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 GLOBAL ENVIRONMENT FUND
- - - ------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
Oppenheimer Global Environment Fund
- - - ------------------------------------------------------------
(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:
Shares of beneficial interest
(2) Aggregate number of securities to which transaction applies:
N/A
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11: 1
N/A
(4) Proposed maximum aggregate value of transaction:
N/A
/ / 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:
- - - --------------------
1 - Set forth the amount on which the filing fee is calculated and state
how it was determined.
<PAGE>
Preliminary Copy
OPPENHEIMER GLOBAL ENVIRONMENT FUND
Two World Trade Center, New York, New York 10048-0203
NOTICE OF MEETING OF SHAREHOLDERS TO BE HELD
June 20, 1994
To The Shareholders of
Oppenheimer Global Environment Fund
Notice is hereby given that a Meeting of the Shareholders of Oppenheimer
Global Environment Fund (the "Fund") will be held at 3410 South Galena
Street, Denver, Colorado, 80231, at 10:00 A.M., Denver time, on June 20,
1994, or any adjournments thereof, for the following purposes:
(a) To elect thirteen Trustees to hold office until the next meeting of
shareholders called for the purpose of electing Trustees and until their
successors are elected and shall qualify;
(b) To ratify the selection of KPMG Peat Marwick as the independent
certified public accountants and auditors of the Fund for the fiscal year
beginning October 1, 1993 (Proposal No. 1);
(c) To approve amendments to the Fund's Declaration of Trust (Proposal No.
2); and
(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 April 22, 1994, are
entitled to vote at the meeting. The election of Trustees and the
Proposals are more fully discussed in the Proxy Statement. Please read
it carefully before telling us, through your proxy or in person, how you
wish your shares to be voted. The Board of Trustees of the Fund
recommends a vote to elect each of the nominees as Trustee and in favor
of each Proposal. WE URGE YOU TO SIGN, DATE AND MAIL THE ENCLOSED PROXY
PROMPTLY.
By Order of the Board of Trustees,
Andrew J. Donohue, Secretary
May 6, 1994
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.<PAGE>
OPPENHEIMER GLOBAL ENVIRONMENT FUND
Two World Trade Center, New York, New York 10048-0203
PROXY STATEMENT
MEETING OF SHAREHOLDERS
TO BE HELD JUNE 20, 1994
This statement is furnished to the shareholders of Oppenheimer Global
Environment Fund (the "Fund") in connection with the solicitation by the
Fund's Board of Trustees of proxies to be used at a meeting (the
"Meeting") of shareholders to be held at 3410 South Galena Street, Denver,
Colorado, 80231, at 10:00 A.M., Denver time, on June 20, 1994, or any
adjournments thereof. It is expected that the mailing of this Proxy
Statement will be made on or about May 6, 1994. Financial statements
covering the operations of the Fund for the fiscal year ended September
30, 1993 were mailed to all persons who were shareholders of record on
September 30, 1993, and will be mailed to persons who became shareholders
between September 30, 1993 (the record date for the mailing of that Annual
Report) and the record date for this Proxy Statement at the same time this
Proxy Statement is mailed.
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) vote such shares as record holder on the
Proposals in the same proportion as that broker-dealer votes street
accounts shares for which instructions were timely received.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 investment
adviser, Oppenheimer Management Corporation (the "Manager"), personally
or by telephone or telegraph; any expenses so incurred will also be borne
by the Fund. Brokers, banks and other fiduciaries may be required to
forward soliciting material to their principals and to obtain
authorization for the execution of proxies. For those services, they will
be reimbursed by the Fund for their out-of-pocket expenses.
Shares Outstanding and Entitled to Vote. As of April 22, 1994, the record
date, there were ______________ shares of the Fund issued and outstanding.
All shares of the Fund have equal voting rights as to the election of
Trustees and as to each Proposal described herein, and the holders of
shares are 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 the Fund, except Merrill Lynch, Pierce, Fenner &
Smith, Inc., which was the record owner of ____________________________
shares of the Fund (approximately ____% of the Fund's then-outstanding
shares).
ELECTION OF TRUSTEES
At the Meeting, thirteen Trustees are to be elected to hold office until
the next meeting of shareholders called for the purpose of electing
Trustees or until their successors shall be duly elected and shall have
qualified. The persons named as attorneys-in-fact in the enclosed proxy
have advised the Fund that unless a proxy instructs them to withhold
authority to vote for all listed nominees or any individual nominee, all
validly executed proxies will be voted by them for the election of the
nominees named below as Trustees of the Fund. As a Massachusetts business
trust, the Fund does not contemplate holding annual shareholder meetings
for the purpose of electing Trustees. Thus, the Trustees will be elected
for indefinite terms until a shareholders meeting is called for the
purpose of voting for Trustees and until their successors are elected and
shall qualify.
Each of the nominees is presently a Trustee and has agreed to be nominated
and, if elected, to continue to serve as a Trustee of the Fund. All
Trustees except Ms. Moynihan and Mr. Robert G. Galli, Mr. Edward V. Regan
and Mr. Clayton K. Yeutter have been elected by shareholders of the Fund.
Each of the Trustees is also a Trustee or Director of Oppenheimer Fund,
Oppenheimer Discovery Fund, Oppenheimer Global Bio-Tech Fund, Oppenheimer
Global Fund, Oppenheimer Global Growth & Income Fund, Oppenheimer Special
Fund, Oppenheimer Time Fund, Oppenheimer Target Fund, Oppenheimer Tax-Free
Bond Fund, Oppenheimer Gold & Special Minerals Fund, Oppenheimer New York
Tax-Exempt Fund, Oppenheimer California Tax-Exempt Fund, Oppenheimer
Multi-State Tax-Exempt Trust, Oppenheimer Asset Allocation Fund,
Oppenheimer Mortgage Income Fund, Oppenheimer Money Market Fund, Inc.,
Oppenheimer U.S. Government Trust, Oppenheimer Multi-Government Trust and
Oppenheimer Multi-Sector Income Trust (together with the Fund, the "New
York OppenheimerFunds"). Mr. Spiro is President of the Fund and each of
the other New York OppenheimerFunds.
Each nominee indicated below by an asterisk is an "interested person" (as
that term is defined in the Investment Company Act of 1940, hereinafter
referred to as the "Investment Company Act") of the Fund due to the
connections indicated with the Manager or its affiliates. The year given
below indicates when the nominee first became a Trustee or Director of any
of the New York OppenheimerFunds without a break in service. The
beneficial ownership of shares listed below includes voting and investment
control, unless otherwise indicated below. If any of the nominees should
be unable to accept nomination or election, it is the intention of the
persons named as attorneys-in-fact in the enclosed proxy to vote such
proxy for the election of such other person or persons selected and
nominated by disinterested Trustees as the Board of Trustees may, in its
discretion, recommend. As of April 22, 1994 the Trustees and officers of
the Fund as a group owned __________ shares of the Fund in the aggregate,
which is less than 1% of the outstanding shares.
