SCHEDULE 14A
Information Required in Proxy Statement
(Rule 14a-101)
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
(Amendment No. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/X / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or 14a-12
OPPENHEIMER STRATEGIC INCOME FUND
(Name of Registrant as Specified in its Charter)
Philip T. Masterson
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
/ / $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) or Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is
calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.: Schedule 14A
(3) Filing Party: Philip T. Masterson
(4) Date Filed: September 12, 2000
230_Sched14A-Pre_0800.doc
<PAGE>
Oppenheimer Strategic Income Fund
[OppenheimerFunds Logo] Proxy for Shareholders Meeting To Be Held
November 13, 2000
Oppenheimer Strategic Income fund
6803 S. Tucson Way Your shareholder vote is important!
Englewood, CO 80112-3924
The undersigned shareholder of
Oppenheimer Strategic Income Fund (the
"Fund"), does hereby appoint Brian
Wixted, Robert Bishop, and Scott
Farrar, and each of them, as
attorneys-in-fact and proxies of the
undersigned, with full power of
substitution, to attend the Meeting of
Shareholders of the Fund to be held
November 13, 2000, at 6803 South Tucson
Way, Englewood, Colorado 80112 at 10:00
A.M, Mountain time, and at all
Adjournments thereof, and to vote the
shares held in the name of the
undersigned on the record date for said
meeting for the election of Trustees
and on the proposals specified below.
Said attorneys-in-fact shall vote in
accordance with their best judgment as
to any other matter.
Proxy solicited on behalf of the Board
of Trustees, which recommends a vote
FOR the election of all nominees for
Trustee and FOR each Proposal below.
The shares represented hereby will be
voted as indicated below or FOR if no
choice is indicated.
Your prompt response can save your Fund
money.
Please vote, sign and mail your proxy ballot (attached below) in the enclosed
postage-paid envelope today, no matter how many shares you own. A majority of
the Fund's shares must be represented in person or by proxy. Please vote your
proxy so your Fund can avoid the expense of another mailing.
Keep This Portion for Your Records
Detach and Return this Portion Only
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
<PAGE>
Oppenheimer Strategic Income fund
1. Election a) W. Armstrong g) R. Kalinowski For All
of Trustees Withhold All
(Proposal No. b) R. Avis h) C. Kast For All Except
1) c) G. Bowen i) R. Kirchner
Election of d) E. Cameron To withhold authority to vote
e) J. Fossel j) B. for any individual nominee,
f) S. Freedman Macaskill mark "For All Except" and
k) F.W. write the nominee's letter on
Marshall the line below.
l) J. Swain
to the contrary at left.
Vote On Proposals For Against Abstain
2. Ratification of selection of
Deloitte & Touche LLP as independent
auditors (Proposal No. 2)
3. Approval of a Revision to the
Fund's Investment Objective
(Proposal No. 3)
4. Approval of the Elimination or
Amendment of Certain Fundamental
Restrictions of the Fund
(Proposal No. 4)
a. Purchasing Securities on Margin
b. Making Short Sales
c. Purchasing Securities of Issuers
in which Officers or Trustees
have an Interest
d. Investing in Unseasoned Issuers
e. Investing in Oil, Gas, or Other
Mineral-Related Programs or Leases
f. Investing in a Company for the
Purpose of Acquiring Control
g. Hedging Strategies
h. Industry Concentration
5. Approval to change Three (3) of the
Fund's fundamental investment
restrictions to permit the Fund to
participate in an inter-fund lending
arrangement (Proposal No. 5)
6. Authorization to permit the Trustees
to adopt an Amended and Restated
Declaration of Trust (Proposal No. 6)
7. Approval of the new Class B 12b-1
Distribution and Service Plan and
Agreement (Class B Shareholders
only) (Proposal No. 7)
NOTE: Please sign exactly as your name(s) appears hereon. When signing as
custodian, attorney, executor, administrator, trustee, etc., please give your
full title as such. All joint owners should sign this proxy. If the account is
registered in the name of a corporation, partnership or other entity, a duly
authorized individual must sign on its behalf and give title.
Signature Date
Signature (Joint Owners) Date
230_Ballot-Proxy00.doc
<PAGE>
OPPENHEIMER STRATEGIC INCOME FUND
6803 South Tucson Way, Englewood, CO 80112
Notice Of Meeting Of Shareholders To Be Held
November 13, 2000
To the Shareholders of Oppenheimer Strategic Income Fund:
Notice is hereby given that a Meeting of the Shareholders (the "Meeting") of
Oppenheimer Strategic Income Fund (the "Fund"), will be held at 6803 South
Tucson Way, Englewood, Colorado, 80112, at 11:00 A.M., Mountain time, on
November 13, 2000.
During the Meeting, shareholders of the Fund will vote on the following
proposals:
1. To elect a Board of Trustees;
2. To ratify the selection of Deloitte & Touche LLP as the independent
auditor for the Fund for the fiscal year beginning October 1, 2000;
3. To approve a revision to the Fund's investment objective;
4. To approve the elimination or amendment of certain fundamental investment
restrictions of the Fund;
5. To approve changes to three (3) fundamental investment restrictions of the
Fund to permit inter-fund lending;
6. To authorize the Trustees to adopt an Amended and Restated Declaration of
Trust;
7. To approve the Fund's Class B 12b-1 Distribution and Service Plan and
Agreement (only Class B shareholders may vote on this proposal); and
8. To transact such other business as may properly come before the meeting,
or any adjournments thereof.
Shareholders of record at the close of business on August 24, 2000, are entitled
to vote at the meeting. The Proposals are more fully discussed in the Proxy
Statement. Please read it carefully before telling us, through your proxy or in
person, how you wish your shares to be voted. The Board of Trustees of the Fund
recommends a vote to elect each of the nominees as Trustee and in favor of each
Proposal. WE URGE YOU TO MARK, SIGN, DATE AND MAIL THE ENCLOSED PROXY PROMPTLY.
By Order of the Board of Trustees,
Andrew J. Donohue, Secretary
September 29, 2000
<PAGE>
PLEASE RETURN YOUR PROXY CARD PROMPTLY. YOUR VOTE IS IMPORTANT NO MATTER HOW
MANY SHARES YOU OWN.
230
<PAGE>
TABLE OF CONTENTS
Proxy Statement Page
Questions and Answers
Proposal 1: To Elect a Board of Trustees
Proposal 2: To ratify the selection of Deloitte & Touche LLP as the
independent auditor for the Fund for the fiscal year beginning
October 1, 2000
Proposal 3 To approve a revision to the Fund's investment objective
Introduction to Proposals 4 and 5:
Proposal 4: To approve the elimination or amendment of certain
fundamental investment restrictions of the Fund
Proposal 5: To approve changes to three (3) fundamental investment
restrictions of the Fund to permit inter-fund lending
Proposal 6: To authorize the Trustees to adopt an Amended and Restated
Declaration of Trust
Proposal 7: To approve the Fund's Class B 12b-1 Distribution and Service Plan
and Agreement (only Class B shareholders may vote on this proposal)
EXHIBITS
A: Amended and Restated Declaration of Trust
B: Amended and Restated Class B 12b-1 Distribution and Service Plan and
Agreement
<PAGE>
OPPENHEIMER STRATEGIC INCOME FUND
PROXY STATEMENT
QUESTIONS AND ANSWERS
Q. Who is Asking for My Vote?
A. Trustees of Oppenheimer Strategic Income Fund (the "Fund") have
asked that you vote on several matters at the Special Meeting of
Shareholders to be held on November 13, 2000.
Q. Who is Eligible to Vote?
A. Shareholders of record at the close of business on August 24, 2000
are entitled to vote at the Meeting or any adjourned meeting.
Shareholders are entitled to cast one vote for each matter presented
at the Meeting. The Notice of Meeting, proxy card and proxy
statement were mailed to shareholders of record on or about
September 29, 2000.
Q. On What Matters Am I Being Asked to Vote?
A. You are being asked to vote on the following proposals:
1. To elect a Board of Trustees;
2. To ratify the selection of Deloitte & Touche LLP as the independent
auditor for the Fund;
3. To approve a revision to the Fund's investment objective;
4. To approve the elimination or amendment of certain fundamental investment
restrictions of the Fund;
5. To approve changes to certain fundamental investment restrictions of the
Fund to permit inter-fund lending;
6. To authorize the Trustees to adopt an Amended and Restated Declaration of
Trust; and
7. To approve the Fund's Amended and Restated Class B 12b-1 Distribution
and Service Plan and Agreement (Class B shareholders only).
Q. How do the Trustees Recommend that I Vote?
A. The Trustees recommend that you vote:
1. FOR election of all nominees as Trustees;
2. FOR ratification of the selection of Deloitte & Touche LLP as the
independent auditor for the Fund;
3. FOR a revision to the Fund's investment objective;
4. FOR the elimination or amendment of each of the Fund's fundamental
investment restrictions proposed to be eliminated or amended;
5. FOR changes to the Fund's fundamental investment restrictions proposed for
change to permit inter-fund lending;
6. FOR authorization of the Trustees to adopt an Amended and Restated
Declaration of Trust; and
7. FOR the adoption of an Amended and Restated Class B 12b-1 Distribution and
Service Plan and Agreement.
Q. How Can I Vote?
A. You can vote in two (2) different ways:
o By mail, with the enclosed ballot
o In person at the Meeting
Whichever method you choose, please take the time to read the full text of the
proxy statement before you vote.
Q. How Will My Vote Be Recorded?
A. Proxy cards that are properly signed, dated and received at or prior
to the Meeting, or any adjournment thereof, will be voted as
specified. If you specify a vote for any of the proposals, your
proxy will be voted as indicated. If you sign and date the proxy
card, but do not specify a vote for one or more of the proposals,
your shares will be voted in favor of the Trustees recommendations.
Q. How Can I Revoke My Proxy?
A. You may revoke your proxy at any time before it is voted by
forwarding a written revocation or a later-dated proxy card to the
Fund that is received at or prior to the Meeting, or any adjournment
thereof, or attending the Meeting, or any adjournment thereof, and
voting in person.
Q. How Can I Get More Information About the Fund?
A. A copy of the Fund's annual report and semi-annual report dated
September 30, 1999 and March 31, 2000, respectively, have previously
been mailed to Shareholders. If you would like to have copies of the
Fund's most recent annual and semi-annual report sent to you free of
charge, please call us toll-free at 1.800.525.7048 or write to the
Fund at OppenheimerFunds Services, P.O. Box 5270 Denver Colorado
80217-5270.
Q. Whom Do I Call If I Have Questions?
A. Please call us at 1.800.525.7048
THIS PROXY STATEMENT IS DESIGNED TO FURNISH SHAREHOLDERS WITH THE INFORMATION
NECESSARY TO VOTE ON THE MATTERS COMING BEFORE THE MEETING. IF YOU HAVE ANY
QUESTIONS, PLEASE CALL US AT 1.800.525.7048.
<PAGE>
OPPENHEIMER STRATEGIC INCOME FUND
PROXY STATEMENT
Meeting of Shareholders
To Be Held November 13, 2000
This statement is furnished to the shareholders of Oppenheimer Strategic Income
Fund (the "Fund"), in connection with the solicitation by the Fund's Board of
Trustees of proxies to be used at a special meeting of shareholders (the
"Meeting") to be held at 6803 South Tucson Way, Englewood, Colorado, 80112, at
11:00 A.M., Mountain time, on November 13, 2000, or any adjournments thereof. It
is expected that the mailing of this Proxy Statement will be made on or about
September 29, 2000.
SUMMARY OF PROPOSALS
-------------------------------------------------------------------------------
Proposal Shareholder Voting
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
1. To Elect a Board of Trustees All
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
2. To Ratify the Selection of Deloitte & Touche LLP
as Independent Auditors for the Fund for the All
fiscal year beginning October 1, 2000
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
3. To Approve a Revision to the Fund's Investment All
Objective
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
4. To approve the elimination or amendment of
certain fundamental investment restrictions for
the Fund
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
a. Purchasing Securities on Margin All
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
b. Making Short Sales All
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
c. Purchasing Securities of Issuers in which All
Officers or Trustees have an Interest
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
d. Investing in Unseasoned Issuers All
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
e. Investing in Oil, Gas, or Other
Mineral-Related Programs or Leases
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
f. Investing in a Company for the Purpose of All
Acquiring Control
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
g. Hedging Strategies All
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
h. Industry Concentration
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
5. To Approve Changes to Three (3) of the Fund's
Fundamental Investment Restrictions to Permit
the Fund to Participate in an Inter-Fund Lending All
Arrangement
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
6. To Authorize the Trustees to adopt an Amended All
and Restated Declaration of Trust
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
7. To Approve the "New" Class B 12b-1 Distribution Class B Shareholders
and Service Plan and Agreement only
-------------------------------------------------------------------------------
PROPOSAL 1: ELECTION OF TRUSTEES
At the Meeting, twelve (12) Trustees are to be elected to hold office
until the next meeting of shareholders called for the purpose of electing
Trustees and until their successors are duly elected and shall have qualified.
The persons named as attorneys-in-fact in the enclosed proxy have advised the
Fund that unless a proxy instructs them to withhold authority to vote for all
listed nominees or any individual nominee, all validly executed proxies will be
voted by them for the election of the nominees named below as Trustees of the
Fund. As a Massachusetts business trust, the Fund does not contemplate holding
annual shareholder meetings for the purpose of electing Trustees. Thus, the
Trustees will be elected for indefinite terms until a special shareholder
meeting is called for the purpose of voting for Trustees and until their
successors are properly elected and qualified.
Each of the nominees (except for Messrs. Bowen, Cameron and Marshall and
Ms. Macaskill) currently serves as a Trustee of the Fund. All of the nominees
have consented to be named as such in this proxy statement and have consented to
serve as Trustees if elected.
Each nominee indicated below by an asterisk is an "interested person" (as
that term is defined in the Investment Company Act of 1940, referred to in this
Proxy Statement as the "1940 Act") of the Fund due to the positions indicated
with the Fund's investment advisor, OppenheimerFunds, Inc. (the "Manager") or
its affiliates, or other positions described. The beneficial ownership of Class
A shares listed below includes voting and investment control, unless otherwise
indicated below. All of the Trustees own shares in one or more of the
Denver-based funds in the OppenheimerFunds complex. If a nominee should be
unable to accept election, the Board of Trustees may, in its discretion, select
another person to fill the vacant position.
Name, Age, Address Fund Shares Beneficially Owned as of
And Five-Year Business Experience August 24, 2000 and % of Class Owned
William L. Armstrong (63) 0
11 Carriage Lane
Littleton, CO 80121
Trustee since 1999.
Chairman of the following private mortgage banking companies: Cherry Creek
Mortgage Company (since 1991), Centennial State Mortgage Company (since 1994),
The El Paso Mortgage Company (since 1993), Transland Financial Services, Inc.
(since 1997), and Ambassador Media Corporation (since 1984); Chairman of the
following private companies: Frontier Real Estate, Inc. (residential real estate
brokerage) (since 1994), Frontier Title (title insurance agency) (since 1995)
and Great Frontier Insurance (insurance agency) (since 1995); Director of the
following public companies: Storage Technology Corporation (computer equipment
company) (since 1991), Helmerich & Payne, Inc. (oil and gas drilling/production
company) (since 1992), UNUMProvident (insurance company) (since 1991); formerly
Director of the following public companies: International Family Entertainment
(television channel) (1991 - 1997) and Natec Resources, Inc. (air pollution
control equipment and services company) (1991 - 1995); formerly U.S. Senator
(January 1979 - January 1991). Director/trustee of 13 investment companies in
the OppenheimerFunds complex.
Robert G. Avis (69)* 0
10369 Clayton Road
St. Louis, MO 63131
Trustee since 1993.
Director and President of A.G. Edwards Capital, Inc. (general partner of private
equity funds); formerly, until March 2000, Chairman, President and Chief
Executive Officer of A.G. Edwards Capital, Inc.; formerly, until March 1999,
Vice Chairman and Director of A.G. Edwards and Vice Chairman of A.G. Edwards &
Sons, Inc. (its brokerage company subsidiary); until March 1999, Chairman of
A.G. Edwards Trust Company and A.G.E. Asset Management (investment advisor);
until March 2000, a Director of A.G. Edwards & Sons and A.G. Edwards Trust
Company. Director/trustee of 22 investment companies of the OppenheimerFunds
complex.
* Trustee who is an Interested Person of the Fund.
Name, Age, Address Fund Shares Beneficially Owned as of
And Five-Year Business Experience August 24, 2000 and % of Class Owned
George C. Bowen (64) 0
9224 Bauer Ct.
Lone Tree, CO 80124
Formerly (until April 1999) Mr. Bowen held the following positions: Senior Vice
President (since September 1987) and Treasurer (since March 1985) of the
Manager; Vice President (since June 1983) and Treasurer (since March 1985) of
OppenheimerFunds Distributor, Inc. ("Distributor"); Vice President (since
October 1989) and Treasurer (since April 1986) of HarbourView Asset Management
Corporation, an investment advisory subsidiary of the Manager; Senior Vice
President (since February 1992), Treasurer (since July 1991); Assistant
Secretary and a director (since December 1991) of Centennial Asset Management
Corporation, an investment advisory subsidiary of the Manager; President,
Treasurer and a director of Centennial Capital Corporation (since June 1989);
Vice President and Treasurer (since August 1978) and Secretary (since April
1981) of Shareholder Services, Inc.; Vice President, Treasurer and Secretary of
Shareholder Financial Services, Inc. (since November 1989), both are transfer
agent subsidiaries of the Manager; Assistant Treasurer of Oppenheimer
Acquisition Corp. (since March 1998), the Manager's parent holding company;
Treasurer of Oppenheimer Partnership Holdings, Inc. (since November 1989), a
holding company subsidiary of the Manager; Vice President and Treasurer of
Oppenheimer Real Asset Management, Inc., an investment advisory subsidiary of
the Manager; (since July 1996); Treasurer of OppenheimerFunds International
Ltd., and Oppenheimer Millennium Funds plc (since October 1997), off-shore
investment companies managed by the Manager. Director/trustee of 17 investment
companies in the OppenheimerFunds complex.
Edward L. Cameron (61) 0
Spring Valley Road
Morristown, NJ 07960
Formerly (from 1974-1999) a partner with PricewaterhouseCoopers LLP (an
accounting firm) and Chairman, Price Waterhouse LLP Global Investment Management
Industry Services Group (from 1994-1998). Director/trustee of 7 investment
companies in the OppenheimerFunds complex.
Jon S. Fossel (58) 0
810 Jack Creek Road
Ennis, MT 59729
Trustee since 1990.
Formerly (until October 1996) Chairman and a director of the Manager, President
and a director of Oppenheimer Acquisition Corp., and Shareholder Services, Inc.
and Shareholder Financial Services, Inc. Director/trustee of 20 investment
companies in the OppenheimerFunds complex.
Name, Age, Address Fund Shares Beneficially Owned as of
And Five-Year Business Experience August 24, 2000 and % of Class Owned
Sam Freedman (59) 0
4975 Lakeshore Drive
Littleton, CO 80123
Trustee since 1996.
Formerly (until October 1994) Chairman and Chief Executive Officer of
OppenheimerFunds Services, the transfer agent of the Fund and a division of the
Manager; Chairman, Chief Executive Officer and a director of Shareholder
Services, Inc.; Chairman, Chief Executive Officer and director of Shareholder
Financial Services, Inc.; Vice President and director of Oppenheimer Acquisition
Corp.; a director of OppenheimerFunds, Inc. Director/trustee of 22 investment
companies in the OppenheimerFunds complex.
Raymond J. Kalinowski (71) 0
44 Portland Drive
St. Louis, MO 63131
Trustee since 1988.
Formerly a director of Wave Technologies International, Inc. (a computer
products training company), self-employed consultant (securities matters) and
director/trustee of 22 investment companies in the OppenheimerFunds complex.
C. Howard Kast (78) 0
2552 East Alameda, #30
Denver, CO 80209
Trustee since 1988.
Formerly Managing Partner of Deloitte, Haskins & Sells (an accounting firm) and
director/trustee of 22 investment companies in the OppenheimerFunds complex.
Robert M. Kirchner (78) 0
7500 E. Arapahoe Road
Suite 250
Englewood, CO 80112
Trustee since 1988.
President of The Kirchner Company (management consultants) and director/trustee
of 22 investment companies in the OppenheimerFunds complex.
Bridget A. Macaskill* (52) 0
Two World Trade Center
New York, NY 10048
President (since June 1991), Chief Executive Officer (since September 1995) and
a Director (since December 1994) of the Manager; President and director (since
June 1991) of HarbourView Asset Management Corporation; Chairman and a director
of Shareholder Services, Inc. (since August 1994) and Shareholder Financial
Services, Inc. (since September 1995), President (since September 1995) and a
director (since October 1990) of Oppenheimer Acquisition Corp; President (since
September 1995) and a director (since November 1989) of Oppenheimer Partnership
Holdings, Inc.; a director of Oppenheimer Real Asset Management, Inc. (since
July 1996); President and a director (since October 1997) of OppenheimerFunds
International Ltd. and of Oppenheimer Millennium Funds plc; a director of
Prudential Corporation plc (a U.K. financial service company), a director (since
April 2000) of OppenheimerFunds Legacy Program, a charitable trust program
established by the Manager. President and director/trustee of 19 investment
companies in the OppenheimerFunds complex.
Name, Age, Address Fund Shares Beneficially Owned as of
And Five-Year Business Experience August 24, 2000 and % of Class Owned
F. William Marshall, Jr. (58) 0
87 Ely Road
Longmeadow, MA 01106
Formerly Chairman (1999) SIS & Family Bank, F.S.B. (formerly SIS Bank);
President, Chief Executive Officer and Director (1993-1999), SIS Bankcorp., Inc.
and SIS Bank (formerly, Springfield Institution for Savings); Executive Vice
President (1999), Peoples Heritage Financial Group, Inc.; Chairman and Chief
Executive Officer (1990-1993), Bank of Ireland First Holdings, Inc. and First
New Hampshire Banks; Trustee (since 1996), MassMutual Institutional Funds
(open-end investment company); Trustee (since 1996), MML Series Investment Fund
(open-end investment company).
