Oppenheimer Rochester Amt-free Municipal Fund Inactive
Filed: 7 Aug 02, 12:00am
John V. Murphy
Chairman, President and OppenheimerFunds Logo
Chief Executive Officer OppenheimerFunds, Inc.
498 Seventh Avenue
New York, NY 10018
WWW.OPPENHEIMERFUNDS.COM
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September 24, 2002
Dear Oppenheimer Municipal Bond Fund Shareholder,
We have scheduled a shareholder meeting on November 22, 2002 for you to decide upon some important proposals for
the Fund. Your ballot card and a detailed statement of the issues are enclosed with this letter.
Your Board of Trustees believes the matters being proposed for approval are in the best interests of the Fund and
its shareholders and recommends a vote "for" the election of Trustees and for each Proposal. Regardless of the
number of shares you own, it is important that your shares be represented and voted. So we urge you to consider
these issues carefully and make your vote count.
How do you vote?
To cast your vote, simply mark, sign and date the enclosed proxy ballot and return it in the postage-paid
envelope today. You also may vote by telephone by following the instructions on the proxy ballot. Using a
touch-tone telephone to cast your vote saves you time and helps reduce the Fund's expenses. If you vote by
phone, you do not need to mail the proxy ballot.
Remember, it can be expensive for the Fund--and ultimately for you as a shareholder--to remail ballots if not
enough responses are received to conduct the meeting. If your vote is not received before the scheduled meeting,
you may receive a telephone call asking you to vote.
What are the issues?
o Election of Trustees. You are being asked to consider and approve the election of twelve Trustees. You
will find detailed information on the Trustees in the enclosed proxy statement.
o Approval of Elimination or Amendment of Certain Fundamental Investment Policies. Your approval is
requested to eliminate or amend certain fundamental investment policies of the Fund.
o Authorize the Trustees to adopt an Amended and Restated Declaration of Trust.
Please read the enclosed proxy statement for complete details on these proposals. Of course, if you have any
questions, please contact your financial advisor, or call us at 1.800.708.7780. As always, we appreciate your
confidence in OppenheimerFunds and look forward to serving you for many years to come.
Sincerely,
John V. Murphy signature
OPPENHEIMER MUNICIPAL BOND FUND
6803 South Tucson Way, Englewood, CO 80112
Notice Of Special Meeting Of Shareholders To Be Held
November 22, 2002
To The Shareholders of Oppenheimer Municipal Bond Fund:
Notice is hereby given that a Special Meeting of the Shareholders (the "Meeting") of Oppenheimer Municipal Bond Fund (the "Fund")
will be held at 6803 South Tucson Way, Englewood, Colorado, 80112, at 1:00 P.M. Mountain time, on November 22, 2002.
During the Meeting, shareholders of the Fund will vote on the following proposals and related sub-proposals:
1. To elect a Board of Trustees;
2. To approve the elimination or amendment of certain fundamental investment policies of the Fund;
3. To authorize the Trustees to adopt an Amended and Restated Declaration of Trust; and
4. To transact such other business as may properly come before the meeting, or any adjournments thereof.
Shareholders of record at the close of business on August 26, 2002 are entitled to vote at the meeting. The proposals and
sub-proposals are more fully discussed in the Proxy Statement. Please read it carefully before telling us, through your proxy or in
person, how you wish your shares to be voted. The Board of Trustees of the Fund recommends a vote to elect each of the nominees as
Trustee and in favor of each proposal. WE URGE YOU TO MARK, SIGN, DATE AND MAIL THE ENCLOSED PROXY PROMPTLY.
By Order of the Board of Trustees,
Robert G. Zack
Secretary
September 17, 2002
PLEASE RETURN YOUR PROXY BALLOT PROMPTLY.
YOUR VOTE IS IMPORTANT NO MATTER HOW MANY SHARES YOU OWN.
310
TABLE OF CONTENTS
Proxy Statement Page
Questions and Answers ii
Proposal 1: To Elect a Board of Trustees 2
Introduction to Proposal 2 10
Proposal 2: To approve the elimination or amendment of certain fundamental 11
investment policies of the Fund
Introduction to Proposal 3
Proposal 3: To authorize the Trustees to adopt an Amended and Restated Declaration 19
of Trust
Information About the Fund 23
Further Information About Voting and the Meeting 25
Other Matters 28
EXHIBIT A: Amended and Restated Declaration of Trust A-1
OPPENHEIMER MUNICIPAL BOND FUND
PROXY STATEMENT QUESTIONS AND ANSWERS
Q. Who is Asking for My Vote?
A. The Trustees of Oppenheimer Municipal Bond Fund (the "Fund") have asked that you vote on several matters at the Special
Meeting of Shareholders to be held on November 22, 2002.
Q. Who is Eligible to Vote?
A. Shareholders of record at the close of business on August 26, 2002 are entitled to vote at the Meeting or any adjournment of
the Meeting. Shareholders are entitled to cast one vote per share (and a fractional vote for a fractional share) for
each matter presented at the Meeting. It is expected that the Notice of Meeting, Proxy Ballot and Proxy Statement
will be mailed to shareholders of record on or about September 24, 2002.
Q. On What Matters Am I Being Asked to Vote?
A. You are being asked to vote on the following proposals:
1. To elect a Board of Trustees;
2. To approve the elimination or amendment of certain fundamental investment policies of the Fund; and
3. To authorize the Trustees to adopt an Amended and Restated Declaration of Trust.
Q. How do the Trustees Recommend that I Vote?
A. The Trustees recommend that you vote:
1. FOR election of all nominees as Trustees;
2. FOR the elimination or amendment of each of the Fund's fundamental investment policies proposed to be eliminated or amended,
as the case may be; and
3. FOR each sub-proposal related to the authorization of the Trustees to adopt an Amended and Restated Declaration of Trust.
Q. What are the reasons for the proposed changes to some of the Fund's fundamental investment policies?
A. Some of the Fund's current policies reflect regulations that no longer apply to the Fund. In other cases, the Fund's
policies are more stringent than current regulations require. The Fund's Trustees and the Fund's investment
advisor, OppenheimerFunds, Inc., believe that the proposed changes to the Fund's investment policies will benefit
shareholders by allowing the Fund more flexibility to adapt to future changes in the investment environment and
increasing the Fund's ability to take advantage of investment opportunities.
Q. Why is the Board of Trustees recommending the adoption of an amended and restated declaration of trust?
A. The Trustees recommend the adoption of a more modern form of trust instrument that, going forward, will be used as
the standard declaration of trust for all new Oppenheimer funds organized as Massachusetts business trusts. The
Trustees believe adoption of the amended and restated declaration of trust will result in more efficient and
economical governance of the Fund by providing the Trustees with more flexibility and broader authority to act
without shareholder approval. Adoption of the new declaration of trust will not result in any changes in the Fund's
Trustees or officers or in the investment policies and shareholder services described in the Fund's current
prospectus.
