SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the registrant / X /
Filed by a party other than the registrant / /
Check the appropriate box:
/ X / Preliminary proxy statement
/ / Definitive proxy statement
/ / Definitive additional materials
/ / Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
OPPENHEIMER PENNSYLVANIA TAX-EXEMPT FUND
------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
OPPENHEIMER PENNSYLVANIA TAX-EXEMPT FUND
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(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
/ X / $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1) or
14a-6(j)(2).
/ / $500 per each party to the controversy pursuant to Exchange
Act Rule 14a-6(i)(3).
/ / Fee Computed on table below per Exchange Act Rules 14a
-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction
applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11: 1
--------------------
1 - Set forth the amount on which the filing fee is calculated and
state how it was determined.
(4) Proposed maximum aggregate value of transaction:
/ / Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for
which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the form
or schedule and the date of its filing.
(1) Amount previously paid:
(2) Form, schedule or registration statement no.:
(3) Filing Party:
(4) Date Filed:
Preliminary Copy
OPPENHEIMER PENNSYLVANIA TAX-EXEMPT FUND
Two World Trade Center, New York, New York 10048-0203
Notice Of Meeting Of Shareholders To Be Held
May 25, 1995
To The Class A & Class B Shareholders of
Oppenheimer Pennsylvania Tax-Exempt Fund
Notice is hereby given that a Meeting of the Class A and Class B
Shareholders of Oppenheimer Pennsylvania Tax-Exempt Fund (the "Fund") will
be held at 3410 South Galena Street, Denver, Colorado, 80231, at 10:00
A.M., Denver time, on May 25, 1995, or any adjournments thereof, for the
following purposes:
To be voted on by holders of:
Class A Shares Class B Shares
X X
(a) To approve changes in the Fund's fundamental
investment policies on investing in investment grade
and unrated bonds (Proposal No. 1); and
X
(b) To approve the Fund's Class B
12b-1 Distribution and Service Plan (Proposal No. 2);
and
X X
(c) 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 March 24, 1995, 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 in favor of each
Proposal. WE URGE YOU TO MARK, SIGN, DATE AND MAIL THE ENCLOSED PROXY
PROMPTLY.
<PAGE>
By Order of the Board of Trustees,
Andrew J. Donohue, Secretary
April 13, 1995
_______________________________________________________________________
Shareholders who do not expect to attend the Meeting are asked to indicate
voting instructions on the enclosed proxy and to date, sign and return it
in the accompanying postage-paid envelope. To avoid unnecessary duplicate
mailings, we ask your cooperation in promptly mailing your proxy no matter
how large or small your holdings may be.
740
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OPPENHEIMER PENNSYLVANIA TAX-EXEMPT FUND
Two World Trade Center, New York, New York 10048-0203
PROXY STATEMENT
Meeting of Shareholders
To Be Held May 25, 1995
This statement is furnished to the Class A and Class B shareholders of
Oppenheimer Pennsylvania Tax-Exempt Fund (the "Fund") in connection with
the solicitation by the Fund's Board of Trustees of proxies to be used at
a meeting (the "Meeting") of shareholders to be held at 3410 South Galena
Street, Denver, Colorado, 80231, at 10:00 A.M., Denver time, on May 25,
1995, or any adjournments thereof. It is expected that the mailing of
this Proxy Statement will be made on or about April 13, 1995. For a free
copy of the annual report covering the operations of the Fund for the
fiscal year ended December 31, 1994, call Oppenheimer Shareholder
Services, the Fund's transfer agent, at 1-800-525-7048.
The enclosed proxy, if properly executed and returned, will be voted (or
counted as an abstention or withheld from voting) in accordance with the
choices specified thereon, and will be included in determining whether
there is a quorum to conduct the meeting. The proxy will be voted in
favor of the nominees for Trustee named in this Proxy Statement unless a
choice is indicated to withhold authority to vote for all listed nominees
or any individual nominee. The proxy will be voted in favor of each
Proposal unless a choice is indicated to vote against or to abstain from
voting on that Proposal. Shares owned of record by broker-dealers for the
benefit of their customers ("street account shares") will be voted by the
broker-dealer based on instructions received from its customers. If no
instructions are received, the broker-dealer may (if permitted under
applicable stock exchange rules) as record holder vote such shares for the
election of Trustees and on the Proposals in the same proportion as that
broker-dealer votes street account shares for which voting instructions
were received in time to be voted.
If a shareholder executes and returns a proxy but fails to indicate how
the votes should be cast, the proxy will be voted in favor of the election
of each of the nominees named herein for Trustee and in favor of each
Proposal.
The proxy may be revoked at any time prior to the voting by: (1) writing
to the Secretary of the Fund at Two World Trade Center, New York, New
York, 10048-0203; (2) attending the meeting and voting in person; or (3)
signing and returning a new proxy (if returned and received in time to be
voted).
The cost of printing and distributing these proxy materials is an expense
of the Fund. In addition to the solicitation of proxies by mail, proxies
may be solicited by officers or employees of the Fund's transfer agent,
personally or by telephone; any expenses so incurred will also be borne
by the Fund. Brokers, banks and other fiduciaries may be required to
forward soliciting material to their principals and to obtain
authorization for the execution of proxies. For those services they will
be reimbursed by the Fund for their out-of-pocket expenses.
