<PAGE>
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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
/ / Definitive proxy statement
/ / Definitive additional materials
/ / Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
Oppenheimer Intermediate Tax-Exempt Bond Fund, a series of
Oppenheimer Tax-Exempt Bond 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):
/ x / $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1) or
14a-6(j)(2).
/ / $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 0-11:1
- -------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- -------------------------------------------------------------------------
/ / Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the
offsetting fee was paid previously. Identify the previous filing
by registration statement number, or the form or schedule and the
date of its filing.
- -------------------------------------------------------------------------
(1) Amount previously paid:
- -------------------------------------------------------------------------
(2) Form, schedule or registration statement no.:
- -------------------------------------------------------------------------
(3) Filing Party:
- -------------------------------------------------------------------------
(4) Date Filed:
- -----------------------
1Set forth the amount on which the filing fee is calculated and state how
it was determined.
<PAGE>
Preliminary Copy
May 1995
Dear Oppenheimer Intermediate Tax-Exempt Bond Fund Class A shareholder:
We have scheduled a shareholder meeting on June 14, 1995 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 vote is very important because these decisions will affect your
investment, and it's your chance to help shape the policies of the Fund.
So we urge you to consider these issues carefully and to make your vote
count.
How do you vote?
To vote, simply complete the ballot by marking your choices and
return it in the postage-paid envelope provided. 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?
After consideration, the Board of Trustees, who represent your
interests in the day-to-day management of the Fund, recommend approval of
the following items:
- - Election of Trustees. There are nine Trustees up for reelection on
June 14. You will find detailed information on the members of the
Board in the enclosed proxy statement.
- - Ratification of Auditors. Each year, outside auditors are employed
to review the Fund's financial statements, as explained in the proxy
statement.
- - Change in Certain Fundamental Investment Policies. The fundamental
investment policies described in the prospectus determine the types
of securities that may be purchased by the Fund.
In the wake of last year's turbulent marketplace, the Fund's
investment adviser requests your approval to amend some of these
investment limitations to allow the portfolio manager more
flexibility to diversify the Fund's holdings. Specifically, the
investment adviser recommends that the Fund have the capacity to
invest at least 80% of its total assets in investment grade municipal
securities. Currently, the Fund shall invest at least 65% of its
assets in investment grade bonds. Bond are generally considered to
be debt securities with maturities of ten or more years. A portfolio
made up primarily of longer-term securities is generally more
sensitive to changes in interest rates than a portfolio of securities
with varying maturities. The investment adviser firmly believes the
ability to diversify the Fund's assets in securities of various
maturities may help protect your investment against volatility, as
well as potentially add to your investment return over time.
Please contact your financial advisor or call at 1-800-525-7048 if
you have any questions.
As always, we appreciate your confidence in OppenheimerFunds and
thank you for allowing us to manage a portion of your investment assets.
Sincerely,
Jon S. Fossel
<PAGE>
Preliminary Copy
May 1995
Dear Oppenheimer Intermediate Tax-Exempt Bond Fund Class C shareholder:
We have scheduled a shareholder meeting on June 14, 1995 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 vote is very important because these decisions will affect your
investment, and it's your chance to help shape the policies of the Fund.
So we urge you to consider these issues carefully and to make your vote
count.
How do you vote?
To vote, simply complete the ballot by marking your choices and
return it in the postage-paid envelope provided. 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?
After consideration, the Board of Trustees, who represent your
interests in the day-to-day management of the Fund, recommend approval of
the following items:
- - Election of Trustees. There are nine Trustees up for reelection on
June 14. You will find detailed information on the members of the
Board in the enclosed proxy statement.
- - Ratification of Auditors. Each year, outside auditors are employed
to review the Fund's financial statements, as explained in the proxy
statement.
- - Change in Certain Fundamental Investment Policies. The fundamental
investment policies described in the prospectus determine the types
of securities that may be purchased by the Fund.
In the wake of last year's turbulent marketplace, the Fund's
investment adviser requests your approval to amend some of these
investment limitations to allow the portfolio manager more
flexibility to diversify the Fund's holdings. Specifically, the
investment adviser recommends that the Fund have the capacity to
invest at least 80% of its total assets in investment grade municipal
securities. Currently, the Fund shall invest at least 65% of its
assets in investment grade bonds. Bond are generally considered to
be debt securities with maturities of ten or more years. A portfolio
made up primarily of longer-term securities is generally more
sensitive to changes in interest rates than a portfolio of securities
with varying maturities. The investment adviser firmly believes the
ability to diversify the Fund's assets in securities of various
maturities may help protect your investment against volatility, as
well as potentially add to your investment return over time.
- - Changes in Distribution Plan Contracts for Class C Shares.
Currently, the Fund's distributor is reimbursed for a portion of its
distribution expenses from the service fee and the asset-based sales
charge. Your approval is requested to change the way the distributor
is paid so that it is compensated for its distribution efforts at the
same rate. This is a common type of plan in the mutual fund industry
and is not expected to increase fund expenses materially under normal
circumstances. Any distribution costs in excess of that rate will
be the responsibility of the distributor.
Please contact your financial advisor or call at 1-800-525-7048 if
you have any questions.
As always, we appreciate your confidence in OppenheimerFunds and
thank you for allowing us to manage a portion of your investment assets.
Sincerely,
Jon S. Fossel
<PAGE>
Preliminary Copy
Oppenheimer Intermediate Tax- Proxy for Shareholders Meeting To
Exempt Bond Fund - Class A Be Held June 14, 1995
Shares
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 Intermediate Tax-Exempt Bond Fund - Class A Shares
Proxy For Shareholders Meeting To Be Held June 14, 1995
The undersigned shareholder of Oppenheimer Intermediate Tax-Exempt
Bond Fund (the "Fund"), does hereby appoint Robert Bishop, George C.
Bowen, Andrew J. Donohue and Scott Farrar, and each of them, as attorneys-
in-fact and proxies of the undersigned, with full power of substitution,
to attend the Meeting of Shareholders of the Fund to be held June 14,
1995, at 3410 South Galena Street, Denver, Colorado 80231 at 10:00 A.M.,
Denver time and at all adjournments thereof, and to vote the shares held
in the name of the undersigned on the record date for said meeting for the
election of Trustees and on the proposals specified on the reverse side.
Said attorneys-in-fact shall vote in accordance with their best judgment
as to any other matter.
Proxy solicited on behalf of the Board Of Trustees, which recommends a
vote FOR the election of all nominees for Trustee and FOR each Proposal
on the reverse side. The shares represented hereby will be voted as
indicated on the reverse side or FOR if no choice is indicated.