Q. How Can I Vote?
A. You can vote in three (3) different ways:
o By mail, with the enclosed ballot
o In person at the Meeting (if you are a record owner)
o By telephone (please see the insert for instructions)
Voting by telephone is convenient and can help reduce the Fund's expenses. Whichever method you choose, please
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take the time to read the full text of the proxy statement before you vote.
Please be advised that the deadline for voting by telephone is 3:00 p.m. (Eastern Time ("ET")) on the last business
day before the Meeting.
Q. How Will My Vote Be Recorded?
A. Proxy ballots that are properly signed, dated and received at or prior to the Meeting, or any adjournment thereof, will be
voted as specified. If you specify a vote for any of the proposals, your proxy will be voted as indicated. If you
sign and date the proxy ballot, but do not specify a vote for one or more of the proposals, your shares will be
voted in favor of the Trustees recommendations. Telephonic votes will be recorded according to the telephone voting
procedures described in the "Further Information About Voting and the Meeting" section of the Proxy statement.
Q. How Can I Revoke My Proxy?
A. You may revoke your proxy at any time before it is voted by forwarding a
written revocation or a later-dated proxy ballot to the Fund that is received at or prior to the Meeting, or any
adjournment thereof, or by attending the Meeting, or any adjournment thereof, and voting in person, if you are a
record owner. Please be advised that the deadline for revoking your proxy by telephone is 3:00 p.m. (ET) on the
last business day before the Meeting.
Q. How Can I Get More Information About the Fund?
Copies of the Fund's annual report dated July 31, 2002 and semi-annual report dated January 31, 2002 have previously
been mailed to Shareholders. If you would like to have copies of the Fund's most recent annual and semi-annual
reports sent to you free of charge, please call us toll-free at 1.800.708.7780, write to the Fund at OppenheimerFunds
Services, P.O. Box 5270, Denver, Colorado 80217-5270 or visit the Oppenheimer funds website at
www.oppenheimerfunds.com.
Q. Whom Do I Call If I Have Questions?
A. Please call us at 1.800.708.7780.
The proxy statement is designed to furnish shareholders with the information necessary to vote on the matters coming before the Meeting.
If you have any questions, please call us at 1.800.708.7780.
OPPENHEIMER MUNICIPAL BOND FUND
PROXY STATEMENT
Special Meeting of Shareholders
To Be Held November 22, 2002
This statement is furnished to the shareholders of Oppenheimer Municipal Bond Fund (the "Fund") in connection with the
solicitation by the Fund's Board of Trustees of proxies to be used at a special meeting of shareholders (the "Meeting") to be held at
6803 South Tucson Way, Englewood, Colorado, 80112, at 1:00 P.M. Mountain time, on November 22, 2002, or any adjournments thereof. It
is expected that the mailing of this Proxy Statement will be made on or about September 24, 2002.
SUMMARY OF PROPOSALS
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Proposal Shareholders Voting
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1. To Elect a Board of Trustees All
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2. To approve the Elimination or Amendment of Certain Fundamental
Investment Policies for the Fund
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A. Purchasing Securities on Margin All
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B. Making Short Sales All
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C. Purchasing Securities of Issuers in which Officers or Trustees All
have an Interest
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D. Investing in Real Estate All
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E. Industry Concentration All
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F. Borrowing All
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G. Lending All
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H. Diversification All
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I. Purchasing Restricted or Illiquid Securities All
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J. Investing in Other Investment Companies All
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3. To Authorize the Trustees to Adopt an Amended and Restated
Declaration of Trust All
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PROPOSAL 1: ELECTION OF TRUSTEES
At the Meeting, eleven (11) Trustees are to be elected. If elected, the Trustees will serve indefinite terms until a
special shareholder meeting is called for the purpose of voting for Trustees or until their successors are properly elected and
qualified. The persons named as attorneys-in-fact in the enclosed proxy have advised the Fund that, unless a proxy ballot instructs
them to withhold authority to vote for all listed nominees or any individual nominee, all validly executed proxies will be voted for
the election of the nominees named below.
As a Massachusetts business trust, the Fund is not required and does not intend to hold annual shareholder meetings for the
purpose of electing Trustees. As a result, if elected, the Trustees will hold office until the next meeting of shareholders called
for the purpose of electing Trustees or until their successors are duly elected and shall have qualified. If a nominee should be
unable to accept election, serve his or her term or resign, the Board of Trustees may, in its discretion, select another person to
fill the vacant position.
Although the Fund will not normally hold annual meetings of its shareholders, it may hold shareholder meetings from time to
time on important matters, and shareholders have the right to call a meeting to remove a Trustee or to take other action described in
the Fund's Declaration of Trust. Also, if at any time, less than a majority of the Trustees holding office has been elected by the
shareholders, the Trustees then in office will promptly call a shareholders' meeting for the purpose of electing Trustees.
Each of the nominees currently serves as a Trustee of the Fund. Each of the nominees has consented to be named as such in
this proxy statement and to serve as Trustee if elected. Each of the Trustees serves as trustee or director of other funds in the
Oppenheimer family of funds. The Oppenheimer funds on which each of the Trustees currently serves are referred to as "Board I Funds"
in this proxy statement.
The Fund's Trustees and officers, their positions with the Fund and length of service in such positions as well as their
principal occupations and business affiliations during the past five years are listed below. Except for Mr. Murphy, each of the
Trustees is an independent trustee of the Fund ("Independent Trustee"). Mr. Murphy is an "interested trustee" (as that term is
defined in the Investment Company Act of 1940, referred to in this Proxy Statement as the "1940 Act") of the Fund, because he is
affiliated with OppenheimerFunds, Inc. (the "Manager") by virtue of his positions as an officer and director of the Manager, and as a
shareholder of its parent company. Mr. Murphy was elected as a Trustee of the Fund with the understanding that in the event he
ceases to be the chief executive officer of the Manager, he will resign as a trustee of the Fund and the other Board I Funds for
which he is a trustee or director. All information is as of December 31, 2001, except as otherwise indicated.
Board I Funds
Mr. Reynolds has reported he has a controlling interest in The Directorship Search Group, Inc. ("The Directorship Search
Group"), a director, and executive recruiting firm that provided consulting services to Massachusetts Mutual Life Insurance Company
(which controls the Manager) for fees aggregating $75,000 from July 1, 1999 through December 31, 2001, an amount representing less
than 5% of the annual revenues of The Directorship Search Group, Inc. Mr. Reynolds estimates that The Directorship Search Group will
bill Massachusetts Mutual Life Insurance Company $150,000 for services to be provided during the calendar year 2002.
The Independent Trustees have unanimously (except for Mr. Reynolds, who abstained) determined that the consulting
arrangements between The Directorship Search Group, Inc. and Massachusetts Mutual Life Insurance Company were not material business
or professional relationships that would compromise Mr. Reynolds' status as an Independent Trustee. Nonetheless, to assure certainty
as to determinations of the Board and the Independent Trustees as to matters upon which the 1940 Act or the rules thereunder require
approval by a majority of Independent Trustees, Mr. Reynolds will not be counted for purposes of determining whether a quorum of
Independent Trustees was present or whether a majority of Independent Trustees approved the matter.