Name and Other Information:
- - - ----------------------------
Leon Levy
first became a
Trustee in 1959
Age: 68
Business Experience During the Past Five Years:
- - - ------------------------------------------------
General Partner of Odyssey Partners, L.P. (investment partnership);
Chairman of Avatar Holdings, Inc. (real estate development).
Leo Cherne
first became a
Trustee in 1982
Age: 81
Chairman Emeritus of the International Rescue Committee (philanthropic
organization); formerly Executive Director of the Research Institute of
America.
Edmund T. Delaney
first became a
Trustee in 1959
Age: 80
Attorney-at-law; formerly a member of the Connecticut State Historical
Commission and Counsel to Copp, Berall & Hempstead (a law firm).
Robert G. Galli*
first became a
Trustee in 1993
Age: 60
Vice Chairman of the Manager; Vice President and General Counsel of
Oppenheimer Acquisition Corp. ("OAC"), the Manager's parent holding
company; formerly he held the following positions: a director of the
Manager and Oppenheimer Funds Distributor, Inc. (the "Distributor"), Vice
President and a director of HarbourView Asset Management Corporation
("HarbourView") and Centennial Asset Management Corporation
("Centennial"), investment adviser subsidiaries of the Manager, a director
of Shareholder Financial Services, Inc. ("SFSI") and Shareholder Services,
Inc. ("SSI"), transfer agent subsidiaries of the Manager, an officer of
other OppenheimerFunds and Executive Vice President and General Counsel
of the Manager and the Distributor.
Benjamin Lipstein
first became a
Trustee in 1974
Age: 71
Professor Emeritus of Marketing, Stern Graduate School of Business
Administration, New York University.
Elizabeth B. Moynihan
first became a
Trustee in 1992
Age: 64
Author and architectural historian; a trustee of the American Schools of
Oriental Research, the Institute of Fine Arts (New York University), the
Freer Gallery of Art (Smithsonian Institution) and the Preservation League
of New York State; a member of the Indo-U.S. Sub-Commission on Education
and Culture.
Kenneth A. Randall
first became a
Trustee in 1980
Age: 66
A director of Northeast Bancorp, Inc. (bank holding company), Dominion
Resources, Inc. (electric utility holding company), and Kemper Corporation
(insurance and financial services company); formerly Chairman of the Board
of ICL Inc. (information systems).
Edward V. Regan
first became a
Trustee in 1993
Age: 63
President of Jerome Levy Economics Institute a member of the U.S.
Competitiveness Policy Council; a director of GranCare, Inc. (health care
provider); formerly New York State Comptroller and a trustee, New York
State and Local Retirement Fund.
Russell S. Reynolds, Jr.
first became a
Trustee in 1989
Age: 62
Founder and Chairman of Russell Reynolds Associates, Inc. (executive
recruiting); a trustee of Mystic Seaport Museum, International House,
Greenwich Historical Society and Greenwich Hospital.
Sidney M. Robbins
first became a
Trustee in 1963
Age: 82
Chase Manhattan Professor Emeritus of Financial Institutions, Graduate
School of Business, Columbia University; Visiting Professor of Finance,
University of Hawaii; a director of The Korea Fund, Inc. and The Malaysia
Fund, Inc. (closed-end investment companies); member of the Board of
Advisors of Olympus Private Placement Fund, L.P.; Professor Emeritus of
Finance, Adelphi University.
Donald W. Spiro*
first became a
Trustee in 1985
Age: 68
Chairman Emeritus and a director of the Manager; formerly Chairman of the
Manager and the Distributor.
Pauline Trigere
first became a
Trustee in 1977
Age: 81
Chairman and Chief Executive Officer of Trigere, Inc. (design and sale of
women's fashions).
Clayton K. Yeutter
first became a
Trustee in 1993
Age: 63
Counsel to Hogan & Hartson (a law firm); a director of B.A.T. Industries,
Ltd. (tobacco and financial services), Caterpillar, Inc. (machinery),
ConAgra, Inc. (food and agricultural products), FMC Corp. (chemicals and
machinery), Lindsay Manufacturing Co. and Texas Instruments, Inc.
(electronics); formerly (in descending chronological order) Deputy
Chairman, Bush/Quayle Presidential Campaign; Counsellor to the President
(Bush) for Domestic Policy; Chairman of the Republican National Committee;
Secretary of the U.S. Department of Agriculture; and U.S. Trade
Representative, Executive Office of the President.
_______________________
* A nominee who is an "interested person" of the Fund under the Investment
Company Act.
Vote Required. An affirmative vote of a plurality of the votes cast by
holders of voting securities of the Fund is required for the election of
a nominee as Trustee. The Board of Trustees recommends a vote for the
election of each nominee.
Functions of the Board of Trustees. The primary responsibility for the
management of the Fund rests with the Board of Trustees. The Trustees meet
regularly to review the activities of the Fund and of the Manager, which
is responsible for its day-to-day operations. Six regular meetings of the
Trustees were held in the fiscal year ended September 30, 1993. Each of
the Trustees other than Mr. Cherne and Ms. Trigere was present for at
least 75% of the meetings held. The Trustees of the Fund have appointed
an Audit Committee, comprised of Messrs. Randall (Chairman), Robbins (Vice
Chairman) and Cherne, none of whom is an "interested person" (as that term
is defined in the Investment Company Act) of the Manager or the Fund. The
functions of the Committee include (i) making recommendations to the Board
concerning the selection of independent auditors for the Fund (subject to
shareholder ratification); (ii) reviewing the methods, scope and results
of audits and the fees charged; (iii) reviewing the adequacy of the Fund's
internal accounting procedures and controls; and (iv) establishing a
separate line of communication between the Fund's independent auditors and
its independent Trustees. The Committee met four times during the fiscal
year ended September 30, 1993, and all members other than Mr. Cherne
attended at least 75% of the meetings held during that period. The Board
of Trustees does not have a standing nominating or compensation committee.
Remuneration of Trustees and Officers. Messrs. Spiro and Galli and the
other officers of the Fund listed below are affiliated with the Manager
and receive no salary or fee from the Fund. The Fund currently pays each
other Trustee a fee varying from $782 to $2,115 for serving as Trustee,
or as Chairman or a member of the committees of the Board of Trustees.