James C. Swain* (66) 0
6803 South Tucson Way
Englewood, CO 80112
Trustee since 1988.
Vice Chairman of the Manager (since September 1988); formerly President and a
director of Centennial Asset Management Corporation and Chairman of the Board of
Shareholder Services, Inc. Director/trustee and Chairman of the Board of 22
investment companies in the OppenheimerFunds complex.
* Trustee who would be an Interested Person of the Fund.
Under the 1940 Act, the Board of Trustees may fill vacancies on the Board
of Trustees or appoint new Trustees only if, immediately thereafter, at least
two-thirds of the Trustees will have been elected by shareholders. Currently,
three of the Fund's eight Trustees have not been elected by shareholders. In
addition, the Board of Trustees has nominated Messrs. Bowen, Cameron and
Marshall to become independent Trustees of the Fund, and Ms. Macaskill to become
an interested Trustee of the Fund. In light of the fact that only five of the
Fund's Trustees have been elected by shareholders, it follows that a meeting of
shareholders needs to be held to elect Trustees.
Under the 1940 Act, the Fund is also required to call a meeting of
shareholders promptly to elect Trustees if at any time less than a majority of
the Trustees have been elected by shareholders. By holding a meeting to elect
Trustees at this time, the Fund may be able to delay the time at which another
shareholder meeting is required for the election of Trustees, which will result
in a savings of the costs associated with holding a meeting.
The primary responsibility for the management of the Fund rests with the
Board of Trustees. The Trustees meet regularly to review the activities of the
Fund and of the Manager, which is responsible for its day-to-day operations.
Four regular meetings and two special meetings of the Trustees were held during
the fiscal year ended September 30, 1999. Each of the incumbent Trustees was
present for at least 75% of the meetings held of the Board and of all committees
on which that Trustee served. The Trustees have appointed an Audit Committee,
comprised of Messrs. Kast (Chairman), and Kirchner, neither of whom is an
"interested person," as defined in the 1940 Act, of the Manager or the Fund. Mr.
Cameron will become a member of the audit committee if elected as a Trustee of
the Fund by shareholders. The Audit Committee met four times during the fiscal
year ended September 30, 1999. The Board of Trustees does not have a standing,
nominating or compensation committee. The Audit Committee furnishes the Board
with recommendations regarding the selection of the independent auditor. The
other functions of the Committee include (i) reviewing the methods, scope and
results of audits and the fees charged; (ii) reviewing the adequacy of the
Fund's internal accounting procedures and controls; (iii) establishing a
separate line of communication between the Fund's independent auditors and its
independent Trustees, and selecting and nominating the independent Trustees.
Each of the current Trustees also serves as a trustee or director of other
Denver-based funds in the OppenheimerFunds complex. The Trustees who are not
affiliated with the investment advisor ("Non-affiliated Trustees") are paid a
retainer plus a fixed fee for attending each meeting and are reimbursed for
expenses incurred in connection with attending such meetings. Each Fund in the
OppenheimerFunds complex for which they serve as a director or trustee pays a
share of these expenses.
The officers of the Fund are affiliated with the Manager. They and the
Trustees of the Fund who are affiliated with the Manager (currently Mr. Swain)
receive no salary or fee from the Fund. The remaining Trustees of the Fund
received the compensation shown below from the Fund during the fiscal year ended
September 30, 1999, and from all of the Denver-based Oppenheimer funds
(including the Fund) for which they served as Trustee, Director or Managing
General Partner during the calendar year ended December 31, 1999. Compensation
is paid for services in the positions below their names:
<PAGE>
-------------------------------------------------------------------------------
Trustee's Name and Aggregate Number of Boards Total
Within Oppenheimer
Funds Complex on Compensation
Which Trustee From all
Compensation Served as of Oppenheimer
Other Positions from Fund 1 12/31/99 Funds 2
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
William H. Armstrong $1,789 13 $14,542
Review Committee Member
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Robert G. Avis $10,946 22 $67,998
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William A. Baker3 $11,186 22 $67,998
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Jon. S. Fossel $11,110 20 $66,586
Review Committee Member
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Sam Freedman $11,912 22 $73,998
Chairman, Review
Committee
-------------------------------------------------------------------------------
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Raymond J. Kalinowski $11,789 22 $73,248
Former Audit Committee
Member
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-------------------------------------------------------------------------------
C. Howard Kast $12,580 22 $78,873
Chairman, Audit
Committee and Review
Committee Member
-------------------------------------------------------------------------------
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Robert M. Kirchner $11,069 22 $69,248
Audit Committee Member
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Ned M. Steel $10,946 22 $67,998
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1. For the Fund's fiscal year ended 09/30/99.
2. For the 1999 calendar year.
3. Effective July 1, 2000, Messrs. Baker and Steel resigned as Trustees of the
Fund.
The Board of Trustees has also adopted a Deferred Compensation Plan for
Non-affiliated Trustees that enables Trustees to elect to defer receipt of all
or a portion of the annual fees they are entitled to receive from the Fund. As
of September 30, 1999, none of the Trustees elected to do so. Under the plan,
the compensation deferred by a Trustee is periodically adjusted as though an
equivalent amount had been invested in shares of one or more Oppenheimer funds
selected by the Trustee. The amount paid to the Trustee under the plan will be
determined based upon the performance of the selected funds. Deferral of
Trustees' fees under the plan will not materially affect the Fund's assets,
liabilities or net income per share. The plan will not obligate the Fund to
retain the services of any Trustee or to pay any particular amount of
compensation to any Trustee.
Each officer of the Fund is elected by the Trustees to serve an annual
term. Information is given below about the executive officers who are not
Trustees of the Fund, including their business experience during the past five
years. Messrs. Donohue, Wixted, Bishop, Zack and Farrar serve in a similar
capacity with several other funds in the OppenheimerFunds complex.
Name, Age, Address and Five-Year Business Experience
Arthur P. Steinmetz, Vice President and Portfolio Manager since October 1989;
Age: 41
Two World Trade Center, New York, New York 10048-0203
Senior Vice President of the Manager (since March 1993); an officer of other
Oppenheimer funds.
David P. Negri, Vice President and Portfolio Manager since October 1989, Age:
46.
Two World Trade Center, 34th Floor, New York, New York 10048-0203
Senior Vice President of the Manager (since June 1989); an officer of other
Oppenheimer funds.
Andrew J. Donohue, Vice President and Secretary since 1996; Age: 50
Two World Trade Center, New York, NY 10048
Executive Vice President (since January 1993), General Counsel (since October
1991) and a Director (since September 1995) of the Manager; Executive Vice
President and General Counsel (since September 1993) and a director (since
January 1992) of the Distributor; Executive Vice President, General Counsel and
a director of HarbourView Asset Management Corporation, Shareholder Services,
Inc., Shareholder Financial Services, Inc. and (since September 1995)
Oppenheimer Partnership Holdings, Inc.; President and a director of Centennial
Asset Management Corporation (since September 1995); President, General Counsel
and a director of Oppenheimer Real Asset Management, Inc. (since July 1996);
General Counsel (since May 1996) and Secretary (since April 1997) of Oppenheimer
Acquisition Corp.; Vice President and a director of OppenheimerFunds
International Ltd. and Oppenheimer Millennium Funds plc (since October 1997);a
director (since April 2000) of OppenheimerFunds Legacy Program, a charitable
trust program sponsored by the Manager; an officer of other Oppenheimer funds.
Brian W. Wixted, Treasurer since April, 1999; Age: 40.
6803 South Tucson Way, Englewood, Colorado 80112
Senior Vice President and Treasurer (since April 1999) of the Manager; Treasurer
(since March 1999) of HarbourView Asset Management Corporation, Shareholder
Services, Inc., Shareholder Financial Services, Inc. and Oppenheimer Partnership
Holdings, Inc. (since April 1999); Assistant Treasurer of Oppenheimer
Acquisition Corp. (since April 1999); Assistant Secretary of Centennial Asset
Management Corporation (since April 1999); formerly Principal and Chief
Operating Officer, Bankers Trust Company - Mutual Fund Services Division (March
1995 - March 1999); Vice President and Chief Financial Officer of CS First
Boston Investment Management Corp. (September 1991 - March 1995); and Vice
President and Accounting Manager, Merrill Lynch Asset Management (November 1987
- September 1991).
Robert G. Zack, Assistant Secretary since 1988; Age: 51
Two World Trade Center, New York, NY 10048
Senior Vice President (since May 1985) and Associate General Counsel (since May
1981) of the Manager, Assistant Secretary of Shareholder Services, Inc. (since
May 1985), and Shareholder Financial Services, Inc. (since November 1989);
Assistant Secretary of OppenheimerFunds International Ltd. and Oppenheimer
Millennium Funds plc (since October 1997); an officer of other Oppenheimer
funds.
Robert J. Bishop, Assistant Treasurer since April 1994; Age: 41
6803 South Tucson Way, Englewood, CO 80112
Vice President of the Manager/Mutual Fund Accounting (since May 1996); an
officer of other Oppenheimer funds; formerly an Assistant Vice President of the
Manager/Mutual Fund Accounting (April 1994 - May 1996), and a Fund Controller
for the Manager.
Scott T. Farrar, Assistant Treasurer since April 1994; Age: 34
6803 South Tucson Way, Englewood, CO 80112
Vice President of the Manager/Mutual Fund Accounting (since May 1996); Assistant
Treasurer of Oppenheimer Millennium Funds plc (since October 1997); an officer
of other Oppenheimer funds; formerly an Assistant Vice President of the
Manager/Mutual Fund Accounting (April 1994 - May 1996), and a Fund Controller
for the Manager.
All officers serve at the pleasure of the Board.
As of August 24, 2000, the Trustees and officers as a group beneficially owned
31,007.597 shares, or less than 1% of the outstanding Class A, Class B, Class C
or Class Y shares of the Fund.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR THE ELECTION OF EACH NOMINEE AS
TRUSTEE. PROPOSAL 2: RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
The Board of Trustees of the Fund, including a majority of the Trustees
who are not "interested persons" (as defined in the 1940 Act) of the Fund or the
Manager, selected Deloitte & Touche LLP ("Deloitte") as auditors of the Fund for
the fiscal year beginning October 1, 2000. Deloitte also serves as auditors for
the Manager and certain other funds for which the Manager acts as investment
advisor. At the Meeting, a resolution will be presented for the shareholders'
vote to ratify the selection of Deloitte as auditors. Representatives of
Deloitte are not expected to be present at the Meeting but will have the
opportunity to make a statement if they desire to do so and will be available
should any matter arise requiring their presence.
THE BOARD OF TRUSTEES RECOMMENDS APPROVAL OF THE SELECTION OF DELOITTE AS
AUDITORS OF THE FUND.
PROPOSAL 3: ApprovAL OF a REVISION TO the Fund's Investment ObjectivE
The investment objective currently states that the Fund seeks high current
income by investing mainly in debt securities and by writing covered call
options on them. While the Manager would like the flexibility to write covered
call options on behalf of the Fund, it does not anticipate doing so in the
future to any significant degree. Therefore, the Board recommends that the
Fund's investment objective be revised to eliminate the reference to using
covered call options.
The current investment objective and proposed revised investment objective are
set forth below.
Current Proposed
The Fund seeks high current income by The Fund seeks high current income by
investing mainly in debt securities investing mainly in debt securities. and by
writing covered call options on them.
The Fund has not significantly used--and does not want to be required to
use--covered call option writing as an investment technique in managing the
Fund's assets. The Fund will continue to seek a high current income by investing
mainly in debt securities, and therefore, management of the Fund will not
change. In addition, writing covered call options on debt securities is not the
principal objective or focus of the Fund and is more akin to an investment
policy or strategy for achieving the Fund's objective. Accordingly, the Board
believes that elimination of that part of the Fund's investment objective
regarding covered call options on debt securities could increase that Fund's
flexibility in choosing investments and managing the portfolio.
THE BOARD OF TRUSTEES UNANIMOUSLY RECOMMENDS THAT YOU APPROVE THIS PROPOSAL
Introduction to Proposals 4 and 5
The Fund is subject to certain investment restrictions which govern the
Fund's investment activities. Under the 1940 Act, certain investment
restrictions are required to be "fundamental," which means that they can only be
changed by a shareholder vote. An investment company may designate additional
restrictions as fundamental, and it may also adopt "non-fundamental"
restrictions, which may be changed by the Trustees without shareholder approval.
The Fund has adopted certain fundamental investment restrictions that are set
forth in its Statement of Additional Information, which cannot be changed
without the requisite shareholder approval described below under "Further
Information about Voting at the Meeting." Restrictions that the Fund has not
specifically designated as being fundamental are considered to be
"non-fundamental" and may be changed by the Trustees without shareholder
approval.
Since the Fund was established, certain legal and regulatory requirements
applicable to registered investment companies (also referred to as "funds")
changed. For example, certain restrictions imposed by state laws and regulations
were preempted by the National Securities Markets Improvement Act of 1996
("NSMIA") and therefore are no longer applicable to funds. As a result of NSMIA,
the Fund currently is subject to several fundamental investment restrictions
that are either more restrictive than required under current law, or which are
no longer required at all. A number of the fundamental restrictions that the
Fund has adopted in the past also reflect regulatory, business or industry
conditions, practices or requirements which at one time, for a variety of
reasons, led to the imposition of limitations on the management of the Fund's
investments. With the passage of time, the development of new practices and
changes in regulatory standards, several of these fundamental restrictions are
considered by Fund management to be unnecessary or unwarranted. In addition
other fundamental restrictions reflect federal regulatory requirements which
remain in effect, but which are not required to be stated as fundamental
restrictions. Accordingly, the Trustees recommend that the Fund's shareholders
approve the amendment or elimination of certain of the Fund's current
fundamental investment restrictions. Certain sub-proposals request that
shareholders approve the elimination of a fundamental investment restriction. If
those sub-proposals are approved by shareholders, the Board may adopt
non-fundamental investment policies or modify existing non-fundamental
investment policies at any time without shareholder approval. The purpose of
each sub-proposal is to provide the Fund with the maximum flexibility permitted
by law to pursue its investment objectives and policies and to standardize the
Fund's policy in this area to one which is expected to become standard for all
Oppenheimer funds. The proposed standardized restrictions satisfy current
federal regulatory requirements and are written to provide flexibility to
respond to future legal, regulatory, market or technical changes.
By both standardizing and reducing the total number of investment
restrictions that can be changed only by a shareholder vote, the Trustees
believe that it will assist the Fund and the Manager in maintaining compliance
with the various investment restrictions to which the Oppenheimer funds are
subject, and that the Fund will be able to minimize the costs and delays
associated with holding future shareholder meetings to revise fundamental
investment restrictions that have become outdated or inappropriate. The Trustees
also believe that the investment advisor's ability to manage the Fund's assets
in a changing investment environment will be enhanced, and that investment
management opportunities will be increased by these changes.
The proposed standardized changes will not affect the Fund's investment
objective. Although the proposed changes in fundamental investment restrictions
will provide the Fund greater flexibility to respond to future investment
opportunities, the Board does not anticipate that the changes, individually or
in the aggregate, will result in a material change in the level of investment
risk associated with investment in the Fund. The Board does not anticipate that
the proposed changes will materially affect the manner in which the Fund is
managed. If the Board determines in the future to change materially the manner
in which the Fund is managed, the prospectus will be amended.
The recommended changes are specified below. Shareholders are requested to
vote on each Sub-Proposal in Proposal 4 separately. If approved, the effective
date of these Proposals may be delayed until the Fund's updated Prospectus
and/or Statement of Additional Information can reflect the changes. If any
Sub-Proposal in Proposal 4 is not approved or if Proposal 5 is not approved, the
fundamental investment restriction covered in that Sub-Proposal or Proposal will
remain unchanged.
PROPOSAL 4: TO APPROVE THE ELIMINATION OF CERTAIN FUNDAMENTAL INVESTMENT
RESTRICTIONS OF THE FUND
A. Purchasing Securities on Margin
The Fund currently is subject to a fundamental investment restriction
prohibiting it from purchasing securities on margin. The existing restriction is
not required to be a fundamental investment restriction under the 1940 Act. It
is proposed that this current fundamental restriction prohibiting purchases of
securities on margin be eliminated. The current fundamental investment
restriction is set forth below.
Current
The Fund cannot buy securities on margin. However, the Fund can make
margin deposits in connection with its use of hedging instruments.
Margin purchases involve the purchase of securities with money borrowed
from a broker. "Margin" is the cash or eligible securities that the borrower
places with a broker as collateral against the loan. The Fund's current
fundamental investment restriction prohibits it from purchasing securities on
margin, except to obtain such short-term credits as may be necessary for the
clearance of transactions. Policies of the SEC allow mutual funds to make
initial and variation margin payments in connection with the purchase and sale
of futures contracts and options on futures contracts. In the futures markets,
"margin" payments are akin to a "performance bond," rather than a loan to
purchase securities as is the case in the securities markets. As a result,
futures margins typically range from 2-5% of the value of the underlying
contract and are marked-to-market on a daily basis.
Elimination of this fundamental investment restriction is unlikely to
affect the management of the Fund. The 1940 Act prohibitions on margin purchases
will continue to apply to the Fund. Accordingly, the Fund will be able to obtain
such short-term credits as may be necessary for clearance of transactions.
Elimination of this restriction will not affect the Fund's ability to purchase
securities on margin.
B. Making Short Sales
The Fund is currently subject to a fundamental investment restriction
prohibiting it from engaging in short sales. The existing policy is not required
to be a fundamental investment policy under the 1940 Act. It is proposed that
this current fundamental policy prohibiting the Fund from making short sales be
eliminated. The current fundamental investment policy is set forth below.
Current
The Fund cannot make short sales of securities or maintain a short
position, unless at all times when a short position is open the Fund
owns an equal amount of those securities, or by virtue of ownership of
other securities has the right to obtain an equal amount of the
securities sold short without payment of further consideration.
In a short sale, an investor sells a borrowed security with a
corresponding obligation to the lender to return the identical security. In an
investment technique known as a short sale "against-the-box," an investor sells
short while owning the same securities in the same amount, or having the right
to obtain equivalent securities. The investor could have the right to obtain
equivalent securities, for example, through ownership of options or convertible
securities.
Elimination of this fundamental investment restriction is unlikely to
affect the management of the Fund. The 1940 Act prohibitions on short sales will
continue to apply to the Fund. Accordingly, the Fund will be able to sell
securities short provided the Fund maintains the asset coverage as required by
the 1940 Act.
C. Purchasing Securities of Issuers in which Officers or Trustees Have An
Interest.
The Fund is currently subject to a fundamental investment restriction
prohibiting it from purchasing the securities of an issuer if the officers and
trustees of the Fund or the Manager individually own 1/2 of 1% of such
securities and together own more than 5% of such securities. It is proposed that
the current fundamental restriction be eliminated. The current fundamental
investment restriction is set forth below.
Current
The Fund cannot invest in or hold securities of any issuer if officers,
Directors and Trustees of the Fund or the Manager individually
beneficially own more than 1/2 of 1% of the securities of that issuer
and together own more than 5% of the securities of that issuer.
This restriction was originally adopted to address state or "Blue Sky"
requirements in connection with the registration of shares of the Fund for sale
in a particular state or states. The Board recommends that shareholders
eliminate this fundamental investment restriction. Under NSMIA, this restriction
no longer applies to the Fund. In addition, the Board believes that its
elimination could increase the Fund's flexibility when choosing investments in
the future.
D. Investing in Unseasoned Issuers.
The Fund is currently subject to a fundamental investment restriction
limiting its investment in securities of issuers that have been in operation
less than three years ("unseasoned issuers"). It is proposed that the current
fundamental restriction be eliminated. The current fundamental restriction is
set forth below.
Current
The Fund cannot invest more than 5% of its total assets in securities
of issuers (including their predecessors) that have been in operation
less than three years.
This restriction was originally adopted to address state or "Blue Sky"
requirements in connection with the registration of shares of the Fund for sale
in a particular state or states. The Board recommends that shareholders
eliminate this fundamental investment restriction. Under NSMIA, this restriction
no longer applies to the Fund. In addition, the Board believes that its
elimination could increase the Fund's flexibility when choosing investments in
the future.
E. Investing in Oil, Gas or Other Mineral Exploration or Development Programs.
The Fund is currently subject to a fundamental investment restriction
prohibiting it from investing in mineral-related programs or leases. It is
proposed that the current fundamental restriction be eliminated. The current
fundamental restriction is set forth below.
Current
The Fund cannot invest in oil, gas or other mineral exploration or
development programs.
This restriction was originally adopted to address state or "Blue Sky"
requirements in connection with the registration of shares of the Fund for sale
in a particular state or states. The Board recommends that shareholders
eliminate this fundamental investment restriction. Under NSMIA, this restriction
no longer applies to the Fund. In addition, the Board believes that its
elimination could increase the Fund's flexibility when choosing investments in
the future.
F. Investing in a Company for the Purpose of Acquiring Control
The Fund is currently subject to a fundamental investment restriction
prohibiting it form investing in portfolio companies for the purpose of
acquiring control. It is proposed that the current fundamental investment
restriction be eliminated.
Although the Fund has no intention of investing for the purpose of
acquiring control of a company, it believes that this restriction is unnecessary
and may, in fact, reduce possible investment opportunities. The current
fundamental investment restriction is set forth below:
Current
The Fund cannot invest in the securities of any company for the purpose
of exercising management control.
Elimination of the above fundamental investment restriction is not
expected to have a significant impact on the Fund's investment practices or
management because the Fund currently has no intention of investing in companies
for the purpose of obtaining or exercising management or control. A fund might
be considered to be investing for control if it purchases a large percentage of
the securities of a single issuer. The restriction was intended to ensure that a
mutual fund would not be engaged in the business of managing another company.
This restriction was originally adopted to address state or "Blue Sky"
requirements in connection with the registration of shares of the Fund for sale
in a particular state or states. The Board recommends that shareholders
eliminate this fundamental investment restriction. Under NSMIA, this restriction
no longer applies to the Fund. In addition, the Board believes that its
elimination could increase the Fund's flexibility when choosing investments in
the future.