Messrs. Galli and Spiro have had no material business or professional relationship with the Manager or its affiliates within
the past two fiscal years. However, within the past five years and before becoming Independent Trustees they had been officers of
the Manager and owned shares of its parent company. In 1997, Mr. Galli sold his remaining shares of the Manager's parent company for
a cash payment of approximately $7,851,200. In 1997, Mr. Spiro sold shares of the Manager's parent company for a cash payment of
approximately $9,814,000. In 1999, Mr. Spiro sold his remaining shares of the Manager's parent company for a cash payment of
approximately $9,399,000.
The company's Trustees and officers, their positions with the Funds and length of service in such positions as well as their
principal occupations and business affiliation during the past five years are listed below. All information is as of July 22, 2002,
except as otherwise indicated.
Nominees for Independent Trustee
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Name,Address, 1 Principal Occupation(s) During Past 5 Years / Other Dollar Range Aggregate Dollar
Range of Shares
of Shares Beneficially Owned
Age, Position(s) Beneficially in the Oppenheimer
Held with Fund and Owned in the Funds Overseen by
Length of Service Trusteeships/Directorships Held by Nominee / Number of Fund (as of Nominee (as of
(as applicable)2 Portfolios in Fund Complex Overseen by Nominee 7/23/02) 7/23/02)3
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Leon Levy, Chairman General Partner of Odyssey Partners, L.P. (investment $0 None
of the Board of partnership) (since 1982) and Chairman of the Board of
Trustees Avatar Holdings, Inc. (real estate development) (since
Trustee since 1976 1981). Oversees 31 portfolios in the OppenheimerFunds
Age: 76 complex.
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Robert G. Galli, A Trustee or Trustee of other Oppenheimer funds. Formerly $0 Over $100,000
Trustee since 1993 Vice Chairman of the Manager (October 1995 - December
Age: 68 1997). Oversees 41 portfolios in the OppenheimerFunds
complex.
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Phillip A. The Director of the Institute for Advanced Study, $0 Over $100,0003
Griffiths, Trustee Princeton, N.J. (since 1991), director of GSI Lumonics
Nominee since 1999 (since 2001) and a member of the National Academy of
Age: 63 Sciences (since 1979); formerly (in descending
chronological order) a director of Bankers Trust
Corporation, Provost and Professor of Mathematics at Duke
University, a director of Research Triangle Institute,
Raleigh, N.C., and a Professor of Mathematics at Harvard
University. Oversees 30 (31, if elected) portfolios in the
OppenheimerFunds complex.
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Benjamin Lipstein, Professor Emeritus of Marketing, Stern Graduate School of $0 Over $100,000
Trustee since 1976 Business Administration, New York University. Oversees 31
Age: 78 portfolios in the OppenheimerFunds complex.
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Elizabeth B. Author and architectural historian; a trustee of the Freer $0 $50,001 - $100,000
Moynihan, Trustee Gallery of Art and Arthur M. Sackler Gallery (Smithsonian
since 1992 Institute), Trustees Council of the National Building
Age: 72 Museum; a member of the Trustees Council, Preservation
League of New York State. Oversees 31 portfolios in the
OppenheimerFunds complex.
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Kenneth A. Randall, A director of Dominion Resources, Inc. (electric utility $10,0001 - Over $100,000
Trustee since 1980 holding company) and Prime Retail, Inc. (real estate
Age: 74 investment trust); formerly a director of Dominion Energy,
Inc. (electric power and oil & gas producer), President
and Chief Executive Officer of The Conference Board, Inc.
(international economic and business research) and a $50,000
director of Lumbermens Mutual Casualty Company, American
Motorists Insurance Company and American Manufacturers
Mutual Insurance Company. Oversees 31 portfolios in the
OppenheimerFunds complex.
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Edward V. Regan, President, Baruch College, CUNY; a director of RBAsset
Trustee since 1993 (real estate manager); a director of OffitBank; formerly
Age: 71 Trustee, Financial Accounting Foundation (FASB and GASB),
Senior Fellow of Jerome Levy Economics Institute, Bard
College, Chairman of Municipal Assistance Corporation for $1- $10,000 $50,001 - $100,000
the City of New York, New York State Comptroller and
Trustee of New York State and Local Retirement Fund.
Director/trustee of 31 investment companies in the
OppenheimerFunds complex.
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Russell S. Reynolds, Chairman of The Directorship Search Group, Inc. (corporate
Jr., governance consulting and executive recruiting) (since
Trustee since 1989 1993); a life trustee of International House (non-profit
Age: 70 educational organization), and a trustee of the Greenwich $0 $50,001 - $100,000
Historical Society (since 1996). Oversees 31 portfolios in
the OppenheimerFunds complex.
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Donald W. Spiro, Chairman Emeritus (since January 1991) of the Manager.
Vice Chairman of the Formerly he held the following positions: Chairman
Board of Trustees, (November 1987 - January 1991) and a director (January
Trustee since 1985 1969 - August 1999) of the Manager; President and Director
Age: 76 of OppenheimerFunds Distributor, Inc., a subsidiary of the $0 Over $100,000
Manager and the Fund's Distributor (July 1978 - January
1992). Oversees 31 portfolios in the OppenheimerFunds
complex.
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Clayton K. Yeutter, Of Counsel, Hogan & Hartson (a law firm) (since 1993). $0 $50,001 - $100,000
Trustee since 1991 Other directorships: Caterpillar, Inc. (since 1993) and
Age: 71 Weyerhaeuser Co. (since 1999). Oversees 31 portfolios in
the OppenheimerFunds complex.
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Joel W. Motley, Director (January 2002 - Present), Columbia Equity Financial
Trustee Nominee Corp. (privately-held financial adviser); Managing Director
Age: 50 (January 2002-present),Carmona Motley Inc. (privately-held
financial adviser); Formerly he held the following positions: $03 $0
Managing Director (January 1998-December 2001), Carmona
Motley Hoffman, Inc. (privately-held financial adviser);
Managing Director (January 1992-December 1997), Carmona
Motley & Co. (privately-held financial adviser).
