shareholders. Upon
request, shareholders may obtain without charge a copy of the Annual Report or
Semi-Annual Report 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
$3,000 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 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. Proposal 6 requires the affirmative
vote of a majority of the outstanding Class B shares. Approval of Proposals 3
through 5 requires the affirmative vote of a majority of the outstanding shares
of the Fund. 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 Funds are 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 that 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.
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 6 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 the Proposal 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. Any adjourned session or sessions may be held within 90 days after
the date set for the original Meeting without the necessity of further notice.
By Order of the Board of Trustees,
Andrew J. Donohue, Secretary
July __, 2000
proxy\500_2000august28
<PAGE>
AMENDED AND RESTATED DECLARATION OF TRUST
OF
OPPENHEIMER DISCOVERY FUND
This DECLARATION OF TRUST, made as of the 15th of July, 1985, by and among
the individuals executing this Declaration of Trust as the Trustees, and amended
and restated this 29th day of June, 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 DISCOVERY FUND. The address
of Oppenheimer Discovery 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
-------------- ------
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 or reckless disregard of the duties
involved in the conduct of the office in question;
(iv) the term "covered expenses" shall mean expenses
(including attorney's fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by an indemnitee in connection with a covered
proceeding; and
(v) the term "adjudication of liability" shall mean, as to any
covered proceeding and as to any indemnitee, an adverse determination as to the
indemnitee whether by judgment, order, settlement, conviction or upon a plea of
nolo contendere or its equivalent.
(d) The Trust shall not indemnify any indemnitee for any covered
expenses in any covered proceeding if there has been an adjudication of
liability against such indemnitee expressly based on a finding of disabling
conduct.
(e) Except as set forth in paragraph (d) above, the Trust shall
indemnify any indemnitee for covered expenses in any covered proceeding, whether
or not there is an adjudication of liability as to such indemnitee, 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
-------------- -------
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.
Dr. Phillip Griffiths Kenneth A. Randall
97 Olden Lane 6 Whittaker's Mill
Princeton, NJ 08540 Williamsburg, VA 23185
Robert G. Galli Edward V. Regan
19750 Beach Road 67 Park Avenue
Apt. 401 Apt. D
Jupiter Island, FL 33469 New York, NY 10016
Leon Levy Russell S. Reynolds, Jr.
One Sutton Place South 98 Field Point Circle
Apt. 3A Greenwich, CT 06830
New York, NY 10022
Dr. Benjamin Lipstein Donald W. Spiro
591 Breezy Hill Road Two World Trade Center
Hillsdale, NY 12529 34th Floor
New York, NY 10048
Bridget Macaskill Ambassador Clayton K. Yeutter
160 East 81st Street 10475 East Laurel Lane
New York, NY 10028 Scottsdale, AZ 85259
Elizabeth B. Moynihan
801 Pennsylvania Avenue, N.W.
Apt. 1115
Washington, DC 20004
orgzn\500_dot
<PAGE>
AMENDED AND RESTRATED
DISTRIBUTION AND SERVICE PLAN AND AGREEMENT
With
OppenheimerFunds Distributor, Inc.
For Class B Shares of
Oppenheimer Discovery Fund
This Amended and Restated Distribution and Service Plan and Agreement (the
"Plan") is dated as of the ___ day of ________, 2000, by and between Oppenheimer
Discovery Fund (the "Fund") and OppenheimerFunds Distributor, Inc. (the
"Distributor").
1. The Plan. This Plan is the Fund's written distribution and service plan for
Class B shares of the Fund (the "Shares"), designed to comply with the
provisions of Rule 12b-1, as it may be amended from time to time (the "Rule"),
under the Investment Company Act of 1940 (the "1940 Act"). Pursuant to this Plan
the Fund will compensate the Distributor for its services in connection with the
distribution of Shares, and the personal service and maintenance of shareholder
accounts that hold Shares ("Accounts"). The Fund may act as distributor of
securities of which it is the issuer, pursuant to the Rule, according to the
terms of this Plan. The terms and provisions of this Plan shall be interpreted
and defined in a manner consistent with the provisions and definitions contained
in (i) the Fund's Registration Statement, (ii) the 1940 Act, (iii) the Rule,
(iv) Rule 2830 of the Conduct Rules of the National Association of Securities
Dealers, Inc., or any amendment or successor to such rule (the "NASD Conduct
Rules") and (v) any conditions pertaining either to distribution-related
expenses or to a plan of distribution to which the Fund is subject under any
order on which the Fund relies, issued at any time by the U.S. Securities and
Exchange Commission ("SEC").
