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 International Bond Fund
- ------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
Patricia C. Foster, Esq.
- ------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
/ X / $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1) or
14a-6(j)(2).
/ / $500 per each party to the controversy pursuant to Exchange
Act Rule 14a-6(i)(3).
/ / Fee Computed on table below per Exchange Act Rules 14a-
6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
- ------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- ------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11:(1)
- ------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- ------------------------------------------------------------------
/ / Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for
which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the
form or schedule and the date of its filing.
(1) Amount previously paid:
- ------------------------------------------------------------------
(2) Form, schedule or registration statement no.:
- ------------------------------------------------------------------
(3) Filing Party:
- ------------------------------------------------------------------
(4) Date Filed:
- -----------------------
(1) Set forth the amount on which the filing fee is calculated and
state how it was determined.
<PAGE>
OPPENHEIMER INTERNATIONAL BOND FUND
PROXY FOR SHAREHOLDERS MEETING TO BE HELD SEPTEMBER 26, 1996
CLASS A SHARES
Your shareholder vote is important!
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.
Please detach at perforation before mailing.
- -------------------------------------------------------------------
Oppenheimer International Bond Fund
Proxy for Shareholders Meeting to be held September 26, 1996.
The undersigned Class A shareholder of Oppenheimer International
Bond Fund (the "Fund") does hereby appoint Robert Bishop, George
C. Bowen, Andrew J. Donohue, Scott Farrar, Rendle Myer 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 September 26, 1996, 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 TRUSTEES AND
FOR THE PROPOSALS ON THE REVERSE SIDE. THE SHARES REPRESENTED
HEREBY WILL BE VOTED AS INDICATED ON THE REVERSE SIDE OR FOR IF NO
CHOICE IS INDICATED.
<PAGE>
Oppenheimer International Bond Fund/Proxy for Shareholders Meeting
to be held September 26, 1996
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.
Please detach at perforation before mailing.
- -------------------------------------------------------------------
1. Election of Trustees (Proposal No. 1)
A) Robert G. Avis F) Sam Freedman
B) William A. Baker G) C. Howard Kast
C) Charles Conrad, Jr. H) Robert M. Kirchner
D) John S. Fossel I) Bridget A. Macaskill
E) Raymond J. Kalinowski J) Ned M. Steel
K) James C. Swain
____FOR all nominees listed ____WITHHOLD AUTHORITY
except as marked to the to vote for all nominees listed above.
contrary. Instruction: To
withhold authority to vote
for any individual nominee,
line out that nominee's name
above.
2. Ratification of selection of Deloitte & Touche LLP as
independent auditors (Proposal No. 2)
FOR____ AGAINST____ ABSTAIN____
3. Approval of the Investment Advisory Agreement (Proposal No. 3)
FOR____ AGAINST____ ABSTAIN____
4. Approval of the Class A 12b-1 Service Plan and Agreement
(Proposal No. 4)
FOR____ AGAINST____ ABSTAIN____
Dated: ___________________________,1996
(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 behalf of such entity and give his or her
title.
<PAGE>
OPPENHEIMER INTERNATIONAL BOND FUND
PROXY FOR SHAREHOLDERS MEETING TO BE HELD SEPTEMBER 26, 1996
CLASS B SHARES
Your shareholder vote is important!
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.
Please detach at perforation before mailing.
- -----------------------------------------------------------------
Oppenheimer International Bond Fund
Proxy for Shareholders Meeting to be held September 26, 1996.
The undersigned Class B shareholder of Oppenheimer International
Bond Fund (the "Fund") does hereby appoint Robert Bishop, George
C. Bowen, Andrew J. Donohue, Scott Farrar, Rendle Myer 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 September 26, 1996, 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 TRUSTEES AND
FOR THE PROPOSALS ON THE REVERSE SIDE. THE SHARES REPRESENTED
HEREBY WILL BE VOTED AS INDICATED ON THE REVERSE SIDE OR FOR IF NO
CHOICE IS INDICATED.
<PAGE>
Oppenheimer International Bond Fund/Proxy for Shareholders Meeting
to be held September 26, 1996
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.
Please detach at perforation before mailing.
- -----------------------------------------------------------------
1. Election of Trustees (Proposal No. 1)
A) Robert G. Avis F) Sam Freedman
B) William A. Baker G) C. Howard Kast
C) Charles Conrad, Jr. H) Robert M. Kirchner
D) John S. Fossel I) Bridget A. Macaskill
E) Raymond J. Kalinowski J) Ned M. Steel
K) James C. Swain
____FOR all nominees listed ____WITHHOLD AUTHORITY
except as marked to the to vote for all nominees
contrary. Instruction: To listed above.
withhold authority to vote
for any individual nominee,
line out that nominee's name
above.
2. Ratification of selection of Deloitte & Touche LLP as
independent auditors (Proposal No. 2)
FOR____ AGAINST____ ABSTAIN____
3. Approval of the Investment Advisory Agreement (Proposal No. 3)
FOR____ AGAINST____ ABSTAIN____
4. Approval of the Class B 12b-1 Distribution and Service Plan and
Agreement (Proposal No. 5)
FOR____ AGAINST____ ABSTAIN____
Dated: ___________________________, 1996
(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 behalf of such entity and give his or her
title.
<PAGE>
OPPENHEIMER INTERNATIONAL BOND FUND
PROXY FOR SHAREHOLDERS MEETING TO BE HELD SEPTEMBER 26, 1996
CLASS C SHARES
Your shareholder vote is important!
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.
Please detach at perforation before mailing.
- -----------------------------------------------------------------
Oppenheimer International Bond Fund
Proxy for Shareholders Meeting to be held September 26, 1996.
The undersigned Class C shareholder of Oppenheimer International
Bond Fund (the "Fund") does hereby appoint Robert Bishop, George
C. Bowen, Andrew J. Donohue, Scott Farrar, Rendle Myer 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 September 26, 1996, 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 TRUSTEES AND
FOR THE PROPOSALS ON THE REVERSE SIDE. THE SHARES REPRESENTED
HEREBY WILL BE VOTED AS INDICATED ON THE REVERSE SIDE OR FOR IF NO
CHOICE IS INDICATED.
<PAGE>
Oppenheimer International Bond Fund/Proxy for Shareholders Meeting
to be held September 26, 1996
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.
Please detach at perforation before mailing.
- -----------------------------------------------------------------
1. Election of Trustees (Proposal No. 1)
A) Robert G. Avis F) Sam Freedman
B) William A. Baker G) C. Howard Kast
C) Charles Conrad, Jr. H) Robert M. Kirchner
D) John S. Fossel I) Bridget A. Macaskill
E) Raymond J. Kalinowski J) Ned M. Steel
K) James C. Swain
____FOR all nominees listed ____WITHHOLD AUTHORITY
except as marked to the to vote for all nominees
contrary. Instruction: To listed above.
withhold authority to vote
for any individual nominee,
line out that nominee's name
above.
2. Ratification of selection of Deloitte & Touche LLP as
independent auditors (Proposal No. 2)
FOR____ AGAINST____ ABSTAIN____
3. Approval of the Investment Advisory Agreement (Proposal No. 3)
FOR____ AGAINST____ ABSTAIN____
4. Approval of the Class C 12b-1 Distribution and Service Plan and
Agreement (Proposal No. 6)
FOR____ AGAINST____ ABSTAIN____
Dated: ___________________________, 1996
(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 behalf of such entity and give his or her
title.
<PAGE>
OPPENHEIMER INTERNATIONAL BOND FUND
3410 South Galena Street, Denver, Colorado 80231
Notice Of Meeting Of Shareholders
To Be Held September 26, 1996
To The Class A, Class B and Class C Shareholders of
Oppenheimer International Bond Fund:
Notice is hereby given that a Meeting of the Class A, Class B and
Class C shareholders of Oppenheimer International Bond Fund (the
"Fund") will be held at 3410 South Galena Street, Denver, Colorado
80231, at 10:00 A.M., Denver time, on Thursday September 26, 1996,
or any adjournments thereof (the "Meeting"), for the following
purposes:
To be voted on by holders of:
<TABLE>
<CAPTION>
Class A Class B Class C
Shares Shares Shares
- ------- ------- -------
<S> <C> <C> <C>
X X X (a) To elect eleven 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 (Proposal 1);
X X X (b) To ratify the selection of
Deloitte and Touche LLP as the
independent certified public
accountants and auditors of the Fund
for the period from the Fund s
inception (June 15, 1995) and for
the fiscal year beginning October 1,
1996 (Proposal No. 2);
X X X (c) To approve the Investment
Advisory Agreement between the Fund
and OppenheimerFunds, Inc. (the
Manager (Proposal No. 3);
X (d) To approve the Fund s Class A
12b-1 Service Plan and Agreement
(only shareholders of Class A
shares vote on this proposal)
(Proposal No.4);
X (e) To approve the Fund s Class B
12b-1 Distribution and Service Plan
and Agreement(only shareholders of
Class B shares vote on this
proposal) (Proposal No.5);
X (f) To approve the Fund s Class C
12b-1 Distribution and Service Plan
and Agreement (only shareholders of
Class C shares vote on this
proposal) (Proposal No. 6); and
X X X (g) To transact such other business
as may properly come before the
meeting, or any adjournments
thereof.
</TABLE>
Shareholders of record at the close of business on July 19, 1996
are entitled to vote at the Meeting. The Proposals are more fully
discussed in the Proxy Statement. Please read it carefully before
telling us, through your proxy or in person, how you wish your
shares to be voted. The Board of Trustees of the Fund recommends
a vote to elect each of its nominees as Trustee and in favor of the
Proposals. WE URGE YOU TO SIGN, DATE AND MAIL THE ENCLOSED PROXY
PROMPTLY.
By Order of the Board of Trustees,
Andrew J. Donohue, Secretary
August 16, 1996
- -----------------------------------------------------------------
Shareholders who do not expect to attend the Meeting are requested
to indicate voting instructions on the enclosed proxy and to date,
sign and return it in the accompanying postage-paid envelope. To
avoid unnecessary expense and duplicate mailings, we ask your
cooperation in promptly mailing your proxy no matter how large or
small your holdings may be.