(over)
860
Oppenheimer Intermediate Tax- Proxy for Shareholders Meeting To
Exempt Bond Fund - Class A Be Held June 14, 1995
Shares
Your shareholder Your prompt response can save your
vote is important! Fund money.
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 Trustees
____ For all nominees listed _____ Withhold authority
except as marked to the vote for all nominees
contrary at left. listed at left.
R. Avis W. Baker C. Conrad J. Fossel
(A) (B) (C) (D)
R. Kalinowski C. Kast R. Kirchner N. Steel
(E) (F) (G) (H)
C. Swain
(I)
Instruction: To withhold authority to vote for any individual nominee,
line out that nominee's name at left.
2. Ratification of selection of Deloitte & Touche LLP as independent
auditors (Proposal No. 1)
For ____ Against ____ Abstain ____
3. Approval of the proposed changes in fundamental investment policies
(Proposal No. 2)
For ____ Against ____ Abstain ____
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: _______________________, 1995
(Month) (Day)
____________________________
Signature(s)
____________________________
Signature(s)
Please read both sides of this ballot.
860
PROXY/860BAL.695
<PAGE>
Preliminary Copy
Oppenheimer Intermediate Tax- Proxy for Shareholders Meeting To
Exempt Bond Fund - Class C Be Held June 14, 1995
Shares
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 Intermediate Tax-Exempt Bond Fund - Class C Shares
Proxy For Shareholders Meeting To Be Held June 14, 1995
The undersigned shareholder of Oppenheimer Intermediate Tax-Exempt
Bond Fund (the "Fund"), does hereby appoint Robert Bishop, George C.
Bowen, Andrew J. Donohue and Scott Farrar, and each of them, as attorneys-
in-fact and proxies of the undersigned, with full power of substitution,
to attend the Meeting of Shareholders of the Fund to be held June 14,
1995, at 3410 South Galena Street, Denver, Colorado 80231 at 10:00 A.M.,
Denver time and at all adjournments thereof, and to vote the shares held
in the name of the undersigned on the record date for said meeting for the
election of Trustees and on the proposals specified on the reverse side.
Said attorneys-in-fact shall vote in accordance with their best judgment
as to any other matter.
Proxy solicited on behalf of the Board Of Trustees, which recommends a
vote FOR the election of all nominees for Trustee and FOR each Proposal
on the reverse side. The shares represented hereby will be voted as
indicated on the reverse side or FOR if no choice is indicated.
(over)
862
Oppenheimer Intermediate Tax- Proxy for Shareholders Meeting To
Exempt Bond Fund - Class C Be Held June 14, 1995
Shares
Your shareholder Your prompt response can save your
vote is important! Fund money.
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 Trustees
____ For all nominees listed _____ Withhold authority
except as marked to the vote for all nominees
contrary at left. listed at left.
R. Avis W. Baker C. Conrad J. Fossel
(A) (B) (C) (D)
R. Kalinowski C. Kast R. Kirchner N. Steel
(E) (F) (G) (H)
C. Swain
(I)
Instruction: To withhold authority to vote for any individual nominee,
line out that nominee's name at left.
2. Ratification of selection of Deloitte & Touche LLP as independent
auditors (Proposal No. 1)
For ____ Against ____ Abstain ____
3. Approval of the proposed changes in fundamental investment policies
(Proposal No. 2)
For ____ Against ____ Abstain ____
4. Approval of the proposed Class C 12b-1 Distribution and Service Plan
(Proposal No. 3)
For ____ Against ____ Abstain ____
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: _______________________, 1995
(Month) (Day)
____________________________
Signature(s)
____________________________
Signature(s)
Please read both sides of this ballot.
862
PROXY/860BAL.695
<PAGE>
Preliminary Copy
OPPENHEIMER INTERMEDIATE TAX-EXEMPT BOND FUND
3410 South Galena Street, Denver, Colorado 80231
Notice Of Meeting Of Shareholders To Be Held
June 14, 1995
To The Class A & Class C Shareholders of
Oppenheimer Intermediate Tax-Exempt Bond Fund
Notice is hereby given that a Meeting of the Class A and Class C
Shareholders of Oppenheimer Intermediate Tax-Exempt Bond Fund (the "Fund")
will be held at 3410 South Galena Street, Denver, Colorado, 80231, at
10:00 A.M., Denver time, on June 14, 1995, or any adjournments thereof,
for the following purposes:
<TABLE>
<CAPTION>
To be Voted on by Holders of:
Class A Shares Class C Shares
<S> <C> <C>
X X (a) To elect nine Trustees to hold
office until the next meeting of
shareholders called for the purpose of
electing Trustees and until their
successors are elected and shall
qualify;
X X (b) To ratify the selection of
Deloitte & Touche LLP as the
independent certified public
accountants and auditors of the Fund
for the fiscal year beginning October
1, 1994 (Proposal No. 1);
X X (c) To approve changes in the Fund's
fundamental investment policies on
investing in municipal bonds (Proposal
No. 2);
X (d) To approve the Fund's Class C 12b-
1 Distribution and Service Plan
(Proposal No. 3); and
X X (e) To transact such other business as
may properly come before the meeting,
or any adjournments thereof.
</TABLE>
Shareholders of record at the close of business on April 21, 1995, are
entitled to vote at the meeting. The election of Trustees and 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 Fund
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,
George C. Bowen, Secretary
May 1, 1995
- --------------------------------------------------------------------------
Shareholders who do not expect to attend the Meeting are asked to indicate
voting instructions on the enclosed proxy and to date, sign and return it
in the accompanying postage-paid envelope. To avoid unnecessary duplicate
mailings, we ask your cooperation in promptly mailing your proxy no matter
how large or small your holdings may be.
860
<PAGE>
OPPENHEIMER INTERMEDIATE TAX-EXEMPT BOND FUND
3410 South Galena Street, Denver, Colorado 80231
PROXY STATEMENT
Meeting of Shareholders
To Be Held June 14, 1995
This statement is furnished to the Class A and Class C shareholders of
Oppenheimer Intermediate Tax-Exempt Bond Fund (the "Fund") in connection
with the solicitation by the Fund's Board of Trustees of proxies to be
used at a meeting (the "Meeting") of shareholders to be held at 3410 South
Galena Street, Denver, Colorado, 80231, at 10:00 A.M., Denver time, on
June 14, 1995, or any adjournments thereof. It is expected that the
mailing of this Proxy Statement will be made on or about May 1, 1995. For
a free copy of the annual report covering the operations of the Fund for
the fiscal year ended September 30, 1994, call Oppenheimer Shareholder
Services, the Fund's transfer agent, at 1-800-525-7048.