2. Definitions. As used in this Plan, the following terms shall have the
-----------
following meanings:
(a) "Recipient" shall mean any broker, dealer, bank or other person or
entity which: (i) has rendered assistance (whether direct, administrative or
both) in the distribution of Shares or has provided administrative support
services with respect to Shares held by Customers (defined below) of the
Recipient; (ii) shall furnish the Distributor (on behalf of the Fund) with such
information as the Distributor shall reasonably request to answer such questions
as may arise concerning the sale of Shares; and (iii) has been selected by the
Distributor to receive payments under the Plan.
(b) "Independent Trustees" shall mean the members of the Fund's Board of
Trustees who are not "interested persons" (as defined in the 1940 Act) of the
Fund and who have no direct or indirect financial interest in the operation of
this Plan or in any agreement relating to this Plan.
(c) "Customers" shall mean such brokerage or other customers or
investment advisory or other clients of a Recipient, and/or accounts as to which
such Recipient provides administrative support services or is a custodian or
other fiduciary.
<PAGE>
75
(d) "Qualified Holdings" shall mean, as to any Recipient, all Shares owned
beneficially or of
record by: (i) such Recipient, or (ii) such Recipient's Customers, but in no
event shall any such Shares be deemed owned by more than one Recipient for
purposes of this Plan. In the event that more than one person or entity would
otherwise qualify as Recipients as to the same Shares, the Recipient which is
the dealer of record on the Fund's books as determined by the Distributor shall
be deemed the Recipient as to such Shares for purposes of this Plan.
3. Payments for Distribution Assistance and Administrative Support
Services.
(a) Payments to the Distributor. In consideration of the payments made by
the Fund to the Distributor under this Plan, the Distributor shall provide
administrative support services and distribution assistance services to the
Fund. Such services include distribution assistance and administrative support
services rendered in connection with Shares (1) sold in purchase transactions,
(2) issued in exchange for shares of another investment company for which the
Distributor serves as distributor or sub-distributor, or (3) issued pursuant to
a plan of reorganization to which the Fund is a party. If the Board believes
that the Distributor may not be rendering appropriate distribution assistance or
administrative support services in connection with the sale of Shares, then the
Distributor, at the request of the Board, shall provide the Board with a written
report or other information to verify that the Distributor is providing
appropriate services in this regard. For such services, the Fund will make the
following payments to the Distributor:
(i) Administrative Support Services Fees. Within forty-five (45)
days of the end of each calendar quarter, the Fund will make payments in the
aggregate amount of 0.0625% (0.25% on an annual basis) of the average during
that calendar quarter of the aggregate net asset value of the Shares computed as
of the close of each business day (the "Service Fee"). Such Service Fee payments
received from the Fund will compensate the Distributor for providing
administrative support services with respect to Accounts. The administrative
support services in connection with Accounts may include, but shall not be
limited to, the administrative support services that a Recipient may render as
described in Section 3(b)(i) below.
(ii) Distribution Assistance Fees (Asset-Based Sales Charge). Within
ten (10) days of the end of each month, the Fund will make payments in the
aggregate amount of 0.0625% (0.75% on an annual basis) of the average during the
month of the aggregate net asset value of Shares computed as of the close of
each business day (the "Asset-Based Sales Charge") outstanding until such Shares
are repurchased or converted to another class of shares of the Fund, provided,
however, that a majority of the Independent Trustees may, but are not obligated
to, set a time period (the "Fund Maximum Holding Period") from time to time for
such payments. Such Asset-Based Sales Charge payments received from the Fund
will compensate the Distributor for providing distribution assistance in
connection with the sale of Shares.
