As filed with the Securities and Exchange
Commission on February 28, 1995.
Registration No. 811-5278
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-2
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 / X /
Amendment No. 10 / X /
THE NEW YORK TAX-EXEMPT INCOME FUND, INC.
(Exact Name of Registrant as Specified in Charter)
3410 South Galena Street, Denver, Colorado 80231
(Address of Principal Executive Offices)
303-671-3200
(Registrant's Telephone Number)
ANDREW J. DONOHUE, ESQ.
Oppenheimer Management Corporation
Two World Trade Center, New York, New York 10048-0203
(Name and Address of Agent for Service)
<PAGE>
FORM N-2
THE NEW YORK TAX-EXEMPT INCOME FUND, INC.
Cross Reference Sheet
Part A of
Form N-2
Item No. Prospectus Heading
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1 *
2 *
3 *
4 *
5 *
6 *
7 *
8 General Description of the Registrant
9 Management
10 Capital Stock, Long-Term Debt, and Other Securities
11 *
12 *
13 See Item 15 of the Statement of Additional Information
Part B of
Form N-2
Item No. Heading In Statement of Additional Information
14 Cover Page
15 Table of Contents
16 *
17 See Item 8 of the Prospectus
18 Management
19 Control Persons and Principal Holders of Securities
20 See Item 9 of the Prospectus
21 Brokerage Allocation and Other Practices
22 See Item 10 of the Prospectus
23 Financial Statements
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* Not applicable or negative answer.
<PAGE>
THE NEW YORK TAX-EXEMPT INCOME FUND, INC.
PART A
INFORMATION REQUIRED IN A PROSPECTUS
Item 1. Outside Front Cover.
Inapplicable.
Item 2. Inside Front and Outside Back Cover Page.
Inapplicable.
Item 3. Fee Table and Synopsis.
Inapplicable.
Item 4. Financial Highlights.
Inapplicable.
Item 5. Plan of Distribution.
Inapplicable.
Item 6. Selling Shareholders.
Inapplicable.
Item 7. Use of Proceeds.
Inapplicable.
Item 8. General Description of the Fund.
1. The New York Tax-Exempt Income Fund, Inc. (the "Fund") is a
diversified closed-end management investment company incorporated under
the laws of Minnesota on August 10, 1987.
2., 3., and 4. The Fund's primary investment objective is to provide
to the holders of the Fund's Common Stock, through investment in a
professionally managed portfolio of tax-exempt New York Municipal
Securities (defined below), current interest income exempt from both
federal income tax (although such interest income may be subject to the
federal alternative minimum tax as discussed below) and New York State and
New York City income taxes. It is a secondary objective of the Fund to
preserve and enhance the Fund's net asset value through investments in
tax-exempt New York Municipal Securities that, in the opinion of
Oppenheimer Management Corporation, the Fund's investment adviser (the
"Adviser"), are underrated or represent municipal market sectors that are
undervalued. Underrated Municipal Securities are those whose ratings do
not, in the Adviser's opinion, reflect their true value. Obligations may
be underrated because of the time that has elapsed since their most recent
rating, or because of positive factors that may not have been fully taken
into account by the rating agencies, or for other similar reasons.
Undervalued municipal market sectors, on the other hand, refers to
Municipal Securities of particular types or purposes (e.g., hospital
bonds, industrial revenue bonds, or bonds issued by a particular municipal
issuer) that, in the Adviser's opinion, are worth more than the value
assigned to them in the marketplace. Municipal Securities may be
undervalued because there is a temporary excess of supply in a particular
market sector, or because of a general decline in the market price of
Municipal Securities of a market sector for reasons that do not apply to
the particular Municipal Securities that are considered undervalued. The
Fund's investment in underrated or undervalued New York Municipal
Securities will be based on the Adviser's belief that the prices of such
Securities should ultimately reflect their true value. Under certain
market conditions, such underrated or undervalued Municipal Securities may
realize market appreciation, while in a declining market such Municipal
Securities may experience less market depreciation than other Municipal
Securities. Accordingly, "enhancement of net asset value" does not merely
refer to market appreciation of the Fund's portfolio securities, and the
Fund does not suggest that capital appreciation is itself an objective of
the Fund. Instead, the objective of enhancement of net asset value is one
of seeking to outperform the market by prudent selection of Municipal
Securities, regardless of which direction the market may move. A
shareholder of the Fund will realize a taxable gain upon the sale of
shares at an appreciated net asset value or in the event of capital gain
distributions by the Fund as discussed below in "Tax Status."
- Portfolio Investments. Except during temporary defensive periods,
the Fund will, as a fundamental policy, invest at least 80% of its net
assets in tax-exempt New York Municipal Securities. It is also a
fundamental policy that 80% of the Fund's net assets will be securities
rated at the time of purchase within the four highest grades for long-term
securities or within the two highest grades for short-term loans, notes
and commercial paper by Moody's Investors Services, Inc. ("Moody's"), or
Standard & Poor's Corporation ("S&P"), or Fitch Investors Service, Inc.
("Fitch"). Municipal Securities rated "Baa" or "MIG2" by Moody's, or
"BBB" or "SP-2" by S&P, or "BBB" or "F-3" by Fitch, although investment
grade, may be subject to greater market fluctuations and risks of loss of
income and principal than higher-rated Municipal Securities and may be
considered to have speculative characteristics. A general description of
Moody's, S&P's and Fitch's ratings of securities is set forth in Appendix
A to this Prospectus. The Fund intends to emphasize investments in New
York Municipal Securities with long-term maturities, but the degree of
such emphasis will depend upon market conditions existing at the time of
investment.
The Fund may invest up to 20% of its net assets in unrated New York
Municipal Securities or in New York Municipal Securities rated lower than
the four highest grades for long-term securities, but no more than half
of this amount (10% of the Fund's net assets) will be invested in such
lower rated New York Municipal Securities. To the extent it does so,
there may be somewhat greater risk because such unrated or lower rated
Municipal Securities, although generally offering a higher current yield
than higher rated securities, are generally less liquid and involve a
greater risk of non-payment of principal and interest than higher rated
securities. The Fund will invest in only unrated New York Municipal
Securities which, in the opinion of the Adviser, have credit
characteristics equivalent to New York Municipal Securities which have
ratings qualifying them for investment by the Fund. The Fund will not
invest in any rated New York Municipal Securities that are rated lower
than Ba by Moody's or BB by S&P or BB by Fitch at the time of purchase.
Interest on certain "private activity" bonds (as defined under the
Internal Revenue Code of 1986, as amended (the "Internal Revenue Code"))
is treated as a tax preference item under the alternative minimum tax
provisions of federal tax law. Such "private activity" bonds currently
constitute a very small percentage of the market in Municipal Securities
(as defined herein). The Fund will not invest more than 20% of its net
assets in such "private activity" bonds. To the extent the Fund invests
in such "private activity" bonds, investors could be subject to taxation
on the income from such investments. In the case of certain corporations,
all tax-exempt income, including interest on bonds held by the Fund, may
be included in computing the federal alternative minimum and environmental
taxes.
- Temporary Investments. During temporary defensive periods (e.g.
times when temporary imbalances of supply and demand or other temporary
dislocations in the tax-exempt bond market adversely affect the price at
which New York Municipal Securities are available), the Fund may invest
any percentage of its net assets in taxable temporary investments, the
income on which may be subject to either or both of New York State and New
York City income taxes or to both federal and New York income taxes. The
Fund will invest only in temporary investments which are U.S. Government
securities or securities rated within the two highest grades by Moody's,
S&P or Fitch (including Municipal Securities the income from which is
subject to New York State and New York City income taxes), and which
mature within one year from the date of purchase. Temporary investments
of the Fund may also include repurchase agreements as discussed below.
The foregoing restrictions and other limitations discussed herein will
apply only at the time of purchase of securities and will not be
considered violated unless an excess or deficiency occurs or exists
immediately after and as a result of an acquisition of securities.
The foregoing investment objectives and policies are fundamental
policies of the Fund and may not be changed without the approval of the
majority of the outstanding shares of the Fund. As used in this
Prospectus, a majority of the Fund's outstanding shares means the vote of:
(i) 67% or more of the Fund's shares present at a meeting, if the holders
of more than 50% of the Fund's shares are present or represented by proxy,
or (ii) more than 50% of the Fund's shares, whichever is less.
- Municipal Securities. Municipal securities ("Municipal
Securities") include debt obligations issued by states, cities and local
authorities to obtain funds for various public purposes, including the
construction of such public facilities as airports, bridges, highways,
housing, hospitals, mass transportation, schools, streets and water and
sewer works. Other public purposes for which Municipal Securities may be
issued include the refinancing of outstanding obligations, the obtaining
of funds for general operating expenses and for loans to other public
institutions and facilities. In addition, certain industrial development
bonds and pollution control bonds may be included within the term
"Municipal Securities" if the interest paid thereon qualifies as exempt
from federal income tax. New York Municipal Securities ("New York
Municipal Securities") are Municipal Securities which bear interest that,
in the opinion of bond counsel to the issuer, is exempt from federal and
New York State and New York City income taxes. Neither the Fund nor the
Adviser will make any special review for the Fund of the proceedings
relating to the issuance of the New York Municipal Securities or of the
bases for such opinions.
The two principal classifications of Municipal Securities are
"general obligation" and "revenue" bonds. General obligation bonds are
secured by the issuer's pledge of its full faith, credit and taxing power
for the payment of principal and interest. Revenue bonds are payable only
from the revenues derived from a particular facility or class of
facilities or, in some cases, from the proceeds of a special excise or
other specific revenue source. Industrial development and pollution
control bonds are in most cases revenue bonds and do not generally
constitute the pledge of credit or taxing power of the issuer of such
bonds. There are, of course, variations in the security of Municipal
Securities, both within a particular classification and between
classifications, depending on numerous factors.
Also included within the general category of Municipal Securities are
participations in lease obligations or installment purchase contract
obligations (hereinafter collectively called "lease obligations") of
municipal authorities or entities. Although lease obligations do not
constitute general obligations of the municipality for which the
municipality's taxing power is pledged, a lease obligation is ordinarily
backed by the municipality's covenant to budget for, appropriate and make
the payments due under the lease obligation. However, certain lease
obligations contain "non-appropriation" clauses which provide that the
municipality has no obligation to make lease or installment purchase
payments in future years unless money is appropriated for such purpose on
a yearly basis. In addition to the "non-appropriation" risk, these
securities represent a relatively new type of financing that has not yet
developed the depth of marketability associated with more conventional
bonds. Although "non-appropriation" lease obligations are secured by the
leased property, disposition of the property in the event of foreclosure
might prove difficult. The Fund will seek to minimize these risks by
investing not more than 5% of its investment assets in lease obligations
that contain "non-appropriation" clauses, and by investing in only those
"non-appropriation" lease obligations where (1) the nature of the leased
equipment or property is such that its ownership or use is essential to
a governmental function of the municipality, (2) the lease payments will
commence amortization of principal at an early date resulting in an
average life of seven years or less for the lease obligation, (3)
appropriate covenants will be obtained from the municipal obligor
prohibiting the substitution or purchase of similar equipment if lease
payments are not appropriated, (4) the lease obligor has maintained good
market acceptability in the past, (5) the investment is of a size that
will be attractive to institutional investors, and (6) the underlying
leased equipment has elements of portability and/or use that enhance its
marketability in the event foreclosure on the underlying equipment was
ever required.
Certain Municipal Securities may carry variable or floating rates of
interest whereby the rate of interest is not fixed but varies with changes
in specified market rates or indexes, such as a bank prime rate or a tax-
exempt money market index. Municipal Securities also include obligations,
such as tax-exempt notes, municipal commercial paper and municipal lease
obligations, having relatively short-term maturities, although, as noted
above, the Fund intends to emphasize investments in Municipal Securities
with long-term maturities.
The yields on Municipal Securities are dependent on a variety of
factors, including the condition of the general money market and the
Municipal Securities market, the size of a particular offering, the
maturity of the obligations and the rating of the issue. The ratings of
Moody's and S&P represent their opinions as to the quality of the
Municipal Securities which they undertake to rate. It should be
emphasized, however, that ratings are general and are not absolute
standards of quality. Consequently, Municipal Securities with the same
maturity, coupon and rating may have different yields while obligations
of the same maturity and coupon with different ratings may have the same
yield. The market value of outstanding Municipal Securities will vary
with changes in prevailing interest rate levels and as a result of
changing evaluations of the ability of their issuers to meet interest and
principal payments. Ratings may be changed, suspended or withdrawn as a
result of changes in information obtained by Moody's S&P or Fitch, or
unavailability of such information, or for other circumstances. Such
events may adversely affect the market value of the subject Municipal
Securities.
Securities of issuers of Municipal Securities are subject to the
provisions of bankruptcy, insolvency and other laws affecting the rights
and remedies of creditors, such as the Bankruptcy Reform Act of 1978. In
addition, the obligations of such issuers may become subject to the laws
enacted in the future by Congress, state legislatures or referenda
extending the time for payment of principal and/or interest, or imposing
other constraints upon enforcement of such obligations or upon
municipalities to levy taxes. There is also the possibility that, as a
result of legislation or other conditions, the power or ability of any
issuer to pay, when due, the principal of and interest on its Municipal
Securities may be materially affected.
- Credit Risk and Interest Rate Risk. The values of Municipal
Securities will vary as a result of changing evaluations by rating
services and investors of the ability of the issuers of such securities
to meet the interest and principal payments. Such values will also change
in response to changes in interest rates. Should interest rates rise, the
values of outstanding Municipal Securities will probably decline and (if
purchased at principal amount) would sell at a discount. If interest
rates fall, the values of outstanding Municipal Securities will probably
increase and (if purchased at principal amount) would sell at a premium.
Changes in the values of the Fund's Municipal Securities from these or
other factors will not affect interest income derived from these
securities but will affect the Fund's net asset value per share.
- Floating Rate/Variable Rate Obligations. Some of the Municipal
Securities the Fund may purchase may have variable or floating interest
rates. Variable rates are adjustable at stated periodic intervals.
Floating rates are automatically adjusted according to a specified market
rate for such investments, such as the percentage of the prime rate of a
bank, or the 90-day U.S. Treasury Bill rate. Such obligations may be
secured by bank letters of credit or other credit support arrangements.
- Inverse Floaters and Other Derivative Investments. The Fund may
invest in certain municipal "derivative investments." The Fund may use
some derivative investments for hedging purposes, and may invest in others
because they offer the potential for increased income and principal value.
In general, a "derivative investment" is a specially-designed investment
whose performance is linked to the performance of another investment or
security, such as an option, future or index. In the broadest sense,
derivative investments include exchange-traded options and futures
contracts (please refer to "Financial Futures and Options Transactions,"
below).
The Fund may invest in "inverse floater" variable rate bonds, a type
of derivative investment whose yields move in the opposite direction as
short-term interest rates change. As interest rates rise, inverse
floaters produce less current income. Their price may be more volatile
than the price of a comparable fixed-rate security. Some inverse floaters
have a "cap" whereby if interest rates rise above the "cap," the security
pays additional interest income. If rates do not rise above the "cap,"
the Fund will have paid an additional amount for a feature that proves
worthless. The Fund may also invest in municipal securities that pay
interest that depends on an external pricing mechanism, also a type of
derivative investment. Examples of external pricing mechanisms are
interest rate swaps or caps and municipal bond or swap indices. The Fund
anticipates that under normal circumstances it will invest no more than
10% of its net assets in inverse floaters.
The risks of investing in derivative investments include not only the
ability of the issuer of the derivative investment to pay the amount due
on the maturity of the investment, but also the risk that the underlying
security or investment might not perform the way the Manager expected it
to perform. That can mean that the Fund will realize less income than
expected. Another risk of investing in derivative investments is that
their market value could be expected to vary to a much greater extent than
the market value of municipal securities that are not derivative
investments but have similar credit quality, redemption provisions and
maturities.
Special Investment Considerations - New York Municipal Securities. As
described above, except during temporary defensive periods, the Fund will
invest 100% of its net assets in New York Municipal Securities. The Fund
is therefore susceptible to political, economic or regulatory factors
affecting issuers of New York Municipal Securities. Certain events and
conditions relating to the financial situation in New York are summarized
briefly below. No assurance can be given that such factors or
developments arising out of the events and conditions summarized below
will not materially affect the value of the New York Municipal Securities
to be held by the Fund. The Fund is highly sensitive to the fiscal
stability of New York State (the "State") and its subdivisions, agencies,
instrumentalities or authorities, including New York City, which issue the
Municipal Securities in which the Fund concentrates its investments. The
following information on risk factors in concentrating in New York
Municipal Securities is only a summary, based on publicly available
information, and official statements relating to offerings of New York
issuers of Municipal Securities prior to January 18, 1995, and no
representation is made as to the accuracy of such information.
- - New York City
- General. More than any other municipality, the fiscal health of
New York City (the "City") has a significant effect on the fiscal health
of the State. The national economic downturn which began in July 1990
adversely affected the local economy which had been declining since late
1989. In order to achieve a balanced budget as required by the laws of
the State for the 1992 fiscal year, the City increased taxes and reduced
services during the 1991 fiscal year to close a then projected gap of $3.3
billion in the 1992 fiscal year which resulted from, among other things,
lower than projected tax revenue of approximately $1.4 billion, reduced
State aid for the City and greater than projected increases in legally
mandated expenditures, including public assistance and Medicaid
expenditures. Beginning in calendar year 1992, the improvement in the
national economy helped stabilize conditions in the City. Employment
losses moderated toward year-end and real Gross City Product ("GCP")
increased, boosted by strong wage gains. The City's current four-year
financial plan assumes that, after noticeable improvements in the City's
economy during calendar year 1994, economic growth will slow in calendar
years 1995 and 1996 with local employment increasing modestly. In
December 1994, the City experienced substantial shortfalls in payments of
non-property tax revenues from those forecasted. Through December 1994,
collections of non-property taxes were approximately $200 million lower
than projected.
For each of the 1981 through 1994 fiscal years, the City achieved
balanced operating results as reported in accordance with then applicable
generally accepted accounting principles ("GAAP"). The City was required
to close substantial budget gaps in recent years in order to maintain
balanced operating results. For fiscal year 1995, the City adopted a
budget which halted the trend in recent years of substantial increases in
City spending from one year to the next. There can be no assurance that
the City will continue to maintain a balanced budget as required by State
law without additional tax or other revenue increases or reductions in
City services, which could adversely affect the City's economic base.
The Mayor is responsible for preparing the City's four-year financial
plan, including the City's current financial plan for the 1995 through
1998 fiscal years (the "1995-1998 Financial Plan", "Financial Plan" or
"City Plan").
The City Comptroller and other agencies and public officials have
issued reports and made public statements which, among other things, state
that projected revenues may be different from those forecast in the City
Plan. In addition, the Control Board staff and others have questioned
whether the City has the capacity to generate sufficient revenues in the
future to provide the level of services included in the City Plan. It is
reasonable to expect that such reports and statements will continue to be
issued and to engender public comment.
- 1995-1998 Financial Plan. On October 25, 1994, the City published
the City Plan for the 1995-1998 fiscal years which is a proposed
modification to a financial plan submitted to the Control Board on July
8, 1994 (the "July City Plan") and which relates to the City, the Board
of Education ("BOE") and the City University of New York ("CUNY").
The City's July City Plan set forth proposed actions for the 1995
fiscal year to close a previously projected gap of approximately $2.3
billion for the 1995 fiscal year, which included City actions aggregating
$1.9 billion, a $288 million increase in State actions over the 1994 and
1995 fiscal years, and a $200 million increase in Federal assistance. The
City actions included proposed agency actions aggregating $1.1 billion,
including productivity savings; tax and fee enforcement initiatives;
service reductions; and savings from the restructuring of City services.
City actions also included savings of $45 million resulting from proposed
tort reform, the projected transfer to the 1995 fiscal year of $171
million of the projected 1994 fiscal year surplus, savings of $200 million
for employee health care costs, $51 million in reduced pension costs,
savings of $225 million from refinancing City bonds and $65 million from
the proposed sale of certain City assets.
The 1995-1998 City Plan published on October 25, 1994 reflects actual
receipts and expenditures and changes in forecast revenues and
expenditures since the July City Plan and projects revenues and
expenditures for the 1995 fiscal year balanced in accordance with GAAP.
For the 1995 fiscal year, the City Plan includes actions to offset an
additional potential $1.1 billion budget gap, resulting principally from
a $104 million decrease in the $171 million projected surplus from the
1994 fiscal year to be transferred to the 1995 fiscal year, due primarily
to lower projected tax revenues for the 1994 fiscal year; reductions in
projected tax revenues for the 1995 fiscal year totalling $170 million;
$60 million of increased City pension contributions resulting from lower
than expected earnings on pension fund assets for the 1994 fiscal year;
a $166 million shortfall in projected increased Federal assistance due
primarily to the failure to enact national health care reform; the failure
of the State Legislature to approve tort reform; the failure to achieve
the projected savings of $200 million for employee health care costs; a
$165 million increase in projected overtime expenditures; and additional
agency spending requirements, primarily for increased costs for foster
care and homeless services, and other decreased projected revenues.
The gap closing measures for the 1995 fiscal year include additional
proposed agency actions aggregating $851 million, which together with the
$1.1 billion of agency actions proposed in the July City Plan, are
substantial and may be difficult to implement. The City Plan is subject
to the ability of the City to implement proposed reductions in City
personnel and other cost reduction initiatives. In addition, legislation
has been adopted by the State Legislature that would impose a maintenance
of effort requirement on the level of funding required of the City for the
BOE. This legislation has not been forwarded to the Governor for
signature. If enacted into law, this legislation would require the City
to increase its fiscal year 1995 funding for the BOE by approximately $500
million over the amount included in the 1995-1998 City Plan, and could
also result in increased funding for the BOE in subsequent years.
The City Plan also sets forth projections for the 1996 through 1998
fiscal years and outlines a proposed gap-closing program to close
projected budget gaps of $1.0 billion, $1.5 billion and $2.0 billion for
the 1996 through 1998 fiscal years, respectively, after successful
implementation of the $1.1 billion gap-closing program for the 1995 fiscal
year. These projections take into account expected increases in Federal
and State assistance. Various actions proposed in the City Plan,
including the proposed continuation of the personal income tax surcharge
and the proposed increase in State aid, are subject to approval by the
Governor and the State Legislature, and the proposed increase in Federal
aid is subject to approval by Congress and the President. The State
Legislature has in previous legislative sessions failed to approve
proposals for the State assumption of certain Medicaid costs and
reallocation in State education aid, thereby increasing the uncertainty
as to the receipt of the State assistance included in the City Plan. If
these actions cannot be implemented, the City will be required to take
other actions to decrease expenditures or increase revenues to maintain
a balanced financial plan.
In January, 1993, the City announced settlement with a coalition of
municipal unions covering approximately 44% of the City's workforce.
Subsequently, the City reached agreement with all but four of its major
bargaining units under terms generally consistent with the coalition
agreement. Taken together, these agreements cover approximately 95% of
the City's workforce. Contract disputes with the four major bargaining
units that did not reach agreement with the City are in arbitration. The
City Plan reflects the costs associated with these settlements, provides
for similar increases for all City-funded employees, and provides no
additional wage increases for City employees after the 1995 fiscal year.
In the event of a collective bargaining impasse, the terms of wage
settlements could be determined through the impasse procedure in the New
York City Collective Bargaining Law, which can impose a binding
settlement.
The City's projections set forth in the City Plan are based on
various assumptions and contingencies which are uncertain and which may
not materialize. Changes in major assumptions could significantly affect
the City's ability to balance its budget as required by State law and to
meet its annual cash flow and financial requirements. Such assumptions
and contingencies include the timing and pace of any regional and local
economic recovery, the impact of real estate tax revenues on the real
estate market, wage increases for City employees consistent with those
assumed in the City Plan, employment growth, the results of a pending
actuarial audit of the City's pension system which is expected to
significantly increase the City's annual pension costs, the ability to
implement proposed reductions in City personnel and other cost reduction
initiatives, which may require in certain cases the cooperation of the
City's municipal unions, and provision of State and Federal aid and
mandate relief.
Implementation of the City Plan is also dependent upon the City's
ability to market its securities successfully in the public credit
markets. The City's financing program for fiscal years 1995 through 1998
contemplates the issuance of $11.3 billion of general obligation bonds
primarily to reconstruct and rehabilitate the City's infrastructure and
physical assets and to make other capital investments. In addition, the
City issues revenue and tax anticipation notes to finance its seasonal
working capital requirements. The success of projected public sales of
City bonds and notes will be subject to prevailing market conditions, and
no assurance can be given that such sales will be completed. If the City
were unable to sell its general obligation bonds and notes, it would be
prevented from meeting its planned capital and operating expenditures.
- Ratings. In 1975, Standard & Poor's suspended its A rating of City
bonds. This suspension remained in effect until March 1981, at which time
the City received an investment grade rating of BBB from Standard &
Poor's. On July 2, 1985, Standard & Poor's revised its rating of City
bonds upward to BBB+ and on November 19, 1987, to A-. Moody's ratings of
City bonds were revised in November 1981 from B (in effect since 1977) to
Ba1, in November 1983 to Baa, in December 1985 to Baa1, in May 1988 to A
and again in February 1991 to Baa1. Since July 15, 1993, Fitch has rated
City bonds A-.
On January 17, 1995, mayor Rudolph Giuliani announced that the City
would borrow money to help close its budget gap instead of turning to the
BOE to find savings this school year, which announcement resulted in
Standard & Poor's placing City bonds on a negative credit watch. Standard
& Poor's further indicated that it would reconsider the City's bond rating
in April 1995.
Such ratings reflect only the views of these rating agencies, from
which an explanation of the significance of such ratings may be obtained.
There is no assurance that such ratings will continue for any given period
of time or that they will not be revised downward or withdrawn entirely.
Any such downward revision or withdrawal could have an adverse effect on
the market prices of bonds.
- Outstanding Net Indebtedness. As of September 30, 1994, the City
and the Municipal Assistance Corporation for the City of New York had,
respectively, $21.218 billion and $4.146 billion of outstanding net long-
term debt.
The City depends on the State for State aid both to enable the City
to balance its budget and to meet its cash requirements. If the State
experiences revenue shortfalls or spending increases beyond its
projections during its 1995 fiscal year or subsequent years, such
developments could result in reductions in anticipated State aid to the
City. In addition, there can be no assurance that State budgets in future
fiscal years will be adopted by the April 1 statutory deadline and that
there will not be adverse effects on the City's cash flow and additional
City expenditures as a result of such delays.
- Litigation. The City is a defendant in a significant number of
lawsuits. Such litigation includes, but is not limited to, routine
litigation incidental to the performance of its government and other
functions, actions commenced and claims asserted against the City arising
out of alleged constitutional violations, alleged torts, alleged breaches
of contracts and other violations of law and condemnation proceedings and
other tax and miscellaneous actions. While the ultimate outcome and
fiscal impact, if any, on the proceedings and claims are not currently
predictable, adverse determination in certain of them might have a
material adverse effect upon the City's ability to carry out the City
Plan. As of June 30, 1994, the City estimated its potential future
liability on account of all outstanding claims to be approximately $2.6
billion.
- - New York State
The State has historically been one of the wealthiest states in the
nation. For decades, however, the State economy has grown more slowly
than that of the nation as a whole, resulting in the gradual erosion of
its relative economic affluence. The causes of this relative decline are
varied and complex, in many cases involving national and international
developments beyond the State's control. Part of the reason for the long-
term relative decline in the State economy has been attributed to the
combined State and local tax burden, which is one of the highest in the
nation. The existence of this tax burden limits the State's ability to
impose higher taxes in the event of future financial difficulties.
Recently, the State has been relatively successful in bringing the rate
of growth in the public sector in the State in line with changes in the
private economy.
As a result of the national and regional economic recession, the
State's tax receipts for its 1991 and 1992 fiscal years were substantially
lower than projected, which resulted in reductions in State aid to
localities for the State's 1992 and 1993 fiscal years from amounts
previously projected and increases in certain states taxes and fees. The
State completed its 1993 fiscal year with a positive margin of $671
million in the General Fund, which was deposited into a tax refund reserve
account. The State's economy, as measured by employment, started to
recover near the start of the 1993 calendar year and the State completed
its 1994 fiscal year with a cash-basis balanced budget in the State's
General Fund (the major operating fund of the State), after depositing
$1.5 billion in various reserve funds.
The State's 1994-95 Financial Plan, which is based upon the enacted
State budget, projects a balanced General Fund. The State's 1994-95
Financial Plan provided the City with savings through various actions,
which include increased State education aid and State assumption of
certain costs previously paid by the City and restoration of certain prior
year revenue sharing reductions. However, the State Legislature failed
to enact a substantial portion of the proposed State assumption of local
Medicaid costs, other significant mandate relief items, and the proposed
tort reform legislation, which would have provided the City with
additional savings. The State's second quarterly update was released on
October 28, 1994. It projects a year-end surplus in the General Fund of
$14 million. The update revises the projected General Fund receipt and
disbursements contained in the 1994-95 State Financial Plan as revised by
the first quarterly update issued on July 29, 1994. Receipts are now
projected at $34.054 billion, a decreased of $267 million from the State's
first quarterly update, reflecting primarily recent weakness in the
financial services sector. The State's estimated disbursements are
projected at $33.967 billion, a decrease of $281 million from July,
attributable largely to anticipated decreases in social services spending.
However, the State Division of the Budget cautioned that its projections
were subject to the risk that increases in interest rates could impede
economic growth. It has been reported the State will face a potential
budget gap for its 1995-96 fiscal year which could approximate $4 billion.
As a result, the State would be required to take actions to increase
receipts and/or reduce disbursements from projected levels when it
proposes its budget for the 1995-96 fiscal year, which could result in
reductions in State aid to localities.