Oversees 31 portfolios in the OppenheimerFunds complex
Nominee for Interested Trustee
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Name, Address,4 Principal Occupation(s) During Past 5 Years / Other Dollar Range Aggregate Dollar
of Shares Range of Shares
Beneficially Beneficially Owned
Age, Position(s) Held Owned in the in any of the
with Fund and Length of Trusteeships/Directorships Held by Nominee / Number of Fund (as of Oppenheimer Funds
Service5 Portfolios in Fund Complex Overseen by Nominee 7/23/02) (as of 7/23/02)6
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John V. Murphy, Chairman, Chief Executive Officer and director (since $0 Over $100,000
President and Trustee June 2001) and President (since September 2000) of the
Nominee Manager; President and a director or trustee of other
Trustee since October Oppenheimer funds; President and a director (since July
2001 2001) of Oppenheimer Acquisition Corp., the Manager's
Age: 52 parent holding company and of Oppenheimer Partnership
Holdings, Inc., a holding company subsidiary of the
Manager; Director (since November 2001) of
OppenheimerFunds Distributor, Inc., a subsidiary of the
Manager; Chairman and a director (since July 2001) of
Shareholder Services, Inc. and of Shareholder Financial
Services, Inc., transfer agent subsidiaries of the
Manager; President and a director (since July 2001) of
OppenheimerFunds Legacy Program, a charitable trust
program established by the Manager; a director of the
following investment advisory subsidiaries of the
Manager: OAM Institutional, Inc. and Centennial Asset
Management Corporation (since November 2001),
HarbourView Asset Management Corporation and OFI Private
Investments, Inc. (since July 2001); President (since
November 1, 2001) and a director (since July 2001) of
Oppenheimer Real Asset Management, Inc., an investment
advisor subsidiary of the Manager; a director (since
November 2001) of Trinity Investment Management Corp.
and Tremont Advisers, Inc., investment advisory
affiliates of the Manager; Executive Vice President
(since February 1997) of Massachusetts Mutual Life
Insurance Company, the Manager's parent company; a
director (since June 1995) of DBL Acquisition
Corporation; formerly Chief Operating Officer (from
September 2000 to June 2001) of the Manager; President
and trustee (from November 1999 to November 2001) of MML
Series Investment Fund and MassMutual Institutional
Funds, open-end investment companies; a director (from
September 1999 to August 2000) of C.M. Life Insurance
Company; President, Chief Executive Officer and director
(from September 1999 to August 2000) of MML Bay State
Life Insurance Company; a director (from June 1989 to
June 1998) of Emerald Isle Bancorp and Hibernia Savings
Bank, wholly-owned subsidiary of Emerald Isle Bancorp.
Oversees 63 portfolios in the OppenheimerFunds complex.
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1 The address of each nominee of 6803 S. Tucson Way, Englewood, CO 80112-3924
2 If elected, each Trustee will serve for an indefinite term, until his or her resignation, death or removal.
3 Includes shares owned by Mr. Galli in other Oppenheimer funds for which he serves as director or trustee.
4 The address of Mr. Murphy is 498 Seventh Avenue, New York, New York 10018
5 If elected, Mr. Murphy will serve for an indefinite term, until his resignation, death or removal.
6 Includes shares owned by Mr. Murphy in other Oppenheimer funds for which he serves as director or trustee.
7 The address of each Officer is 498 Seventh Avenue, New York, New York 10018 except for Messrs. Bishop and Wixted and Ms. Ives,
whose address is 6803 S. Tucson Way, Englewood, CO 80112-3924 and except for Mr. Fielding whose address is 350 Linden Oaks,
Rochester, New York 14623.
8 Each Officer serves an annual term, until his or her resignation, death or removal.
A. General Information Regarding the Board of Trustees.
The Fund is governed by a Board of Trustees, which is responsible for protecting the interests of shareholders. The Trustees
meet periodically throughout the year to oversee the Fund's activities, review its performance and review the actions of the Manager,
which is responsible for the Fund's day-to-day operations. Six regular meetings of the Trustees were held during the fiscal year
ended July 31, 2002. Each of the incumbent Trustees was present for at least 75% of the aggregate number of Board of Trustees
meetings and committees on which that Trustee served that were held during the period.
B. Committees of the Board of Trustees.
The Board of Trustees has appointed standing Audit, Study and Proxy Committees comprised of Independent Trustees only.
The members of the Audit Committee are Kenneth Randall (Chairman), Benjamin Lipstein and Edward Regan. The Audit Committee
held five meetings during the Fund's fiscal year ended July 31, 2002. The Audit Committee furnishes the Board with recommendations
regarding the selection of the Fund's independent auditors. Other functions of the Audit Committee include, but are not limited to:
(i) reviewing the scope and results of audits and the audit fees charged; (ii) reviewing reports from the Fund's independent auditor
regarding the Fund's internal accounting procedures and controls; and (iii) establishing a separate line of communication between the
Fund's independent auditors and its Independent Trustees.
The members of the Study Committee are Benjamin Lipstein (Chairman), Robert Galli and Elizabeth Moynihan. The Study
Committee held six meetings during the Fund's fiscal year ended July 31, 2002. Among other functions, the Study Committee evaluates
and reports to the Board on the Fund's contractual arrangements, including the investment advisory and distribution agreements,
transfer and shareholder service agreements and custodian agreements as well as the policies and procedures adopted by the Fund to
comply with the 1940 Act and other applicable law.
The members of the Proxy Committee are Edward Regan (Chairman), Russell Reynolds and Clayton Yeutter. The Proxy Committee
held no meetings during the fiscal year ended July 31, 2002. The Proxy Committee provides the Board with recommendations for proxy
voting and monitors proxy voting by the Fund.
Based on the Audit Committee's recommendation, the Board of Trustees of the Fund, including a majority of the Independent
Trustees, at a meeting held August 9, 2001, selected KPMG LLP ("KPMG") as auditors of the Fund for the fiscal year beginning July 31,
2002. KPMG also serves as auditors for certain other funds for which the Manager acts as investment advisor.
During the fiscal year ended July 31, 2002, KPMG/Deloitte performed audit services for the Fund including the audit of the
Fund's financial statements, review of the Fund's annual report and registration statement amendment, consultation on financial
accounting and reporting matters and meetings with the Board of Trustees.
1. Audit Fees.
The aggregate fees billed by KPMG for professional services rendered for the audit of the Fund's annual financial statements
for the fiscal year ended July 31, 2002 were $_______.
2. All Other Fees.
There were no fees billed by KPMG for services rendered to the Fund other than the services described above under "Audit
Fees" for the fiscal year ended July 31, 2002. Additionally, there were no fees billed by KPMG to the Manager or subsidiaries of the
Manager for non-audit services rendered to the Manager or its subsidiaries for the fiscal year ended July 31, 2002. The aggregate
fees billed by KPMG for non-audit services rendered to the Fund's Manager and its subsidiaries during the calendar year 2002 were
$-----------------.
The Audit Committee of the Fund's Board of Trustees considered whether the provision of these non-audit services is
compatible with maintaining KPMG's independence with respect to the audit services it provides to the Fund.
Representatives of KPMG are not expected to be present at the Meeting but will be available should any matter arise
requiring their presence.
C. Additional Information Regarding Trustees and Officers.
The Fund's Independent Trustees are paid a retainer plus a fixed fee for attending each meeting and are reimbursed for
expenses incurred in connection with attending such meetings. Each Board I Fund for which they serve as a director or trustee pays a
share of those expenses.