During the fiscal year ended September 30, 1993, Trustees' fees and
expenses aggregated $5,606. In addition, the Fund has adopted a
retirement plan that provides for payment to a retired Trustee of up to
80% of the average compensation paid during that Trustee's five years of
service in which the highest compensation was received. A Trustee must
serve in that capacity for any of the New York OppenheimerFunds listed
above for at least 15 years in order to be eligible for the maximum
payment. No Trustee has retired under this plan, and therefore no
payments have been made by the Fund. In the fiscal year ended September
30, 1993, the Fund accrued $34,057 for retirement plan benefits for its
Trustees under the plan.
Officers of the Fund. Each officer of the Fund is elected by the Trustees
to serve an indefinite term. Information is given below about the
executive officers who are not Trustees of the Fund, including their
business experience during the past five years. Messrs. Bishop, Bowen,
Donohue, Farrar and Zack serve in a similar capacity with the other New
York OppenheimerFunds listed above.
John L. Wallace, Vice President and Portfolio Manager; Age: 40.
Vice President of the Manager; an officer of other OppenheimerFunds;
formerly a Securities Analyst and Assistant Portfolio Manager for the
Manager.
Andrew J. Donohue, Secretary; Age: 43.
Executive Vice President and General Counsel of the Manager and the
Distributor; an officer of other OppenheimerFunds; formerly Senior
Vice President and General Counsel of the Manager and the
Distributor, Partner in Kraft & McManimon (a law firm), an officer
of First Investors Corporation (a broker-dealer) and First Investors
Management Company, Inc. (broker-dealer and investment adviser) and
director and an officer of First Investors Family of Funds and First
Investors Life Insurance Company.
George C. Bowen, Treasurer; Age 57.
Senior Vice President and Treasurer of the Manager; Vice President
and Treasurer of the Distributor and HarbourView; Senior Vice
President, Treasurer, Assistant Secretary and a director of
Centennial; Vice President, Treasurer and Secretary of SSI, SFSI, and
the OppenheimerFunds; formerly Senior Vice President/Comptroller and
Secretary of Oppenheimer Asset Management Corporation, a former
investment advisory subsidiary of the Manager.
Robert G. Zack, Assistant Secretary; Age 45.
Senior Vice President and Associate General Counsel of the Manager;
Assistant Secretary of SSI, SFSI and other OppenheimerFunds.
Robert Bishop, Assistant Treasurer; Age 35.
Assistant Vice President of the Manager/Mutual Fund Accounting; an
officer of other OppenheimerFunds; previously a Fund Controller for
the Manager, prior to which he was an Accountant for Resolution Trust
Corporation and previously an Accountant and Commissions Supervisor
for Stuart James Company Inc., a broker-dealer.
Scott Farrar, Assistant Treasurer; Age: 28.
Assistant Vice President of the Manager/Mutual Fund Accounting; an
officer of other OppenheimerFunds; previously a Fund Controller for
the Manager, prior to which he was an International Mutual Fund
Supervisor for Brown Brothers Harriman Co., a bank, and previously
a Senior Fund Accountant for State Street Bank & Trust Company,
before which he was a sales representative for Central Colorado
Planning.
RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
(Proposal No. 1)
The Investment Company Act requires that independent certified public
accountants and auditors ("auditors") be selected annually by the Board
of Trustees and that such selection be ratified by the shareholders at the
next-convened annual meeting of the Fund, if one is held. The Board of
Trustees of the Fund, including a majority of the Trustees who are not
"interested persons" (as defined in the Investment Company Act) of the
Fund or the Manager, at a meeting held October 6, 1993, selected KPMG Peat
Marwick ("KPMG") as auditors of the Fund for the fiscal year beginning
October 1, 1993. KPMG also serves as auditors for certain other funds for
which the Manager acts as investment adviser. At the Meeting, a
resolution will be presented for the shareholders' vote to ratify the
selection of KPMG as auditors. Representatives of KPMG are not expected
to be present at the Meeting but will be available should any matter arise
requiring their presence. The Board of Trustees recommends approval of
the selection of KPMG as auditors of the Fund.
APPROVAL OF AMENDMENTS TO THE FUND'S DECLARATION OF TRUST
(Proposal No. 2)
The Fund's Declaration of Trust (the "Declaration of Trust") currently
authorizes the shares of the Fund to be issued in one or more series, each
series having only one class of shares. A shares of each series
represents an equal proportionate interest in such series with each other
share of the same series. There is currently one series authorized by the
Board. The Fund is not authorized to offer classes of a series. The Fund
has obtained an order of the Securities and Exchange Commission ("SEC")
exempting it from certain provisions of the Investment Company Act and
thereby allowing the Fund to offer multiple classes of shares. The Fund's
Board of Trustees, including a majority of those Trustees who are not
"interested persons" (as defined in the Investment Company Act) of the
Fund or the Manager (the "Independent Trustees"), has voted to authorize
the issuance of additional classes of shares of the Fund's current series
and to request the shareholders to approve amendments to the Declaration
of Trust to permit the issuance of such additional classes, as well as any
additional classes of series of the Fund that may hereafter be created.
This will enable investors to be offered different classes of shares of
a series representing interests in the same investment portfolio but with
different distribution arrangements.
At present, the Fund has a single class of shares sold at a public
offering price that includes an initial sales charge (shares purchased in
amounts aggregating $1 million or more are sold at net asset value but may
be subject to a contingent deferred sales charge if redeemed within 18
months of purchase). Upon the Fund's offering multiple classes of shares
(the "multiclass arrangement"), shares of the presently outstanding class
would continue to be offered under the Fund's present distribution
arrangement, and would thereafter be referred to as the Fund's "Class A
shares." If this Proposal is approved, the Fund would be permitted to
offer shares of one or more additional classes, although there is no
obligation that it do so. Shares of such additional classes may be
offered under different sales charge and 12b-1 plan arrangements and
therefore may have different expenses than Class A shares. However,
shares of each class would represent interests in the same portfolio of
investments held by the Fund. The only differences between shares of
different classes would relate to (a) any differences in expenses payable
by each class and the impact of such differences on their respective net
asset values and distributions to shareholders, (b) voting rights with
respect to any matter solely affecting the respective class, (c) any
differences relating to procedures applicable to purchasing, redeeming or
exchanging shares or converting shares into another authorized class of
shares, and (d) the designation of the respective class. The Fund has
retained an independent expert to review the methodology which the Board
has adopted of allocating expenses to shares of each class. The Board
does not expect that the multiclass arrangement will result in any
additional expense being allocated to Class A shares, and if there are any
such additional expenses, the Board believes that such expenses will not
affect the dividends or net asset value of the Class A shares.