G. Hedging Strategies.
The Fund currently is subject to a fundamental investment restriction
prohibiting it from purchasing real estate or physical commodities. Although
this policy does not prohibit the Fund from investing in hedging instruments or
structured notes whose returns are linked to the returns of physical commodities
or currencies, the existing policy is not required to be fundamental under the
1940 Act. The Fund's Trustees propose that the Fund's current fundamental policy
be changed to a non-fundamental policy and amended as indicated below.
Current
The Fund cannot buy or sell real estate, commodities or commodity
contracts. However, the Fund can purchase debt securities secured by
real estate or interests in real estate, or issued by companies,
including real estate investment trusts, that invest in real estate or
interests in real estate. The Fund can also buy and sell hedging
instruments.
Proposed
The Fund cannot invest in real estate, physical commodities or
commodity contracts. However, the Fund may: (1) invest in debt
securities secured by real estate or interests in real estate, or
issued by companies, including real estate investment trusts, that
invest in real estate or interests in real estate; (2) invest in
hedging instruments permitted by any of its other investment policies;
and (3) buy and sell options, futures, securities or other instruments
backed by, or the investment return from which is linked to changes in
the price of, physical commodities or currencies.
The purpose of this proposal is to clarify the Fund's permitted
investments and to conform the Fund's policy in this area to one that is
expected to become standard for all Oppenheimer funds. The Trustees believe that
standardized policies will assist the Fund and the Manager in maintaining
compliance with the various investment restrictions to which the Oppenheimer
funds are subject.
H. Industry Concentration.
The Fund currently has a fundamental investment restriction prohibiting it
from "concentrating" its investments, that is, investing "more than 25%" of its
total assets in any one industry, excluding securities issued or guaranteed by
the United States government or its agencies and instrumentalities. Consistent
with how the staff of the Securities and Exchange Commission interprets
"concentration" under the Investment Company Act, the Fund interprets this
policy to apply to "25% or more" of its total assets rather than "more than
25%". The Fund's Trustees propose that the Fund's industry concentration policy
remain fundamental, but be amended to state that it applies to "25% or more" of
the Fund's total assets. The current and proposed policies are stated below.
Current
The Fund cannot invest more than 25% (the Fund interprets this policy
to apply to "25% or more" of its total assets) of its total assets in
any one industry. That limit does not apply to securities issued or
guaranteed by the U.S. government or its agencies and
instrumentalities. Each foreign government is treated as an "industry"
and utilities are divided according to the services they provide.
Proposed
The Fund cannot invest 25% or more of its total assets in any one
industry. That limit does not apply to securities issued or guaranteed
by the U.S. government or its agencies and instrumentalities. Each
foreign government is treated as an "industry" and utilities are
divided according to the services they provide.
The purpose of this proposal is to clarify the Fund's fundamental policy
on industry concentration and to conform the Fund's policy in this area to one
that is expected to be standard for all Oppenheimer funds. The Trustees believe
that standardized policies will assist the Fund and the Manager in maintaining
compliance with the various investment restrictions to which the Oppenheimer
funds are subject.
THE BOARD OF TRUSTEES UNANIMOUSLY RECOMMENDS THAT YOU APPROVE EACH SUB-PROPOSAL
DESCRIBED ABOVE
PROPOSAL 5: TO APPROVE CHANGES TO CERTAIN FUNDAMENTAL INVESTMENT RESTRICTIONS OF
THE FUND
Proposal number 5 is composed of two separate proposed changes to the
Fund's current investment policies. The Board believes that under appropriate
circumstances, the Fund should be permitted to lend money to, and borrow money
from other Oppenheimer mutual funds (referred to as "inter-fund lending") and
pledge its assets as collateral for the loan as explained in the following
proposals. Both of these proposals must be approved together if the inter-fund
lending arrangements described below are to be implemented, and shareholders are
requested to vote to approve or disapprove both together.
A. Borrowing.
The 1940 Act imposes certain restrictions on the borrowing activities of
registered investment companies. The restrictions on borrowing are generally
designed to protect shareholders and their investment by restricting a fund's
ability to subject its assets to claims of creditors who might have a claim to
the fund's assets that would take priority over the claims of shareholders. A
fund's borrowing restriction must be a fundamental investment restriction.
Under the 1940 Act, a fund may borrow from banks up to one-third of its
total assets (including the amount borrowed). In addition, a fund may borrow up
to 5% of its total assets for temporary purposes from any person. Section 18 of
the 1940 Act deems a loan temporary if it is repaid within 60 days and not
extended or renewed. Funds typically borrow money to meet redemptions in order
to avoid forced, unplanned sales of portfolio securities. This technique allows
a fund greater flexibility to buy and sell portfolio securities for investment
or tax considerations, rather than for cash flow considerations.
The Board proposes that the Fund's restriction on borrowing be amended to permit
the Fund to borrow from banks and/or affiliated investment companies up to
one-third of its total assets (including the amount borrowed). As amended, the
Fund's restriction on borrowing would remain a fundamental restriction
changeable only by the vote of a majority of the outstanding voting securities
of the Fund as defined in the 1940 Act.
The current and proposed fundamental investment restrictions are set forth
below.
Current Proposed
The Fund cannot borrow money in The Fund cannot borrow money in excess
excess of 50% of the value of its of 50% of the value of its total
total assets (as a non-fundamental assets (as a non-fundamental operating
operating policy, that limit is policy, that limit is applied to 50%
applied to 50% of the Fund's net of the Fund's net assets). The Fund
assets). The Fund may only borrow may borrow only from banks and/or
subject to the 300% asset coverage affiliated investment companies. With
requirement set forth in its policy respect to this fundamental policy,
on borrowing. the Fund can borrow only if it
maintains a 300% ratio of assets to
borrowings at all times in the manner
set forth in the Investment Company Act
of 1940.
The current restriction on borrowing is silent with respect to the
permissible entities that the Fund may borrow from. The Board proposes that this
restriction be amended to permit the Fund to borrow money from banks and/or from
affiliated investment companies provided such borrowings do not exceed 50% of
its total assets and the Fund maintains the 300% asset coverage required under
the 1940 Act.
Permitting the Fund to borrow money from affiliated funds (for example,
those funds in the OppenheimerFunds complex) would afford the Fund the
flexibility to use the most cost-effective alternative to satisfy its borrowing
requirements. The Trustees believe that the Fund may be able to obtain lower
interest rates on its borrowings from affiliated funds than it would through
traditional bank channels.
Current law prohibits the Fund from borrowing from other funds of the
OppenheimerFunds complex. Before an inter-fund lending arrangement can be
established, the Fund must obtain approval from the SEC. Implementation of
inter-fund lending would be accomplished consistent with applicable regulatory
requirements, including the provisions of any order the SEC might issue to the
Fund and other Oppenheimer funds. The Fund has not yet decided to apply for such
an order and there is no guarantee any such order would be granted, even if
applied for. Until the SEC has approved an inter-fund lending application, the
Fund will not engage in borrowing from affiliated investment companies.
The Fund will not borrow from affiliated funds unless the terms of the
borrowing arrangement are at least as favorable as the terms the Fund could
otherwise negotiate with a third party. To assure that the Fund will not be
disadvantaged by borrowing from an affiliated Fund, certain safeguards may be
implemented. An example of the types of safeguards which the SEC may require may
include some or all of the following: the fund will not borrow money from
affiliated funds unless the interest rate is more favorable than available bank
loan rates; the Fund's borrowing from affiliated funds must be consistent with
its investment objective and investment policies; the loan rates will be
determined by a pre-established formula based on quotations from independent
banks; if the Fund has outstanding borrowings from all sources greater than 10%
of its total assets, then the Fund must secure each additional outstanding
inter-fund loan by the pledge of segregated collateral; the Fund cannot borrow
from an affiliated fund in excess of 125% of its total redemptions for the
preceding seven days; each inter-fund loan may be repaid on any day by the Fund;
and the Trustees will be provided with a report of all inter-fund loans and the
Trustees will monitor all such borrowings to ensure that the Fund's
participation is appropriate.
In determining to recommend the proposed amendment to shareholders for
approval, the Board considered the possible risks to the Fund from participation
in the inter-fund lending program. There is a risk that a borrowing fund could
have a loan called on one days' notice. In that circumstance, the borrowing fund
might have to borrow from a bank at a higher interest cost if money to lend were
not available from another Oppenheimer fund. The Board considered that the
benefits to the Fund of participating in the program outweigh the possible risks
to the Fund from such participation.
Shareholders are being asked to approve an amendment to the Fund's
fundamental policy on borrowing and are also being asked to approve an amendment
to the Fund's fundamental restriction on lending (paragraph B "Lending," below).
If this proposal 5 is adopted, the Fund, subject to its investment objectives
and policies and SEC approval, will be able to participate in the inter-fund
lending program as both a lender and a borrower.
B. Lending.
Under the 1940 Act, a fund's restriction regarding lending must be
fundamental. Under its current restriction, the Fund is permitted to enter into
repurchase agreements, which may be considered a loan, and is permitted to lend
its portfolio securities.
It is proposed that the current fundamental restriction be amended to
permit the Fund to lend its assets to affiliated investment companies (for
example, other funds in the OppenheimerFunds complex). Before an inter-fund
lending arrangement can be established, the Fund must obtain approval from the
SEC. Implementation of inter-fund lending would be accomplished consistent with
applicable regulatory requirements, including the provisions of any order the
SEC might issue to the Fund and other Oppenheimer funds. The Fund has not yet
decided to apply for such an order and there is no guarantee any such order
would be granted, even if applied for. Until the SEC has approved an inter-fund
lending application, the Fund will not engage in lending with affiliated
investment companies. As amended, the restriction on lending for the Fund would
remain a fundamental restriction changeable only by the vote of a majority of
the outstanding voting securities as defined in the 1940 Act of the Fund. The
current and proposed fundamental investment restrictions are set forth below.
Current Proposed
The Fund cannot make loans. However, The Fund cannot make loans except (a)
it can invest in debt obligations in through lending of securities, (b)
accordance with its investment through the purchase of debt instruments
objective and policies. The Fund or similar evidences of indebtedness,
may also lend its portfolio (c) through an interfund lending program
securities as set forth in its with other affiliated funds, provided
policy on securities lending and may that no such loan may be made if, as a
enter into repurchase agreements. result, the aggregate of such loans
would exceed 33 1/3% of the value of its
total assets (taken at market value at
the time of such loans), and (d) through
repurchase agreements.
The reason for lending money to an affiliated fund is that the lending
fund may be able to obtain a higher rate of return than it could from interest
rates on alternative short-term investments. To assure that the Fund will not be
disadvantaged by making loans to affiliated funds, certain safeguards will be
implemented. Examples of the types of safeguards which the SEC may require may
include some or all of the following: the Fund will not lend money to affiliated
funds unless the interest rate on such loan is determined to be reasonable under
the circumstances; the Fund may not make interfund loans in excess of 7.5% of
its net assets; an interfund loan to any one affiliated fund shall not exceed 5%
of the Fund's net assets; an interfund loan may not be outstanding for more than
seven days; each interfund loan may be called on one business days' notice; and
the Manager will provide the Trustees reports on all inter-fund loans
demonstrating that the Fund's participation is appropriate and that the loan is
consistent with its investment objectives and policies.
When the Fund lends assets to another affiliated fund, the lending fund is
subject to credit risks if the borrowing fund fails to repay the loan. The
Trustees believe that the risk is minimal.
C. Diversification
The Fund is currently subject to a fundamental investment restriction
concerning the diversification of Fund assets. It is proposed that this current
restriction be amended to exclude securities of other investment companies from
the restriction. As amended, the restriction would remain fundamental,
changeable only by the vote of a majority of the outstanding voting securities
of that Fund as defined in the 1940 Act. The current and proposed fundamental
investment restrictions are set forth below.
Current
The Fund cannot buy securities issued or guaranteed by any one issuer
if more than 5% of its total assets would be invested in securities of
that issuer or it would then own more than 10% of that issuer's voting
securities. That restriction applies only to 75% of the Fund's total
assets. The limit does not apply to securities issued by the U.S.
Government or any of its agencies or instrumentalities.
Proposed
The Fund cannot buy securities issued or guaranteed by any one issuer
if more than 5% of its total assets would be invested in securities of
that issuer or it would then own more than 10% of that issuer's voting
securities. This limit applies to 75% of the Fund's total assets. The
limit does not apply to securities issued by the U.S. Government or any
of its agencies or instrumentalities, or securities of other investment
companies.
The percentage limits in the current and proposed fundamental investment
restrictions are imposed by the 1940 Act. It is proposed that the current
restriction be amended to permit the Fund to lend its assets to affiliated
investment companies (for example, other funds in the OppenheimerFunds complex),
as discussed previously in Paragraph B of Proposal 4 "Lending". Although this
change would permit the Fund to enter into a fund of funds arrangement as
permitted by an SEC exemptive order to which the Fund is a party, the Fund does
not anticipate participating in a fund of funds arrangement. In fact, the Fund
currently has a non-fundamental operating policy prohibiting it from investing
in securities of other investment companies, unless it acquires them as part of
a merger, consolidation or acquisition of assets. A fund of funds arrangement
may result in the duplication of expenses.
THE BOARD OF TRUSTEES UNANIMOUSLY RECOMMENDS THAT YOU APPROVE THIS PROPOSAL
PROPOSAL 6: TO AUTHORIZE THE TRUSTEES TO ADOPT AN AMENDED AND
RESTATED DECLARATION OF TRUST
The Board of Trustees has approved and recommends that the shareholders of the
Trust authorize them to adopt and execute the Amended and Restated Declaration
of Trust for the Trust in the form attached to this Proxy Statement as Exhibit A
(New Declaration of Trust). The attached New Declaration of Trust has been
marked to show changes from the Trust's existing Declaration of Trust (Current
Declaration of Trust). The New Declaration of Trust is a more
modern form of trust instrument for a Massachusetts business trust, and going
forward, will be used as the standard Declaration of Trust for all new
OppenheimerFunds Massachusetts business trusts.
Adoption of the New Declaration of Trust will not result in any changes in the
Fund's Trustees or officers or in the investment policies and shareholder
services described in the Fund's current prospectus.
Generally, a majority of the Trustees may amend the Current Declaration of Trust
when authorized by a "majority of the outstanding voting securities" (as defined
in the 1940 Act) of the Trust. The Trustees approved the form of the New
Declaration of Trust and authorized the submission of the New Declaration of
Trust to the Trust's shareholders for their authorization at this Meeting.
The New Declaration of Trust amends the Current Declaration of Trust in a number
of significant ways. The following discussion summarizes some of the more
significant amendments to the Current Declaration of Trust effected by the New
Declaration of Trust.
In addition to the changes described below, there are other substantive and
stylistic differences between the New Declaration of Trust and the Current
Declaration of Trust. The following summary is qualified in its entirety by
reference to the New Declaration of Trust itself, which is attached as Exhibit A
to this Proxy Statement.
Significant Changes Effected by the New Declaration of Trust.
Reorganization of the Trust or Its Series or Classes. Unlike the Current
Declaration of Trust, the New Declaration of Trust generally permits the
Trustees, subject to applicable Federal and state law, to reorganize the Trust
or any of its series or classes into a newly formed entity without shareholder
approval. The Current Declaration of Trust requires shareholder approval in
order to reorganize the Trust or any of its series. Currently, the Fund is the
sole series of the Trust.
Under certain circumstances, it may not be in the shareholders' interest to
require a shareholder meeting to permit the Trust or a series of the Trust to
reorganize into a newly formed entity. For example, in order to reduce the cost
and scope of state regulatory constraints or to take advantage of a more
favorable tax treatment offered by another state, the Trustees may determine
that it would be in the shareholders' interests to reorganize the Trust or a
series of the Trust to domicile it in another state or to change its legal form.
Under the Current Declaration of Trust, the Trustees cannot effectuate such a
potentially beneficial reorganization without first conducting a shareholder
meeting and incurring the attendant costs and delays. In contrast, the New
Declaration of Trust gives the Trustees the flexibility to reorganize the Trust
or any of its series into a newly formed entity and achieve potential
shareholder benefits without incurring the delay and costs of a proxy
solicitation. Such flexibility should help to assure that the Trust operates
under the most appropriate form of organization. The Trustees have no intention
at this time of reorganizing the Trust into a newly formed entity.
Before allowing a trust or a series reorganization to proceed without
shareholder approval, the Trustees have a fiduciary responsibility to first
determine that the proposed transaction is in the shareholders' interest. Any
exercise of the Trustees' increased authority under the New Declaration of Trust
is also subject to any applicable requirements of the 1940 Act and Massachusetts
law. Of course, in all cases, the New Declaration of Trust would require that
shareholders receive written notification of any transaction.
The New Declaration of Trust does not give the Trustees the authority to merge a
series with another operating mutual fund or sell all or a portion of a series'
assets to another operating mutual fund without first seeking shareholder
approval. Under the New Declaration of Trust, shareholder approval is still
required for these transactions.
Termination of the Trust or its Series or Classes. Unlike the Current
Declaration of Trust, the New Declaration of Trust generally permits the
Trustees, subject to applicable Federal and state law, to terminate the Trust or
any of its series or classes of shares without shareholder approval, provided
the Trustees determine that such action is in the best interest of shareholders
affected. Affected shareholders would receive written notice of any such
termination. The Trustees have no current intentions of terminating the Trust or
any class of shares.
Under certain circumstances, it may not be in the shareholders' interest to
require a shareholder meeting to permit the Trustees to terminate the Trust or a
series or class of shares. For example, a series may have insufficient assets to
invest effectively or a series or a class of shares may have excessively high
expense levels due to operational needs. Under such circumstances, absent viable
alternatives, the Trustees may determine that terminating the series or class of
shares is in the shareholders' interest and the only appropriate course of
action. The process of obtaining shareholder approval of the series' or classes'
termination may, however, make it more difficult to complete the series' or
classes' liquidation and termination and, in general, will increase the costs
associated with the termination. In such a case, it may be in the shareholders'
interest to permit the series' or classes' termination without incurring the
costs and delays of a shareholder meeting.
As discussed above, before allowing the Trust or a series or class to terminate
without shareholder approval, the Trustees have a fiduciary responsibility to
first determine that the proposed transaction is in the shareholders' interest.
Any exercise of the Trustees' increased authority under the New Declaration of
Trust is also subject to any applicable requirements of the 1940 Act and
Massachusetts law, and shareholders' receipt of written notification of the
transaction.
Future Amendments of the Declaration of Trust. The New Declaration of Trust
permits the Trustees, with certain exceptions, to amend the Declaration of Trust
without shareholder approval. Under the New Declaration of Trust, shareholders
generally have the right to vote on any amendment affecting their right to vote,
on any amendment affecting the New Declaration of Trust's amendment provisions,
on any amendment affecting the shareholders' rights to indemnification, and on
any amendment affecting the shareholders' rights to vote on the merger or sale
of the Trusts', series', or classes' assets to another issuer. The Current
Declaration of Trust, on the other hand, generally gives shareholders the
exclusive power to amend the Declaration of Trust with certain limited
exceptions. By allowing amendment of the Declaration of Trust without
shareholder approval, the New Declaration of Trust gives the Trustees the
authority to react quickly to future contingencies. As mentioned above, such
increased authority remains subordinate to the Trustees' continuing fiduciary
obligations to act with due care and in the shareholders' interest.
Other Changes Effected by the New Declaration of Trust
In addition to the significant changes described above, the New
Declaration of Trust modifies the Current Declaration of Trust in a number of
important ways, including, but not limited to, the following:
a. The New Declaration of Trust clarifies that no shareholders of
any series or class shall have a claim on the assets of another
series or class.
b. As a general matter, the New Declaration of Trust modifies the
Current Declaration of Trust to incorporate appropriate
references to classes of shares.
c. The New Declaration of Trust modifies the Current Declaration of
Trust by changing the par value of the Trust's shares from no par
value to $.001 par value.
d. The New Declaration of Trust modifies the Current Declaration of
Trust by giving the Trustees the power to effect a reverse stock
split, and to make distributions in-kind.
e. The New Declaration of Trust modifies the Current Declaration
of Trust so that all Shares of all Series vote together on issues
to be voted on unless (i) separate Series or Class voting is
otherwise required by the 1940 Act or the instrument establishing
such Shares, in which case the provisions of the 1940 Act or such
instrument, as applicable, will control, or (ii) unless the issue
to be voted on affects only particular Series or Classes, in
which case only Series or Classes so affected will be entitled to
vote.
f. The New Declaration of Trust clarifies that proxies may be voted
pursuant to any computerized, telephonic or mechanical data
gathering device, that Shareholders receive one vote per Share
and a proportional fractional vote for each fractional share, and
that, at a meeting, Shareholders may vote on issues with respect
to which a quorum is present, while adjourning with respect to
issues for which a quorum is not present.
g. The New Declaration of Trust clarifies various existing
trustee powers. For example, the New Declaration of Trust
clarifies that the Trustees may appoint and terminate agents and
consultants and hire and terminate employees; in addition to
banks and trust companies, the Trustees may employ as fund
custodian companies that are members of a national securities
exchange or other entities permitted under the 1940 Act; to
retain one or more transfer agents and employ sub-agents;
delegate authority to investment advisors and other agents or
independent contractors; pledge, mortgage or hypothecate the
assets of the Trust; and operate and carry on the business of an
investment company. The New Declaration of Trust clarifies or
adds to the list of trustee powers. For example, the Trustees may
sue or be sued in the name of the Trust; make loans of cash
and/or securities; enter into joint ventures, general or limited
partnerships and other combinations or associations; endorse or
guarantee the payment of any notes or other obligations of any
person or make contracts of guarantee or suretyship or otherwise
assume liability for payment; purchase insurance and/or bonding;
pay pensions and adopt retirement, incentive and benefit plans;
and adopt 12b-1 plans (subject to shareholder approval).
h. The New Declaration of Trust clarifies that the Trust may
redeem shares of a class or series held by a shareholder for any
reason, including but not limited to reimbursing the Trust or the
distributor for the shareholder's failure to make timely and good
payment; failure to supply a tax identification number; pursuant
to authorization by a shareholder to pay fees or make other
payments to third parties; and failure to maintain a minimum
account balance as established by the Trustees from time to time.
i. The New Declaration of Trust clarifies that a trust is created
and not a partnership, joint stock association, corporation,
bailment, or any other form of legal relationship, and expressly
disclaims shareholder and Trustee liability for the acts and
obligations of the Trust.
j. The New Declaration of Trust clarifies that the Trustees shall
not be responsible or liable for any neglect or wrongdoing of any
officer, agent, employee, consultant, advisor, administrator,
distributor or principal underwriter, custodian or transfer agent
of the Trust nor shall a Trustee be responsible for the act or
omission of any other Trustee.