Neither the officers of the Fund nor any Trustee who is not an Independent Trustee receives any salary or fee from the Fund.
The Independent Trustees of the Fund received the compensation shown below from the Fund with respect to the Fund's fiscal year ended
July 31, 2002.
The compensation from all of the Board I Funds (including the Fund) represents compensation received as a director, trustee or
member of a committee of the boards of those funds during the calendar year 2001. Compensation from the Fund is paid for services in
the positions below their names.
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Name of Trustee or Nominee and Other Aggregate Retirement Number of Funds Total
Benefits Compensation
Accrued as Part which Trustee or From All
Compensation of Fund Nominee Oversees Funds Overseen by
Fund Position(s) (as applicable) from Fund1 Expenses1 as of 12/31/01 Nominee2
- --------------------------------------- ------------------- ------------------ ------------------ --------------------
- --------------------------------------- ------------------- ------------------ ------------------ --------------------
Leon Levy $20,264 $0 31 $173,700
Chairman
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Robert G. Galli3 $8,375 $0 41 $202,886
Study Committee Member
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Phillip Griffiths4 $8,375 $0 30 $54,889
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Benjamin Lipstein $17,515 $0 31 $150,152
Study Committee Chairman,
Audit Committee Member
- --------------------------------------- ------------------- ------------------ ------------------ --------------------
- --------------------------------------- ------------------- ------------------ ------------------ --------------------
Elizabeth B. Moynihan $12,342 $0 31 $105,760
Study Committee Member
- --------------------------------------- ------------------- ------------------ ------------------ --------------------
- --------------------------------------- ------------------- ------------------ ------------------ --------------------
Kenneth A. Randall $11,321 $0 31 $97,012
Audit Committee Chairman
- --------------------------------------- ------------------- ------------------ ------------------ --------------------
- --------------------------------------- ------------------- ------------------ ------------------ --------------------
Edward V. Regan $7,482 $0 31 $95,960
Proxy Committee Chairman, Audit
Committee Member
- --------------------------------------- ------------------- ------------------ ------------------ --------------------
- --------------------------------------- ------------------- ------------------ ------------------ --------------------
Russell S. Reynolds, Jr. $11,193 $0 31 $71,792
Proxy Committee Member
- --------------------------------------- ------------------- ------------------ ------------------ --------------------
- --------------------------------------- ------------------- ------------------ ------------------ --------------------
Donald Spiro $12,342 $0 31 $64,080
- --------------------------------------- ------------------- ------------------ ------------------ --------------------
- --------------------------------------- ------------------- ------------------ ------------------ --------------------
Clayton K. Yeutter5 $6,786 $0 31 $71,792
Proxy Committee Member
- --------------------------------------- ------------------- ------------------ ------------------ --------------------
1. For the fiscal year ended July 31, 2002. Aggregate compensation includes fees, deferred compensation, if any, and
retirement plan benefits accrued for a Trustee. No retirement benefit expenses were allocated to the Fund for fiscal year ended
July 31, 2002.
2. For the 2001 calendar year.
3. Total compensation for the 2001 calendar year includes compensation received for serving as a Trustee/Director of 10 other
Oppenheimer funds in addition to the Board I Funds.
4. Aggregate compensation from the Fund includes $0 deferred under Deferred Compensation Plan described below.
5. Aggregate compensation from the Fund includes $0 deferred under Deferred Compensation Plan described below.
The Fund has adopted a retirement plan that provides for payments to retired Trustees. Payments are up to 80% of the average
compensation paid during a Trustee's five years of service in which the highest compensation was received. A Trustee must serve as
director or trustee for any of the Board I Funds for at least 15 years to be eligible for the maximum payment. Each Trustee's
retirement benefits will depend on the amount of the compensation received by the Trustee for service in future fiscal years as well
as the Trustee's length of service. The Fund cannot estimate the number of years of credited service that will be used to determine
those benefits at this time. Therefore, the amount of the retirement benefits cannot be determined at this time.
The Board of Trustees has adopted a Deferred Compensation Plan for Independent Trustees that enables them to elect to defer
receipt of all or a portion of the annual fees they are entitled to receive from the Fund. Under the plan, the compensation deferred
by a Trustee is periodically adjusted as though an equivalent amount had been invested in shares of one or more Oppenheimer funds
selected by the Trustee. The amount paid to the Trustee under the plan will be determined based upon the performance of the selected
funds.
Deferral of Trustees' fees under the plan will not materially affect the Fund's assets, liabilities or net income per share.
The plan will not obligate the Fund to retain the services of any Trustee or to pay any particular level of compensation to any
Trustee. Pursuant to an order issued by the Securities and Exchange Commission, the Fund may invest in the funds selected by the
Trustee under the plan without shareholder approval.
Information is given below about the executive officers who are not Trustees or nominees for Trustee of the Fund, including
their business experience during the past five years. Messrs. Fielding, Murphy, Zack, Wixted and Molleur, and Mses. Feld and Ives,
respectively, hold the same offices with one or more of the other funds in the OppenheimerFunds complex. In light of Mr. Murphy's
nomination as a trustee, his biographical information is provided above.
- ----------------------------------------------- ------------------------------------------------------------------------
Name, Address,6 Age, Position(s) Held with Principal Occupation(s)8 During Past 5 Years
Fund and Length of Time Served 7
- ----------------------------------------------- ------------------------------------------------------------------------
- ----------------------------------------------- ------------------------------------------------------------------------
Ronald H. Fielding, Vice President and Senior Vice President (since January 1996) of the Manager; Chairman of
Portfolio Manager (since January 1996) the Rochester Division of the Manager (since January 1996); an officer
Age 53 of 9 portfolios in the OppenheimerFunds complex; prior to joining the
Manager in January 1996, he was President and a director of Rochester
Capital Advisors, Inc. (1993 - 1995), the Fund's prior investment
advisor, and of Rochester Fund Services, Inc. (1986 - 1995), the
Fund's prior distributor; President and a trustee of Limited Term New
York Municipal Fund (1991 - 1995), Oppenheimer Convertible Securities
Fund (1986 - 1995) and Rochester Fund Municipals (1986 - 1995);
President and a director of Rochester Tax Managed Fund, Inc. (1982 -
1995) and of Fielding Management Company, Inc. (1982 - 1995), an
investment advisor.