Shares Outstanding and Entitled to Vote. The Fund is a series of
Oppenheimer Multi-State Tax-Exempt Trust (the "Trust"). Since the
proposals described in this Proxy Statement affect the Fund alone, only
its shares are eligible to vote at the Meeting. As of March 24, 1995, the
record date, there were 6,459,914.746 shares of the Fund issued and
outstanding, consisting of 5,514,151.043 Class A shares and 945,763.703
Class B shares. Each Class A and Class B share of the Fund has voting
rights as stated in this Proxy Statement and is entitled to one vote for
each share (and a fractional vote for a fractional share) held of record
at the close of business on the record date. As of the record date, no
person owned of record or was known by the management of the Fund to be
the beneficial owner of 5% or more of the outstanding shares of either
class of the Fund's shares.
APPROVAL OF CHANGES TO THE FUND'S FUNDAMENTAL
INVESTMENT POLICIES WITH RESPECT TO INVESTMENT
IN NON-INVESTMENT GRADE MUNICIPAL SECURITIES
(Proposal No. 1)
The Fund currently has certain investment policies with respect to its
investment in municipal securities, the interest of which is not subject
to Federal individual income tax ("Municipal Securities"). These
investment policies have been designated as "fundamental" policies, which
are policies that may not be changed without the requisite shareholder
approval as described below.
As a matter of fundamental investment policy, the Fund is required to
invest only in Municipal Securities within the four highest rating
categories of Moody's Investor Service, Inc. ("Moody's"), Standard &
Poor's Corporation ("S&P"), Fitch Investors Service, Inc. ("Fitch") or,
if unrated, judged by the Manager to be of comparable quality to Municipal
Securities rated within such grades. Such ratings are known as
"investment grade" ratings. Investments in the lowest investment grade
rating category and in unrated Municipal Securities judged by the Fund's
investment adviser, Oppenheimer Management Corporation (the "Manager"),
to be of comparable investment quality to that category may not exceed 25%
of the Fund's total assets. In addition, investments in unrated Municipal
Securities may not exceed 25% of the Fund's total assets.
If this Proposal is approved, the requirement to invest only in investment
grade Municipal Securities and the limitations described above on
investment in the lowest investment grade rating category and in unrated
Municipal Securities would be eliminated as fundamental policies. It is
the intention of the Fund's Board of Trustees to adopt a non-fundamental
investment policy limiting investments in non-investment grade Municipal
Securities, including unrated Municipal Securities not judged by the
Manager to be of comparable investment quality to investment grade
Municipal Securities, to 25% of the Fund's total assets. This limitation
is being adopted as a non-fundamental policy so that if the Fund's Board
of Trustees approves further revisions at some future date, the Fund would
not have to bear the cost of obtaining shareholder approval.
This Proposal would permit the Fund to invest in non-investment grade
Municipal Securities and increase its investment in unrated Municipal
Securities, when consistent with the Fund's investment objective of
seeking the maximum tax-exempt current income that is consistent with
preservation of capital. The reason for the proposed change is that a
portfolio made up entirely of investment grade Municipal Securities is
generally very sensitive to changes in interest rates, and therefore the
Fund's net asset value is presently susceptible to declines in a rising
interest rate environment. Allowing the Fund's portfolio managers to vary
the creditworthiness standard of the Fund's portfolio will permit them to
attempt to decrease the sensitivity of that portfolio to interest rate
changes. In addition, the Fund's investment adviser believes that, from
time to time, investment opportunities exist in non-investment grade
securities in which the Fund should be able to participate.
Although the yield in non-investment grade Municipal Securities tends to
be higher than that of higher grade Municipal Securities, and the
potential for higher long-term returns increases if such investments are
made, there is an increased credit risk potential that issuers of non-
investment grade Municipal Securities may not be able to make interest or
principal payments as they become due. The Fund's portfolio managers
intend to continue to consider issuer creditworthiness, among other
factors, in selecting individual Municipal Securities and in determining
from time to time whether a portion (but under the proposed non-
fundamental limits, not more than 25%) of the Fund's portfolio should be
invested in non-investment grade or unrated Municipal Securities.
At a meeting of the Fund's Board of Trustees held on March 16, 1995, the
Manager presented to the Fund's Board of Trustees the issue of eliminating
the fundamental restrictions outlined above, so that the Board would have
the flexibility to approve further revisions, and the advantages and risks
of allowing the Fund's investment adviser flexibility to invest up to 25%
of the Fund's portfolio in non-investment grade Municipal Securities, in
response to market, economic and other conditions. The Trustees approved
and recommended, subject to shareholder approval, the change in
fundamental investment policies described in this Proposal. If approved,
the effective date of this Proposal can be delayed by the Fund until the
Fund's Prospectus is updated to reflect this change.
Vote Required. An affirmative vote of the holders of a "majority" (as
defined in the Investment Company Act) of all outstanding Class A and
Class B voting securities of the Fund is required for approval of the
Proposed Agreement; the classes do not vote separately. Such "majority"
vote is defined in the Investment Company Act as the vote of the holders
of the lesser of: (1) 67% or more of the voting securities present or
represented by proxy at the shareholders meeting, if the holders of more
than 50% of the outstanding voting securities are present or represented
by proxy, or (ii) more than 50% of the outstanding voting securities. The
Board of Trustees recommends a vote in favor of approving this Proposal.
APPROVAL OF THE FUND'S CLASS B 12b-1 DISTRIBUTION
AND SERVICE PLAN AND AGREEMENT
(Proposal No. 2)
NOTE: This Proposal applies to Class B Shareholders only.