THE BOARD OF TRUSTEES UNANIMOUSLY RECOMMENDS THAT YOU APPROVE THIS PROPOSAL
PROPOSAL 7: APPROVAL OF THE FUND'S CLASS B 12b-1 DISTRIBUTION AND SERVICE PLAN
AND AGREEMENT
Class B shares were first offered to the public on November 30, 1992. At that
time, the Fund had adopted a Distribution Plan and Agreement for Class B shares.
In June of 1993, the Fund's Board of Trustees including a majority of the
Independent Trustees* approved amendments to the plan to recharacterize it as a
Distribution and Service Plan and Agreement (the "Distribution and Service
Plan") for Class B shares, which permitted the Fund to pay up to 0.25% of its
average annual net assets as a service fee and up to 0.75% of its average annual
assets as an asset-based sales charge. On June 20, 1994, the shareholders of the
Fund approved further amendment of the Distribution and Service Plan to
eliminate a provision that would require the Fund to continue to make payments
to OppenheimerFunds Distributor, Inc. (the "Distributor") after a termination of
the Distribution and Service Plan and Agreement.
* Trustees who are not "interested persons" (as defined in the 1940 Act) of the
Fund or the Manager and who have no direct or indirect financial interest in the
operation of the Fund's 12b-1 plan or in any related agreement.
At a meeting of the Board of Trustees held February 29, 2000, the Manager
proposed the adoption of a new Distribution and Service Plan (the "Proposed
Plan"), which is a "compensation type plan" instead of the current
"reimbursement type plan." The Fund's Board of Trustees, including a majority of
the Independent Trustees, approved the new Distribution and Service Plan,
subject to shareholder approval, and determined to recommend the Distribution
and Service Plan and Agreement for approval by the shareholders. A copy of the
Proposed Distribution and Service Plan is attached as Exhibit B to this proxy
statement, and is hereby submitted to Class B shareholders for approval.
Description of the Distribution and Service Plans. Under both the Proposed Plan
and the current Distribution and Service Plan and Agreement (the "Current
Plan"), the Fund makes payments to the Distributor for its services in
connection with the distribution of Class B Shares and the personal service and
maintenance of accounts that hold Class B shares. The Fund pays the Distributor
an asset-based sales charge of 0.75% per annum of Class B shares outstanding for
no more than six years, and also pays the Distributor a service fee of 0.25% per
annum, each of which is computed on the average annual net assets of Class B
shares of the Fund.
Service Fee. Under the Proposed Plan and the Current Plan, the Distributor pays
certain brokers, dealers, banks or other persons or entities ("Recipients") a
service fee of 0.25% for providing personal services to Class B shareholders and
for maintenance of shareholder accounts by those Recipients. The services
rendered by Recipients in connection with personal services and the maintenance
of Class B shareholder accounts may include but shall not be limited to, the
following: answering routine inquiries from the Recipient's customers concerning
the Fund, assisting in the establishment and maintenance of accounts or
sub-accounts in the Fund and processing share redemption transactions, making
the Fund's investment plans and dividend payment options available, and
providing such other information and services in connection with the rendering
of personal services and/or the maintenance of accounts, as the Distributor or
the Fund may reasonably request. The Distributor is permitted under the Proposed
and Current Plans to retain service fee payments to compensate it for rendering
such services.
Service fee payments under the Proposed and Current Plans by the Distributor to
Recipients are made (i) in advance for the first year Class B shares are
outstanding, following the purchase of shares, in an amount equal to 0.25% of
the net asset value of the shares purchased by the Recipient or its customers
and (ii) thereafter, on a quarterly basis, computed as of the close of business
each day at an annual rate of 0.25% of the net asset value of Class B shares
held in accounts of the Recipient or its customers. The Distributor retains the
service fee during the first year shares are outstanding. In the event Class B
shares are redeemed less than one year after the date such shares were sold, the
Recipient is obligated to repay to the Distributor on demand a pro rata portion
of such advance service fee payments, based on the ratio of the remaining period
to one year.
The main difference between the proposed and current Plan for the payment of the
service fee is that under the current Plan, the Fund reimburses the Distributor
for service fee payments made to Recipients. Under the Proposed Plan, the Fund
will pay the Distributor a service fee at a flat rate of 0.25% per annum without
regard to the Distributor's expenses. Under the Current Plan, the full 0.25%
service fee paid by the Fund is, in effect, passed through the Distributor and
paid to Recipients for the Recipient's services in servicing accounts and
personal services to account holders. It is not anticipated that this
arrangement will change under the Plan, and the amount of service fee payments
by the Fund is not expected to change.
Asset-Based Sales Charge. The Current Plan, a reimbursement type plan, provides
that the Fund will pay the Distributor on a monthly basis an asset-based sales
charge at an annual rate of 0.75% of the net asset value of Class B Shares
outstanding to reimburse the Distributor for its expenses in rendering services
in connection with the distribution of the Fund's Class B shares. Under the
Current Plan, the distribution assistance and administrative support services
rendered by the Distributor in connection with the sales of Class B shares may
include: (i) paying sales commissions to any broker, dealer, bank or other
institution that sells the Fund's Class B shares; (ii) paying compensation to
and expenses of personnel of the Distributor who support distribution of Class B
shares by Recipients; (iii) paying or reimbursing the Distributor for interest
and other borrowing costs incurred on any unreimbursed expenses carried forward
to subsequent fiscal quarters; (iv) other direct distribution costs of the type
approved by the Board, including without limitation the costs of sales
literature, advertising and prospectuses (other than those furnished to current
shareholders) and state "blue sky" registration expenses; and (v) any services
rendered by the Distributor that a Recipient may render as described above.
The Proposed Plan, a compensation type plan, provides that the Fund will pay the
Distributor on a monthly basis an asset-based sales charge at an annual rate of
0.75% of the net asset value of Class B Shares outstanding to compensate the
Distributor for providing distribution assistance in connection with the
distribution of the Fund's Class B Shares. Under the Proposed Plan, the
distribution assistance and administrative support services rendered by the
Distributor in connection with the distribution of Class B Shares may include:
(i) paying sales commissions to any broker, dealer, bank or other person or
entity that sells and services the Fund's Class B Shares; (ii) paying
compensation to and expenses of personnel of the Distributor who support
distribution of Class B Shares by Recipients; (iii) obtaining financing or
providing such financing from its own resources, or from an affiliate, for
interest and other borrowing costs of the Distributor's unreimbursed expenses,
incurred in rendering distribution assistance and administrative support
services for Class B Shares; and (iv) paying certain other direct distribution
expenses.
Other distribution assistance rendered by Recipients under either Plan may
include, but shall not be limited to, the following: distributing sales
literature and prospectuses other than those furnished to current Class B
shareholders, providing compensation to and paying expenses of personnel of the
Recipient who support the distribution of Class B shares by the Recipient, and
providing such other information and services in connection with the
distribution of Class B shares as the Distributor or the Fund may reasonably
request.
The Proposed Plan provides that payments may be made in connection with Class B
Shares acquired (i) by purchase, (ii) in exchange for shares of another
investment company for which the Distributor serves as distributor or
sub-distributor, or (iii) pursuant to a plan of reorganization to which the Fund
is a party.
Under both Plans, the Distributor pays sales commissions from its own resources
to Recipients at the time of sale currently equal to 3.75% of the purchase price
of Fund shares sold by such Recipient, and advances the first year service fee
of 0.25%. The Proposed Plan also provides that the Distributor may pay to the
dealer on a quarterly basis the service fee and the asset-based sales charge
payable on Class B shares in lieu of paying the sales commission of 3.75% and
the advance of the service fee at the time of purchase. The Distributor retains
the service fee and the asset-based sales charge during the first year shares
are outstanding to recoup the sales commissions it pays, the advances of service
fee payments it makes, and its financing costs. Thereafter, the Distributor pays
the service fee to Recipients and retains the asset-based sales charge.
Asset-based sales charge payments are designed to permit an investor to purchase
shares of the Fund without paying a front-end sales load and at the same time
permit the Distributor to compensate Recipients in connection with the sale of
Class B shares of the Fund. The Distributor and the Fund anticipate that it will
take a number of years for the Distributor to recoup the sales commissions paid
to Recipients and other distribution-related expenses, from the Fund's payments
to the Distributor under the Class B Plan, and from the contingent deferred
sales charge deducted from redemption proceeds for Class B shares redeemed
within six years of their purchase, as described in the Fund's prospectus.
Like the Current Plan, the Proposed Plan contains a provision which provides
that the Board may allow the Fund to continue payments to the Distributor for
Class B shares sold prior to termination of the Plan. Pursuant to this
provision, payment of the service fee and the asset-based sales charge could be
continued by the Board after termination.
Like the service fee, the main difference between the Proposed and Current Plans
regarding payment of the asset-based sales charge is that under the Current
Plan, the Fund reimburses the Distributor for its services rendered and under
the Proposed Plan, the Fund will pay the Distributor at a flat rate of 0.75% per
annum without regard to the Distributor's expenses. As discussed below, it is
possible that the Fund will, over time, pay more under the Proposed Plan than
under the Current Plan. This is due to the fact that the length of time over
which the Fund's payments will continue under the Proposed Plan is not limited
by any reimbursement factor, and the Fund's payments may thus continue for a
longer period of time than under the Current Plan.
Additional Information. Both Plans have the effect of increasing annual expenses
of Class B Shares of the Fund by up to 1.00% of the class's average annual net
assets from what those expenses would otherwise be. Payments by the Fund to the
Distributor under the Current Plan for the fiscal year ended September 30, 1999
were $38,357,095 (1.00% of the Fund's average net assets represented by Class B
Shares during that period) - of which the Distributor paid $216,015 to an
affiliate of the Distributor and retained $31,023,782 as reimbursement for Class
B sales commissions and service fee advances, as well as financing costs; the
balance was paid to Recipients not affiliated with the Distributor.
If the Class B shareholders approve this Proposal, the Proposed Plan shall,
unless terminated as described below, become effective upon shareholder approval
and continue in effect until December 31, 2000 and from year to year thereafter
only so long as such continuance is specifically approved, at least annually, by
the Fund's Board of Trustees and its Independent Trustees by a vote cast in
person at a meeting called for the purpose of voting on such continuance. Either
Plan may be terminated at any time by a vote of a majority of the Independent
Trustees or by a vote of the holders of a majority (as defined in the 1940 Act)
of the Fund's outstanding Class B shares. Neither Plan may be amended to
increase materially the amount of payments to be made without approval by Class
B shareholders. All material amendments must be approved by a majority of the
Independent Trustees. If the Class B shareholders do not approve this Proposal,
the Current Plan will remain in effect.
Each of the Proposed Plan and the Current Plan provides that while it is in
effect, the selection and nomination of those Trustees of the Fund who are not
"interested persons" of the Fund or the Manager is committed to the discretion
of the Independent Trustees. This does not prevent the involvement of others in
such selection and nomination if the final decision on any such selection or
nomination is approved by a majority of the Independent Trustees.
Under either Plan, the Board of Trustees may determine that no payment for
service fees or asset-based sales charge will be made to any Recipient in any
quarter if the aggregate net asset value of all Fund shares held by the
Recipient for itself and its customers does not exceed a minimum amount, if any,
that may be fixed from time to time by a majority of the Independent Trustees.
Under both Plans, the Board of Trustees has set the fee at the maximum rate and
set no minimum amount. Each Plan permits the Distributor and the Manager to make
additional distribution payments to Recipients from their own resources
(including profits from management fees) at no cost to the Fund. The Distributor
and the Manager may, in their sole discretion, increase or decrease the amount
of distribution assistance payments they make to Recipients from their own
assets.
Rule 12b-1 of the 1940 Act permits the Fund to adopt the Plans and each Plan
conforms with the rules of the National Association of Securities Dealers.
Analysis of the Proposed Plan by the Board of Trustees. In considering whether
to recommend the Proposed Plan for approval, the Board requested and evaluated
information it deemed necessary to make an informed determination. The Board,
including the Independent Trustees, did not single out any factor or group of
factors as being more important than other factors, but considered such matters
together in arriving at its decision. The Board found that there is a reasonable
likelihood that the Proposed Plan benefits the Fund and its Class B shareholders
by providing financial incentives to financial intermediaries to attract new
Class B shareholders to the Fund and by assisting the efforts of the Fund and
the Distributor to service and retain existing shareholders and attract new
investors. The Proposed Plan enables the Fund and the Distributor to offer
investors in the Fund alternative ways to purchase shares. This arrangement
allows the Fund to be competitive with similar funds, including funds that
impose sales charges, provide financial incentives to institutions that direct
investors to such funds, and provide shareholder servicing and administrative
services.
The Distributor identified two main difficulties with the Current Plan. These
involve accurately following certain distribution expenses when exchanges among
the funds occur, and the Distributor's inability to recover its
distribution-related expenses incurred when funds enter into reorganization
agreements.
The Fund and the other mutual funds in the OppenheimerFunds complex have
arrangements so that a shareholder of one fund may exchange his or her shares
for the shares of one or more other Oppenheimer funds. Frequently, a shareholder
will enter into a number of exchanges.
The Distributor advised the Board that the Distributor could not at this time
design and implement an expedient and cost-effective accounting system to follow
expenses of the sales commission, service fee payment and other
distribution-related expenses on a per share basis as exchanges occur. As a
result, the Distributor may not receive full reimbursement for its
distribution-related expenses under the Current Plan.
It occasionally happens that, for various reasons, it is desirable for one fund
to reorganize into another fund when it is anticipated that such a
reorganization will benefit the funds involved. When reorganizations occur, the
Distributor currently must write off and thus is unable to recover previously
spent, but unrecovered, distribution expenses for the fund which will go out of
existence.
The compensation type Plan proposed for approval will eliminate the foregoing
difficulties and allow the Distributor to continue to provide exchanges and
reorganizations without having to risk the loss of, in some cases, substantial
amounts of money previously spent for distribution. The Proposed Plan expressly
provides that the distribution and administrative support services under the
plan may be rendered in connection with Class B shares issued by the Fund in
exchanges for other Oppenheimer funds and in a reorganization with another
mutual fund.
The Distributor advised the Board that under the Proposed Plan, it will be able
to track its expenses of distribution for the OppenheimerFunds complex, and that
it will also be able reasonably to identify its distribution costs with respect
to the Fund and each other Oppenheimer fund by allocating the Distributor's
distribution expenses among the funds in the complex according to sales. While
not a precise method, the Board concluded that this method of allocating
distribution expenses to the Fund is a reasonable manner by which to identify
the Distributor's expenses in distributing the Fund's shares. The payments under
the proposed Plan will remain subject to the limits imposed on asset-based sales
charges by the NASD.
The Board considered that a wide range of different situations might occur in
the future regarding the sale and redemption of Fund shares. It is possible
under the current reimbursement Plan for the Fund's payments to be substantially
reduced or cease when limited to reimbursement to the Distributor for its costs.
The Board concluded that this type of situation is unlikely to occur. The Board
also recognized that superior investment performance could result in larger
amounts paid by the Fund under the Proposed Plan and the Distributor's recovery
of more Plan payments from the Fund than the Distributor had expended on the
Fund. Other differing scenarios were also reviewed.
The level of annual payments by the Fund under the Proposed Plan will not
increase over, and are not anticipated to be less than, the amounts currently
paid by the Fund. Under the Proposed Plan, however, over time, the Fund's Plan
payments may exceed the amount which the Fund might pay under the Current Plan.
The length of time over which the Fund's payments will continue under the
Proposed Plan is not limited by any reimbursement factor, and the Fund's
payments may thus continue for a longer period of time than under the Current
Plan, thus potentially increasing the amount of Plan payments which reduce the
dividends and total return on Fund shares. The Board also recognized that Class
B shares convert to Class A shares at the end of six years after their purchase.
The Board concluded that it is extremely difficult to predict purchases, sales
and exchanges by shareholders, and how future individual, market and economic
events may influence individual investor decisions. The Board thus concluded
that it is not reasonably possible to determine with any degree of certainty at
this time whether the Fund will pay more under the Proposed Plan than it would
under the Current Plan. The Distributor has agreed to provide the Board with
certain quarterly reports as to the amount of payments made by the Fund under
the Proposed Plan and the purpose for which payments were made (similar to what
the Board now receives under the Current Plan). The Distributor will provide
extensive annual reports to the Board which set forth the Distributor's
allocated distribution-related expenses and recovery of money by the Distributor
from the asset-based sales charges and contingent deferred sales charges, and
information on sales, redemptions and exchanges of Fund shares and related data.
The Board determined that under these quarterly and annual reports, the Board
will be provided with adequate information about the payments which the Fund
makes to the Distributor, about the payments which the Distributor makes and
receives in connection with the distribution of the Fund's shares, and about the
Distributor's other distribution expenses. The Board anticipates that with this
information, the Board will be able to review each year the benefits which the
Fund is receiving from the Plan payments it makes to determine if the Fund is
benefiting at a level commensurate with those payments.
Stimulation of distribution of mutual fund shares and providing for shareholder
services and account maintenance services by payments to a mutual fund's
distributor and to brokers, dealers, banks and other financial institutions has
become common in the mutual fund industry. Competition among brokers and dealers
for these types of payments has intensified. The Trustees concluded that
promotion, sale and servicing of mutual fund shares and shareholders through
various brokers, dealers, banks and other financial institutions is a successful
way of distributing shares of a mutual fund. The Trustees concluded that without
an effective means of selling and distributing Fund shares and servicing
shareholders and providing account maintenance, shareholders may redeem shares,
or not buy more shares, and if assets decline, expenses may increase on a per
share basis. By providing an alternative means of acquiring Fund shares, the
Distribution and Service Plan proposed for shareholder approval is designed to
stimulate sales by and services from many types of financial institutions.
The Trustees recognize that the Manager will benefit from the Proposed Plan
through larger investment advisory fees resulting from an increase in Fund
assets, since its investment advisory fees are based upon a percentage of net
assets of the Fund. The Board was also advised by the Manager that a
compensation plan could possibly decrease the time necessary for the Distributor
to recover, and could possibly increase the likelihood that the Distributor
might actually recover, the costs of distributing Class B shares. If either were
to occur, the profits of the Manager, which is the parent company of the
Distributor, would be increased. The Board, including each of the Independent
Trustees, determined that the Proposed Plan is in the best interests of the
Fund, and that
its adoption has a reasonable likelihood of benefiting the Fund and its Class B
shareholders. In its annual review of the Proposed Plan, the Board will consider
the continued appropriateness of the Distribution and Service Plan, including
the level of payments provided for therein.
THE BOARD OF TRUSTEES UNANIMOUSLY RECOMMENDS THAT YOU APPROVE THIS PROPOSAL
INFORMATION ABOUT THE FUND
The SEC requires that the following information be provided to the Fund's
shareholders.
Fund Information. As of August 24, 2000, the Fund had 1,589,184,329.96 shares
outstanding, consisting of 820,419,700.500 Class A, 621,425,641.675 Class B,
130,551,469.885 Class C and 16,787,517.917 Class Y shares. Each share has voting
rights as stated in this Proxy Statement and is entitled to one vote for each
share (and a fractional vote for a fractional share).
Beneficial Owners. Occasionally, the number of shares of the Fund held in
"street name" accounts of various securities dealers for the benefit of their
clients may exceed 5% of the total shares outstanding. As of August 24, 2000,
the only persons who owned of record or were known by the Fund to own
beneficially 5% or more of any class of the Fund's outstanding shares were:
Merrill Lynch Pierce Fenner & Smith, 4800 Deer Lake Drive E., 3rd Floor,
Jacksonville, Florida 32246, which owned 9,167,783.090 Class C shares
(representing approximately 7.00% of the Fund's then-outstanding Class C
shares), for the benefit of its customers.
Massachusetts Mutual Life Insurance Company, 1295 State Street,
Springfield, Massachusetts 01111, which owned 16,235,415.56 Class Y shares
(representing approximately 96.69% of the Fund's then-outstanding Class Y
shares), for the benefit of its customers.
The Manager, the Distributor and the Transfer Agent. Subject to the authority of
the Board of Trustees, the Manager is responsible for the day-to-day management
of the Fund's business, pursuant to its investment advisory agreement with the
Fund. OppenheimerFunds Distributor, Inc., a wholly-owned subsidiary of the
Manager, is the general distributor (the "Distributor") of the Fund's shares.
OppenheimerFunds Services, a division of the Manager, located at 6803 South
Tucson Way, Englewood, CO 80112, serves as the transfer and shareholder
servicing agent (the "Transfer Agent") for the Funds on an "at cost" basis, for
which it was paid $11,298,653 by the Fund during the fiscal year ended September
30, 1999.
The Manager (including subsidiaries and affiliates) currently manages investment
companies, including other Oppenheimer funds, with assets of more than $120
billion as of June 30, 2000, and with more than 5 million shareholder accounts.
The Manager is a wholly-owned subsidiary of Oppenheimer Acquisition Corp.
("OAC"), a holding company controlled by Massachusetts Mutual Life Insurance
Company ("MassMutual"). The Manager, the Distributor and OAC are located at Two
World Trade Center, New York, New York 10048. MassMutual is located at 1295
State Street, Springfield, Massachusetts 01111. OAC acquired the Manager on
October 22, 1990. As indicated below, the common stock of OAC is owned by (i)
certain officers and/or directors of the Manager, (ii) MassMutual and (iii)
another investor. No institution or person holds 5% or more of OAC's outstanding
common stock except MassMutual. MassMutual has engaged in the life insurance
business since 1851.
The common stock of OAC is divided into three classes. Effective as of August 1,
1997, OAC declared a ten for one stock split. At December 31, 1999, on a
post-split basis, MassMutual held (i) all of the 21,600,000 shares of Class A
voting stock, (ii) 10,565,715 shares of Class B voting stock, and (iii)
18,377,759 shares of Class C non-voting stock. This collectively represented
91.9% of the outstanding common stock and 90.4% of the voting power of OAC as of
that date. Certain officers and/or directors of the Manager held (i) 3,035,120
shares of the Class B voting stock, representing 5.5% of the outstanding common
stock and 8.5% of the voting power, and (ii) options acquired without cash
payment which, when they become exercisable, allow the holders to purchase up to
1,508,523 shares of Class C non-voting stock. That group includes persons who
serve as officers of the Fund and Bridget A. Macaskill, who is being nominated
as a Trustee of the Fund.
