April 1994
Dear Oppenheimer Pennsylvania Tax-Exempt Fund Class A Shareholder:
We have scheduled a shareholder meeting on May 25, 1995 for you to
decide upon some important proposals for the Fund. Your ballot card
and a detailed statement are enclosed with this letter.
Your vote is very important, because these decisions will affect
your investment, and it's your chance to help shape the policies of the
Fund. So we urge you to consider the issues carefully and to make your
vote count.
How do you vote?
To vote, simply complete the ballot by marking your choices and
return it in the postage-paid envelope provided. Remember, it can be
expensive for the Fund -- and ultimately for you as a shareholder -- to
re-mail ballots if not enough responses are received to conduct the
meeting.
What are the issues?
After consideration, the Board of Trustees, which represents your
interests in the day-to-day management of the Fund, recommends approval
of the following items:
-- Change in Certain Fundamental Investment Policies. The
fundamental investment policies described in the prospectus determine
the types of securities which may be purchased and any limitations on
securities that may be held by the Fund.
In the wake of last year's turbulent marketplace, the Fund's
investment adviser requests your approval to amend some of these
investment limitations to allow the portfolio manager more
flexibility to diversify the Fund's holdings. Specifically, the
investment adviser recommends that the Fund have the capacity to
invest up to 25% of its assets in below-investment-grade
securities. These investments would be made when analysis
indicates these securities are attractive.
As demonstrated last year, when higher-grade municipal securities
underperformed, the ability to diversify holdings can be critical
to long-term success and to managing short-term volatility. The
Fund's investment adviser firmly believes the ability to diversify
some of the Fund's assets in lower-rated municipal securities may
help protect your investment against volatility, as well as
potentially add to your investment return over time.
-- Elimination of Policy Restrictions Required Under Prior Law.
You are being asked to approve the elimination of several restrictions
on managing the Fund which were required under prior Pennsylvania law.
Additional information is included in the proxy statement.
Please contact your financial advisor or call us at 1-800-525-7048
if you have any questions.
As always, we appreciate your confidence in OppenheimerFunds and
thank you for allowing us to manage a portion of your investment
assets.
Sincerely,
/s/ Jon S. Fossel
<PAGE>
April 1994
Dear Oppenheimer Pennsylvania Tax-Exempt Fund Class B Shareholder:
We have scheduled a shareholder meeting on May 25, 1995 for you to
decide upon some important proposals for the Fund. Your ballot card
and a detailed statement of the issues are enclosed with this letter.
Your vote is very important, because these decisions will affect
your investment, and it's your chance to help shape the policies of the
Fund. So we urge you to consider these issues carefully and to make
your vote count.
How do you vote?
To vote, simply complete the ballot by marking your choices and
return it in the postage-paid envelope provided. Remember, it can be
expensive for the Fund -- and ultimately for you as a shareholder -- to
re-mail ballots if not enough responses are received to conduct the
meeting.
What are the issues?
After consideration, the Board of Trustees, which represents your
interests in the day-to-day management of the Fund, recommends approval
of the following items:
-- Change in Certain Fundamental Investment Policies. The
fundamental investment policies described in the prospectus determine
the types of securities which may be purchased by the Fund.
In the wake of last year's turbulent marketplace, the Fund's
investment adviser requests your approval to amend some of these
investment limitations to allow the portfolio manager more
flexibility to diversify the Fund's holdings. Specifically, the
investment adviser recommends that the Fund have the capacity to
invest up to 25% of its assets in below-investment-grade
securities. These investments would be made when analysis
indicates these securities are attractive.
As demonstrated last year, when higher-grade municipal securities
underperformed, the ability to diversify holdings can be critical
to long-term success and to managing short-term volatility. The
investment adviser firmly believes that the ability to diversify
some of the Fund's assets in lower-rated municipal securities may
help protect your investment against volatility, as well as
potentially add to your investment return over time.
-- New 12b-1 Plan for Class B Shares. Currently, the Fund's
distributor is reimbursed for a portion of its expenses by
demonstrating actual distribution costs. Your approval is requested to
change the way the distributor is paid so that it is compensated with a
flat fee (as a percentage of net assets) for its distribution efforts
at the same rate as the current plan. This is a common type of plan in
the mutual fund industry and is not expected to materially increase
fund expenses under normal circumstances. Any distribution costs in
excess of that rate will be the responsibility of the distributor.
- -- Elimination of Policy Restrictions Required Under Prior Law. You
are being asked to approve the elimination of several restrictions
on managing the Fund which were required under prior Pennsylvania
law. Additional information is included in the proxy statement.
Please contact your financial advisor or call us at 1-800-525-7048
if you have any questions.
As always, we appreciate your confidence in OppenheimerFunds and
thank you for allowing us to manage a portion of your investment
assets.