<PAGE>
OPPENHEIMER INTERNATIONAL BOND FUND
3410 South Galena Street, Denver, Colorado 80231
PROXY STATEMENT
Meeting Of Shareholders
To Be Held September 26, 1996
This Proxy Statement is furnished to the Class A, Class B and Class
C shareholders of Oppenheimer International Bond Fund (the "Fund")
in connection with the solicitation by the Fund's Board of Trustees
of proxies to be used at the Meeting of Shareholders to be held at
3410 South Galena Street, Denver, Colorado 80231, at 10:00 A.M.,
Denver time, on September 26, 1996, or any adjournments thereof
(the "Meeting"). It is expected that the mailing of this Proxy
Statement will be made on or about August 16, 1996. For free
copies of the annual and semi-annual reports covering the
operations of the Fund for the period from June 15, 1995
(inception) to September 30, 1995 (the fiscal period ended ) and
for the six months ended March 31, 1996, respectively, call
OppenheimerFunds 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 Trustees 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 of the Proposals
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 in the same proportion as that broker-
dealer votes street account shares for which voting instructions
were timely received. Shares represented in person or by proxy
(including shares which abstain or do not vote with respect to one
or more proposals presented for shareholder approval, including
broker non-votes )will be counted for purposes of determining the
number of shares that are present and are entitled to vote with
respect to any particular proposal, but will not be counted as a
vote in favor of such proposal. Accordingly, an abstention from
voting on a proposal or a broker non-vote will have the same legal
effect as a vote against the proposal. Broker non-votes exist
where a proxy received from a broker indicates that the broker does
not have discretionary authority to vote the shares on the matter.
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 of the Proposals.
The proxy may be revoked at any time prior to the voting by: (1)
writing to the Secretary of the Fund at 3410 South Galena Street,
Denver, Colorado 80231; (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 the preparation and distribution of 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 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 July 19, 1996, the
record date, there were _________ shares of the Fund issued and
outstanding consisting of ____ Class A shares, ____Class B shares
and _____ Class C shares. Each Class A, Class B and Class C 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 July 12, 1996, 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. [or list the 5%
owners of any class]
ELECTION OF TRUSTEES
(Proposal No. 1)
At the Meeting, eleven Trustees are to be elected to hold office
until the next meeting of shareholders called for the purpose of
electing Trustees and until their successors 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 the 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 of the Fund and, if
elected, has agreed to continue to serve as Trustee.
Each of the nominees is also a trustee, director or managing
general partner of Oppenheimer Total Return Fund, Inc., Oppenheimer
Equity Income Fund, Oppenheimer Cash Reserves, Centennial America
Fund, L.P., Oppenheimer Variable Account Funds, Oppenheimer
Champion Income Fund, Oppenheimer High Yield Fund, Oppenheimer Main
Street Funds, Inc., Oppenheimer Strategic Income Fund, Oppenheimer
Strategic Income & Growth Fund, Oppenheimer Integrity Funds,
Oppenheimer Limited-Term Government Fund, Oppenheimer Tax-Exempt
Fund, Centennial Money Market Trust, Centennial Government Trust,
Centennial New York Tax Exempt Trust, Centennial California Tax
Exempt Trust, Daily Cash Accumulation Fund, Inc., Centennial Tax-
Exempt Trust, Panorama Series Fund, Inc. and The New York Tax-
Exempt Fund, Inc. (together with the Fund, the "Denver Oppenheimer
funds"), except that Mr. Fossel and Ms. Macaskill are not directors
or trustees of Oppenheimer Strategic Income Fund, Oppenheimer
Integrity Funds and Panorama Series Fund, Inc. Ms. Macaskill and
Mr. Swain are President and Chairman, respectively, of all the
Denver Oppenheimer funds.
The nominees indicated below by an asterisk are "interested
persons" (as that term is defined in the Investment Company Act of
1940, as amended, hereinafter referred to as the "Investment
Company Act") of the Fund due to the positions indicated with the
Fund s investment adviser, OppenheimerFunds, Inc. (the Manager )
or its affiliates or other positions described. The year given
below indicates when the nominees first became a trustee or
director of any of the Denver Oppenheimer funds without a break in
service. If a nominee should be unable to accept election, the
Board of Trustees may, in its discretion, select another person to
fill the vacant position. As of July 12, 1996, none of the
Trustees and officers of the Fund beneficially owned shares of the
Fund. [or the beneficial ownership of Class A shares listed below
includes voting and investment control, unless otherwise indicated
below]
<TABLE>
<CAPTION>
Shares
Beneficially
Name and Other Business Experience Owned as of
Information During the Past Five Years July 12, 1996
<S> <C> <C>
Robert G. Avis* Vice Chairman of A.G. Edwards
first became a & Sons, Inc.(a broker-dealer)
Trustee or and A.G.Edwards, Inc.(its
Director in 1993. parent holding company);
Age: 65 Chairman of A.G.E. Asset
Management and A.G. Edwards
Trust Company (its affiliated
investment adviser and trust
company, respectively).
William A. Baker Management Consultant.
first became a
Trustee or
Director in 1966.
Age: 81
Charles Conrad, Jr. Chairman and CEO of Universal
first became a Space Lines, Inc.; formerly
Trustee or Vice President of McDonnell
Director in 1970. Douglas Space Systems Co.
Age: 66 and associated with the
National Aeronautics and
Space Administration.
Jon S. Fossel* Chairman and a director of
first became a the Manager; of Oppenheimer
Trustee or Acquisition Corporation
a director ( OAC ), the Manager s
Director in 1990. parent holding company,
Age: 54 Shareholder Services, Inc.
( SSI ), a transfer agent
subsidiary of the Manager;
formerly President the Manager.
Sam Freedman Formerly Chairman and Chief
first became a Executive Officer of
Trustee OppenheimerFunds Services,
in 1996. a transfer agent division
Age: 55 of the Manager; Chairman,
Chief Executive Officer and
Director of SSI; Chairman,
Chief Executive Officer
and Director of Shareholder
Financial Services, Inc.
( SFSI ), a transfer agent
subsidiary of the Manager;
Vice President and Director
of OAC; Director of the
Manager.
Raymond J. Kalinowski Director of Wave Technologies
first became a International, Inc.; Formerly
Trustee or Vice Chairman and a director
Director in 1988. of A.G. Edwards, Inc., parent
Age: 67 holding company of A.G. Edwards
& Sons, Inc. (a broker-dealer),
of which he was Senior Vice
President.
C. Howard Kast Formerly Managing Partner of
first became Deloitte and Touche LLP,
a Trustee or (an accounting firm).
Director in 1988.
Age: 74
Robert M. Kirchner President of The Kirchner
first became a Company (management
Trustee or consultants).
Director in 1963.
Age: 74
Bridget A. Macaskill* President, Chief Executive
first become a Officer and a Director of
Trustee or the Manager parent of the
Director in 1995. Manager and HarbourView
Age: 48 Asset Management Corporation
( HarbourView ), a subsidiary
of the Manager; Chairman and
a Director of SSI and SFSI;
President and a Director
of OAC and Oppenheimer
Partnership Holdings, Inc.,
a holding company subsidiary
of the Manager; formerly
Executive Vice President of
the Manager.
Ned M. Steel Chartered property and
first became a casualty underwriter;
Trustee or Director of Visiting Nurse
Director in 1963. Corporation of Colorado;
Age: 81 formerly Senior Vice President
and a director of Van Gilder
Insurance Corp. (insurance
brokers).
James C. Swain* Vice Chairman of the Manager;
first became a formerly a director of the
Trustee or Manager; President and a
Director in 1969. director of Centennial Asset
Age: 62 Management Corporation
("Centennial"), an investment
adviser subsidiary of the
Manager, and formerly Chairman
of the Board of SSI.
</TABLE>
- ------------------------
* A Director who is an "interested person" of the Fund or the
Manager under the Investment Company Act.
Vote Required. The affirmative vote of a majority of the votes
cast by shareholders of the Fund without regard to class 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
the Manager, which is responsible for the Fund's day-to-day
operations. Two regular meetings of the Board were held in the
period from June 15, 1995 (inception) to September 30, 1995 and all
of the Trustees except Fossel, Macaskill and Freedman who were
elected after September 30, 1995 were present for all of those
meetings. The Trustees of the Fund have appointed an Audit and
Review Committee (the "Audit Committee"), comprised of Messrs.
Baker (Chairman), Conrad and Kirchner, 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
Audit 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 Audit Committee met two times during the fiscal
period ended September 30, 1995 and all members attended at least
75% of the meetings held during this period. The Board of Trustees
does not have a standing nominating or compensation committee.
Remuneration of Trustees and Officers. The officers of the Fund
(including Ms. Macaskill and Mr. Swain) are affiliated with the
Manager; they and the Trustees of the Fund who are affiliated with
the Manager (Ms. Macaskill and Messrs. Fossel and Swain) receive no
salary or fee from the Fund. The Trustees of the Fund (excluding
Mr. Freedman, who was not elected as a Trustee until June 27, 1996,
and Ms. Macaskill and Messrs. Fossel and Swain) received the total
amounts shown below (i) from the Fund, during its fiscal period
ended September 30, 1995, and (ii) from all 21 of the Denver-based
Oppenheimer funds (including the Fund and excluding Panorama Series
Fund, Inc.) listed in the third paragraph of this section (and from
Oppenheimer Strategic Investment Grade Bond Fund, Oppenheimer
Strategic Diversified Income Fund and Oppenheimer Strategic Short-
Term Income Fund, which ceased operation following the acquisition
of their assets by certain other Oppenheimer funds), for services
in the positions shown below.
<TABLE>
<CAPTION>
Total
Compensation
Aggregate From All
Compensation Denver
Name and Position from Fund1 OppenheimerFunds2
<S> <C> <C>
Robert G. Avis $0 $53,000.00
Trustee
William A. Baker $0 $73,254.66
Audit and Review Committee
Chairman and Trustee
Charles Conrad, Jr. $0 $64,309.17
Audit and Review Committee
Member and Trustee
Raymond J. Kalinowski $0 $65,000.00
Risk Management Oversight
Committee Member and Trustee
C. Howard Kast $0 $65,000.00
Risk Management Oversight
Committee Member and Trustee
Robert M. Kirchner $0 $68,292.00
Audit and Review Committee
Member and Trustee
Ned M. Steel $0 $53,000.00
Trustee
</TABLE>
- -------------------
1 There were no payments to Trustees during fiscal period ended
September 30, 1995
2 For the 1995 calendar year.
Officers of the Fund. Each officer of the Fund is elected by the
Trustees to serve an annual term. Information is given below about
the Fund's executive officers who are not Trustees of the Fund,
including their business experience during the past five years.
Messrs. Bishop, Donohue, Bowen, Farrar and Zack serve in a similar
capacity with the other Denver Oppenheimer funds.
Ashwin K. Vasan, Vice President and Portfolio Manager; Age 34.
Vice President of the Manager; an officer of other
Oppenheimer funds; formerly a Securities Analyst for the
Manager prior to which he was a Securities Analyst for
Citibank, N.A.