Class B shares were first offered to the public on May 1, 1993. At that
time, the Fund had adopted a Distribution Plan and Agreement for Class B
shares pursuant to Rule 12b-1 of the Investment Company Act. In June of
1993, the Fund's Board of Trustees, including a majority of the Trustees
who are not "interested persons" (as defined in the Investment Company
Act) of the Fund and who have no direct or indirect financial interest in
the operation of the Fund's current 12b-1 plans or in any related
agreements ("Independent Trustees"), approved amendments to that plan to
recharacterize it as a distribution and service plan and agreement in
conformity with the National Association of Securities Dealers, Inc.
("NASD") Rule which permits 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. In February of 1994, that
Distribution and Service Plan was further amended by the Fund's Board of
Trustees to eliminate a provision which had required the Fund to continue
to make payments to the Distributor after a termination of the
Distribution and Service Plan.
At a meeting of the Fund's Board of Trustees held March 16, 1995, the
Manager proposed the adoption of a new Distribution and Service Plan and
Agreement (the "Distribution and Service Plan") which is recharacterized
as a "compensation type plan" instead of a "reimbursement type plan." The
Fund's Board of Trustees, including a majority of the Independent
Trustees, approved the new amendments to the Fund's Distribution and
Service Plan, and determined to recommend the Distribution and Service
Plan and Agreement for approval by the shareholders. A copy of the new
Distribution and Service Plan is attached as Exhibit A to this proxy
statement.
Description of the Distribution and Service Plan. Under the Distribution
and Service Plan, the Fund compensates the Distributor for its services
in connection with the distribution of Class 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 six years or less, and also pays the
Distributor a service fee of 0.15% (which may be increased under the Plan
to 0.25%) per annum, each of which is computed on the average annual net
assets of Class B shares of the Fund.
The Distribution and Service Plan provides for payments for two different
distribution related functions. The Distributor pays certain brokers
dealers, banks or other institutions ("Recipients") a service fee of 0.15%
for personal services to Class B shareholders and 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, providing such customers with information on their
investment in shares, assisting in the establishment and maintenance of
accounts or sub-accounts in the Fund, making the Fund's investment plans
and dividend payment options available, and providing such other
information and customer liaison services and the maintenance of accounts
as the Distributor or the Fund may reasonably request. The Distributor
is permitted under the Distribution and Service Plan to retain service fee
payments to compensate it for rendering such services.
Service fee payments by the Distributor to Recipients are currently made
(i) in advance for the first year Class B shares are outstanding,
following the purchase of shares, in an amount equal to 0.15% 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 0.15% of the net asset value of
Class B shares held in accounts of the Recipient or its customers. In the
event Class B shares are redeemed less than one year after the date such
shares were sold, the Recipient is obligated to repay to the Distributor
on demand a pro rata portion of such advance service fee payments, based
on the ratio of the remaining period to one year.
The Distribution and Service Plan also 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 it for other services in connection with the distribution of
the Fund's Class B shares. 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 sell 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, and (iii) paying
or reimbursing the Distributor for interest and other borrowing costs
incurred on any unreimbursed expenses carried forward to subsequent fiscal
quarters. The other distribution assistance in connection with the sale
of Class B shares rendered by the Distributor and Recipients include, but
shall not be limited to, the following: distributing sales literature and
prospectuses other than those furnished to current Class B shareholders,
processing Class B share purchase and redemption transactions and
providing such other information in connection with the distribution of
Class B shares as the Distributor or the Fund may reasonably request.
The Distributor currently pays sales commissions from its own resources
to Recipients at the time of sale equal to 3.85% of the purchase price of
Fund shares sold by such Recipient, and advances the first year service
fee of 0.15%. Asset-based sales charge payments are designed to permit
an investor to purchase shares of the Fund without the assessment of a
front-end sales load and at the same time permit the Distributor to
compensate Recipients in connection with the sale of shares of the Fund.
The Distributor and the Fund anticipate that it will take a number of
years for the Distributor to recoup the sales commissions paid to
Recipients and other distribution-related expenses, from the Fund's
payments to the Distributor under the Distribution and Service Plan, and
from the contingent deferred sales charge deducted from redemption
proceeds for Class B shares redeemed before the end of six years of their
purchase, as described in the Fund's prospectus.
The Distribution and Service Plan contains a provision which provides that
the Board may allow the Fund to continue payments to the Distributor for
Class B shares sold prior to termination of the Distribution and Service
Plan. Pursuant to this provision, payment of the asset-based sales charge
of up to 0.75% per annum could be continued by the Board after
termination.
The Distribution and Service Plan has the effect of increasing annual
expenses of Class B shares of the Fund by up to 1.00% (currently 0.90%)
of the class's average annual net assets from what those expenses would
otherwise be. Payments by the Fund to the Distributor under the current
Class B Plan for the fiscal year ended December 31, 1994 were $65,901
(0.69% of the Fund's net assets represented by Class B shares during that
period), of which the Distributor paid $385 to an affiliate of the
Distributor and retained $63,420 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 Distribution and
Service Plan shall, unless terminated as described below, continue in
effect until December 31, 1995 and from year to year thereafter only so
long as such continuance is specifically approved, at least annually, by
the Fund's Board of Trustees and its Independent Trustees by a vote cast
in person at a meeting called for the purpose of voting on such
continuance. The Distribution and Service Plan may be terminated at any
time by a vote of a majority of the Independent Trustees or by a vote of
the holders of a "majority" (as defined in the Investment Company Act) of
the Fund's outstanding Class B shares. The Distribution and Service Plan
may not be amended to increase materially the amount of payments to be
made without approval by Class B shareholders. All material amendments
must be approved by a majority of the Independent Trustees.
Additional Information. The Distribution and Service Plan provides that
while it is in effect, the selection and nomination of those Trustees of
the Fund who are not "interested persons" of the Fund is committed to the
discretion of the Independent Trustees. This does not prevent the
involvement of others in such selection and nomination if the final
decision on any such selection or nomination is approved by a majority of
the Independent Trustees.