The distribution assistance to be rendered by the Distributor in
connection with the Shares may include, but shall not be limited to, the
following: (i) paying sales commissions to any broker, dealer, bank or other
person or entity that sells Shares, and/or paying such persons "Advance Service
Fee Payments" (as defined below) in advance of, and/or in amounts greater than,
the amount provided for in Section 3(b) of this Agreement; (ii) paying
compensation to and expenses of personnel of the Distributor who support
distribution of Shares by Recipients; (iii) obtaining financing or providing
such financing from its own resources, or from an affiliate, for the interest
and other borrowing costs of the Distributor's unreimbursed expenses incurred in
rendering distribution assistance and administrative support services to the
Fund; and (iv) paying other direct distribution costs, including without
limitation the costs of sales literature, advertising and prospectuses (other
than those prospectuses furnished to current holders of the Fund's shares
("Shareholders")) and state "blue sky" registration expenses.
<PAGE>
(b) Payments to Recipients. The Distributor is authorized under the Plan
to pay Recipients (1) distribution assistance fees for rendering distribution
assistance in connection with the sale of Shares and/or (2) service fees for
rendering administrative support services with respect to Accounts. However, no
such payments shall be made to any Recipient for any such quarter in which its
Qualified Holdings do not equal or exceed, at the end of such quarter, the
minimum amount ("Minimum Qualified Holdings"), if any, that may be set from time
to time by a majority of the Independent Trustees. All fee payments made by the
Distributor hereunder are subject to reduction or chargeback so that the
aggregate service fee payments and Advance Service Fee Payments do not exceed
the limits on payments to Recipients that are, or may be, imposed by the NASD
Conduct Rules. The Distributor may make Plan payments to any "affiliated person"
(as defined in the 1940 Act) of the Distributor if such affiliated person
qualifies as a Recipient or retain such payments if the Distributor qualifies as
a Recipient.
(i) Service Fee. In consideration of the administrative support
services provided by a Recipient during a calendar quarter, the Distributor
shall make service fee payments to that Recipient quarterly, within forty-five
(45) days of the end of each calendar quarter, at a rate not to exceed 0.0625%
(0.25% on an annual basis) of the average during the calendar quarter of the
aggregate net asset value of Shares, computed as of the close of each business
day, constituting Qualified Holdings owned beneficially or of record by the
Recipient or by its Customers for a period of more than the minimum period (the
"Minimum Holding Period"), if any, that may be set from time to time by a
majority of the Independent Trustees.
Alternatively, the Distributor may, at its sole option, make the
following service fee payments to any Recipient quarterly, within forty-five
(45) days of the end of each calendar quarter: (i) "Advance Service Fee
Payments" at a rate not to exceed 0.25% of the average during the calendar
quarter of the aggregate net asset value of Shares, computed as of the close of
business on the day such Shares are sold, constituting Qualified Holdings, sold
by the Recipient during that quarter and owned beneficially or of record by the
Recipient or by its Customers, plus (ii) service fee payments at a rate not to
exceed 0.0625% (0.25% on an annual basis) of the average during the calendar
quarter of the aggregate net asset value of Shares, computed as of the close of
each business day, constituting Qualified Holdings owned beneficially or of
record by the Recipient or by its Customers for a period of more than one (1)
year. At the Distributor's sole option, the Advance Service Fee Payments may be
made more often than quarterly, and sooner than the end of the calendar quarter.
In the event Shares are redeemed less than one year after the date such Shares
were sold, the Recipient is obligated to and will repay the Distributor on
demand a pro rata portion of such Advance Service Fee Payments, based on the
ratio of the time such Shares were held to one (1) year.
The administrative support services to be rendered by Recipients in
connection with the Accounts may include, but shall not be limited to, the
following: answering routine inquiries concerning the Fund, assisting in the
establishment and maintenance of accounts or sub-accounts in the Fund and
processing Share repurchase transactions, making the Fund's investment plans and
dividend payment options available, and providing such other information and
services in connection with the rendering of personal services and/or the
maintenance of Accounts, as the Distributor or the Fund may reasonably request.