Andrew J. Donohue, Vice President and Secretary; Age 45.
Executive Vice President and General Counsel of the Manager
and OppenheimerFunds Distributor, Inc. (the "Distributor");
President and a Director of Centennial; Executive Vice
President, General Counsel and Director of HarbourView, SFSI,
SSI and Oppenheimer Partnership Holding, Inc.; an officer of
other Oppenheimer funds; formerly, Senior Vice President and
Associate 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), director and an officer of First
Investors Family of Funds and First Investors Life Insurance
Company.
George C. Bowen, Vice President, Treasurer and Assistant Secretary;
Age 59.
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 and SFSI; Treasurer of OAC and an officer of
other Oppenheimer funds.
Robert G. Zack, Assistant Secretary; Age 48.
Senior Vice President and Associate General Counsel of the
Manager; Assistant Secretary of SSI and SFSI; an officer of
other Oppenheimer funds.
Robert J. Bishop, Assistant Treasurer; Age 37.
Vice President of the Manager/Mutual Fund Accounting; an
officer of other Oppenheimer funds; previously a Fund
Controller for the Manager, prior to which he was an
Accountant for Yale & Seffinger, P.C., an accounting firm and
previously an Accountant and Commissions Supervisor for
Stuart James Company Inc., a broker-dealer; an officer of
other Oppenheimer funds.
Scott Farrar, Assistant Treasurer; Age 30.
Vice President of the Manager/Mutual Fund Accounting; an
officer of other Oppenheimer funds; 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; an officer
of other Oppenheimer funds.
RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
(Proposal No. 2)
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
selected Deloitte & Touche LLP ("Deloitte") as auditors of the Fund
for the period from June 15, 1995 (inception) through September 30,
1996 and for the fiscal year beginning October 1, 1996. Deloitte
also serves as auditors for the Manager and certain other funds for
which the Manager acts as investment adviser. At the Meeting, a
resolution will be presented for the Class A, Class B, and Class C
shareholders' vote voting in the aggregate to ratify the selection
of Deloitte as auditors. Representatives of Deloitte are not
expected to be present at the Meeting but they will have the
opportunity to make a statement if they desire to do so and they
will be available should any matter arise requiring their presence.
The Board of Trustees recommends approval of the selection of
Deloitte as auditors of the Fund.
APPROVAL OF INVESTMENT ADVISORY AGREEMENT
(Proposal No. 3)
The Fund has an Investment Advisory Agreement dated June 5, 1995,
with the Manager (the Agreement") which was submitted to and
approved by the Fund's initial sole shareholder, and by the Fund's
Board of Trustees at a meeting held February 28, 1995. The Fund
is submitting the Agreement to shareholders for approval at this
meeting which is the first-convened shareholders meeting. A copy
of the Agreement is appended hereto as Exhibit A. The Board,
including a majority of the Trustees who are not "interested persons"
(as defined in the Investment Company Act) of the Fund or the
Manager, and who have no direct or indirect financial interest in the
operation of the Agreement ("Independent Trustees"), approved
the terms of the Agreement between the Fund and the Manager.
If approved by the shareholders at this meeting, the Agreement
will continue in effect until December 31, 1996, and thereafter
from year to year unless terminated, but only so long as such
continuance is approved in accordance with the Investment Company
Act. In considering whether to approve the Agreement, the Board
requested and evaluated information necessary to make an
informed determination.
Under the Agreement, the management fee payable monthly to the
Manager is computed on the net assets of the Fund as of the close
of business each day at the annual rates of 0.75% of the first $200
million of net assets; 0.72% of the next $200 million; 0.69% of the
next $200 million; 0.66% on the next $200 million 0.60% on the next
$200 million and 0.50% of net assets in excess of $1 billion.
For the fiscal period ended September 30, 1995, the Fund paid a
management fee of $8,252 under the Agreement. The Manager also acts
as investment adviser to seventeen other funds that have investment
objectives similar to that of the Fund. A list of those funds,
their net assets and advisory fee rates paid by those funds is
included as Exhibit B to this Proxy Statement. The Manager also
receives $12,000 per annum to prepare the income tax return for the
Fund.
OppenheimerFunds Services ( OFS ), is the transfer agent for the
Fund and received $_______ from the Fund for such services during
fiscal period ended Sept 30, 1995. If the Agreement is approved,
OFS will continue to act as transfer agent for the Fund.
Under the Agreement, the Manager supervises the investment
operations of the Fund and the composition of its portfolio and
furnishes the Fund advice and recommendations with respect to
investments, investment policies and the purchase and sale of
securities. 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 its 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 of the Fund's
shares 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 and audit expenses, custodian and transfer agent expenses,
share certificate issuance costs, certain printing and registration
costs, and non-recurring expenses, including litigation.
The Agreement contains no expense limitation. However,
independently of the Agreement, the Manager has undertaken that the
total expenses of the Fund in any fiscal year (including the
management fee but excluding taxes, interest, brokerage
commissions, distribution assistance payments and any extraordinary
non-recurring expenses, such as litigation) shall not exceed the
most stringent applicable regulatory limitation. 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. As in the case of each of the funds listed in
Exhibit B, the Manager reserves the right to change or eliminate
this expense limitation at any time.
The Agreement provides that in the absence of willful misfeasance,
bad faith or gross negligence in the performance of its duties or
reckless disregard of its obligations under the Agreement, the
Manager is not liable for any loss resulting from a good faith
error or omission on its part in performing the services required
by the Agreement. The Agreement permits the Manager to act as
investment adviser for any other person, firm or corporation and to
use the name "Oppenheimer" in connection with other investment
companies for which it may act as investment adviser. 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.
Brokerage Provisions of the Agreement. One of the duties of the
Manager under the Agreement is to arrange the portfolio
transactions for the Fund. The Agreement contains provisions
relating to the employment of broker-dealers ("brokers") to effect
the Fund's portfolio transactions. In doing so, the Manager is
authorized by the agreement to employ broker-dealers, 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, but is expected to
minimize the commissions paid to the extent consistent with the
interest and policies of the Fund as established by its Board of
Trustees. Purchase of 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.
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. Subject
to the foregoing considerations, the Manager may also consider
sales of shares of the Fund and 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, the procedures and rules described above,
allocations of brokerage are made by Manager s portfolio traders
based upon recommendations from the Manager s portfolio managers.
In certain instances, portfolio managers may directly place trades
and allocate brokerage, also subject to the provisions of the
Agreement and the procedures and rules described above. In either
case, brokerage is allocated under the supervision of the Manager s
executive officers. Transactions in securities other than those
for which as exchange is the primary market are generally done with
principals or market makers. Brokerage commissions are paid
primarily for effecting transactions in listed securities or for
certain fixed-income agency transactions in the secondary market
and are otherwise paid only if it appears likely that a better
price or execution can be obtained. No brokerage commissions were
paid to any broker affiliated with either the Fund or the Manager
during the fiscal period ended September 30, 1995.
Most purchases of money market instruments and debt obligations are
principal transactions at net prices. Instead of using a broker
for those transaction, the Fund normally deals directly with the
selling or purchasing principal or market maker unless it determine
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.
Purchases from dealers include a spread between the bid and asked
prices. The Fund seeks to obtain prompt execution of these orders
at the most favorable net price. Options commissions may be
relatively higher than those which would apply to direct purchases
and sales of portfolio securities.
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
transaction 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. The 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. The Board has also permitted the Manager to use
stated commissions on secondary fixed-income agency trades to
obtain research where the broker has represented to the Manager
that: (i) the trade is not from or for the broker s own inventory,
(ii) the trade was executed by the broker on an agency basis at the
stated commission, and (iii) the trade is not a riskless principal
transaction.
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 in commission
dollars. The Board permits the Manager to use concessions on
fixed-price offerings of fixed income securities to obtain research
in the same manner for agency transactions. The Board also permits
the Manager to use stated commissions on secondary fixed-income
agency trades to obtain research where the broker has represented
to the Manager that: (i) the trade is not from or for the broker s
own inventory, (ii) the trade was executed by the broker on an
agency basis at the stated commission, and (iii) the trade is not
a riskless principal transaction.
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
by 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, annually reviews information furnished by the
Manager as to the commissions paid to brokers furnishing such
services so that the Board may ascertain whether the amount of such
commissions was reasonably related to the value or benefit of such
services.
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. OppenheimerFunds Distributor,
Inc., a wholly-owned subsidiary of the Manager, is the general
distributor of the Fund's shares.
The Manager (including a subsidiary) currently manages investment
companies, including other Oppenheimer funds, with assets of more
than $50 billion as of June 30, 1996, and with more than 3 million
shareholder accounts. The Manager is a wholly-owned subsidiary of
Oppenheimer Acquisition Corp. ("OAC"), a holding company controlled
by Massachusetts Mutual Life Insurance Company ("MassMutual"). The
Manager, the Distributor and OAC are located at Two World Trade
Center, New York, New York 10048. MassMutual is located at 1295
State Street, Springfield, Massachusetts 01111. OAC acquired the
Manager on October 22, 1990. As indicated below, the common stock
of OAC is owned by (i) certain officers and/or directors of the
Manager, (ii) MassMutual and (iii) another investor. No
institution or person holds 5% or more of OAC's outstanding common
stock except MassMutual. MassMutual has engaged in the life
insurance business since 1851.
The common stock of OAC is divided into three classes. At June 30,
1996, MassMutual held (i) all of the 2,160,000 shares of Class A
voting stock, (ii) 526,105 shares of Class B voting stock, and
(iii) 1,328,053 shares of Class C non-voting stock. This
collectively represented 84.0% of the outstanding common stock and
92.3% of the voting power of OAC as of that date. Certain officers
and/or directors of the Manager held (I) 598,704 shares of the
Class B voting stock, representing 12.5% of the outstanding common
stock and 6.0% of the voting power, and (ii) options acquired
without cash payment which, when they become exercisable, allow the
holders to purchase up to 627,362 shares of Class C non-voting
stock. That group includes persons who serve as officers of the
Fund and Ms. Macaskill, Messrs. Fossel and Swain who 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. From the period September 1, 1994 to March
31, 1996, the only transactions by persons who serve as Trustees of
the Fund were by Ms. Macaskill, who surrendered to OAC 20,000 stock
appreciation rights issued in tandem with the Class C OAC options,
for cash payments aggregating $1,421,800 and Mr. Freedman, who
surrendered to OAC 45,474 stock appreciation rights issued in
tandem under the Class C OAC options, for a cash payment of
$4,497,833.34. Mr. Freedman no longer holds any OAC stock or
options.