Sincerely,
/s/ Jon S. Fossel
<PAGE>
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);
X X (b) To approve changes in the Fund's
fundamental investment policies imposed
under prior Pennsylvania law (Proposal
No. 2);
X (c) To approve the Fund's Class B
12b-1 Distribution and Service Plan
(Proposal No. 3); and
X X (d) 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
<PAGE>
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 on 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 permitted to
invest only in Municipal Securities within the four highest rating
categories of Moody's Investors Service, Inc. ("Moody's"), Standard &
Poor's Corporation ("S&P"), Fitch Investors Service, Inc. ("Fitch") or,
if unrated, judged by the Fund's investment adviser 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 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 requirements 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 Fund's investment adviser to be of
comparable investment quality to investment grade Municipal Securities
("Non-Investment Grade Municipal Securities"), to 25% of the Fund's
total assets. This limitation is being adopted as a non-fundamental
policy so that the Fund's Board of Trustees may further revise it at
some future date without securing shareholder approval and without
subjecting the Fund to the expense of holding a shareholder meeting to
obtain such 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 Municipal Securities in which the Fund
should be able to participate. The Fund should continue to be able to
invest in Municipal Securities which are deemed creditworthy but are
unrated because of the issuer's unwillingness to incur the expense of
obtaining a credit rating.
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 that issuers of Non-
Investment Grade Municipal Securities may not 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 Municipal Securities and
whether a portion of the Fund's portfolio should be invested in 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 to change a
Fundamental investment policy; 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. If this Proposal is not approved, the
above-described fundamental investment policies will not change. The
Board of Trustees recommends a vote in favor of approving this
Proposal.
APPROVAL OF CHANGES IN THE FUND'S FUNDAMENTAL POLICIES
IMPOSED UNDER PRIOR PENNSYLVANIA LAW
(Proposal No. 2)
Under prior Pennsylvania law, the Fund was required to adopt certain
investment restrictions in order for the fund's distributions to be
exempt from Pennsylvania personal income taxes and, in the case of
residents of Philadelphia, the investment income tax of the school
district of Philadelphia. In order for the Fund to comply with this
and other Pennsylvania law requirements previously in effect, the
investment policies of the Fund include, as a fundamental policy, that
the Fund will invest in securities to earn income but not trade for
profits. Furthermore, the Fund will not vary its portfolio investments
except to: (i) eliminate unsafe investments and investments not
consistent with the preservation of the Fund's capital or the tax
status of the Fund's investments; (ii) honor redemption orders, meet
anticipated redemption requirements and negate gains from discount
purchases; (iii) reinvest the earnings from securities in like
securities; or (iv) defray normal administrative expenses.
The Pennsylvania laws which require such investment restrictions have
since been repealed. Therefore, the Fund's fundamental policies are
more restrictive than necessary under current Pennsylvania law in order
for the Fund to pay dividends which are exempt from Pennsylvania
personal income tax and the investment income tax of the school
district of Philadelphia. The effects of these fundamental investment
policies may cause the Fund to have less flexibility than other mutual
funds in responding to changes in market conditions, interest rates or
new investment opportunities.
At a meeting of the Fund's Board of Trustees held on March 16, 1995,
the Trustees approved and recommended, subject to shareholder approval,
the elimination of those fundamental investment policies which were put
in place under prior Pennsylvania law. Approval of this Proposal will
allow the manager the flexibility to respond to changes in market
conditions, interest rates or new investment opportunities, without
affecting the ability of the Fund to pay distributions which are exempt
from Pennsylvania personal income tax and the investment income tax of
the school district of Philadelphia. 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" of
all outstanding Class A and Class B voting securities of the Fund is
required to change a fundamental investment policy; the classes do not
vote separately. Requirements for such "majority" vote are the same as
those described above for Proposal No. 1. If this Proposal is not
approved, the above-described fundamental investment policies will not
change. 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. 3)
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 on 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
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, 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 within 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 (0.90% 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.
No Recipient received 10% or more of such payments by the Fund in that
period.
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 does 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. It is possible for
the Fund's Class B 12b-1 payments to be increased or the period during
which payments to the Distributor are made extended when such payments
are not limited by the Distributor's expenses (including past expenses
which were not previously reimbursed, and which were, therefore,
carried forward with interest) as under the existing reimbursement-type
plan. However, under normal circumstances this is unlikely.
Therefore, adoption of this Proposal is not expected to materially
increase the Fund's expenses under normal circumstances. Under the
existing and proposed Distribution and Service Plans, payments will
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.
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 formulated the terms of the new plan to assure that the Board has
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
despite any increase in Fund assets as a result 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" 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++".