Under the Distribution and Service Plan, no payment for service fees will
be made to any Recipient in any quarter if the aggregate net asset value
of all Fund shares held by the Recipient for itself and its customers did
not exceed a minimum amount, if any, that may be determined from time to
time by a majority of the Independent Trustees. Initially, the Board of
Trustees has set no minimum amount. The Distribution and Service Plan
permits the Distributor and the Manager to make additional distribution
payments to Recipients from their own resources (including profits from
management fees) at no cost to the Fund. The Distributor and the Manager
may, in their sole discretion, increase or decrease the amount of
distribution assistance payments they make to Recipients from their own
assets.
Analysis of the Distribution and Service Plan by the Board of Trustees.
In considering whether to recommend the Distribution and Service Plan for
approval, the Board requested and evaluated information it deemed
necessary to make an informed determination. The Board found that there
is a reasonable likelihood that the Distribution and Service Plan benefits
the Fund and its Class 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
Distribution and Service Plan enables the Fund to be competitive with
similar funds, including funds that impose sales charges, provide
financial incentives to institutions that direct investors to such funds,
and provide shareholder servicing and administrative services.
The Board also focused on the two principal differences in the
Distribution and Service Plan and its predecessor. First, the proposed
plan provides for compensating the Distributor for its distribution
efforts rather than reimbursing it for its costs. While it was possible
for the Fund's Class B 12b-1 payments to be reduced when limited by the
Distributor's expenses (including past expenses which were not previously
reimbursed, and which were, therefore, carried forward with interest)
under a reimbursement-type plan, under normal circumstances this is
unlikely. Therefore, adoption of this Proposal is not expected to
materially increase the Fund's expenses under normal circumstances.
Payments under the proposed Distribution and Service Plan remain subject
to limits imposed on asset-based sales charges by the NASD. The Board
also noted that investors who purchase Class B shares of the Fund
reasonably expect that they will be paying an asset-based sales charge of
0.75% per annum for up to six years regardless of the Distributor's actual
distribution expenses.
A second difference in the Distribution and Service Plan over its
predecessor is that the current Plan expressly provides that distribution
and administrative support services may be rendered in connection with
Class B shares acquired either in exchange for other OppenheimerFund
shares or by reorganization with another fund. The Board determined that
although these changes are less likely to have significance under a
compensation-type Plan, it should have the flexibility to approve
reorganizations among funds without concern that the transaction would
affect payments to the Distributor for its distribution efforts. The
Board also noted that investors who purchase Class B shares of the Fund
reasonably expect that they will be paying an asset-based sales charge of
0.75% per annum for up to six years regardless of share exchanges or the
occurrence of reorganizations to which their Fund is a party.
The Board concluded that it is likely that because the Distribution and
Service Plan provides an alternative means for investors to acquire Fund
shares without paying an initial sales charge, it will benefit Class B
shareholders of the Fund by enabling the Fund to maintain or increase its
present asset base in the face of competition from a variety of financial
products. The Trustees recognized that payments made pursuant to the
Distribution and Service Plan would likely be offset in part by economies
of scale associated with the growth of the Fund's assets. With larger
assets, the Class B shareholders should benefit as the Distribution and
Service Plan should help maintain Fund assets at the lower investment
advisory fee rate that is currently in effect. Costs of shareholder
administration and transfer agency operations will be spread among a
larger number of shareholders as the Fund grows larger, thereby reducing
the Fund's expense ratio. The Manager has advised the Trustees that
investing larger amounts of money is made more readily, more efficiently,
and at lesser cost to the Fund. The Board found that a positive flow of
new investment money is desirable primarily to offset the potentially
adverse effects that might result from a pattern of net redemptions. Net
cash outflow increases the likelihood that the Fund will have to dispose
of portfolio securities for other than investment purposes. Net cash
inflow minimizes the need to sell securities to meet redemptions when
investment considerations would dictate otherwise, reduces daily liquidity
requirements, and may assist in a prompt restructuring of the portfolio
without the need to dispose of present holdings.
Stimulation of distribution of mutual fund shares and providing for
shareholder services and account maintenance services by payments to a
mutual fund's distributor and to brokers, dealers, banks and other
financial institutions has become common in the mutual fund industry.
Competition among brokers and dealers for these types of payments has
intensified. The Trustees concluded that promotion, sale and servicing
of mutual fund shares and shareholders through various brokers, dealers,
banks and other financial institutions is a successful way of distributing
shares of a mutual fund. The Trustees concluded that without an effective
means of selling and distributing Fund shares and servicing shareholders
and providing account maintenance, expenses may remain higher on a per
share basis than those of some competing funds. By providing an
alternative means of acquiring Fund shares, the Distribution and Service
Plan proposed for shareholder approval is designed to stimulate sales by
and services from many types of financial institutions.
The Trustees recognize that the Manager will benefit from the Distribution
and Service Plan through larger investment advisory fees resulting from
an increase in Fund assets, since its fees are based upon a percentage of
net assets of the Fund. The Board, including each of the Independent
Trustees, determined that the Distribution and Service Plan is in the best
interests of the Fund, and that its continuation has a reasonable
likelihood of benefiting the Fund and its Class B shareholders. In its
annual review of the Distribution and Service Plan, the Board will
consider the continued appropriateness of the Distribution and Service
Plan, including the level of payments provided for therein.