The names and principal occupations of the executive officers and
directors of the Manager are as follows: Jon S. Fossel, Chairman;
Bridget A. Macaskill, Chief Executive Officer, President and a
director; Donald W. Spiro, Chairman Emeritus; Robert G. Galli, Vice
Chairman, James C. Swain, Vice Chairman; Robert C. Doll, Executive
Vice President and a director; O. Leonard Darling, Janess Ruff,
Loretta McCarthy and Nancy Sperte, Executive Vice Presidents;
Tilghman G. Pitts III, Executive Vice President; Andrew J. Donohue,
Executive Vice President, General Counsel and a director; George C.
Bowen, Senior Vice President and Treasurer; Peter M. Antos, Victor
Babin, Robert A. Densen, Ronald H. Fielding, Robert Patterson,
Richard H. Rubinstein, Arthur Steinmetz, Ralph Stellmacher, John
Stoma, Jerry A. Webman, William L. Wilby and Robert G. Zack, Senior
Vice Presidents. These officers are located at one of the three
offices of the Manager: Two World Trade Center, New York, New York
10048-0203; 3410 South Galena Street, Denver, Colorado 80231-5099
and 350 Linden Oaks, Rochester, New York 14625-2807.
Considerations by the Board of Trustees. The Agreement was
approved and adopted by the Board, including the Independent
Trustees, when the Fund was being organized. The Manager advised
the Board at that time that the proposed investment advisory fee
was fair and reasonable and was expected to provide adequate
compensation to the Manager in light of the operations of the Fund
and the Manager s duties and responsibilities under the Agreement.
The Board also recognized that the terms and conditions of the
Agreement were substantially the same as the terms and conditions
in the other investment advisory agreements between the Manager or
its affiliates with the other Denver based mutual funds. The Board
also noted that the investment advisory fee rate was the same fee
rate charged to a number of similar mutual funds in the Denver
complex.
In their deliberations, the Independent Trustees took cognizance of
extensive information and materials which the Manager had
previously provided to them in connection with their annual review
of the investment advisory agreements and investment advisory fee
rates for the other mutual funds in the Denver complex and data
reviewed on other recent occasions when it considered investment
advisory fee rate increases requested by the Manager with respect
to other funds. That information included data as to the financial
stability and qualifications of the Manager and its personnel, the
nature, quality and extent of the services rendered and the
Manager s commitment to its mutual fund advisory business. The
Trustees also considered the extent to which the Manager had
expanded its personnel and other services dedicated to portfolio
management functions.
Analysis of Nature, Quality and Extent of Services. The
Independent Trustees considered, among other factors: (1) the
necessity of the Manager maintaining and enhancing its ability to
retain and attract capable personnel to serve the Fund; (2) the
investment record of the Manager in managing investment companies
for which it acts as investment adviser; (3) the Manager's overall
profitability; (4) possible economies of scale which the Manager
passes on to the Fund; (5) data as to advisory fees of other
investment companies not advised by the Manager but believed to be
in the same overall investment category as the Fund; (6) other
benefits to the Manager from serving as investment manager to the
Fund, as well as benefits to its affiliates acting as principal
underwriter and its division acting as transfer agent to the Fund;
(7) current and developing conditions in the financial services
industry, including the entry into the industry of larger and
highly capitalized companies which are spending and appear to be
prepared to continue to spend substantial sums to engage personnel
and to provide services to competing investment companies; and (8)
the financial resources of the Manager and the desirability of
appropriate incentives to assure that the Manager will continue to
furnish high quality services to the Fund; (9) the higher costs of
doing business and investing in foreign countries and foreign
markets.
Analysis of Profitability of the Manager. The Independent
Trustees considered information provided by the Manager regarding
its profitability and also considered comparative information
relating to the profitability of other mutual fund investment
managers. The Independent Trustees also noted the substantial
marketing and promotional activities in which the Manager and its
affiliates engage and propose to engage on behalf of the Fund.
Determination by the Independent Trustees and the Board of
Trustees. After completion of its review, the Independent Trustees
recommended that the Board of Trustees approve, and the Board
unanimously approved, the Agreement.
Vote Required. An affirmative vote of the holders of a "majority"
(as defined in the Investment Company Act) of all outstanding
voting securities of the Fund is required for approval of the
Agreement; the classes do not vote separately. Such majority vote
is defined in the Investment company Act as the vote of the holders
of the lesser of: (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. The Board of Trustees recommends a vote in
favor of approving the Investment Advisory Agreement.
APPROVAL OF THE FUND'S CLASS A 12b-1
SERVICE PLAN AND AGREEMENT
(Proposal No. 4)
NOTE: This Proposal applies to Class A Shareholders only.
Class A shares were first offered to the public on June 15, 1995.
At that time, the Fund had adopted a Service Plan and Agreement for
Class A shares pursuant to Rule 12b-1 of the Investment Company
Act, 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 to
reimburse the Distributor for all or a portion of its costs
incurred in providing personal service and maintenance of accounts
that hold Class A shares. The Manager, as the sole initial
shareholder of the Fund's Class A shares, has approved a Service
Plan for the Class A shares of the Fund (the "Service Plan") under
Rule 12b-1 of the Investment Company Act. At a meeting of the
Fund's Board of Trustees held February 28, 1995, the Fund's Board
of Trustees, including a majority of the Independent Trustees,
approved the Service Plan, and determined to recommend the Service
Plan for approval by the Class A shareholders. The Service Plan
was renewed for one year on October 29, 1995. A copy of the
Service Plan is attached as Exhibit C to this proxy statement. The
Service Plan is being submitted to shareholders for approval at the
meeting which is the first convened shareholders meeting.
If the Class A shareholders approve this Proposal, the Service Plan
shall, unless terminated as described below, continue in effect
from year to year 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 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 A shares. The Service Plan may not be amended to
increase materially the amount of payments to be made without
approval by the Class A shareholders. All material amendments must
be approved by the Independent Trustees.
Description of the Service Plan. Under the Service Plan, the Fund
reimburses the Distributor quarterly for all or a portion of its
costs incurred in connection with the service and maintenance of
shareholder accounts that hold Class A Shares of the Fund. The
Distributor is reimbursed for quarterly payments made to certain
dealers, brokers, banks or other financial institutions (each is
referred to as a "Recipient") that have rendered personal services
in connection with the personal service and maintenance of
shareholder accounts. Such services may include but are not
limited to 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 plan 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. Payments by the
Distributor to Recipients will be made quarterly and computed as of
the close of business each day at an annual rate not to exceed
0.25% of the net assets of Class A shares of the Fund held in
accounts of the Recipient or its customers. The Service Plan has
the effect of increasing annual expenses of Class A shares of the
Fund by up to 0.25% of the class's average annual net assets from
what its expenses would be otherwise. Currently, the Distributor
is not permitted to retain any part of the payments made by the
Fund under the Service Plan.
Under the Service Plan, no payment will be made to any Recipient in
any quarter if the aggregate net asset value of all Class A Fund
shares held by the Recipient for itself and its customers did not
exceed a minimum amount, if any, that may be determined from time
to time by a majority of the Independent Trustees. Initially, the
Board of Trustees has set the fee at the maximum rate and set no
minimum amount. The 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.
Any expenses accrued under the Service Plan by the Distributor in
one fiscal quarter of the Fund may not be paid from service fees
received from the Fund in subsequent periods. Thus, if the Service
Plan were terminated, no amounts (other than amounts accrued prior
to termination but not yet paid) would be owed by the Fund to the
Distributor or to Recipients. In addition, Service Plan fees
received from the Fund may not be used to pay any interest expense,
carrying charges or other financial costs, or allocation of
overhead of the Distributor.
Additional Information. While the Service Plan is in effect, the
Treasurer of the Fund shall provide a written report to the Fund's
Board of Trustees at least quarterly on the amount of all payments
made pursuant to the Service Plan, the purpose for which the
payment was made and the identity of each Recipient that received
any such payment. Each report, including the allocations on which
such payments are based, will be subject to the review and approval
of the Independent Trustees in the exercise of their fiduciary
duty. The Service Plan further 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.
Analysis of the Service Plan by the Board of Trustees. In
considering whether to recommend the Class A 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 Service Plan will benefit
the Fund and its Class A shareholders by providing financial
incentives to financial intermediaries to attract new Class A
shareholders to the Fund and by assisting the efforts of the Fund
and the Distributor to retain existing investments and attract new
investments. The Service Plan should enable the Fund to be
competitive with similar funds, including funds which impose sales
charges, that provide financial incentives to institutions that
direct investors to such funds, and which provide shareholder
servicing and administrative services.
The Board concluded that it is likely that the Service Plan will
benefit Class A 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 Service Plan might be
offset in part by economies of scale associated with the growth of
the Fund's assets. With larger assets, the Class A shareholders
should benefit from reduced Class A expenses per share because the
effective investment advisory fee rate will decline as assets
increase under the proposed Investment Advisory Agreement. 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
distribution 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, the Fund may not
grow and expenses may remain higher on a per share basis that those
of competing funds. The 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
implementation of the 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 Service Plan would be in the best interests of the Fund, and
that its implementation and continuation has a reasonable
likelihood of benefiting the Fund and its Class A shareholders. In
its annual review of the Service Plan, the Board will consider the
continued appropriateness of the Service Plan, including the level
of payments provided for therein.
Vote Required. Pursuant to Rule 12b-1 under the Investment Company
Act and the Service Plan, an affirmative vote of the holders of a
"majority" (as defined in the Investment Company Act) of the Fund's
Class A shares is required for approval of the Service Plan for
this class. The requirements for such "majority" vote under the
Investment Company Act are as described in Proposal No. 3. A vote
in favor of this Proposal shall be deemed a vote to approve
previous payments by the Fund under the Service Plan and to approve
the Service Plan. 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. 5)
NOTE: This Proposal applies to Class B Shareholders only.
Class B shares were first offered to the public on June 15, 1995.
At that time, the Fund had adopted a Distribution and Service Plan
and Agreement for Class B shares pursuant to Rule 12b-1 of the
Investment Company Act (the Class B Plan ), 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. The Manager, as the sole
initial shareholder of the Fund s Class B shares, has approved the
Class B Plan. At a meeting of the Fund's Board of Trustees held
April 18, 1995, 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 or the Manager, and who have no
direct or indirect financial interest in the operation of the
Fund's 12b-1 plans or in any related agreements ("Independent
Trustees"), approved the Class B Plan and determined to recommend
the Class B Plan for approval by the Class B shareholders. The
Class B Plan was renewed for one year on October 29, 1995. A copy
of the Class B Plan is attached as Exhibit D to this proxy
statement. The Class B Plan is being submitted to shareholders for
approval at this meeting which is the first convened shareholders
meeting.