The multiclass arrangement is intended to provided investors with
alternative methods of purchasing shares of the Fund and to allow
investors a choice in selecting the method of paying sales and
distribution expenses associated with their investment. The investor's
choice should depend on the amount invested and the time for which the
investment in Fund shares is expected to be held. To the extent that
offering varying distribution alternatives increases sales, a larger pool
of assets may reduce pro rata operating expenses of the Fund and better
enable the achievement of investment objectives within the constraints of
portfolio management. If and when the multiclass arrangement is
instituted, the prospectus of the Fund will be amended to disclose all
aspects of such arrangement.
The Fund's By-Laws provide that Trustees shall be elected by a plurality
of the votes cast at a duly constituted meeting unless the Declaration of
Trust, By-Laws or governing statute supersede this provision. The
Declaration of Trust states that if a quorum is present at a meeting, a
vote of a majority of the quorum shall be sufficient to transact all
business at the meeting. This provision could be interpreted to require
a vote of a majority of votes present at a shareholder meeting for the
election of Trustees. The Board believes that election by plurality vote
is sufficient. Accordingly, the Board also recommends that the
Declaration of Trust be amended to allow for the election of Trustees by
a plurality of votes cast.
Votes Required. Under the Investment Company Act, an affirmative vote of
the holders of a "majority," as defined in the Investment Company Act, of
the outstanding voting securities of the Fund is required for approval of
this Proposal. Such "majority" vote is defined in the Investment Company
Act as the vote of the holders of the lesser of (i) 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 the proposal is not approved, the
Fund's Declaration of Trust will remain unchanged. The Board of Trustees
recommends a vote in favor of approving this Proposal.
ADDITIONAL INFORMATION
The Manager. Subject to the authority of the Board of Trustees, the
Manager is responsible for the day-to-day management of the Fund's
business. The Manager is a wholly-owned subsidiary of 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 (the
"Acquisition Date"). 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 Donald W. Spiro (5.24%) and
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,
1993, MassMutual held (i) all of the 2,160,000 shares of Class A voting
stock, (ii) 317,854 shares of Class B voting stock, and (iii) 350,063
shares of Class C non-voting stock. This collectively represented 74.1%
of the outstanding common stock and 84.9% of the voting power of OAC as
of December 31, 1993. Certain officers and/or directors of the Manager
as a group held (i) 821,455 shares of the Class B voting stock,
representing 21.5% of the outstanding common stock and 12.6% of the voting
power, and (ii) options acquired without cash payment which, when they
become exercisable, allow the holders to purchase up to 706,150 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, 1992, certain officers and/or directors of the
Manager (i) sold 295,354 shares of Class B OAC common stock to MassMutual
at the formula price, and (ii) surrendered to OAC 436,053 stock
appreciation rights issued in tandem with the Class C OAC options. Cash
payments aggregating $32,729,119 have or will be made by OAC or
MassMutual to such persons (including Messrs. Spiro and Galli, identified
above) 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). On December 15, 1993, MassMutual purchased its 350,063
shares of Class C OAC stock from OAC for $17,751,718.
As part of the acquisition of the common stock of OAC, MassMutual also
purchased approximately $45 million of subordinated notes of a subsidiary
of OAC; the notes are now an obligation of the Manager. In addition to
the purchase of such notes, MassMutual holds warrants issued by OAC
exercisable over the life of the notes which will allow it to purchase
shares of Class C common stock representing approximately 15.4% of the
common stock of OAC on a fully diluted basis.
The Manager and its affiliates act as investment advisers to investment
companies having combined net assets of more than $27 billion as of
December 31, 1993, and having more than 1.8 million shareholder accounts.
A consolidated statement of financial condition of the Manager as of
December 31, 1993, is included in this Proxy Statement as Exhibit A.
The names and principal occupations of the executive officers and
directors of the Manager are as follows: Jon S. Fossel, Chairman, Chief
Executive Officer and Director; Bridget A. Macaskill, President and
Director; Donald W. Spiro, Chairman Emeritus and a Director; Robert G.
Galli and James C. Swain, Vice Chairmen of the Manager; Samuel Freedman,
Jr., Director; Robert Doll, Jr., and O. Leonard Darling, Executive Vice
Presidents; Tilghman G. Pitts, Executive Vice President and Director;
Andrew J. Donohue, Executive Vice President and General Counsel; Kenneth
Eich, Executive Vice President and Chief Financial Officer; George C.
Bowen, Senior Vice President and Treasurer; Victor Babin, Loretta
McCarthy, Robert Patterson, Arthur Steinmetz, Ralph Stellmacher, Nancy
Sperte and Robert G. Zack, Senior Vice Presidents. The address of Messrs.
Bowen, Eich, Freedman and Swain is 3410 South Galena Street, Denver,
Colorado 80231. The address of all other officers is Two World Trade
Center, New York, New York 10048-0203, which is also the address of the
Manager and OAC.
Investment Advisory Agreement. The Fund has an Investment Advisory
Agreement with the Manager dated October 22, 1990 (the "Agreement"). The
Agreement was submitted to and approved by the shareholders of the Fund
at a meeting held October 1, 1990, because the acquisition of the Manager
by OAC on October 22, 1990, terminated the previous investment advisory
agreement. The Agreement continues in effect from year to year unless
terminated, but only so long as such continuance is approved annually in
accordance with the Investment Company Act. At a meeting held on December
9, 1993, the Fund's Board of Trustees, including a majority of the
Independent Trustees, approved the renewal of the Agreement between the
Manager and the Fund until December 31, 1994. At the time of such
approval, Messrs. Spiro and Galli were shareholders of OAC, the parent of
the Manager. Under the Agreement, the Manager supervises the investment
operations of the Fund and the composition of its portfolio and furnishes
advice and recommendations with respect to investments, investment
policies and the purchase and sale of securities. The management fee
payable monthly to the Manager under the terms of the Agreement is
computed on the assets of the Fund as of the close of business each day.
The annual rates of the fee paid by the Fund are .75% of the first $200
million of net assets; .72% of the next $200 million; .69% of the next
$200 million; .66% of net assets over $600 million. During the fiscal
year ended September 30, 1993, the Fund's fees payable under its Agreement
with the Manager were $352,886.