The common stock of OAC is divided into three classes. At December 31,
1994, MassMutual held (i) all of the 2,160,000 shares of Class A voting
stock, (ii) 422,023 shares of Class B voting stock, and (iii) 937,403
shares of Class C non-voting stock. This collectively represented 80.2%
of the outstanding common stock and 86.5% of the voting power of OAC as
of that date. Certain officers and/or directors of the Manager held
(i) 706,286 shares of the Class B voting stock, representing 16.1% of
the outstanding common stock and 10.9% of the voting power, and (ii)
options acquired without cash payment which, when they become
exercisable, allow the holders to purchase up to 744,282 shares of
Class C non-voting stock. That group includes persons who serve as
officers of the Fund and two of whom (Messrs. Donald W. Spiro and
Robert G. Galli) serve as Trustees of the Fund. Holders of OAC Class B
and Class C common stock may put (sell) their shares and vested options
to OAC or MassMutual at a formula price (based on earnings of the
Manager). MassMutual may exercise call (purchase) options on all
outstanding shares of both such classes of common stock and vested
options at the same formula price, according to a schedule that will
commence on September 30, 1995. Since October 1, 1993, the only
transactions by persons who serve as Trustees of the Fund in excess of
1% of the outstanding shares of common stock or options of OAC were by
Mr. Galli, who surrendered to OAC 45,445 stock appreciation rights
issued in tandem with the Class C OAC options for $2,821,736, and by
Mr. Spiro, who sold 50,000 shares of Class B OAC common stock to
MassMutual for $3,740,000, for cash payments by OAC or MassMutual to be
made as follows: one-third of the amount due (i) within 30 days of the
transaction, (ii) by the first anniversary following the transaction
(with interest), and (iii) by the second anniversary following the
transaction (with interest).
RECEIPT OF SHAREHOLDER PROPOSALS
The Fund is not required to hold shareholder meetings on a regular
basis. Special meetings of shareholders may be called from time to
time by either the Fund or the Shareholders (under special conditions
described in the Fund's Statement of Additional Information). Under
the proxy rules of the Securities and Exchange Commission, shareholder
proposals which meet certain conditions may be included in the Fund's
proxy statement and proxy for a particular meeting. Those rules
require that for future meetings the shareholder must be a record or
beneficial owner of Fund shares with a value of at least $1,000 at the
time the proposal is submitted and for one year prior thereto, and must
continue to own such shares through the date on which the meeting is
held. Another requirement relates to the timely receipt by the Fund of
any such proposal. Under those rules, a proposal submitted for
inclusion in the Fund's proxy material for the next meeting after the
meeting to which this proxy statement relates must be received by the
Fund a reasonable time before the solicitation is made. The fact that
the Fund receives a proposal from a qualified shareholder in a timely
manner does not ensure its inclusion in the proxy material, since there
are other requirements under the proxy rules for such inclusion.
OTHER BUSINESS
Management of the Fund knows of no business other than the matters
specified above that will be presented at the Meeting. Since matters
not known at the time of the solicitation may come before the Meeting,
the proxy as solicited confers discretionary authority with respect to
such matters as properly come before the Meeting, including any
adjournment or adjournments thereof, and it is the intention of the
persons named as attorneys-in-fact in the proxy to vote the proxy in
accordance with their judgment on such matters.
By Order of the Board of Trustees,
Andrew J. Donohue, Secretary
April 13, 1995
<PAGE>
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>
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 Pennsylvania 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)
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 proposed changes in fundamental investment policies on
investment grade and unrated bonds (Proposal No. 1)
For ____ Against ____ Abstain ____
2. Approval of proposed changes in fundamental investment policies
required by prior law (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.
OVER
Dated: _______________________, 1995
(Month) (Day)
____________________________
Signature(s)
____________________________
Signature(s)
Please read both sides of this
ballot.
740
<PAGE>
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 Pennsylvania 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 proposed changes in fundamental investment policies on
investment grade and unrated bonds (Proposal No. 1)
For ____ Against ____ Abstain ____
2. Approval of proposed changes in fundamental investment policies
required by prior law (Proposal No. 2)
For ____ Against ____ Abstain ____
3. Approval of proposed Class B 12b-1 Distribution and Service Plan
and Agreement (Proposal No. 3)
For ____ Against ____ Abstain ____
NOTE: Please sign exactly as your name(s) appear hereon. When signing
as custodian, attorney, executor, administrator, trustee, etc., please
give your full title as such. All joint owners should sign this proxy.
If the account is registered in the name of a corporation, partnership
or other entity, a duly authorized individual must sign on its behalf
and give title.
(Over)
Dated: _______________________, 1995
(Month) (Day)
____________________________
Signature(s)
____________________________
Signature(s)
Please read both sides of this
ballot.