Description of the Class B Distribution and Service Plan. Under
the Class B 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 and also pays the Distributor a service fee of
0.25% per annum, each of which is computed on the average annual
net assets of Class B shares of the Fund.
The Class B 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 0.25% 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 Class B Plan to retain
service fee payments to compensate it for rendering such services.
Service fee payments by the Distributor to Recipients are made (i)
in advance for the first year Class B shares are outstanding,
following the purchase of shares, in an amount equal to 0.25% of
the net asset value of the shares purchased by the Recipient or its
customers and (ii) thereafter, on a quarterly basis, computed as of
the close of business each day at an annual rate of 0.25% of the
net asset value of Class B shares held in accounts of the Recipient
or its customers. The Distributor retains the service fee during
the first year shares are outstanding. In the event Class B shares
are redeemed less than one year after the date such shares were
sold, the Recipient is obligated to repay to the Distributor on
demand a pro rata portion of such advance service fee payments,
based on the ratio of the remaining period to one year.
The Class B 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)
obtaining financing or providing such financing from its own
resources, or from an affiliate, for the interest and other
borrowing costs of the Distributor s unreimbursed expenses incurred
in rendering distribution assistance for Class B shares, and (iv)
paying certain other distribution-related expenses. The other
distribution assistance in connection with the sale of Class B
shares 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
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 3.75% of the
purchase price of Fund shares sold by such Recipient, and advances
the first year service fee of 0.25%. The Distributor retains the
asset-based sales charge as compensation for its services described
above. 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 Class B 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 Class B Plan.
Pursuant to this provision, payment of the asset-based sales charge
and service fee could be continued by the Board after termination.
The Class B Plan has the effect of increasing annual expenses of
Class B shares of the Fund by up to 1.00% of the class's average
annual net assets from what those expenses would otherwise be.
Payments by the Fund to the Distributor under the current Class B
Plan for the period ended September 30, 1995 were $3,267 (1.00% of
the Fund's average net assets represented by Class B shares during
that period), which the Distributor retained as reimbursement for
Class B sales commissions and service fee advances, as well as
financing costs.
If the Class B shareholders approve this Proposal, the Class B Plan
shall, unless terminated as described below, continue in effect
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 Class B 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 Class B 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.
Reports. While this Class B Plan is in effect, the Treasurer of
the Fund shall provide written reports to the Fund s Board for its
review, detailing services rendered in connection with the
distribution of the Shares, the amount of all payments made and the
purpose for which the payments were made. The reports shall be
provided quarterly and shall state whether all provisions of the
Class B Plan have been complied with.
Additional Information. The Class B 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 Class B Plan, the Board may determine no payment be made
to the Distributor or 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 the
fee at the maximum rate and set no minimum amount. The Class B
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 Class B Distribution and Service Plan by the Board
of Trustees. In considering whether to recommend the Class B 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 Class B 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 Class B 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 concluded that it is likely that because the Class B 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 Class B 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 Class B 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 Class B 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 Class
B 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 Class B 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 Class B Plan, the Board
will consider the continued appropriateness of the Class B Plan,
including the level of payments provided for therein.
Vote Required. Pursuant to Rule 12b-1 under the Investment Company
Act, an affirmative vote of the holders of a "majority" (as defined
in the Investment Company Act) of the Fund's Class B shares is
required for approval of the Class B Plan. The requirements for
such "majority" vote under the Investment Company Act are as
described in Proposal No. 3. A vote in favor of this Proposal
shall be deemed a vote to approve previous payments made under the
Class B Plan. The Board of Trustees recommends a vote in favor of
approving this Proposal.
APPROVAL OF THE FUND'S CLASS C 12b-1 DISTRIBUTION
AND SERVICE PLAN AND AGREEMENT
(Proposal No. 6)
NOTE: This Proposal applies to Class C Shareholders only.
Class C shares were first offered to the public on June 15, 1995.
At that time, the Fund had adopted a Distribution and Service Plan
and Agreement for Class C shares pursuant to Rule 12b-1 of the
Investment Company Act (the Class C Plan ), 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. The Manager, as the sole
initial shareholder of the Fund s Class C shares has approved the
Class C Plan. At a meeting of the Fund's Board of Trustees held
April 18, 1995, 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 or the Manager, and who have no
direct or indirect financial interest in the operation of the
Fund's 12b-1 plans or in any related agreements ("Independent
Trustees"), approved the Class C Plan, and determined to
recommend the Class C Plan for approval by the Class C
shareholders. The Class C Plan was renewed for one year on October
29, 1995. A copy of the Class C Plan is attached as Exhibit E to
this proxy statement. The Class C Plan is being submitted to
shareholders for approval at this meeting which is the first
convened shareholder meeting.
Description of the Class C Distribution and Service Plan. Under
the Class C Plan, the Fund compensates the Distributor for its
services in connection with the distribution of Class C Shares and
the personal service and maintenance of accounts that hold Class C
shares. The Fund pays the Distributor an asset-based sales charge
of 0.75% per annum and also pays the Distributor a service fee of
0.25% per annum, each of which is computed on the average annual
net assets of Class C shares of the Fund.
The Class C 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 0.25% for personal services to Class C shareholders
and maintenance of shareholder accounts by those Recipients. The
services rendered by Recipients in connection with personal
services and the maintenance of Class C 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 Class C Plan to retain
service fee payments to compensate it for rendering such services.
Service fee payments by the Distributor to Recipients are made (i)
in advance for the first year Class C shares are outstanding,
following the purchase of shares, in an amount equal to 0.25% of
the net asset value of the shares purchased by the Recipient or its
customers and (ii) thereafter, on a quarterly basis, computed as of
the close of business each day at an annual rate of 0.25% of the
net asset value of Class C shares held in accounts of the Recipient
or its customers. The Distributor retains the service fee during
the first year shares are outstanding. In the event Class C 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 Class C Plan also provides that the Fund will pay the
Distributor on a quarterly basis an asset-based sales charge at an
annual rate of 0.75% of the net asset value of Class C shares
outstanding to compensate it for other services in connection with
the distribution of the Fund's Class C shares. The Distributor
retains the asset-based sales charge during the first year shares
are outstanding. The Distributor pays the asset based sales charge
to the Recipient as an on going commission and for distribution
services rendered with respect to Class C shares that have been
outstanding for more than one year. The distribution assistance
and administrative support services rendered by the Distributor in
connection with the sales of Class C shares may include: (i) paying
sales commissions to any broker, dealer, bank or other institution
that sells the Fund's Class C shares, (ii) paying compensation to
and expenses of personnel of the Distributor who support
distribution of Class C shares by Recipients, and (iii) obtaining
financing or providing such financing from its own resources, or
from an affiliate, for the interest and other borrowing costs of
the Distributor s unreimbursed expenses incurred in rendering
distribution assistance for Class C shares, and (iv) paying certain
other distribution-related expenses. The other distribution
assistance in connection with the sale of Class C shares 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 Class C
shareholders, processing Class C share purchase and redemption
transactions and providing such other information in connection
with the distribution of Class C 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 0.75% of the
purchase price of Fund shares sold by such Recipient, and advances
the first year service fee of 0.25%. The Distributor retains the
asset-based sales charge during the first year shares are
outstanding as compensation for its services described above.
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 Class C Plan contains a provision which provides that the Board
may allow the Fund to continue payments to the Distributor for
Class C shares sold prior to termination of the Class C Plan.
Pursuant to this provision, payment of the asset-based sales charge
and service fee could be continued by the Board after termination.
The Class C Plan has the effect of increasing annual expenses of
Class C shares of the Fund by up to 1.00% of the class's average
annual net assets from what those expenses would otherwise be.
Payments by the Fund to the Distributor under the current Class C
Plan for the period ended September 30, 1995 were $282 (1.00% of
the Fund's average net assets represented by Class C shares during
that period), which the Distributor retained as reimbursement for
Class C sales commissions and service fee advances, as well as
financing costs.
If the Class C shareholders approve this Proposal, the Class C Plan
shall, unless terminated as described below, continue in effect
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 Class C 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 C shares. The Class C Plan may not be
amended to increase materially the amount of payments to be made
without approval by Class C shareholders. All material amendments
must be approved by a majority of the Independent Trustees.
Reports. While this Class C Plan is in effect, the Treasurer of
the Fund shall provide written reports to the Fund s Board for its
review, detailing services rendered in connection with the
distribution of the Shares, the amount of all payments made and the
purpose for which the payments were made. The reports shall be
provided quarterly and shall state whether all provisions of the
Class C Plan have been complied with.
Additional Information. The Class C 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 Class C Plan, the Board may determine that no payment
will be made to the Distributor or 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 the fee at the maximum rate and set no minimum
amount. The Class C 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 Class C Distribution and Service Plan by the Board
of Trustees. In considering whether to recommend the Class C 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 Class C Plan
benefits the Fund and its Class C shareholders by providing
financial incentives to financial intermediaries to attract new
Class C 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 Class C 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 concluded that it is likely that because the Class C Plan
provides an alternative means for investors to acquire Fund shares
without paying an initial sales charge, it will benefit Class C
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 Class C 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 C shareholders should
benefit as the Class C 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 Class C 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 Class
C 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 Class C Plan is in the
best interests of the Fund, and that its implementation and
continuation has a reasonable likelihood of benefiting the Fund and
its Class C shareholders. In its annual review of the Class C
Plan, the Board will consider the continued appropriateness of the
Class C Plan, including the level of payments provided for therein.
Vote Required. Pursuant to Rule 12b-1 under the Investment Company
Act, an affirmative vote of the holders of a "majority" (as defined
in the Investment Company Act) of the Fund's Class C shares is
required for approval of the Class C Plan. The requirements for
such "majority" vote under the Investment Company Act are as
described in Proposal No. 3. A vote in favor of this Proposal
shall be deemed a vote to approve previous payments made under the
Class C Plan and the Class C Plan. The Board of Trustees
recommends a vote in favor of approving this Proposal.
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
August 16, 1996
<PAGE>
Exhibit A
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made the 5th day of June, 1995, by and between
OPPENHEIMER INTERNATIONAL BOND FUND (hereinafter referred to as the
"Fund"), and OPPENHEIMER MANAGEMENT CORPORATION (hereinafter
referred to as "OMC").