The Agreement requires the Manager, at its expense, to provide the Fund
with adequate office space, facilities and equipment as well as to
provide, and supervise the activities of, all administrative and clerical
personnel required to provide effective administration for the Fund,
including the compilation and maintenance of records with respect to
operations, the preparation and filing of specified reports, and
composition of proxy materials and registration statements for continuous
public sale of shares of the Fund. Expenses not expressly assumed by the
Manager under the Agreement or by the Distributor under the General
Distributor's Agreement are paid by the Fund. The Agreement lists
examples of expenses paid by the Fund, the major categories of which
relate to interest, taxes, brokerage commissions, fees to certain
Trustees, legal, bookkeeping and audit expenses, custodian and transfer
agent expenses, stock certificate issuance costs, certain printing and
registration costs, and non-recurring expenses, including litigation
costs.
Independently of the Agreement, the Manager has voluntarily undertaken
that the total expenses of the Fund in any year (including the management
fee but excluding taxes, interest, brokerage commissions, distribution
plan payments and extraordinary non-recurring expenses such as litigation
costs) shall not exceed (and the Manager undertakes to pay or refund to
the Fund any amount by which such expenses shall exceed) the most
stringent state regulatory limitation on fund expenses applicable to the
Fund. At present, that limitation is imposed by California and limits
expenses (with specified exclusions) to 2.5% of the first $30 million of
average annual net assets, 2% of the next $70 million, and 1.5% of average
annual net assets in excess of $100 million. The payment of the
management fee at the end of any month will be reduced so that there will
not be any accrued but unpaid liability under this expense limitation.
The Manager reserves the right to amend or terminate the expense
assumption undertaking at any time.
The Agreement provides that in the absence of willful misfeasance, bad
faith, gross negligence or reckless disregard for its obligations
thereunder, the Manager is not liable for any loss sustained by reason of
any good faith error or omission on its part in connection with any matter
to which the Agreement relates. The Agreement permits the Manager to act
as investment adviser for any other person, firm or corporation. Pursuant
to a license from the Manager, the Fund may use the name "Oppenheimer" in
connection with its business. If the Manager shall no longer act as
investment adviser to the Fund, the right of the Fund to use the name
"Oppenheimer" as part of its name may be withdrawn.
Provisions of the Investment Advisory Agreement. One of the duties of the
Manager under the Agreement is to arrange the portfolio transactions for
the Fund. In doing so, the Manager is authorized by the Agreement to
employ broker-dealers ("brokers"), including "affiliated" brokers, as that
term is defined in the Investment Company Act, as may, in its best
judgment based on all relevant factors, implement the policy of the Fund
to obtain, at reasonable expense, the "best execution" (prompt and
reliable execution at the most favorable price obtainable) of such
transactions. The Manager need not seek competitive commission bidding
or base its selection on "posted" rates, but is expected to be aware of
the current rates of eligible brokers and to minimize the commissions paid
to the extent consistent with the provisions of the Agreement and the
interests and policies of the Fund as established by its Board of
Trustees.
Under the Agreement, the Manager is authorized to select brokers that
provide brokerage and/or research services for the Fund and/or the other
accounts over which the Manager or its affiliates have investment
discretion. The commissions paid to such brokers may be higher than
another qualified broker would have charged, if a good faith determination
is made by the Manager that the commission is fair and reasonable in
relation to the services provided. There is no formula under which any
of the brokers selected for the Fund's portfolio transactions are entitled
to the allocation of a particular amount of commissions. The Manager may
also consider sales of shares of the Fund and of other investment
companies managed by the Manager or its affiliates as a factor in the
selection of brokers for the Fund's portfolio transactions.
Description of Brokerage Practices. Subject to the provisions of the
Agreement, when brokers are used for the Fund's portfolio transactions,
allocations of brokerage are made by portfolio managers under the
supervision of executive officers of the Manager. Transactions in
securities other than those for which an exchange is the primary market
are generally done with principals or market makers. Brokerage
commissions are paid primarily for effecting transactions in listed
securities and otherwise only if it appears likely that a better price or
execution can be obtained. When the Fund engages in an option
transaction, ordinarily the same broker will be used for the purchase or
sale of the option and any transactions in the securities to which the
option relates. When possible, concurrent orders to purchase or sell the
same security by more than one of the accounts managed by the Manager or
its affiliates are combined. Transactions effected pursuant to such
combined orders are averaged as to price and allocated in accordance with
the purchase or sale orders actually placed for each account. Option
commissions may be relatively higher than those which would apply to
direct purchases and sales of portfolio securities.
Most purchases of money market instruments and debt obligations are
principal transactions at net prices. For those transactions, instead of
using a broker the Fund normally deals directly with the selling or
purchasing principal or market maker unless it is determined that a better
price or execution can be obtained by using a broker. Purchases of these
securities from underwriters include a commission or concession paid by
the issuer to the underwriter, and purchases from dealers include a spread
between the bid and asked price. The Fund seeks to obtain prompt
execution of such orders at the most favorable net price.
The research services provided by a particular broker may be useful only
to one or more of the advisory accounts of the Manager and its affiliates,
and investment research received for the commissions of those other
accounts may be useful both to the Fund and one or more of such other
accounts. Such research, which may be supplied by a third party at the
instance of a broker, includes information and analyses on particular
companies and industries as well as market or economic trends and
portfolio strategy, receipt of market quotations for portfolio
evaluations, information systems, computer hardware and similar products
and services. If a research service also assists the Manager in a non-
research capacity (such as bookkeeping or other administrative functions),
then only the percentage or component that provides assistance to the
Manager in the investment decision-making process may be paid for in
commission dollars. The research services provided by brokers broaden the
scope and supplement the research activities of the Manager, by making
available additional views for consideration and comparisons, and enabling
the Manager to obtain market information for the valuation of securities
held in the Fund's portfolio or being considered for purchase. The Board
of Trustees, including the Independent Trustees of the Fund, annually
reviews information furnished by the Manager as to the commissions paid
to brokers furnishing such services in an effort to ascertain that the
amount of such commissions was reasonably related to the value or benefit
of such services. The Board of Trustees has permitted the Manager to use
concessions on fixed-price offerings to obtain research, in the same
manner as is permitted for agency transactions.
During the fiscal year ended September 30, 1993, total brokerage
commissions paid by the Fund (not including spreads or concessions on
principal transactions on a net trade basis) amounted to $416,080. During
the fiscal year ended September 30, 1993, $158,802 was paid to brokers as
commissions in return for research services (including special research,
statistical information and execution); the aggregate dollar amount of
those transactions was $42,756,378. The transactions giving rise to those
commissions were allocated in accordance with the internal allocation
procedures described above.