The enclosed proxy, if properly executed and returned, will be voted (or
counted as an abstention or withheld from voting) in accordance with the
choices specified thereon, and will be included in determining whether
there is a quorum to conduct the meeting. The proxy will be voted in
favor of the nominees for Trustee named in this Proxy Statement unless a
choice is indicated to withhold authority to vote for all listed nominees
or any individual nominee. The proxy will be voted in favor of each
Proposal unless a choice is indicated to vote against or to abstain from
voting on that Proposal. 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 under
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.
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 herein for Trustee and in favor of each
Proposal.
The proxy may be revoked at any time prior to the voting by: (1) writing
to the Secretary of the Fund at 3410 South Galena Street, Denver, Colorado
80231; (2) attending the meeting and voting in person; or (3) signing and
returning a new proxy (if returned and received in time to be voted).
The cost of printing and distributing these proxy materials is an expense
of the Fund. In addition to the solicitation of proxies by mail, proxies
may be solicited by officers or employees of the Fund's transfer agent,
personally or by telephone; any expenses so incurred will also be borne
by the Fund. Brokers, banks and other fiduciaries may be required to
forward soliciting material to their principals and to obtain
authorization for the execution of proxies. For those services they will
be reimbursed by the Fund for their out-of-pocket expenses.
Shares Outstanding and Entitled to Vote. As of April 21, 1995, the record
date, there were _________________ shares of the Fund issued and
outstanding, consisting of _______________ Class A shares and
_________________ Class C shares. Each Class A and Class C share of the
Fund has voting rights as stated in this Proxy Statement and is entitled
to one vote for each share (and a fractional vote for a fractional share)
held of record at the close of business on the record date. [As of the
record date, no person owned of record or was known by the management of
the Fund to be the beneficial owner of 5% or more of the outstanding
shares of either class of the Fund's shares.]
ELECTION OF TRUSTEES
At the Meeting, nine 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 shall be 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 shareholders meeting is called for the purpose of voting for
Trustees and until their successors are elected and shall qualify.
Each of the nominees is presently a Trustee and has agreed to be nominated
and, if elected, to continue to serve as a Trustee of the Fund. [All
Trustees have been elected by shareholders of the Fund.] Each Trustee is
also a Trustee, Director or Managing General Partner of Daily Cash
Accumulation Fund, Inc., Centennial Money Market Trust, Centennial Tax
Exempt Trust, Centennial Government Trust, Centennial New York Tax Exempt
Trust, Centennial California Tax Exempt Trust, Centennial America Fund,
L.P., Oppenheimer Total Return Fund, Inc., Oppenheimer Equity Income Fund,
Oppenheimer Champion High Yield Fund, Oppenheimer High Yield Fund,
Oppenheimer Cash Reserves, Oppenheimer Variable Account Funds, Oppenheimer
Main Street Funds, Inc., Oppenheimer Integrity Funds, Oppenheimer
Strategic Funds Trust, Oppenheimer Strategic Income & Growth Fund,
Oppenheimer Strategic Investment Grade Bond Fund, Oppenheimer Strategic
Short-Term Income Fund, Oppenheimer Limited-Term Government Fund, and The
New York Tax-Exempt Income Fund, Inc. (collectively, the "Denver-based
OppenheimerFunds"). Mr. Fossel is President and Mr. Swain is Chairman of
each of the Denver-based OppenheimerFunds.
Each nominee indicated below by an asterisk is an "interested person" (as
that term is defined in the Investment Company Act of 1940, hereinafter
referred to as the "Investment Company Act") of the Fund due to the
positions indicated with the Fund's investment adviser, Oppenheimer
Management Corporation (the "Manager") or its affiliates, or other
positions described. The year given below indicates when the nominee
first became a Trustee, Director or Managing General Partner of any of the
Denver OppenheimerFunds without a break in service. The beneficial
ownership of 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 April 21, 1995 the Trustees and officers of the Fund as a group
owned _______________ Class A shares of the Fund in the aggregate, which
is less than 1% of the outstanding shares of that class, and owned
_________________ Class C shares of the Fund in the aggregate, which is
less than 1% of the outstanding shares of that class. The foregoing
statement does not reflect ownership of shares held of record by an
employee benefit plan for employees of the Manager (for which plan two of
the officers listed below, Messrs. Fossel and Donohue, are trustees),
other than the shares beneficially owned under that plan by the officers
of the Fund listed above.
<TABLE>
<CAPTION>
Shares
Beneficially
Name and Business Experience Owned as of
Other Information During the Past Five Years April 21, 1995
<S> <C> <C>
William A. Baker Management Consultant.
first became a
Trustee in 1966.
Age: 80
Charles Conrad, Jr. Vice President of McDonnell
first became a Douglas, Ltd.; formerly associated
Trustees in 1970. with the National Aeronautics and
Age: 64 Space Administration.
Raymond J. Kalinowski Director of Wave Technologies
first became a International, Inc.; formerly Vice
Trustee in 1988. Chairman and a director of A.G.
Age: 65 Edwards, Inc., parent holding
company of A.G. Edwards & Sons,
Inc. (a broker-dealer), of which
he was a Senior Vice President.
C. Howard Kast Formerly Managing Partner of
first became a Haskins & Sells (an accounting
Trustee in 1988. firm).
Age: 73
Robert M. Kirchner President of The Kirchner Company
first became a (management consultants).
Trustee in 1963.
Age: 73
Ned M. Steel Chartered property and casualty
first became a underwriter; Director of Visiting
Trustee in 1963. Nurse Corporation of Colorado;
Age: 79 formerly Senior Vice President
and a director of Van Gilder
Insurance Corp. (insurance
brokers).
Robert G. Avis* Vice Chairman of A.G. Edwards &
first became a Sons, Inc. (a broker-dealer) and
Trustee in 1993. A.G. Edwards, Inc. (its parent
Age: 63 holding company); Chairman of A.G.
Edwards Trust Company (its
affiliated investment adviser and
trust company, respectively).
Jon S. Fossel* Chairman, Chief Executive Officer
first became a and a director of the Adviser;
Trustee in 1990. President and a director of
Age: 53 Oppenheimer Acquisition Corporation
("OAC"), parent of the Adviser;
President and a director of
HarbourView Asset Management
Corporation ("HarbourView"),
an investment adviser subsidiary of
the Adviser; a director of
Shareholder Services, Inc. ("SSI")
and Shareholder Financial Services,
Inc. ("SFSI"), transfer agent
subsidiaries of the Adviser;
formerly President of the Adviser.
James C. Swain* Vice Chairman and a director of
first became a the Adviser, President and a
Trustee in 1969. director of Centennial Asset
Age: 61 Management Corporation
("Centennial"), an investment
adviser subsidiary of the
Adviser; formerly President and
a director of Oppenheimer Asset
Management Corporation ("OAMC"),
an investment adviser that was a
subsidiary of the Adviser, and
Chairman of the Board of SSI.