WHEREAS, the Fund is a open-end, diversified management investment
company registered as such with the Securities and Exchange
Commission (the "Commission") pursuant to the Investment Company
Act of 1940 (the "Investment Company Act"), and OMC is an
investment adviser registered as such with the Commission under the
Investment Advisors Act of 1940;
WHEREAS, the Fund desires that OMC shall act as its investment
adviser pursuant to this Agreement;
NOW, THEREFORE, in consideration of the mutual promises and
covenants hereinafter set forth, it is agreed by and between the
parties, as follows:
1. General Provision.
The Fund hereby employs OMC and OMC hereby undertakes to act as
the investment adviser of the Fund and to perform for the Fund such
other duties and functions as are hereinafter set forth. OMC
shall, in all matters, give to the Fund and its Board of Trustees
the benefit of its best judgment, effort, advice and
recommendations and shall, at all times conform to, and use its
best efforts to enable the Fund to conform to (i) the provisions of
the Investment Company Act and any rules or regulations thereunder;
(ii) any other applicable provisions of state or Federal law; (iii)
the provisions of the Declaration of Trust and By-Laws of the Fund
as amended from time to time; (iv) policies and determinations of
the Board of Trustees of the Fund; (v) the fundamental policies and
investment restrictions of the Fund as reflected in its
registration statement under the Investment Company Act or as such
policies may, from time to time, be amended by the Fund's
shareholders; and (vi) the Prospectus and Statement of Additional
Information of the Fund in effect from time to time. The
appropriate officers and employees of OMC shall be available upon
reasonable notice for consultation with any of the Trustees and
officers of the Fund with respect to any matters dealing with the
business and affairs of the Fund including the valuation of
portfolio securities of the Fund which are either not registered
for public sale or not traded on any securities market.
2. Investment Management.
(a) OMC shall, subject to the direction and control by the
Fund's Board of Trustees, (i) regularly provide investment advice
and recommendations to the Fund with respect to its investments,
investment policies and the purchase and sale of securities; (ii)
supervise continuously the investment program of the Fund and the
composition of its portfolio and determine what securities shall be
purchased or sold by the Fund; and (iii) arrange, subject to the
provisions of paragraph 7 hereof, for the purchase of securities
and other investments for the Fund and the sale of securities and
other investments held in the Fund's portfolio.
(b) Provided that the Fund shall not be required to pay any
compensation for services under this Agreement other than as
provided by the terms of this Agreement and subject to the
provisions of paragraph 7 hereof, OMC may obtain investment
information, research or assistance from any other person, firm or
corporation to supplement, update or otherwise improve its
investment management services.
(c) Provided that nothing herein shall be deemed to protect OMC
from willful misfeasance, bad faith or gross negligence in the
performance of its duties, or reckless disregard of its obligations
and duties under this Agreement, OMC shall not be liable for any
loss sustained by reason of good faith errors or omissions in
connection with any matters to which this Agreement relates.
(d) Nothing in this Agreement shall prevent OMC or any officer
thereof from acting as investment adviser for any other person,
firm or corporation or in any way limit or restrict OMC or any of
its directors, officers, stockholders or employees from buying,
selling or trading any securities for its or their own account or
for the account of others for whom it or they may be acting,
provided that such activities will not adversely affect or
otherwise impair the performance by OMC of its duties and
obligations under this Agreement.
3. Other Duties of OMC.
OMC shall, at its own expense, provide and supervise the
activities of all administrative and clerical personnel as shall be
required to provide effective corporate administration for the
Fund, including the compilation and maintenance of such records
with respect to its operations as may reasonably be required; the
preparation and filing of such reports with respect thereto as
shall be required by the Commission; composition of periodic
reports with respect to operations of the Fund for its
shareholders; composition of proxy materials for meetings of the
Fund's shareholders; and the composition of such registration
statements as may be required by Federal and state securities laws
for continuous public sale of shares of the Fund. OMC shall, at
its own cost and expense, also provide the Fund with adequate
office space, facilities and equipment. OMC shall, at its own
expense, provide such officers for the Fund as the Board of
Trustees may request.
4. Allocation of Expenses.
All other costs and expenses of the Fund not expressly assumed
by OMC under this Agreement, or to be paid by the Distributor of
the shares of the Fund, shall be paid by the Fund, including, but
not limited to: (i) interest and taxes; (ii) brokerage commissions;
(iii) insurance premiums for fidelity and other coverage requisite
to its operations; (iv) compensation and expenses of its trustees
other than those affiliated with OMC; (v) legal and audit expenses;
(vi) custodian and transfer agent fees and expenses; (vii) expenses
incident to the redemption of its shares; (viii) expenses incident
to the issuance of its shares against payment therefor by or on
behalf of the subscribers thereto; (ix) fees and expenses, other
than as hereinabove provided, incident to the registration under
Federal and state securities laws of shares of the Fund for public
sale; (x) expenses of printing and mailing reports, notices and
proxy materials to shareholders of the Fund; (xi) except as noted
above, all other expenses incidental to holding meetings of the
Fund's shareholders; and (xii) such extraordinary non-recurring
expenses as may arise, including litigation, affecting the Fund and
any legal obligation which the Fund may have to indemnify its
officers and trustees with respect thereto. Any officers or
employees of OMC or any entity controlling, controlled by or under
common control with OMC who also serve as officers, trustees or
employees of the Fund shall not receive any compensation from the
Fund for their services.
5. Compensation of OMC.
The Fund agrees to pay OMC and OMC agrees to accept as full
compensation for the performance of all functions and duties on its
part to be performed pursuant to the provisions hereof, a fee
computed on the aggregate net asset value of the shares of the Fund
as of the close of each business day and payable monthly at the
following annual rate:
.75% of the first $200 million of net assets;
.72% of the next $200 million;
.69% of the next $200 million;
.66% of the next $200 million;
.60% of the next $200 million; and
.50% of net assets in excess of $1 billion.
6. Use of Name "Oppenheimer."
OMC hereby grants to the Fund a royalty-free, non-exclusive
license to use the name "Oppenheimer" in the name of the Fund for
the duration of this Agreement and any extensions or renewals
thereof. To the extent necessary to protect OMC's rights to the
name "Oppenheimer" under applicable law, such license shall allow
OMC to inspect and, subject to control by the Fund's Board, control
the nature and quality of services offered by the Fund under such
name and may, upon termination of this Agreement, be terminated by
OMC, in which event the Fund shall promptly take whatever action
may be necessary to change its name and discontinue any further use
of the name "Oppenheimer" in the name of the Fund or otherwise.
The name "Oppenheimer" may be used or licensed by OMC in connection
with any of its activities, or licensed by OMC to any other party.
7. Portfolio Transactions and Brokerage.
(a) OMC is authorized, in arranging the purchase and sale of the
Fund's portfolio securities, to employ or deal with such members of
securities or commodities exchanges, brokers or dealers
(hereinafter "broker-dealers"), including "affiliated" broker-
dealers (as that term is defined in the Investment Company Act), as
may, in its best judgment, implement the policy of the Fund to
obtain, at reasonable expense, the "best execution" (prompt and
reliable execution at the most favorable security price obtainable)
of the Fund's portfolio transactions as well as to obtain,
consistent with the provisions of subparagraph (c) of this
paragraph 7, the benefit of such investment information or research
as will be of significant assistance to the performance by OMC of
its investment management functions.
(b) OMC shall select broker-dealers to effect the Fund's
portfolio transactions on the basis of its estimate of their
ability to obtain best execution of particular and related
portfolio transactions. The abilities of a broker-dealer to obtain
best execution of particular portfolio transaction(s) will be
judged by OMC on the basis of all relevant factors and
considerations including, insofar as feasible, the execution
capabilities required by the transaction or transactions; the
ability and willingness of the broker-dealer to facilitate the
Fund's portfolio transactions by participating therein for its own
account; the importance to the Fund of speed, efficiency or
confidentiality; the broker-dealer's apparent familiarity with
sources from or to whom particular securities might be purchased or
sold; as well as any other matters relevant to the selection of a
broker-dealer for particular and related transactions of the Fund.
(c) OMC shall have discretion, in the interests of the Fund, to
allocate brokerage on the Fund's portfolio transactions to broker-
dealers, other than an affiliated broker-dealer, qualified to
obtain best execution of such transactions who provide brokerage
and/or research services (as such services are defined in Section
28(e)(3) of the Securities Exchange Act of 1934) for the Fund
and/or other accounts for which OMC or its affiliates exercise
"investment discretion" (as that term is defined in Section
3(a)(35) of the Securities Exchange Act of 1934) and to cause the
Fund to pay such broker-dealers a commission for effecting a
portfolio transaction for the Fund that is in excess of the amount
of commission another broker-dealer adequately qualified to effect
such transaction would have charged for effecting that transaction,
if OMC determines, in good faith, that such commission is
reasonable in relation to the value of the brokerage and/or
research services provided by such broker-dealer, viewed in terms
of either that particular transaction or the overall
responsibilities of OMC or its affiliates with respect to the
accounts as to which they exercise investment discretion. In
reaching such determination, OMC will not be required to place or
attempt to place a specific dollar value on the brokerage and/or
research services provided or being provided by such broker-dealer.
In demonstrating that such determinations were made in good faith,
OMC shall be prepared to show that all commissions were allocated
for purposes contemplated by this Agreement and that the total
commissions paid by the Fund over a representative period selected
by the Fund's trustees were reasonable in relation to the benefits
to the Fund.
(d) OMC shall have no duty or obligation to seek advance
competitive bidding for the most favorable commission rate
applicable to any particular portfolio transactions or to select
any broker-dealer on the basis of its purported or "posted"
commission rate but will, to the best of its ability, endeavor to
be aware of the current level of the charges of eligible broker-
dealers and to minimize the expense incurred by the Fund for
effecting its portfolio transactions to the extent consistent with
the interests and policies of the Fund as established by the
determinations of the Board of Trustees of the Fund and the
provisions of this paragraph 7.
(e) The Fund recognizes that an affiliated broker-dealer: (i)
may act as one of the Fund's regular brokers for the Fund so long
as it is lawful for it so to act; (ii) may be a major recipient of
brokerage commissions paid by the Fund; and (iii) may effect
portfolio transactions for the Fund only if the commissions, fees
or other remuneration received or to be received by it are
determined in accordance with procedures contemplated by any rule,
regulation or order adopted under the Investment Company Act for
determining the permissible level of such commissions.
(f) Subject to the foregoing provisions of this paragraph 7, OMC
may also consider sales of shares of the Fund and the other funds
advised by OMC and its affiliates as a factor in the selection of
broker-dealers for its portfolio transactions.