There can be no assurance that the State will not face substantial
potential budget gaps in future years resulting from a significant
disparity between tax revenues projected from a lower recurring receipts
base and the spending required to maintain state programs at current
levels. To address any potential budgetary imbalance, the State may need
to take significant actions to align recurring receipts and disbursements
in future fiscal years.
- Ratings. On January 13, 1992, Standard & Poor's reduced its
ratings on the State's general obligation bonds from A to A- and, in
addition, reduced its ratings on the State's moral obligation, lease
purchase, guaranteed and contractual obligation debt. Standard & Poor's
also continued its negative rating outlook assessment on State general
obligation debt. On April 26, 1993, Standard & Poor's revised the rating
outlook assessment to stable. On February 14, 1994, Standard & Poor's
raised its outlook to positive and, on June 27, 1994, confirmed its A-
rating.
On January 6, 1992, Moody's reduced its ratings on outstanding
limited-liability State lease purchase and contractual obligations from
A to Baa1. On June 27, 1994, Moody's reconfirmed its A rating on the
State's general obligation long-term indebtedness.
Ratings reflect only the respective views of such organizations. See
"New York City - Ratings," above on page 8.
- Litigation.
Abandoned Property Law. On May 31, 1988, the Supreme Court of the
United States took jurisdiction of a claim of the State of Delaware that
certain unclaimed dividends, interest and other distributions made by
issuers of securities and held by New York-based brokers incorporated in
Delaware for beneficial owners who cannot be identified or located, had
been, and were being, wrongfully taken by the State of New York pursuant
to New York's Abandoned Property Law (State of Delaware v. State of New
York). Texas intervened, claiming a portion of such distributions and
similar property taken by the State of New York from New York-based banks
and depositories incorporated in Delaware. All other states and the
District of Columbia moved to intervene. In a decision dated March 30,
1993, the United States Supreme Court granted all pending motions of the
states and the District of Columbia to intervene and remanded the case to
a Special Master for further proceedings consistent with the Court's
decision. The Court determined that the abandoned property should be
remitted first to the state of the beneficial owner's last known address,
if ascertainable and, if not, then to the state of incorporation of the
intermediary bank, broker or depository. New York and Delaware have
executed a settlement agreement which provides for payments by New York
to Delaware of $35 million in the State's 1993-94 fiscal year and five
annual payments thereafter of $33 million. New York and Massachusetts
have executed a settlement agreement which provides for aggregate payments
by New York of $23 million, payable over five consecutive years. The
claims of the other states and the District of Columbia remain.
Public Authority Financing Programs. On June 30, 1994, the Court of
Appeals unanimously affirmed the rulings of the trial court and the
Appellate Division on favor of the State in case of Schulz et al. v. State
of New York, et al. (commencement May 24, 1993) and upheld the
constitutionality of certain highway, bridge and mass transportation
bonding programs of the New York State Thruway Authority and the
Metropolitan Transportation Authority authorized by Chapter 56 of the Laws
of 1993.
In upholding the State's position, the Court of Appeals found that,
because the State itself does not become "indebted" in financing
arrangements with public authorities where the State's obligation to make
payments is subject to appropriation, such as lease-purchase and
contractual-obligation financing arrangements described in the State's
Annual Information Statement, those financing arrangements do not
constitute indebtedness of the State for purposes of the State
constitutional limits on debt and are thus not required to be submitted
to the voters for approval at a general election.
Plaintiffs' motion for reargument before the Court of Appeals was
denied on September 1, 1994. The time for appeal to the United States
Supreme Court by petition for a writ of certiorari has not yet expired.
Medicaid Cases. In Matter of New York Association of Homes and
Services for the Aging, Inc. v. Commissioner, by decision dated June 30,
1994, the Court of Appeals held invalid the State Department of Health's
retroactive application to rate years 1989 through 1991 of the nursing
home Medicaid reimbursement rate recalibration adjustment set forth in 10
NYCRR Section 86-2.31(a).
Other Investment Techniques and Strategies. The Fund may also use the
investment techniques and strategies described below. These techniques
involve certain risks.
- When-Issued and Delayed Delivery Transactions. The Fund may
purchase and sell Municipal Securities (up to 20% of the net assets of the
Fund) on a when-issued or delayed delivery basis. When-issued and delayed
delivery transactions arise when securities are purchased or sold with
payment and delivery beyond the regular settlement date. When-issued and
delayed delivery transactions normally settle within 30-45 days. In such
transactions, the payment obligation and the interest rate are fixed at
the time the buyer enters into the commitment. The Fund will maintain,
in a segregated account with the custodian of the Fund, cash, U.S.
Treasury bills or Municipal Securities having an aggregate value equal to
the amount of such payment obligation until payment is made. The
commitment to purchase securities on a when-issued or delayed delivery
basis may involve an element of risk because the value of the securities
is subject to market fluctuation; the value at delivery may be more or
less than the purchase price. Since the Fund relies on the buyer or
seller, as the case may be, to consummate the transaction, failure by the
other party to complete the transaction may result in the Fund missing the
opportunity of obtaining a price or yield considered to be advantageous.
No interest accrues to the purchase prior to settlement of the
transaction, and at the time of delivery the market value may be less than
cost.
- Financial Futures and Options Transactions. The Fund may attempt
to hedge all or a portion of its investment portfolio against market risk
by engaging in transactions in financial futures contracts or options on
financial futures, including options that either are based on an index of
long-term Municipal Securities or relate to debt securities whose prices
are anticipated by the Adviser to correlate with the prices of the
Municipal Securities owned by the Fund. To accomplish such hedging, the
Fund may take a position in a futures contract or in an option which is
expected to move in the opposite direction from the position being hedged.
The use of futures and options for hedging purposes can be expected to
result in taxable income to the shareholders of the Fund.
The sale of financial futures or the purchase of put options on
financial futures or on debt securities or indexes is a means of hedging
against the risk of rising interest rates, whereas the purchase of
financial futures or of call options on financial futures or on debt
securities or indexes is a means of hedging the Fund's portfolio against
an increase in the price of securities the Fund intends to purchase.
Writing a call option on a futures contract or on debt securities or
indexes may serve as a hedge against a modest decline in prices of
Municipal Securities held in the Fund's portfolio, and writing a put
option on a futures contract or on debt securities or indexes may serve
as a partial hedge against an increase in the value of Municipal
Securities the Fund intends to acquire. The writing of such options
provides a hedge to the extent of the premium received in the writing
transaction.
A futures contract is a contract between a seller and a buyer for the
sale and purchase of specified property at a specified future date for a
specified price. An option is a contract that gives the holder of the
option the right, but not the obligation, to buy (in the case of a call
option) specified property from, or to sell (in the case of a put option)
specified property to, the writer of the option for a specified price
during a specified period prior to the option's expiration. Financial
futures contracts and options cover specified debt securities (such as
U.S. Treasury securities) or indexes designed to correlate with price
movements in certain categories of debt securities. On at least one
exchange, futures contracts trade on an index designed to correlate with
the long-term municipal bond market. Financial futures contracts and
options on financial contracts are traded on exchanges regulated by the
Commodity Futures Trading Commission ("CFTC"). Options on certain
financial instruments and financial indexes are traded in securities
markets regulated by the Securities and Exchange Commission. Although
futures contracts and options on specified financial instruments call for
settlement by delivery of the financial instruments covered by the
contracts, in most cases positions in these contracts are closed out by
entering into offsetting liquidating or closing transactions. Index
futures and options are designed for cash settlement only.
There are certain risks associated with the use of financial futures
and options to hedge investment portfolios. There may be imperfect
correlation between price movements of the portfolio securities being
hedged and the hedging positions. Losses may be incurred in hedging
transactions, which could reduce the portfolio gains that might have been
realized if the hedging transaction had not been entered into. The
ability to close out positions in futures and options depends upon the
existence of a liquid market, which may not exist for all futures and
options at all times. If the Fund engages in futures transactions or in
the writing of options on futures, it will be required to maintain initial
margin and variation margin in accordance with applicable rules of the
exchanges and the CFTC. If the Fund purchases a financial futures
contract or a call option or writes a put option in order to hedge the
anticipated purchase of Municipal Securities, and if the Fund fails to
complete the anticipated purchase transaction, the Fund may experience a
loss or a gain on the futures or options transaction that will not be
offset by price movements in the Municipal Securities that were the
subject of the anticipatory hedge. The cost of purchasing options on debt
securities or indexes effectively increases the cost of the securities
subject to them, thereby reducing the yield otherwise available from such
securities.
Although certain risks are involved in futures and options
transactions, because these transactions will be engaged in by the Fund
only for hedging purposes, these futures and options portfolio strategies
should not subject the Fund to those risks frequently associated with
speculation in futures or options transactions. Regulations of the CFTC
applicable to the Fund require that transactions in futures and options
on futures be engaged in only for bona-fide hedging purposes, and that no
such transactions may be entered into by the Fund if the aggregate initial
margin deposits and premiums paid by the Fund exceed 5% of the market
value of its assets. In addition, the Fund is subject to the tax
requirement that it derive less than 30% of its gross income from the sale
or other disposition of securities held for less than three months. With
respect to its engaging in transactions involving the purchase or writing
of put and call options on debt securities or indexes, the Fund will not
purchase such options if more than 5% of its assets would be invested in
the premiums for such options, and it will only write "covered" or
"secured" options, wherein the securities or cash required to be delivered
upon exercise are held by the Fund, with such cash being maintained in a
segregated account. These requirements and limitations may limit the
Fund's ability to engage in hedging transactions.
- Repurchase Agreements. As temporary investments, the Fund may
invest in repurchase agreements. A repurchase agreement is a contractual
agreement whereby the seller of securities (U.S. Government obligations
or Municipal Securities) agrees to repurchase the same security at a
specified price on a future date agreed upon by the parties. The agreed-
upon repurchase price determines the yield during the Fund's holding
period. Repurchase agreements are considered to be loans under the 1940
Act collateralized by the underlying security that is the subject of the
repurchase contract. Income generated from transactions in repurchase
agreements will be taxable. The Fund will only enter into repurchase
agreements with registered securities dealers or domestic banks that,
under Board approved procedures, present minimal credit risk. The risk
to the Fund is limited to the ability of the seller to pay the agreed-upon
repurchase price on the delivery date. The value of the underlying
collateral at the time a repurchase agreement is entered into always
equals or exceeds the agreed-upon repurchase price; however, in the event
of default and the sale of the collateral, the Fund might incur a loss if
the value of the collateral declines, and might incur disposition costs
or experience delays in connection with liquidating the collateral. The
Adviser will monitor the value of the collateral at the time the
transaction is entered into and at all times subsequent during the term
of the repurchase agreement in an effort to determine that the value
always equals or exceeds the agreed-upon repurchase price. In the event
the value of the collateral declines below the repurchase price, the
Adviser will demand additional collateral from the seller to increase the
value of the collateral to at least that of the repurchase price.
- Illiquid and Restricted Securities. Under the policies and
procedures established by the Fund's Board of Directors, the Manager
determines the liquidity of certain of the Fund's investments. Investments
may be illiquid because of the absence of an active trading market, making
it difficult to value them or dispose of them promptly at an acceptable
price. A restricted security is one that has a contractual restriction on
its resale or which cannot be sold publicly until it is registered under
the Securities Act of 1933. The Fund will not invest more than 10% of its
net assets in illiquid or restricted securities (that limit may increase
to 15% if certain state laws are changed or the Fund's shares are no
longer sold in those states). The Fund's percentage limitation on these
investments does not apply to certain restricted securities that are
eligible for resale to qualified institutional purchasers.
Other Investment Restrictions. The Fund has adopted the following
investment restrictions, which together with its investment objective, are
fundamental policies changeable only with the approval of the holders of
a "majority" of the Fund's outstanding voting securities, defined in the
1940 Act as the affirmative vote of the lesser of (a) more than 50% of the
outstanding Shares of the Fund, or (b) 67% or more of the Shares present
or represented by proxy at a meeting if more than 50% of the Fund's
outstanding Shares are represented at the meeting in person or by proxy.
The percentage limitations set forth below, as well as those described
elsewhere, apply only at the time of investment and require no action by
the Fund as a result of subsequent changes in the value or size of the
Fund. Under these restrictions, the Fund will not:
(1) Issue senior securities as defined in the Investment Company Act
of 1940 (the "1940 Act"), except to the extent such issuance might be
involved with respect to borrowings described under subparagraph (3) below
or with respect to transactions involving futures contracts or the writing
of options within the limits described herein;
(2) Make short sales of securities or purchase any securities on
margin (except for such short-term credits as are necessary for the
clearance of transactions), or write or purchase put or call options,
except to the extent that the purchase of a stand-by commitment may be
considered the purchase of a put, and except for transactions involving
options within the limits described herein;
(3) Borrow money, except from banks for temporary or emergency
purposes or for repurchase of its shares, and then only in an amount not
exceeding one-third of the value of the Fund's total assets including the
amount borrowed. While any such borrowings exceed 5% of the Fund's total
assets, no additional purchases of investment securities will be made;
(4) Underwrite any issue of securities, except to the extent that
the purchase of Municipal Securities in accordance with its investment
objectives, policies and limitations may be deemed to be an underwriting;
(5) Invest more than 25% of its total assets in securities of
issuers in any one industry; provided, however, that such limitations
shall not be applicable to Municipal Securities issued by governments or
political subdivisions of governments, and obligations issued or
guaranteed by the U.S. Government, its agencies or instrumentalities;
(6) Purchase or sell real estate, but this shall not prevent the
Fund from investing in Municipal Securities secured by real estate or
interests therein;
(7) Purchase or sell commodities or commodities contracts, except
for transactions involving futures contracts within the limits described
herein;
(8) Make loans, other than by entering into repurchase agreements
and through the purchase of Municipal Securities or temporary investments
in accordance with its investment objectives, policies and limitations;
(9) Invest in securities other than New York Municipal Securities
and temporary investments, as those terms are defined herein;
(10) Invest more than 5% of its total assets in securities of any one
issuer, except that this limitation shall not apply to securities of the
U.S. Government, its agencies and instrumentalities or to the investment
of 25% of its total assets;
(11) Pledge, mortgage or hypothecate its assets, except that, to
secure borrowings permitted by subparagraph (3) above, it may pledge
securities having a market value at the time of pledge not exceeding 20%
of the value of the Fund's total assets;
(12) Invest more than 10% of its total assets in repurchase
agreements maturing in more than seven days; or
(13) Purchase or retain the securities of any issuer other than the
securities of the Fund if, to the Fund's knowledge, those directors of the
Fund, or those officers and directors of the Adviser, who individually own
beneficially more than 1/2 of 1% of the outstanding securities of such
issuer, together own beneficially more than 5% of such outstanding
securities.
For the purpose of applying the limitation set forth in subparagraph
(10) above, an issuer shall be deemed a separate issuer when its assets
and revenues are separate from other governmental entities and its
securities are backed only by its assets and revenues. Similarly, in the
case of a non-governmental user, such as an industrial corporation or a
privately owned or operated hospital, if the security is backed only by
the assets and revenues of the non-governmental user then such non-
governmental user would be deemed to be the sole issuer. Where a security
is also backed by the enforceable obligations of a superior governmental
entity, it shall be included in the computation of securities owned that
are issued by such superior governmental entity. If, however, a security
is guaranteed by a governmental entity or some other entity, such as a
bank guarantee or letter of credit, such a guarantee or letter of credit
would be considered a separate security and would be treated as an issue
of such government, other entity or bank.
5. The shares of the Fund's common stock (the "Shares") are listed
and traded on the American Stock Exchange (the "AMEX"). The following
table sets forth for the Shares for the periods indicated: (a) the per
Share high sales price on the AMEX, the net asset value per share as of
such day and the premium or discount (expressed as a percentage of net
asset value) represented by the difference between such high sales price
and the corresponding net asset value, (b) the per Share low sales price
on the AMEX, the net asset value per Share as of such day and the premium
or discount (expressed as a percentage of net asset value) represented by
the difference between such low sales price and the corresponding net
asset value.
<TABLE>
<CAPTION>
Market Price High;(1) Market Price Low; (1)
NAV and Premium/ NAV and Premium/
Quarter Ended (Discount) That Day (2) (Discount) That Day (2)
<S> <C> <C>
1/31/93 Market: $11.500 Market: $10.125
NAV: $10.45 NAV: $10.41
Premium/(Discount): (10.05)% Premium/(Discount): 2.74%
4/30/93 Market: $12.250 Market: $11.000
NAV: $10.56 NAV: $10.59
Premium/(Discount): (16.00)% Premium/(Discount): (3.87)%
7/31/93 Market: $12.500 Market: $11.375
NAV: $10.66 NAV: $10.61
Premium/(Discount): (17.26)% Premium/(Discount): (7.21)%
10/31/93 Market: $12.875 Market: $12.000
NAV: $10.76 NAV: $10.65
Premium/(Discount): (19.66)% Premium/(Discount): (12.68)%
1/31/94 Market: $12.625 Market: $11.250
NAV: $10.77 NAV: $10.42
Premium/(Discount): (17.22)% Premium/(Discount): (7.97)%
4/30/94 Market: $11.750 Market: $9.875
NAV: $10.46 NAV: $9.80
Premium/(Discount): (12.33)% Premium/(Discount): (0.77)%
7/31/94 Market: $10.250 Market: $9.500
NAV: $9.72 NAV: $9.66
Premium/(Discount): (5.45)% Premium/(Discount): 1.66%
10/31/94 Market: $10.000 Market: $9.250
NAV: $9.51 NAV: $9.43
Premium/(Discount): 5.15% Premium/(Discount): 1.91%
1/31/95 Market: $9.500 Market: $8.875
NAV: $9.09 NAV: $9.17
Premium/(Discount): (4.51)% Premium/(Discount): 3.22%
<FN
_______________
1. As reported by the AMEX.
2. The Fund's computation of net asset value (NAV) is as of the close
of trading on the last day of the week immediately preceding the day
for which the high and low market price is reported and the premium
or discount (expressed as a percentage of net asset value) is
calculated based on the difference between the high or low market
price and the corresponding net asset value for that day, divided by
the net asset value.
</TABLE>
On February 10, 1995, the net asset value per share of the Fund
was $9.44, the closing sales price on the AMEX was $9.625 and the premium
to net asset value (expressed as a percentage) was 1.96%.
The Board of Directors of the Fund has determined that it may be in
the interests of Fund shareholders for the Fund to take action to attempt
to reduce or eliminate a market value discount from net asset value. To
that end, the Fund may, from time to time, either repurchase Shares in the
open market or, subject to conditions imposed from time to time by the
Board, make a tender offer for a portion of the Fund's Shares at their net
asset value per Share. Subject to the Fund's fundamental policy with
respect to borrowings, the Fund may incur debt to finance repurchases
and/or tenders. Interest on any such borrowings will reduce the Fund's
net income. In addition, the acquisition of Shares by the Fund will
decrease the total assets of the Fund and therefore will have the effect
of increasing the Fund's expense ratio. If the Fund must liquidate
portfolio securities to purchase Shares tendered, the Fund may be required
to sell portfolio securities for other than investment purposes and may
realize gains and losses. Gains realized on securities held for less than
three months may affect the Fund's ability to retain its status as a
regulated investment company under the Internal Revenue Code.
In addition to open-market Share purchases and tender offers, the
Board could also seek shareholder approval to convert the Fund to an open-
end investment company if the Fund's Shares trade at a substantial
discount. If the Fund's Shares have traded on the AMEX at an average
discount from net asset value of more than 10%, determined on the basis
of the discount as of the end of the last trading day in each week during
the period of 12 calendar weeks ending October 31 in such year, the
Directors will consider recommending to shareholders a proposal to convert
the Fund to an open-end company. If during a year in which the Fund's
Shares trade at the average discount stated, and for the period described,
in the preceding sentence the Fund also receives written requests from the
holders of 10% or more of the Fund's outstanding Shares that a proposal
to convert to an open end company be submitted to the Fund's shareholders,
within six months the Directors will submit a proposal to the Fund's
shareholders, to the extent consistent with the 1940 Act, to amend the
Fund's Articles of Incorporation to convert the Fund from a closed-end to
an open-end investment company. If the Fund converted to an open-end
investment company, it would be able continuously to issue and offer its
Shares for sale, and each Share of the Fund could be tendered to the Fund
for redemption at the option of the shareholder, at a redemption price
equal to the current net asset value per Share. To meet such redemption
request, the Fund could be required to liquidate portfolio securities.
Its Shares would no longer be listed on the AMEX. The Fund cannot predict
whether any repurchase of Shares made while the Fund is a closed-end
investment company would decrease the discount from net asset value at
which the Shares trade. To the extent that any such repurchase decreased
the discount from net asset value to an amount below 10% during the
measurement period described above, the Fund would not be required to
submit to shareholders a proposal to convert the Fund to an open-end
investment company.
Item 9. Management.
1(a). The Fund is governed by a Board of Directors, which is
responsible under Minnesota law for protecting the interests of
shareholders. The Directors meet periodically throughout the year to
oversee the Fund's activities, review its performance, and review the
actions of the Adviser. The Fund is required to hold annual shareholder
meetings for the election of directors and the ratification of its
independent auditors. The Fund may also hold shareholder meetings from
time to time for other important matters, and shareholders have the right
to call a meeting to remove a Director or to take other action described
in the Fund's Articles of Incorporation.
1(b). The Adviser, a Colorado corporation with its principal
offices at Two World Trade Center, New York, New York 10048-0203, acts as
investment manager for the Fund under an investment advisory agreement
(the "Advisory Agreement") under which it provides ongoing investment
advice and conducts the investment operations of the Fund, including
purchases and sales of its portfolio securities, under the general
supervision and control of the Directors of the Fund.
The Adviser has operated as an investment company adviser since April
30, 1959. It and its affiliates currently advise U.S. investment
companies with assets aggregating over $29 billion as of December 31,
1994, and having more than 2.4 million shareholder accounts. The Adviser
is owned by Oppenheimer Acquisition Corp. ("OAC"), a holding company owned
in part by senior management of the Adviser, and ultimately controlled by
Massachusetts Mutual Life Insurance Company, a mutual life insurance
company that also advises pension plans and investment companies.
The Adviser provides office space and investment advisory services
for the Fund and pays all compensation of those Directors and officers of
the Fund who are affiliated persons of the Adviser. Under the Advisory
Agreement, the Fund pays the Adviser monthly an advisory fee at the rate
of .50% per annum computed on the average weekly net assets of the Fund.
During the fiscal year ended October 1992, the Fund paid management fees
to the Adviser and Clayton Brown Advisers, Inc., the Fund's former
adviser, as applicable during that period, of $120,212. During the fiscal
years ended October 31, 1993 and 1994, the Fund paid management fees to
the Adviser in the amounts of $125,019 and $118,617, respectively. The
Fund incurred approximately $23,212 in expenses for the fiscal year ended
October 31, 1994 for services provided by SFSI.
Under the Advisory Agreement, the Fund pays certain of its other
costs not paid by the Adviser, including (a) brokerage and commission
expenses, (b) Federal, state, local and foreign taxes, including issue and
transfer taxes, incurred by or levied on the Fund, (c) interest charges
on borrowings, (d) the organizational and offering expenses of the Fund,
whether or not advanced by the Adviser, (e) fees and expenses of
registering the Shares of the Fund under the appropriate Federal
securities laws and of qualifying Shares of the Fund under applicable
state securities laws, (f) fees and expenses of listing and maintaining
the listings of the Fund's Shares on any national securities exchange, (g)
expenses of printing and distributing reports to shareholders, (h) costs
of shareholder meetings and proxy solicitation, (i) charges and expenses
of the Fund's custodian and Registrar, Transfer and Dividend Disbursing
Agent, (j) compensation of the Fund's Directors who are not interested
persons of the Adviser, (k) legal and auditing expenses, (l) the cost of
certificates representing the Fund's Shares, (m) costs of stationery and
supplies, and (n) insurance premiums.
Beginning February 16, 1990, the Adviser began performing limited
accounting services for the Fund at an annual fee of $12,000, plus out-of-
pocket costs and expenses reasonably incurred for acting as such
accounting agent.
1(c). The Portfolio Manager of the Fund is Robert E. Patterson, who
also serves as Vice President of the Fund and Senior Vice President of the
Adviser. Mr. Patterson has been the person principally responsible for
the day-to-day management of the Fund's portfolio since November, 1985.
During the past five years, Mr. Patterson has served as an officer of
other OppenheimerFunds.
1(d). Inapplicable.
1(e). Citibank, N.A., 399 Park Avenue, New York, New York, acts as
the custodian (the "Custodian") for the Fund's assets held in the United
States. Rules adopted under the 1940 Act permit the Fund to maintain its
securities and cash in the custody of certain eligible banks and
securities depositories. The Adviser and its affiliates presently have
banking relationships with the Custodian. The Adviser has represented to
the Fund that its banking relationships with the Custodian have been and
will continue to be unrelated to and unaffected by the relationship
between the Fund and the Custodian. It will be the practice of the Fund
to deal with the Custodian in a manner uninfluenced by any banking
relationship the Custodian may have with the Adviser and its affiliates.
Shareholder Financial Services, Inc. ("SFSI"), a subsidiary of the
Adviser, acts as primary transfer agent, shareholder servicing agent and
dividend paying agent for the Fund. Fees paid to SFSI are based on the
number of shareholder accounts and the number of shareholder transactions,
plus out-of-pocket costs and expenses. United Missouri Trust Company of
New York acts as co-transfer agent and co-registrar with SFSI to provide
such services as SFSI may request.
1(f). See Item 10. Part 1, below.
1(g). Inapplicable.
2. Inapplicable.
3. As of February 2, 1995, the only person owning of record or
known by the Fund to own beneficially 25% or more of the outstanding
Shares was Cede & Co. M, Fast Account, c/o Depository Trust Co., 7 Hanover
Square, 22nd Floor, Dividend Department, New York, New York 10004, who
owned of record 1,399,788.4540 Shares (approximately 58% of the Shares
then outstanding).
Item 10. Capital Stock, Long-Term Debt, and Other Securities.
1. The Fund was incorporated in Minnesota on August 10, 1987. Its
authorized capital stock consists of a single class of 250,000,000 shares
of Common Stock, par value $.01 per share. All shares have equal
noncumulative voting rights and equal rights with respect to dividends,
assets and liquidation. Shares are fully paid and non-assessable when
issued and have no pre-emptive, conversion or exchange rights.
Pursuant to the Fund's Dividend Reinvestment and Cash Purchase Plan
(the "Plan"), all dividends and capital gains distributions
("Distributions") declared by the Fund will be automatically reinvested
in additional full and fractional shares of the Fund ("Shares") unless (i)
a shareholder elects to receive cash or (ii) Shares are held in nominee
name, in which event the nominee should be consulted as to participation
in the Plan. Shareholders that participate in the Plan ("Participants")
may, at their option, make additional cash investments in Shares, semi-
annually in amounts of at least $100, through payment to Shareholder
Financial Services, Inc., the agent for the Plan (the "Agent"), and a
service fee of $.75.
Depending upon the circumstances hereinafter described, Plan Shares
will be acquired by the Agent for the Participant's account through
receipt of newly issued Shares or the purchase of outstanding Shares on
the open market. If the market price of Shares on the relevant date
(normally the payment date) equals or exceeds their net asset value, the
Agent will ask the Fund for payment of the Distribution in additional
Shares at the greater of the Fund's net asset value determined as of the
date of purchase or 95% of the then-current market price. If the market
price is lower than net asset value, the Distribution will be paid in
cash, which the Agent will use to buy Shares on the American Stock
Exchange (the "AMEX"), or otherwise on the open market to the extent
available. If the market price exceeds the net asset value before the
Agent has completed its purchases, the average purchase price per Share
paid by the Agent may exceed the net asset value, resulting in fewer
Shares being acquired than if the Distribution had been paid in Shares
issued by the Fund.
Participants may elect to withdraw from the Plan at any time and
thereby receive cash in lieu of Shares by sending appropriate written
instructions to the Agent. Elections received by the Agent will be
effective only if received more than ten days prior to the record date for
any Distribution; otherwise, such termination will be effective shortly
after the investment of such Distribution with respect to any subsequent
Distribution. Upon withdrawal from or termination of the Plan, all Shares
acquired under the Plan will remain in the Participant's account unless
otherwise requested. For full Shares, the Participant may either: (1)
receive without charge a share certificate for such Shares; or (2) request
the Agent (after receipt by the Agent of signature guaranteed instructions
by all registered owners) to sell the Shares acquired under the Plan and
remit the proceeds less any brokerage commissions and a $2.50 service fee.
Fractional Shares may either remain in the Participant's account or be
reduced to cash by the Agent at the current market price with the proceeds
remitted to the Participant. Shareholders who have previously withdrawn
from the Plan may rejoin at any time by sending written instructions
signed by all registered owners to the Agent.
There is no direct charge for participation in the Plan; all fees of
the Agent are paid by the Fund. There are no brokerage charges for Shares
issued directly by the Fund. However, each Participant will pay a pro
rata share of brokerage commissions incurred with respect to open market
purchases of Shares to be issued under the Plan. Participants will
receive tax information annually for their personal records and to assist
in Federal income tax return preparation. The automatic reinvestment of
Distributions does not relieve Participants of any income tax that may be
payable on Distributions.
The Plan may be terminated or amended at any time upon 30 days' prior
written notice to Participants which, with respect to a Plan termination,
must precede the record date of any Distribution by the Fund. Additional
information concerning the Plan may be obtained by shareholders holding
Shares registered directly in their names by writing the Agent,
Shareholder Financial Services, Inc., P.O. Box 173673, Denver, CO, 80217-
3673 or by calling 1-800-647-7374. Shareholders holding Shares in nominee
name should contact their brokerage firm or other nominee for more
information.
The Fund presently has provisions in its Articles of Incorporation
of Trust and By-Laws (together, the "Charter Documents") which could have
the effect of limiting (i) the ability of other entities or persons to
acquire control of the Fund, (ii) the Fund's freedom to engage in certain
transactions or (iii) the ability of the Fund's Directors or shareholders
to amend the Charter Documents or effect changes in the Fund's management.