<FN>
- ----------------------
*A Trustee who is an "interested person" of the Fund or the Adviser under
the Investment Company Act.
</TABLE>
Vote Required. The affirmative vote of a majority of the votes cast by
shareholders of the Fund without regard to class is required for the
election of a nominee as Trustee. The Board of Trustees recommends a vote
for the election of each nominee.
Functions of the Board of Trustees: 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 the Adviser, which
is responsible for the Fund's day-to-day operations. ___ regular meetings
of the Board were held in the fiscal year ended September 30, 1994 and all
of the Trustees [except Mr. Fossel] were present for at least 75% of those
meetings. The Trustees of the Fund have appointed an Audit and Review
Committee (the "Audit Committee"), comprised of Messrs. Baker (Chairman),
Conrad and Kirchner, none of whom is an "interested person" (as that term
is defined in the Investment Company Act) of the Adviser or the Fund. The
functions of the Audit Committee include (i) making recommendations to the
Board concerning the selection of independent auditors for the Fund
(subject to shareholder ratification); (ii) reviewing the methods, scope
and results of audits and the fees charged; (iii) reviewing the adequacy
of the Fund's internal accounting procedures and controls; and (iv)
establishing a separate line of communication between the Fund's
independent auditors and its independent Trustees. The Audit Committee
met _____ times during the fiscal year ended September 30, 1994 and [all
members] attended at least 75% of the meetings held during this period.
The Board of Trustees does not have a standing nominating or compensation
committee.
Remuneration of Trustees. The officers of the Fund are affiliated with
the Manager; they and the Trustees of the Fund who are affiliated with the
Manager (Messrs. Fossel and Swain, who are both officers and Trustees)
receive no salary or fee from the Fund. The Trustees of the Fund
(excluding Messrs. Fossel and Swain) received the total amounts shown
below (i) from the Fund, during its fiscal year ended September 30, 1994,
and (ii) from all 22 of the Denver-based OppenheimerFunds (including the
Fund) listed in the third paragraph of this section for services in the
positions shown:
<TABLE>
<CAPTION>
Total Compensation
Aggregate From All
Compensation Denver-based
Name and Position from Fund OppenheimerFunds 1
<S> <C> <C>
Robert G. Avis $ $53,000.00
Trustee
William A. Baker $ $73,257.01
Audit and Review Committee
Chairman and Trustee
Charles Conrad, Jr. $ $68,293.67
Audit and Review Committee
Member and Trustee
Raymond J. Kalinowski $ $53,000.00
Trustee
C. Howard Kast $ $53,000.00
Trustee
Robert M. Kirchner $ $68,293.67
Audit and Review Committee
Member and Trustee
Ned M. Steel $ $53,000.00
Trustee
- --------------------
1For the 1994 calendar year.
</table)
Officers of the Fund. 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.
Robert E. Patterson, Vice President and Portfolio Manager; Age 51.
Senior Vice President of the Manager; an officer of other
OppenheimerFunds.
Caryn Halbrecht, Vice President and Portfolio Manager; Age 38.
Vice President of the Manager; an officer of other OppenheimerFunds;
formerly Vice President of Fixed Income Portfolio Management at
Bankers Trust.
Andrew J. Donohue, Secretary; Age: 44.
Executive Vice President and General Counsel of the Manager and the
Distributor; an officer of other OppenheimerFunds; formerly Senior
Vice President and Associate General Counsel of the Manager and the
Distributor, Partner in, Kraft & McManimon (a law firm), an officer
of First Investors Corporation (a broker-dealer) and First Investors
Management Company, Inc. (broker-dealer and investment adviser);
director and an officer of First Investors Family of Funds and First
Investors Life Insurance Company.
George C. Bowen, Vice President and Treasurer; Age 58.
Senior Vice President and Treasurer of the Manager; Vice President
and Treasurer of the Distributor and HarbourView; Senior Vice
President, Treasurer, Assistant Secretary and a director of
Centennial; Vice President, Treasurer and Secretary of SSI and SFSI;
an officer of other OppenheimerFunds.
Robert G. Zack, Assistant Secretary; Age 46.
Senior Vice President and Associate General Counsel of the Manager;
Assistant Secretary of SSI and SFSI; an officer of other
OppenheimerFunds.
Robert Bishop, Assistant Treasurer; Age 36.
Assistant Vice President of the Manager/Mutual Fund Accounting; an
officer of other OppenheimerFunds; previously a Fund Controller for
the Manager, prior to which he was an accountant for Yale &
Seffinger, P.C., an accounting firm, and previously an accountant and
commissions supervisor for Stuart James Company, Inc., a broker-
dealer.
Scott Farrar, Assistant Treasurer; Age 29.
Assistant Vice President of the Manager/Mutual Fund Accounting; an
officer of other OppenheimerFunds; previously a Fund Controller for
the Manager, prior to which he was an international mutual fund
supervisor for Brown Brothers, Harriman & Co., a bank, and previously
a senior fund accountant for State Street Bank & Trust Company.
RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
(Proposal No. 1)
The Investment Company Act requires that independent certified public
accountants and auditors ("auditors") be selected annually by the Board
of Trustees and that such selection be ratified by the shareholders at the
next-convened annual meeting of the Fund, if one is held. 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 October 13, 1994, selected Deloitte
& Touche LLP ("Deloitte") as auditors of the Fund for the fiscal year
beginning October 1, 1994. Deloitte also serves as auditors for certain
other funds for which the Manager acts as investment adviser, and serves
as auditors for the Manager and its subsidiaries. At the Meeting, a
resolution will be presented for the Class A and Class C shareholders'
vote to ratify the selection of Deloitte as auditors. Representatives of
Deloitte are not expected to be present at the Meeting but will have the
opportunity to make a statement if they desire to do so and will be
available should any matter arise requiring their presence. The Board of
Trustees recommends approval of the selection of Deloitte as auditors of
the Fund.
APPROVAL OF CHANGES TO THE FUND'S FUNDAMENTAL
INVESTMENT POLICIES
(Proposal No. 2)
If this Proposal is approved, the Fund will (1) eliminate unnecessary
fundamental restrictions and replace them with non-fundamental
restrictions, (2) broadly define its investment objective, (3) change its
name and the name of the Trust to remove the word "Bond," and (4) permit
non-investment grade investments in a limited amount. The Fund was not
originally an OppenheimerFund, and the changes set forth in this Proposal
will serve to characterize the Fund as an OppenheimerFund.