(ii) Distribution Assistance Fees (Asset-Based Sales Charge)
Payments. In its sole discretion and irrespective of whichever alternative
method of making service fee payments to Recipients is selected by the
Distributor, in addition the Distributor may make distribution assistance fee
payments to a Recipient quarterly, within forty-five (45) days after the end of
each calendar quarter, at a rate not to exceed 0.1875% (0.75% on an annual
basis) of the average during the calendar quarter of the aggregate net asset
value of Shares computed as of the close of each business day constituting
Qualified Holdings owned beneficially or of record by the Recipient or its
Customers until such Shares are repurchased or converted to another class of
shares of the Fund, provided, however, that a majority of the Independent
Trustees may, but are not obligated to, set a time period (the "Recipient
Maximum Holding Period") for making such payments. Distribution assistance fee
payments shall be made only to Recipients that are registered with the SEC as a
broker-dealer or are exempt from registration.
The distribution assistance to be rendered by the Recipients in
connection with the sale of Shares may include, but shall not be limited to, the
following: distributing sales literature and prospectuses other than those
furnished to current Shareholders, providing compensation to and paying expenses
of personnel of the Recipient who support the distribution of Shares by the
Recipient, and providing such other information and services in connection with
the distribution of Shares as the Distributor or the Fund may reasonably
request.
<PAGE>
(c) A majority of the Independent Trustees may at any time or from time to
time increase or decrease the rate of fees to be paid to the Distributor or to
any Recipient, but not to exceed the rates set forth above, and/or direct the
Distributor to set, eliminate or modify the Fund Maximum Holding Period, any
Minimum Holding Period, the Recipient Maximum Holding Period and/or any Minimum
Qualified Holdings and/or to split requirements so that different time periods
apply to shares that are afforded different shareholder privileges and features.
The Distributor shall notify all Recipients of any Minimum Qualified Holdings,
Maximum Holding Period and Minimum Holding Period that are established and the
rate of payments hereunder applicable to Recipients, and shall provide each
Recipient with written notice within thirty (30) days after any change in these
provisions. Inclusion of such provisions or a change in such provisions in a
revised current prospectus, Statement of Additional Information or supplement to
either shall constitute sufficient notice.
(d) The Service Fee and the Asset-Based Sales Charge on Shares are subject
to reduction or elimination under the limits that apply to such fees and charges
under the NASD Conduct Rules relating to sales of shares of open-end funds.
(e) Under the Plan, payments may also be made to Recipients: (i) by
OppenheimerFunds, Inc. ("OFI") from its own resources (which may include profits
derived from the advisory fee it receives from the Fund), or (ii) by the
Distributor (a subsidiary of OFI), from its own resources, from Asset-Based
Sales Charge payments or from the proceeds of its borrowings, in either case, in
the discretion of OFI or the Distributor, respectively.
(f) Recipients are intended to have certain rights as third-party
beneficiaries under this Plan, subject to the limitations set forth below. It
may be presumed that a Recipient has provided distribution assistance or
administrative support services qualifying for payment under the Plan if it has
Qualified Holdings of Shares that entitle it to payments under the Plan. In the
event that either the Distributor or the Board should have reason to believe
that, notwithstanding the level of Qualified Holdings, a Recipient may not be
rendering appropriate distribution assistance in connection with the sale of
Shares or administrative support services for Accounts, then the Distributor, at
the request of the Board, shall require the Recipient to provide a written
report or other information to verify that said Recipient is providing
appropriate distribution assistance and/or services in this regard. If the
Distributor or the Board of Trustees still is not satisfied after the receipt of
such report, either may take appropriate steps to terminate the Recipient's
status as such under the Plan, whereupon such Recipient's rights as a
third-party beneficiary hereunder shall terminate. Additionally, in their
discretion, a majority of the Fund's Independent Trustees at any time may remove
any broker, dealer, bank or other person or entity as a Recipient, where upon
such person's or entity's rights as a third-party beneficiary hereof shall
terminate. Notwithstanding any other provision of this Plan, this Plan does not
obligate or in any way make the Fund liable to make any payment whatsoever to
any person or entity other than directly to the Distributor. The Distributor has
no obligation to pay any Service Fees or Distribution Assistance Fees to any
Recipient if the Distributor has not received payment of Service Fees or
Distribution Assistance Fees from the Fund.