Those provisions of the Charter Documents may be regarded as "anti-
takeover" provisions. Specifically, under the Fund's Articles of
Incorporation, the affirmative vote of the holders of not less than two
thirds (66-2/3%) of the Fund's Shares outstanding and entitled to vote is
required to authorize the consolidation of the Fund with another entity,
a merger of the Fund with or into another entity a sale or transfer of all
or substantially all of the Fund's assets, the dissolution of the Fund,
the conversion of the Fund to an open-end company, and any amendment of
the Fund's Articles of Incorporation that would affect any of the other
provisions requiring a two-thirds vote. Reference is made to the Charter
Documents of the Fund, on file with the Securities and Exchange
Commission, for the full text of these provisions.
2. Inapplicable.
3. Inapplicable.
4. The Fund qualified for treatment as, and elected to be, a
regulated investment company ("RIC") under Subchapter M of the Internal
Revenue Code for its taxable year ended October 31, 1994, and intends to
continue to qualify as a RIC for each subsequent taxable year. However,
the Fund reserves the right not to qualify under Subchapter M as a RIC in
any year or years. For each taxable year that the Fund qualifies for
treatment as a RIC, the Fund (but not its shareholders) will not be
required to pay Federal income tax. In addition, the Fund intends to
invest in sufficient Municipal Securities so that it will qualify to pay
"exempt-interest dividends" (as defined in the Code) to shareholders; the
dividends payable from net tax-exempt interest earned from Municipal
Securities will qualify as exempt-interest dividends if, at the close of
each quarter of the taxable year of the Fund, at least 50% of the value
of the Fund's total assets consists of Municipal Securities, the interest
on which is excludible from gross income under Section 103(a) of the Code,
and the Fund designates such dividends as exempt-interest dividends in a
written notice mailed to shareholders within sixty days of the end of the
Fund's taxable year.
Exempt-interest dividends distributed to shareholders are not subject
to federal income tax except to the extent such interest is subject to the
alternative minimum tax, as discussed hereinafter. The percentage of
income that is tax-exempt is applied uniformly to all income distributions
made during each fiscal year and thus is an annual average for the Fund
rather than a day-by-day determination for each shareholder whether such
distributions are received in shares or in cash. The percentage of all
distributions other than exempt-interest dividends paid by the Fund,
including distributions from interest on taxable investments and net
realized short-term capital gains, will be taxable to the shareholders as
ordinary income. Any distribution of net realized long-term capital gains
will generally be subject to Federal taxation as long-term capital gains,
regardless of the length of time the investor has held such shares. In
the case of distributions received in cash or reinvested in shares
purchased on the open market, the amount of the distribution for tax
purposes will be the amount of cash distributed or allocated to the
shareholder, and the tax basis of any shares purchased will be the price
paid by the Plan Agent. In the case of distributions made in shares
issued by the Fund, the amount of the distribution will be the fair market
value of the shares on the payment date, and the tax basis of the shares
received will be the same amount.
Although dividends generally will be treated as distributed when
paid, dividends declared in October, November or December, payable to
shareholders of record on a specified date in one of those months and paid
during January of the following year will be treated as having been
distributed by the Fund (and received by the shareholders) on December 31
of the year such dividends are declared.
For both individuals and corporations, interest paid on certain
"private activity bonds" issued on or after August 8, 1986 shall be
treated as an item of tax preference and may, therefore, be subject to the
alternative minimum tax. Under regulations to be issued by the Secretary
of the Treasury, exempt-interest dividends paid by the Fund will be
treated by shareholders as interest on "private activity bonds" to the
extent of the proportionate amount of interest on private activity bonds
received by the Fund. Such exempt-interest dividends constitute a tax
preference for both individual and corporate taxpayers in computing the
alternative minimum tax.
Exempt-interest dividends received by a shareholder which are not
with respect to "private activity bonds" are not treated as a tax
preference item. However, for certain corporate shareholders such
dividends will be included in the computation of an adjustment item used
in determining such corporation's alternative minimum tax and the
environmental tax (the "Superfund Tax"). The adjustment item is 75% of
the difference between such corporate shareholder's "adjusted current
earnings" and its other alternative minimum taxable income with certain
adjustments. Although exempt-interest dividends received by a corporate
shareholder will not be included in the gross income of such corporation
for Federal income tax purposes, "adjusted current earnings" includes all
tax-exempt interest, including exempt-interest dividends received from the
Fund. Corporate shareholders are advised to consult their tax advisers
with respect to the tax consequences of the alternative minimum tax and
the Superfund Tax.
Sales of shares of the Fund by shareholders will generally be a
taxable transaction for Federal income tax purposes and such shareholders
will recognize gain or loss in an amount equal to the difference between
the basis of the shares and the amount received. Assuming that
shareholders hold such shares as a capital asset, the gain or loss will
be a capital gain or loss and will be long-term if shareholders have held
such shares for a period of more than one year. The loss on shares held
six months or less will be a long-term capital loss to the extent any
long-term capital gain distribution is made with respect to such shares
during the period the shareholder owns the shares. In the case of
shareholders holding shares of the Fund for six months or less and
subsequently selling those shares at a loss after receiving an exempt-
interest dividend, the loss will be disallowed to the extent of the
exempt-interest dividends received. In addition, no loss will be
recognized on the sale or other disposition of shares if the shareholder
acquires (through the reinvestment in shares of the Fund or otherwise),
or enters into a contract or option to acquire, shares within 30 days
before or after the disposition.
In the case of corporations, the tax rate generally applicable to
long-term capital gains is 34%. Federal tax legislation has been proposed
from time to time that may reinstate the preferential treatment of capital
gains. It is not known whether any such legislation will be enacted into
law. All taxpayers will be required to disclose to the Internal Revenue
Service the amount of tax-exempt interest earned during the year.
The Fund's hedging activities and transactions in options, futures
contracts and forward contracts will be subject to special tax rules, the
effect of which may be to accelerate income to the Fund, defer Fund
losses, cause adjustments in the holding period of Fund securities and
convert short term capital losses into long term capital losses. These
rules could therefore affect the amount, timing and character of
distributions to shareholders. Recognition of unrealized gains by the
Fund under the "mark to market" rules of the Code may increase the
difficulty of compliance with requirements which must be met in order for
the Fund to continue to qualify as a regulated investment company, thus
requiring the Fund to limit its hedging activities. In order to qualify
as a regulated investment company, the Fund must derive less than 30% of
its annual gross income in the fiscal year from the sale or other
disposition of securities held less than three months. Accordingly, the
Fund will limit its activities in options, futures contracts, forward
contracts and certain other transactions to the extent necessary to comply
with this requirement. Moreover, the Fund's hedging activities may
produce a difference between its book income and its taxable income.
Such a difference may cause a portion of the Fund's income distributions
to constitute return of capital for tax purposes or require the Fund to
make distributions exceeding book income to qualify as a regulated
investment company.
Distributions from the Fund will not be eligible for the dividends
received deduction for corporations.
The Fund is required by law to withhold 31% of taxable dividends,
distributions and redemptions paid to investors who do not furnish to the
Fund their correct taxpayer identification number (in the case of
individuals, their social security number) and in certain other
circumstances.
Currently, up to 50% of a social security recipient's benefits may
be included in taxable income for a benefit recipient if the sum of his
adjusted gross income, income from tax-exempt sources such as tax-exempt
bonds and the Fund plus 50% of his social security benefits received
exceeds certain base amounts. Income from the Fund is still tax-exempt
to the extent described above; it is only included in the calculation of
whether a recipient's income exceeds certain established amounts.
Interest on indebtedness which is incurred to purchase or carry
shares of the Fund, regardless of whether such borrowing is directly
traceable to the purchase or carrying of shares of the Fund, is not
deductible for federal income tax purposes. Further, the Fund may not be
an appropriate investment for persons who are "substantial users" of
facilities financed by industrial development bonds or private activity
bonds held by the Fund or are "related persons" to such users, as such
terms are defined by the Code; such persons should consult their tax
advisers before investing in the Fund.
Ownership of shares of the Fund may result in collateral federal
income tax consequences to certain taxpayers, including, without
limitation, corporations subject to the branch profits tax, financial
institutions, certain insurance companies, and certain S corporations.
Prospective purchasers of the shares should consult their tax advisors as
to applicability of any such collateral consequences.
The foregoing is a general abbreviated summary of the provisions of
the Code and Treasury Regulations presently in effect as they directly
govern the taxation of the Fund and its shareholders. These provisions
are subject to change by legislative or administrative action, and any
such change may be retroactive with respect to Fund transactions.
Shareholders are advised to consult with their own tax advisers for more
detailed information concerning federal income tax matters.
Individual shareholders of the Fund who are subject to New York State
(and New York City) personal income taxation will not be required to
include in adjusted gross income for New York State (and New York City)
purposes that portion of the Fund's federally tax-exempt dividends which
are identified by the Fund as directly attributable to interest earned on
the New York Municipal Securities. Fund dividends, including the
federally tax-exempt portion thereof, which are attributable to interest
on Municipal Securities other than New York Municipal Securities,
including interest on obligations of other states or federal obligations,
if any, would be taxed as dividends to individual shareholders for
purposes of New York State (and New York City) personal income taxation.
Individual shareholders who are subject to New York State (and New
York City) personal income taxation will also be taxed at rates applicable
to other income on distributions of long or short-term capital gains of
the Fund. In addition, for New York State (and New York City) tax
purposes, an individual shareholder will recognize a taxable long or
short-term capital gain or loss in any year in which such shareholder's
shares are sold. Generally, capital losses are subject to the same limits
on deductibility for New York State (and New York City) purposes as they
are for Federal income tax purposes. Thus, for New York State (and New
York City) income tax purposes, as for Federal income tax purposes, no
capital loss will be allowed on the sale or exchange of shares held for
six months or less up to the amount of exempt-interest dividends received
with respect to such shares.
Generally, corporate shareholders of the Fund which are subject to
New York State franchise taxation (and New York City general corporation
taxation) are subject to a tax computed on the basis of entire net income
allocated to New York, business and investment capital allocated to New
York, minimum taxable income allocated to New York (entire net income plus
certain salaries for New York City purposes), or a flat rate minimum,
whichever produces the greater tax, plus a tax based on subsidiary
capital. The entire net income and minimum taxable income of a corporate
shareholder will include dividends received from the Fund and investment
capital of such a shareholder will include its stock interest in the Fund,
without any exclusion for dividends attributable to interest on New York
Municipal Securities or for the portion of the Fund's assets attributable
to such New York Municipal Securities. Corporate shareholders that are
subject to the metropolitan commuter transportation district surcharge
will also be required to pay a tax surcharge on the franchise taxes
imposed by New York State with respect to Fund dividends and capital gain
distributions and gain from the sale or exchange of Fund shares.
Although shareholders of the Fund will not be subject to New York
City unincorporated business taxation solely by reason of their ownership
of shares in the Fund, a shareholder who is subject to the New York City
unincorporated business tax must include income and gains derived from the
Fund in income subject to such tax, except exempt-interest that is
directly attributable to interest on New York Municipal Securities.
Shares of the Fund will be exempt from local property taxes in New
York State and New York City.
5. The following information is provided as of February 1, 1995:
<TABLE>
<CAPTION>
(1) (2) (3) (4)
Amount Held Amount Outstanding
by Registrant Exclusive of
Amount or for its Amount Shown
Title of Class Authorized Account Under (3)
<S> <C> <C> <C>
Shares of Beneficial 250,000,000 None 2,416,144
Interest, $.01 par value
</TABLE>
Item 11. Defaults and Arrears on Senior Securities.
Inapplicable.
Item 12. Legal Proceedings.
Inapplicable.
Item 13. Table of Contents of the Statement of Additional
Information.
Reference is made to Item 15 of the Statement of Additional
Information.
<PAGE>
APPENDIX A
Description of Ratings Categories
Municipal Bonds
- - Moody's Investor Services, Inc. The five highest ratings of Moody's
Investors Service, Inc. ("Moody's") for Municipal Bonds are Aaa, Aa, A,
Baa and Ba. Municipal Bonds rated Aaa are judged to be of the "best
quality." The rating of Aa is assigned to bonds which are of "high
quality by all standards," but as to which margins of protection or other
elements make long-term risks appear somewhat larger than Aaa rated
Municipal Bonds. The Aaa and Aa rated bonds comprise what are generally
known as "high grade bonds." Municipal Bonds which are rated A by Moody's
possess many favorable investment attributes and are considered "upper
medium grade obligations." Factors giving security to principal and
interest of A rated bonds are considered adequate, but elements may be
present which suggest a susceptibility to impairment at some time in the
future. Municipal Bonds rated Baa are considered "medium grade"
obligations. They are neither highly protected nor poorly secured.
Interest payments and principal security appear adequate for the present
but certain protective elements may be lacking or may be
characteristically unreliable over any great length of time. Those bonds
in the Aa, A and Baa groups which Moody's believes possess the strongest
attributes are designated Aa1, A1 and Baa1, respectively. Municipal Bonds
rated Ba are judged to have speculative elements; their future cannot be
considered well-assured. Often the protection of interest and principal
payments may be very moderate and not well safeguarded during both good
and bad times over the future. Uncertainty of position characterizes
bonds in this class.
In addition to the alphabetic rating system described above,
Municipal Bonds rated by Moody's which have a demand feature that provides
the holder with the ability to periodically tender ("put") the portion of
the debt covered by the demand feature, may also have a short-term rating
assigned to such demand feature. The short-term rating uses the symbol
VMIG to distinguish characteristics which include payment upon periodic
demand rather than fund or scheduled maturity dates and potential reliance
upon external liquidity, as well as other factors. The highest investment
quality is designated by the VMIG 1 rating and the lowest by VMIG 4.
- - Standard & Poor's Corporation. The five highest ratings of Standard &
Poor's Corporation ("S&P") for Municipal Bonds are AAA (Prime), AA (High
Grade), A (Good Grade), and BBB (Medium Grade) and BB (below investment
grade). Municipal Bonds rated AAA are "obligations of the highest
quality." The rating of AA is accorded issues with investment
characteristics "only slightly less marked than those of the prime quality
issues." The category of A describes "the third strongest capacity for
payment of debt service." Principal and interest payments on bonds in
this category are regarded as safe. It differs from the two higher
ratings because, with respect to general obligations bonds, there is some
weakness, either in the local economic base, in debt burden, in the
balance between revenues and expenditures, or in quality of management.
Under certain adverse circumstances, any one such weakness might impair
the ability of the issuer to meet debt obligations at some future date.
With respect to revenue bonds, debt service coverage is good, but not
exceptional. Stability of the pledged revenues could show some variations
because of increased competition or economic influences on revenues.
Basic security provisions, while satisfactory, are less stringent.
Management performance appears adequate.
The BBB rating is the lowest "investment grade" security rating. The
difference between A and BBB ratings is that the latter shows more than
one fundamental weakness, or one very substantial fundamental weakness,
whereas the former shows only one deficiency among the factors considered.
With respect to revenue bonds, debt coverage is only fair. Stability of
the pledged revenues could show variations, with the revenue flow possibly
being subject to erosion over time. Basic security provisions are no more
than adequate. Management performance could be stronger. The ratings AA,
A, and BBB may be modified by the addition of a plus or minus sign to show
relative standing within the major rating categories. Bonds rated BB are
regarded as predominately speculative with respect to the issuers capacity
to pay interest and repay principal in accordance with the terms of the
obligation. While such bonds will likely have some quality and protective
characteristics, these are outweighed by large uncertainties or major risk
exposure to adverse conditions.
- - Fitch. The five highest ratings of Fitch for Municipal Bonds are AAA,
AA, A, BBB, and BB. Municipal Bonds rated AAA are judged to be of the
"highest credit quality." The rating of AA is assigned to bonds of "very
high credit quality." Municipal Bonds which are rated A by Fitch are
considered to be of "high credit quality." The rating of BBB is assigned
to bonds of "satisfactory credit quality." The A and BBB rated bonds are
more vulnerable to adverse changes in economic conditions than bonds with
higher ratings. The rating of BB is assigned to bonds considered to be
speculative.
Tax-Exempt Municipal Notes
- Moody's ratings for state and municipal notes and other short-term
loans are designated Moody's Investment Grade ("MIG"). Notes bearing the
designation MIG-1 are of the best quality, enjoying strong protection from
established cash flows of funds for their servicing or from established
and broad-based access to the market for financing. Notes bearing the
designation "MIG-2" are of high quality with ample margins of protection,
although not as large as notes rated "MIG." Such short-term notes which
have demand features may also carry a rating using the symbol VMIG as
described above, with the designation MIG-1/VMIG 1 denoting best quality,
with superior liquidity support in addition to those characteristics
attributable to the designation MIG-1.
- S&P's rating for Municipal Notes due in three years or less are SP-
1 and SP-2. SP-1 describes issues with a very strong capacity to pay
principal and interest and compares with bonds rated A by S&P; if modified
by a plus sign, it compares with bonds rated AA or AAA by S&P. SP-2
describes issues with a satisfactory capacity to pay principal and
interest, and compares with bonds rated BBB by S&P.
- Fitch's rating for Municipal Notes due in three years or less are
F-1+, F-1, F-2 and F-3. F-1+ describes notes with an exceptionally strong
credit quality and the strongest degree of assurance for timely payment.
F-1 describes notes with a very strong credit quality and assurance of
timely payment is only slightly less in degree than issues rated F-1+.
F-2 describes notes with a good credit quality and a satisfactory
assurance of timely payment, but the margin of safety is not as great for
issues assigned F-1+ or F-1 ratings. F-3 describes notes with a fair
credit quality and an adequate assurance of timely payment, but near-term
adverse changes could cause such securities to be rated below investment
grade.
Corporate Debt
The "other debt securities" included in the definition of temporary
investments are corporate (as opposed to municipal) debt obligations rated
Aaa, Aa or A by Moody's, AAA, AA or A by S&P or F+1-, F-1, F-2 or F-1 by
Fitch. The Moody's corporate debt ratings shown do not differ materially
from those set forth above for Municipal Bonds. Corporate debt
obligations rated AAA by S&P are "highest grade obligations." Obligations
bearing the rating of AA also qualify as "high grade obligations" and "in
the majority of instances differ from AAA issues only in small degrees."
Corporate debt obligations rated A by S&P are regarded as "upper medium
grade" and have considerable investment strength, but are not entirely
free from adverse effects of changes in economic and trade conditions.
The Fitch ratings shown do not differ from those set forth below for tax-
exempt municipal notes.
Commercial Paper
The commercial paper ratings of A-1 by S&P, P-1 by Moody's, and F-1+
by Fitch are the highest commercial paper ratings of the respective
agencies. The issuer's earnings, quality of long-term debt, management
and industry position are among the factors considered in assigning such
ratings.
<PAGE>
The New York Tax-Exempt Income Fund, Inc.
3410 South Galena Street, Denver, Colorado 80231
1-800-525-7048
Statement of Additional Information dated February 28, 1995
This Statement of Additional Information is not a Prospectus. This
document contains additional information about the Fund and supplements
information in the Prospectus dated February 28, 1995. It should be read
together with the Prospectus, and the Registration Statement on Form N-2,
of which the Prospectus and this Statement of Additional Information are
a part, can be inspected and copied at public reference facilities
maintained by the Securities and Exchange Commission (the "SEC") in
Washington, D.C. and certain of its regional offices, and copies of such
materials can be obtained at prescribed rates from the Public Reference
Branch, Office of Consumer Affairs and Information Services, SEC,
Washington, D.C., 20549.
TABLE OF CONTENTS
Page
Investment Objective and Policies *
Management 2
Control Persons and Principal Holders of Securities 6
Investment Advisory and Other Services *
Brokerage Allocation and Other Practices 6
Tax Status *
Financial Statements 7
______________________
*See Prospectus
<PAGE>
PART B
INFORMATION REQUIRED IN A STATEMENT OF ADDITIONAL INFORMATION
Item 14. Cover Page.
Reference is made to the preceding page.
Item 15. Table of Contents.
Reference is made to the preceding page and to Items 16 through
23 of the Statement of Additional Information set forth below.
Item 16. General Information and History.
Inapplicable.
Item 17. Investment Objective and Policies.
Reference is made to Item 8 of the Prospectus.
Item 18. Management.
1. and 2. The Fund's directors and officers, and their respective
principal occupations during the past five years, are listed below. All
of the Directors, are also Directors, Trustees or Managing General
Partners 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. (collectively, the "Centennial
Trusts"), Oppenheimer Equity Income Fund, Oppenheimer Total Return Fund,
Inc., Oppenheimer High Yield Fund, Oppenheimer Strategic Income Fund,
Oppenheimer Strategic Diversified Income Fund, Oppenheimer Strategic
Income & Growth Fund, Oppenheimer Strategic Investment Grade Bond Fund,
Oppenheimer Strategic Short-Term Income Fund, Oppenheimer Value Stock
Fund, Oppenheimer Investment Grade Bond Fund, Oppenheimer Variable Account
Funds, Oppenheimer Cash Reserves, Oppenheimer Main Street Funds, Inc.,
Oppenheimer Champion High Yield Fund, Oppenheimer Limited-Term Government
Fund, Oppenheimer Intermediate Tax-Exempt Bond Fund, and Oppenheimer
Insured Tax-Exempt Bond Fund (collectively, the "Denver-based
OppenheimerFunds"). Messrs. Fossel, Swain, Donohue, Bishop, Bowen, Farrar
and Zack hold the same offices with the other Denver-based
OppenheimerFunds.
<TABLE>
<CAPTION>
Principal Occupation during the
Name & Address Past Five Years and Other Affiliations
- -------------- --------------------------------------
<S> <C>
Robert G. Avis; Age: 63 Director Vice Chairman of A.G. Edwards &
Sons, Inc. (a One North Jefferson broker/dealer) and A.G. Edwards, Inc.
(its parent St. Louis, MO 63103 holding company); Chairman of A.G.E. Asset
Management and A.G. Edwards Trust Company
(its affiliated investment adviser and trust
company, respectively).
William A. Baker; Age: 80 Director
Management Consultant.
197 Desert Lakes Drive
Palm Springs, CA 92264
Charles Conrad, Jr.; Age: 64 Director Vice President of McDonnell Douglas
Space Systems, 19411 Merion Circle Co.; formerly associated with the
National Huntington Beach, CA 92647 Aeronautics and Space Administration.
Jon S. Fossel; Age: 52 Director and
Chairman, Chief Executive Officer and a
director
Two World Trade Center President of the Adviser; President and a
director of
New York, NY 10048-0203 Oppenheimer Acquisition Corp. ("OAC"), the
Adviser's parent holding company; President
and a director of HarbourView Asset
Management Corp. ("HarbourView"), a
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.
Raymond J. Kalinowski; Age: 65 Director
Formerly Vice Chairman and a director of
A.G.
44 Portland Drive Edwards, Inc., parent holding company of
A.G.
St. Louis, MO 63131 Edwards & Sons, Inc. (a broker-dealer), of
which he was Senior Vice President.
C. Howard Kast; Age: 73 Director Formerly the Managing Partner of
Deloitte, Haskins 2552 East Alameda & Sells (an accounting firm).
Denver, CO 80209
Robert M. Kirchner; Age: 73 Director
President of The Kirchner Company
(management
7500 E. Arapahoe Road consultants).
Englewood, CO 80112
Ned M. Steel; Age: 79 Director
Chartered Property and Casualty
Underwriter;
3416 South Race Street formerly Senior Vice President and a
director of Van Englewood, CO 80110 Gilder Insurance Corp. (insurance
brokers)
James C. Swain; Age: 61 Chairman
Vice Chairman of the Adviser; President and
a
3410 South Galena Street director of Centennial Asset Management
Denver, CO 80231 Corporation ("Centennial"), an investment
adviser subsidiary of the Adviser; formerly
President and a director of Oppenheimer Asset Management
Corporation ("OAMC"), an investment adviser
which was a subsidiary of the Adviser;
Chairman of the Board of SSI.
</TABLE>
Robert E. Patterson, Vice President and Portfolio Manager; Age: 51.
Two World Trade Center, New York, NY 10048-0203
Vice President of the Adviser; an officer of other OppenheimerFunds.
Andrew J. Donohue, Vice President; Age: 44
Two World Trade Center, New York, NY 10048-0203
Executive Vice President and General Counsel of the Adviser and
Oppenheimer Funds Distributor, Inc. (the "Distributor"); an officer
of other OppenheimerFunds; formerly Senior Vice President and
Associate General Counsel of the Adviser 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.
Robert G. Zack, Vice President; Age: 46.
Two World Trade Center, New York, NY 10048-0203
Senior Vice President and Associate General Counsel of the Adviser;
Assistant Secretary of SSI and SFSI; an officer of other
OppenheimerFunds.
George C. Bowen, Vice President, Secretary and Treasurer; Age: 58.
3410 South Galena Street, Denver, CO 80231
Senior Vice President and Treasurer of the Adviser; Vice President and
Treasurer of OFMI 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; formerly Senior Vice President/Comptroller and
Secretary of OAMC.
Robert J. Bishop, Assistant Treasurer; Age: 36.
3410 South Galena Street, Denver, CO 80231
Assistant Vice President of the Adviser/Mutual Fund Accounting; an
officer of other OppenheimerFunds; previously a Fund Controller for
the Adviser, prior to which he was an Accountant for Yale & Seffinger,
P.C., an accounting firm, and previously an Accountant and Commissions
Supervisor for Stuart James Company, Inc., a broker-dealer.
Scott Farrar, Assistant Treasurer; Age: 29.
3410 South Galena Street, Denver, CO 80231
Assistant Vice President of the Adviser/Mutual Fund Accounting; an
officer of other OppenheimerFunds; previously a Fund Controller for
the Adviser, 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, before
which he was a sales representative for Central Colorado Planning.
The Fund's Board of Directors has overall responsibility for the
management of the Fund under the laws of Minnesota governing the
responsibilities of directors of corporations. Subject to the authority
of the Board of Directors, the Adviser is responsible for day-to-day
management of the Fund's business, supervises the investment operations
of the Fund and the composition of its portfolio and furnishes the Fund
advice and recommendations with respect to investments, investment
policies and the purchase and sale of securities pursuant to the Advisory
Agreement. The Board of Directors does not have an executive or
investment committee. The directors of the Fund have appointed an Audit
and Review Committee consisting of Messrs. Baker (Chairman), Conrad and
Kirchner, none of whom is an "interested person" of the Adviser or the
Fund. The committee's functions 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 Directors.
3. Inapplicable.
4. The officers of the Fund are affiliated with the Manager; they
and the Directors of the Fund who are affiliated with the Manager (Messrs.
Fossel and Swain, who are both officers and Directors) receive no salary
or fee from the Fund. The Directors of the Fund (excluding Messrs. Fossel
and Swain) received the total amounts shown below from all 22 of the
Denver-based OppenheimerFunds (including the Fund) listed in the first
paragraph of Item 18, Parts 1 and 2, for services in the positions shown:
<TABLE>
<CAPTION>
Total Compensation From All
Name Position Denver-based OppenheimerFunds1
<S> <C> <C>
Robert G. Avis Director $53,000.00
William A. Baker Audit and Review $73,257.01
Committee Member, Chairman
and Director
Charles Conrad, Jr. Audit and Review $68,293.67
Committee Member and
Director
Raymond J. KalinowskiDirector $53,000.00
C. Howard Kast Director $53,000.00
Robert M. Kirchner Audit and Review $68,293.67
Committee Member and
Director
Ned M. Steel Director $53,000.00
______________________
1 For the 1994 calendar year.
</TABLE>
Item 19. Control Persons and Principal Holders of Securities.
1. Inapplicable.
2. As of February 2, 1995, the only person owning of record or
known by the Fund to own beneficially 5% or more of the outstanding Shares
was Cede & Co. M, Fast Account, c/o Depository Trust Co., 7 Hanover
Square, 22nd Floor, Dividend Department, New York, New York 10004, who
owned of record 1,399,788.4540 Shares (approximately 58.0% of the Shares
then outstanding).
3. As of February 16 1995, the directors and officers of the Fund
as a group owned less than 1% of the outstanding Shares.
Item 20. Investment Advisory and Other Services.
Reference is made to Item 9 of the Prospectus.
Item 21. Brokerage Allocation and Other Practices.
1. and 2. The Fund paid no brokerage commissions during the fiscal
years ended October 31, 1992, 1993 and 1994.
The Adviser supplies portfolio management, selects brokers and
supplies investment research in accordance with the Fund's policies. The
Fund does not intend to effect portfolio transactions through any broker
which is an affiliated person of the Fund or its Adviser although the Fund
reserves the right to do so.
As most purchases of portfolio securities made by the Fund are
principal transactions at net prices, the Fund incurs little or no
brokerage costs. The Fund deals directly with the selling or purchasing
principal or market maker without incurring charges for the services of
a broker on its behalf unless it is determined that a better price or
execution may be obtained by using the services of a broker. Purchases
of portfolio securities from underwriters include a commission or
concession paid by the issuer to the underwriter, and purchases from
dealers include a spread between the bid and asked price. The Fund seeks
to obtain prompt execution of orders at the most favorable net price.
3. The Advisory Agreement between the Fund and the Adviser (the
"Advisory Agreement") contains provisions relating to the selection of
brokers, dealers and futures commission merchants (collectively referred
to as "brokers") for the Fund's portfolio transactions. The Adviser may
employ brokers as may, in its best judgment based on all relevant factors,
implement the policy of the Fund to obtain, at reasonable expense, the
"best execution" (prompt and reliable execution at the most favorable
price obtainable) of such transactions. The Adviser has no duty or
obligation to seek advance competitive bidding for the most favorable
commission rate or to select any broker-dealer on the basis of its
purported or "posted" commission rates but will, to the best of its
ability endeavor to be aware of the current level of charges of eligible
broker-dealers and to minimize the expense incurred by the Fund to the
extent consistent with the interests and policies of the Fund as
established by the Board of Directors and the provisions of the Agreement.