If this Proposal is approved, the Fund's investment policies and
restrictions will be non-fundamental investment policies except as
otherwise stated. The name of the Fund would become "Oppenheimer
Intermediate Tax-Exempt Fund." This Fund's investment objective would be
changed to "seeking a high level of current income exempt from Federal
income tax." The Fund will under normal market conditions invest at least
80% of its total assets in investment grade municipal securities, the
interest of which is not subject to Federal individual income tax
("Municipal Securities"). "Investment grade" securities are those rated -
or are determined by the Manager to be of comparable quality to those
rated - within the four highest rating categories of Moody's Investor
Services, Inc. ("Moody's"), Standard & Poor's Corporation ("S & P") or
Fitch Investors Service, Inc. ("Fitch").
No more than 20% of its total assets will be invested in taxable
investments. However, for temporary defensive purposes, the Fund may
invest up to 100% of its assets in taxable CDs and commercial paper and
taxable or tax-exempt money market instruments. The Fund may not invest
more than 20% of its total assets in private activity municipal securities
issued to benefit a private user, the interest on which may be subject to
the Federal alternative minimum tax. The Fund will not invest more than
10% of its total assets in securities which are not investment grade (or
if not rated, of comparable quality as determined by the Manager). Under
normal market conditions, the Fund will maintain a dollar-weighted average
portfolio maturity of more than three years but not more than ten years.
The Fund may purchase put and call options and other hedging instruments,
but: (i) the Fund may not purchase options if, as a result, the aggregate
value of all outstanding options exceeds 5% of the Fund's total assets;
(ii) the Fund may not write covered call options which, at the time of
purchase, would require delivery of securities in excess of 20% of the
value of its total assets; (iii) the Fund will not enter into futures and
options thereon, whether long, short or a combination thereof, for non-
bona fide hedging purposes if the aggregate initial margins and premiums
exceed 5% of its total assets; and (iv) the Fund may not enter into swap
transactions with regard to more than 50% of its total assets and only
with respect to securities owned by the Fund. The Fund will be permitted
to invest in commodities and commodity contracts, although the Fund may
not purchase or sell physical commodities unless acquired as a result of
ownership of securities or other instruments. This policy shall not
prevent the Fund from buying or selling options and futures contracts or
from investing in securities or other instruments backed by physical
commodities.
The Fund will not purchase or retain securities if as a result the Fund
will have more than 5% of its total assets invested in securities of
private issuers having a record of less than three years continuous
operation (including the operation of predecessor companies or
enterprises) or in industrial development bonds if the private entity on
whose credit the securities are based, directly or indirectly, has a
record of less that three years continuous operation (including the
operation of predecessor companies or enterprises).
As a matter of fundamental investment policy, the Fund may not purchase
securities, or other instruments, on margin, except that the Fund may
invest in options, futures, options on futures and similar instruments and
may make margin deposits and payments in connection therewith. As a
matter of fundamental investment policy, the Fund will not invest in real
estate, but this restriction will not prevent the Fund from investing in
securities or other permissible instruments secured by real estate or
interests therein.
One significant fundamental investment policy will be revoked if the
proposal is approved. The Fund will no longer be required to invest at
least 65% of its total assets in a portfolio of investment grade municipal
bonds. Bonds generally have a maturity in excess of ten years. The new
non-fundamental investment policy, that the Fund will invest at least 80%
of its total assets in investment grade municipal securities, has no
restrictions on the maturity of the municipal securities acquired. The
reason for the proposed change is that a portfolio made up primarily of
longer-term Municipal Securities is generally very sensitive to changes
in interest rates, and therefore the Fund's net asset value is presently
susceptible to declines in a rising interest rate environment. Allowing
the Fund's portfolio managers more flexibility to vary the maturities of
the Fund's portfolio securities will permit them to attempt to decrease
the sensitivity of the portfolio to interest rate changes.
The Fund's current investment restrictions with respect to borrowing
money, making loans, concentration, diversification, investments in oil,
gas or other mineral exploration or development, short sales, underwriting
of securities, purchases for control purposes, investing in securities of
other investment companies, acquiring securities owned by officers,
directors or trustees of the Fund or the Manager, and common stocks and
warrants will remain unchanged.
At a meeting of the Fund's Board of Trustees held on February 28, 1995,
the Manager presented to the Fund's Board of Trustees the issue of
eliminating the fundamental restrictions outlined above, so that the Board
would have the flexibility to approve further revisions, and the
advantages and risks associated with the proposed non-fundamental
investment policies in response to market, economic and other conditions.
The Trustees approved and recommended, subject to shareholder approval,
the change in fundamental investment policies described in this Proposal.
If approved, the effective date of this Proposal can be delayed by the
Fund until the Fund's Prospectus is updated to reflect this change.
Vote Required. An affirmative vote of the holders of a "majority" (as
defined in the Investment Company Act) of all outstanding Class A and
Class C voting securities of the Fund is required for approval of the
Proposed Agreement; the classes do not vote separately. Such "majority"
vote is defined in the Investment Company Act as the vote of the holders
of the lesser of: (1) 67% or more of the voting securities present or
represented by proxy at the shareholders meeting, if the holders of more
than 50% of the outstanding voting securities are present or represented
by proxy, or (ii) more than 50% of the outstanding voting securities. The
Board of Trustees recommends a vote in favor of approving this Proposal.
APPROVAL OF THE FUND'S CLASS C 12b-1 DISTRIBUTION
AND SERVICE PLAN AND AGREEMENT
(Proposal No. 3)
NOTE: This Proposal applies to Class C Shareholders only.
Class C shares were first offered to the public on December 1, 1993. At
that time, the Fund adopted a Distribution Plan and Agreement for Class
C shares pursuant to Rule 12b-1 of the Investment Company Act.
At a meeting of the Fund's Board of Trustees held February 28, 1995, the
Manager proposed the adoption of a new Distribution and Service Plan and
Agreement (the "Distribution and Service Plan") which is recharacterized
as a "compensation type plan" instead of a "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 new Distribution and Service Plan is attached as Exhibit A to this
proxy statement.
Description of the Distribution and Service Plan. Under the Distribution
and Service Plan, the Fund compensates the Distributor for its services
in connection with the distribution of Class C Shares and the personal
service and maintenance of accounts that hold Class C shares. The Fund
pays the Distributor an asset-based sales charge of 0.75% per annum, 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 C shares of the
Fund.
The Distribution and Service Plan provides for payments for two different
distribution related functions. The Distributor pays certain brokers,
dealers, banks or other institutions ("Recipients") a service fee of 0.25%
for personal services to Class C shareholders and maintenance of
shareholder accounts by those Recipients. The services rendered by
Recipients in connection with personal services and the maintenance of
Class C shareholder accounts may include but shall not be limited to, the
following: answering routine inquiries from the Recipient's customers
concerning the Fund, providing such customers with information on their
investment in shares, assisting in the establishment and maintenance of
accounts or sub-accounts in the Fund, making the Fund's investment plans
and dividend payment options available, and providing such other
information and customer liaison services and the maintenance of accounts
as the Distributor or the Fund may reasonably request. The Distributor
is permitted under the Distribution and Service Plan to retain service fee
payments to compensate it for rendering such services.