Holders of OAC Class B and Class C common stock may put (sell) their shares and
vested options to OAC or MassMutual at a formula price (based on earnings of the
Manager). MassMutual may exercise call (purchase) options on all outstanding
shares of both such classes of common stock and vested options at the same
formula price. From the period October 1, 1998 to September 31, 1999, the only
transactions on a post-split basis by persons who serve as Trustees of the Fund
were by Mr. Swain who exercised 80,000 options to Mass Mutual for a cash payment
of $2,621,900, Ms. Macaskill who exercised 434,873 options to Mass Mutual for a
cash payment of $14,770,051 and Mr. Bowen who sold 11,420 shares of Class B OAC
common stock to Mass Mutual and exercised 65,880 options to Mass Mutual for a
cash payment of $2,335,929.
The names and principal occupations of the executive officers and directors of
the Manager are as follows: Bridget A. Macaskill, President, Chief Executive
Officer and a director; James C. Swain, Vice Chairman; Jeremy Griffiths,
Executive Vice President and Chief Financial Officer; O. Leonard Darling,
Executive Vice President and Chief Investment Officer; Andrew J. Donohue,
Executive Vice President, General Counsel and a director; George Batejan,
Executive Vice President and Chief Information Officer, Craig Dinsell, Loretta
McCarthy, James Ruff and Andrew Ruotolo, Executive Vice Presidents; Brian W.
Wixted, Senior Vice President and Treasurer; and Charles Albers, Victor Babin,
Bruce Bartlett, Richard Bayha, Robert A. Densen, Ronald H. Fielding, Robert B.
Grill, Robert Guy, Steve Ilnitzki, Lynn Oberist Keeshan, Thomas W. Keffer, Avram
Kornberg, John S. Kowalik, Andrew J. Mika, David Negri, Robert E. Patterson,
Russell Read, David Robertson, Richard Rubinstein, Arthur Steinmetz, John Stoma,
Jerry A. Webman, William L. Wilby, Donna Winn, Carol Wolf, Kurt Wolfgruber,
Robert G. Zack, and Arthur J. Zimmer, Senior Vice Presidents. These officers are
located at one of the three offices of the Manager: Two World Trade Center, New
York, NY 10048-0203; 6803 South Tucson Way, Englewood, CO 80112;and 350 Linden
Oaks, Rochester, NY 14625-2807.
Custodian. The Bank of New York, Mutual Funds Division, 100 Church Street, New
York, NY 10286, acts as custodian of the Fund's securities and other assets.
Reports to Shareholders and Financial Statements. The Annual and Semi-Annual
Reports to Shareholders of the Fund, including financial statements of the Fund
for the fiscal year ended September 30, 1999, and six months ended March 31,
2000, respectively, have previously been sent to all shareholders. Upon request,
shareholders may obtain without charge a copy of the Annual or Semi-Annual
Report by writing the Fund at the address above or calling the Fund at
1.800.525.7048.
FURTHER INFORMATION ABOUT VOTING AND THE MEETING
Solicitation of Proxies. The cost of soliciting these proxies will be borne by
the Fund. In addition to solicitations by mail, proxies may be solicited by
officers or employees of the Fund's transfer agent or by officers or employees
of the Fund's investment advisor, personally or by telephone or telegraph;
without extra compensation. Proxies may also be solicited by a proxy
solicitation firm hired at the Fund's expense for such purpose. Brokers, banks
and other fiduciaries may be required to forward soliciting material to their
principals and to obtain authorization for the execution of proxies. For those
services they will be reimbursed by the Fund for their out-of-pocket expenses.
Voting By Broker-Dealers. Shares owned of record by broker-dealers for the
benefit of their customers ("street account shares") will be voted by the
broker-dealer based on instructions received from its customers. If no
instructions are received, the broker-dealer may (if permitted by applicable
stock exchange rules) as record holder vote such shares for the election of
Trustees and on the Proposals in the same proportion as that broker-dealer votes
street account shares for which voting instructions were received in time to be
voted. A "broker non-vote" is deemed to exist when a proxy received from a
broker indicates that the broker does not have discretionary authority to vote
the shares on that matter. Abstentions and broker non-votes will have the same
effect as a vote against the proposal.
Quorum. A majority of the shares outstanding and entitled to vote, present in
person or represented by proxy, constitutes a quorum at the Meeting. Shares over
which broker-dealers have discretionary voting power, shares that represent
broker non-votes and shares whose proxies reflect an abstention on any item are
all counted as shares present and entitled to vote for purposes of determining
whether the required quorum of shares exists.
Required Vote. Approval of Proposals 1 and 2 requires the affirmative vote of a
majority of the outstanding shares present at the meeting. Approval of Proposals
3 through 6 requires the affirmative vote of a "majority" (as defined in the
1940 Act) of the outstanding voting securities of the Fund voting in the
aggregate and not by class. Proposal 7 requires the affirmative vote of a
majority of the outstanding Class B shares. As defined in the 1940 Act, the vote
of a majority of the outstanding shares means the vote of (1) 67% or more of the
Fund's outstanding shares present at a meeting, if the holders of more than 50%
of the outstanding shares of the Fund are present or represented by proxy; or
(2) more than 50% of the Fund's outstanding shares, whichever is less.
If a shareholder executes and returns a proxy but fails to indicate how the
votes should be cast, the proxy will be voted in favor of the election of each
of the nominees named in this Proxy Statement for Trustee and in favor of each
Proposal.
You may revoke your previously granted proxy at any time before it is exercised
(1) by delivering a written notice to the Fund expressly revoking your proxy,
(2) by signing and forwarding to the Fund a later-dated proxy, or (3) by
attending the Meeting and casting your votes in person.
Shareholder Proposals. The Fund is not required to hold shareholder meetings on
a regular basis. Special meetings of shareholders may be called from time to
time by either the Fund or the shareholders (for certain matters and under
special conditions described in the Statement of Additional Information). Under
the proxy rules of the Securities and Exchange Commission, shareholder proposals
which meet certain conditions may be included in a Fund's proxy statement for a
particular meeting. Those rules require that for future meetings, the
shareholder must be a record or beneficial owner of Fund shares either (i) with
a value of at least $2,000 or (ii) in an amount representing at least 1% of the
Fund's securities to be voted, at the time the proposal is submitted and for one
year prior thereto, and must continue to own such shares through the date on
which the meeting is held. Another requirement relates to the timely receipt by
the Fund of any such proposal. Under those rules, a proposal submitted for
inclusion in the Fund's proxy material for the next meeting after the meeting to
which this proxy statement relates must be received by the Fund a reasonable
time before the solicitation is made. The fact that the Fund receives a proposal
from a qualified shareholder in a timely manner does not ensure its inclusion in
the proxy material, since there are other requirements under the proxy rules for
such inclusion.
OTHER MATTERS
The Board does not intend to bring any matters before the Meeting other
than Proposals 1 through 7 and the Board and the Manager are not aware of any
other matters to be brought before the Meeting by others. Since matters not
known at the time of the solicitation may come before the Meeting, the proxy as
solicited confers discretionary authority with respect to such matters as
properly come before the Meeting, including any adjournment or adjournments
thereof, and it is the intention of the persons named as attorneys-in-fact in
the proxy to vote the proxy in accordance with their judgment on such matters.
In the event sufficient votes in favor of one or more Proposals set forth
in the Notice of Meeting of Shareholders are not received by the date of the
Meeting, the persons named in the enclosed proxy may propose one or more
adjournments of the Meeting. If a quorum is present but sufficient votes in
favor of one or more of the Proposals have not been received, the persons named
as proxies may propose one or more adjournments of the Meeting to permit further
solicitation of proxies with respect to any such proposal. All such adjournments
will require the affirmative vote of a majority of the shares present in person
or by proxy at the session of the Meeting to be adjourned. A vote may be taken
on one or more of the proposals in this proxy statement prior to any such
adjournment if sufficient votes for its approval have been received and it is
otherwise appropriate.
By Order of the Board of Trustees,
Andrew J. Donohue, Secretary
September 29, 2000
230_Proxy-0800_Pre.doc
<PAGE>
EXHIBIT A
EIGHTH AMENDED AND RESTATED DECLARATION OF TRUST
OF
OPPENHEIMER STRATEGIC INCOME FUND
This DECLARATION OF TRUST, made as of the 24th day of June, 1997, by and
among the individuals executing this Declaration of Trust as the Trustees, and
amended and restated this ___ day of ___________, 2000.
WHEREAS, the Trustees wish to establish a trust fund under the laws of the
Commonwealth of Massachusetts, for the investment and reinvestment of funds
contributed thereto;
NOW, THEREFORE, the Trustees declare that all money and property
contributed to the trust fund hereunder shall be held and managed under this
Declaration of Trust in trust as herein set forth below.
ARTICLE FIRST - NAME
------------- ----
This Trust shall be known as OPPENHEIMER STRATEGIC INCOME FUND. The
address of Oppenheimer Strategic Income Fund is 6803 South Tucson Way,
Englewood, CO 80112. The Registered Agent for Service is Massachusetts Mutual
Life Insurance Company, 1295 State Street, Springfield, Massachusetts 01111,
Attention: Stephen Kuhn, Esq.
ARTICLE SECOND - DEFINITIONS
-------------- -----------
Whenever used herein, unless otherwise required by the context or
specifically provided:
1. All terms used in this Declaration of Trust that are defined in the 1940
Act (defined below) shall have the meanings given to them in the 1940 Act.
2. "1940 Act" refers to the Investment Company Act of 1940 and the Rules
and Regulations of the Commission thereunder, all as amended from time to time.
3. "Board" or "Board of Trustees" or the "Trustees" means the Board of
Trustees of the Trust.
4. "By-Laws" means the By-Laws of the Trust as amended from time to time.
5. "Class" means a class of a series of shares of the Trust established
and designated under or in accordance with the provisions of Article FOURTH.
6. "Commission" means the Securities and Exchange Commission.
7. "Declaration of Trust" shall mean this Amended and Restated Declaration
of Trust as it may be amended or restated from time to time.
8. "Majority Vote of Shareholders" shall mean, with respect to any matter
on which the Shares of the Trust or of a Series or Class thereof, as the
case may be, may be voted, the "vote of a majority of the outstanding
voting securities" (as defined in the 1940 Act or the rules and regulations
of the Commission thereunder) of the Trust or such Series or Class, as the
case may be.
9. "Net asset value" means, with respect to any Share of any Series, (i)
in the case of a Share of a Series whose Shares are not divided into Classes,
the quotient obtained by dividing the value of the net assets of that Series
(being the value of the assets belonging to that Series less the liabilities
belonging to that Series) by the total number of Shares of that Series
outstanding, and (ii) in the case of a Share of a Class of Shares of a Series
whose Shares are divided into Classes, the quotient obtained by dividing the
value of the net assets of that Series allocable to such Class (being the value
of the assets belonging to that Series allocable to such Class less the
liabilities belonging to such Class) by the total number of Shares of such Class
outstanding; all determined in accordance with the methods and procedures,
including without limitation those with respect to rounding, established by the
Trustees from time to time.
10. "Series" refers to series of shares of the Trust established and
designated under or in accordance with the provisions of Article FOURTH.
11. "Shareholder" means a record owner of Shares of the Trust.
12. "Shares" refers to the transferable units of interest into which the
beneficial interest in the Trust or any Series or Class of the Trust (as the
context may require) shall be divided from time to time and includes fractions
of Shares as well as whole Shares.
13. "Trust" refers to the Massachusetts business trust created by this
Declaration of Trust, as amended or restated from time to time.
14. "Trustees" refers to the individual trustees in their capacity as
trustees hereunder of the Trust and their successor or successors for the time
being in office as such trustees.
ARTICLE THIRD - PURPOSE OF TRUST
------------- ----------------
The purpose or purposes for which the Trust is formed and the business or
objects to be transacted, carried on and promoted by it are as follows:
1. To hold, invest or reinvest its funds, and in connection therewith to
hold part or all of its funds in cash, and to purchase or otherwise acquire,
hold for investment or otherwise, sell, lend, pledge, mortgage, write options
on, lease, sell short, assign, negotiate, transfer, exchange or otherwise
dispose of or turn to account or realize upon, securities (which term
"securities" shall for the purposes of this Declaration of Trust, without
limitation of the generality thereof, be deemed to include any stocks, shares,
bonds, financial futures contracts, indexes, debentures, notes, mortgages or
other obligations, and any certificates, receipts, warrants or other instruments
representing rights to receive, purchase or subscribe for the same, or
evidencing or representing any other rights or interests therein, or in any
property or assets) created or issued by any issuer (which term "issuer" shall
for the purposes of this Declaration of Trust, without limitation of the
generality thereof, be deemed to include any persons, firms, associations,
corporations, syndicates, business trusts, partnerships, investment companies,
combinations, organizations, governments, or subdivisions thereof) and in
financial instruments (whether they are considered as securities or
commodities); and to exercise, as owner or holder of any securities or financial
instruments, all rights, powers and privileges in respect thereof; and to do any
and all acts and things for the preservation, protection, improvement and
enhancement in value of any or all such securities or financial instruments.
2. To borrow money and pledge assets in connection with any of the objects
or purposes of the Trust, and to issue notes or other obligations evidencing
such borrowings, to the extent permitted by the 1940 Act and by the Trust's
fundamental investment policies under the 1940 Act.
3. To issue and sell its Shares in such Series and Classes and amounts and
on such terms and conditions, for such purposes and for such amount or kind of
consideration (including without limitation thereto, securities) now or
hereafter permitted by the laws of the Commonwealth of Massachusetts and by this
Declaration of Trust, as the Trustees may determine.
4. To purchase or otherwise acquire, hold, dispose of, resell, transfer,
reissue, redeem or cancel its Shares, or to classify or reclassify any unissued
Shares or any Shares previously issued and reacquired of any Series or Class
into one or more Series or Classes that may have been established and designated
from time to time, all without the vote or consent of the Shareholders of the
Trust, in any manner and to the extent now or hereafter permitted by this
Declaration of Trust.
5. To conduct its business in all its branches at one or more offices in
New York, Colorado and elsewhere in any part of the world, without restriction
or limit as to extent.
6. To carry out all or any of the foregoing objects and purposes as
principal or agent, and alone or with associates or to the extent now or
hereafter permitted by the laws of Massachusetts, as a member of, or as the
owner or holder of any securities or other instruments of, or share of interest
in, any issuer, and in connection therewith or make or enter into such deeds or
contracts with any issuers and to do such acts and things and to exercise such
powers, as a natural person could lawfully make, enter into, do or exercise.
7. To do any and all such further acts and things and to exercise any and
all such further powers as may be necessary, incidental, relative, conducive,
appropriate or desirable for the accomplishment, carrying out or attainment of
all or any of the foregoing purposes or objects.
The foregoing objects and purposes shall, except as otherwise expressly
provided, be in no way limited or restricted by reference to, or inference from,
the terms of any other clause of this or any other Article of this Declaration
of Trust, and shall each be regarded as independent and construed as powers as
well as objects and purposes, and the enumeration of specific purposes, objects
and powers shall not be construed to limit or restrict in any manner the meaning
of general terms or the general powers of the Trust now or hereafter conferred
by the laws of the Commonwealth of Massachusetts nor shall the expression of one
thing be deemed to exclude another, though it be of a similar or dissimilar
nature, not expressed; provided, however, that the Trust shall not carry on any
business, or exercise any powers, in any state, territory, district or country
except to the extent that the same may lawfully be carried on or exercised under
the laws thereof.
ARTICLE FOURTH - SHARES
-------------- ------
1. The beneficial interest in the Trust shall be divided into Shares, all
with $.001 par value per share, but the Trustees shall have the authority from
time to time, without obtaining shareholder approval, to create one or more
Series of Shares in addition to the Series specifically established and
designated in part 3 of this Article FOURTH, and to divide the shares of any
Series into two or more Classes pursuant to part 2 of this Article FOURTH, all
as they deem necessary or desirable, to establish and designate such Series and
Classes, and to fix and determine the relative rights and preferences as between
the different Series of Shares or Classes as to right of redemption and the
price, terms and manner of redemption, liabilities and expenses to be borne by
any Series or Class, special and relative rights as to dividends and other
distributions and on liquidation, sinking or purchase fund provisions,
conversion on liquidation, conversion rights, and conditions under which the
several Series or Classes shall have individual voting rights or no voting
rights. Except as established by the Trustees with respect to such Series or
Classes, pursuant to the provisions of this Article FOURTH, and except as
otherwise provided herein, all Shares of the different Series and Classes of a
Series, if any, shall be identical.
(a) The number of authorized Shares and the number of Shares of each
Series and each Class of a Series that may be issued is unlimited, and the
Trustees may issue Shares of any Series or Class of any Series for such
consideration and on such terms as they may determine (or for no consideration
if pursuant to a Share dividend or split-up), or may reduce the number of issued
Shares of a Series or Class in proportion to the relative net asset value of the
Shares of such Series or Class, all without action or approval of the
Shareholders. All Shares when so issued on the terms determined by the Trustees
shall be fully paid and non-assessable. The Trustees may classify or reclassify
any unissued Shares or any Shares previously issued and reacquired of any Series
into one or more Series or Classes of Series that may be established and
designated from time to time. The Trustees may hold as treasury Shares (of the
same or some other Series), reissue for such consideration and on such terms as
they may determine, or cancel, at their discretion from time to time, any Shares
reacquired by the Trust.
(b) The establishment and designation of any Series or any Class of
any Series in addition to that established and designated in part 3 of this
Article FOURTH shall be effective upon either (i) the execution by a majority of
the Trustees of an instrument setting forth such establishment and designation
and the relative rights and preferences of such Series or such Class of such
Series, whether directly in such instrument or by reference to, or approval of,
another document that sets forth such relative rights and preferences of the
Series or any Class of any Series including, without limitation, any
registration statement of the Trust, (ii) upon the execution of an instrument in
writing by an officer of the Trust pursuant to the vote of a majority of the
Trustees, or (iii) as otherwise provided in either such instrument. At any time
that there are no Shares outstanding of any particular Series or Class
previously established and designated, the Trustees may by an instrument
executed by a majority of their number or by an officer of the Trust pursuant to
a vote of a majority of the Trustees abolish that Series or Class and the
establishment and designation thereof. Each instrument referred to in this
paragraph shall be an amendment to this Declaration of Trust, and the Trustees
may make any such amendment without shareholder approval.
(c) Any Trustee, officer or other agent of the Trust, and any
organization in which any such person is interested may acquire, own, hold and
dispose of Shares of any Series or Class of any Series of the Trust to the same
extent as if such person were not a Trustee, officer or other agent of the
Trust; and the Trust may issue and sell or cause to be issued and sold and may
purchase Shares of any Series or Class of any Series from any such person or any
such organization subject only to the general limitations, restrictions or other
provisions applicable to the sale or purchase of Shares of such Series or Class
generally.
2. (a) Classes. The Trustees shall have the exclusive authority from time
to time, without obtaining shareholder approval, to divide the Shares of any
Series into two or more Classes as they deem necessary or desirable, and to
establish and designate such Classes. In such event, each Class of a Series
shall represent interests in the designated Series of the Trust and have such
voting, dividend, liquidation and other rights as may be established and
designated by the Trustees. Expenses and liabilities related directly or
indirectly to the Shares of a Class of a Series may be borne solely by such
Class (as shall be determined by the Trustees) and, as provided in this Article
FOURTH. The bearing of expenses and liabilities solely by a Class of Shares of a
Series shall be appropriately reflected (in the manner determined by the
Trustees) in the net asset value, dividend and liquidation rights of the Shares
of such Class of a Series. The division of the Shares of a Series into Classes
and the terms and conditions pursuant to which the Shares of the Classes of a
Series will be issued must be made in compliance with the 1940 Act. No division
of Shares of a Series into Classes shall result in the creation of a Class of
Shares having a preference as to dividends or distributions or a preference in
the event of any liquidation, termination or winding up of the Trust, to the
extent such a preference is prohibited by Section 18 of the 1940 Act as to the
Trust. The fact that a Series shall have initially been established and
designated without any specific establishment or designation of Classes (i.e.,
that all Shares of such Series are initially of a single Class), or that a
Series shall have more than one established and designated Class, shall not
limit the authority of the Trustees to establish and designate separate Classes,
or one or more additional Classes, of said Series without approval of the
holders of the initial Class thereof, or previously established and designated
Class or Classes thereof.
(b) Class Differences. The relative rights and preferences of the
Classes of any Series may differ in such other respects as the Trustees may
determine to be appropriate in their sole discretion, provided that such
differences are set forth in the instrument establishing and designating such
Classes and executed by a majority of the Trustees (or by an instrument executed
by an officer of the Trust pursuant to a vote of a majority of the Trustees).
The relative rights and preferences of each Class of Shares shall be the
same in all respects except that, and unless and until the Board of Trustees
shall determine otherwise: (i) when a vote of Shareholders is required under
this Declaration of Trust or when a meeting of Shareholders is called by the
Board of Trustees, the Shares of a Class shall vote exclusively on matters that
affect that Class only; (ii) the expenses and liabilities related to a Class
shall be borne solely by such Class (as determined and allocated to such Class
by the Trustees from time to time in a manner consistent with parts 2 and 3 of
this Article FOURTH); and (iii) pursuant to part 10 of Article NINTH, the Shares
of each Class shall have such other rights and preferences as are set forth from
time to time in the then effective prospectus and/or statement of additional
information relating to the Shares. Dividends and distributions on each Class of
Shares may differ from the dividends and distributions on any other such Class,
and the net asset value of each Class of Shares may differ from the net asset
value of any other such Class.