Certain other investment companies advised by the Adviser and its
affiliates have investment objectives and policies similar to those of the
Fund. If transactions on behalf of more than one fund during the same
period increase the demand for securities being purchased or the supply
of securities being sold, there may be an adverse effect on price or
quantity. When the Fund engages in an option transaction, ordinarily the
same broker will be used for the purchase or sale of the option and any
transactions in the security to which the option relates.
If brokers are used for portfolio transactions, brokers may be
selected for their execution and/or research services, on which no dollar
value can be placed. Information received by the Adviser for those other
accounts may or may not be useful to the Fund. The commissions paid to
such dealers may be higher than another qualified dealer would have
charged if a good faith determination is made by the Adviser that the
commission is reasonable in relation to the services provided. Subject
to applicable regulations, sales of shares of the Fund and/or investment
companies advised by the Adviser or its affiliates may also be considered
as a factor in directing transactions to brokers, but only in conformity
with the price, execution and other considerations and practices discussed
above.
Such research, which may be provided by a broker through a third
party, includes information on particular companies and industries as well
as market, economic or institutional activity areas. It serves to broaden
the scope and supplement the research activities of the Adviser, to make
available additional views for consideration and comparisons, and to
enable the Adviser to obtain market information for the valuation of
securities held in the Fund's portfolio or being considered for purchase.
4. Inapplicable.
5. Inapplicable.
Item 22. Tax Status.
Reference is made to Item 10 of the Prospectus.
Item 23. Financial Statements.
1. Statement of Investments
2. Statement of Assets and Liabilities
3. Statement of Operations
4. Statements of Changes in Net Assets
5. Financial Highlights
6. Notes to Financial Statements
7. Independent Auditors' Report
8. Independent Auditors' Consent
<PAGE>
INDEPENDENT AUDITORS' REPORT
The New York Tax-Exempt Income Fund, Inc.
The Board of Directors and Shareholders of
The New York Tax-Exempt Income Fund, Inc.:
We have audited the accompanying statement of assets and liabilities, including
the statement of investments, of The New York Tax-Exempt Income Fund, Inc. as of
October 31, 1994, the related statement of operations for the year then ended,
the statements of changes in net assets for the years ended October 31, 1994 and
1993 and the financial highlights for the period December 1, 1989 to October 31,
1994. These financial statements and financial highlights are the responsibility
of the Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits. The financial
highlights (except for total return) for the period October 15, 1987
(commencement of operations) to November 30, 1989 were audited by other auditors
whose report dated January 4, 1990, expressed an unqualified opinion on those
financial highlights.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit also includes examining,
on a test basis, evidence supporting the amounts and disclosures in the
financial statements. Our procedures included confirmation of securities owned
at October 31, 1994 by correspondence with the custodian. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the financial position of The New York
Tax-Exempt Income Fund, Inc. at October 31, 1994, the results of its operations,
the changes in its net assets, and the financial highlights for the respective
stated periods, in conformity with generally accepted accounting principles.
DELOITTE & TOUCHE LLP
Denver, Colorado
November 21, 1994
STATEMENT OF INVESTMENTS October 31, 1994
The New York Tax-Exempt Income Fund, Inc.
<TABLE>
<CAPTION>
Ratings: Market
Moody's/S&P's/Fitch's Face Value
(Unaudited) Amount See Note 1
--------------------- ---------- -----------
<S> <C> <C> <C>
MUNICIPAL BONDS AND NOTES -- 98.4%
NEW YORK -- 89.9%
Babylon, New York Industrial Development Agency
Resource Recovery Revenue Bonds, Ogden Martin
Systems, Inc., Series C, 8.50%, 1/1/19........... Baa1/NR $ 985,000 $ 1,064,859
City of New York General Obligation Bonds:
Prerefunded, Series A, 8.75%, 11/1/15............ AAA/AAA 1,000,000 1,116,508
Series D, 7.50%, 2/1/19.......................... Baa1/A- 1,300,000 1,356,089
Dormitory Authority of the State of New York:
City University System, Prerefunded, Series A,
7.625%, 7/1/20................................. AAA/BBB 175,000 196,409
Revenue Bonds, Judicial Facilities Lease Project,
Escrowed to Maturity, BIG Insured, 7.375%,
7/1/16......................................... AAA/AAA 250,000 275,060
Revenue Refunding Bonds, Long Island Jewish
Medical Center, Series A, FHA Insured, 7.75%,
8/15/27........................................ Aa/AAA 1,000,000 1,065,085
Great Neck North, New York Water Authority Revenue
Bonds, Water Systems Project, Prerefunded, Series
A, 7%, 1/1/18.................................... A1/A- 600,000 652,684
Metropolitan Transportation Authority of New York
Revenue Bonds, Transportation Facilities Service
Contracts, Prerefunded, Series 1, 8.50%,
7/1/17........................................... Aaa/AAA 500,000 552,027
Municipal Assistance Corp. for the City of New York
Revenue Bonds:
Series 61, MBIA Insured, 6.875%, 7/1/07.......... Aaa/AAA 500,000 522,712
Series 62, 6.90%, 7/1/07......................... Aa/AA-/AA 500,000 523,712
New York City Health & Hospital Corp. Revenue
Refunding Bonds, Series A, AMBAC Insured, 7.52%,
2/15/23 (1)...................................... Aaa/AAA/AAA 1,000,000 730,029
New York City Municipal Water Finance Authority
Revenue Bonds, Water and Sewer System Project,
Prerefunded, Series A, 9%, 6/15/17............... AAA/AAA 500,000 557,451
</TABLE>
3
<PAGE> 4
STATEMENT OF INVESTMENTS October 31, 1994 (Continued)
The New York Tax-Exempt Income Fund, Inc.
<TABLE>
<CAPTION>
Ratings: Market
Moody's/S&P's/Fitch's Face Value
(Unaudited) Amount See Note 1
--------------------- ---------- -----------
<S> <C> <C> <C>
MUNICIPAL BONDS AND NOTES (CONTINUED)
NEW YORK (CONTINUED)
New York State Energy Research and Development
Authority:
Electric Facilities Revenue Bonds, Long Island
Lighting Co., Series C, 6.90%, 8/1/22.......... Ba1/BB+ $1,000,000 $ 923,674
Gas Facilities Revenue Bonds, Brooklyn Union Gas
Co. Project, Series D, MBIA Insured,
7.54%, 7/8/26 (1).............................. Aaa/AAA/A 1,000,000 658,989
Pollution Control Revenue Bonds, Rochester
Gas and Electric Co. Project, Series C,
8.375%, 12/1/28................................ Baa1/BBB+ 250,000 272,616
New York State General Obligation Refunding Bonds,
9.875%, 11/15/05................................. A/A-/A+ 400,000 517,204
New York State Housing Finance Agency Revenue
Bonds, State University Construction Project,
Prerefunded, Series A, 8.30%, 5/1/18............. AAA/AAA 750,000 831,319
New York State Local Government Assistance Corp.
Revenue Refunding Bonds, Series B, 5.50%,
4/1/21........................................... A/A/A+ 200,000 165,959
New York State Medical Care Facilities Finance
Agency Revenue Bonds:
Bronx-Lebanon Hospital, Series A, BIG Insured,
7.10%, 2/15/27................................. Aaa/AAA 1,000,000 1,042,071
Mental Health Services Facilities Improvement
Project:
Prerefunded, Series A, 8.875%, 8/15/07......... AAA/AAA 155,000 173,160
Series A, 8.875%, 8/15/07...................... Baa1/BBB+ 345,000 378,307
Richland Memorial Hospital and Nursing Home Mtg.,
Series B, FHA Insured, 9.125%, 2/15/25......... Aa/A 495,000 511,499
New York State Mortgage Agency Revenue Bonds:
Ninth Series E, 8.375%, 4/1/18................... Aa/NR 655,000 676,898
6.20%, 10/1/24 (1)............................... NR/NR 1,000,000 594,456
New York State Power Authority Revenue Refunding
Bonds:
Series V, MBIA Insured, 7.875%, 1/1/13........... Aaa/AAA 450,000 483,374
Series V, 8%, 1/1/17............................. Aa/AA- 500,000 539,236
New York State Urban Development Corp. Revenue
Refunding Bonds, Correctional Facilities Capital
Project, Prerefunded, 8%, 1/1/06................. AAA/BBB 1,000,000 1,056,001
</TABLE>
4
<PAGE> 5
STATEMENT OF INVESTMENTS October 31, 1994 (Continued)
The New York Tax-Exempt Income Fund, Inc.
<TABLE>
<CAPTION>
Ratings: Market
Moody's/S&P's/Fitch's Face Value
(Unaudited) Amount See Note 1
--------------------- ---------- -----------
<S> <C> <C> <C>
MUNICIPAL BONDS AND NOTES (CONTINUED)
NEW YORK (CONTINUED)
Port Authority of New York and New Jersey
Consolidated Revenue Bonds, Sixty Series,
8.25%, 4/1/23.................................... A1/AA-/AA- $ 600,000 $ 619,426
Suffolk County, New York General Obligation Bonds:
Prerefunded, FGIC Insured, 7.10%, 7/15/10........ Aaa/AAA/AAA 510,000 545,795
Refunding, AMBAC Insured, 10%, 11/1/02........... Aaa/AAA/AAA 250,000 313,349
Suffolk County, New York Water Authority Revenue
Refunding Bonds, Waterworks Project:
Prerefunded, AMBAC Insured, 7.375%, 6/1/12....... Aaa/AAA/AAA 120,000 131,650
AMBAC Insured, 7.375%, 6/1/12.................... Aaa/AAA/AAA 25,000 26,821
Triborough Bridge and Tunnel Authority of
New York General Purpose Revenue Bonds,
Prerefunded, Series K, 8.25%, 1/1/17............. AAA/AAA 1,040,000 1,127,393
-----------
20,201,822
U.S. POSSESSIONS -- 8.5%
Puerto Rico Commonwealth Highway and Transportation
Authority Revenue Bonds, Series W, 7.12%, 7/1/10
(1).............................................. Baa1/A 1,000,000 779,432
Puerto Rico Electric Power Authority Revenue
Refunding Bonds, Prerefunded, Series K,
9.375%, 7/1/17................................... Aaa/AAA 1,000,000 1,126,857
-----------
1,906,289
-----------
Total Investments, at Value (Cost $22,031,521).......................... 98.4% 22,108,111
Other Assets Net of Liabilities......................................... 1.6 359,651
----------- ------------
Net Assets.............................................................. 100.0% $22,467,762
=========== ============
</TABLE>
(1) Represents the current interest rate for a variable rate bond. Variable rate
bonds known as "inverse floaters" pay interest at a rate that varies
inversely with short term interest rates. As interest rates rise, inverse
floaters produce less current income. Their price may be more volatile than
the price of a comparable fixed-rate security.
See accompanying Notes to Financial Statements.
5
<PAGE> 6
STATEMENT OF ASSETS AND LIABILITIES October 31, 1994
The New York Tax-Exempt Income Fund, Inc.
<TABLE>
<CAPTION>
<S> <C>
ASSETS:
Investments, at value (cost $22,031,521) -- see accompanying statement.................. $22,108,111
Cash.................................................................................... 33,144
Interest receivable..................................................................... 487,561
Other................................................................................... 536
-----------
Total assets........................................................................ 22,629,352
-----------
LIABILITIES:
Payables and other liabilities:
Dividends............................................................................. 127,615
Other................................................................................. 33,975
-----------
Total liabilities................................................................... 161,590
-----------
NET ASSETS.............................................................................. $22,467,762
===========
COMPOSITION OF NET ASSETS:
Par value of shares of capital stock.................................................... $ 24,078
Additional paid-in capital.............................................................. 22,308,269
Undistributed net investment income..................................................... 67,276
Accumulated net realized loss from investment transactions.............................. (8,451)
Net unrealized appreciation on investments -- Note 3.................................... 76,590
-----------
NET ASSETS -- Applicable to 2,407,824 shares of capital stock outstanding............... $22,467,762
===========
NET ASSET VALUE PER SHARE............................................................... $ 9.33
====
</TABLE>
See accompanying Notes to Financial Statements.
6
<PAGE> 7
STATEMENT OF OPERATIONS For the Year Ended October 31, 1994
The New York Tax-Exempt Income Fund, Inc.
<TABLE>
<CAPTION>
<S> <C>
INVESTMENT INCOME -- Interest........................................................... $ 1,765,361
-----------
EXPENSES:
Management fees -- Note 4............................................................... 118,617
Transfer agent and accounting services fees -- Note 4................................... 35,212
Shareholder reports..................................................................... 30,806
Legal and auditing fees................................................................. 7,755
Registration and filing fees............................................................ 7,737
Directors' fees and expenses............................................................ 5,133
Other................................................................................... 1,486
-----------
Total expenses...................................................................... 206,746
-----------
NET INVESTMENT INCOME................................................................... 1,558,615
-----------
REALIZED AND UNREALIZED LOSS ON INVESTMENTS:
Net realized loss on investments........................................................ (2,690)
Net change in unrealized appreciation or depreciation on investments.................... (2,847,845)
-----------
NET REALIZED AND UNREALIZED LOSS ON INVESTMENTS......................................... (2,850,535)
-----------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS.................................... $(1,291,920)
============
</TABLE>
See accompanying Notes to Financial Statements.
7
<PAGE> 8
STATEMENTS OF CHANGES IN NET ASSETS
The New York Tax-Exempt Income Fund, Inc.
<TABLE>
<CAPTION>
Year Ended October 31,
--------------------------
1994 1993
----------- -----------
<S> <C> <C>
OPERATIONS:
Net investment income...................................................... $ 1,558,615 $ 1,561,535
Net realized gain (loss) on investments.................................... (2,690) 589,479
Net change in unrealized appreciation or depreciation on investments....... (2,847,845) 683,597
----------- -----------
Net increase (decrease) in net assets resulting from operations.......... (1,291,920) 2,834,611
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS:
Dividends from net investment income ($.645 and $.736 per share,
respectively)............................................................ (1,543,711) (1,734,275)
Dividends in excess of net investment income ($.011 per share)............. (25,458) --
Distributions from net realized gain on investments ($.073 per share)...... -- (171,101)
Distributions in excess of net realized gain on investments ($.252 per
share)................................................................... (598,198) --
CAPITAL STOCK TRANSACTIONS:
Proceeds from shares issued to shareholders in reinvestment of dividends
and distributions........................................................ 410,642 321,465
----------- -----------
Total increase (decrease) in net assets.............................. (3,048,645) 1,250,700
NET ASSETS:
Beginning of period........................................................ 25,516,407 24,265,707
----------- -----------
End of period (including undistributed net investment income of $67,276
and $96,085, respectively)............................................... $22,467,762 $25,516,407
============ ===========
</TABLE>
See accompanying Notes to Financial Statements.
8
<PAGE> 9
FINANCIAL HIGHLIGHTS
The New York Tax-Exempt Income Fund, Inc.
<TABLE>
<CAPTION>
Eleven
Months
Ended
Year Ended October 31, October
------------------------------------------- 31,
1994 1993 1992 1991 1990(2)
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING DATA:
Net asset value, beginning of
period......................... $ 10.77 $ 10.37 $ 10.22 $ 9.78 $ 10.00
------- ------- ------- ------- -------
Income (loss) from investment
operations:
Net investment income before
cumulative effect of a change
in accounting principle...... .65 .66 .65 .64 .57
Cumulative effect of a change
in the method of accounting
for registration and initial
public offering costs........ -- -- -- -- --
Net realized and unrealized
gain (loss) on investments... (1.18) .55 .18 .47 (.12)
------- ------- ------- ------- -------
Total income (loss) from
investment operations...... (.53) 1.21 .83 1.11 .45
------- ------- ------- ------- -------
Dividends and distributions to
shareholders:
Dividends from net investment
income....................... (.65) (.74) (.64) (.64) (.56)
Dividends in excess of net
investment income............ (.01) -- -- -- --
Distributions from net realized
gain on investments.......... -- (.07) (.04) (.03) (.11)
Distributions in excess of net
realized gain on
investments.................. (.25) -- -- -- --
------- ------- ------- ------- -------
Total dividends and
distributions to
shareholders............... (.91) (.81) (.68) (.67) (.67)
Registration and initial public
offering costs................. -- -- -- -- --
------- ------- ------- ------- -------
Net asset value, end of
period......................... $ 9.33 $ 10.77 $ 10.37 $ 10.22 $ 9.78
======== ======== ======== ======== ========
Market value, end of period..... $ 9.50 $ 12.63 $ 10.88 $ 10.00 $ 9.13
TOTAL RETURN, AT MARKET
VALUE(3)....................... (17.70)% 25.11% 16.09% 17.19% 5.55%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in
thousands)..................... $22,468 $25,516 $24,266 $23,713 $22,705
Average net assets (in
thousands)..................... $23,852 $24,936 $24,042 $23,101 $22,847
Number of shares outstanding at
end of period (in thousands)... 2,408 2,369 2,340 2,321 2,321
Ratios to average net assets:
Net investment income.......... 6.53% 6.26% 6.32% 6.43% 6.33%(4)
Expenses....................... .87% .84% .97% .97% 1.12%(4)
Portfolio turnover rate(5)...... 6% 28% 9% 2% 4%
</TABLE>
<TABLE>
<CAPTION>
Period
Year Ended November Ended
30, November
--------------------- 30,
1989 1988 1987(1)
------- ------- -------
<S> <C> <C> <C>
PER SHARE OPERATING DATA:
Net asset value, beginning of
period......................... $ 9.92 $ 9.51 $ 9.35
------- ------- -------
Income (loss) from investment
operations:
Net investment income before
cumulative effect of a change
in accounting principle...... .62 .61 .04
Cumulative effect of a change
in the method of accounting
for registration and initial
public offering costs........ .03 -- --
Net realized and unrealized
gain (loss) on investments... .24 .47 .12
------- ------- -------
Total income (loss) from
investment operations...... .89 1.08 .16
------- ------- -------
Dividends and distributions to
shareholders:
Dividends from net investment
income....................... (.63) (.59) --
Dividends in excess of net
investment income............ -- -- --
Distributions from net realized
gain on investments.......... (.06) (.08) --
Distributions in excess of net
realized gain on
investments.................. -- -- --
------- ------- -------
Total dividends and
distributions to
shareholders............... (.69) (.67) --
Registration and initial public
offering costs................. (.12) -- --
------- ------- -------
Net asset value, end of
period......................... $ 10.00 $ 9.92 $ 9.51
======== ======== ========
Market value, end of period..... $ 9.25 $ 9.38 $ 10.25
TOTAL RETURN, AT MARKET
VALUE(3)....................... 5.70% (2.06)% .25%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in
thousands)..................... $23,203 $23,004 $21,973
Average net assets (in
thousands)..................... $23,108 $22,132 $15,294
Number of shares outstanding at
end of period (in thousands)... 2,321 2,318 2,311
Ratios to average net assets:
Net investment income.......... 6.57% 6.27% 4.02%(4)
Expenses....................... 1.34% 1.53% 1.46%(4)
Portfolio turnover rate(5)...... 24% 45% 35%
</TABLE>
(1) For the period from October 15, 1987 (commencement of operations) to
November 30, 1987.
(2) On April 7, 1990, Oppenheimer Management Corporation became the investment
advisor to the Fund.
(3) Assumes a hypothetical purchase at the current market price on the business
day before the first day of the fiscal period, with all dividends and
distributions reinvested in additional shares on the reinvestment date, and
a sale at the current market price on the last business day of the period.
(4) Annualized.
(5) The lesser of purchases or sales of portfolio securities for a period,
divided by the monthly average of the market value of portfolio securities
owned during the period. Securities with a maturity or expiration date at
the time of acquisition of one year or less are excluded from the
calculation. Purchases and sales of investment securities (excluding
short-term securities) for the year ended October 31, 1994 were $1,517,122
and $1,620,171, respectively.
See accompanying Notes to Financial Statements.
9
<PAGE> 10
NOTES TO FINANCIAL STATEMENTS
The New York Tax-Exempt Income Fund, Inc.
1. SIGNIFICANT ACCOUNTING POLICIES
The New York Tax-Exempt Income Fund, Inc. (the Fund) is registered under the
Investment Company Act of 1940, as amended, as a diversified, closed-end
management investment company. The Fund's investment advisor is Oppenheimer
Management Corporation (the Manager). The following is a summary of significant
accounting policies consistently followed by the Fund.
Investment Valuation -- Portfolio securities are valued at 4:00 p.m. (New York
time) on the last day of each week on which day the New York Stock Exchange is
open. Long-term debt securities are valued by a portfolio pricing service
approved by the Board of Directors. Long-term debt securities which cannot be
valued by the approved portfolio pricing service are valued by averaging the
mean between the bid and asked prices obtained from two active market makers in
such securities. Short-term debt securities having a remaining maturity of 60
days or less are valued at cost (or last determined market value) adjusted for
amortization to maturity of any premium or discount. Securities for which market
quotes are not readily available are valued under procedures established by the
Board of Directors to determine fair value in good faith.
Federal Income Taxes -- The Fund intends to continue to comply with provisions
of the Internal Revenue Code applicable to regulated investment companies and to
distribute all of its taxable income, including any net realized gain on
investments not offset by loss carryovers, to shareholders. Therefore, no
federal income tax provision is required. At October 31, 1994, the Fund had
available for federal income tax purposes an unused capital loss carryover of
approximately $2,100, which will expire in 2002.
Distributions to Shareholders -- The Fund intends to declare and pay dividends
from net investment income monthly. Distributions from net realized gains on
investments, if any, will be declared at least once each year.
Change in Accounting for Distributions to Shareholders -- Effective November 1,
1993, the Fund adopted Statement of Position 93-2: Determination, Disclosure,
and Financial Statement Presentation of Income, Capital Gain, and Return of
Capital Distributions by Investment Companies. As a result, the Fund changed the
classification of distributions to shareholders to better disclose the
differences between financial statement amounts and distributions determined in
accordance with income tax regulations. Accordingly, subsequent to October 31,
1993, amounts have been reclassified to reflect a decrease in paid-in capital of
$8,074, a decrease in undistributed net investment income of $17,660, and a
decrease in undistributed capital loss on investments of $25,734. During the
year ended October 31, 1994, in accordance with Statement of Position 93-2,
undistributed net investment income was decreased by $595 and undistributed
capital loss was decreased by $595.
Other -- Investment transactions are accounted for on the date the investments
are purchased or sold (trade date). Discount on securities purchased is
amortized over the life of the respective securities, in accordance with federal
income tax requirements. Realized gains and losses on investments and unrealized
appreciation and depreciation are determined on an identified cost basis, which
is the same basis used for federal income tax purposes. For bonds acquired after
April 30, 1993, accrued market discount is recognized at maturity or disposition
as taxable ordinary income. Taxable ordinary income is realized to the extent of
the lesser of gain or accrued market discount.
10
<PAGE> 11
NOTES TO FINANCIAL STATEMENTS (Continued)
The New York Tax-Exempt Income Fund, Inc.
2. CAPITAL STOCK
The Fund has authorized 250,000,000 shares of $.01 par value capital stock. Of
these shares, 17,176 shares remain reserved for issuance under a Dividend
Reinvestment and Cash Purchase Plan. Transactions in shares of capital stock
were as follows:
<TABLE>
<CAPTION>
Year Ended October 31,
---------------------------------------
1994 1993
----------------- -----------------
Shares Amount Shares Amount
------ -------- ------ --------
<S> <C> <C> <C> <C>
Net increase
from dividends
and distributions
reinvested.......... 38,818 $410,642 29,079 $321,465
</TABLE>
3. UNREALIZED GAINS AND LOSSES ON INVESTMENTS
At October 31, 1994, net unrealized appreciation on investments of $76,590 was
composed of gross appreciation of $1,426,249, and gross depreciation of
$1,349,659.
4. MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES
Management fees paid to the Manager were in accordance with the investment
advisory agreement with the Fund which provides for an annual fee of .50% on the
Fund's net assets.
The Manager acts as the accounting agent for the Fund at an annual fee of
$12,000, plus out-of-pocket costs and expenses reasonably incurred.
Shareholder Financial Services, Inc. (SFSI), a wholly-owned subsidiary of the
Manager, is the transfer agent and registrar for the Fund. Fees paid to SFSI are
based on the number of accounts and the number of shareholder transactions, plus
out-of-pocket costs and expenses.
<PAGE>
PART C
OTHER INFORMATION
Item 24. Financial Statements and Exhibits.
1. Financial Statements.
(a) Statement of Investments - (See Part B, Statement of Additional
Information): filed herewith.
(b) Statement of Assets and Liabilities - (See Part B, Statement of
Additional Information): filed herewith.
(c) Statement of Operations - (See Part B, Statement of Additional
Information): filed herewith.
(d) Statements of Changes in Net Assets - (See Part B, Statement of
Additional Information): filed herewith.
(e) Financial Highlights - (See Part B, Statement of Additional
Information): filed herewith.
(f) Notes to Financial Statements - (See Part B, Statement of Additional
Information): filed herewith.
(g) Independent Auditors' Report - (See Part B, Statement of Additional
Information): filed herewith.
(h) Independent Auditors' Consent - (See Part B, Statement of Additional
Information): filed herewith.
2. Exhibits:
(a) Articles of Incorporation of the Registrant: Previously filed as
Exhibit 1 to Fund's Registration Statement on Form N-2 (Investment Company
Act File No. 811-5278), filed with the Securities and Exchange Commission
on August 11, 1987, and refiled herewith pursuant to Item 102 of
Regulation S-T.
(b) By-Laws of the Registrant: Previously filed as Exhibit 2 to Amendment
No. 1 to the Fund's Registration Statement on Form N-2 (Investment Company
Act File No. 811-5278), filed with the Securities and Exchange Commission
on September 14, 1987, and refiled herewith pursuant to Item 102 of
Regulation S-T.
(c) Not applicable.
(d) Specimen certificate for Shares of Capital Stock of the Registrant:
Previously filed with Registrant's Amendment No. 7, 2/28/91, and refiled
herewith pursuant to Item 102 of Regulation S-T.
(e) See (j)(2) and (j)(3) below.
(f) Not applicable.
(g) Investment Advisory Agreement with Oppenheimer Management Corporation
dated 10/22/90 - Previously filed with Registrant's Amendment No. 7,
2/28/91, and incorporated herein by reference.
(h) Not applicable.
(i) Not applicable.
(j)(1) Custodian Agreement between Registrant and Citibank, N.A.: To be
filed by Amendment.
(2) Registrar, Transfer Agency and Service Agreement between Registrant
and Shareholder Financial Services, Inc.: Filed herewith.
(3) Co-Transfer Agency Agreement between Registrant and United Missouri
Trust Company of New York: Filed herewith.
(k) Not applicable.
(l) Not applicable.
(m) Not applicable.
(n) Not applicable.
(o) Not applicable.
(p) Not applicable.
(q) Not applicable.
(r) Financial data schedule: Filed herewith.
Item 25. Marketing Arrangements.
Inapplicable.
Item 26. Other Expenses of Issuance and Distribution.
Inapplicable.
Item 27. Persons Controlled by or under Common Control with
Registrant.
None.
Item 28. Number of Holders of Securities.
(2)
Number of
(1) Record Holders at
Title of Class February 1, 1995
Shares of Common Stock 974
Item 29. Indemnification.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 (the "Act") may be permitted to directors, officers
and controlling persons of the Registrant pursuant to the foregoing
provisions or otherwise, the Registrant has been advised that in the
opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer, or controlling person of the Registrant
in connection with the successful defense of any action, suit or
proceeding) is asserted against the Registrant by such director, officer
or controlling person, the Registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to
a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act,
and will be governed by the final adjudication of such issue.
Registrant, in conjunction with the Registrant's Directors, and
other registered management investment companies managed by the Adviser,
generally maintains insurance on behalf of any person who is or was a
Director, officer, employee, or agent of Registrant.
Item 30. Business and Other Connections of Investment Adviser.
(a)Oppenheimer Management Corporation is the investment adviser of
the Registrant; it and certain subsidiaries and affiliates act in the same
capacity to other registered investment companies listed in Item 30(b)
below.
(b)There is set forth below information as to any other business,
profession, vocation or employment of a substantial nature in which each
officer and director of Oppenheimer Management Corporation is, or at any
time during the past two fiscal years has been, engaged for his/her own
account or in the capacity of director, officer, employee, partner or
trustee.
<TABLE>
<CAPTION>
Name & Current Position
with Oppenheimer Other Business and Connections
Management Corporation During the Past Two Years
- ----------------------- ------------------------------
<S> <C>
Lawrence Apolito, None.
Vice President
James C. Ayer, Jr., Vice President and Portfolio Manager of
Assistant Vice President Oppenheimer Gold & Special Minerals Fund and
Oppenheimer Global Emerging Growth Fund.
Victor Babin, None.
Senior Vice President
Robert J. Bishop Assistant Treasurer of the OppenheimerFunds
Assistant Vice President (listed below); previously a Fund Controller
for Oppenheimer Management Corporation (the
"Adviser").
Christopher O. Blunt, Vice President of Oppenheimer Funds
Vice President Distributor, Inc. Formerly a Vice President
of CIC/DISC Subsidiary.
George Bowen Treasurer of the New York-based
Senior Vice President OppenheimerFunds; Vice President, Secretary
and Treasurer and Treasurer of the Denver-based
OppenheimerFunds. Vice President and
Treasurer of Oppenheimer Funds Distributor,
Inc. (the "Distributor") and HarbourView
Asset Management Corporation
("HarbourView"), an investment adviser
subsidiary of OMC; Senior Vice President,
Treasurer, Assistant Secretary and a
director of Centennial Asset Management
Corporation ("Centennial"), an investment
adviser subsidiary of the Adviser; Vice
President, Treasurer and Secretary of
Shareholder Services, Inc. ("SSI") and
Shareholder Financial Services, Inc.