8. Duration.
This Agreement will take effect on the date first set forth
above. Unless earlier terminated pursuant to paragraph 10 hereof,
this Agreement shall remain in effect until December 31, 1996, and
thereafter will continue in effect from year to year, so long as
such continuance shall be approved at least annually by the Fund's
Board of Trustees, including the vote of the majority of the
trustees of the Fund who are not parties to this Agreement or
"interested persons" (as defined in the Investment Company Act) of
any such party, cast in person at a meeting called for the purpose
of voting on such approval, or by the holders of a "majority" (as
defined in the Investment Company Act) of the outstanding voting
securities of the Fund and by such a vote of the Fund's Board of
Trustees.
9. Disclaimer of Shareholder or Trustee Liability.
OMC understands and agrees that the obligations of the Fund under
this Agreement are not binding upon any shareholder or Trustee of
the Fund personally, but bind only the Fund and the Fund's
property; OMC represents that it has notice of the provisions of
the Declaration of Trust of the Fund disclaiming shareholder or
Trustee liability for acts or obligations of the Fund.
10. Termination.
This Agreement may be terminated (i) by OMC at any time without
penalty upon sixty days' written notice to the Fund (which notice
may be waived by the Fund); or (ii) by the Fund at any time without
penalty upon sixty days' written notice to OMC (which notice may be
waived by OMC) provided that such termination by the Fund shall be
directed or approved by the vote of a majority of all of the
trustees of the Fund then in office or by the vote of the holders
of a "majority" of the outstanding voting securities of the Fund
(as defined in the Investment Company Act).
11. Assignment or Amendment.
This Agreement may not be amended or the rights of OMC hereunder
sold, transferred, pledged or otherwise in any manner encumbered
without the affirmative vote or written consent of the holders of
the "majority" of the outstanding voting securities of the Fund.
This Agreement shall automatically and immediately terminate in the
event of its "assignment," as defined in the Investment Company
Act.
12. Definitions.
The terms and provisions of the Agreement shall be interpreted
and defined in a manner consistent with the provisions and
definitions contained in the Investment Company Act.
OPPENHEIMER INTERNATIONAL BOND FUND
Attest:
/s/ Mitchell J. Lindauer /s/ Robert G. Zack
- ------------------------ -----------------------------------
Mitchell J. Lindauer Robert G. Zack
Assistant Secretary
OPPENHEIMER MANAGEMENT CORPORATION
Attest:
/s/ Katherine P. Feld /s/ Andrew J. Donohue
- --------------------- ----------------------------------
Katherine P. Feld Andrew J. Donohue
Executive Vice President
<PAGE>
Exhibit B
List of Fixed-Income Funds
<TABLE>
<CAPTION>
Net Assets
As of 6/30/96 Advisory Fee Rate as % of
Name of Fund ($ Millions) Average Annual Net Assets
<S> <C> <C>
Oppenheimer Bond Fund 225.8 0.75% on the first $200 million
Oppenheimer High Yield Fund 1,359.8 0.72% on the next $200 million
Oppenheimer Strategic Income Fund 5,888.5 0.69% on the next $200 million
Oppenheimer Strategic Income & Growth 71.0 0.66% on the next $200 million
Fund 0.60% on the next $200 million
0.50% of assets in excess of $1 billion
Oppenheimer California Tax-Exempt Fund 82.3 0.60% on the first $200 million
Oppenheimer Florida Tax-Exempt Fund 32.2 0.55% on the next $100 million
Oppenheimer New Jersey Tax-Exempt Fund 20.4 0.50% on the next $200
million
Oppenheimer New York Tax-Exempt Fund 23.6 0.45% on the next $250
million
Oppenheimer Pennsylvania Tax-Exempt Fund 80.7 0.40% on the next $250
million
Oppenheimer Tax-Free Bond Fund 666.2 0.35% of assets in excess of $1
Oppenheimer Champion Income Fund 479.9 0.70% on the first $250 million
0.65% on the next $250 million
0.60% on the next $500 million
0.55% of assets in excess of $1 billion
Oppenheimer Insured Tax-Exempt Fund 97.4 0.45% on the first $100 million
0.40% on the next $150 million
0.375% on the next $250 million
0.35% of assets in excess of
$500 million
Oppenheimer Limited-Term Government Fund 616.1 0.50% on the first $100
million
0.45% on the next $150 million
0.425% on the next $250 million
0.40% of net assets in excess of
$500 million
Oppenheimer US Government Trust 551.6 0.65% on the first $200 million
0.60% on the next $100 million
0.57% on the next $100 million
0.55% on the next $400 million
0.50% of net assets in excess of
$800 million
Oppenheimer Intermediate Tax-Exempt Fund 92.7 0.45% on the first $100
million
0.40% on the next $150 million
0.375% on the next $250 million
0.35% of net assets in excess of
$500 million
Rochester Fund Municipals 2,159.1 0.54% on the first $100 million
0.52% on the next $150 million
0.47% of net assets in excess of
$250 million up to $2 billion
0.46% on the next $3 billion
0.45% of net assets in excess of
$5 billion
Limited Term New York Municipal Fund 635.0 0.50% on the first $100 million
0.45% on the next $150 million
0.40% of net assets in excess of
$250 million up to $2 billion
0.39% of net assets in excess of
$2 billion
</table)
<PAGE>
Exhibit C
SERVICE PLAN AND AGREEMENT
BETWEEN
OPPENHEIMER FUNDS DISTRIBUTOR, INC.
AND
OPPENHEIMER INTERNATIONAL BOND FUND
FOR CLASS A SHARES
SERVICE PLAN AND AGREEMENT (the "Plan") dated the 5th day of June,
1995, by and between OPPENHEIMER INTERNATIONAL BOND FUND (the
"Fund") and OPPENHEIMER FUNDS DISTRIBUTOR, INC. (the
"Distributor").
1. The Plan. This Plan is the Fund's written service plan for
its Class A Shares described in the Fund's registration statement
as of the date this Plan takes effect, contemplated by and to
comply with Article III, Section 26 of the Rules of Fair Practice
of the National Association of Securities Dealers, pursuant to
which the Fund will reimburse the Distributor for a portion of its
costs incurred in connection with the that hold Class A Shares
(the "Shares") of such series and class of the Fund. The Fund may
be deemed to be acting as distributor of securities of which it is
the issuer, pursuant to Rule 12b-1 under the Investment Company Act
of 1940 (the "1940 Act"), according to the terms of this Plan. The
Distributor is authorized under the Plan to pay "Recipients," as
hereinafter defined, for rendering services and for the maintenance
of Accounts. Such Recipients are intended to have certain rights
as third-party beneficiaries under this Plan.
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 services in connection with the personal service and
maintenance of Accounts; (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 such service; and (iii) has been
selected by the Distributor to receive payments under the
Plan. Notwithstanding the foregoing, a majority of the Fund'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 brokerage or other
customers, or investment advisory or other clients of such
Recipient 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.
(a) Under the Plan, the Fund will make payments to the
Distributor, within forty-five (45) days of the end of each
calendar quarter, in the amount of the lesser of: (i) .0625%
(.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, or (ii) the
Distributor's actual expenses under the Plan for that quarter
of the type approved by the Board. The Distributor will use
such fee received from the Fund in its entirety to reimburse
itself for payments to Recipients and for its other
expenditures and costs of the type approved by the Board
incurred in connection with the personal service and
maintenance of Accounts including, but not limited to, the
services described in the following paragraph. 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.
The services to be rendered by
the Distributor and Recipients in connection with the personal
service and the maintenance of 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. It may be presumed that a Recipient has
provided services qualifying for compensation 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 services, 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 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.
Payments received by the
Distributor from the Fund under the Plan will not be used to
pay any interest expense, carrying charges or other financial
costs, or allocation of overhead by the Distributor, or for
any other purpose other than for the payments described in
this Section 3. The amount payable to the Distributor each
quarter will be reduced to the extent that reimbursement
payments otherwise permissible under the Plan have not been
authorized by the Board of Trustees for that quarter. Any
unreimbursed expenses incurred for any quarter by the
Distributor may not be recovered in later periods.
(b) The Distributor shall make
payments to any Recipient quarterly, within forty-five (45)
days of the end of each calendar quarter, at a rate not to
exceed .0625% (.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, of
Qualified Holdings owned beneficially or of record by the
Recipient or by its Customers. 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 increase or
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 increase or decrease the number
of shares constituting Minimum Qualified Holdings. The
Distributor shall notify all Recipients of the Minimum
Qualified Holdings 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.
(c) 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.
4. Selection and Nomination of Trustees. While this Plan is in
effect, the selection or replacement of Independent Trustees and
the nomination of those persons to be Trustees of the Fund who are
not "interested persons" of the Fund shall be committed to the
discretion of the Independent Trustees. Nothing herein shall
prevent the Independent 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 Independent Trustees.
5. Reports. While this Plan is in effect, the Treasurer of the
Fund shall provide at least quarterly a written report to the
Fund's Board for its review, detailing the amount of all payments
made pursuant to this Plan, the identity of the Recipient of each
such payment, and the purposes for which the payments were made.
The report shall state whether all provisions of Section 3 of this
Plan have been complied with. The Distributor shall annually
certify to the Board the amount of its total expenses incurred that
year with respect to the personal service and maintenance of
Accounts in conjunction with the Board's annual review of the
continuation of the Plan.
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 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
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 Independent Trustees cast
in person at a meeting called on February 28, 1995 for the purpose
of voting on this Plan, and shall take effect on the date that the
Fund's Registration Statement is declared effective by the
Securities and Exchange Commission. Unless terminated as
hereinafter provided, it shall continue in effect until October 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 the Board and its Independent Trustees cast in
person at a meeting called for the purpose of voting on such
continuance. 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. This Plan may not be
amended to increase materially the amount of payments to be made
without approval of the Class A Shareholders, in the manner
described above, and all material amendments must be approved by a
vote of the Board and of the Independent Trustees.
8. Disclaimer of Shareholder and Trustee Liability. The
Distributor understands that the obligations of the Fund under this
Plan are not binding upon any Trustee or shareholder of the Fund
personally, but bind only the Fund and the Fund's property. The
Distributor represents that it has notice of the provisions of the
Declaration of Trust of the Fund disclaiming shareholder and
Trustee liability for acts or obligations of the Fund.
OPPENHEIMER INTERNATIONAL BOND 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>
Exhibit D
DISTRIBUTION AND SERVICE PLAN AND AGREEMENT
WITH
OPPENHEIMER FUNDS DISTRIBUTOR, INC.
FOR CLASS B SHARES OF
OPPENHEIMER INTERNATIONAL BOND FUND
DISTRIBUTION AND SERVICE PLAN AND AGREEMENT (the "Plan") dated the
5th day of June, 1995, by and between OPPENHEIMER INTERNATIONAL
BOND 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 Fund may act as distributor of securities of which it is the
issuer, pursuant to the Rule, according to the terms of this Plan.