3. Without limiting the authority of the Trustees set forth in parts 1 and
2 of this Article FOURTH to establish and designate any further Series or
Classes of Series, the Trustees hereby establish one Series of Shares having the
same name as the Trust, and said Shares shall be divided into four Classes,
which shall be designated Class A, Class B, Class C and Class Y. In addition to
the rights and preferences described in parts 1 and 2 of this Article FOURTH
with respect to Series and Classes, the Series and Classes established hereby
shall have the relative rights and preferences described in this part 3 of this
Article FOURTH. The Shares of any Series or Class that may from time to time be
established and designated by the Trustees shall (unless the Trustees otherwise
determine with respect to some Series or Classes at the time of establishing and
designating the same) have the following relative rights and preferences:
(a) Assets Belonging to Series or Class. All consideration received
by the Trust for the issue or sale of Shares of a particular Series or any Class
thereof, together with all assets in which such consideration is invested or
reinvested, all income, earnings, profits, and proceeds thereof, including any
proceeds derived from the sale, exchange or liquidation of such assets, and any
funds or payments derived from any reinvestment of such proceeds in whatever
form the same may be, shall irrevocably belong to that Series (and may be
allocated to any Classes thereof) for all purposes, subject only to the rights
of creditors, and shall be so recorded upon the books of account of the Trust.
Such consideration, assets, income, earnings, profits, and proceeds thereof,
including any proceeds derived from the sale, exchange or liquidation of such
assets, and any funds or payments derived from any reinvestment of such
proceeds, in whatever form the same may be, together with any General Items
allocated to that Series as provided in the following sentence, are herein
referred to as "assets belonging to" that Series. In the event that there are
any assets, income, earnings, profits, and proceeds thereof, funds, or payments
which are not readily identifiable as belonging to any particular Series
(collectively "General Items"), the Trustees shall allocate such General Items
to and among any one or more of the Series established and designated from time
to time in such manner and on such basis as they, in their sole discretion, deem
fair and equitable; and any General Items so allocated to a particular Series
shall belong to that Series (and be allocable to any Classes thereof). Each such
allocation by the Trustees shall be conclusive and binding upon the Shareholders
of all Series (and any Classes thereof) for all purposes. No Shareholder or
former Shareholder of any Series or Class shall have a claim on or any right to
any assets allocated or belonging to any other Series or Class.
(b) (1) Liabilities Belonging to Series. The liabilities, expenses,
costs, charges and reserves attributable to each Series shall be charged and
allocated to the assets belonging to each particular Series. Any general
liabilities, expenses, costs, charges and reserves of the Trust which are not
identifiable as belonging to any particular Series shall be allocated and
charged by the Trustees to and among any one or more of the Series established
and designated from time to time in such manner and on such basis as the
Trustees in their sole discretion deem fair and equitable. The liabilities,
expenses, costs, charges and reserves allocated and so charged to each Series
are herein referred to as "liabilities belonging to" that Series. Each
allocation of liabilities, expenses, costs, charges and reserves by the Trustees
shall be conclusive and binding upon the shareholders of all Series for all
purposes.
(2) Liabilities Belonging to a Class. If a Series is divided
into more than one Class, the liabilities, expenses, costs, charges and reserves
attributable to a Class shall be charged and allocated to the Class to which
such liabilities, expenses, costs, charges or reserves are attributable. Any
general liabilities, expenses, costs, charges or reserves belonging to the
Series which are not identifiable as belonging to any particular Class shall be
allocated and charged by the Trustees to and among any one or more of the
Classes established and designated from time to time in such manner and on such
basis as the Trustees in their sole discretion deem fair and equitable. The
liabilities, expenses, costs, charges and reserves allocated and so charged to
each Class are herein referred to as "liabilities belonging to" that Class. Each
allocation of liabilities, expenses, costs, charges and reserves by the Trustees
shall be conclusive and binding upon the holders of all Classes for all
purposes.
(c) Dividends. Dividends and distributions on Shares of a particular
Series or Class may be paid to the holders of Shares of that Series or Class,
with such frequency as the Trustees may determine, which may be daily or
otherwise pursuant to a standing resolution or resolutions adopted only once or
with such frequency as the Trustees may determine, from such of the income,
capital gains accrued or realized, and capital and surplus, from the assets
belonging to that Series, or in the case of a Class, belonging to such Series
and being allocable to such Class, as the Trustees may determine, after
providing for actual and accrued liabilities belonging to such Series or Class.
All dividends and distributions on Shares of a particular Series or Class shall
be distributed pro rata to the Shareholders of such Series or Class in
proportion to the number of Shares of such Series or Class held by such
Shareholders at the date and time of record established for the payment of such
dividends or distributions, except that in connection with any dividend or
distribution program or procedure the Trustees may determine that no dividend or
distribution shall be payable on Shares as to which the Shareholder's purchase
order and/or payment have not been received by the time or times established by
the Trustees under such program or procedure. Such dividends and distributions
may be made in cash or Shares of that Series or Class or a combination thereof
as determined by the Trustees or pursuant to any program that the Trustees may
have in effect at the time for the election by each Shareholder of the mode of
the making of such dividend or distribution to that Shareholder. Any such
dividend or distribution paid in Shares will be paid at the net asset value
thereof as determined in accordance with part 13 of Article SEVENTH.
Notwithstanding anything in this Declaration of Trust to the contrary, the
Trustees may at any time declare and distribute a dividend of stock or other
property pro rata among the Shareholders of a particular Series or Class at the
date and time of record established for the payment of such dividends or
distributions.
(d) Liquidation. In the event of the liquidation or dissolution of
the Trust or any Series or Class thereof, the Shareholders of each Series and
all Classes of each Series that have been established and designated and are
being liquidated and dissolved shall be entitled to receive, as a Series or
Class, when and as declared by the Trustees, the excess of the assets belonging
to that Series or, in the case of a Class, belonging to that Series and
allocable to that Class, over the liabilities belonging to that Series or Class.
Upon the liquidation or dissolution of the Trust or any Series or Class pursuant
to this part 3(d) of this Article FOURTH the Trustees shall make provisions for
the payment of all outstanding obligations, taxes and other liabilities, accrued
or contingent, of the Trust or that Series or Class. The assets so distributable
to the Shareholders of any particular Class and Series shall be distributed
among such Shareholders in proportion to the relative net asset value of such
Shares. The liquidation of the Trust or any particular Series or Class thereof
may be authorized at any time by vote of a majority of the Trustees or
instrument executed by a majority of their number then in office, provided the
Trustees find that it is in the best interest of the Shareholders of such Series
or Class or as otherwise provided in this Declaration of Trust or the instrument
establishing such Series or Class. The Trustees shall provide written notice to
affected shareholders of a termination effected under this part 3(d) of this
Article FOURTH.
(e) Transfer. All Shares of each particular Series or Class shall be
transferable, but transfers of Shares of a particular Class and Series will be
recorded on the Share transfer records of the Trust applicable to such Series or
Class of that Series, as kept by the Trust or by any transfer or similar agent,
as the case may be, only at such times as Shareholders shall have the right to
require the Trust to redeem Shares of such Series or Class of that Series and at
such other times as may be permitted by the Trustees.
(f) Equality. Except as provided herein or in the instrument
designating and establishing any Series or Class, all Shares of a particular
Series or Class shall represent an equal proportionate interest in the assets
belonging to that Series, or in the case of a Class, belonging to that Series
and allocable to that Class, (subject to the liabilities belonging to that
Series or that Class), and each Share of any particular Series or Class shall be
equal to each other Share of that Series or Class; but the provisions of this
sentence shall not restrict any distinctions permissible under this Article
FOURTH that may exist with respect to Shares of the different Classes of a
Series. The Trustees may from time to time divide or combine the Shares of any
particular Class or Series into a greater or lesser number of Shares of that
Class or Series provided that such division or combination does not change the
proportionate beneficial interest in the assets belonging to that Series or
allocable to that Class or in any way affect the rights of Shares of any other
Class or Series.
(g) Fractions. Any fractional Share of any Class or Series, if any
such fractional Share is outstanding, shall carry proportionately all the rights
and obligations of a whole Share of that Class and Series, including those
rights and obligations with respect to voting, receipt of dividends and
distributions, redemption of Shares, and liquidation of the Trust.
(h) Conversion Rights. Subject to compliance with the requirements
of the 1940 Act, the Trustees shall have the authority to provide that (i)
holders of Shares of any Series shall have the right to exchange said Shares
into Shares of one or more other Series of Shares, (ii) holders of shares of any
Class shall have the right to exchange said Shares into Shares of one or more
other Classes of the same or a different Series, and/or (iii) the Trust shall
have the right to carry out exchanges of the aforesaid kind, in each case in
accordance with such requirements and procedures as may be established by the
Trustees.
(i) Ownership of Shares. The ownership of Shares shall be recorded
on the books of the Trust or of a transfer or similar agent for the Trust, which
books shall be maintained separately for the Shares of each Class and Series
that has been established and designated. No certification certifying the
ownership of Shares need be issued except as the Trustees may otherwise
determine from time to time. The Trustees may make such rules as they consider
appropriate for the issuance of Share certificates, the use of facsimile
signatures, the transfer of Shares and similar matters. The record books of the
Trust as kept by the Trust or any transfer or similar agent, as the case may be,
shall be conclusive as to who are the Shareholders and as to the number of
Shares of each Class and Series held from time to time by each such Shareholder.
(j) Investments in the Trust. The Trustees may accept investments in
the Trust from such persons and on such terms and for such consideration, not
inconsistent with the provisions of the 1940 Act, as they from time to time
authorize or determine. Such investments may be in the form of cash, securities
or other property in which the appropriate Series is authorized to invest, hold
or own, valued as provided in part 13, Article SEVENTH. The Trustees may
authorize any distributor, principal underwriter, custodian, transfer agent or
other person to accept orders for the purchase or sale of Shares that conform to
such authorized terms and to reject any purchase or sale orders for Shares
whether or not conforming to such authorized terms.ARTICLE FIFTH - SHAREHOLDERS'
VOTING POWERS AND MEETINGS
The following provisions are hereby adopted with respect to voting Shares
of the Trust and certain other rights:
1. The Shareholders shall have the power to vote only (a) for the election
of Trustees when that issue is submitted to Shareholders, or removal of Trustees
to the extent and as provided in Article SIXTH, (b) with respect to the
amendment of this Declaration of Trust to the extent and as provided in part 12,
Article NINTH, (c) with respect to transactions with respect to the Trust, a
Series or Class as provided in part 4(a), Article NINTH, (d) to the same extent
as the shareholders of a Massachusetts business corporation, as to whether or
not a court action, proceeding or claim should be brought or maintained
derivatively or as a class action on behalf of the Trust any Series, Class or
the Shareholders, (e) with respect to those matters relating to the Trust as may
be required by the 1940 Act or required by law, by this Declaration of Trust, or
the By-Laws of the Trust or any registration statement of the Trust filed with
the Commission or any State, or as the Trustees may consider desirable, and (f)
with respect to any other matter as to which the Trustees, in their sole
discretion, shall submit to the Shareholders.
2. The Trust will not hold shareholder meetings unless required by the
1940 Act, the provisions of this Declaration of Trust, or any other applicable
law. The Trustees may call a meeting of shareholders from time to time.
3. As to each matter submitted to a vote of Shareholders, each Shareholder
shall be entitled to one vote for each whole Share and to a proportionate
fractional vote for each fractional Share standing in such Shareholder's name on
the books of the Trust irrespective of the Series thereof or the Class thereof
and all Shares of all Series and Classes shall vote together as a single Class;
provided, however, that (i) as to any matter with respect to which a separate
vote of one or more Series or Classes thereof is required by the 1940 Act or the
provisions of the writing establishing and designating the Series or Class, such
requirements as to a separate vote by such Series or Class thereof shall apply
in lieu of all Shares of all Series and Classes thereof voting together as a
single Class; and (ii) as to any matter which affects only the interests of one
or more particular Series or Classes thereof, only the holders of Shares of the
one or more affected Series or Classes thereof shall be entitled to vote, and
each such Series or Class shall vote as a separate Class. All Shares of a Series
shall have identical voting rights, and all Shares of a Class of a Series shall
have identical voting rights. Shares may be voted in person or by proxy. Proxies
may be given by or on behalf of a Shareholder orally or in writing or pursuant
to any computerized, telephonic, or mechanical data gathering process.
4. Except as required by the 1940 Act or other applicable law, the
presence in person or by proxy of one-third of the Shares entitled to vote shall
be a quorum for the transaction of business at a Shareholders' meeting,
provided, however, that if any action to be taken by the Shareholders of a
Series or Class requires an affirmative vote of a majority, or more than a
majority, of the Shares outstanding and entitled to vote, then with respect to
voting on that particular issue the presence in person or by proxy of the
holders of a majority of the Shares outstanding and entitled to vote at such a
meeting shall constitute a quorum for the transaction of business with respect
to such issue. Any number less than a quorum shall be sufficient for
adjournments. If at any meeting of the Shareholders there shall be less than a
quorum present with respect to a particular issue to be voted on, such meeting
may be adjourned, without further notice, with respect to such issue from time
to time until a quorum shall be present with respect to such issue, but voting
may take place with respect to issues for which a quorum is present. Any meeting
of Shareholders, whether or not a quorum is present, may be adjourned with
respect to any one or more items of business for any lawful purpose, provided
that no meeting shall be adjourned for more than six months beyond the
originally scheduled date. Any adjourned session or sessions may be held, within
a reasonable time after the date for the original meeting without the necessity
of further notice. A majority of the Shares voted at a meeting at which a quorum
is present shall decide any questions and a plurality shall elect a Trustee,
except when a different vote is required by any provision of the 1940 Act or
other applicable law or by this Declaration of Trust or By-Laws.
5. Each Shareholder, upon request to the Trust in proper form determined
by the Trust, shall be entitled to require the Trust to redeem from the net
assets of that Series all or part of the Shares of such Series and Class
standing in the name of such Shareholder. The method of computing such net asset
value, the time at which such net asset value shall be computed and the time
within which the Trust shall make payment therefor, shall be determined as
hereinafter provided in Article SEVENTH of this Declaration of Trust.
Notwithstanding the foregoing, the Trustees, when permitted or required to do so
by the 1940 Act, may suspend the right of the Shareholders to require the Trust
to redeem Shares.
6. No Shareholder shall, as such holder, have any right to purchase or
subscribe for any Shares of the Trust which it may issue or sell, other than
such right, if any, as the Trustees, in their discretion, may determine.
7. All persons who shall acquire Shares shall acquire the same subject to
the provisions of the Declaration of Trust.
8. Cumulative voting for the election of Trustees shall not be allowed.
ARTICLE SIXTH - THE TRUSTEES
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1. The persons who shall act as Trustees until their successors are duly
chosen and qualify are the trustees executing this Declaration of Trust or any
counterpart thereof. However, the By-Laws of the Trust may fix the number of
Trustees at a number greater or lesser than the number of initial Trustees and
may authorize the Trustees to increase or decrease the number of Trustees, to
fill any vacancies on the Board which may occur for any reason including any
vacancies created by any such increase in the number of Trustees, to set and
alter the terms of office of the Trustees and to lengthen or lessen their own
terms of office or make their terms of office of indefinite duration, all
subject to the 1940 Act, as amended from time to time, and to this Article
SIXTH. Unless otherwise provided by the By-Laws of the Trust, the Trustees need
not be Shareholders.
2. A Trustee at any time may be removed either with or without cause by
resolution duly adopted by the affirmative vote of the holders of two-thirds of
the outstanding Shares, present in person or by proxy at any meeting of
Shareholders called for such purpose; such a meeting shall be called by the
Trustees when requested in writing to do so by the record holders of not less
than ten per centum of the outstanding Shares. A Trustee may also be removed by
the Board of Trustees, as provided in the By-Laws of the Trust.
3. The Trustees shall make available a list of names and addresses of all
Shareholders as recorded on the books of the Trust, upon receipt of the request
in writing signed by not less than ten Shareholders (who have been shareholders
for at least six months) holding in the aggregate shares of the Trust valued at
not less than $25,000 at current offering price (as defined in the then
effective Prospectus and/or Statement of Additional Information relating to the
Shares under the Securities Act of 1933, as amended from time to time) or
holding not less than 1% in amount of the entire amount of Shares issued and
outstanding; such request must state that such Shareholders wish to communicate
with other Shareholders with a view to obtaining signatures to a request for a
meeting to take action pursuant to part 2 of this Article SIXTH and be
accompanied by a form of communication to the Shareholders. The Trustees may, in
their discretion, satisfy their obligation under this part 3 by either making
available the Shareholder list to such Shareholders at the principal offices of
the Trust, or at the offices of the Trust's transfer agent, during regular
business hours, or by mailing a copy of such communication and form of request,
at the expense of such requesting Shareholders, to all other Shareholders, and
the Trustees may also take such other action as may be permitted under Section
16(c) of the 1940 Act.
ARTICLE SEVENTH - POWERS OF TRUSTEES
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The following provisions are hereby adopted for the purpose of defining,
limiting and regulating the powers of the Trust, the Trustees and the
Shareholders.
1. As soon as any Trustee is duly elected by the Shareholders or the
Trustees and shall have accepted this Trust, the Trust estate shall vest in the
new Trustee or Trustees, together with the continuing Trustees, without any
further act or conveyance, and he or she shall be deemed a Trustee hereunder.
2. The death, declination, resignation, retirement, removal, or incapacity
of the Trustees, or any one of them, shall not operate to annul or terminate the
Trust or any Series but the Trust shall continue in full force and effect
pursuant to the terms of this Declaration of Trust.
3. The assets of the Trust shall be held separate and apart from any
assets now or hereafter held in any capacity other than as Trustee hereunder by
the Trustees or any successor Trustees. All of the assets of the Trust shall at
all times be considered as vested in the Trustees. No Shareholder shall have, as
a holder of beneficial interest in the Trust, any authority, power or right
whatsoever to transact business for or on behalf of the Trust, or on behalf of
the Trustees, in connection with the property or assets of the Trust, or in any
part thereof.
4. The Trustees in all instances shall act as principals, and are and
shall be free from the control of the Shareholders. The Trustees shall have full
power and authority to do any and all acts and to make and execute, and to
authorize the officers and agents of the Trust to make and execute, any and all
contracts and instruments that they may consider necessary or appropriate in
connection with the management of the Trust. Except as otherwise provided herein
or in the 1940 Act, the Trustees shall not in any way be bound or limited by
present or future laws or customs in regard to Trust investments, but shall have
full authority and power to make any and all investments which they, in their
uncontrolled discretion and to the same extent as if the Trustees were the sole
owners of the assets of the Trust and the business in their own right, shall
deem proper to accomplish the purpose of this Trust. Subject to any applicable
limitation in this Declaration of Trust or by the By-Laws of the Trust, and in
addition to the powers otherwise granted herein, the Trustees shall have power
and authority:
(a) to adopt By-Laws not inconsistent with this Declaration of Trust
providing for the conduct of the business of the Trust, including meetings of
the Shareholders and Trustees, and other related matters, and to amend and
repeal them to the extent that they do not reserve that right to the
Shareholders;
(b) to elect and remove such officers and appoint and terminate such
officers as they consider appropriate with or without cause, and to appoint and
terminate agents and consultants and hire and terminate employees, any one or
more of the foregoing of whom may be a Trustee, and may provide for the
compensation of all of the foregoing; to appoint and designate from among the
Trustees or other qualified persons such committees as the Trustees may
determine and to terminate any such committee and remove any member of such
committee;
(c) to employ as custodian of any assets of the Trust one or more
banks, trust companies, companies that are members of a national securities
exchange, or any other entity qualified and eligible to act as a custodian under
the 1940 Act, as modified by or interpreted by any applicable order or orders of
the Commission or any rules or regulations adopted or interpretive releases of
the Commission thereunder, subject to any conditions set forth in this
Declaration of Trust or in the By-Laws, and may authorize such depository or
custodian to employ subcustodians or agents;
(d) to retain one or more transfer agents and shareholder servicing
agents, or both, and may authorize such transfer agents or servicing agents to
employ sub-agents;
(e) to provide for the distribution of Shares either through a
principal underwriter or the Trust itself or both or otherwise;
(f) to set record dates by resolution of the Trustees or in the
manner provided for in the By-Laws of the Trust;
(g) to delegate such authority as they consider desirable to any
officers of the Trust and to any investment advisor, manager, custodian or
underwriter, or other agent or independent contractor;
(h) to vote or give assent, or exercise any rights of ownership,
with respect to stock or other securities or property held in Trust hereunder;
and to execute and deliver powers of attorney to or otherwise authorize by
standing policies adopted by the Trustees, such person or persons as the
Trustees shall deem proper, granting to such person or persons such power and
discretion with relation to securities or property as the Trustees shall deem
proper;
(i) to exercise powers and rights of subscription or otherwise which
in any manner arise out of ownership of securities held in trust hereunder;
(j) to hold any security or property in a form not indicating any
trust, whether in bearer, unregistered or other negotiable form, either in its
own name or in the name of a custodian, subcustodian or a nominee or nominees or
otherwise;
(k) to consent to or participate in any plan for the reorganization,
consolidation or merger of any corporation or concern, any security of which is
held in the Trust; to consent to any contract, lease, mortgage, purchase, or
sale of property by such corporation or concern, and to pay calls or
subscriptions with respect to any security or instrument held in the Trust;(l)
to join with other holders of any security or instrument in acting through a
committee, depositary, voting trustee or otherwise, and in that connection to
deposit any security or instrument with, or transfer any security to, any such
committee, depositary or trustee, and to delegate to them such power and
authority with relation to any security (whether or not so deposited or
transferred) as the Trustees shall deem proper, and to agree to pay, and to pay,
such portion of the expenses and compensation of such committee, depositary or
trustee as the Trustees shall deem proper;
(m) to sue or be sued in the name of the Trust;
(n) to compromise, arbitrate, or otherwise adjust claims in favor of
or against the Trust or any matter in controversy including, but not limited to,
claims for taxes;
(o) to make, by resolutions adopted by the Trustees or in the manner
provided in the By-Laws, distributions of income and of capital gains to
Shareholders;
(p) to borrow money and to pledge, mortgage or hypothecate the
assets of the Trust or any part thereof, to the extent and in the manner
permitted by the 1940 Act;
(q) to enter into investment advisory or management contracts,
subject to the 1940 Act, with any one or more corporations, partnerships,
trusts, associations or other persons;
(r) to make loans of cash and/or securities or other assets of the
Trust;
(s) to change the name of the Trust or any Class or Series of the
Trust as they consider appropriate without prior shareholder approval;
(t) to establish officers' and Trustees' fees or compensation and
fees or compensation for committees of the Trustees to be paid by the Trust or
each Series thereof in such manner and amount as the Trustees may determine;
(u) to invest all or any portion of the Trust's assets in any one or
more registered investment companies, including investment by means of transfer
of such assets in exchange for an interest or interests in such investment
company or investment companies or by any other means approved by the Trustees;
(v) to determine whether a minimum and/or maximum value should apply
to accounts holding shares, to fix such values and establish the procedures to
cause the involuntary redemption of accounts that do not satisfy such criteria;
and
(w) to enter into joint ventures, general or limited partnerships
and any other combinations or associations;
(x) to endorse or guarantee the payment of any notes or other
obligations of any person; to make contracts of guaranty or suretyship, or
otherwise assume liability for payment thereof;
(y) to purchase and pay for entirely out of Trust property such
insurance and/or bonding as they may deem necessary or appropriate for the
conduct of the business, including, without limitation, insurance policies
insuring the assets of the Trust and payment of distributions and principal on
its portfolio investments, and insurance policies insuring the Shareholders,
Trustees, officers, employees, agents, consultants, investment advisors,
managers, administrators, distributors, principal underwriters, or independent
contractors, or any thereof (or any person connected therewith), of the Trust
individually against all claims and liabilities of every nature arising by
reason of holding, being or having held any such office or position, or by
reason of any action alleged to have been taken or omitted by any such person in
any such capacity, including any action taken or omitted that may be determined
to constitute negligence, whether or not the Trust would have the power to
indemnify such person against such liability;
(z) to pay pensions for faithful service, as deemed appropriate by
the Trustees, and to adopt, establish and carry out pension, profit-sharing,
share bonus, share purchase, savings, thrift and other retirement, incentive and
benefit plans, trusts and provisions, including the purchasing of life insurance
and annuity contracts as a means of providing such retirement and other
benefits, for any or all of the Trustees, officers, employees and agents of the
Trust;
(aa) to adopt on behalf of the Trust or any Series with respect to
any Class thereof a plan of distribution and related agreements thereto pursuant
to the terms of Rule 12b-1 of the 1940 Act and to make payments from the assets
of the Trust or the relevant Series pursuant to said Rule 12b-1 Plan;
(bb) to operate as and carry on the business of an investment
company and to exercise all the powers necessary and appropriate to the conduct
of such operations;
(cc) to issue, sell, repurchase, redeem, retire, cancel, acquire,
hold, resell, reissue, dispose of, and otherwise deal in Shares and, subject to
the provisions set forth in Article FOURTH and part 4, Article FIFTH, to apply
to any such repurchase, redemption, retirement, cancellation or acquisition of
Shares any funds or property of the Trust, or the particular Series of the
Trust, with respect to which such Shares are issued;
(dd) in general to carry on any other business in connection with or
incidental to any of the foregoing powers, to do everything necessary, suitable
or proper for the accomplishment of any purpose or the attainment of any object
or the furtherance of any power hereinbefore set forth, either alone or in
association with others, and to do every other act or thing incidental or
appurtenant to or growing out of or connected with the aforesaid business or
purposes, objects or powers.