Vote Required. Pursuant to Rule 12b-1 under the Investment Company Act,
an affirmative vote of the holders of a "majority" (as defined in the
Investment Company Act) of the Fund's Class B voting securities is
required for approval of the Distribution and Service Plan. The
requirements for such "majority" vote under the Investment Company Act are
as described in Proposal No. 1. A vote in favor of this Proposal shall
be deemed a vote to approve the prior Plans and the Distribution and
Service Plan. The Board of Trustees recommends a vote in favor of
approving this Proposal.
ADDITIONAL INFORMATION
The Manager and the Distributor. Subject to the authority of the Board
of Trustees, the Manager is responsible for the day-to-day management of
the Fund's business, pursuant to its investment advisory agreement with
the Fund. Oppenheimer Funds Distributor, Inc., a wholly-owned subsidiary
of the Manager, is the general distributor of the Fund's shares. The
address of the Manager and the Distributor is Two World Trade Center, New
York, New York 10048-0203.
The Manager (including a subsidiary) currently manages investment
companies, including other OppenheimerFunds, with assets of more than $29
billion as of December 31, 1994, and with more than 2.4 million
shareholder accounts. The Manager is a wholly-owned subsidiary of
Oppenheimer Acquisition Corp. ("OAC"), a holding company controlled by
Massachusetts Mutual Life Insurance Company ("MassMutual"). MassMutual
is located at 1295 State Street, Springfield, Massachusetts 01111. OAC
acquired the Manager on October 22, 1990. As indicated below, the common
stock of OAC is owned by (i) certain officers and/or directors of the
Manager, (ii) MassMutual and (iii) another investor. No institution or
person holds 5% or more of OAC's outstanding common stock except
MassMutual. MassMutual has engaged in the life insurance business since
1851. It is the nation's twelfth largest life insurance company by assets
and has an A.M. Best Co. rating of "A++".
RECEIPT OF SHAREHOLDER PROPOSALS
The Fund is not required to hold shareholder meetings on a regular basis.
Special meetings of shareholders may be called from time to time by either
the Fund or the Shareholders (under special conditions described in the
Fund's Statement of Additional Information). Under the proxy rules of the
Securities and Exchange Commission, shareholder proposals which meet
certain conditions may be included in the Fund's proxy statement and proxy
for a particular meeting. Those rules require that for future meetings
the shareholder must be a record or beneficial owner of Fund shares with
a value of at least $1,000 at the time the proposal is submitted and for
one year prior thereto, and must continue to own such shares through the
date on which the meeting is held. Another requirement relates to the
timely receipt by the Fund of any such proposal. Under those rules, a
proposal submitted for inclusion in the Fund's proxy material for the next
meeting after the meeting to which this proxy statement relates must be
received by the Fund a reasonable time before the solicitation is made.
The fact that the Fund receives a proposal from a qualified shareholder
in a timely manner does not ensure its inclusion in the proxy material,
since there are other requirements under the proxy rules for such
inclusion.
OTHER BUSINESS
Management of the Fund knows of no business other than the matters
specified above that will be presented at the Meeting. Since matters not
known at the time of the solicitation may come before the Meeting, the
proxy as solicited confers discretionary authority with respect to such
matters as properly come before the Meeting, including any adjournment or
adjournments thereof, and it is the intention of the persons named as
attorneys-in-fact in the proxy to vote the proxy in accordance with their
judgment on such matters.
By Order of the Board of Trustees,
Andrew J. Donohue, Secretary
April 13, 1995
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Exhibit A
DISTRIBUTION AND SERVICE PLAN AND AGREEMENT
WITH
OPPENHEIMER FUNDS DISTRIBUTOR, INC.
FOR CLASS B SHARES OF
OPPENHEIMER PENNSYLVANIA TAX-EXEMPT FUND
DISTRIBUTION AND SERVICE PLAN AND AGREEMENT (the "Plan") dated the 26th
day of May, 1995, by and between OPPENHEIMER MULTI-STATE TAX-EXEMPT TRUST
(the "Trust") on behalf of OPPENHEIMER PENNSYLVANIA TAX-EXEMPT FUND (the
"Fund") and OPPENHEIMER FUNDS 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 (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 Trust may act as distributor of securities of which it
is the issuer, pursuant to the Rule, according to the terms of this Plan.
The Distributor is authorized under the Plan to pay "Recipients," as
hereinafter defined, for rendering (1) distribution assistance in
connection with the sale of Shares and/or (2) administrative support
services with respect to Accounts. Such Recipients are intended to have
certain rights as third-party beneficiaries under this Plan. The terms
and provisions of this Plan shall be interpreted and defined in a manner
consistent with the provisions and definitions contained in (i) the 1940
Act, (ii) the Rule, (iii) Article III, Section 26, of the Rules of Fair
Practice of the National Association of Securities Dealers, Inc., or its
successor (the "NASD Rules of Fair Practice") and (iv) any conditions
pertaining either to distribution-related expenses or to a plan of
distribution, to which the Fund is subject under any order on which the
Fund relies, issued at any time by the Securities and Exchange Commission.
2. Definitions. As used in this Plan, the following terms shall have
the following meanings:
(a) "Recipient" shall mean any broker, dealer, bank or other
institution which: (i) has rendered assistance (whether direct,
administrative or both) in the distribution of Shares or has provided
administrative support services with respect to Shares held by
Customers (defined below) of the Recipient; (ii) shall furnish the
Distributor (on behalf of the Fund) with such information as the
Distributor shall reasonably request to answer such questions as may
arise concerning the sale of Shares; and (iii) has been selected by the
Distributor to receive payments under the Plan. Notwithstanding the
foregoing, a majority of the Trust's Board of Trustees (the "Board")
who are not "interested persons" (as defined in the 1940 Act) and who
have no direct or indirect financial interest in the operation of this
Plan or in any agreements relating to this Plan (the "Independent
Trustees") may remove any broker, dealer, bank or other institution as
a Recipient, whereupon such entity's rights as a third-party
beneficiary hereof shall terminate.