4. Selection and Nomination of Trustees. While this Plan is in effect, the
selection and nomination of persons to be Trustees of the Fund who are not
"interested persons" of the Fund ("Disinterested Trustees") shall be committed
to the discretion of the incumbent Disinterested Trustees. Nothing herein shall
prevent the incumbent Disinterested Trustees from soliciting the views or the
involvement of others in such selection or nominations as long as the final
decision on any such selection and nomination is approved by a majority of the
incumbent Disinterested Trustees.
5. Reports. While this Plan is in effect, the Treasurer of the Fund shall
provide written reports to the Fund's Board for its review, detailing the amount
of all payments made under this Plan and the purpose for which the payments were
made. The reports shall be provided quarterly, and shall state whether all
provisions of Section 3 of this Plan have been complied with.
<PAGE>
6. Related Agreements. Any agreement related to this Plan shall be in writing
and shall provide that: (i) such agreement may be terminated at any time,
without payment of any penalty, by a vote of a majority of the Independent
Trustees or by a vote of the holders of a "majority" (as defined in the 1940
Act) of the Fund's outstanding Class B voting shares; (ii) such termination
shall be on not more than sixty days' written notice to any other party to the
agreement; (iii) such agreement shall automatically terminate in the event of
its "assignment" (as defined in the 1940 Act); (iv) such agreement shall go into
effect when approved by a vote of the Board and its Independent Trustees cast in
person at a meeting called for the purpose of voting on such agreement; and (v)
such agreement shall, unless terminated as herein provided, continue in effect
from year to year only so long as such continuance is specifically approved at
least annually by a vote of the Board and its Independent Trustees cast in
person at a meeting called for the purpose of voting on such continuance.
7. Effectiveness, Continuation, Termination and Amendment. This Plan, which
replaces the Fund's prior Distribution and Service Plan and Agreement for Class
B Shares, has been approved by a vote of the Board and its Independent Trustees
cast in person at a meeting called on ________,2000 for the purpose of voting on
this Plan, and has been approved by the holders of the Fund's outstanding Class
B shares in the manner described above at a meeting held __________, 2000.
Unless terminated as hereinafter provided, it shall continue in effect until
renewed by the Board in accordance with the Rule and thereafter from year to
year or as the Board may otherwise determine but only so long as such
continuance is specifically approved at least annually by a vote of the Board
and its Independent Trustees cast in person at a meeting called for the purpose
of voting on such continuance.
This Plan may not be amended to increase materially the amount of payments
to be made under this Plan, without approval of the Class B Shareholders at a
meeting called for that purpose, and all material amendments must be approved by
a vote of the Board and of the Independent Trustees.
This Plan may be terminated at any time by vote of a majority of the
Independent Trustees or by the vote of the holders of a "majority" (as defined
in the 1940 Act) of the Fund's outstanding Class B voting shares. In the event
of such termination, the Board and its Independent Trustees shall determine
whether the Distributor shall be entitled to payment from the Fund of all or a
portion of the Service Fee and/or the Asset-Based Sales Charge in respect of
Shares sold prior to the effective date of such termination.
8. Disclaimer of Shareholder and Trustee Liability. The Distributor
-----------------------------------------------------
understands that the obligations of the Fund under this Plan are not binding
upon any Trustee or shareholder of the Fund personally, but bind only the
Fund and the Fund's property. The Distributor represents that it has notice
of the provisions
of the Declaration of Trust of the Fund disclaiming Trustee and shareholder
liability for acts or obligations of the Fund.
Oppenheimer Discovery Fund
By:____________________________________
Andrew J. Donohue, Secretary
OppenheimerFunds Distributor, Inc.
By: ____________________________________
Katherine P. Feld, Vice President &
Secretary
N-1A/OrgDoc/500_12b1ClassB2000