- ----------------------------------------------- ------------------------------------------------------------------------
- ----------------------------------------------- ------------------------------------------------------------------------
Brian W. Wixted, Treasurer, Principal Senior Vice President and Treasurer (since March 1999) of the Manager;
Financial and Accounting Officer (since April Treasurer (since March 1999) of HarbourView Asset Management
1999) Corporation, Shareholder Services, Inc., Oppenheimer Real Asset
Age: 42 Management Corporation, Shareholder Financial Services, Inc. and
Oppenheimer Partnership Holdings, Inc., of OFI Private Investments,
Inc. (since March 2000) and of OppenheimerFunds International Ltd. and
Oppenheimer Millennium Funds plc (since May 2000); Treasurer and Chief
Financial Officer (since May 2000) of Oppenheimer Trust Company;
Assistant Treasurer (since March 1999) of Oppenheimer Acquisition
Corp.; an officer of other Oppenheimer funds; formerly Principal and
Chief Operating Officer, Bankers Trust Company - Mutual Fund Services
Division (March 1995 - March 1999); Vice President and Chief Financial
Officer of CS First Boston Investment Management Corp. (September 1991
- March 1995).
- ----------------------------------------------- ------------------------------------------------------------------------
- ----------------------------------------------- ------------------------------------------------------------------------
Robert G. Zack, Secretary Senior Vice President (since May 1985) and General Counsel (since
(since November 1, 2001) February 2002) of the Manager; Assistant Secretary of Shareholder
Age: 53 Services, Inc. (since May 1985), Shareholder Financial Services, Inc.
(since November 1989); OppenheimerFunds International Ltd. and
Oppenheimer Millennium Funds plc (since October 1997); an officer of
other Oppenheimer funds; formerly Acting General Counsel (November
2001 - February 2002) and Associate General Counsel (1984- October
2001)
- ----------------------------------------------- ------------------------------------------------------------------------
- ----------------------------------------------- ------------------------------------------------------------------------
Denis R. Molleur, Assistant Secretary Vice President and Senior Counsel of the Manager (since July 1999); an
(since November 1, 2001) officer of other Oppenheimer funds; formerly a Vice President and
Age: 44 Associate Counsel of the Manager (September 1995 - July 1999).
- ----------------------------------------------- ------------------------------------------------------------------------
- ----------------------------------------------- ------------------------------------------------------------------------
Katherine P. Feld, Assistant Secretary Vice President and Senior Counsel of the Manager (since July 1999); an
(since November 1,2001) officer of other Oppenheimer funds; formerly a Vice President and
Age: 43 Associate Counsel of the Manager (June 1990 - July 1999).
- ----------------------------------------------- ------------------------------------------------------------------------
- ----------------------------------------------- ------------------------------------------------------------------------
Kathleen T. Ives, Assistant Secretary Vice President and Assistant Counsel of the Manager (since June 1998);
(since November 1, 2001) an officer of other Oppenheimer funds; formerly an Assistant Vice
Age: 36 President and Assistant Counsel of the Manager (August 1997 - June
1998); and Assistant Counsel of the Manager (August 1994-August 1997).
- ----------------------------------------------- ------------------------------------------------------------------------
All officers serve at the pleasure of the Board.
As of August 26, 2002, the Trustees, nominees for Trustee and officers, individually and as a group, beneficially owned
____________ shares [LESS THAN 1%] of the outstanding Class A shares and no Class B or Class C, shares of the Fund. The foregoing
statement does not reflect ownership of shares of the Fund held of record by an employee benefit plan for employees of the Manager,
other than the shares beneficially owned under the plan by the officers of the Fund listed above. In addition, each Independent
Trustee, and his or her family members, do not own securities of either the Manager or Distributor of the Board I Funds or any person
directly or indirectly controlling, controlled by or under common control with the Manager or Distributor.
THE BOARD OF TRUSTEES UNANIMOUSLY RECOMMENDS
A VOTE FOR THE ELECTION OF EACH NOMINEE AS TRUSTEE
Introduction to Proposal 2
What is the Historical Background of the Fund's Current Investment Policies?
The Fund operates in accordance with its investment objective, policies and restrictions, which are described in its
prospectus and statement of additional information (together, the "prospectus"). The Fund's policies generally are classified as
either "fundamental" or "non-fundamental." Fundamental policies can be changed only by a shareholder vote. Non-fundamental policies
may be changed by the Trustees without shareholder approval, although significant changes will be described in amendments to the
Fund's prospectus.
The 1940 Act requires that certain policies of the Fund be classified as fundamental. Proposal 2 is intended to modernize
the Fund's policies as well as standardize its policies by reclassifying fundamental policies that are not required to be fundamental
as non-fundamental or by eliminating them entirely. The proposals are designed to provide the Fund with maximum flexibility to
pursue its investment objective and respond to an ever-changing investment environment. The Fund, however, has no current intention
of significantly changing its actual investment strategies should shareholders approve the proposed changes.
Subsequent to the Fund being established, certain regulatory requirements applicable to registered open-end investment
companies (referred to as "mutual funds" in this Proxy Statement) changed. For example, certain restrictions previously imposed by
state regulations were preempted by the National Securities Markets Improvement Act of 1996 ("NSMIA"), and are no longer applicable
to mutual funds. As a result, the Fund currently is subject to several fundamental investment policies that are either more
restrictive than required under current regulations or no longer required at all.
With the passage of time, the development of new industry practices and changes in regulatory standards, several of the
Fund's fundamental policies are considered by the Trustees and the Manager to be unnecessary or unwarranted. The standardized policies
proposed below would satisfy current federal regulatory requirements and are written to provide the Fund with flexibility to respond
to future legal, regulatory, market and industry developments.
Why do the Fund's Trustees Recommend the Proposed Changes?
The Trustees believe standardizing and reducing the total number of investment policies that can be changed only by a
shareholder vote will assist the Fund and the Manager in maintaining compliance with the various investment restrictions to which the
Fund is subject, and will help minimize the costs and delays associated with holding future shareholder meetings to revise
fundamental investment policies that become outdated or inappropriate. The Trustees also believe that the Manager's ability to manage
the Fund's assets in a changing investment environment will be enhanced, and that investment management opportunities will be
increased by the proposed changes.
Although the Trustees believe the proposed changes in fundamental investment policies will provide the Fund greater
flexibility to respond to future investment opportunities, the Trustees do not anticipate that the changes, either individually or
together, will result in a material change in the level of risk associated with investment in the Fund. In addition, the Fund's
Trustees do not anticipate that the proposed changes will materially affect the manner in which the Fund is managed. In the future,
if the Trustees determine to change materially the manner in which the Fund is managed, the Fund's prospectus will be amended to
reflect such a change.
The recommended changes are specified below. Shareholders are requested to vote on each sub-proposal in Proposal 2
separately. If approved, the effective date of the sub-proposals will be delayed until the Fund's prospectus can be updated to
reflect the changes. If any sub-proposal in Proposal 2 is not approved, the fundamental investment policy or policies covered in that
sub-proposal will remain unchanged.
PROPOSAL 2: TO APPROVE THE ELIMINATION OR AMENDMENT OF CERTAIN FUNDAMENTAL INVESTMENT POLICIES OF THE FUND
A. Purchasing Securities on Margin.
The Fund is currently subject to a fundamental investment policy prohibiting it from purchasing securities on margin. The
existing policy is not required to be a fundamental investment policy under the 1940 Act. It is proposed that this current
fundamental policy prohibiting purchases of securities on margin be eliminated. The current fundamental investment policy is set
forth below.