(b) "Qualified Holdings" shall mean, as to any Recipient, all Shares
owned beneficially or of record by: (i) such Recipient, or (ii) such
customers, clients and/or accounts as to which such Recipient is a
fiduciary or custodian or co-fiduciary or co-custodian (collectively,
the "Customers"), but in no event shall any such Shares be deemed owned
by more than one Recipient for purposes of this Plan. In the event
that two entities would otherwise qualify as Recipients as to the same
Shares, the Recipient which is the dealer of record on the Fund's books
shall be deemed the Recipient as to such Shares for purposes of this
Plan.
3. Payments for Distribution Assistance and Administrative Support
Services.
(a) The Trust will make payments to the Distributor, (i) within
forty-five (45) days of the end of each calendar quarter, in the
aggregate amount of 0.0625% (0.25% on an annual basis) of the average
during the calendar quarter of the aggregate net asset value of the
Shares computed as of the close of each business day (the "Service
Fee"), plus (ii) within ten (10) days of the end of each month, 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 for six years or less (the "Maximum Holding Period"). Such
Service Fee payments received from the Trust will compensate the
Distributor and Recipients for providing administrative support
services of the type approved by the Board with respect to Accounts.
Such Asset-Based Sales Charge payments received from the Fund will
compensate the Distributor and Recipients for providing distribution
assistance in connection with the sales of Shares.
The administrative support services in connection with the Accounts
to be rendered by Recipients may include, but shall not be limited to,
the following: answering routine inquiries concerning the Fund,
assisting in 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 distribution assistance in connection with the sale of Shares to
be rendered by the Distributor and Recipients may include, but shall
not be limited to, the following: distributing sales literature and
prospectuses other than those furnished to current holders of the
Fund's Shares ("Shareholders"), and providing such other information
and services in connection with the distribution of Shares as the
Distributor or the Fund may reasonably request.
It may be presumed that a Recipient has provided distribution
assistance or administrative support services qualifying for payment
under the Plan if it has Qualified Holdings of Shares to entitle it to
payments under the Plan. In the event that either the Distributor or
the Board should have reason to believe that, notwithstanding the level
of Qualified Holdings, a Recipient may not be rendering appropriate
distribution assistance in connection with the sale of Shares or
administrative support services for Accounts, then the Distributor, at
the request of the Board, shall require the Recipient to provide a
written report or other information to verify that said Recipient is
providing appropriate distribution assistance and/or services in this
regard. If the Distributor still is not satisfied, it may take
appropriate steps to terminate the Recipient's status as such under the
Plan, whereupon such entity's rights as a third-party beneficiary
hereunder shall terminate.
(b) The Distributor shall make service fee payments to any Recipient
quarterly, within forty-five (45) days of the end of each calendar
quarter, at a rate not to exceed 0.0625% (0.25% on an annual basis) of
the average during the calendar quarter of the aggregate net asset
value of Shares computed as of the close of each business day,
constituting Qualified Holdings owned beneficially or of record by the
Recipient or by its Customers for a period of more than the minimum
period (the "Minimum Holding Period"), if any, to be set from time to
time by a majority of the Independent Trustees.
Alternatively, the Distributor may, at its sole option, make service
fee payments ("Advance Service Fee Payments") to any Recipient
quarterly, within forty-five (45) days of the end of each calendar
quarter, at a rate not to exceed (i) 0.25% of the average during the
calendar quarter of the aggregate net asset value of Shares, computed
as of the close of business on the day such Shares are sold,
constituting Qualified Holdings sold by the Recipient during that
quarter and owned beneficially or of record by the Recipient or by its
Customers, plus (ii) 0.0625% (0.25% on an annual basis) of the average
during the calendar quarter of the aggregate net asset value of Shares
computed as of the close of each business day, constituting Qualified
Holdings owned beneficially or of record by the Recipient or by its
Customers for a period of more than one (1) year, subject to reduction
or chargeback so that the Advance Service Fee Payments do not exceed
the limits on payments to Recipients that are, or may be, imposed by
Article III, Section 26, of the NASD Rules of Fair Practice. In the
event Shares are redeemed less than one year after the date such Shares
were sold, the Recipient is obligated and will repay to 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 Advance Service Fee Payments described in part (i) of this
paragraph (b) may, at the Distributor's sole option, be made more often
than quarterly, and sooner than the end of the calendar quarter.
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, to be set from time to time by a majority of the Independent
Trustees.
A majority of the Independent Trustees may at any time or from time
to time decrease and thereafter adjust the rate of fees to be paid to
the Distributor or to any Recipient, but not to exceed the rate set
forth above, and/or direct the Distributor to increase or decrease the
Maximum Holding Period, the Minimum Holding Period or the Minimum
Qualified Holdings. The Distributor shall notify all Recipients of the
Minimum Qualified Holdings, Maximum Holding Period and Minimum Holding
Period, if any, 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 shall constitute sufficient notice. The Distributor may
make Plan payments to any "affiliated person" (as defined in the 1940
Act) of the Distributor if such affiliated person qualifies as a
Recipient.