Distribution Agreement. Oppenheimer Funds Distributor, Inc., a wholly-
owned subsidiary of the Manager, is the general distributor of the Fund's
shares under a General Distributor's Agreement dated October 22, 1990.
The General Distributor's Agreement is subject to the same annual renewal
requirements and termination provisions as the Agreement. For the fiscal
year ended September 30, 1993, selling charges on the Fund's shares
amounted to $279,673, of which the Distributor and an affiliated broker-
dealer retained $61,218 in the aggregate.
Service Plan. The Fund has adopted a Service Plan pursuant to Rule 12b-1
of the Investment Company Act under which the Fund reimburses the
Distributor for a portion of its costs incurred in connection with the
personal service and maintenance of accounts that hold Fund shares. The
Distributor uses such fees received from the Fund in their entirety: (i)
to compensate brokers, dealers, banks and other institutions
("Recipients") each quarter for providing personal service and the
maintenance of accounts that hold Fund shares, and (ii) to reimburse
itself (to the extent authorized by the Board) for its other expenditures
under the Plan and for its direct costs for personal service and the
maintenance of accounts. The Board has not authorized any reimbursement
to the Distributor under (ii) above. The services to be provided under
the Plan include, but are not limited to, the following: answering routine
inquiries from the Recipient's customers concerning the Fund, providing
such customers with information on their investment in Fund 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 Plan has the affect of increasing annual
expenses of the Fund by up to 0.25% of its average annual net assets from
what its expense would otherwise be. For the fiscal year ended September
30, 1993, payments under that Plan totalled $114,385, all of which was
paid by the Distributor to Recipients as reimbursement for distribution-
related services, including $2,296 paid to an affiliate of the
Distributor.
Service Contract. Oppenheimer Shareholder Services ("OSS"), a division
of the Manager, serves as the Fund's transfer agent and registrar pursuant
to a Service Contract under which it is reimbursed by the Fund for its
costs in providing those services to the Fund, including the cost of
rental of office space. Similar services are provided by OSS to certain
other mutual funds advised by the Manager. OSS received $167,925 from the
Fund during the fiscal year ended September 30, 1993. The costs described
for these services are charged to the Fund as operating expenses and are
borne ratably by all shareholders in proportion to their holdings of
shares of the Fund.
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 Commission's proxy
rules, 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
May 6, 1994
<PAGE> Exhibit A
INDEPENDENT AUDITORS' REPORT
Oppenheimer Management Corporation:
We have audited the accompanying consolidated statement of financial
condition of Oppenheimer Management Corporation and subsidiaries as of
December 31, 1993. This financial statement is the responsibility of the
Company's management. Our responsibility is to express an opinion on this
financial statement based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the statement of financial
condition is free of material misstatement. An audit includes examining,
on a test basis, evidence supporting the amounts and disclosures in the
statement of financial condition. An audit also includes assessing the
accounting principles used and significant estimates made by management,
as well as evaluating the overall statement of financial condition
presentation. We believe that our audit provides a reasonable basis for
our opinion.
In our opinion, such consolidated statement of financial condition
presents fairly, in all material respects, the financial position of
Oppenheimer Management Corporation and subsidiaries at December 31, 1993
in conformity with generally accepted accounting principles.
As discussed in Note 1 to the financial statements, the Company changed
its method of accounting for income taxes to conform with Statement of
Financial Accounting Standards No. 109.
DELOITTE & TOUCHE
Denver, Colorado
February 16, 1994
OPPENHEIMER MANAGEMENT CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF FINANCIAL CONDITION
DECEMBER 31, 1993
ASSETS NOTES
CURRENT ASSETS:
Cash $ 31,940,116
Investments in money market
mutual funds 26,850,605
Investments in managed mutual funds 4,981,458
Investments in Zero Coupon U.S.
Treasuries Trust, at market 3,897,237
Accounts receivable:
Brokers and dealers 2 49,538,320
Managed mutual funds 2,3 11,433,524
Affiliated companies 100,495
Income taxes 13,902,237
Other 4,471,131
Other current assets 2,124,857
-------------
Total current assets 149,239,980
-----------------
PROPERTY AND EQUIPMENT - Less
accumulated depreciation and
amortization of $8,169,031 8,896,837
-----------------
OTHER ASSETS:
Intangible assets, net 1 113,445,572
Deferred sales commissions 54,452,051
Deferred charges 1,550,484
Other 1,607,387
----------------
Total other assets 171,055,494
------------------
TOTAL $329,192,311
<PAGE>
LIABILITIES AND SHAREHOLDER'S EQUITY
NOTES
CURRENT LIABILITIES:
Accounts payable and accrued
expenses $ 33,866,353
Subscriptions payable to managed
mutual funds 2 71,371,285
Payable to brokers and dealers 2 9,483,935
Current portion of long-term debt 5,6 17,463,094
------------
Total current liabilities 132,184,667
--------------
LONG-TERM LIABILITIES:
Deferred income taxes4 4 15,447,486
Senior debt 5 59,781,186
Subordinated notes 6 44,450,000
-------------
Total liabilities 251,863,339
---------------
COMMITMENTS 1,8
SHAREHOLDER'S EQUITY: 5,7
Preferred stock - nonvoting;
$10 par value; 392,461 shares
authorized; 25,141 shares
issued and outstanding 251,410
Common Stock - voting; $.10 par
value; 229,246 shares authorized;
179,658 shares issued and
outstanding 17,966
Additional paid-in capital 49,241,234
Retained earnings 27,818,362
----------------
Total shareholder's equity 77,328,972
-----------------
TOTAL $329,192,311
See notes to consolidated statement of financial condition.
OPPENHEIMER MANAGEMENT CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED STATEMENT OF FINANCIAL CONDITION
DECEMBER 31, 1993
1. THE COMPANY AND ITS SIGNIFICANT ACCOUNTING POLICIES
Oppenheimer Management Corporation (OMC) and its subsidiaries
(collectively, the "Company") are engaged in the business of
organizing, promoting, and managing registered investment
companies (hereafter referred to as "mutual funds").
OMC owns all the outstanding stock of Oppenheimer Funds
Distributor, Inc., Shareholder Services, Inc. (SSI), HarbourView
Asset Management Corporation, Centennial Asset Management
Corporation, Oppenheimer Partnership Holdings, Inc., and
Shareholder Financial Services, Inc. OMC is a wholly-owned
subsidiary of Oppenheimer Acquisition Corporation (OAC), which is
controlled by Massachusetts Mutual Life Insurance Company and
senior management of OMC.
Principles of Consolidation - The accompanying consolidated
statement of financial condition includes the accounts of OMC and
its subsidiaries. All significant intercompany transactions and
balances have been eliminated in consolidation.