The foregoing clauses shall be construed both as objectives and powers,
and the foregoing enumeration of specific powers shall not be held to limit or
restrict in any manner the general powers of the Trustees. Any action by one or
more of the Trustees in their capacity as such hereunder shall be deemed an
action on behalf of the Trust or the applicable Series and not an action in an
individual capacity.
5. No one dealing with the Trustees shall be under any obligation to make
any inquiry concerning the authority of the Trustees, or to see to the
application of any payments made or property transferred to the Trustees or upon
their order.
6. (a) The Trustees shall have no power to bind any Shareholder personally
or to call upon any Shareholder for the payment of any sum of money or
assessment whatsoever other than such as the Shareholder may at any time
personally agree to pay by way of subscription to any Shares or otherwise. This
paragraph shall not limit the right of the Trustees to assert claims against any
shareholder based upon the acts or omissions of such shareholder or for any
other reason.
(b) Whenever this Declaration of Trust calls for or permits any
action to be taken by the Trustees hereunder, such action shall mean that taken
by the Board of Trustees by vote of the majority of a quorum of Trustees as set
forth from time to time in the By-Laws of the Trust or as required by the 1940
Act.
(c) The Trustees shall possess and exercise any and all such
additional powers as are reasonably implied from the powers herein contained
such as may be necessary or convenient in the conduct of any business or
enterprise of the Trust, to do and perform anything necessary, suitable, or
proper for the accomplishment of any of the purposes, or the attainment of any
one or more of the objects, herein enumerated, or which shall at any time appear
conducive to or expedient for the protection or benefit of the Trust, and to do
and perform all other acts and things necessary or incidental to the purposes
herein before set forth, or that may be deemed necessary by the Trustees.
Without limiting the generality of the foregoing, except as otherwise provided
herein or in the 1940 Act, the Trustees shall not in any way be bound or limited
by present or future laws or customs in regard to trust investments, but shall
have full authority and power to make any and all investments that they, in
their discretion, shall deem proper to accomplish the purpose of this Trust.
(d) The Trustees shall have the power, to the extent not
inconsistent with the 1940 Act, to determine conclusively whether any moneys,
securities, or other properties of the Trust are, for the purposes of this
Trust, to be considered as capital or income and in what manner any expenses or
disbursements are to be borne as between capital and income whether or not in
the absence of this provision such moneys, securities, or other properties would
be regarded as capital or income and whether or not in the absence of this
provision such expenses or disbursements would ordinarily be charged to capital
or to income.
7. The By-Laws of the Trust may divide the Trustees into classes and
prescribe the tenure of office of the several classes, but no class of Trustee
shall be elected for a period shorter than that from the time of the election
following the division into classes until the next meeting of Trustees and
thereafter for a period shorter than the interval between meetings of Trustees
or for a period longer than five years, and the term of office of at least one
class shall expire each year.
8. The Shareholders shall, for any lawful purpose, have the right to
inspect the records, documents, accounts and books of the Trust, subject to
reasonable regulations of the Trustees, not contrary to Massachusetts law, as to
whether and to what extent, and at what times and places, and under what
conditions and regulations, such right shall be exercised.
9. Any officer elected or appointed by the Trustees or by the Shareholders
or otherwise, may be removed at any time, with or without cause.
10. The Trustees shall have power to hold their meetings, to have an
office or offices and, subject to the provisions of the laws of Massachusetts,
to keep the books of the Trust outside of said Commonwealth at such places as
may from time to time be designated by them. Action may be taken by the Trustees
without a meeting by unanimous written consent or by telephone or similar method
of communication.
11. Securities held by the Trust shall be voted in person or by proxy by
the President or a Vice-President, or such officer or officers of the Trust or
such other agent of the Trust as the Trustees shall designate or otherwise
authorize by standing policies adopted by the Trustees for the purpose, or by a
proxy or proxies thereunto duly authorized by the Trustees.12. (a) Subject to
the provisions of the 1940 Act, any Trustee, officer or employee, individually,
or any partnership of which any Trustee, officer or employee may be a member, or
any corporation or association of which any Trustee, officer or employee may be
an officer, partner, director, trustee, employee or stockholder, or otherwise
may have an interest, may be a party to, or may be pecuniarily or otherwise
interested in, any contract or transaction of the Trust, and in the absence of
fraud no contract or other transaction shall be thereby affected or invalidated;
provided that in such case a Trustee, officer or employee or a partnership,
corporation or association of which a Trustee, officer or employee is a member,
officer, director, trustee, employee or stockholder is so interested, such fact
shall be disclosed or shall have been known to the Trustees including those
Trustees who are not so interested and who are neither "interested" nor
"affiliated" persons as those terms are defined in the 1940 Act, or a majority
thereof; and any Trustee who is so interested, or who is also a director,
officer, partner, trustee, employee or stockholder of such other corporation or
a member of such partnership or association which is so interested, may be
counted in determining the existence of a quorum at any meeting of the Trustees
which shall authorize any such contract or transaction, and may vote thereat to
authorize any such contract or transaction, with like force and effect as if he
were not so interested.
(b) Specifically, but without limitation of the foregoing, the Trust
may enter into a management or investment advisory contract or underwriting
contract and other contracts with, and may otherwise do business with any
manager or investment advisor for the Trust and/or principal underwriter of the
Shares of the Trust or any subsidiary or affiliate of any such manager or
investment advisor and/or principal underwriter and may permit any such firm or
corporation to enter into any contracts or other arrangements with any other
firm or corporation relating to the Trust notwithstanding that the Trustees of
the Trust may be composed in part of partners, directors, officers or employees
of any such firm or corporation, and officers of the Trust may have been or may
be or become partners, directors, officers or employees of any such firm or
corporation, and in the absence of fraud the Trust and any such firm or
corporation may deal freely with each other, and no such contract or transaction
between the Trust and any such firm or corporation shall be invalidated or in
any way affected thereby, nor shall any Trustee or officer of the Trust be
liable to the Trust or to any Shareholder or creditor thereof or to any other
person for any loss incurred by it or him solely because of the existence of any
such contract or transaction; provided that nothing herein shall protect any
director or officer of the Trust against any liability to the trust or to its
security holders to which he would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of his office.
(c) As used in this paragraph the following terms shall have the
meanings set forth below:
(i) the term "indemnitee" shall mean any present or former
Trustee, officer or employee of the Trust, any present or former Trustee,
partner, Director or officer of another trust, partnership, corporation or
association whose securities are or were owned by the Trust or of which the
Trust is or was a creditor and who served or serves in such capacity at the
request of the Trust, and the heirs, executors, administrators, successors and
assigns of any of the foregoing; however, whenever conduct by an indemnitee is
referred to, the conduct shall be that of the original indemnitee rather than
that of the heir, executor, administrator, successor or assignee;
(ii) the term "covered proceeding" shall mean any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative, to which an indemnitee is or was a party or is
threatened to be made a party by reason of the fact or facts under which he or
it is an indemnitee as defined above;
(iii) the term "disabling conduct" shall mean willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of the office in question;
(iv) the term "covered expenses" shall mean expenses
(including attorney's fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by an indemnitee in connection with a covered
proceeding; and
(v) the term "adjudication of liability" shall mean, as to any
covered proceeding and as to any indemnitee, an adverse determination as to the
indemnitee whether by judgment, order, settlement, conviction or upon a plea of
nolo contendere or its equivalent.
(d) The Trust shall not indemnify any indemnitee for any covered
expenses in any covered proceeding if there has been an adjudication of
liability against such indemnitee expressly based on a finding of disabling
conduct.
(e) Except as set forth in paragraph (d) above, the Trust shall
indemnify any indemnitee for covered expenses in any covered proceeding, whether
or not there is an adjudication of liability as to such indemnitee, such
indemnification by the Trust to be to the fullest extent now or hereafter
permitted by any applicable law unless the By-laws limit or restrict the
indemnification to which any indemnitee may be entitled. The Board of Trustees
may adopt by-law provisions to implement subparagraphs (c), (d) and (e) hereof.
(f) Nothing herein shall be deemed to affect the right of the Trust
and/or any indemnitee to acquire and pay for any insurance covering any or all
indemnities to the extent permitted by applicable law or to affect any other
indemnification rights to which any indemnitee may be entitled to the extent
permitted by applicable law. Such rights to indemnification shall not, except as
otherwise provided by law, be deemed exclusive of any other rights to which such
indemnitee may be entitled under any statute, By-Law, contract or otherwise.
13. The Trustees are empowered, in their absolute discretion, to establish
the bases or times, or both, for determining the net asset value per Share of
any Class and Series in accordance with the 1940 Act and to authorize the
voluntary purchase by any Class and Series, either directly or through an agent,
of Shares of any Class and Series upon such terms and conditions and for such
consideration as the Trustees shall deem advisable in accordance with the 1940
Act.
14. Payment of the net asset value per Share of any Class and Series
properly surrendered to it for redemption shall be made by the Trust within
seven days, or as specified in any applicable law or regulation, after tender of
such stock or request for redemption to the Trust for such purpose together with
any additional documentation that may be reasonably required by the Trust or its
transfer agent to evidence the authority of the tenderor to make such request,
plus any period of time during which the right of the holders of the shares of
such Class of that Series to require the Trust to redeem such shares has been
suspended. Any such payment may be made in portfolio securities of such Class of
that Series and/or in cash, as the Trustees shall deem advisable, and no
Shareholder shall have a right, other than as determined by the Trustees, to
have Shares redeemed in kind.
15. The Trust shall have the right, at any time, without prior notice to
the Shareholder to redeem Shares of the Class and Series held by a Shareholder
held in any account registered in the name of such Shareholder for its current
net asset value, for any reason, including, but not limited to, (i) the
determination that such redemption is necessary to reimburse either that Series
or Class of the Trust or the distributor (i.e., principal underwriter) of the
Shares for any loss either has sustained by reason of the failure of such
Shareholder to make timely and good payment for Shares purchased or subscribed
for by such Shareholder, regardless of whether such Shareholder was a
Shareholder at the time of such purchase or subscription, (ii) the failure of a
Shareholder to supply a tax identification number if required to do so, (iii)
the failure of a Shareholder to pay when due for the purchase of Shares issued
to him and subject to and upon such terms and conditions as the Trustees may
from time to time prescribe, (iv) pursuant to authorization by a Shareholder to
pay fees or make other payments to one or more third parties, including, without
limitation, any affiliate of the investment advisor of the Trust or any Series
thereof, or (v) if the aggregate net asset value of all Shares of such
Shareholder (taken at cost or value, as determined by the Board) has been
reduced below an amount established by the Board of Trustees from time to time
as the minimum amount required to be maintained by Shareholders.
ARTICLE EIGHTH - LICENSE
-------------- -------
The name "Oppenheimer" included in the name of the Trust and of any Series
shall be used pursuant to a royalty-free, non-exclusive license from
OppenheimerFunds, Inc. ("OFI"), incidental to and as part of any one or more
advisory, management or supervisory contracts which may be entered into by the
Trust with OFI. Such license shall allow OFI to inspect and subject to the
control of the Board of Trustees to control the nature and quality of services
offered by the Trust under such name. The license may be terminated by OFI upon
termination of such advisory, management or supervisory contracts or without
cause upon 60 days' written notice, in which case neither the Trust nor any
Series or Class shall have any further right to use the name "Oppenheimer" in
its name or otherwise and the Trust, the Shareholders and its officers and
Trustees shall promptly take whatever action may be necessary to change its name
and the names of any Series or Classes accordingly.
ARTICLE NINTH - MISCELLANEOUS:
------------- -------------
1. In case any Shareholder or former Shareholder shall be held to be
personally liable solely by reason of his being or having been a Shareholder and
not because of his acts or omissions or for some other reason, the Shareholder
or former Shareholder (or the Shareholders' heirs, executors, administrators or
other legal representatives or in the case of a corporation or other entity, its
corporate or other general successor) shall be entitled out of the Trust estate
to be held harmless from and indemnified against all loss and expense arising
from such liability. The Trust shall, upon request by the Shareholder, assume
the defense of any such claim made against any Shareholder for any act or
obligation of the Trust and satisfy any judgment thereon.
2. It is hereby expressly declared that a trust is created hereby and not
a partnership, joint stock association, corporation, bailment, or any other form
of a legal relationship other than a trust, as contemplated in Massachusetts
General Laws Chapter 182. No individual Trustee hereunder shall have any power
to bind the Trust unless so authorized by the Trustees, or to personally bind
the Trust's officers or any Shareholder. All persons extending credit to, doing
business with, contracting with or having or asserting any claim against the
Trust or the Trustees shall look only to the assets of the appropriate Series
for payment under any such credit, transaction, contract or claim; and neither
the Shareholders nor the Trustees, nor any of their agents, whether past,
present or future, shall be personally liable therefor; notice of such
disclaimer and agreement thereto shall be given in each agreement, obligation or
instrument entered into or executed by Trust or the Trustees. There is hereby
expressly disclaimed Shareholder and Trustee liability for the acts and
obligations of the Trust. Nothing in this Declaration of Trust shall protect a
Trustee or officer against any liability to which such Trustee or officer would
otherwise be subject by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of the
office of Trustee or of such officer hereunder.
3. The exercise by the Trustees of their powers and discretion hereunder
in good faith and with reasonable care under the circumstances then prevailing,
shall be binding upon everyone interested. Subject to the provisions of part 2
of this Article NINTH, the Trustees shall not be liable for errors of judgment
or mistakes of fact or law. Subject to the foregoing, (a) Trustees shall not be
responsible or liable in any event for any neglect or wrongdoing of any officer,
agent, employee, consultant, advisor, administrator, distributor or principal
underwriter, custodian or transfer, dividend disbursing, Shareholder servicing
or accounting agent of the Trust, nor shall any Trustee be responsible for the
act or omission of any other Trustee; (b) the Trustees may take advice of
counsel or other experts with respect to the meaning and operations of this
Declaration of Trust, applicable laws, contracts, obligations, transactions or
any other business the Trust may enter into, and subject to the provisions of
part 2 of this Article NINTH, shall be under no liability for any act or
omission in accordance with such advice or for failing to follow such advice;
and (c) in discharging their duties, the Trustees, when acting in good faith,
shall be entitled to rely upon the books of account of the Trust and upon
written reports made to the Trustees by any officer appointed by them, any
independent public accountant, and (with respect to the subject matter of the
contract involved) any officer, partner or responsible employee of a party who
has been appointed by the Trustees or with whom the Trust has entered into a
contract pursuant to Article SEVENTH. The Trustees shall not be required to give
any bond as such, nor any surety if a bond is required.
4. This Trust shall continue without limitation of time but subject to the
provisions of sub-sections (a) and (b) of this part 4.
Subject to applicable Federal and State law, and except as otherwise
provided in part 5 of this Article NINTH, the Trustees, with the Majority Vote
of Shareholders of an affected Series or Class, may sell and convey all or
substantially all the assets of that Series or Class (which sale may be subject
to the retention of assets for the payment of liabilities and expenses and may
be in the form of a statutory merger to the extent permitted by applicable law)
to another issuer or to another Series or Class of the Trust for a consideration
which may be or include securities of such issuer or may merge or consolidate
with any other corporation, association, trust, or other organization or may
sell, lease, or exchange all or a portion of the Trust property or Trust
property allocated or belonging to such Series or Class, upon such terms and
conditions and for such consideration when and as authorized by such vote. Such
transactions may be effected through share-for-share exchanges, transfers or
sale of assets, shareholder in-kind redemptions and purchases, exchange offers,
or any other method approved by the Trustees. Upon making provision for the
payment of liabilities, by assumption by such issuer or otherwise, the Trustees
shall distribute the remaining proceeds among the holders of the outstanding
Shares of the Series or Class, the assets of which have been so transferred, in
proportion to the relative net asset value of such Shares.
(b) Upon completion of the distribution of the remaining proceeds or
the remaining assets as provided in sub-section (a) hereof or pursuant to part
3(d) of Article FOURTH, as applicable, the Series the assets of which have been
so transferred shall terminate, and if all the assets of the Trust have been so
transferred, the Trust shall terminate and the Trustees shall be discharged of
any and all further liabilities and duties hereunder and the right, title and
interest of all parties shall be canceled and discharged.
5. Subject to applicable Federal and state law, the Trustees may without
the vote or consent of Shareholders cause to be organized or assist in
organizing one or more corporations, trusts, partnerships, limited liability
companies, associations, or other organization, under the laws of any
jurisdiction, to take over all or a portion of the Trust property or all or a
portion of the Trust property allocated or belonging to such Series or Class or
to carry on any business in which the Trust shall directly or indirectly have
any interest, and to sell, convey and transfer the Trust property or the Trust
property allocated or belonging to such Series or Class to any such corporation,
trust, limited liability company, partnership, association, or organization in
exchange for the shares or securities thereof or otherwise, and to lend money
to, subscribe for the shares or securities of, and enter into any contracts with
any such corporation, trust, partnership, limited liability company,
association, or organization or any corporation, partnership, limited liability
company, trust, association, or organization in which the Trust or such Series
or Class holds or is about to acquire shares or any other interest. Subject to
applicable Federal and state law, the Trustees may also cause a merger or
consolidation between the Trust or any successor thereto or any Series or Class
thereof and any such corporation, trust, partnership, limited liability company,
association, or other organization. Nothing contained herein shall be construed
as requiring approval of shareholders for the Trustees to organize or assist in
organizing one or more corporations, trusts, partnerships, limited liability
companies, associations, or other organizations and selling, conveying, or
transferring the Trust property or a portion of the Trust property to such
organization or entities; provided, however, that the Trustees shall provide
written notice to the affected Shareholders of any transaction whereby, pursuant
to this part 5, Article NINTH, the Trust or any Series or Class thereof sells,
conveys, or transfers all or a substantial portion of its assets to another
entity or merges or consolidates with another entity. Such transactions may be
effected through share-for-share exchanges, transfer or sale of assets,
shareholder in-kind redemptions and purchases, exchange offers, or any other
approved by the Trustees.
6. The original or a copy of this instrument and of each restated
declaration of trust or instrument supplemental hereto shall be kept at the
office of the Trust where it may be inspected by any Shareholder. A copy of this
instrument and of each supplemental or restated declaration of trust shall be
filed with the Secretary of the Commonwealth of Massachusetts, as well as any
other governmental office where such filing may from time to time be required.
Anyone dealing with the Trust may rely on a certificate by an officer of the
Trust as to whether or not any such supplemental or restated declarations of
trust have been made and as to any matters in connection with the Trust
hereunder, and, with the same effect as if it were the original, may rely on a
copy certified by an officer of the Trust to be a copy of this instrument or of
any such supplemental or restated declaration of trust. In this instrument or in
any such supplemental or restated declaration of trust, references to this
instrument, and all expressions like "herein", "hereof" and "hereunder" shall be
deemed to refer to this instrument as amended or affected by any such
supplemental or restated declaration of trust. This instrument may be executed
in any number of counterparts, each of which shall be deemed an original. 7. The
Trust set forth in this instrument is created under and is to be governed by and
construed and administered according to the laws of the Commonwealth of
Massachusetts. The Trust shall be of the type commonly called a Massachusetts
business trust, and without limiting the provisions hereof, the Trust may
exercise all powers which are ordinarily exercised by such a trust.