Current Fundamental Policy
--------------------------
The Fund cannot purchase securities on margin. However, the Fund may make margin deposits in connection
with any of the hedging instruments permitted by any of its other fundamental policies.
Margin purchases involve the purchase of securities with borrowed money and the 1940 Act imposes certain restrictions on
borrowing as discussed in detail below under Proposal F ("Borrowing"). "Margin" is the cash or securities that the borrower places
with a broker as collateral against the loan. Although the Fund's current fundamental investment policy prohibits it from purchasing
securities on margin, the 1940 Act permits the Fund to obtain such short-term credits as may be necessary for the clearance of
transactions. In addition, SEC staff interpretations permit mutual funds to make margin payments in connection with the purchase and
sale of futures contracts and options on futures contracts.
As a result of NSMIA, the state restrictions regarding margin purchases no longer apply to the Fund. The Trustees recommend
that shareholders eliminate this fundamental investment policy in order to conform the Fund's policy with that of other Oppenheimer
funds. Elimination of this fundamental investment policy is unlikely to affect management of the Fund, and is not expected to
materially increase the risk of an investment in the Fund.
The Fund would continue to be prohibited from purchasing securities on margin. However, consistent with the 1940 Act, the
Fund would continue to be able to obtain such short-term credits as may be necessary for clearance of transactions and to make margin
payments in connection with the purchase and sale of futures contracts and options on futures contracts.
B. Making Short Sales
------------------
The Fund is currently subject to a fundamental investment policy prohibiting it from making short sales. The existing policy
is not required to be a fundamental policy under the 1940 Act. It is proposed that the current fundamental policy prohibiting making
short sales be eliminated. The current fundamental policy reads as follows:
Current Fundamental Policy
--------------------------
The Fund cannot sell securities short.
In a short sale, an investor sells a borrowed security with a corresponding obligation to the lender to return the identical
security. In an investment technique known as a short sale "against-the-box," an investor sells short while owning the same
securities in the same amount, or having the right to obtain equivalent securities. The investor could have the right to obtain
equivalent securities, for example, through ownership of options or convertible securities.
As a result of NSMIA, the state restrictions regarding short sales no longer apply to the Fund. The Trustees recommend that
shareholders eliminate this fundamental investment policy in order to conform the Fund's policy with that of other Oppenheimer funds.
Elimination of this fundamental investment policy is unlikely to affect management of the Fund, and is not expected to
materially increase the risk of an investment in the Fund. A short sale is a form of leverage. Leverage exists when a fund has the
right to a return on an investment that exceeds the amount the fund contributed to the investment. The use of leverage exposes
shareholders and their investments in a fund to a greater risk of loss. For example, engaging in short sales may cause the value of
a fund's shares to be more volatile than if the fund did not engage in short selling. In addition, in a short sale, there is a risk
that the investor may have to buy the security later at a price higher than the sales price and incur a loss as a result.
Although the Fund would be permitted to sell securities short if shareholders approve this sub-proposal, the Fund would have to
segregate liquid assets to cover its obligation under any short sale. If the Fund's Manager and its Trustees believed that it was in
the best interests of the Fund to engage in short sales to a significant degree, the Fund's prospectus would have to be updated to
reflect that change in policy. Among other things, the prospectus would be updated to describe in detail the risks associated with
short sales, which are outlined above.
C. Purchasing Securities of Issuers in which Officers or Trustees Have An Interest.
The Fund is currently subject to a fundamental investment policy prohibiting it from purchasing or holding the securities of
an issuer if the officers and trustees of the Fund or the Manager individually beneficially own1/2of 1% of such securities and
together own more than 5% of such securities. It is proposed that the current fundamental policy be eliminated. The current
fundamental investment policy is set forth below.
Current Fundamental Policy
--------------------------
The Fund cannot invest in or hold securities of any issuer if officers and Trustees of the Fund or the
Manager individually beneficially own more than 1/2 of 1% of the securities of that issuer and together own
beneficially more than 5% of the securities of that issuer.
Elimination of this fundamental policy is unlikely to affect management of the Fund, and is not expected to materially
increase the risk of an investment in the Fund. This policy was originally adopted to address then existing state requirements in
connection with the registration of shares of the Fund for sale in a particular state or states. As a result of NSMIA, the state
restriction no longer applies to the Fund.
The Trustees recommend that shareholders eliminate this fundamental investment policy in order to conform the Fund's policy
in this area with that of other Oppenheimer funds. In addition, the Trustees believe that its elimination could increase the Fund's
flexibility when choosing investments in the future.
D. Real Estate.
The Fund is currently subject to a fundamental investment policy prohibiting it from purchasing real estate or physical
commodities. The Fund's policy regarding investments in real estate and commodities is required to be fundamental. Although this
policy does not prohibit the Fund from investing in hedging instruments or structured notes whose returns are linked to the returns
of physical commodities or currencies, the Fund's Trustees propose that the Fund's current fundamental policy be clarified and remain
a fundamental policy as indicated below.
Current Fundamental Policy Proposed Fundamental Policy
-------------------------- ---------------------------
The Fund cannot invest in real estate, physical The Fund cannot invest in real estate, physical commodities or
commodities or commodity contracts. commodity contracts, except to the extent permitted under the
1940 Act, the rules or regulations thereunder or any exemption
therefrom, as such statute, rules or regulations may be
amended or interpreted from time to time.
The existing and proposed policies permit the Fund to: (1) invest in debt securities secured by real estate or interests in
real estate, or issued by companies, including real estate investment trusts, that invest in real estate or interests in real estate;
(2) invest in hedging instruments permitted by any of its other investment policies; and (3) buy and sell options, futures,
securities or other instruments backed by, or the investment return of which is linked to changes in the price of physical
commodities or currencies. Therefore, amending the existing policy as proposed is not expected to increase the risk of an investment
in the Fund.
The purpose of this proposal is to clarify the Fund's permitted investments and to conform the Fund's policy in this area
with that of other Oppenheimer funds. The Trustees believe that standardized policies will assist the Fund and the Manager in
maintaining compliance with the various investment restrictions to which the Oppenheimer funds are subject.
E. Industry Concentration.
The Fund currently has a fundamental investment policy prohibiting it from "concentrating" its investments, that is,
investing "more than 25%" of its total assets in any one industry, excluding securities issued or guaranteed by the United States
government or its agencies and instrumentalities. Consistent with the SEC staff's interpretation of "concentration" under the 1940
Act, the Fund interprets this policy to apply to "25% or more" of its total assets rather than "more than 25%." The Fund's Trustees
propose that the Fund's industry concentration policy remain fundamental, but be amended to state that it applies to "25% or more" of
the Fund's total assets and to clarify that the policy does not apply to investments in securities issued by other mutual funds. The
Trustees believe that amending this policy as proposed will not affect management of the Fund. The current and proposed policies are
stated below.