Investments in Money Market Mutual Funds - The Company invests
available cash in money market mutual funds managed by the
Company. The investments are recorded at cost which equals
market.
Investments in Managed Mutual Funds - The Company owns shares of
stock in several of the mutual funds it manages. The shares are
purchased at their respective net asset values. The resulting
investments are recorded at cost which approximates market.
Investments in Zero Coupon U.S. Treasuries Trust - The Company is
the Sponsor for the Oppenheimer Zero Coupon U.S. Treasuries Trust
and has undertaken to maintain a secondary market for units in the
Trust. The investments are carried at market.
Property and Equipment - Property and equipment is recorded at
cost. Equipment depreciation expense is provided over the assets'
estimated useful lives on the straight-line method. Leasehold
improvements are amortized on the straight-line method over the
remaining terms of the lease agreements.
<TABLE>
<CAPTION>
Intangible Assets - Intangible assets at December 31, 1993, are as
follows:
Less
Useful Accumulated Net
Lives Cost Amortization Book Value
----------- ----------- ------------ -----------
<S> <C> <C> <C> <C>
Debt Issuance Costs 7 years $ 5,535,450 $ (2,999,400) $ 2,536,050
Management Contracts 7 years 38,600,000 (18,840,667) 19,759,333
Goodwill 25 years 100,766,565 (11,671,455) 89,095,110
Other 4-10 years 4,385,906 (2,330,827) 2,055,079
----------- ------------ ----------
$149,287,921 $(35,842,349) $113,445,572
</TABLE>
Deferred Sales Commissions - Sales commissions paid to brokers and
dealers in connection with sales of shares of certain mutual funds
are charged to deferred sales commissions and amortized over six
years. Early withdrawal charges received by the Company from
redeeming shareholders reduce unamortized deferred sales
commissions.
Stock Appreciation Rights - OAC has granted certain stock
appreciation rights relating to OAC's stock to certain employees of
OMC. During 1993, OMC recorded $21,603,294 relating to these stock
appreciation rights as a credit to additional paid-in capital.
Income Taxes - OAC files a consolidated federal income tax return
which includes the Company. Income taxes are recorded as if the
Company files on a separate return basis. During 1993 the Company
was required to adopt Statement of Financial Accounting Standards
No. 109, Accounting for Income Taxes. Statement 109 requires a
change from the deferred method of accounting for income taxes of
APB Opinion 11 to the asset and liability method of accounting for
income taxes. The asset and liability method prescribed by
Statement 109 results in deferred tax assets and liabilities being
recorded for the differences between the book and tax basis relating
to the Company's assets and liabilities.
The Company adopted Statement 109 in 1993 and has elected to restate
prior years beginning with the 1990 period. The effect of this
restatement on prior years has been reflected in retained earnings
as of December 31, 1992.
2. TRANSACTIONS WITH BROKERS AND DEALERS
The Company acts as general distributor for the sale and
distribution of shares of several mutual funds. In this capacity,
the Company records a receivable when it issues confirmations of all
accepted purchase orders to the originating brokers and dealers; at
the same time, the Company records a liability to the mutual funds
equal to the net asset value of all shares subject to such
confirmations. This liability must be paid to the mutual funds
within 11 business days unless the trade is canceled. If the
originating broker or dealer fails to make timely settlement of its
purchase order under the terms of its dealer agreement with the
Company, the Company may cancel the purchase order and, at the
Company's risk, hold responsible the originating broker or dealer.
When brokers and dealers place share redemption orders with a fund's
distributor, the Company records a receivable from the mutual funds
equal to the net asset value of all shares redeemed; at the same
time the Company records a corresponding liability payable to the
originating brokers.
3. RELATED PARTIES
The following is a summary of the significant balances, transactions
and relationships with affiliated companies and other related
parties as of December 31, 1993:
Officers and Directors of the Company; Shareholders of OAC - Several
officers and directors of the Company and shareholders of OAC are
also officers and directors or trustees of the mutual funds managed
and distributed by the Company.
Transfer Agents - SSI and Oppenheimer Shareholder Services (OSS), a
division of OMC, act as transfer and shareholder servicing agents
for the mutual funds managed by the Company and others. Amounts
charged to managed mutual funds are based on costs incurred on
behalf of the mutual funds pursuant to service agreements between
SSI or OSS and the mutual funds. SSI also acts as transfer agent
for certain mutual funds not managed by the Company, and amounts
charged to those funds are based on fees set by contracts with the
respective mutual funds.
The receivable from managed mutual funds includes $2,466,000
resulting from transfer agency fees and expenditures made on behalf
of the mutual funds at December 31, 1993.
4. INCOME TAXES
As discussed in note 1, the Company adopted Statement 109 in 1993
and has applied the provisions of the Statement retroactively to
1990. The principal effect of this change in accounting for income
taxes related to the remeasurement of the 1990 acquisition of
Maximum Holdings, Inc. and resulted in the recording of goodwill in
the amount of $13,800,000 and deferred taxes payable in the same
amount. In addition, retained earnings at December 31, 1992 was
increased by $2,001,702 to reflect the effects of the restatement as
of that date.
Deferred tax assets of $20,165,000 have been recorded in the
accompanying financial statements. These amounts primarily relate
to the benefit associated with certain state tax loss carryforwards
and compensation not deductible for tax purposes until paid. A
valuation allowance has not been recorded with respect to this
deferred tax asset. Deferred tax liabilities of $35,612,000 have
also been recorded. These amounts relate primarily to the current
deduction, for tax purposes, of deferred sales commissions which are
amortized over six years for book purposes and the difference in
book and tax basis relating to certain management contracts.
The Company has certain net operating loss carryforwards relating to
various states. If not used in the interim, these losses will
generally expire on December 31, 2008.
5. SENIOR DEBT
At December 31, 1993, the Company has outstanding $77.2 million of
Senior Debt borrowed from five banks. This amount is comprised of a
term loan of $23.7 million due September 30, 1997 and $53.5 million
outstanding on a $75 million revolving credit. The revolving credit
is subject to annual renewal, and, if not renewed, is repayable in
four annual installments. The debt bears interest at the Company's
election at the rate for Eurodollar deposits plus 1 1/2% or the
higher of the prime rate, plus 1/2% or the federal funds rate plus
1/2%. The credit agreement contains covenants requiring certain
minimum financial tests and restrictions on capital expenditures,
investments, indebtedness and dividends. At December 31, 1993, the
Company was in compliance with the terms of the credit agreement.