The 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
person or entity which: (i) has rendered assistance (whether
direct, administrative or both) in the distribution of Shares
or has provided administrative support services with respect
to Shares held by Customers (defined below) of the Recipient;
(ii) shall furnish the Distributor (on behalf of the Fund)
with such information as the Distributor shall reasonably
request to answer such questions as may arise concerning the
sale of Shares; and (iii) has been selected by the Distributor
to receive payments under the Plan. Notwithstanding the
foregoing, a majority of the Fund'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 person or entity as a
Recipient, whereupon such person's or 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 brokerage or other customers, or investment
advisory or other clients of such Recipient 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
more than one person or entity would otherwise qualify as
Recipients as to the same Shares, the Recipient which is the
dealer of record on the Fund's books as determined by the
Distributor shall be deemed the Recipient as to such Shares
for purposes of this Plan.
3. Payments for Distribution Assistance and Administrative
Support Services.
(a) The Fund 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 Fund will compensate the Distributor and
Recipients for providing administrative support services 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 or the Board of Trustees still is
not satisfied, either may take appropriate steps to terminate
the Recipient's status as such under the Plan, whereupon such
Recipient's rights as a third-party beneficiary hereunder
shall terminate.
(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 Service Fee and the Asset-Based Sales Charge on
Shares are 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 person or entity 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(b) of this Agreement; (ii) paying
compensation to and expenses of personnel of the Distributor
who support distribution of Shares by Recipients; (iii)
obtaining financing or providing such financing from its own
resources, or from an affiliate, for the interest and other
borrowing costs of the Distributor's unreimbursed expenses
incurred in rendering distribution assistance and
administrative support services to the Fund; (iv) paying 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) providing any service
rendered by the Distributor that a Recipient may render
pursuant to part (a) of this Section 3. Such services include
distribution assistance 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.
(e) Notwithstanding any other provision of this Plan, this
Plan does not obligate or in any way make the Fund liable to
make any payment whatsoever to any person or entity other than
directly to the Distributor. In no event shall the amounts to
be paid to the Distributor exceed the rate of fees to be paid
by the Fund to the Distributor set forth in paragraph (a) of
this section 3.
4. Selection and Nomination of Trustees. While this Plan is in
effect, the selection and nomination of those persons to be
Trustees of the Fund 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
Fund shall provide written reports to the Fund's Board for its
review, detailing services rendered in connection with the
distribution of the Shares, the amount of all payments made and the
purpose for which the payments were made. The reports shall be
provided quarterly and shall state whether all provisions of
Section 3 of this Plan have been complied with.
6. Related Agreements. Any agreement related to this Plan shall
be in writing and shall provide that: (i) such agreement may be
terminated at any time, without payment of any penalty, by a vote
of a majority of the Independent Trustees or by a vote of the
holders of a "majority" (as defined in the 1940 Act) of the Fund's
outstanding 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 April 18, 1995, for
the purpose of voting on this Plan, and shall take effect on the
date that the Fund's Registration Statement is declared effective
by the Securities and Exchange Commission. Unless terminated as
hereinafter provided, it shall continue in effect until October 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 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 Fund under this Plan are
not binding upon any Trustee or shareholder of the Fund personally,
but bind only the Fund and the Fund's property. The Distributor
represents that it has notice of the provisions of the Declaration
of Trust of the Fund disclaiming shareholder and Trustee liability
for acts or obligations of the Fund.
OPPENHEIMER INTERNATIONAL BOND FUND
By: /s/ Andrew J. Donohue
-----------------------------------
Andrew J. Donohue, Vice President
OPPENHEIMER FUNDS DISTRIBUTOR, INC.
By: /s/ Katherine P. Feld
-----------------------------------
Katherine P. Feld
Vice President & Secretary
<PAGE>
Exhibit E
DISTRIBUTION AND SERVICE PLAN AND AGREEMENT
WITH
OPPENHEIMER FUNDS DISTRIBUTOR, INC.
FOR CLASS C SHARES OF
OPPENHEIMER INTERNATIONAL BOND FUND
DISTRIBUTION AND SERVICE PLAN AND AGREEMENT (the "Plan") dated the
5th day of June, 1995, by and between OPPENHEIMER INTERNATIONAL
BOND FUND (the "Fund") and OPPENHEIMER FUNDS DISTRIBUTOR, INC. (the
"Distributor").
1. The Plan. This Plan is the Fund's written distribution plan
for Class C 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 a portion of its costs incurred in connection with
the distribution of Shares, and the personal service and
maintenance of shareholder accounts that hold Shares ("Accounts").
The Fund may act as distributor of securities of which it is the
issuer, pursuant to the Rule, according to the terms of this Plan.
The 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
person or entity which: (i) has rendered assistance (whether
direct, administrative or both) in the distribution of Shares
or has provided administrative support services with respect
to Shares held by Customers (defined below) of the Recipient;
(ii) shall furnish the Distributor (on behalf of the Fund)
with such information as the Distributor shall reasonably
request to answer such questions as may arise concerning the
sale of Shares; and (iii) has been selected by the Distributor
to receive payments under the Plan. Notwithstanding the
foregoing, a majority of the Fund'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 person or entity as a
Recipient, whereupon such person's or 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 brokerage or other customers, or investment
advisory or other clients of such recipient 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
more than one person or entity would otherwise qualify as
Recipients as to the same Shares, the Recipient which is the
dealer of record on the Fund's books as determined by the
Distributor shall be deemed the Recipient as to such Shares
for purposes of this Plan.
3. Payments for Distribution Assistance and Administrative
Support Services.
(a) The Fund will make payments to the Distributor, within
forty-five (45) days of the end of each calendar quarter, in
the aggregate amount (i) 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) 0.1875% (0.75% 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 "Asset Based Sales Charge").
Such Service Fee payments received from the Fund will
compensate the Distributor and Recipients for providing
administrative support services 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 sale 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 establishing and
maintaining 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 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 the Accounts, then the
Distributor, at the request of the Board, shall require the
Recipient to provide a written report or other information to
verify that said Recipient is providing appropriate
distribution assistance and/or services in this regard. If
the Distributor or the Board of Trustees still is not
satisfied, either may take appropriate steps to terminate the
Recipient's status as such under the Plan, whereupon such
Recipient's rights as a third-party beneficiary hereunder
shall terminate.
(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 the
preceding sentence may, at the Distributor's sole option, be
made more often than quarterly, and sooner than the end of the
calendar quarter. In addition, the Distributor shall make
asset-based sales charge payments to any Recipient quarterly,
within forty-five (45) days of the end of each calendar
quarter, at a rate not to exceed 0.1875% (0.75% on an annual
basis) of the average during the calendar quarter of the
aggregate net asset value of Shares computed as of the close
of each business day constituting Qualified Holdings owned
beneficially or of record by the Recipient or its Customers
for a period of more than one (1) year. However, no such
service fee or asset-based sales charge payments
(collectively, the "Recipient 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 rates set forth above, and/or direct the
Distributor to increase or decrease the Minimum Holding Period
or the Minimum Qualified Holdings. The Distributor shall
notify all Recipients of the Minimum Qualified Holdings or
Minimum Holding Period, if any, and the rates of Recipient
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 Service Fee and the Asset-Based Sales Charge on
Shares are 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 in connection with the sale of Shares to be
rendered by the Distributor may include, but shall not be
limited to, the following: (i) paying sales commissions to any
broker, dealer, bank or other person or entity that sell
Shares, and\or paying such persons Advance Service Fee
Payments in advance of, and\or greater than, the amount
provided for in Section 3(b) of this Agreement; (ii) paying
compensation to and expenses of personnel of the Distributor
who support distribution of Shares by Recipients; (iii)
obtaining financing or providing such financing from its own
resources, or from an affiliate, for the interest and other
borrowing costs of the Distributor's unreimbursed expenses
incurred in rendering distribution assistance and
administrative support services to the Fund; (iv) paying other
direct distribution costs of the type approved by the Board,
including without limitation the costs of sales literature,
advertising and prospectuses (other than those furnished to
current Shareholders) and state "blue sky" registration
expenses; and (v) providing any service rendered by the
Distributor that a Recipient may render pursuant to part (a)
of this Section 3. Such services include distribution
assistance and administrative support services rendered in
connection with Shares acquired (i) by purchase, (ii) in
exchange for shares of another investment company for which
the Distributor serves as distributor or sub-distributor, or
(iii) pursuant to a plan of reorganization to which the Fund
is a party. 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.
(e) Notwithstanding any other provision of this Plan, this
Plan does not obligate or in any way make the Fund liable to
make any payment whatsoever to any person or entity other than
directly to the Distributor. In no event shall the amounts to
be paid to the Distributor exceed the rate of fees to be paid
by the Fund to the Distributor set forth in paragraph (a) of
this section 3.
4. Selection and Nomination of Trustees. While this Plan is in
effect, the selection and nomination of those persons to be
Trustees of the Fund 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
Fund shall provide written reports to the Fund's Board for its
review, detailing services rendered in connection with the
distribution of Shares, the amount of all payments made and the
purpose for which the payments were made. The reports shall be
provided quarterly and shall state whether all provisions of
Section 3 of this Plan have been complied with.
6. Related Agreements. Any agreement related to this Plan shall
be in writing and shall provide that: (i) such agreement may be
terminated at any time, without payment of any penalty, by a vote
of a majority of the Independent Trustees or by a vote of the
holders of a "majority" (as defined in the 1940 Act) of the Fund's
outstanding 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 April 18, 1995 for
the purpose of voting on this Plan, and takes effect as of the date
first set forth above. Unless terminated as hereinafter provided,
it shall continue in effect from year to year from the date first
set forth above 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 C 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 is entitled to payment from the Fund of all or a
portion of the Service Fee and/or the Asset-Based Sales Charge in
respect of Shares sold prior to the effective date of such
termination.
8. Disclaimer of Shareholder and Trustee Liability. The
Distributor understands that the obligations of the Fund under this
Plan are not binding upon any Trustee or shareholder of the Fund
personally, but bind only the Fund and the Fund's property. The
Distributor represents that it has notice of the provisions of the
Declaration of Trust of the Fund disclaiming shareholder and
Trustee liability for acts or obligations of the Fund.
OPPENHEIMER INTERNATIONAL BOND FUND
By: /s/ Andrew J. Donohue
-------------------------------------
Andrew J. Donohue, Vice President
OPPENHEIMER FUNDS DISTRIBUTOR, INC.
By: /s/ Katherine P. Feld
--------------------------------------
Katherine P. Feld
Vice President and Secretary
</TABLE>