(c) The Distributor is entitled to retain from the payments
described in Section 3(a) the aggregate amount of (i) the Service Fee
on Shares outstanding for less than the Minimum Holding Period plus
(ii) the Asset-Based Sales Charge on Shares outstanding for not more
than the Maximum Holding Period, in each case computed as of the close
of each business day during that period and subject to reduction or
elimination of such amounts under the limits to which the Distributor
is, or may become, subject under Article III, Section 26, of the NASD
Rules of Fair Practice. The distribution assistance and administrative
support services to be rendered by the Distributor in connection with
the Shares may include, but shall not be limited to, the following: (i)
paying sales commissions to any broker, dealer, bank or other
institution that sells Shares, and/or paying such persons Advance
Service Fee Payments in advance of, and/or greater than, the amount
provided for in Section 3(a) of this Agreement; (ii) paying
compensation to and expenses of personnel of the Distributor who
support distribution of Shares by Recipients; (iii) paying of or
reimbursing the Distributor for interest and other borrowing costs on
its unreimbursed expenses at the rate paid by the Distributor or, if
such amounts are financed by the Distributor from its own resources or
by an affiliate, at the rate of 1% per annum above the prime rate
(which shall mean the most preferential interest rate on corporate
loans at large U.S. money center commercial banks) then being reported
in the Eastern edition of the Wall Street Journal (or if such prime
rate is no longer so reported, such other rate as may be designated
from time to time by the Distributor with the approval of the
Independent Trustees); (iv) other direct distribution costs, including
without limitation the costs of sales literature, advertising and
prospectuses (other than those furnished to current Shareholders) and
state "blue sky" registration expenses; and (v) any service rendered by
the Distributor that a Recipient may render pursuant to part (a) of
this Section 3. Such services include distribution and administrative
support services rendered in connection with Shares acquired by the
Fund (i) by purchase, (ii) in exchange for shares of another investment
company for which the Distributor serves as distributor or sub-
distributor, or (ii) pursuant to a plan of reorganization to which the
Fund is a party. In the event that the Board should have reason to
believe that the Distributor may not be rendering appropriate
distribution assistance or administrative support services in
connection with the sale of Shares, then the Distributor, at the
request of the Board, shall provide the Board with a written report or
other information to verify that the Distributor is providing
appropriate services in this regard.
(d) Under the Plan, payments may be made to Recipients: (i) by
Oppenheimer Management Corporation ("OMC") from its own resources
(which may include profits derived from the advisory fee it receives
from the Fund), or (ii) by the Distributor (a subsidiary of OMC), from
its own resources, from Asset-Based Sales Charge payments or from its
borrowings.
4. Selection and Nomination of Trustees. While this Plan is in effect,
the selection and nomination of those persons to be Trustees of the Trust
who are not "interested persons" of the Fund ("Disinterested Trustees")
shall be committed to the discretion of such Disinterested Trustees.
Nothing herein shall prevent the Disinterested Trustees from soliciting
the views or the involvement of others in such selection or nomination if
the final decision on any such selection and nomination is approved by a
majority of the incumbent Disinterested Trustees.
5. Reports. While this Plan is in effect, the Treasurer of the Trust
shall provide written reports to the Trust's Board for its review,
detailing services rendered in connection with the distribution of the
Shares. The reports shall be provided in the frequency requested by the
Board, and shall state whether all provisions of Section 3 of this Plan
have been complied with.
6. Related Agreements. Any agreement related to this Plan shall be in
writing and shall provide that: (i) such agreement may be terminated at
any time, without payment of any penalty, by a vote of a majority of the
Independent Trustees or by a vote of the holders of a "majority" (as
defined in the 1940 Act) of the Fund's outstanding voting securities of
the Class, on not more than sixty days written notice to any other party
to the agreement; (ii) such agreement shall automatically terminate in the
event of its assignment (as defined in the 1940 Act); (iii) it shall go
into effect when approved by a vote of the Board and its Independent
Trustees cast in person at a meeting called for the purpose of voting on
such agreement; and (iv) it shall, unless terminated as herein provided,
continue in effect from year to year only so long as such continuance is
specifically approved at least annually by a vote of the Board and its
Independent Trustees cast in person at a meeting called for the purpose
of voting on such continuance.
7. Effectiveness, Continuation, Termination and Amendment. This Plan
has been approved by a vote of the Board and its Independent Trustees cast
in person at a meeting called on March 16, 1995, for the purpose of voting
on this Plan, and shall take effect after approval by Class B shareholders
of the Fund, at which time it shall replace the Fund's Distribution and
Service Plan and Agreement for the Shares dated February 10, 1994. Unless
terminated as hereinafter provided, it shall continue in effect until
December 31, 1995 and from year to year thereafter or as the Board may
otherwise determine only so long as such continuance is specifically
approved at least annually by a vote of the Board and its Independent
Trustees cast in person at a meeting called for the purpose of voting on
such continuance. This Plan may not be amended to increase materially the
amount of payments to be made without approval of the Class B
Shareholders, in the manner described above, and all material amendments
must be approved by a vote of the Board and of the Independent Trustees.
This Plan may be terminated at any time by vote of a majority of the
Independent Trustees or by the vote of the holders of a "majority" (as
defined in the 1940 Act) of the Fund's outstanding voting securities of
the Class. In the event of such termination, the Board and its
Independent Trustees shall determine whether the Distributor 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 Liability. The Distributor understands
that the obligations of the Trust under this Plan are not binding upon any
Trustee or shareholder of the Trust personally, but bind only the Trust
and the Trust'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 Trust.
OPPENHEIMER MULTI-STATE TAX-EXEMPT
TRUST for
OPPENHEIMER PENNSYLVANIA TAX-EXEMPT FUND
By: /s/ Robert G. Zack
-----------------------------
Robert G. Zack, Assistant Secretary
OPPENHEIMER FUNDS DISTRIBUTOR, INC.