Service fee payments by the Distributor to Recipients are made (i) in
advance for the first year Class C shares are outstanding, following the
purchase of shares, in an amount equal to 0.25% of the net asset value of
the shares purchased by the Recipient or its customers and (ii)
thereafter, 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 C
shares held in accounts of the Recipient or its customers. In the event
Class C 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.
The Distribution and Service Plan also provides that the Fund will pay the
Distributor on a quarterly basis an asset-based sales charge at an annual
rate of 0.75% of the net asset value of Class C shares outstanding to
compensate it for other services in connection with the distribution of
the Fund's Class C shares. The distribution assistance and administrative
support services rendered by the Distributor in connection with the sales
of Class C shares may include: (i) paying sales commissions to any broker,
dealer, bank or other institution that sells the Fund's Class C shares,
(ii) paying compensation to and expenses of personnel of the Distributor
who support distribution of Class C shares by Recipients, and (iii) paying
or reimbursing the Distributor for interest and other borrowing costs
incurred on any unreimbursed expenses carried forward to subsequent fiscal
quarters. The other distribution assistance in connection with the sale
of Class C shares rendered by the Distributor and Recipients may include,
but shall not be limited to, the following: distributing sales literature
and prospectuses other than those furnished to current Class C
shareholders, processing Class C share purchase and redemption
transactions and providing such other information in connection with the
distribution of Class C shares as the Distributor or the Fund may
reasonably request.
The Distributor currently pays sales commissions from its own resources
to Recipients at the time of sale equal to 0.75% of the purchase price of
Fund shares sold by such Recipient, and advances the first year service
fee of 0.25%. Asset-based sales charge payments are designed to permit
an investor to purchase shares of the Fund without the assessment of a
front-end sales load and at the same time permit the Distributor to
compensate Recipients in connection with the sale of shares of the Fund.
The Distributor and the Fund anticipate that it will take a number of
years for the Distributor to recoup the sales commissions paid to
Recipients and other distribution-related expenses, from the Fund's
payments to the Distributor under the Distribution and Service Plan, and
from the contingent deferred sales charge deducted from redemption
proceeds for Class C shares redeemed within 12 months of their purchase,
as described in the Fund's prospectus.
The Distribution and Service Plan contains a provision which provides that
the Board may allow the Fund to continue payments to the Distributor for
Class C shares sold prior to termination of the Distribution and Service
Plan. Pursuant to this provision, payment of the asset-based sales charge
of up to 0.75% per annum could be continued by the Board after
termination.
The Distribution and Service Plan has the effect of increasing annual
expenses of Class C 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 Class C Plan for
the fiscal year ended September 30, 1994 were $39,120 (____% of the Fund's
average net assets represented by Class C shares during that period),
which the Distributor retained in its entirety as reimbursement for Class
C sales commissions and service fee advances, as well as financing costs.
If the Class C shareholders approve this Proposal, the Distribution and
Service Plan shall, unless terminated as described below, continue in
effect until December 31, 1995 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. The Distribution and Service 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 Investment Company Act) of
the Fund's outstanding Class C shares. The Distribution and Service Plan
may not be amended to increase materially the amount of payments to be
made without approval by Class C shareholders. All material amendments
must be approved by a majority of the Independent Trustees.
Additional Information. The Distribution and Service 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 Independent 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 Independent Trustees.
Under the Distribution and Service Plan, 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 did
not exceed a minimum amount, if any, that may be determined 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.
The Distribution and Service 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 Distribution and Service Plan by the Board of Trustees.
In considering whether to recommend the Distribution and Service 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 Distribution and Service Plan benefits
the Fund and its Class C shareholders by providing financial incentives
to financial intermediaries to attract new Class C 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
Distribution and Service Plan enables 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 Board also focused on the two principal differences in the
Distribution and Service Plan and its predecessor. First, the proposed
plan provides for compensating the Distributor for its distribution
efforts rather than reimbursing it for its costs. While it was possible
for the Fund's Class C 12b-1 payments to be reduced when limited by the
Distributor's expenses (including past expenses which were not previously
reimbursed, and which were, therefore, carried forward with interest)
under a reimbursement-type plan, under normal circumstances this is
unlikely. Therefore, adoption of this Proposal is not expected to
materially increase the Fund's expenses under normal circumstances.
Payments under the proposed Distribution and Service Plan still remain
subject to limits imposed on asset-based sales charges by the NASD. The
Board also noted that investors who purchase Class C shares of the Fund
reasonably expect that they will be paying an asset-based sales charge of
0.75% per annum regardless of the Distributor's actual distribution
expenses.
A second difference in the Distribution and Service Plan over its
predecessor is that the proposed Plan expressly provides that distribution
and administrative support services may be rendered in connection with
Class C shares acquired either in exchange for other OppenheimerFund
shares or by reorganization with another fund. The Board determined that
although these changes are less likely to have significance under a
compensation-type Plan, it should have the flexibility to approve
reorganizations among funds without concern that the transaction would
affect payments to the Distributor for its distribution efforts. The
Board also noted that investors who purchase Class C shares of the Fund
reasonably expect that they will be paying an asset-based sales charge of
0.75% per annum regardless of share exchanges or the occurrence of
reorganizations to which their Fund is a party.
The Board concluded that it is likely that because the Distribution and
Service Plan provides an alternative means for investors to acquire Fund
shares without paying an initial sales charge, it will benefit Class C
shareholders of the Fund by enabling the Fund to maintain or increase its
present asset base in the face of competition from a variety of financial
products. The Trustees recognized that payments made pursuant to the
Distribution and Service Plan would likely be offset in part by economies
of scale associated with the growth of the Fund's assets. With larger
assets, the Class C shareholders should benefit as the Distribution and
Service Plan should help maintain Fund assets at the lower investment
advisory fee rate that is currently in effect. Costs of shareholder
administration and transfer agency operations will be spread among a
larger number of shareholders as the Fund grows larger, thereby reducing
the Fund's expense ratio. The Manager has advised the Trustees that
investing larger amounts of money is made more readily, more efficiently,
and at lesser cost to the Fund. The Board found that a positive flow of
new investment money is desirable primarily to offset the potentially
adverse effects that might result from a pattern of net redemptions. Net
cash outflow increases the likelihood that the Fund will have to dispose
of portfolio securities for other than investment purposes. Net cash
inflow minimizes the need to sell securities to meet redemptions when
investment considerations would dictate otherwise, reduces daily liquidity
requirements, and may assist in a prompt restructuring of the portfolio
without the need to dispose of present holdings.