("SFSI"), transfer agent subsidiaries of
OMC; President, Treasurer and Director of
Centennial Capital Corporation; Vice
President and Treasurer of Main Street
Advisers; formerly Senior Vice President/
Comptroller and Secretary of Oppenheimer
Asset Management Corporation ("OAMC"), an
investment adviser which was a subsidiary of
the OMC.
Michael A. Carbuto, Vice President and Portfolio Manager of
Vice President Oppenheimer Tax-Exempt Cash Reserves,
Centennial California Tax Exempt Trust,
Centennial New York Tax Exempt Trust and
Centennial Tax Exempt Trust; Vice President
of Centennial.
William Colbourne, Formerly, Director of Alternative Staffing
Assistant Vice President Resources, and Vice President of Human
Resources, American Cancer Society.
Lynn Coluccy, Vice President Formerly Vice President/Director of Internal
Audit of the Adviser.
O. Leonard Darling, Formerly Co-Director of Fixed Income for
Executive Vice President State Street Research & Management Co.
Robert A. Densen, None.
Vice President
Robert Doll, Jr., Vice President and Portfolio Manager of
Executive Vice President Oppenheimer Growth Fund and Oppenheimer
Target Fund; Senior Vice President and
Portfolio Manager of Strategic Income &
Growth Fund.
John Doney, Vice President Vice President and Portfolio Manager of
Oppenheimer Equity Income Fund.
Andrew J. Donohue, Secretary of the New York-based
Executive Vice President OppenheimerFunds; Vice President of the
& General Counsel Denver-based OppenheimerFunds; Executive
Vice President, Director and General Counsel
of the Distributor; formerly Senior Vice
President and Associate General Counsel of
the Adviser and the Distributor.
Kenneth C. Eich, Treasurer of Oppenheimer Acquisition
Executive Vice President/ Corporation
Chief Financial Officer
George Evans, Vice President Vice President and Portfolio Manager of
Oppenheimer Global Securities Fund.
Scott Farrar, Assistant Treasurer of the OppenheimerFunds;
Assistant Vice President previously a Fund Controller for the
Adviser.
Katherine P.Feld Vice President and Secretary of Oppenheimer
Vice President and Funds Distributor, Inc.; Secretary of
Secretary HarbourView, Main Street Advisers, Inc. and
Centennial; Secretary, Vice President and
Director of Centennial Capital Corp.
Jon S. Fossel, President and director of Oppenheimer
Chairman of the Board, Acquisition Corp. ("OAC"), the Adviser's
Chief Executive Officer parent holding company; President, CEO and
and Director a director of HarbourView; a director of SSI
and SFSI; President, Director, Trustee, and
Managing General Partner of the Denver-based
OppenheimerFunds; formerly President of the
Adviser. President and Chairman of the Board
of Main Street Advisers, Inc.
Robert G. Galli, Trustee of the New York-based
Vice Chairman OppenheimerFunds; Vice President and Counsel
of OAC; formerly he held the following
positions: a director of the Distributor,
Vice President and a director of HarbourView
and Centennial, a director of SFSI and SSI,
an officer of other OppenheimerFunds and
Executive Vice President & General Counsel
of the Adviser and the Distributor.
Linda Gardner, None.
Assistant Vice President
Ginger Gonzalez, Formerly 1st Vice President/Director of
Vice President Creative Services for Shearson Lehman
Brothers.
Dorothy Grunwager, None.
Assistant Vice President
Caryn Halbrecht, Vice President and Portfolio Manager of
Vice President Oppenheimer Insured Tax-Exempt Bond Fund and
Oppenheimer Intermediate Tax Exempt Bond
Fund; an officer of other OppenheimerFunds;
formerly Vice President of Fixed Income
Portfolio Management at Bankers Trust.
Barbara Hennigar, President and Director of Shareholder
President and Chief Financial Service, Inc.
Executive Officer of
Oppenheimer Shareholder
Services, a division of OMC.
Alan Hoden, Vice President None.
Merryl Hoffman, None.
Vice President
Scott T. Huebl, None.
Assistant Vice President
Jane Ingalls, Formerly a Senior Associate with Robinson,
Assistant Vice President Lake/Sawyer Miller.
Stephen Jobe, None.
Vice President
Avram Kornberg, Formerly a Vice President with Bankers
Vice President Trust.
Paul LaRocco, Portfolio Manager of Oppenheimer Capital
Assistant Vice President Appreciation Fund; Associate Portfolio
Manager of Oppenheimer Discovery Fund and
Oppenheimer Time Fund. Formerly a
Securities Analyst for Columbus Circle
Investors.
Mitchell J. Lindauer, None.
Vice President
Loretta McCarthy, None.
Senior Vice President
Bridget Macaskill, Director of HarbourView; Director of Main
President and Director Street Advisers, Inc.; and Chairman of
Shareholder Services, Inc.
Sally Marzouk, None.
Vice President
Denis R. Molleur, None.
Vice President
Kenneth Nadler, None.
Vice President
David Negri, Vice President and Portfolio Manager of
Vice President Oppenheimer Strategic Bond Fund, Oppenheimer
Multiple Strategies Fund, Oppenheimer
Strategic Investment Grade Bond Fund,
Oppenheimer Asset Allocation Fund,
Oppenheimer Strategic Diversified Income
Fund, Oppenheimer Strategic Income Fund,
Oppenheimer Strategic Income & Growth Fund,
Oppenheimer Strategic Short-Term Income
Fund, Oppenheimer High Income Fund and
Oppenheimer Bond Fund; an officer of other
OppenheimerFunds.
Barbara Niederbrach, None.
Assistant Vice President
Stuart Novek, Formerly a Director Account Supervisor for
Vice President J. Walter Thompson.
Robert A. Nowaczyk, None.
Vice President
Julia O'Neal, None.
Assistant Vice President
Robert E. Patterson, Vice President and Portfolio Manager of
Senior Vice President Oppenheimer Main Street California Tax-
Exempt Fund, Oppenheimer Insured Tax-Exempt
Bond Fund, Oppenheimer Intermediate Tax-
Exempt Bond Fund, Oppenheimer Florida Tax-
Exempt Fund, Oppenheimer New Jersey Tax-
Exempt Fund, Oppenheimer Pennsylvania Tax-
Exempt Fund, Oppenheimer California Tax-
Exempt Fund, Oppenheimer New York Tax-Exempt
Fund and Oppenheimer Tax-Free Bond Fund;
Vice President of the New York Tax-Exempt
Income Fund, Inc.; Vice President of
Oppenheimer Multi-Sector Income Trust.
Tilghman G. Pitts III, Chairman and Director of the Distributor.
Executive Vice President
and Director
Jane Putnam, Associate Portfolio Manager of Oppenheimer
Assistant Vice President Growth Fund and Oppenheimer Target Fund and
Portfolio Manager for Oppenheimer Variable
Account Funds-Growth Fund; Senior Investment
Officer and Portfolio Manager with Chemical
Bank.
Russell Read, Formerly an International Finance Consultant
Assistant Vice President for Dow Chemical.
Thomas Reedy, Vice President of Oppenheimer Multi-Sector
Vice President Income Trust and Oppenheimer Multi-
Government Trust; an officer of other
OppenheimerFunds; formerly a Securities
Analyst for the Manager.
David Rosenberg, Vice President and Portfolio Manager of
Vice President Oppenheimer Limited-Term Government Fund and
Oppenheimer U.S. Government Trust. Formerly
Vice President and Senior Portfolio Manager
for Delaware Investment Advisors.
Richard H. Rubinstein, Vice President and Portfolio Manager of
Vice President Oppenheimer Asset Allocation Fund,
Oppenheimer Fund and Oppenheimer Multiple
Strategies Fund; an officer of other
OppenheimerFunds; formerly Vice President
and Portfolio Manager/Security Analyst for
Oppenheimer Capital Corp., an investment
adviser.
Lawrence Rudnick, Formerly Vice President of Dollar Dry Dock
Assistant Vice President Bank.
Ellen Schoenfeld, None.
Assistant Vice President
Nancy Sperte, None.
Senior Vice President
Donald W. Spiro, President and Trustee of the New York-based
Chairman Emeritus OppenheimerFunds; formerly Chairman of the
and Director Adviser and the Distributor.
Arthur Steinmetz, Vice President and Portfolio Manager of
Senior Vice President Oppenheimer Strategic Diversified Income
Fund, Oppenheimer Strategic Income Fund,
Oppenheimer Strategic Income & Growth Fund,
Oppenheimer Strategic Investment Grade Bond
Fund, Oppenheimer Strategic Short-Term
Income Fund; an officer of other
OppenheimerFunds.
Ralph Stellmacher, Vice President and Portfolio Manager of
Senior Vice President Oppenheimer Champion High Yield Fund and
Oppenheimer High Yield Fund; an officer of
other OppenheimerFunds.
John Stoma, Vice President Formerly Vice President of Pension Marketing
with Manulife Financial.
James C. Swain, Chairman, CEO and Trustee, Director or
Vice Chairman of the Managing Partner of the Denver-based
Board of Directors OppenheimerFunds; President and a Director
and Director of Centennial; formerly President and
Director of OAMC, and Chairman of the Board
of SSI.
James Tobin, Vice President None.
Jay Tracey, Vice President Vice President of the Adviser; Vice
President and Portfolio Manager of
Oppenheimer Time Fund and Oppenheimer
Discovery Fund. Formerly Managing Director
of Buckingham Capital Management.
Gary Tyc, Vice President, Assistant Treasurer of the Distributor and
Assistant Secretary SFSI.
and Assistant Treasurer
Ashwin Vasan, Vice President of Oppenheimer Multi-Sector
Vice President Income Trust and Oppenheimer Multi-
Government Trust: an officer of other
OppenheimerFunds.
Valerie Victorson, None.
Vice President
John Wallace, Vice President and Portfolio Manager of
Vice President Oppenheimer Total Return Fund, and
Oppenheimer Main Street Income and Growth
Fund; an officer of other OppenheimerFunds;
formerly a Securities Analyst and Assistant
Portfolio Manager for the Adviser.
Dorothy Warmack, Vice President and Portfolio Manager of
Vice President Daily Cash Accumulation Fund, Inc.,
Oppenheimer Cash Reserves, Centennial
America Fund, L.P., Centennial Government
Trust and Centennial Money Market Trust;
Vice President of Centennial.
Christine Wells, None.
Vice President
William L. Wilby, Vice President and Portfolio Manager of
Senior Vice President Oppenheimer Global Fund and Oppenheimer
Global Growth & Income Fund; Vice President
of HarbourView; an officer of other
OppenheimerFunds.
Carol Wolf, Vice President and Portfolio Manager of
Vice President Oppenheimer Money Market Fund, Inc.,
Centennial America Fund, L.P., Centennial
Government Trust, Centennial Money Market
Trust and Daily Cash Accumulation Fund,
Inc.; Vice President of Oppenheimer Multi-
Sector Income Trust; Vice President of
Centennial.
Robert G. Zack, Associate General Counsel of the Adviser;
Senior Vice President Assistant Secretary of the OppenheimerFunds;
and Assistant Secretary Assistant Secretary of SSI, SFSI; an officer
of other OppenheimerFunds.
Eva A. Zeff, Vice President and Portfolio Manager of
Assistant Vice President Oppenheimer Mortgage Income Fund; an officer
of other OppenheimerFunds; formerly a
Securities Analyst for the Adviser.
Arthur J. Zimmer, Vice President and Portfolio Manager of
Vice President Centennial America Fund, L.P., Oppenheimer
Money Fund, Centennial Government Trust,
Centennial Money Market Trust and Daily Cash
Accumulation Fund, Inc.; Vice President of
Oppenheimer Multi-Sector Income Trust; Vice
President of Centennial; an officer of other
OppenheimerFunds.
</TABLE>
The OppenheimerFunds include the New York-based OppenheimerFunds
and the Denver-based OppenheimerFunds set forth below:
New York-based OppenheimerFunds
Oppenheimer Asset Allocation Fund
Oppenheimer California Tax-Exempt Fund
Oppenheimer Discovery Fund
Oppenheimer Global Emerging Growth Fund
Oppenheimer Global Fund
Oppenheimer Global Growth & Income Fund
Oppenheimer Gold & Special Minerals Fund
Oppenheimer Growth Fund
Oppenheimer Money Market Fund, Inc.
Oppenheimer Mortgage Income Fund
Oppenheimer Multi-Government Trust
Oppenheimer Multi-Sector Income Trust
Oppenheimer Multi-State Tax-Exempt Trust
Oppenheimer New York Tax-Exempt Fund
Oppenheimer Fund
Oppenheimer Target Fund
Oppenheimer Tax-Free Bond Fund
Oppenheimer Time Fund
Oppenheimer U.S. Government Trust
Denver-based OppenheimerFunds
Oppenheimer Cash Reserves
Centennial America Fund, L.P.
Centennial California Tax Exempt Trust
Centennial Government Trust
Centennial Money Market Trust
Centennial New York Tax Exempt Trust
Centennial Tax Exempt Trust
Daily Cash Accumulation Fund, Inc.
The New York Tax-Exempt Income Fund, Inc.
Oppenheimer Champion High Yield Fund
Oppenheimer Equity Income Fund
Oppenheimer High Yield Fund
Oppenheimer Integrity Funds
Oppenheimer Limited-Term Government Fund
Oppenheimer Main Street Funds, Inc.
Oppenheimer Strategic Funds Trust
Oppenheimer Strategic Income & Growth Fund
Oppenheimer Strategic Investment Grade Bond Fund
Oppenheimer Strategic Short-Term Income Fund
Oppenheimer Tax-Exempt Bond Fund
Oppenheimer Total Return Fund, Inc.
Oppenheimer Variable Account Funds
The address of Oppenheimer Management Corporation, the New York-
based OppenheimerFunds, Oppenheimer Funds Distributor, Inc., Harbourview
Asset Management Corp., Oppenheimer Partnership Holdings, Inc., and
Oppenheimer Acquisition Corp. is Two World Trade Center, New York, New
York 10048-0203.
The address of the Denver-based OppenheimerFunds, Shareholder
Financial Services, Inc., Shareholder Services, Inc., Oppenheimer
Shareholder Services, Centennial Asset Management Corporation, Centennial
Capital Corp., and Main Street Advisers, Inc. is 3410 South Galena Street,
Denver, Colorado 80231.
Item 31. Location of Accounts and Records.
All accounts, books and other documents, required to be
maintained by the Registrant under Section 31(a) of the Investment Company
Act of 1940 and the Rule thereunder are maintained by Oppenheimer
Management Corporation at its offices at 3410 South Galena Street, Denver,
Colorado 80231.
Item 32. Management Services.
The Registrant is not a party to any management-related
service contract not discussed in Part A of this Registration Statement.
Item 33. Undertakings.
1. The Registrant undertakes to suspend the offering of
the shares covered hereby until it amends its prospectus if (1) subsequent
to the effective date of this Registration Statement, its net asset value
per share declines more than 10 percent from its net asset value per share
as of the effective date of this Registration Statement, or (2) its net
asset value increases to an amount greater than its net proceeds as stated
in the prospectus.
2. Inapplicable
3. Inapplicable
4. Inapplicable
5. Inapplicable
6. Inapplicable
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and/or the
Investment Company Act of 1940, the Registrant has duly caused this
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Denver and State of Colorado on
the 24th day of February, 1995.
THE NEW YORK TAX-EXEMPT INCOME FUND, INC.
By: /s/ James C. Swain
----------------------------------------
James C. Swain, Chairman
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in
the capacities on the dates indicated:
Signatures Title Date
- ---------- ----- ----
/s/ James C. Swain* Chairman of the February 24, 1995
- ---------------------------- Board of Directors
James C. Swain
President, Principal February 24, 1995
- ---------------------------- Executive Officer
Jon S. Fossel and Trustee
/s/ George C. Bowen* Chief Financial February 24, 1995
- ---------------------------- and Accounting Officer
George C. Bowen
Director February 24, 1995
- ----------------------------
Robert G. Avis
/s/ William A. Baker* Director February 24, 1995
- ----------------------------
William A. Baker
/s/ Charles Conrad, Jr.* Director February 24, 1995
- ----------------------------
Charles Conrad, Jr.
/s/ Raymond J. Kalinowski Director February 24, 1995
- ----------------------------
Raymond J. Kalinowski
/s/ C. Howard Kast* Director February 24, 1995
- ----------------------------
C. Howard Kast
/s/ Robert M. Kirchner* Director February 24, 1995
- ----------------------------
Robert M. Kirchner
/s/ Ned M. Steel* Director February 24, 1995
- ----------------------------
Ned M. Steel
*By /s/ Robert G. Zack
------------------
Robert G. Zack, Attorney-in-Fact
<PAGE>
THE NEW YORK TAX-EXEMPT INCOME FUND, INC.
Registration No. 811-5278
Post-Effective Amendment No. 10
Index to Exhibits
Exhibit No. Description
- ----------- -----------
24(1)(h) Independent Auditor's Consent
24(2)(a) Articles of Incorporation
24(2)(b) By-Laws
24(2)(d) Specimen Share Certificate
24(2)(j)(2) Registrar, Transfer Agency
and
Service Agreement
24(2)(j)(3) Co-Transfer Agency Agreement
24(2)(r) Financial Data Schedule
-- Powers of Attorney
INDEPENDENT AUDITORS' CONSENT
The New York Tax-Exempt Income Fund, Inc.:
We consent to the use in Amendment No. 10 to Registration Statement No.
811-5278 of our report dated November 21, 1994 on the financial statements
of The New York Tax-Exempt Income Fund, Inc. appearing in the Registration
Statement.
/s/ Deloitte & Touche LLP
- -------------------------
DELOITTE & TOUCHE LLP
February 27, 1995
ARTICLES OF INCORPORATION
OF
THE NEW YORK TAX-EXEMPT INCOME FUND, INC.
THIS IS TO CERTIFY:
The undersigned does hereby establish a corporation under and
by virtue of the Minnesota Business Corporation Act, Chapter 302A,
Minnesota Statutes and does hereby adopt the following Articles of
Incorporation:
FIRST: The name and address of the incorporator signing these
Articles of Incorporation is as follows:
Name Address
Gerald E. Pelzer 300 West Washington Street
Chicago, Illinois 60606
SECOND: The name of the Corporation is: The New York Tax-
Exempt Income Fund, Inc. (the "Corporation").
THIRD: The purposes for which the Corporation is formed and the
business to be carried on and promoted by it are as follows:
To hold, invest, and reinvest its funds, and in connection therewith
to hold part or all of its funds in cash, and to purchase or otherwise
sell, assign, negotiate, transfer, exchange or otherwise dispose of or
turn to account or realize upon securities and other negotiable or non-
negotiable instruments, obligations and evidences of indebtedness created
or issued by any persons, firms, associations, corporations, syndicates,
combinations, organizations, governments or subdivisions thereof, and
generally deal in any such securities and other negotiable or non-
negotiable instruments, obligations and evidences of indebtedness; and to
exercise, as owner or holder of any securities or 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 and all such securities or other instruments and, in general,
to conduct the business of a closed-end investment company as that term
is defined in the Act of Congress entitled the Investment Company Act of
1940, as amended;
To issue and sell shares of its own capital stock from time to time
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 State of Minnesota and by
these Articles of Incorporation as it Board of Directors may determine;
and
To engage in any lawful act or activity for which corporations may
be organized under the Minnesota Business Corporation Act.
The enumeration herewith of the objects and purposes of the
Corporation shall be construed as powers as well as objects and purposes
and shall not be deemed to exclude by inference any powers, objects or
purposes which the Corporation is empowered to exercise, whether expressly
by force of the laws of the State of Minnesota now or hereafter in effect,
or impliedly by the reasonable construction of such laws.
FOURTH: The address of the registered office of the
Corporation in the State of Minnesota is 405 Second Avenue South,
Minneapolis, Minnesota 55401. The name of its resident agent at
such address is CT Corporation System, Inc.
FIFTH: The total number of shares of stock which the
Corporation is authorized to issue is Two Hundred and Fifty Million
(250,000,000) shares of common stock, par value $.01 per share and
of the aggregate par value of Two Million Five Hundred Thousand
Dollars ($2,500,000) (the "Common Stock"), all of which shall be of
the same class and have equal voting rights. The Common Stock
shall be subject to the following restrictions, conditions, and
provisions:
(a) In the event of the liquidation or dissolution of the
Corporation, the holders of the Common Stock shall be entitled to
receive pro rata the net distributable assets of the Corporation.
(b) The holders of shares of the Common Stock shall not, as
such holders, have any right to acquire, purchase or subscribe for
any shares of Common Stock or securities of the Corporation which
it may hereafter issue or sell (whether out of the number of shares
authorized by these Articles of Incorporation, or out of any shares
acquired by it after the issuance thereof, or otherwise), other
than such right, if any, as the Board of Directors of the
Corporation in its discretion may determine.
(c) Dividends, when, as and if declared by the Board of
Directors, shall be shared equally by the holders of Common Stock
on a share for share basis. Unless a holder of Common Stock
directs otherwise, any such dividends so declared and distributed
shall be automatically reinvested in full and fractional shares of
the Corporation; provided, however, that the Board of Directors may
direct that any such dividends be paid to said holder, or,
alternatively, may direct that any such dividends be paid rather
than so reinvested unless such holder elects to have them
reinvested.
(d) If any shares of Common Stock shall have been purchased
or otherwise reacquired by the Corporation in accordance with law,
all shares so purchased or otherwise reacquired shall be retired
automatically, and such retired shares shall have the status of
authorized but unissued shares of Common Stock and the number of
authorized shares of Common Stock of the Corporation shall not be
reduced by the number of any shares retired.
(e) The value of the net assets of the Corporation as of any
relevant time shall be determined by such person or persons (which
term shall include any firm, corporation, trust, or association) as
the Board of Directors of the Corporation, from time to time, may
authorize, such determination to be made in accordance with
generally accepted accounting principles by deducting from the
gross value of the assets belonging to the Corporation at such time
the amount of all liabilities, including expenses incurred or
accrued and unpaid, such reservations as may be established to
cover (i) taxes in respect of net realized gains and potential
taxes to be paid in respect of the access, if any, of the
unrealized gains over unrealized losses and (ii) any other
liabilities, and such other deductions as may be determined by or
under the authority of the Board of Directors. The net asset value
per share of the Corporation's Common Stock shall be determined at
the time or times hereinbelow set forth by dividing the value of
the net assets of the Corporation by the total number of
outstanding shares (excluding treasury shares). The Board of
Directors is empowered, in its absolute discretion, to establish
other methods for determining such net asset value whenever such
other methods are deemed by it to be necessary in order to enable
the Corporation to comply with, or are deemed by it to be desirable
provided they are not inconsistent with, any provision of the
Investment Company Act of 1940 as amended, or any rule or
regulation thereunder. The net asset value per share of the Common
Stock shall be determined as of the close of trading on the last
day of each week on which the New York Stock Exchange, Inc. (the
"Exchange") is open for trading.
In determining the gross value of the assets of the
Corporation, portfolio securities and other assets will be valued
at fair value using methods determined in good faith by the Board
of Directors.
The Corporation may suspend the determination of net asset
value (i) during any period when the Exchange is closed (other than
customary week-end and holiday closings), (ii) when trading in the
markets the Corporation normally utilizes is restricted, or an
emergency exists as determined by the Securities and Exchange
Commission (the "Commission") so that disposal of the Corporation's
investments or determination of its net asset value is not
reasonably practical, or (iii) for such other periods as the
Commission may by order permit for protection of the holders of
shares of the Common Stock.
(f) Shares of Common Stock shall be issued from time to time
either for cash or for such other consideration (which may be in
any one or more instances a certain specified consideration or
certain specified consideration) as the Board of Directors, from
time to time, may deem advisable, in the manner and to the extent
now or hereafter permitted by the laws of the State of Minnesota;
provided, however, that the consideration (or the value thereof as
determined by the Board of Directors) per share to be received by
the Corporation upon the issuance or sale of any share (including
treasury shares) shall not be less than the par value thereof and
not less than the net asset value per share of the Corporation's
Common Stock determined as provided in Paragraph (e) of this
Article FIFTH as of a time not earlier than the close of business
on the last day of the next preceding week on which the Exchange
was open for trading and not later than the close of business on
the last day of the week on which the shares are sold or, if the
Exchange is not open for trading on that day, not later than the
close of trading on the next day on which the Exchange is open for
business, as the Board of Directors shall determine.
(g) The Corporation may issue shares of Common Stock in
fractional denominations to the same extent as its whole shares,
and shares in fractional denominations shall be shares of Common
Stock having proportionately to the respective fractions
represented thereby all the rights of whole shares, including,
without limitation, the right to vote, the right to receive
dividends and distributions and the right to participate upon
liquidation of the Corporation, but excluding the right to receive
a certificate representing fractional shares.
(h) There shall be no right of cumulative voting in the
election of directors of the Corporation.
SIXTH: (a) The initial number of directors of the
Corporation shall be those elected by the incorporator, but
initially shall not be less than five. The By-Laws of the
Corporation may fix the number of directors at a number greater or
less than five and may authorize the Board of Directors, by the
vote of the majority of the entire Board of Directors, to increase
or decrease the number of directors fixed by these Articles of
Incorporation or by the By-Laws within limits specified in the By-
Laws.
(b) Beginning with the first annual meeting of
shareholders (the "First Annual Meeting"), the Board of Directors
shall be divided into three classes: Class I, Class II, and Class
III. The terms of office of the classes of directors elected at
the First Annual Meeting shall expire at the times of the annual
meeting of shareholders as follows: Class I -- 1989, Class II --
1990, Class III -- 1991 or thereafter in each case when their
respective successors are elected and qualified. At each
subsequent annual meeting, the directors chosen to succeed those
whose terms are expiring shall be identified as being of the same
class as the directors whom they succeed and shall be elected for
a term expiring at the time of the third succeeding annual meeting
of shareholders, or thereafter in each case when their respective
successors are elected and qualified. If the number of directors
is changed, any increase or decrease shall be apportioned among the
classes by resolution of the Board of Directors so as to maintain
the number of directors in each class as nearly as equal as
possible, but in no case shall a decrease in the number of
directors shorten the term of any incumbent director.
(c) Any vacancy occurring in the Board of Directors may
be filled by a majority of the directors in office. A new
directorship resulting from an increase in the number of directors
shall be construed to be a vacancy. Any director elected to fill
a vacancy shall be in the same class and have the same remaining
term as that of the predecessor.
(d) A director may be removed from office only for
"Cause" (as hereinafter defined) and only by action of the
shareholders taken by the holders of at least sixty-six and two-
thirds percent (66 2/3%) of the outstanding Common Stock. "Cause"
shall require willful misconduct, dishonesty, fraud or a felony
conviction.
(e) In addition to the voting requirements imposed by
law or by any other provisions of these Articles of Incorporation,
the provisions set forth in this Article SIXTH may not be amended,
altered or repealed in any respect, nor may any provision
inconsistent with this Article SIXTH be adopted, unless such action
is approved by the affirmative vote of the holders of at least
sixty-six and two-thirds percent (66 2/3%) of the outstanding
Common Stock.
SEVENTH: The following provisions are inserted for the
management of the business and for the conduct of the affairs of
the Corporation, and for further definition, limitation and
regulation of the powers of the Corporation and of its directors
and shareholders.
(a) All corporate powers of the Corporation shall
be exercised by the Board of Directors except as
otherwise provided by law; provided, subject to the
provisions of paragraph (c) of this Article SEVENTH, the
Board of Directors may delegate the management of the
assets of the Corporation and such other functions as it
may deem reasonable and proper to an Investment Adviser,
as such term is hereinbelow defined, pursuant to a
written contract. The Board of Directors may, by
resolution or resolutions passed by a majority of the
whole Board, designate one or more committees, each
committee to consist of two or more of the directors of
the Corporation, which, to the extent provided in said
resolution or resolutions or in the By-Laws of the
Corporation, shall have and may exercise the powers of
the Board of Directors in the management of the business
and affairs of the Corporation, and may have power to
authorize the seal of the Corporation to be affixed to
all papers which may require it.
(b) A contract or other transaction between the
Corporation and any of its directors or between the
Corporation and an organization in which any of its
directors is a director, officer or legal representative
or has a material financial interest is not void or
voidable because the director or directors or other
organizations are parties or because the director or
directors are present at the meeting of shareholders or
the board or a committee at which the contract or
transaction is authorized, approved or ratified, if: (i)
the contract or transaction was, and the person asserting
the validity of the contract or transaction sustains the
burden of establishing that the contract or transaction
was, fair and reasonable as to the Corporation at the
time it was authorized, approved or ratified; (ii) the
material facts as to the contract or transaction and as
to the director's or directors' interest are fully
disclosed or known to the shareholders and the contract
or transaction is approved in good faith by the holders
of a majority of the outstanding shares, but shares owned
by the interested director or directors shall not be
counted in determining the presence of a quorum and shall
not be voted; or (iii) the material facts as to the
contract or transaction and as to the director's or
directors' interest are fully disclosed or known to the
board or a committee, and the board or committee
authorizes, approves, or ratifies the contract or
transaction in good faith by a majority of the board or
committee, but the interested director or directors shall
not be counted in determining the presence of a quorum
and shall not vote.
(c) The Corporation may enter into a written
contract with one or more persons (which term shall
include any firm, corporation, trust or association),
hereinafter referred to as the "Investment Adviser", to
act as investment adviser to the Corporation and as such
to perform such functions as the Board of Directors may
deem reasonable and proper, including, without
limitation, investment advisory, management, research,
valuation of assets, clerical and administrative
functions. Any such contract shall be subject to the
approval of those persons required by the Investment
Company Act of 1940, as amended, to approve such
contract, and shall be terminable at any time upon not
more than 60 days' notice by resolution of the Board of
Directors or by vote of a majority of the outstanding
shares.