By:/s/ Katherine P. Feld
-----------------------
Katherine P. Feld, Vice President
& Secretary
<PAGE>
Preliminary Copy
Oppenheimer Pennsylvania Proxy for Shareholders Meeting To
Tax-Exempt Fund - Class A Shares Be Held May 25, 1995
Your shareholder Your prompt response can save your
vote is important! Fund the expense of another mailing.
Please mark your proxy on the reverse side,
date and sign it, and return it promptly in
the accompanying envelope, which requires
no postage if mailed in the United States.
Please detach at perforation before
mailing.
Oppenheimer Pennsylvania Tax-Exempt Fund - Class A Shares
Proxy For Shareholders Meeting To Be Held May 25, 1995
The undersigned shareholder of Oppenheimer New York Tax-Exempt Fund
(the "Fund"), does hereby appoint Robert Bishop, George C. Bowen, Andrew
J. Donohue and Scott Farrar, and each of them, as attorneys-in-fact and
proxies of the undersigned, with full power of substitution, to attend the
Meeting of Shareholders of the Fund to be held May 25, 1995, at 3410 South
Galena Street, Denver, Colorado 80231 at 10:00 A.M., Denver time and at
all adjournments thereof, and to vote the shares held in the name of the
undersigned on the record date for said meeting on the proposal specified
on the reverse side. Said attorneys-in-fact shall vote in accordance with
their best judgment as to any other matter.
Proxy solicited on behalf of the Board Of Trustees, which recommends a
vote FOR the Proposal on the reverse side. The shares represented hereby
will be voted as indicated on the reverse side or FOR if no choice is
indicated.
(over)
740
Oppenheimer Pennsylvania Proxy for Shareholders Meeting To
Tax-Exempt Fund - Class A Shares Be Held May 25, 1995
Your shareholder Your prompt response can save your
vote is important! Fund money.
Please vote, sign and mail your proxy
ballot (this card) in the enclosed postage-
paid envelope today, no matter how many
shares you own. A majority of the Fund's
shares must be represented in person or by
proxy.
Please vote your proxy so your Fund can
avoid the expense of another mailing.
Please detach at perforation before
mailing.
1. Approval of the proposed changes in fundamental investment policies
(Proposal No. 1)
For ____ Against ____ Abstain ____
NOTE: Please sign exactly as your name(s) appear hereon. When signing
as custodian, attorney, executor, administrator, trustee, etc., please
give your full title as such. All joint owners should sign this proxy.
If the account is registered in the name of a corporation, partnership or
other entity, a duly authorized individual must sign on its behalf and
give title.
Dated: _______________________, 1995
(Month) (Day)
____________________________
Signature(s)
____________________________
Signature(s)
Please read both sides of this ballot.
740
<PAGE>
Preliminary Copy
Oppenheimer Pennsylvania Proxy for Shareholders Meeting To
Tax-Exempt Fund - Class B Shares Be Held May 25, 1995
Your shareholder Your prompt response can save your
vote is important! Fund the expense of another mailing.
Please mark your proxy on the reverse side,
date and sign it, and return it promptly in
the accompanying envelope, which requires
no postage if mailed in the United States.
Please detach at perforation before
mailing.
Oppenheimer Pennsylvania Tax-Exempt Fund - Class B Shares
Proxy For Shareholders Meeting To Be Held May 25, 1995
The undersigned shareholder of Oppenheimer New York Tax-Exempt Fund
(the "Fund"), does hereby appoint Robert Bishop, George C. Bowen, Andrew
J. Donohue and Scott Farrar, and each of them, as attorneys-in-fact and
proxies of the undersigned, with full power of substitution, to attend the
Meeting of Shareholders of the Fund to be held May 25, 1995, at 3410 South
Galena Street, Denver, Colorado 80231 at 10:00 A.M., Denver time and at
all adjournments thereof, and to vote the shares held in the name of the
undersigned on the record date for said meeting on the proposals specified
on the reverse side. Said attorneys-in-fact shall vote in accordance with
their best judgment as to any other matter.
Proxy solicited on behalf of the Board Of Trustees, which recommends a
vote FOR each Proposal on the reverse side. The shares represented hereby
will be voted as indicated on the reverse side or FOR if no choice is
indicated.
(over)
741
Oppenheimer Pennsylvania Proxy for Shareholders Meeting To
Tax-Exempt Fund - Class B Shares Be Held May 25, 1995
Your shareholder Your prompt response can save your
vote is important! Fund money.
Please vote, sign and mail your proxy
ballot (this card) in the enclosed postage-
paid envelope today, no matter how many
shares you own. A majority of the Fund's
shares must be represented in person or by
proxy. Please vote your proxy so your Fund
can avoid the expense of another mailing.
Please detach at perforation before
mailing.
1. Approval of the proposed changes in fundamental investment policies
(Proposal No. 1)
For ____ Against ____ Abstain ____
2. Approval of the proposed Class B 12b-1 Distribution and Service Plan
and Agreement (Proposal No. 2)
For ____ Against ____ Abstain ____
NOTE: Please sign exactly as your name(s) appear hereon. When signing
as custodian, attorney, executor, administrator, trustee, etc., please
give your full title as such. All joint owners should sign this proxy.
If the account is registered in the name of a corporation, partnership or
other entity, a duly authorized individual must sign on its behalf and
give title.
Dated: _______________________, 1995
(Month) (Day)
____________________________
Signature(s)
____________________________
Signature(s)
Please read both sides of this ballot.
741