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 than those of some competing funds. 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 Distribution
and Service Plan through larger investment advisory fees resulting from
an increase in Fund assets, since its fees are based upon a percentage of
net assets of the Fund. The Board, including each of the Independent
Trustees, determined that the Distribution and Service Plan is in the best
interests of the Fund, and that its continuation has a reasonable
likelihood of benefiting the Fund and its Class C shareholders. In its
annual review of the Distribution and Service Plan, the Board will
consider the continued appropriateness of the Distribution and Service
Plan, including the level of payments provided for therein.
Vote Required. Pursuant to Rule 12b-1 under the Investment Company Act,
an affirmative vote of the holders of a "majority" (as defined in the
Investment Company Act) of the Fund's Class C voting securities is
required for approval of the Distribution and Service Plan. The
requirements for such "majority" vote under the Investment Company Act are
as described in Proposal No. 2. A vote in favor of this Proposal shall
be deemed a vote to approve the prior Plans and the Distribution and
Service Plan. The Board of Trustees recommends a vote in favor of
approving this Proposal.
ADDITIONAL INFORMATION
The Manager and the Distributor. Subject to the authority of the Board
of Trustees, the Manager is responsible for the day-to-day management of
the Fund's business, pursuant to its investment advisory agreement with
the Fund. Oppenheimer Funds Distributor, Inc., a wholly-owned subsidiary
of the Manager, is the general distributor of the Fund's shares. The
address of the Manager and the Distributor is Two World Trade Center, New
York, New York 10048-0203.
The Manager (including a subsidiary) currently manages investment
companies, including other OppenheimerFunds, with assets of more than $29
billion as of December 31, 1994, and with more than 2.4 million
shareholder accounts. The Manager is a wholly-owned subsidiary of
Oppenheimer Acquisition Corp. ("OAC"), a holding company controlled by
Massachusetts Mutual Life Insurance Company ("MassMutual"). 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. It is the nation's twelfth largest life insurance company by assets
and has an A.M. Best Co. rating of "A++".
The common stock of OAC is divided into three classes. At December 31,
1994, MassMutual held (i) all of the 2,160,000 shares of Class A voting
stock, (ii) 422,023 shares of Class B voting stock, and (iii) 937,403
shares of Class C non-voting stock. This collectively represented 80.2%
of the outstanding common stock and 86.5% of the voting power of OAC as
of that date. Certain officers and/or directors of the Manager held (i)
706,286 shares of the Class B voting stock, representing 16.1% of the
outstanding common stock and 10.9% of the voting power, and (ii) options
acquired without cash payment which, when they become exercisable, allow
the holders to purchase up to 744,282 shares of Class C non-voting stock.
That group includes persons who serve as officers of the Fund and two of
whom (Messrs. Donald W. Spiro and Robert G. Galli) serve as Trustees 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, according to
a schedule that will commence on September 30, 1995. Since October 1,
1993, the only transactions by persons who serve as Trustees of the Fund
in excess of 1% of the outstanding shares of common stock or options of
OAC were by Mr. Galli, who surrendered to OAC 45,445 stock appreciation
rights issued in tandem with the Class C OAC options for $2,821,736, and
by Mr. Spiro, who sold 50,000 shares of Class B OAC common stock to
MassMutual for $3,740,000, for cash payments by OAC or MassMutual to be
made as follows: one-third of the amount due (i) within 30 days of the
transaction, (ii) by the first anniversary following the transaction (with
interest), and (iii) by the second anniversary following the transaction
(with interest).
RECEIPT OF SHAREHOLDER PROPOSALS
The Fund is not required to hold shareholder meetings on a regular basis.
Special meetings of shareholders may be called from time to time by either
the Fund or the Shareholders (under special conditions described in the
Fund's Statement of Additional Information). Under the proxy rules of the
Securities and Exchange Commission, shareholder proposals which meet
certain conditions may be included in the Fund's proxy statement and proxy
for a particular meeting. Those rules require that for future meetings
the shareholder must be a record or beneficial owner of Fund shares with
a value of at least $1,000 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 BUSINESS
Management of the Fund knows of no business other than the matters
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.
By Order of the Board of Trustees,
George C. Bowen, Secretary
May 1, 1995
<PAGE>
Exhibit A
DISTRIBUTION AND SERVICE PLAN AND AGREEMENT
WITH
OPPENHEIMER FUNDS DISTRIBUTOR, INC.
FOR CLASS C SHARES OF
OPPENHEIMER INTERMEDIATE TAX-EXEMPT FUND
DISTRIBUTION AND SERVICE PLAN AND AGREEMENT (the "Plan") dated the 15th
day of June, 1995, by and between OPPENHEIMER TAX-EXEMPT FUND (the
"Trust") for the account of OPPENHEIMER INTERMEDIATE TAX-EXEMPT FUND (the
"Fund") and OPPENHEIMER FUNDS DISTRIBUTOR, INC. (the "Distributor").
1. The Plan. This Plan is the Fund's written distribution plan for
Class C shares of the Fund (the "Shares"), contemplated by Rule 12b-1 (the
"Rule") under the Investment Company Act of 1940 (the "1940 Act"),
pursuant to which the Fund will compensate the Distributor for its
services incurred 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 Distributor is authorized under the Plan to pay "Recipients," as
hereinafter defined, for rendering (1) distribution assistance in
connection with the sale of Shares and/or (2) administrative support
services with respect to Accounts. Such Recipients are intended to have
certain rights as third-party beneficiaries under 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 1940
Act, (ii) the Rule, (iii) Article III, Section 26, of the Rules of Fair
Practice of the National Association of Securities Dealers, Inc., or its
successor (the "NASD Rules of Fair Practice") and (iv) 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 Securities and Exchange Commission.
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 institution
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. Notwithstanding the foregoing, a majority of
the Trust's Board of Trustees (the "Board") who are not "interested
persons" (as defined in the 1940 Act) and who have no direct or
indirect financial interest in the operation of this Plan or in any
agreements relating to this Plan (the "Independent Trustees") may
remove any broker, dealer, bank or other institution as a Recipient,
whereupon such entity's rights as a third-party beneficiary hereof
shall terminate.
(b)"Qualified Holdings" shall mean, as to any Recipient, all Shares
owned beneficially or of record by: (i) such Recipient, or (ii) such
customers, clients and/or accounts as to which such Recipient is a
fiduciary or custodian or co-fiduciary or co-custodian (collectively,
the "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 two entities would otherwise qualify as Recipients as to the same
Shares, the Recipient which is the dealer of record on the Fund's books
shall be deemed the Recipient as to such Shares for purposes of this
Plan.