Subject to the provisions of paragraph (b) of
this Article SEVENTH, any such contract may be made with
any firm or corporation in which any director or
directors of the Corporation may be interested. The
compensation of the Investment Adviser may be based upon
a percentage of the value of the net assets of the
Corporation, a percentage of the income or gross realized
or unrealized gain of the Corporation, or a combination
thereof, or otherwise, as may be provided in such
contract.
(d) The Board of Directors shall have authority to
appoint and enter into a written contract or contracts
with an underwriter or distributor or distributors as
agent or agents for the sale of shares of the Corporation
and to pay such underwriter, distributor or distributors
and agent or agents such amounts as the Board of
Directors may in its discretion deem reasonable and
proper. Subject to the provisions of paragraph (b) of
this Article SEVENTH, any such contract may be made with
any firm or corporation, including, without limitation,
the Investment Adviser, or any firm or corporation in
which any director or directors of the Corporation or the
Investment Adviser may be interested.
(e) The Board of Directors is hereby empowered to
authorize the issuance from time to time of any class or
series of class of shares of common stock, whether now or
hereafter authorized, for such consideration as the Board
of Directors may deem advisable, subject to the
limitations and restrictions as may be set forth in these
Articles of Incorporation or in the By-Laws of the
Corporation, or in the laws of the State of Minnesota.
(f) The Board of Directors shall have the power to
make, alter, amend or repeal the By-Laws of the
Corporation, and to adopt any new By-Laws, except to the
extent that the By-Laws may otherwise provide; provided,
however, that any such By-Laws may be altered, amended or
repealed, or new By-Laws may be adopted, by the
shareholders of the Corporation.
(g) The Board of Directors shall have power from
time to time to set apart out of any funds of the
Corporation available for dividends a reserve or reserves
for any proper purpose, and to abolish any such reserve.
(h) Any determination made by or pursuant to the
direction of the Board of Directors in good faith and
consistent with the provisions of these Articles of
Incorporation as to any of the following matters shall be
final and conclusive and shall be binding upon the
Corporation and every holder at any time of shares of
Common Stock, namely: the amount of the assets,
obligations, liabilities and expenses of the Corporation;
the amount of the net income of the Corporation from
dividends and interest for any period and the amount of
assets at any time legally available for the payment of
dividends or distributions; the amount, purpose, time of
creation, increase or decrease, alteration or
cancellation of any reserves or charges and the propriety
thereof (whether or not any obligation or liability for
which such reserves or charges was created shall have
been paid or discharged); the market value, or any quoted
price to be applied in determining the market value, of
any security owned or held by the Corporation; the fair
value of any security for which quoted prices are not
readily available, or of any other asset owned or held by
the Corporation; the number of shares of the Corporation
issued or issuable; the net asset value per share; any
matter relating to the acquisition, holding and
depositing of securities and other assets by the
Corporation; any question as to whether any transaction
constitutes a purchase of securities on margin, a short
sale of securities, or an underwriting of the sale of, or
participation in any underwriting or selling group in
connection with the public distribution of, any
securities, and any matter relating to the issue, sale,
repurchase, and/or other acquisition or disposition of
shares of Common Stock of the Corporation. No provision
of these Articles of Incorporation shall be effective to
(i) require a waiver of compliance with any provision of
the Securities Act of 1933, as amended, or the Investment
Company Act of 1940, as amended, or of any valid rule,
regulation or order of the Commission thereunder, or (ii)
protect or purport to protect any director or officer of
the Corporation against any liability to the Corporation
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.
EIGHTH: To the maximum extent permitted by the
Minnesota Business Corporation Act, as from time to time
amended, the Corporation shall indemnify its currently
acting and its former directors, officers, employees and
agents, and those persons who, at the request of the
Corporation serve or have served another corporation,
partnership, joint venture, trust or other enterprise in
one or more such capacities. The indemnification
provided for herein shall not be deemed exclusive of any
other rights to which those seeking indemnification may
otherwise be entitled.
Expenses (including attorneys' fees) incurred
in defending a civil or criminal action, suit or
proceeding (including costs connected with the
preparation of a settlement) may be paid by the
Corporation in advance of the final disposition of such
action, suit or proceeding, if authorized by the Board of
Directors in the specific case upon receipt of an
undertaking by or on behalf of the director, officer,
employee or agent to repay that amount of the advance
which exceeds the amount which it is ultimately
determined that he is entitled to receive from the
Corporation by reason of indemnification as authorized
herein; provided, however, that prior to making any such
advance at least one of the following conditions shall
have been met: (1) the indemnitee shall provide a
security for his undertaking, (2) the Corporation shall
be insured against losses arising by reason of any lawful
advances, or (3) a majority of a quorum of the
disinterested, non-party directors of the Corporation, or
an independent legal counsel in a written opinion, shall
determine, based on a review of readily available facts,
that there is reason to believe that the indemnitee
ultimately will be found entitled to indemnification.
Nothing in these Articles of Incorporation or
in the By-Laws shall be deemed to protect or provide
indemnification to any director or officer of the
Corporation against any liability tothe Corporation 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 ("disabling
conduct"), and the Corporation shall not indemnify any of
its officers or directors against any liability to the
Corporation or to its security holders unless a
determination shall have been made in the manner provided
hereafter that such liability has not arisen from such
officer's or director's disabling conduct. A
determination that an officer or director is entitled to
indemnification shall have been properly made if it is
based upon (1) a final decision on the merits by a court
or other body before whom the proceeding was brought that
the indemnitee was not liable by reason of disabling
conduct or, (2) in the absence of such a decision, a
reasonable determinatio, based upon a review of the
facts, that the indemnitee was not liable by reason of
disabling conduct, by (a) the vote of a majority of a
quorum of directors who are neither "interested persons"
of the Corporation as defined in the Investment Company
Act of 1940 nor parties to the proceeding, or (b) an
independent legal counsel in a written opinion.
NINTH: The existence of the Corporation shall
be perpetual.
TENTH: Any action required or permitted to be
taken by the Board of Directors may be taken by written
action signed by that number of directors that would be
required to take the same action at a meeting of the
board at which all directors were present.
ELEVENTH: (a) Notwithstanding any other
provision of these Articles of Incorporation, an
affirmative vote of the holders of at least sixty-six and
two-thirds percent (66 2/3%) of the outstanding Common
Stock shall be required to approve, adopt or authorize
(i) a conversion of the Corporation from a closed-end
investment company to an open-end investment company,
(ii) a merger or consolidation of the Corporation with
any other corporation or a reorganization or
recapitalization, (iii) a sale, lease or transfer of all
or substantially all of the assets of the Corporation
(other than in the regular course of the Corporation's
investment activities), or (iv) a liquidation or
dissolution of the Corporation, unless such action has
previously been approved, adopted or authorized by the
affirmative vote of two-thirds of the total number of
directors fixed in accordance with the By-Laws.
(b) In addition to the voting requirements
imposed by law or by any other provision of these
Articles of Incorporation, the provisions set forth in
this Article ELEVENTH may not be amended, altered or
repealed in any respect, nor may any provision
inconsistent with this Article ELEVENTH be adopted,
unless such action is approved by the affirmative vote
of the holders of at least sixty-six and two-thirds
percent (662/3%) of the outstanding Common Stock.
TWELFTH: No person who was or is a director of
the Corporation shall be personally liable to the
Corporation or its shareholders for monetary damages for
any breach of fiduciary duty as a director except for
liability (a) for any breach of the director's duty of
loyalty to the Corporation or its shareholders, (b) for
acts or omissions not in good faith or that involve
intentional misconduct or knowing violation of law, (c)
under Section 302A.559 or 80A.23 of the Minnesota
Business Corporation Act, (d) for any transaction for
which the director derived an improper personal benefit
or (e) for any act or omission occurring
prior to the date of this Article TWELFTH becomes effective.
THIRTEENTH: (a) The Corporation reserves the right to amend,
alter, change or repeal any provision contained in these Articles of
Incorporation, in the manner now or hereafter prescribed by statute, and
any contract rights conferred upon the shareholders are granted subject
to this reservation.
(b) Notwithstanding the foregoing, the provisions set forth in
Articles SIXTH and ELEVENTH may not be amended, altered or repealed in any
respect, nor may any provision inconsistent with any of such Articles be
adopted unless such amendment, alteration, repeal or inconsistent
provision is approved as specified in each such respective Article.
FOURTEENTH: (a) An action required or permitted to be taken at
a meeting of the shareholders may be taken without a meeting by written
action signed by all of the shareholders entitled to vote on that action.
The written action is effective when it has been signed by all of those
shareholders, unless a different effective time is provided in the written
action.
(b) An action which requires the shareholder approval and which
is required or permitted to be taken at a Board meeting may be taken by
written action signed by all of the directors. An action which does not
require shareholder approval and which is required or permitted to be
taken at a Board meeting may be taken by written action signed by the
number of directors that would be required to take the same action at a
meeting of the Board at which all directors were present. The written
action is effective when signed by the required number of directors,
unless a different effective time is provided in the written action. When
written action is permitted to be taken by less than all directors, all
directors shall be notified immediately of its text and effective date.
IN WITNESS WHEREOF, I have signed these Articles of
Incorporation on this 7th day of August, 1987.
/s/ Gerald E. Pelzer
-----------------------
Gerald E. Pelzer
/s/ Lori Gruenwald
-----------------------
Lori Gruenwald
ORGZN\875.WPD
BY-LAWS
OF
THE NEW YORK TAX-EXEMPT INCOME FUND, INC.
OFFICES
Section 1.1 Registered Office. The registered office of the
Corporation in the State of Minnesota shall be at CT Corporation System,
Inc. 405 Second Avenue South, Minneapolis, Minnesota 55401, or at such
other address as may be fixed by the Board of Directors.
Section 1.2 Other Offices. The Corporation may have such other
offices and places of business within or without the State of Minnesota
as the Board of Directors shall determine.
SHAREHOLDERS
Section 2.1 Place of Meetings. Meetings of the shareholders may be
held at such place or places within or without the State of Minnesota as
shall be fixed by the Board of Directors and stated in the notice of the
meeting.
Section 2.2 Regular Meeting. Regular meetings of the shareholders
for the election of directors and the transaction of such other business
as may properly come before the meeting shall be held on an annual or
other less frequent periodic basis at such date and time as the Board of
Directors by resolution shall designate, except as otherwise be required
by the Minnesota Business Corporation Act.
Section 2.3 Special Meeting. Special meetings of the shareholders
for any purpose may be called by the Chairman of the Board, the President
or two or more directors, and must be called at the written request,
stating the purpose or purposes of the meeting, of shareholders entitled
to cast at least 10 percent of all the votes entitled to be cast at the
meeting.
Section 2.4 Notice of Meetings. Notice stating the time and place
of the meeting, and in the case of a special meeting the purpose or
purposes thereof and by whom called, shall be delivered to each
shareholder entitled to vote, and each other shareholder entitled to
notice of the meeting, not less than ten nor more than sixty days prior
to the meeting, except where the meeting is an adjourned meeting and that
date, time and place of the meeting were announced at the time of the
adjournment.
Section 2.5 Quorum and Action. (a) The holders of a majority of the
voting power of the shares entitled to vote at a meeting are a quorum for
the transaction of business. If a quorum is present when a duly called
or held meeting is convened, the shareholders present may continue to
transaction business until adjournment, even though the withdrawal of a
number of shareholders originally present leaves less than the proportion
or number otherwise required for a quorum.
(b) The shareholders shall take action by the affirmative vote of
the holders of a majority of the voting power of the shares present and
entitled to vote at a meeting of shareholders at which a quorum is
present, except as may otherwise be required by the 1940 Act or under the
Minnesota Business Corporation Act.
(c) On each matter submitted to vote of the shareholders, each
holder of a share shall be entitled to one vote for each such share
standing in his name on the books of the Corporation, except as may be
otherwise required by the 1940 Act or under the Minnesota Business
Corporation Act.
Section 2.6 Voting. At each meeting of the shareholders, every hold
of stock then entitled to vote may vote in person or by proxy and, except
as may be otherwise provided by the Articles of Incorporation, shall have
one vote for each share of stock registered in his name.
Section 2.7 Proxy Representation. A shareholder may cast or
authorize the casting of a vote by filing a written appointment of a proxy
with an officer of the Corporation at or before the meeting at which the
appointment is to be effective. The appointment of a proxy is valid for
eleven months, unless a longer period is expressly provided in the
appointment. No appointment is irrevocable unless the appointment is
coupled with an interest in the shares or in the Corporation.
Section 2.8 Adjourned Meetings. Any meeting of shareholders may,
by announcement thereat, be adjourned to a designated time and place by
the vote of the holders of a majority of the shares present and entitled
to vote thereat even though less than a quorum is so present. An
adjourned meeting may reconvene as designated, and when a quorum is
present any business may be transacted which might have been transacted
at the meeting as originally called.
DIRECTORS
Section 3.1 Qualifications and Number; Vacancies. Each director
shall be a natural person. A director need not be a shareholder, a
citizen of the United States, or a resident of the State of Minnesota.
The initial Board of Directors shall consist of five persons, which shall
be the fixed number of directors until changed. The number of directors
shall never be less than one. The number of directors may be increased
or, subject to the provisions of the Minnesota Business Corporation Act,
decreased at any time by amendment to these By-Laws or by the directors
or by the shareholders. The first Board of Directors shall be elected by
the incorporator or incorporators and shall hold office until the first
regular annual meeting of the shareholders, and until their successors are
elected and qualified. Thereafter, the term of office of each director
shall be as set forth in the Articles of Incorporation of the Corporation.
Section 3.2 Powers. The business and affairs of the Corporation
shall be managed under the direction of the Board of Directors. All
powers of the Corporation may be exercised by or under the authority of
the Board of Directors, except those conferred on or reserved to the
shareholders by statute, the Articles of Incorporation or these By-Laws.
Section 3.3. Investment Policies. It shall be the duty of the Board
of Directors to ensure that the purchase, sale, retention and disposal of
portfolio securities and other investment practices of the Corporation are
at all times consistent with the investment objectives, policies and
restrictions with respect to securities investments and otherwise of the
Corporation filed from time to time with the Securities and Exchange
Commission and as required by the 1940 Act, unless such duty is delegated
to an investment adviser pursuant to a written contact, as provided in the
Articles of incorporation. The Board, however, may delegate the duty of
management of the assets of the Corporation, and may delegate such other
of its powers and duties as are permitted by the Articles of
Incorporation, to the Executive Committee or any other committee, or to
an individual or corporate investment adviser to act as investment adviser
pursuant to a written contract to be approved or ratified initially by the
vote of a majority of the outstanding voting securities of the Corporation
and to be renewable annually by the affirmative vote of a majority of the
entire Board of Directors, including a majority of the directors of the
Corporation who are not parties to such contract or affiliated persons
(other than as directors) of the Corporation or the investment adviser.
Section 3.4 Meetings. Regular meetings of the Board of Directors
may be held without notice at such time as the Board thereof shall fix.
Special meetings of the Board may be called by the Chairman of the Board
or the President, and shall be called at the written request of two or
more directors. Three days' notice of special meetings shall be given to
each director by mail, personally or by telegraph or cable. Notice of
special meetings need not state the purpose or purposes thereof, except
as provided by these By-Laws or by statute. Meetings of the Board may be
held at any place within or outside the State of Minnesota. A conference
among directors by any means of communication through which the directors
may simultaneously hear each other during the conference constitutes a
board meeting, if the notice requirements have been met and if the number
of directors participating in the conference would be sufficient to
constitute a quorum at a meeting. Participation in a meeting by that
means constitutes presence in person at the meeting.
Section 3.5 Quorum and Action. A majority of the directors currently
holding office shall constitute a quorum for the transaction of business.
If a quorum is present when a duly called or held meeting is convened, the
directors present may continue to transact business until adjournment,
even though the withdrawal of a number of directors originally present
leaves less than the proportion or number otherwise required for a quorum.
At any duly held meeting at which a quorum is present, the affirmative
vote of the majority of the directors present shall be the act of the
Board of Directors on any question, except where the act of a greater
number is required by these By-Laws, by the Articles of Incorporation or
by statute.
Section 3.6 Removal. Unless the Articles of Incorporation provide
otherwise, any one or more of the directors may be removed, (1) either
with or without cause, at any time, by vote of the shareholders holding
a majority of all the votes entitled to be cast for the election of
directors, at a special meeting of shareholders, the notice of which
announces such removal, or (2) for cause, by the affirmative vote of a
majority of the entire Board of Directors at any regular or special
meeting of the Board.
Section 3.7 Committees. The Board of Directors, by resolution
adopted by the affirmative vote of a majority of the Board, may designate
from its members an Executive Committee, an Investment Committee (whose
function shall be to advise the Board as to the Investment policies of the
Corporation) and any other committee, each such committee to consist of
two or more persons who need not be directors and to have such powers and
authority (to the extent permitted by law) as may be provided in such
resolution.
OFFICERS
Section 4.1 Number and Qualifications. The officers of the
Corporation shall include a Chairman of the Board, a chief executive
officer who shall be designated President, one or more Vice Presidents
(one of whom may be designated an Executive Vice President), a chief
financial officer who shall be designated Treasurer, and a Secretary. Any
two or more offices may be held by the same person. Unless otherwise
determined by the Board, each officer shall be appointed by the Board of
Directors for a term which shall continue until the meeting of the Board
of Directors following the next regular meeting of shareholders and until
his successors shall have been duly elected and qualified, or until his
death, or until he shall have resigned or have been removed, as
hereinafter provided in these By-Laws. The Board may from time to time
elect, or delegate to the Chairman of the Board or the President, or both,
the power to appoint, such officers (including one or more Assistant Vice
Presidents, one or more Assistant Treasurers and one or more Assistant
Secretaries) and such agents as may be necessary or desirable for the
business of the Corporation. Such other officers shall hold office for
such terms as may be prescribed by the Board or by the appointing
authority.
Section 4.2 Resignations. Any officer of the Corporation may resign
at any time by giving written notice of his resignation to the Board of
Directors, the Chairman of the Board, the President or the Secretary. Any
such resignation shall take effect at the time specified therein or, if
the time when it shall become effective shall not be specified therein,
immediately upon its receipt, and, unless otherwise specified therein, the
acceptance of such resignation shall not be necessary to make it
effective.
Section 4.3 Removal. An officer may be removed at any time, with or
without cause, by a resolution approved by the affirmative vote of a
majority of the directors present at a duly convened meeting of the Board
of Directors.
Section 4.4 Vacancies. A vacancy in any office because of death,
resignation, removal, disqualification or any other cause, may be filled
for the unexpired portion of the term by the Board of Directors, or in the
manner determined by the Board, or pursuant to the provisions of the
Minnesota Business Corporation Act.
Section 4.5 The Chairman of the Board. The Chairman of the Board
shall be an ex officio member of all committees of the Board. He shall
perform all duties incident to the office of Chairman of the Board and
such other duties as may from time to time be assigned to him by the Board
or by these By-Laws. In the case of the absence of the President, his
inability to act or any other reason, the Chairman of the Board shall
perform the duties of the President and when so acting shall have all the
power of, and be subject to all the restrictions upon, the President.
Section 4.6 The President. The President shall be elected from among
the directors. He shall be the chief executive officer of the Corporation
and shall:
(a) have general active management of the business of the
Corporation;
(b) when present, preside at all meetings of the Board and of the
shareholders;
(c) see that all orders and resolutions of the Board are carried into
effect;
(d) sign and deliver in the name of the Corporation any deeds,
mortgages, bonds, contracts or other instruments pertaining to the
business of the Corporation, except in cases in which the authority to
sign and deliver is required by law to be exercised by another person or
is expressly delegated by the Articles or By-Laws or by the Board to some
other officer or agent of the Corporation; and
(e) maintain records of and, whenever necessary, certify all
proceedings of the Board and the shareholders.
The President shall be authorized to do or cause to be done all
things necessary or appropriate, including preparation, execution and
filing of any documents, to effectuate the registration from time to time
of shares of the Common Stock of the Corporation with the Securities and
Exchange Commission pursuant to the Securities Act of 1933, as amended.
He shall perform all duties incident to the office of President and such
other duties as from time to time may be assigned to him by the Board or
by these By-Laws. In the case of the absence of the Chairman of the
Board, or his inability to act, the President shall perform the duties of
the Chairman of the Board and when so acting shall have all the powers of,
and be subject to all the restrictions upon, the Chairman of the Board.
Section 4.7 Executive Vice President. In the case of the absence or
inability to act of the President and the Chairman of the Board, the
Executive Vice President shall perform the duties of the President and
when so acting shall have all the powers of, and be subject to all the
restrictions upon, the President. The Executive Vice President shall
perform all duties incident to the office of Executive Vice President and
such other duties as from time to time may be assigned to him by the
Board, the President or these By-Laws.
Section 4.8 Vice President. Each Vice President shall perform all
such duties as from time to time may be assigned to him by the Board or
the President.
Section 4.9 Treasurer. The Treasurer shall:
(a) have charge and custody of, and be responsible for, all the funds
and securities of the Corporation, except those which the Corporation has
placed in the custody of a bank or trust company pursuant to a written
agreement designating such bank or trust company as custodian of the
property of the Corporation, as required by Section 6.6 of these By-Laws;
(b) keep accurate financial records for the Corporation;
(c) deposit all money, drafts and checks in the name of and to the
credit of the Corporation in the banks and depositories designated by the
Board;
(d) endorse for deposit all notes, checks and drafts received by the
Corporation as ordered by the Board, making proper vouchers therefor;
(e) disburse corporate funds and issue checks and drafts in the name
of the Corporation, as ordered by the Board;
(f) render to the President and the Board, whenever requested, an
account of all transactions by the Treasurer and of the financial
condition of the Corporation; and
(g) in general, perform all the duties incident to the office of
Treasurer and such other duties as from time to time may be assigned to
him by the Board or the President.
Section 4.10 The Secretary. The Secretary shall:
(a) keep or cause to be kept in one or more books provided for the
purpose, the minutes of all meetings of the Board, the committees of the
Board and the shareholders;
(b) see that all notices are duly given in accordance with the
provisions of these By-Laws and as required by statute;
(c) be custodian of the records and the seal of the Corporation and
affix and attest the seal to all stock certificates of the Corporation
(unless the seal of the Corporation on such certificates shall be a
facsimile, as hereinafter provided) and affix and attest the seal to all
other documents to be executed on behalf of the Corporation under its
seal;
(d) see that the books, reports, statements, certificates and other
documents and records required by statute to be kept and filed are
properly kept and filed; and
(e) in general, perform all the duties incident to the office of the
Secretary and such other duties as from time to time may be assigned to
him by the Board or the President.
Section 4.11 Salaries. The salaries of all officers shall be fixed
by the Board of Directors, and the Board has the authority by majority to
vote to reimburse expenses and to establish reasonable compensation of all
directors for services to the Corporation as directors, officers, or
otherwise.
CAPITAL STOCK
Section 5.1 Stock Certificates. Each owner of shares of Common Stock
of the Corporation shall be entitled upon request to have a certificate,
in such form required by the laws of the State of Minnesota as shall be
approved by the Board of Directors, representing the number of shares of
stock of the Corporation owned by him. No certificates shall be issued
for fractional shares. The certificates representing shares of stock
shall be signed in the name of the Corporation by the Chairman of the
Board, the President, the Executive Vice President or a Vice President and
by the Secretary, an Assistant Secretary, the Treasurer or an Assistant
Treasurer (which signatures may be either manual or facsimile engraved or
printed) and sealed with the seal of the Corporation (which seal may be
a facsimile, engraved or printed). In case any officer who shall have
signed such certificate shall have ceased to be such officer before such
certificates shall be issued, they may nevertheless be issued by the
Corporation with the same effect as if such officer were still in office
at the date of their issue.
Section 5.2 Books and Records; Inspection. The Corporation shall
keep at its principal executive office, or at another place or places
within the United States determined by the Board, a share register not
more than one year old, containing the names and addresses of the
shareholders and the number and classes of shares held by each
shareholder. The Corporation shall also keep, at its principal executive
office, or at another place or places within the United States determined
by the Board, a record of the dates on which certificates representing
shares were issued.
The Corporation shall keep at its principal executive office, or, if
its principal executive office is outside of the State of Minnesota, shall
make available at its registered office within ten days after receipt by
an officer of the Corporation of a written demand for them made by a
person described in subdivision 4 of Section 302A.461 of the Minnesota
Business Corporation Act, originals or copies of:
(a) records of all proceedings of shareholders for the last three
years;
(b) records of all proceedings of the Board for the last three years;
(c) the Corporation's Articles of Incorporation and all amendments
currently in effect;
(d) the Corporation's By-Laws and all amendments currently in effect;
(e) financial statements required by Section 302A.463 of the
Minnesota Business Corporation Act, and the financial statements for the
most recent interim period prepared in the course of the operation of the
Corporation for distribution to the shareholders or to a governmental
agency as a matter of public record;
(f) reports made to shareholders generally within the last three
years;
(g) a statement of the names and usual business addresses of its
directors and principal officers;
(h) voting trust agreements described in Section 302A.453 of the
Minnesota Business Corporation Act; and
(i) shareholder control agreements described in Section 302A.457 of
the Minnesota Business Corporation Act.
Section 5.3 Share Transfers. Upon compliance with any provisions
restricting the transferability of shares that may be set forth in the
Articles of Incorporation, these By-Laws, or any resolution or written
agreement in respect thereof, transfers of shares of the Corporation shall
be made only on the books of the Corporation by the registered holder
thereof, or by his attorney thereunto authorized by power of attorney duly
executed and filed with an officer of the Corporation, or with a transfer
agent or registrar and on surrender of the certificate or certificates for
such shares properly endorsed and the payment of all taxes thereon.
Except as may be otherwise provided by law or these By-Laws, the person
in whose name shares stand on the books of the Corporation shall be deemed
the owner thereof for all purposes as regards the Corporation; provided
that whenever any transfer of shares shall be made for collateral
security, and not absolutely, such fact, if known to an officer of the
Corporation, shall be so expressed in the entry of transfer.
Section 5.4 Regulations. The Board of Directors may make such
additional rules and regulations, not inconsistent with these By-Laws, as
it may deem expedient concerning the issue, transfer and registration of
certificates for shares of stock of the Corporation. It may appoint, or
authorize any officer or officers to appoint, one or more transfer agents
or one or more transfer clerks and one or more registrars and may require
all certificates for shares of stock to bear the signature or signatures
of any of them.
Section 5.5 Lost, Destroyed or Mutilated Certificates. The holder
of any certificate representing shares of stock of the Corporation shall
immediately notify the Corporation of any loss, destruction or mutilation
of such certificate, and the Corporation may issue a new certificate of
stock in the place of any certificate theretofore issued by it which the
owner thereof shall allege to have been lost or destroyed or which shall
have been mutilated, and the Board may, in its discretion, require such
owner or his legal representatives to give to the Corporation, a bond in
such sum, limited or unlimited, and in such form and with such surety or
sureties as the Board in its absolute discretion shall determine, to
indemnify the Corporation against any claim that may be made against it
on account of the alleged loss or destruction of any such certificate, or
the issuance of a new certificate. Anything herein to the contrary
notwithstanding, the Board, in its absolute discretion, may refuse to
issue any such new certificate, except pursuant to legal proceedings under
the laws of the State of Minnesota.
Section 5.6 Record Date; Certification of Beneficial Owner. (a) The
directors may fix a date not more than sixty days before the date of a
meeting of shareholders as the date for the determination of the holders
of shares entitled to notice of and entitled to vote at the meeting.
(b) In the absence of such fixed record date, (i) the date for
determination of shareholders entitled to notice of or to vote at a
meeting of shareholders shall be the later of the close of business on the
day on which notice of the meeting is mailed or the thirtieth day before
the meeting, and (ii) the date for determining shareholders entitled to
receive payment of a dividend or an allotment of any rights shall be the
close of business on the day on which the resolution of the Board of
Directors is adopted, but the payment or allotment shall not be made more
than sixty days after the date own which the resolution is adopted.
(c) A resolution approved by the affirmative vote of a majority of
the directors present may establish a procedure whereby a shareholder may
certify in writing to the Corporation that all or a portion of the shares
registered in the name of the shareholder are held for the account of one
or more beneficial owners. Upon receipt by the Corporation of the
writing, the persons specified as beneficial owners, rather than the
actual shareholders, are deemed the shareholders for the purposes
specified in the writing.
MISCELLANEOUS
Section 6.1 Seal. The Board of Directors shall provide a suitable
corporate seal stating the corporate name, and state and year of
incorporation, which shall be in the charge of the Secretary and shall be
used as authorized by these By-Laws.
Section 6.2 Fiscal Year. The fiscal year of the Corporation shall
begin on June 1 of each year and end on May 31 of the succeeding year.
Section 6.3 Notice and Waiver of Notice. (a) Any notice of a meeting
required to be given under these By-Laws to shareholders and/or directors
may be waived by any such person (i) orally or in writing signed by such
person before, at or after the meeting or (ii) by attendance at the
meeting in person or, in the case of a shareholder, by proxy.
(b) All notices required by these By-Laws shall be printed or
written, and shall be delivered either personally, by telegraph or cable
or by mail and, if mailed, shall be deemed to be delivered when deposited
in the United States mail, postage prepaid, addressed to the shareholder
or director at his address as it appears on the records of the
Corporation.
Section 6.4 Reports to Shareholders. The books of account of the
Corporation shall be examined by an independent firm of public accountants
at the close of each annual period of the Corporation and at such other
times, if any, as may be directed by the Board of Directors. A report to
the shareholders based upon such examination shall be mailed to each
shareholder of the Corporation of record on such date with respect to each
report as may be determined by the Board, at his address as the same
appears on the books of the Corporation. Each such report shall show the
assets and liabilities of the corporation as of the annual or other period
covered by the report and the securities in which the funds of the
Corporation were then invested; such report shall also show the
Corporation's income and expenses for the period from the end of the
Corporation's preceding fiscal year to the close of the annual or other
period covered by the report and any other information required by the
1940 Act, and shall set forth such other matters as the Board or such
independent firm of public accountants shall determine.