8. In the event that any person advances the organizational expenses of
the Trust, such advances shall become an obligation of the Trust subject to such
terms and conditions as may be fixed by, and on a date fixed by, or determined
with criteria fixed by the Board of Trustees, to be amortized over a period or
periods to be fixed by the Board.
9. Whenever any action is taken under this Declaration of Trust including
action which is required or permitted by the 1940 Act or any other applicable
law, such action shall be deemed to have been properly taken if such action is
in accordance with the construction of the 1940 Act or such other applicable law
then in effect as expressed in "no action" letters of the staff of the
Commission or any release, rule, regulation or order under the 1940 Act or any
decision of a court of competent jurisdiction, notwithstanding that any of the
foregoing shall later be found to be invalid or otherwise reversed or modified
by any of the foregoing.
10. Any action which may be taken by the Board of Trustees under this
Declaration of Trust or its By-Laws may be taken by the description thereof in
the then effective prospectus and/or statement of additional information
relating to the Shares under the Securities Act of 1933 or in any proxy
statement of the Trust rather than by formal resolution of the Board.
11. Whenever under this Declaration of Trust, the Board of Trustees is
permitted or required to place a value on assets of the Trust, such action may
be delegated by the Board, and/or determined in accordance with a formula
determined by the Board, to the extent permitted by the 1940 Act.
12. The Trustee may, without the vote or consent of the Shareholders,
amend or otherwise supplement this Declaration of Trust by executing or
authorizing an officer of the Trust to execute on their behalf a Restated
Declaration of Trust or a Declaration of Trust supplemental hereto, which
thereafter shall form a part hereof, provided, however, that none of the
following amendments shall be effective unless also approved by a Majority Vote
of Shareholders: (i) any amendment to parts 1, 3 and 4, Article FIFTH; (ii) any
amendment to this part 12, Article NINTH; (iii) any amendment to part 1, Article
NINTH; and (iv) any amendment to part 4(a), Article NINTH that would change the
voting rights of Shareholders contained therein. Any amendment required to be
submitted to the Shareholders that, as the Trustees determine, shall affect the
Shareholders of any Series or Class shall, with respect to the Series or Class
so affected, be authorized by vote of the Shareholders of that Series or Class
and no vote of Shareholders of a Series or Class not affected by the amendment
with respect to that Series or Class shall be required. Notwithstanding anything
else herein, any amendment to Article NINTH, part 1 shall not limit the rights
to indemnification or insurance provided therein with respect to action or
omission or indemnities or Shareholder indemnities prior to such amendment.
13. The captions used herein are intended for convenience of reference
only, and shall not modify or affect in any manner the meaning or interpretation
of any of the provisions of this Agreement. As used herein, the singular shall
include the plural, the masculine gender shall include the feminine and neuter,
and the neuter gender shall include the masculine and feminine, unless the
context otherwise requires.
IN WITNESS WHEREOF, the undersigned have executed this instrument as of the ____
day of _________, 2000.
[SIGNATURE LINES OMITTED]
[Remainder of Page Intentionally Left Blank]
<PAGE>
EXHIBIT B
AMENDED AND RESTATED
DISTRIBUTION AND SERVICE PLAN AND AGREEMENT
With
OppenheimerFunds Distributor, Inc.
For Class B Shares of
Oppenheimer Strategic Income Fund
This Distribution and Service Plan and Agreement (the "Plan") is dated as of the
__ day of _______, 2000, by and between Oppenheimer Strategic Income Fund (the
"Fund") and OppenheimerFunds Distributor, Inc. (the "Distributor").
1. The Plan. This Plan is the Fund's written distribution and service plan for
Class B shares of the Fund (the "Shares"), contemplated by Rule 12b-1 as it may
be amended from time to time (the "Rule") under the Investment Company Act of
1940 (the "1940 Act"), pursuant to which the Fund will compensate the
Distributor for its services in connection with the distribution of Shares, and
the personal service and maintenance of shareholder accounts that hold Shares
("Accounts"). The Fund may act as distributor of securities of which it is the
issuer, pursuant to the Rule, according to the terms of this Plan. The terms and
provisions of this Plan shall be interpreted and defined in a manner consistent
with the provisions and definitions contained in (i) the 1940 Act, (ii) the
Rule, (iii) Rule 2830 of the Conduct Rules of the National Association of
Securities Dealers, Inc., or any amendment or successor to such rule (the "NASD
Conduct Rules") and (iv) any conditions pertaining either to
distribution-related expenses or to a plan of distribution to which the Fund is
subject under any order on which the Fund relies, issued at any time by the U.S.
Securities and Exchange Commission ("SEC").
2. Definitions. As used in this Plan, the following terms shall have the
following meanings:
(a) "Recipient" shall mean any broker, dealer, bank or other person or
entity which: (i) has rendered assistance (whether direct, administrative or
both) in the distribution of Shares or has provided administrative support
services with respect to Shares held by Customers (defined below) of the
Recipient; (ii) shall furnish the Distributor (on behalf of the Fund) with such
information as the Distributor shall reasonably request to answer such questions
as may arise concerning the sale of Shares; and (iii) has been selected by the
Distributor to receive payments under the Plan.
(b) "Independent Trustees" shall mean the members of the Fund's Board of
Trustees who are not "interested persons" (as defined in the 1940 Act) of the
Fund and who have no direct or indirect financial interest in the operation of
this Plan or in any agreement relating to this Plan.
(c) "Customers" shall mean such brokerage or other customers or investment
advisory or other clients of a Recipient, and/or accounts as to which such
Recipient provides administrative support services or is a custodian or other
fiduciary.
<PAGE>
(d) "Qualified Holdings" shall mean, as to any Recipient, all Shares owned
beneficially or of record by: (i) such Recipient, or (ii) such Recipient's
Customers, but in no event shall any such Shares be deemed owned by more than
one Recipient for purposes of this Plan. In the event that more than one person
or entity would otherwise qualify as Recipients as to the same Shares, the
Recipient which is the dealer of record on the Fund's books as determined by the
Distributor shall be deemed the Recipient as to such Shares for purposes of this
Plan.
3. Payments for Distribution Assistance and Administrative Support Services.
-------------------------------------------------------------------------
(a) Payments to the Distributor. In consideration of the payments made by
the Fund to the Distributor under this Plan, the Distributor shall provide
administrative support services and distribution assistance services to the
Fund. Such services include distribution assistance and administrative support
services rendered in connection with Shares (1) sold in purchase transactions,
(2) issued in exchange for shares of another investment company for which the
Distributor serves as distributor or sub-distributor, or (3) issued pursuant to
a plan of reorganization to which the Fund is a party. If the Board believes
that the Distributor may not be rendering appropriate distribution assistance or
administrative support services in connection with the sale of Shares, then the
Distributor, at the request of the Board, shall provide the Board with a written
report or other information to verify that the Distributor is providing
appropriate services in this regard. For such services, the Fund will make the
following payments to the Distributor:
(i) Administrative Support Services Fees. Within forty-five (45)
days of the end of each calendar quarter, the Fund will make payments in the
aggregate amount of 0.0625% (0.25% on an annual basis) of the average during
that calendar quarter of the aggregate net asset value of the Shares computed as
of the close of each business day (the "Service Fee"). Such Service Fee payments
received from the Fund will compensate the Distributor for providing
administrative support services with respect to Accounts. The administrative
support services in connection with Accounts may include, but shall not be
limited to, the administrative support services that a Recipient may render as
described in Section 3(b)(i) below.
(ii) Distribution Assistance Fees (Asset-Based Sales Charge). Within
ten (10) days of the end of each month, the Fund will make payments in the
aggregate amount of 0.0625% (0.75% on an annual basis) of the average during the
month of the aggregate net asset value of Shares computed as of the close of
each business day (the "Asset-Based Sales Charge") outstanding until such Shares
are redeemed or converted to another class of shares of the Fund, provided
however, that a majority of the Independent Trustees may, but are not obligated
to, set a time period (the "Fund Maximum Holding Period") from time to time for
making such payments. Such Asset-Based Sales Charge payments received from the
Fund will compensate the Distributor for providing distribution assistance in
connection with the sale of Shares.
The distribution assistance to be rendered by the Distributor in
connection with the Shares may include, but shall not be limited to, the
following: (i) paying sales commissions to any broker, dealer, bank or other
person or entity that sells Shares, and/or paying such persons "Advance Service
Fee Payments" (as defined below) in advance of, and/or in amounts greater than,
the amount provided for in Section 3(b) of this Agreement; (ii) paying
compensation to and expenses of personnel of the Distributor who support
distribution of Shares by Recipients; (iii) obtaining financing or providing
such financing from its own resources, or from an affiliate, for the interest
and other borrowing costs of the Distributor's unreimbursed expenses incurred in
rendering distribution assistance and administrative support services to the
Fund; and (iv) paying other direct distribution costs, including without
limitation the costs of sales literature, advertising and prospectuses (other
than those prospectuses furnished to current holders of the Fund's shares
("Shareholders")) and state "blue sky" registration expenses.
(b) Payments to Recipients. The Distributor is authorized under the Plan
to pay Recipients (1) distribution assistance fees for rendering distribution
assistance in connection with the sale of Shares and/or (2) service fees for
rendering administrative support services with respect to Accounts. However, no
such payments shall be made to any Recipient for any such quarter in which its
Qualified Holdings do not equal or exceed, at the end of such quarter, the
minimum amount ("Minimum Qualified Holdings"), if any, that may be set from time
to time by a majority of the Independent Trustees. All fee payments made by the
Distributor hereunder are subject to reduction or chargeback so that the
aggregate service fee payments and Advance Service Fee Payments do not exceed
the limits on payments to Recipients that are, or may be, imposed by the NASD
Conduct Rules. The Distributor may make Plan payments to any "affiliated person"
(as defined in the 1940 Act) of the Distributor if such affiliated person
qualifies as a Recipient or retain such payments if the Distributor qualifies as
a Recipient.
(i) Service Fee. In consideration of the administrative support
services provided by a Recipient during a calendar quarter, the Distributor
shall make service fee payments to that Recipient quarterly, within forty-five
(45) days of the end of each calendar quarter, at a rate not to exceed 0.0625%
(0.25% on an annual basis) of the average during the calendar quarter of the
aggregate net asset value of Shares, computed as of the close of each business
day, constituting Qualified Holdings owned beneficially or of record by the
Recipient or by its Customers for a period of more than the minimum period (the
"Minimum Holding Period"), if any, that may be set from time to time by a
majority of the Independent Trustees.
Alternatively, the Distributor may, at its sole option, make the
following service fee payments to any Recipient quarterly, within forty-five
(45) days of the end of each calendar quarter: (i) "Advance Service Fee
Payments" at a rate not to exceed 0.25% of the average during the calendar
quarter of the aggregate net asset value of Shares, computed as of the close of
business on the day such Shares are sold, constituting Qualified Holdings, sold
by the Recipient during that quarter and owned beneficially or of record by the
Recipient or by its Customers, plus (ii) service fee payments at a rate not to
exceed 0.0625% (0.25% on an annual basis) of the average during the calendar
quarter of the aggregate net asset value of Shares, computed as of the close of
each business day, constituting Qualified Holdings owned beneficially or of
record by the Recipient or by its Customers for a period of more than one (1)
year. At the Distributor's sole option, the Advance Service Fee Payments may be
made more often than quarterly, and sooner than the end of the calendar quarter.
In the event Shares are redeemed less than one year after the date such Shares
were sold, the Recipient is obligated to and will repay the Distributor on
demand a pro rata portion of such Advance Service Fee Payments, based on the
ratio of the time such Shares were held to one (1) year.
The administrative support services to be rendered by Recipients in
connection with the Accounts may include, but shall not be limited to, the
following: answering routine inquiries concerning the Fund, assisting in the
establishment and maintenance of accounts or sub-accounts in the Fund and
processing Share redemption transactions, making the Fund's investment plans and
dividend payment options available, and providing such other information and
services in connection with the rendering of personal services and/or the
maintenance of Accounts, as the Distributor or the Fund may reasonably request.
(ii) Distribution Assistance Fees (Asset-Based Sales Charge)
Payments. In its sole discretion and irrespective of whichever alternative
method of making service fee payments to Recipients is selected by the
Distributor, in addition the Distributor may make distribution assistance fee
payments to a Recipient quarterly, within forty-five (45) days after the end of
each calendar quarter, at a rate not to exceed 0.1875% (0.75% on an annual
basis) of the average during the calendar quarter of the aggregate net asset
value of Shares computed as of the close of each business day constituting
Qualified Holdings owned beneficially or of record by the Recipient or its
Customers until such Shares are redeemed or converted to another class of shares
of the Fund, provided however, that a majority of the Independent Trustees may,
but are not obligated, to set a time period (the "Recipient Maximum Holding
Period") for making such payments. Distribution assistance fee payments shall be
made only to Recipients that are registered with the SEC as a broker-dealer or
are exempt from registration.
The distribution assistance to be rendered by the Recipients in
connection with the sale of Shares may include, but shall not be limited to, the
following: distributing sales literature and prospectuses other than those
furnished to current Shareholders, providing compensation to and paying expenses
of personnel of the Recipient who support the distribution of Shares by the
Recipient, and providing such other information and services in connection with
the distribution of Shares as the Distributor or the Fund may reasonably
request.
(c) A majority of the Independent Trustees may at any time or from time to
time increase or decrease the rate of fees to be paid to the Distributor or to
any Recipient, but not to exceed the rates set forth above, and/or direct the
Distributor to set, eliminate or modify any Minimum Holding Period, Minimum
Qualified Holdings, Fund Maximum Holding Period and/or Recipient Maximum Holding
Period, and/or to provide for split requirements so that different time periods
apply to shares afforded different shareholder privileges or other features,
including without limitation, different Minimum Holding Periods, Fund Maximum
Holding Periods and/or Recipient Maximum Holding Periods for shares held subject
to systematic withdrawal plans. The Distributor shall notify all Recipients of
any Minimum Holding Period, Minimum Qualified Holdings, Fund Maximum Holding
Periods and/or Recipient Maximum Holding Period that are established and the
rate of payments hereunder applicable to Recipients, and shall provide each
Recipient with written notice within thirty (30) days after any change in these
provisions. Inclusion of such provisions or a change in such provisions in a
revised current prospectus, statement of additional information or supplement to
current prospectus or statement of additional information shall constitute
sufficient notice.
(d) The Service Fee and the Asset-Based Sales Charge on Shares are subject
to reduction or elimination under the limits to which the Distributor is, or may
become, subject under the NASD Conduct Rules.
(e) Under the Plan, payments may also be made to Recipients: (i) by
OppenheimerFunds, Inc. ("OFI") from its own resources (which may include profits
derived from the advisory fee it receives from the Fund), or (ii) by the
Distributor (a subsidiary of OFI), from its own resources, from Asset-Based
Sales Charge payments or from the proceeds of its borrowings, in either case, in
the discretion of OFI or the Distributor, respectively.
(f) Recipients are intended to have certain rights as third-party
beneficiaries under this Plan, subject to the limitations set forth below. It
may be presumed that a Recipient has provided distribution assistance or
administrative support services qualifying for payment under the Plan if it has
Qualified Holdings of Shares that entitle it to payments under the Plan. In the
event that either the Distributor or the Board should have reason to believe
that, notwithstanding the level of Qualified Holdings, a Recipient may not be
rendering appropriate distribution assistance in connection with the sale of
Shares or administrative support services for Accounts, then the Distributor, at
the request of the Board, shall require the Recipient to provide a written
report or other information to verify that said Recipient is providing
appropriate distribution assistance and/or services in this regard. If the
Distributor or the Board of Trustees still is not satisfied after the receipt of
such report, either may take appropriate steps to terminate the Recipient's
status as such under the Plan, whereupon such Recipient's rights as a
third-party beneficiary hereunder shall terminate. Additionally, in their
discretion, a majority of the Fund's Independent Trustees at any time may remove
any broker, dealer, bank or other person or entity as a Recipient, where upon
such person's or entity's rights as a third-party beneficiary hereof shall
terminate. Notwithstanding any other provision of this Plan, this Plan does not
obligate or in any way make the Fund liable to make any payment whatsoever to
any person or entity other than directly to the Distributor. The Distributor has
no obligation to pay any Service Fees or Distribution Assistance Fees to any
Recipient if the Distributor has not received payment of Service Fees or
Distribution Assistance Fees from the Fund.
4. Selection and Nomination of Trustees. While this Plan is in effect, the
selection and nomination of persons to be Trustees of the Fund who are not
"interested persons" of the Fund ("Disinterested Trustees") shall be committed
to the discretion of the incumbent Disinterested Trustees. Nothing herein shall
prevent the incumbent Disinterested Trustees from soliciting the views or the
involvement of others in such selection or nominations as long as the final
decision on any such selection and nomination is approved by a majority of the
incumbent Disinterested Trustees.
5. Reports. While this Plan is in effect, the Treasurer of the Fund shall
provide written reports to the Fund's Board for its review, detailing the amount
of all payments made under this Plan and the purpose for which the payments were
made. The reports shall be provided quarterly, and shall state whether all
provisions of Section 3 of this Plan have been complied with.
6. Related Agreements. Any agreement related to this Plan shall be in writing
and shall provide that: (i) such agreement may be terminated at any time,
without payment of any penalty, by a vote of a majority of the Independent
Trustees or by a vote of the holders of a "majority" (as defined in the 1940
Act) of the Fund's outstanding Class B voting shares; (ii) such termination
shall be on not more than sixty days' written notice to any other party to the
agreement; (iii) such agreement shall automatically terminate in the event of
its "assignment" (as defined in the 1940 Act); (iv) such agreement shall go into
effect when approved by a vote of the Board and its Independent Trustees cast in
person at a meeting called for the purpose of voting on such agreement; and (v)
such agreement shall, unless terminated as herein provided, continue in effect
from year to year only so long as such continuance is specifically approved at
least annually by a vote of the Board and its Independent Trustees cast in
person at a meeting called for the purpose of voting on such continuance.
<PAGE>
7. Effectiveness, Continuation, Termination and Amendment. This Plan has been
approved by a vote of the Board and its Independent Trustees cast in person at a
meeting called on February 29, 2000, for the purpose of voting on this Plan, and
shall take effect as of the date first set forth above. Unless terminated as
hereinafter provided, it shall continue in effect until renewed by the Board in
accordance with the Rule and thereafter from year to year or as the Board may
otherwise determine but only so long as such continuance is specifically
approved at least annually by a vote of the Board and its Independent Trustees
cast in person at a meeting called for the purpose of voting on such
continuance.
This Plan may not be amended to increase materially the amount of payments
to be made under this Plan, without approval of the Class B Shareholders at a
meeting called for that purpose, and all material amendments must be approved by
a vote of the Board and of the Independent Trustees.
This Plan may be terminated at any time by vote of a majority of the
Independent Trustees or by the vote of the holders of a "majority" (as defined
in the 1940 Act) of the Fund's outstanding Class B voting shares. In the event
of such termination, the Board and its Independent Trustees shall determine
whether the Distributor shall be entitled to payment from the Fund of all or a
portion of the Service Fee and/or the Asset-Based Sales Charge in respect of
Shares sold prior to the effective date of such termination.
8. Disclaimer of Shareholder and Trustee Liability. The Distributor understands
that the obligations of the Fund under this Plan are not binding upon any
Trustee or shareholder of the Fund personally, but bind only the Fund and the
Fund's property. The Distributor represents that it has notice of the provisions
of the Declaration of Trust of the Fund disclaiming shareholder and Trustee
liability for acts or obligations of the Fund.
Oppenheimer Strategic Income Fund
By: ___________________
Andrew J. Donohue,
Vice President and Secretary
OppenheimerFunds Distributor, Inc.
By: __________________________
Katherine P. Feld,
Vice President and Secretary
23012b1-B(0900-Am&R).doc
<PAGE>
Bridget A. Macaskill
--------------------------------------------------------------------------------
Chief Executive Officer and Chairman OppenheimerFunds Logo
Two World Trade Center, 34th Floor
New York, NY 10048-0203
800.525.7048
www.oppenheimerfunds.com
September 29, 2000
Dear Oppenheimer Strategic Income Fund Shareholder,
We have scheduled a shareholder meeting on November 13, 2000 for you to
decide upon some important proposals for the Fund. Your ballot card and a
detailed statement of the issues are enclosed with this letter.
Your Board of Trustees believes the matters being proposed for approval
are in the best interests of the Fund and its shareholders and recommends a vote
"for" the election of Trustees and for each Proposal. Regardless of the number
of shares you own, it is important that your shares be represented. So we urge
you to consider these issues carefully and make your vote count.
How do you vote?
To cast your vote, simply mark, sign and date the enclosed proxy ballot
and return it in the postage-paid envelope today. Remember, it can be costly for
the Fund--and ultimately for you as a shareholder--to remail ballots if not
enough responses are received to conduct the meeting.
What are the issues?
o Election of Trustees. You are being asked to consider and approve the
election of 12 Trustees. You will find detailed information on the Trustees
in the enclosed proxy statement.
o Ratification of Auditors. The Board is asking you to ratify the selection of
Deloitte & Touche LLP as independent certified public accountants and
auditors of the Fund for the current fiscal year.
o Revision of Investment Objective. Your approval is requested to revise the
Fund's investment objective.
o Approval of Elimination of Certain Fundamental Investment Restrictions. Your
approval is requested to eliminate certain fundamental investment
restrictions of the Fund.
o Approval of Changes to Certain Fundamental Investment Restrictions. Your
approval is requested to change certain fundamental investment restrictions
of the Fund.
o Authorize the Trustees to adopt an Amended and Restated Declaration of Trust.
o Approval by Class B shareholders of the Fund of a new Class B 12b-1
distribution and service plan.
Please read the enclosed proxy statement for complete details on these
proposals. Of course, if you have any questions, please contact your financial
advisor, or call us at 1-800-525-7048. As always, we appreciate your confidence
in OppenheimerFunds and look forward to serving you for many years to come.
Sincerely,
Bridget A. Macaskill's signature
Enclosures
XP02300.003.0800