3. Payments for Distribution Assistance and Administrative Support
Services.
(a)The Fund will make payments to the Distributor, within forty-five
(45) days of the end of each calendar quarter, in the aggregate amount
(i) of 0.0625% (0.25% on an annual basis) of the average during the
calendar quarter of the aggregate net asset value of the Shares
computed as of the close of each business day (the "Service Fee"), plus
(ii) 0.1875% (0.75% on an annual basis) of the average during the
calendar quarter of the aggregate net asset value of the Shares
computed as of the close of each business day (the "Asset Based Sales
Charge"). Such Service Fee payments received from the Fund will
compensate the Distributor and Recipients for providing administrative
support services of the type approved by the Board with respect to
Accounts. Such Asset Based Sales Charge payments received from the
Fund will compensate the Distributor and Recipients for providing
distribution assistance in connection with the sale of Shares.
The administrative support services in connection with the Accounts
to be rendered by Recipients may include, but shall not be limited to,
the following: answering routine inquiries concerning the Fund,
assisting in establishing and maintaining 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. The distribution
assistance in connection with the sale of Shares to be rendered by
Recipients may include, but shall not be limited to, the following:
distributing sales literature and prospectuses other than those
furnished to current holders of the Fund's Shares ("Shareholders"), and
providing such other information and services in connection with the
distribution of Shares as the Distributor or the Fund may reasonably
request. 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 to 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 the 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 still is not satisfied, it may take
appropriate steps to terminate the Recipient's status as such under the
Plan, whereupon such entity's rights as a third-party beneficiary
hereunder shall terminate.
(b)The Distributor shall make service fee payments to any 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, to be set from time to
time by a majority of the Independent Trustees. Alternatively, the
Distributor may, at its sole option, make service fee payments
("Advance Service Fee Payments") to any Recipient quarterly, within
forty-five (45) days of the end of each calendar quarter, at a rate not
to exceed (i) 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) 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, subject to reduction or
chargeback so that the Advance Service Fee Payments do not exceed the
limits on payments to Recipients that are, or may be, imposed by
Article III, Section 26, of the NASD Rules of Fair Practice. The
Advance Service Fee Payments described in part (i) of the preceding
sentence may, at the Distributor's sole option, be made more often than
quarterly, and sooner than the end of the calendar quarter. In
addition, the Distributor shall make asset-based sales charge payments
to any Recipient quarterly, within forty-five (45) days of 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 for a period of more than one
(1) year. However, no such service fee or asset-based sales charge
payments (collectively, the "Recipient 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, to be set from time to time by
a majority of the Independent Trustees. A majority of the Independent
Trustees may at any time or from time to time decrease and thereafter
adjust 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 increase or decrease the Minimum Holding Period or
the Minimum Qualified Holdings. The Distributor shall notify all
Recipients of the Minimum Qualified Holdings or Minimum Holding Period,
if any, and the rates of Recipient 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 shall constitute sufficient notice. 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.
(c)The Distributor is entitled to retain from the payments described
in Section 3(a) the aggregate amount of (i) the Service Fee on Shares
outstanding for less than the Minimum Holding Period, (ii) the Asset-
Based Sales Charge on Shares outstanding for not more than one (1)
year, plus (iii) any additional Asset-Based Sales Charge payment which
no Recipient qualifies to receive, in each case computed as of the
close of each business day during that period and subject to reduction
or elimination of such amounts under the limits to which the
Distributor is, or may become, subject under Article III, Section 26,
of the NASD Rules of Fair Practice. The distribution assistance and
administrative support services 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 institution that sell Shares, and\or paying such persons
Advance Service Fee Payments in advance of, and\or greater than, the
amount provided for in Section 3(a) of this Agreement; (ii) paying
compensation to and expenses of personnel of the Distributor who
support distribution of Shares by Recipients; (iii) paying of or
reimbursing the Distributor for interest and other borrowing costs on
its unreimbursed expenses at the rate paid by the Distributor or, if
such amounts are financed by the Distributor from its own resources or
by an affiliate, at the rate of 1% per annum above the prime rate
(which shall mean the most preferential interest rate on corporate
loans at large U.S. money center commercial banks) then being reported
in the Eastern edition of the Wall Street Journal (or if such prime
rate is no longer so reported, such other rate as may be designated
from time to time by the Distributor with the approval of the
Independent Trustees); (iv) other direct distribution costs, 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 service rendered
by the Distributor that a Recipient may render pursuant to part (a) of
this Section 3. Such services include distribution and administrative
support services rendered in connection with 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 (ii)
pursuant to a plan of reorganization to which the Fund is a party. In
the event that the Board should have reason to believe 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.
(d)Under the Plan, payments may be made to Recipients: (i) by
Oppenheimer Management Corporation ("OMC") 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 OMC), from
its own resources, from Asset Based Sales Charge payments or from its
borrowings.
4. Selection and Nomination of Trustees. While this Plan is in effect,
the selection and nomination of those persons to be Trustees of the Trust
who are not "interested persons" of the Fund or the Trust ("Disinterested
Trustees") shall be committed to the discretion of such Disinterested
Trustees. Nothing herein shall prevent the Disinterested Trustees from
soliciting the views or the involvement of others in such selection or
nomination if 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 Trust
shall provide at least quarterly a written report to the Trust's Board for
its review, detailing services rendered in connection with the
distribution of the Shares. The reports shall be provided in the
frequency requested by the Board, and shall state whether all provisions
of Section 3 of this Plan have been complied with.
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 voting securities of
the Class, on not more than sixty days written notice to any other party
to the agreement; (ii) such agreement shall automatically terminate in the
event of its assignment (as defined in the 1940 Act); (iii) it 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 (iv) it 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
has been approved by a vote of the Board and its Independent Trustees cast
in person at a meeting called on February 28, 1995 for the purpose of
voting on this Plan, and takes effect as of the date first set forth
above. Unless terminated as hereinafter provided, it shall continue in
effect from year to year from the date first set forth above or as the
Board may otherwise determine 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 without approval of the
Class C Shareholders, in the manner described above, 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 voting securities
of the Class. In the event of such termination, the Board and its
Independent Trustees shall determine whether the Distributor is 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 shareholder and Trustee liability for acts or obligations of
the Fund.
OPPENHEIMER TAX-EXEMPT FUND
for the account of
OPPENHEIMER INTERMEDIATE TAX-EXEMPT FUND
By: ____________________________________
Robert G. Zack, Assistant Secretary
OPPENHEIMER FUNDS DISTRIBUTOR, INC.
By:____________________________________
Katherine P. Feld
Vice President & Secretary
OFMI/860C.695
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