Section 6.5 Approval of Firm of Independent Public Accountants. At
every regular meeting of the stockholders of the Corporation there may be
submitted for ratification or rejection, the name of the firm of
independent public accountants which has been selected for the current
fiscal year in which such meeting is held by a majority of those members
of the Board of Directors who are not investment advisers of, or
affiliated persons of an investment adviser of, or officers or employees
of, the Corporation, as such terms is defined in the 1940 Act.
Section 6.6 Custodian. All securities and cash of the Corporation
shall be held by a custodian meeting the requirements for a custodian
contained in the 1940 Act and the rules and regulations thereunder and in
any applicable state securities or blue sky laws. The Corporation shall
enter into a written contract with the custodian regarding the powers,
duties and compensation of the custodian with respect to the cash and
securities of the Corporation held by the custodian. Said contract and
all amendments thereto shall upon the resignation or inability to serve
of the custodian obtain a successor custodian and require that the cash
and securities owned by the Corporation be delivered directly to the
successor custodian.
Section 6.7 Prohibited Transactions. No officer or director of the
Corporation or of its investment adviser shall deal for or on behalf of
the Corporation with himself, as principal or agent, or with any
corporation or partnership in which he has a financial interest. This
prohibition shall not prevent:
(a) officers or directors of the Corporation from having a financial
interest in the Corporation, its principal underwriter or its investment
adviser;
(b) the purchase of securities for the portfolio or the Corporation
or the sale of securities owned by the Corporation through a securities
dealer, one or more of whose partners, officers or directors is an officer
or director of the Corporation, provided such transactions are handled in
the capacity of broker only and provided commissions charged do not exceed
customary brokerage charges for such service;
(c) the purchase or sale of securities for the portfolio of the
Corporation pursuant to a rule under the 1940 Act or pursuant to an
exemptive order of the Securities and Exchange Commission; or
(d) the employment of legal counsel, evaluator, registrar, transfer
agent, dividend disbursing agent, or custodian having a partner, officer
or director who is an officer or director of the Corporation, provided
only customary fees are charged for services rendered to or for the
benefit of the Corporation.
Section 6.8 Bonds. The Board of Directors may require any officer,
agent or employee of the Corporation to give a bond to the Corporation,
conditioned upon the faithful discharge of his duties, with one or more
sureties and in such amount as may be satisfactory to the Board of
Directors. The Board of Directors shall, in any event, require the
Corporation to provide and maintain a bond issued by a reputable fidelity
insurance company, authorized to business in the place where the bond is
issued, against larceny and embezzlement, covering each officer and
employee of the Corporation, who may singly, or jointly with others, have
access to securities or funds of the Corporation, either directly or
through authority to draw upon such funds or to direct generally the
disposition of such securities, such bond or bonds to be in such
reasonable form and amount as a majority of the Board of Directors who are
not "Interested Persons" of the Corporation as defined in the 1940 Act
shall approve not less than once every twelve months, with due
consideration to all relevant factors including, but not limited to, the
value of the aggregate assets of the Corporation to which any such officer
or employee may have access, the type and terms of the arrangements made
for the custody and safekeeping of such assets, and the nature of the
securities in the Corporation's portfolio, and meet all requirements which
the Securities and Exchange Commission may prescribe by order, rule or
regulations.
AMENDMENTS
Section 7. These By-Laws may be amended or repealed, or new By-Laws
may be adopted, by the Board of Directors at any meeting thereof, provided
that notice of such meeting shall have been given as provided in these By-
Laws, which notice shall state that amendment or repeal of the By-Laws or
adoption of new By-Laws, is one of the purposes of such meeting, or by
action of the Board of Directors by written consent in lieu of a meeting.
Any such By-Laws adopted by the Board may be amended or repealed, or new
By-Laws may be adopted, by the vote of the shareholders of the
Corporation, at any regular or special meeting thereof, provided that the
notice of such meeting shall have been given as provided in these By-Laws,
or the adoption of new By-Laws, is one of the purposes of such meeting,
or by action of the shareholders by written consent in lieu of a meeting.
orgzn\875.1
Share Certificate (8-1/2" x 11")
I. FACE OF CERTIFICATE (All text and other matter lies within 8-1/4" x
10-3/4" decorative border, 5/16" wide)
(at left) (at right)
SEE REVERSE FOR CUSIP 650081 10 2
CERTAIN DEFINITIONS
(at left) (at right)
COMMON STOCK COMMON STOCK
NUMBER SHARES
(at left, box for (at right, box for
share certificate number) number of shares)
(at left the following text, (at right, the following text,
under the box) under the box)
INCORPORATED UNDER THE LAWS OF THE STATE OF MINNESOTA
(centered, the following text)
THE NEW YORK TAX-EXEMPT INCOME FUND, INC.
This certificate is transferable in Denver and New York City
(at left, the following text) (at right vertically, the following text)
This Certifies that COUNTERSIGNED AND REGISTERED:
SHAREHOLDER FINANCIAL SERVICES, INC.
(Denver) Transfer Agent and Registrar
By: (Authorized Signature)
or
UNITED MISSOURI TRUST CO. OF NEW YORK
(New York) Co-Transfer Agent and Registrar
By: (Authorized Signature)
(at left, the following text)
is the owner of
(beginning at left, the following text)
FULLY PAID AND NON-ASSESSABLE SHARES OF THE PAR VALUE OF $.01 EACH OF THE
COMMON STOCK OF THE NEW YORK TAX-EXEMPT INCOME FUND, INC.
(hereinafter called the "Corporation"), transferable on the books of the
Corporation by the holder hereof in person or by duly authorized attorney,
upon surrender of this certificate properly endorsed. This Certificate
and the shares represented hereby are issued and shall be held subject to
all of the provisions of the Articles of Incorporation of the Corporation
as amended (a copy which is on file at the office of the Transfer Agent),
to all of which the holder by acceptance hereof expressly assents. This
Certificate is not valid until countersigned by the Transfer Agent and
registered by the Registrar.
Witness the facsimile seal of the Corporation and the facsimile signatures
of the duly authorized officers of the Corporation.
(at left, the following text) (at right, the following text)
Dated: The New York Tax-Exempt Income Fund, Inc.
(signature at left of seal) (signature at right of seal)
- ----------------------- --------------------------
SECRETARY PRESIDENT
(centered)
1-1/2" diameter facsimile seal
with legend
THE NEW YORK TAX-EXEMPT INCOME FUND, INC.
CORPORATE SEAL
MINNESOTA
<PAGE>
II. BACK OF CERTIFICATE (text reads from top to bottom of 11" dimension)
(centered, the following text)
THE NEW YORK TAX-EXEMPT INCOME FUND, INC.
(beginning at left, the following text)
The following abbreviations, when used in the inscription on the face of
this certificate, shall be construed as though they were written out in
full according to applicable laws or regulations.
TEN COM - as tenants in common
TEN ENT - as tenants by the entireties
JT TEN WROS - as joint tenants with
NOT TC - right of survivorship and not
as tenants in common
(at right, the following text,
parallel with the above abbreviations)
UNIF GIFT MIN ACT - ( ) Custodian ( )
-------- --------
(Cust) (Minor)
Under Uniform Gifts to Minors
Act ( )
--------------
(State)
(centered, the following text)
Additional abbreviations may also be used though not in the above list.
(beginning at left, the following text)
For value received ----------------- hereby sell, assign and transfer unto
- --------------------------------------------------------------------------
(PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE AND
PROVIDE CERTIFICATION BY TRANSFEREE)
- --------------------------------------------------------------------------
(NAME AND ADDRESS OF TRANSFEREE SHOULD BE PRINTED OR TYPEWRITTEN)
- --------------------------------------------------------------------------
- ------------------------------------------------------------------- Shares
of the capital stock represented by the written Certificate and do hereby
irrevocably constitute and appoint ---------------------------- Attorney
to transfer the said stock on the books of the within-named Corporation,
with full power of substitution in the premises.
Dated: ------------------------- Signed: -------------------------
--------------------------------
(both must sign if joint owners)
Signature(s) guaranteed by --------------------------------
(Name of Guarantor)
--------------------------------
(Signature of Officer/Title)
----------------------------------------------
The signature to this assignment with the name
Notice: as written upon the face of the Certificate in
every particular, without alteration or enlar-
gement or any change whatever.
(beginning at left, the following text)
Signatures must be guaranteed by a financial institution of the type
identified in the policies and procedures of Shareholder Financial
Services, Inc.
EDGAR\875CERT
REGISTRAR,
TRANSFER AGENCY AND SERVICE AGREEMENT
between
THE NEW YORK TAX-EXEMPT INCOME FUND, INC.
and
SHAREHOLDER FINANCIAL SERVICES, INC.
<PAGE>
TABLE OF CONTENTS
Page
Article 1 Terms of Appointment; Duties of SFSI 1
Article 2 Fees and Expenses 2
Article 3 Representations and Warranties of SFSI 2
Article 4 Representations and Warranties of the Fund 3
Article 5 Indemnification 3
Article 6 Covenants of the Fund and SFSI 5
Article 7 Termination of Agreement 7
Article 8 Assignment 8
Article 9 Amendment 8
Article 10 Colorado Law to Apply 8
Article 11 Merger of Agreement 8
Exhibit A 9
<PAGE>
REGISTRAR, TRANSFER AGENCY AND SERVICE AGREEMENT
AGREEMENT made as of the 15th day of May, 1992, by and between THE
NEW YORK TAX-EXEMPT INCOME FUND, INC., a Minnesota corporation, having its
principal office and place of business at 3410 South Galena Street,
Denver, Colorado 80231 (the "Fund"), and SHAREHOLDER FINANCIAL SERVICES,
INC., a Colorado corporation which is a registered transfer agent approved
by the American Stock Exchange as transfer agent/registrar for the Fund,
having its principal office and place of business at 3410 South Galena
Street, Denver, Colorado 80231 ("SFSI").
WHEREAS, the Fund desires to appoint SFSI as its registrar,
transfer agent, dividend disbursing agent and agent in connection with
certain other activities, and SFSI desires to accept such appointment;
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereto agree as follows:
Article 1 Terms of Appointment; Duties of SFSI
1.01 Subject to the terms and conditions set forth in this
Agreement, the Fund hereby employs and appoints SFSI to act as, and SFSI
agrees to act as registrar, transfer agent for the Fund's authorized and
issued shares of capital stock ("Shares"), dividend disbursing agent and
agent in connection with the Fund's Dividend Reinvestment Plan (the
"Plan") as set out in the prospectus of the Fund, as amended from time to
time.
1.02 SFSI agrees that it will perform the following services:
(a) In accordance with procedures established from time to
time by written agreement between the Fund and SFSI, SFSI shall:
(i)
issue and record the appropriate number of Shares as
authorized and hold such Shares in the appropriate
Shareholder account;
(ii)
effect transfers of Shares by the registered owners
thereof upon receipt of appropriate documentation;
(iii)
prepare and transmit payments for dividends and
distributions declared by the Fund;
(iv)
act as agent for Shareholders pursuant to the Plan as amended from
time to time and in accordance with the terms of the agreement to
be entered into between the Shareholders and SFSI in substantially
the form attached as Exhibit A hereto.
(b) In addition to and not in lieu of the services set forth
in the above paragraph (a), SFSI shall: (i) perform the customary services
of a registrar, transfer agent and dividend disbursing agent, and (ii) act
as agent of the Plan as described in Article 1 hereof. The services, the
frequency thereof and limitations thereon, which are specifically set out
in the attached fee schedule, include but are not limited to: maintaining
all Shareholder accounts, preparing Shareholder meeting lists, mailing,
receiving and tabulating proxies for the Fund's annual meeting, mailing
shareholder reports to current shareholders, withholding taxes on U.S.
resident and non-resident alien accounts where applicable, preparing and
filing U.S. Treasury Department Forms 1099 and other appropriate forms
required with respect to dividends and distributions by federal
authorities for all registered Shareholders, preparing and mailing share
certificates, confirmation forms and statements of account to
Shareholders, and providing information concerning the Fund in response
to written or telephone requests from shareholders, investors or broker-
dealers.
Article 2 Fees and Expenses
2.01 The Fund agrees to pay SFSI, for all services to be
rendered by SFSI pursuant to this Agreement, those fees enumerated in The
Fee Structure For New York Tax-Exempt Income Fund (the "Fee Schedule")
attached hereto as Exhibit B. Such fees and out-of-pocket expenses and
advances identified under Section 2.02 below may be changed from time to
time, other than as provided in the attached Fee Schedule, subject to
mutual written agreement between the Fund and SFSI.
2.02 In addition to the fee paid under Section 2.01 above, the
Fund agrees to reimburse SFSI for out-of-pocket expenses or advances
incurred by SFSI for the items set out in the fee schedule attached
hereto. In addition, any other expenses incurred by SFSI at the request
or with the consent of the Fund, will be reimbursed by the Fund.
Article 3 Representations and Warranties of SFSI
SFSI represents and warrants to the Fund that at the date of this
Agreement and so long as it remains in force and effect:
3.01 It is a corporation duly organized and existing and in good
standing under the laws of the State of Colorado.
3.02 It is duly qualified to carry on its business in the State
of Colorado.
3.03 It is empowered under applicable laws and by its charter
and by-laws to enter into and perform this Agreement.
3.04 All requisite corporate proceedings have been taken to
authorize it to enter into and perform this Agreement.
3.05 It has and will continue to have access to the necessary
facilities, equipment and personnel to perform its duties and obligations
under this Agreement.
3.06 It is approved as a transfer agent/registrar by the
American Stock Exchange and the New York Stock Exchange and such other
exchanges upon which Shares may be traded.
3.07 It is registered with the Securities and Exchange
Commission as a transfer agent/registrar as required by the Federal
Securities Laws and Regulations.
Article 4 Representations and Warranties of the Fund
The Fund represents and warrants to SFSI that:
4.01 It is a corporation duly organized and existing and in good
standing under the laws of the State of Minnesota.
4.02 It is empowered under applicable laws and by its Articles
of Incorporation and By-Laws to enter into and perform this Agreement.
4.03 All proceedings required by said Articles of Incorporation
and By-Laws have been taken to authorize it to enter into and perform this
Agreement.
4.04 It is a closed-end, diversified investment company
registered under the Investment Company Act of 1940.
4.05 A registration statement under the Securities Act of 1933
is currently effective; information to the contrary will result in
immediate written notification to SFSI.
Article 5 Indemnification
5.01 SFSI shall not be responsible for, and the Fund shall
indemnify and hold SFSI harmless from and against, any and all damages,
costs, charges, counsel fees, payments, expenses and liability directly
arising out of or attributable to:
(a) All actions of SFSI or its agents required to be taken
pursuant to this Agreement, provided that such actions are taken in good
faith and without negligence or willful misconduct.
(b) The Fund's refusal or failure to comply with the terms
of this Agreement, or the Fund's lack of good faith, negligence or willful
misconduct or breach of any representation or warranty of the Fund
hereunder.
(c) The reliance on or use by SFSI or its agent of
information, records and documents which: (i) are received by SFSI or its
agents and furnished to it by or on behalf of the Fund, and (ii) have been
prepared and/or maintained by the Fund or any other person or firm on
behalf of the Fund. Such other person or firm shall include any former
transfer agent or former registrar, or co-transfer agent or co-registrar.
(d) The reliance on, or the carrying out by SFSI or its
agents of any instructions or requests of the Fund's representative.
(e) The offer or sale of Shares in violation of any
requirement under the federal securities laws or regulations or the
securities laws or regulations of any state that such Shares be registered
in such state or in violation of any stop order or other determination or
ruling by any federal agency or any state with respect to the offer or
sale of such Shares in such state.
5.02 The Fund shall not be responsible for, and SFSI shall
indemnify and hold the Fund harmless from and against any and all losses,
damages, costs, charges, counsel fees, payments, expenses and liability
arising out of or attributable to any action or failure or omission to act
by SFSI arising out of or attributable to:
(a) SFSI's refusal or failure to comply with the terms of
this Agreement, or SFSI's lack of good faith, negligence or willful
misconduct or the breach of any representation or warranty of SFSI
hereunder.
(b) The reliance on or use by the Fund, Shareholders,
investors or broker-dealers of information, records and documents which:
(i) are received by the Fund or its investment adviser, or by
Shareholders, investors or broker-dealers and furnished to it by SFSI, and
(ii) have been prepared and/or maintained by SFSI.
5.03 Any time, SFSI may apply to any officer of the Fund for
instructions, and may consult with the Fund's legal counsel with respect
to any matter arising in connection with the services to be performed by
SFSI under this Agreement, and SFSI and its agents shall not be liable and
shall be indemnified by the Fund for any action taken or omitted by it in
reliance upon such instructions or upon the opinion of such counsel. SFSI
and its agents shall be protected and indemnified in acting upon any paper
or document furnished by or on behalf of the Fund, reasonably believed to
be genuine and to have been signed by the proper person or persons, or
upon any instructions, information, data, records or documents provided
SFSI or its agents by telephone, in person, machine readable input, telex,
CRT data entry or other similar means authorized by the Fund, and shall
not be held to have notice of any change of authority of any person, until
receipt of written notice thereof from the Fund. SFSI and its agents
shall also be protected and indemnified in recognizing share certificates
which are reasonably believed to bear the proper manual or facsimile
signatures of the officers of the Fund, and the proper countersignature
of any former transfer agent or former registrar, or of a co-transfer
agent or co-registrar.
5.04 In the event either party is unable to perform its
obligations under the terms of this Agreement because of acts of God, such
party shall not be liable to the other party for damages, costs, charges,
counsel fees, payments and expenses resulting from such failure to perform
or otherwise from such causes.
5.05 Neither party to this Agreement shall be liable to the
other party for consequential damages under any provision of this
Agreement, or for any act or failure to act hereunder in the absence of
negligence, bad faith or willful misconduct.
5.06 In order that the indemnification provisions contained in
this Article 5 shall apply, upon the assertion of a claim for which either
party may be required to indemnify the other, the party seeking
indemnification shall promptly notify the other party in writing of such
assertion, and shall keep the other party advised with respect to all
developments concerning such claim. The party who may be required to
indemnify shall have the option to participate with the party seeking
indemnification in the defense of such claim. The party seeking
indemnification shall in no case confess any claim or make any compromise
in any case in which the other party may be required to indemnify it
except with the other party's prior written consent.
Article 6 Covenants of the Fund and SFSI
6.01 The Fund shall promptly furnish to SFSI the following:
(a) A certified copy of the resolution of the Board of
Directors of the Fund authorizing the execution and delivery of this
Agreement.
(b) A copy of the Articles of Incorporation and By-laws of
the Fund and all amendments thereto.
6.02 SFSI hereby agrees to establish and maintain facilities and
procedures reasonably acceptable to the Fund for safekeeping of share
certificates, check forms and facsimile signature imprinting devices, if
any; for the preparation or use, and for keeping account of, such
certificates, forms and devices; and for making toll-free telephone lines
available for handling inquiries by shareholders, investors and dealers.
6.03 The services provided by SFSI under this Agreement shall
conform with all the requirements imposed on: (i) registered transfer
agents under the Securities Exchange Act of 1934, as amended, and the
Rules thereunder, and (ii) transfer agents and registrars of securities
that are listed for trading on the American Stock Exchange and other
exchanges upon which Shares are traded. Subject to the foregoing, SFSI
shall keep records relating to the services to be performed hereunder, in
the form and manner as it may deem advisable provided however, that SFSI
shall at all times answer in a prompt and efficient manner inquiries from
the Fund and Shareholders relating to Shareholder accounts and SFSI shall
provide the Fund and Shareholders with adequate documentation in this
regard. To the extent required by Section 31 of the Investment Company
Act of 1940, as amended, and the Rules thereunder, SFSI agrees that all
such records prepared or maintained by SFSI relating to the services to
be performed by SFSI hereunder are the property of the Fund and will be
preserved, maintained and made available in accordance with such Section
and Rules, and will be surrendered promptly to the Fund on and in
accordance with its request. SFSI shall provide to the Fund a copy of the
annual report prepared pursuant to Section 17Ad-13 of the Securities
Exchange Act.
6.04 SFSI and the Fund agree that all books, records,
information and data pertaining to the business of the other party which
are exchanged or received pursuant to the negotiation or the carrying out
of this Agreement shall remain confidential, and shall not be voluntarily
disclosed to any other person, except as may be required by law.
6.05 In case of any requests or demands for the inspection of
the Shareholder records of the Fund, SFSI will endeavor to notify the Fund
and to secure instructions from an authorized officer of the Fund as to
such inspection. SFSI reserves the right, however, to exhibit the
Shareholder records to any person whenever it is advised by its counsel
that it may be held liable for the failure to exhibit the Shareholder
records to such person.
6.06 SFSI shall use its best efforts to obtain and keep in
effect with underwriters reasonably satisfactory to the Fund, certificates
or policies covering itself and the Fund and providing for cancellation
or termination only upon 30 days' prior written notice to the Fund, and
shall cooperate in enabling the Fund to recover and receive payment from
such underwriters for insured losses in excess of policy deductibles, as
follows:
(i)
A broad form of Bankers Blanket and/or Financial
Institutions Bond, or similar coverage, in the minimum
amount of $5,000,000, covering theft, embezzlement,
forgery and other specified acts of malfeasance and
misfeasance by SFSI, its agents and employees, with
aggregate coverage for counterfeit or stolen securities
and forged signatures in the minimum amount of $5
million and at least $1,000,000 for each loss;
(ii)
A lost instrument bond permitting the replacement of a share
certificate which has been lost, stolen or destroyed, for a
stated percentage of then-current value thereof, to be paid
by the shareholder or party seeking replacement thereof;
(iii)
Coverage of up to $10 million against loss of securities
transmitted by first class, certified or registered mail
and express or air express throughout the United States;
(iv)
A broad form of liability insurance against errors and
omissions having aggregate coverage for each claim of at
least $10 million; and
(v)
Coverage satisfactory to the American Stock Exchange
pursuant to its Board of Governors Rule 891 of at least
$10 million to protect the Fund's securities while in
transit or in the process of transfer, together with
comparable coverage as required by the New York Stock
Exchange and such other exchanges upon which Shares may
be traded.
The Fund from time to time may change the amounts of any of
the foregoing coverage or prescribe additional coverage. In the event
that SFSI shall be unable to obtain or keep in effect any of the insurance
coverage herein referred to, it shall promptly notify the Fund in writing
of such inability and shall use its best efforts to obtain and keep in
effect such other insurance coverage as the Fund shall reasonably require
in lieu of the coverage described above.
Article 7 Termination of Agreement
7.01 This Agreement may be terminated by either party upon one
hundred twenty (120) days written notice to the other, which notice may
be waived in writing by such other party.
7.02 Should the Fund exercise its right to terminate, all out-
of-pocket expenses associated with the movement of records and material
will be borne by the Fund unless termination by the Fund is on account of
a breach of this Agreement by SFSI.
Article 8 Assignment
8.01 Neither this Agreement nor any rights or obligations
hereunder may be assigned by either party without the written consent of
the other party.
8.02 This Agreement shall inure to the benefit of and be binding
upon the parties and their respective permitted successors and assigns.
Article 9 Amendment
9.01 This Agreement may be amended or modified by a written
agreement executed by both parties.
Article 10 Colorado Law to Apply
10.01 This Agreement shall be construed and the provisions
thereof interpreted under and in accordance with the laws of the State of
Colorado.
Article 11 Merger of Agreement
11.01 This Agreement constitutes the entire agreement between the
parties hereto and supersedes any prior agreement with respect to the
subject hereof whether oral or written.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed in their names and on their behalf under their seals by and
through their duly authorized officers, as of the day and year first above
written.
THE NEW YORK TAX-EXEMPT INCOME FUND, INC.
By: /s/ Robert G. Galli
-------------------------------
Robert G. Galli, Vice President
ATTEST:
/s/ George C. Bowen
- --------------------------
George C. Bowen, Secretary
SHAREHOLDER FINANCIAL SERVICES, INC.
By: /s/ Deborah H. Hofer
--------------------------------
Deborah H. Hofer, Vice President
ATTEST:
/s/ George C. Bowen
- --------------------------
George C. Bowen, Secretary
OSSI/880
Exhibit A
Terms and Conditions of Dividend Reinvestment Plan
1. You, Shareholder Financial Services, Inc., will act as Agent for me,
and will open an account for me under the Dividend Reinvestment Plan in
the same name as my present shares are registered, and put into effect for
me the dividend reinvestment option of the Plan as of the first record
date for a dividend or capital gains distribution, and the cash purchase
option of the Plan as of the next appropriate date as provided in
paragraph 5 below, after you receive the Authorization duly executed by
me.
2. Whenever The New York Tax-Exempt Income Fund, Inc. (the "Fund")
declares a dividend or distribution payable in shares or cash at the
option of the shareholders, I hereby elect to take such dividend or
distribution entirely in additional shares of the Fund to be issued by the
Fund, and you shall automatically receive such shares, including
fractions, for my account. If the market price per share of the Fund's
shares on the valuation date equals or exceeds the net asset value per
share on the valuation date, the number of additional shares to be
credited to my account shall be determined by dividing the dollar amount
of the dividend or distribution payable on my shares by the greater of the
following amounts per share of the Fund's shares on the valuation date:
(a) the net asset value, or (b) 95% of the market price. If the market
price per share of the Fund's shares on the valuation date is less than
the net asset value per share on the valuation date, the number of
additional shares to be credited to my account shall be determined by
dividing the dollar amount of the dividend or distribution by the market
price per share on the valuation date. The valuation date will be the
payment date for the dividend or, if such date is not a New York Stock
Exchange trading day, then the next preceding New York Stock Exchange
trading date.
3. Should the Fund declare a dividend or distribution payable only in
cash, you shall apply the amount of such dividend or distribution on my
shares (less my pro rata share of brokerage commissions incurred with
respect to your open-market purchases in connection with the reinvestment
of such dividend or distribution) to the purchase on the open market of
shares of the Fund for my account. Such purchases will be made on or
shortly after the payment date for such dividend or distribution, and in
no event more than 45 days after such date except where temporary
curtailment or suspension of purchase is necessary to comply with
applicable provisions of federal securities law.
4. For all purposes of the Plan: (a) the market price of the Fund's shares
on a particular date shall be the market price of the shares on a national
securities exchange, or in the event the shares are not listed on a
securities exchange at the time, the market price will be the asked price,
or the mean of the asked prices if more than one is available, of the
shares in the over-the-counter market; (b) net asset value per share of
the Fund's shares on a particular date shall be as determined by or on
behalf of the Fund; (c) all dividends, distributions and other payments
(whether made in cash or in shares) shall be made net of any applicable
withholding tax; and (d) "the shares of the Fund" shall refer to the
Fund's shares of beneficial interest, $.01 par value.
5. I understand that semi-annually I have the option of sending additional
payments, in any amount of $100 to $3,000, for the purchase of the open
market of shares of the Fund for my account. Voluntary payments will be
invested on or about the 15th of January and July, and in no event more
than 45 days after such dates except where temporary curtailment or
suspension of purchases is necessary to comply with applicable provisions
of federal securities law. Funds received more than 30 days prior to the
15th of January and July will be returned uninvested. I may withdraw my
entire voluntary cash payment by written notice received by you not less
than 48 hours before such payment is to be invested.
6. Investments of voluntary cash payments and other open-market purchases
provided for above may be made on any securities exchange where the Fund's
shares are traded, in the over-the-counter market or in negotiated
transactions and may be on such terms as to price, delivery and otherwise
as you shall determine. My funds held by you uninvested will not bear
interest, and it is understood that, in any event, you shall have no
liability in connection with any inability to purchase shares within 45
days after the initial date of such purchase as herein provided, or with
the timing of any purchases effected. You shall have no responsibility
as to the value of the shares of the Fund acquired for my account. For
the purposes of cash investments you may commingle my funds with those of
other shareholders of the Fund for whom you similarly act as Agent, and
the average price (including brokerage commissions) of all shares
purchased by you as Agent shall be the price per share allocable to me in
connection therewith.
7. You may hold my shares acquired pursuant to my Authorization, together
with the shares of other shareholders of the Fund acquired pursuant to
similar authorizations, in noncertificated form in your name or that of
your nominee. You will forward to me any proxy solicitation material and
will vote any shares so held for me only in accordance with the proxy
returned to me to the Fund. Upon my written request, you will deliver to
me, without charge, a certificate or certificates for the full shares.
8. You will confirm to me each acquisition made for my account as soon as
practicable but not later than 60 days after the date thereof. Although
I may from time to time have an undivided fractional interest (computed
to three decimal places) in a share of the Fund, no certificates for a
fractional share will be issued. However, dividends and distributions on
fractional shares will be credited to my account. In the event of
termination of my account under the Plan, you will adjust for any such
undivided fractional interest in cash at the market value of the Fund's
shares at the time of termination less the pro rata expense of any sale
required to make such an adjustment.
9. Any dividends or split shares distributed by the Fund on shares held
by you for me will be credited to my account. In the event that the Fund
makes available to its shareholders rights to purchase additional shares
or other securities, the shares held for me under the Plan will be added
to other shares held by me in calculating the number of rights to be
issued to me.
10. Your service fee for handling distributions or dividends will be paid
by the Fund. I will be charged a $.75 fee for each voluntary cash
investment and a pro rata share of brokerage commissions on all open
market purchases.
11. I may terminate my account under the Plan by notifying you in
writing. Such termination will be effective immediately if my notice is
received by you not less than ten days prior to any dividend or
distribution record date; otherwise such termination will be effective on
the first trading day after the payment date for such dividend or
distribution with respect to any subsequent dividend or distribution. The
Plan may be terminated by you or the Fund upon notice in writing mailed
to me at least 30 days prior to any record date for the payment of any
dividend or distribution by the Fund. Upon any termination you will cause
a certificate or certificates for the full shares held for me under the
Plan and cash adjustment for any fraction to be delivered to me without
charge. If I elect by notice to you in writing in advance of such
termination to have you sell part or all of my shares and remit the
proceeds to me, you are authorized to deduct a $2.50 fee plus brokerage
commission for this transaction from the proceeds.