In addition, the banks have also received a pledge of the shares of
the Company's subsidiaries and guarantees of certain subsidiaries.
Borrowings under the credit agreement are collateralized by certain
assets of the Company.
The mandatory principal repayment schedule for the term loan is as
follows (000's):
1994 $ 10,000
1995 12,000
1996 1,700
--------
$ 23,700
The credit agreement has certain provisions whereby specified
amounts of excess cash flow on a semi-annual basis, as defined in
the agreement, must be applied to reduce the outstanding loan
balance. There are no prepayment penalties.
The Company has entered into interest rate swap agreements whereby
certain banks have agreed to pay the Company interest on a floating
rate (Eurodollar) basis and the Company has agreed to pay the banks
interest on a fixed rate basis. At December 31, 1993, the Company
has fixed an interest rate of 10.00% on $29,000,000 of the Senior
Debt. The interest rate swap agreements mature December 31, 1994.
The Company is exposed to credit loss in the event of non-
performance by the other parties to the interest rate swap
agreements; however, the Company does not anticipate non-performance
by the counterparties. Based on borrowing rates currently available
to the Company for senior and subordinated loans with similar terms,
maturities and prepayment options, the Company estimates that the
fair value of its interest bearing debt and the related interest
rate swap agreements is $124.6 million as compared to the carrying
amount shown on the balance sheet of $121.7 million.
6. SUBORDINATED NOTES
Pursuant to a Note Agreement as amended and restated as of November
24, 1992 (the Note Agreement), the Company issued to a group of
insurance companies owned by Massachusetts Mutual Life Insurance
Company, $44,450,000 face amount of Subordinated Notes (Notes) due
October 31, 2000. The Notes are subordinated to the Senior Debt
obligations, (see Note 5). The Notes require semi-annual interest
payments at a rate of 14% on October 31 and April 30 of each year.
The Company may make optional prepayments of Notes, with a penalty,
beginning November 1, 1995. The Note Agreement contains covenants
requiring certain minimum financial tests and restrictions on
capital expenditures, investments, indebtedness and dividends. At
December 31, 1993, the Company was in compliance with the terms of
the Note Agreement.
The mandatory principal repayment schedule for the Notes is as
follows (000's):
1998 $14,800
1999 14,825
2000 14,825
-------
$44,450
7. SHAREHOLDER'S EQUITY
<TABLE>
<CAPTION>
The following table summarizes the various series and classes of
preferred and common stocks that are authorized, issued and
outstanding as of December 31, 1993:
Shares
Issued and
Authorized Outstanding Amount
<S> <C> <C> <C>
Preferred stock - non-voting;
$10 par value:
Series A - $15.00 non-cumulative,
non-convertible 1,350
Series B - $1.50 non-cumulative,
non-convertible 186,500
Series C - $1.00 cumulative,
non-convertible 12,150 12,150 $121,500
Series D - $.60 cumulative,
convertible:
Class A 161,523
Class B 30,938 12,991 129,910
--------- --------- ---------
Total 392,461 25,141 $251,410
Common stock - voting; $.10
par value:
Common shares 212,461 162,873 $ 16,287
Class A common shares 16,785 16,785 1,679
------------ ---------- -------
Total 229,246 179,658 $ 17,966
</TABLE>
The outstanding preferred shares are redeemable, at the option of
the Company, at $10 per share plus all accrued and unpaid dividends.
In the event of dissolution or liquidation, the preferred
shareholders are entitled to receive these same amounts before any
distributions are made to the common shareholder. The Series D
Preferred Shares are convertible, at the option of the shareholder,
into common shares on a one-for-one basis.
8. COMMITMENTS
Leases - The Company rents office space and certain computer and
other equipment under leases expiring during the next 15 years. At
December 31, 1993, the aggregate minimum annual rentals under
noncancelable operating leases were as follows:
Years Ending
December 31
-----------------
1994 $ 6,237,568
1995 4,406,666
1996 3,513,503
1997 2,573,471
1998 2,223,802
Thereafter 10,660,288
------------
$29,615,298
<PAGE>
OPPENHEIMER GLOBAL ENVIRONMENT FUND
PROXY FOR SHAREHOLDERS MEETING TO BE HELD JUNE 20, 1994
The undersigned shareholder of Oppenheimer Global Environment Fund
(the "Fund"), does hereby appoint George C. Bowen, Andrew J. Donohue,
Robert Bishop and Scott Farrar, and each of them, as attorneys-in-fact
and proxies of the undersigned, with full power of substitution, to
attend the Meeting of Shareholders of the Fund to be held June 20,
1994, at 3410 South Galena Street, Denver, Colorado 80231 at 10:00
a.m., Denver time, and at all adjournments thereof, and to vote the
shares held in the name of the undersigned on the record date for said
meeting for the election of Trustees and on the proposals specified on
the reverse side. Said attorneys-in-fact shall vote in accordance with
their best judgment as to any other matter.
PROXY SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES, WHICH RECOMMENDS A
VOTE FOR THE ELECTION OF ALL NOMINEES FOR TRUSTEE AND FOR EACH PROPOSAL
ON THE REVERSE SIDE. THE SHARES REPRESENTED HEREBY WILL BE VOTED AS
INDICATED ON THE REVERSE SIDE OR FOR IF NO CHOICE IS INDICATED.
Please mark your proxy, date and sign it on the reverse side and return
it promptly in the accompanying envelope, which requires no postage if
mailed in the United States.
(over)
1. Election of Trustees
____ FOR all nominees listed ____ WITHHOLD AUTHORITY
(except as marked to the to vote for all
contrary below) nominees listed below
L. Levy L. Cherne E. Delaney R. Galli B. Lipstein E. Moynihan K. Randall
(A) (B) (C) (D) (E) (F) (G)
E. Regan R. Reynolds S. Robbins D. Spiro P. Trigere C. Yeutter
(H) (I) (J) (K) (L) (M)
INSTRUCTION: To withhold authority to vote for any
individual nominee, line out that nominee's name above.
2. Ratification of selection of KPMG Peat Marwick as independent
auditors (Proposal No. 1)
FOR ____ AGAINST ____ ABSTAIN ____
3. Approval of amendments to the Fund's Declaration of Trust
(Proposal No. 2)
FOR ____ AGAINST ____ ABSTAIN ____
Dated: _______________________, 1994
(Month) (Day)
____________________________
Signature(s)
____________________________
Signature(s)
Please read both sides of this ballot.
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.
250
Preliminary Copy
YOUR SHAREHOLDER VOTE IS IMPORTANT!
Your prompt response can save your 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.
[Reverse side:]
Your prompt response can save your 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.