12. These terms and conditions may be amended or supplemented by you or
the Fund at any time or times but, except when necessary or appropriate
to comply with applicable law or the rules or policies of the Securities
and Exchange Commission or any other regulatory authority, only by mailing
to me appropriate written notice at least 30 days prior to the effective
date thereof. The amendment or supplement shall be deemed to be accepted
by me unless, prior to the effective date thereof, you receive written
notice of the termination of my account under the Plan. Any such
amendment may include an appointment by you in your place and stead of a
successor Agent under these terms and conditions, with full power and
authority to perform all or any of the acts to be performed by the Agent
under these terms and conditions. Upon any such appointment of an Agent
for the purpose of receiving dividends and distributions, the Fund will
be authorized to pay such successor Agent, for my account, all dividends
and distributions payable on shares of the Fund held in my name or under
the Plan for retention or application by such successor Agent as provided
in these terms and conditions.
13. You shall at all times act in good faith and agree to use your best
efforts within reasonable limits to insure the accuracy of all services
performed under this Agreement and to comply with applicable law, but
assume no responsibility and shall not be liable for loss or damage due
to errors unless such error is caused by your negligence, bad faith or
willful misconduct or that of your employees.
14. These terms and conditions shall be governed by the laws of the State
of Colorado.
OSSI/880
CO-TRANSFER AGENT AND CO-REGISTRAR AGREEMENT
AGREEMENT made as of the 14th day of August, 1992, by and among THE
NEW YORK TAX-EXEMPT INCOME FUND, INC. (the "Fund"), a closed-end
registered investment company located at 3410 South Galena Street, Denver,
Colorado, UNITED MISSOURI TRUST COMPANY OF NEW YORK ("UMT"), a registered
transfer agent approved by the American Stock Exchange as a transfer agent
and registrar, located at One Battery Plaza, New York, New York, and
SHAREHOLDER FINANCIAL SERVICES, INC. ("SFSI"), a registered transfer agent
approved by the American Stock Exchange as a transfer agent and registrar,
located at 10200 East Girard, Building A, Suite 407, Denver, Colorado.
WHEREAS, the Fund desires to appoint UMT as co-transfer agent and co-
registrar with SFSI, and UMT desires to accept such appointment;
NOW THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereto agree as follows:
ARTICLE ONE. Terms of Appointment; Duties of UMT.
1.01 UMT shall act as co-transfer agent and co-registrar with
SFSI for the transfer of certificates representing shares of stock of the
Fund. UMT may receive Fund stock certificates at its office, and
otherwise will act upon instructions from SFSI. UMT acknowledges that
SFSI is the primary transfer agent and registrar and that UMT is to
provide the services set forth in this Agreement because the Fund's shares
are listed on the American Stock Exchange. UMT will also provide such
services, information and records as SFSI may request to permit SFSI to
keep and maintain the Fund's books and records as its primary registrar,
shareholder servicing and transfer agent. Such services to be provided
by UMT, at the request of SFSI, shall include but not be limited to the
following:
(i) transfer on its records from time to time certificates
for all shares of stock with respect to which this
appointment is made, as may be surrendered for transfer,
upon receipt and review of appropriate documentation;
and upon cancellation thereof to sign new certificates
for shares of the Fund's stock which have been duly
signed by the Fund and to deliver the same to the
shareholder;
(ii) send information to SFSI regarding transfers of
certificates so that SFSI may record the transfer on
its books; and
(iii) maintain records for share transfers.
ARTICLE TWO. Fees and Expenses.
2.01 For the performance by UMT pursuant to this Agreement,
UMT, SFSI and the Fund agree that SFSI shall pay UMT's fees incurred
hereunder as set out in the attached Fee Schedule. In addition, SFSI
agrees to reimburse UMT for any out-of-pocket expenses or advances
incurred by UMT for the items set out in the attached Fee Schedule. Any
other expenses incurred by UMT at the request or with the consent of SFSI
will be reimbursed by SFSI. Such fees, and any out-of-pocket expenses and
advances, may be changed from time to time subject to mutual written
agreement among UMT and SFSI.
ARTICLE THREE. Representations and Warranties of UMT.
UMT represents and warrants to SFSI and the Fund that at the date
of this Agreement and so long as it remains in force and effect:
3.01 It is a corporation duly organized and existing and in
good standing under the laws of the State of New York.
3.02 It is duly qualified to carry on its business in the
State of New York.
3.03 It is empowered under applicable laws and by its charter
and by-laws to enter into and perform this Agreement.
3.04 All requisite corporate proceedings have been taken to
authorize it to enter into and perform this Agreement.
3.05 It has and will continue to have access to the necessary
facilities, equipment and personnel to perform its duties and obligations
under this Agreement.
3.06 It is approved as a transfer agent/registrar by the
American Stock Exchange and the New York Stock Exchange and such other
exchanges upon which Shares may be traded.
3.07 It is registered with the Securities and Exchange
Commission as a transfer agent/registrar as required by the Federal
Securities Laws and Regulations.
ARTICLE FOUR. Representation and Warranties of SFSI.
SFSI represents and warrants to UMT and the Fund that at the date
of this Agreement and so long as it remains in force and effect:
4.01 It is a corporation duly organized and existing and in
good standing under the laws of the State of Colorado.
4.02 It is duly qualified to carry on its business in the
State of Colorado.
4.03 It is empowered under applicable laws and by its charter
and by-laws to enter into and perform this Agreement.
4.04 All requisite corporate proceedings have been taken to
authorize it to enter into and perform this Agreement.
4.05 It has and will continue to have access to the necessary
facilities, equipment and personnel to perform its duties and obligations
under this Agreement.
4.06 It is approved as a transfer agent/registrar by the
American Stock Exchange and the New York Stock Exchange and such other
exchanges upon which Shares may be traded.
4.07 It is registered with the Securities and Exchange
Commission as a transfer agent/registrar as required by the Federal
Securities Laws and Regulations.
ARTICLE FIVE. Representation and Warranties of the Fund.
The Fund represents and warrants to UMT and SFSI that at the date
of this Agreement and so long as it remains in force and effect:
5.01 It is a corporation duly organized and existing and in
good standing under the laws of the State of Minnesota.
5.02 It is empowered under applicable laws and by its Articles
of Incorporation and By-Laws to enter into and perform this Agreement.
5.03 All proceedings required by said Articles of
Incorporation and By-Laws have been taken to authorize it to enter into
and perform this Agreement.
5.04 It is a closed-end, diversified investment company
registered under the Investment Company Act of 1940.
5.05 A registration statement under the Securities Act of 1933
is currently effective; information to the contrary will result in
immediate written notification to UMT.
ARTICLE SIX. Covenants of UMT and the Fund.
6.01 UMT hereby agrees to establish and maintain facilities
and procedures reasonably acceptable to the Fund and SFSI for safekeeping
of share certificates and facsimile signature imprinting devices, if any;
and for the preparation or use, and for keeping account of, such
certificates, forms and devices.
6.02 The services provided by UMT under this Agreement shall
conform with all the requirements imposed on: (i) registered transfer
agents under the Securities Exchange Act of 1934, as amended, and the
Rules thereunder, and (ii) transfer agents and registrars of securities
that are listed for trading on the American Stock Exchange, New York Stock
Exchange and other exchanges upon which Fund shares are traded. Subject
to the foregoing, UMT shall keep records relating to the services to be
performed hereunder, in the form and manner as it may deem advisable
provided however, that UMT shall at all times answer in a prompt and
efficient manner inquiries from the Fund and its shareholders relating to
shareholder accounts and UMT shall provide the Fund and its shareholders
with adequate documentation in this regard. To the extent required by
Section 31 of the Investment Company Act of 1940, as amended, and the
Rules thereunder, UMT agrees that all such records prepared or maintained
by UMT relating to the services to be performed by UMT hereunder shall be
available to SFSI and to the Fund and are the property of the Fund and
will be preserved, maintained and made available in accordance with such
Section and Rules, and will be surrendered promptly to the Fund on and in
accordance with its request. UMT shall provide to the Fund a copy of the
annual report prepared pursuant to Section 17Ad-13 of the Securities
Exchange Act.
6.03 UMT and the Fund agree that all books, records,
information and data pertaining to the business of the other party which
are exchanged or received pursuant to the negotiation or the carrying out
of this Agreement shall remain confidential, and shall not be voluntarily
disclosed to any other person, except to SFSI and its affiliates or as may
be required by law.
ARTICLE SEVEN. Standards for Operation.
7.01 UMT may establish such rules and regulations governing
the issuance and transfer of the certificates of stock as shall be
reasonable and in conformance with customary practices of transfer agents
and registrars serving mutual funds, including, but not limited to, the
rules and regulations of the American Stock Exchange. UMT's rules and
regulations in reviewing items for negotiability shall be consistent with
those used by SFSI.
ARTICLE EIGHT. Indemnification.
8.01 UMT shall not be responsible for, and SFSI shall
indemnify and hold UMT harmless from and against, any and all losses,
damages, costs, charges, counsel fees, payments, expenses and liability
directly arising out of or attributable to:
(a) All actions of UMT or its agents required to be taken
pursuant to this Agreement, provided that such actions are taken in good
faith and without negligence or willful misconduct.
(b) SFSI's refusal or failure to comply with the terms of
this Agreement, or which arise out of SFSI's lack of good faith,
negligence or willful misconduct or which arise out of the breach of any
representation or warranty of SFSI hereunder.
(c) The reliance on or use by UMT or its agents of
information, records and documents which: (i) are received by UMT or its
agents and furnished to it by or on behalf of the Fund, and (ii) have been
prepared and/or maintained by the Fund or any other person or firm on
behalf of the Fund. Such other person or firm shall include any former
transfer agent or former registrar, or co-transfer agent or co-registrar.
(d) The reliance on, or the carrying out by UMT or its agents
of any instructions or requests of the Fund's representative.
(e) The offer or sale of Shares in violation of any
requirement under the federal securities laws or regulations or the
securities laws or regulations of any state that such Shares be registered
in such state or in violation of any stop order or other determination or
ruling by any federal agency or any state with respect to the offer or
sale of such Shares in such state.
8.02 Neither the Fund nor SFSI shall be responsible for, and
UMT shall indemnify and hold the Fund and SFSI harmless from and against
any and all losses, damages, costs, charges, counsel fees, payments,
expenses and liability arising out of or attributable to any action or
failure or omission to act by UMT arising out of or attributable to:
(a) UMT's refusal or failure to comply with the terms of this
Agreement, or which arise out of or result from UMT's lack of good faith,
negligence or willful misconduct or the breach of any representation or
warranty of UMT hereunder.
(b) The reliance on or use by the Fund, its shareholders,
investors, broker-dealers or SFSI of information, records and documents
which: (i) are received by the Fund or by its shareholders or by
investors, broker-dealers or SFSI and furnished to it by UMT, and (ii)
have been prepared and/or maintained by UMT.
8.03 At any time, UMT may apply to any officer of SFSI for
instructions, and may consult with SFSI's legal counsel with respect to
any matter arising in connection with the services to be performed by UMT
under this Agreement, and UMT and its agents shall not be liable and shall
be indemnified by SFSI for any action taken or omitted by it in reliance
upon such instructions or upon the opinion of such counsel. UMT and its
agents shall be protected and indemnified in acting upon any paper or
document furnished by SFSI or by or on behalf of the Fund, reasonably
believed to be genuine and to have been signed by the proper person or
person, or upon any such instructions, information, data, records or
documents provided UMT or its agents by telephone, in person, machine
readable input, telex, CRT data entry or other similar means authorized
by SFSI or the Fund, and shall not be held to have notice of any change
of authority of any person, until receipt of written notice thereof from
SFSI or the Fund, as appropriate. UMT and its agents shall also be
protected and indemnified in recognizing share certificates which are
reasonably believed to bear the proper manual or facsimile signatures of
the officers of the Fund, and the proper countersignature of any former
transfer agent or former registrar, or of a co-transfer agent or co-
registrar.
8.04 In the event any party is unable to perform its
obligations under the terms of this Agreement because of acts of God, such
party shall not be liable to the other party for damages, costs, charges,
counsel fees, payments and expenses resulting from such failure to perform
or otherwise from such causes.
8.05 No party to this Agreement shall be liable to any other
party for consequential damages under any provision of this Agreement, or
for any act or failure to act hereunder in the absence of negligence, bad
faith or willful misconduct.
8.06 In order that the indemnification provisions contained
in this Article 8 shall apply, upon the assertion of a claim for which any
party may be required to indemnify any other party, the party seeking
indemnification shall promptly notify the other party in writing of such
assertion, and shall keep the other party advised with respect to all
developments concerning such claim. The party who may be required to
indemnify shall have the option to participate with the party seeking
indemnification in the defense of such claim.
ARTICLE NINE. Supporting Documentation.
9.01 The Secretary or an Assistant Secretary of the Fund is
hereby directed to file with UMT:
(1) a copy of the by-laws of the Fund, with all amendments
of said by-laws, certified by the Secretary or an Assistant Secretary;
(2) a copy of the Articles of Incorporation of the Fund with
all amendments, certified by the Secretary of State of the state of
incorporation.
(3) specimens of all forms of stock certificates, including
certificates heretofore issued and exchangeable for present certificates,
adopted by the Fund and certified to be true and correct specimens by the
Secretary or Assistant Secretary of the Fund.
(4) opinion of counsel for the Fund covering the validity of
said stock and the registration under the Securities Act of 1933, as
amended, of all shares thereof already outstanding and all unissued shares
then proposed to be issued, or stating specifically why such registration
is unnecessary; and stating what (if any) approval or consent of any
commission or governmental body to such issue is necessary, together with
copy of any such approval or consent certified by an appropriate official;
(5) list of the duly elected officers of the Fund authorized
to sign stock certificates, with specimen signatures of such officers,
certified by the Secretary or Assistant Secretary of the Fund. UMT may
rely on said list as altered from time to time by Certificates of Change
received from the Secretary or Assistant Secretary;
(6) list of certificates against which stops have been
placed, certified by an officer of the Fund or of the former Transfer
Agent;
(7) instructions with respect to the persons to whom advices
of original issues, transfers or retirement of certificates for shares of
stock, and fee bills for services rendered by UMT are to be sent; and
(8) promptly on any amendment of the by-laws or articles of
incorporation, a certified copy of such amendment.
9.02 The Secretary or an Assistant Secretary of SFSI is hereby
directed to file with UMT a list of the duly elected officers of SFSI
authorized to give instructions to UMT with specimen signatures of such
officers, certified by the Secretary or Assistant Secretary of SFSI. UMT
may rely on said list as altered from time to time by Certificates of
Change received from the Secretary or Assistant Secretary.
9.03 The Secretary or an Assistant Secretary of UMT is hereby
directed to file with SFSI a list of the duly elected officers of UMT
authorized to give instructions to SFSI with specimen signatures of such
officers, certified by the Secretary or Assistant Secretary of UMT. SFSI
may rely on said list as altered from time to time by Certificates of
Change received from the Secretary or Assistant Secretary.
ARTICLE TEN. Miscellaneous Provisions.
10.01 UMT agrees that it will transmit to SFSI by telecopier
or facsimile on the record date all record date items.
10.02 UMT agrees that it will transmit the transfer journal to
SFSI by overnight courier to arrive on the next business day following any
transfer of shares of stock of the Fund.
10.03 UMT agrees that it will provide SFSI with back-up
documentation and research requested by SFSI by the close of business on
the next business day following any such request by SFSI.
10.04 At such time when the volume of business pursuant to this
Agreement may warrant, the Fund and UMT will investigate, with SFSI, the
potential and feasibility of transactions through and/or on-line access
to SFSI's system for the purpose of facilitating the processing of
transfers between UMT and SFSI.
ARTICLE ELEVEN. Termination of Agreement.
11.01 This Agreement may be terminated by any party upon one
hundred twenty (120) days written notice to the other, which notice may
be waived by such other parties.
11.02 Should the Fund exercise its right to terminate, all out-
of-pocket expenses associated with the movement of records and material
will be borne by the Fund unless termination by the Fund is on account of
a breach of this Agreement by SFSI or UMT.
ARTICLE TWELVE. Assignment.
12.01 Neither this Agreement nor any rights or obligations
hereunder may be assigned by any party without the written consent of the
other parties.
12.02 This Agreement shall inure to the benefit of and be
binding upon the parties and their respective permitted successors and
assigns.
ARTICLE THIRTEEN. Amendment.
13.01 This Agreement may be amended or modified by a written
agreement executed by both parties.
ARTICLE FOURTEEN. Colorado Law to Apply.
14.01 This Agreement shall be construed and the provisions
thereof interpreted under and in accordance with the laws of the State of
Colorado.
ARTICLE FIFTEEN. Merger of Agreement.
15.01 This Agreement constitutes the entire agreement between
the parties hereto and supersedes any prior agreement with respect to the
subject hereof whether oral or written.
THE NEW YORK TAX-EXEMPT INCOME FUND, INC.
By: /s/ Robert G. Zack
-----------------------------------
Robert G. Zack, Assistant Secretary
UNITED MISSOURI TRUST COMPANY OF NEW YORK
By: /s/ W.W. O'Connell, II
----------------------------------
W.W. O'Connell, II, Vice President
SHAREHOLDER FINANCIAL SERVICES, INC.
By: /s/ Deborah H. Hofer
--------------------------------
Deborah H. Hofer, Vice President
OSSI/8801
OPPENHEIMER CASH RESERVES
CENTENNIAL AMERICA FUND, L.P.
CENTENNIAL CALIFORNIA TAX-EXEMPT TRUST
CENTENNIAL GOVERNMENT TRUST
CENTENNIAL MONEY MARKET TRUST
CENTENNIAL NEW YORK TAX-EXEMPT TRUST
CENTENNIAL TAX-EXEMPT TRUST
OPPENHEIMER CHAMPION HIGH YIELD FUND
DAILY CASH ACCUMULATION FUND, INC.
OPPENHEIMER EQUITY INCOME FUND
OPPENHEIMER GOVERNMENT SECURITIES FUND
OPPENHEIMER HIGH YIELD FUND
OPPENHEIMER INTEGRITY FUNDS
OPPENHEIMER MAIN STREET FUNDS, INC.
THE NEW YORK TAX-EXEMPT INCOME FUND, INC.
OPPENHEIMER STRATEGIC INCOME FUND
OPPENHEIMER STRATEGIC INCOME & GROWTH FUND
OPPENHEIMER STRATEGIC INVESTMENT GRADE BOND FUND
OPPENHEIMER STRATEGIC SHORT-TERM INCOME FUND
OPPENHEIMER TAX-EXEMPT BOND FUND
OPPENHEIMER TAX-EXEMPT CASH RESERVES
OPPENHEIMER TOTAL RETURN FUND, INC.
OPPENHEIMER VARIABLE ACCOUNT FUNDS
CERTIFIED RESOLUTIONS OF THE BOARDS
October 26, 1993
At a meeting of the Boards for the above referenced funds (the
"Funds") held on October 26, 1993, the members thereof by unanimous vote
of those present adopted and approved the following resolutions:
"RESOLVED, that Andrew J. Donohue or Robert G. Zack, and
each of them, be, and the same, is hereby appointed the
attorney-in-fact and agent of James C. Swain, as Chairman of the
Funds, and George C. Bowen, as Vice President, Secretary and
Treasurer (Principal Financial and Accounting Officer) of the
Funds, to sign on behalf of such officers any and all
Registration Statements (including any post-effective amendments
to such Registration Statements) under the Securities Act of
1933 and the Investment Company Act of 1940 and any amendments
and supplements thereto, and to file the same, with all exhibits
thereto, with the Securities and Exchange Commission; and be it
further
RESOLVED, that Andrew J. Donohue or Robert G. Zack, and
each of them hereby is authorized, empowered and directed, in
the name and on behalf of the Funds, to take such additional
action and to execute and deliver such additional documents and
instruments as any of them may deem necessary or appropriate to
implement the provisions of the foregoing resolution, the
authority for the taking of such action and the execution and
delivery of such documents and instruments to be conclusively
evidenced thereby. These resolutions supersede and replace the
resolutions adopted June 22, 1993.
In witness whereof, the undersigned has hereunto set his hand this
26th day of October, 1993.
/s/ George C. Bowen
-----------------------------------
George C. Bowen, Secretary
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned constitutes and
appoints Robert G. Galli, Andrew J. Donohue or Robert G. Zack, and each
of them, his true and lawful attorneys-in-fact and agents, with full power
of substitution and resubstitution, for him and in his capacities as a
director of THE NEW YORK TAX-EXEMPT INCOME FUND, INC., a Maryland
corporation (the "Fund"), to sign on his behalf any and all Registration
Statements (including any post-effective amendments to Registration
Statements) under the Securities Act of 1933, the Investment Company Act
of 1940 and any amendments and supplements thereto, and other documents
in connection thereunder, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and agents, and
each of them, full power and authority to do and perform each and every
act and thing requisite and necessary to be done in and about the
premises, as fully as to all intents and purposes as he might or could do
in person, hereby ratifying and confirming all that said attorneys-in-fact
and agents, and each of them, may lawfully do or cause to be done by
virtue hereof.
Dated this 28th day of February, 1995.
/s/ William A. Baker
--------------------
William A. Baker
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned constitutes and
appoints Robert G. Galli, Andrew J. Donohue or Robert G. Zack, and each
of them, his true and lawful attorneys-in-fact and agents, with full power
of substitution and resubstitution, for him and in his capacities as a
director of THE NEW YORK TAX-EXEMPT INCOME FUND, INC., a Maryland
corporation (the "Fund"), to sign on his behalf any and all Registration
Statements (including any post-effective amendments to Registration
Statements) under the Securities Act of 1933, the Investment Company Act
of 1940 and any amendments and supplements thereto, and other documents
in connection thereunder, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and agents, and
each of them, full power and authority to do and perform each and every
act and thing requisite and necessary to be done in and about the
premises, as fully as to all intents and purposes as he might or could do
in person, hereby ratifying and confirming all that said attorneys-in-fact
and agents, and each of them, may lawfully do or cause to be done by
virtue hereof.
Dated this 28th day of February, 1995.
/s/ Charles Conrad, Jr.
-----------------------
Charles Conrad, Jr.
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned constitutes and
appoints Robert G. Galli, Andrew J. Donohue or Robert G. Zack, and each
of them, his true and lawful attorneys-in-fact and agents, with full power
of substitution and resubstitution, for him and in his capacities as a
director of THE NEW YORK TAX-EXEMPT INCOME FUND, INC., a Maryland
corporation (the "Fund"), to sign on his behalf any and all Registration
Statements (including any post-effective amendments to Registration
Statements) under the Securities Act of 1933, the Investment Company Act
of 1940 and any amendments and supplements thereto, and other documents
in connection thereunder, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and agents, and
each of them, full power and authority to do and perform each and every
act and thing requisite and necessary to be done in and about the
premises, as fully as to all intents and purposes as he might or could do
in person, hereby ratifying and confirming all that said attorneys-in-fact
and agents, and each of them, may lawfully do or cause to be done by
virtue hereof.
Dated this 28th day of February, 1995.
/s/ Raymond A. Kalinowski
-------------------------
Raymond A. Kalinowski
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned constitutes and
appoints Robert G. Galli, Andrew J. Donohue or Robert G. Zack, and each
of them, his true and lawful attorneys-in-fact and agents, with full power
of substitution and resubstitution, for him and in his capacities as a
director of THE NEW YORK TAX-EXEMPT INCOME FUND, INC., a Maryland
corporation (the "Fund"), to sign on his behalf any and all Registration
Statements (including any post-effective amendments to Registration
Statements) under the Securities Act of 1933, the Investment Company Act
of 1940 and any amendments and supplements thereto, and other documents
in connection thereunder, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and agents, and
each of them, full power and authority to do and perform each and every
act and thing requisite and necessary to be done in and about the
premises, as fully as to all intents and purposes as he might or could do
in person, hereby ratifying and confirming all that said attorneys-in-fact
and agents, and each of them, may lawfully do or cause to be done by
virtue hereof.
Dated this 28th day of February, 1995.
/s/ C. Howard Kast
------------------
C. Howard Kast
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned constitutes and
appoints Robert G. Galli, Andrew J. Donohue or Robert G. Zack, and each
of them, his true and lawful attorneys-in-fact and agents, with full power
of substitution and resubstitution, for him and in his capacities as a
director of THE NEW YORK TAX-EXEMPT INCOME FUND, INC., a Maryland
corporation (the "Fund"), to sign on his behalf any and all Registration
Statements (including any post-effective amendments to Registration
Statements) under the Securities Act of 1933, the Investment Company Act
of 1940 and any amendments and supplements thereto, and other documents
in connection thereunder, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and agents, and
each of them, full power and authority to do and perform each and every
act and thing requisite and necessary to be done in and about the
premises, as fully as to all intents and purposes as he might or could do
in person, hereby ratifying and confirming all that said attorneys-in-fact
and agents, and each of them, may lawfully do or cause to be done by
virtue hereof.
Dated this 28th day of February, 1995.
/s/ Robert M. Kirchner
----------------------
Robert M. Kirchner
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned constitutes and
appoints Robert G. Galli, Andrew J. Donohue or Robert G. Zack, and each
of them, his true and lawful attorneys-in-fact and agents, with full power
of substitution and resubstitution, for him and in his capacities as a
director of THE NEW YORK TAX-EXEMPT INCOME FUND, INC., a Maryland
corporation (the "Fund"), to sign on his behalf any and all Registration
Statements (including any post-effective amendments to Registration
Statements) under the Securities Act of 1933, the Investment Company Act
of 1940 and any amendments and supplements thereto, and other documents
in connection thereunder, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and agents, and
each of them, full power and authority to do and perform each and every
act and thing requisite and necessary to be done in and about the
premises, as fully as to all intents and purposes as he might or could do
in person, hereby ratifying and confirming all that said attorneys-in-fact
and agents, and each of them, may lawfully do or cause to be done by
virtue hereof.
Dated this 28th day of February, 1995.
/s/ Ned M. Steel
----------------
Ned M. Steel
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned constitutes and
appoints Robert G. Galli, Andrew J. Donohue or Robert G. Zack, and each
of them, his true and lawful attorneys-in-fact and agents, with full power
of substitution and resubstitution, for him and in his capacities as a
director of THE NEW YORK TAX-EXEMPT INCOME FUND, INC., a Maryland
corporation (the "Fund"), to sign on his behalf any and all Registration
Statements (including any post-effective amendments to Registration
Statements) under the Securities Act of 1933, the Investment Company Act
of 1940 and any amendments and supplements thereto, and other documents
in connection thereunder, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and agents, and
each of them, full power and authority to do and perform each and every
act and thing requisite and necessary to be done in and about the
premises, as fully as to all intents and purposes as he might or could do
in person, hereby ratifying and confirming all that said attorneys-in-fact
and agents, and each of them, may lawfully do or cause to be done by
virtue hereof.
Dated this 26th day of October, 1993.
/s/ James C. Swain
------------------
James C. Swain
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned constitutes and
appoints Robert G. Galli, Andrew J. Donohue or Robert G. Zack, and each
of them, his true and lawful attorneys-in-fact and agents, with full power
of substitution and resubstitution, for him and in his capacities as a
director of THE NEW YORK TAX-EXEMPT INCOME FUND, INC., a Maryland
corporation (the "Fund"), to sign on his behalf any and all Registration
Statements (including any post-effective amendments to Registration
Statements) under the Securities Act of 1933, the Investment Company Act
of 1940 and any amendments and supplements thereto, and other documents
in connection thereunder, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and agents, and
each of them, full power and authority to do and perform each and every
act and thing requisite and necessary to be done in and about the
premises, as fully as to all intents and purposes as he might or could do
in person, hereby ratifying and confirming all that said attorneys-in-fact
and agents, and each of them, may lawfully do or cause to be done by
virtue hereof.
Dated this 26th day of October, 1993.
/s/ George C. Bowen
-------------------
George C. Bowen
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000820090
<NAME> THE NEW YORK TAX-EXEMPT INCOME FUND, INC.
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> OCT-31-1994
<PERIOD-END> OCT-31-1994
<EXCHANGE-RATE> 1
<INVESTMENTS-AT-COST> 22031521
<INVESTMENTS-AT-VALUE> 22108111
<RECEIVABLES> 520705
<ASSETS-OTHER> 536
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 22629352
<PAYABLE-FOR-SECURITIES> 0
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<OTHER-ITEMS-LIABILITIES> 161590
<TOTAL-LIABILITIES> 161590
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<PAID-IN-CAPITAL-COMMON> 22332347
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<ACCUMULATED-NET-GAINS> (8451)
<OVERDISTRIBUTION-GAINS> 0
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<INTEREST-INCOME> 1765361
<OTHER-INCOME> 0
<EXPENSES-NET> 206746
<NET-INVESTMENT-INCOME> 1558615
<REALIZED-GAINS-CURRENT> (2690)
<APPREC-INCREASE-CURRENT> (2847845)
<NET-CHANGE-FROM-OPS> (1291920)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 1569169
<DISTRIBUTIONS-OF-GAINS> 598198
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 38818
<NET-CHANGE-IN-ASSETS> (3048645)
<ACCUMULATED-NII-PRIOR> 96085
<ACCUMULATED-GAINS-PRIOR> 566108
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 118617
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 206746
<AVERAGE-NET-ASSETS> 23852000
<PER-SHARE-NAV-BEGIN> 10.77
<PER-SHARE-NII> .65
<PER-SHARE-GAIN-APPREC> (1.18)
<PER-SHARE-DIVIDEND> .66
<PER-SHARE-DISTRIBUTIONS> .25
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 9.33
<EXPENSE-RATIO> .87
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