Current Fundamental Policy Proposed Fundamental Policy
-------------------------- ---------------------------
The Fund cannot concentrate its investments to the The Fund cannot invest 25% or more of its total assets
extent of 25% of its total assets in any industry. in any one industry. That limit does not apply to
However, there is no limitation as to the Fund's securities issued or guaranteed by the U.S. government
investments in municipal securities or in obligations or its agencies and instrumentalities or securities
issued by the U.S. Government and its agencies or issued by investment companies. Nor does that limit
instrumentalities. The U.S. government and its apply to municipal securities in general.
agencies and instrumentalities are not considered to
be in an industry for the purposes of this restriction.
The purpose of this proposal is to clarify the Fund's fundamental policy on industry concentration and to conform the Fund's policy
in this area to one that is consistent with that of other Oppenheimer funds. The Trustees believe that standardized policies will
assist the Fund and the Manager in maintaining compliance with the various investment policies to which the Oppenheimer funds are
subject. If shareholders approve this proposal, the Fund would be permitted to enter into a fund-of-funds arrangement. The Fund does
not currently anticipate participating in a fund-of-funds arrangement.
F. Borrowing.
The 1940 Act imposes certain restrictions on the borrowing activities of mutual funds. A fund's borrowing policy must be a
fundamental investment policy.
The restrictions on borrowing are designed to protect mutual fund shareholders and their investments in a fund by limiting a
fund's ability to leverage its assets. Leverage exists when a fund has the right to a return on an investment that exceeds the amount
the fund contributed to the investment. Borrowing money to make an investment is an example of how a fund may leverage its assets.
A mutual fund may borrow money to meet redemptions in order to avoid forced, unplanned sales of portfolio securities. This
technique allows a fund greater flexibility to buy and sell portfolio securities for investment or tax considerations rather than for
cash flow considerations. Some mutual funds also borrow for investment purposes. The Fund currently does not borrow for investment
purposes. The Fund currently does borrow for investment purposes, which may cause the value of its shares to be more volatile than a
fund that does not borrow for investment purposes.
There are risks associated with borrowing. Borrowing exposes shareholders and their investments in a fund to a greater risk
of loss. For example, borrowing may cause the value of a fund's shares to be more volatile than if the fund did not borrow. In
addition, to the extent a fund borrows, it will pay interest on the money that it borrows, and that interest expense will raise the
overall expenses of the fund and reduce its returns. The interest payable on the borrowed amount may be more (or less) than the
return the fund receives from the securities purchased with the borrowed amount. Whether or not this sub-proposal is approved by
shareholders, the Fund currently does not anticipate that, under normal market conditions, its borrowings would exceed five (5)
percent of its net assets.
The Fund is currently subject to a fundamental investment policy concerning borrowing that is more restrictive than required
by the 1940 Act. The Trustees propose that the Fund's policy on borrowing be amended to permit the Fund to borrow as permitted under
the 1940 Act. As amended, the Fund's policy on borrowing would remain a fundamental policy changeable only by the vote of a majority
of the outstanding voting securities of the Fund as defined in the 1940 Act.
The current and proposed fundamental investment policies are set forth below. The current policy on borrowing requires the
Fund to borrow only from banks for temporary purposes, and limits the Fund's borrowing to 10% of its total assets. The Fund's current
policy also prohibits the Fund from borrowing for investment or leverage purposes. The Trustees propose that the current policy be
amended to permit the Fund to borrow as permitted under the 1940 Act. If this sub-proposal is approved by shareholders, the Fund
intends to borrow for leverage purposes.
Current Fundamental Policy Proposed Fundamental Policy
-------------------------- ---------------------------
The Fund cannot borrow money in excess of 10% of the The Fund may not borrow money, except to the extent
value of its total assets. The Fund may borrow only permitted under the 1940 act, the rules or regulations
from banks as a temporary measure for extraordinary or thereunder or any exemption therefrom that is applicable
emergency purposes, and not for the purpose of to the Fund, as such statute, rules or regulations may be
leveraging its investments. No assets of the Fund may amended or interpreted from time to time.
be pledged, mortgaged or otherwise encumbered,
transferred or assigned to secure a debt. However, the
use of escrow or other collateral arrangements in
connection with hedging instruments is permitted.
Currently, under the 1940 Act, a mutual fund may borrow only from banks and the maximum amount it may borrow is up to
one-third of its total assets (including the amount borrowed). A fund may borrow up to 5% of its total assets for temporary purposes
from any person. Under the 1940 Act, there is a rebuttable presumption that a loan is temporary if it is repaid within 60 days and
not extended or renewed. If shareholders approve this sub-proposal, the Fund's current fundamental policy will be replaced by the
proposed fundamental policy and the Fund's prospectus will be updated to describe the current restrictions regarding borrowing under
the 1940 Act, the rules and regulations thereunder and any exemptions applicable to the Fund.
If this sub-proposal and the lending sub-proposal described below in Paragraph G ("Lending") are approved by shareholders,
and the Fund were to obtain the necessary regulatory relief, it would be possible for the Fund to borrow from and lend to other
Oppenheimer funds whose policies permit such activity and that have obtained the necessary regulatory relief as well. If all of the
pre-conditions noted in the preceding sentence were satisfied and the Fund's Trustees were to determine that it was in the Fund's
best interest to borrow from or lend to other Oppenheimer funds, the Fund's prospectus would be updated to reflect such a practice.
G. Lending.
Under the 1940 Act, a fund's policy regarding lending must be fundamental. It is proposed that the current fundamental
policy be replaced by a revised fundamental policy that permits the Fund to engage in lending to the extent the Fund's lending is
consistent with the 1940 Act, the rules thereunder or any exemption from the 1940 Act that is applicable to the Fund. In addition,
the Fund also proposes to clearly state that investments in debt instruments or other similar evidences of indebtedness are not
prohibited by the Fund's investment policy on making loans.
Current Fundamental Policy Proposed Fundamental Policy
-------------------------- ---------------------------
The Fund cannot borrow money in excess of 10% of The Fund cannot make loans, except to the extent
the value of its total assets. The Fund may borrow permitted under the 1940 Act, the rules or regulations
only from banks as a temporary measure for thereunder or any exemption therefrom that is
extraordinary or emergency purposes, and not for applicable to the Fund, as such statute, rules or
the purpose of leveraging its investments. No regulations may be amended or interpreted from time to
assets of the Fund may be pledged, mortgaged or time.
otherwise encumbered, transferred or assigned to
secure a debt. However, the use of escrow or other
collateral arrangements in connection with hedging
instruments is permitted.
H. Diversification
Under the 1940 Act, a fund's policy regarding diversification may not be changed without shareholder approval. Currently,
the Fund cannot buy securities of any one issue if more than 5% of its total assets would be invested in securities of that issuer or
if it would then own more than 10% of that issuer's voting securities. The limit does not apply to securities issued by the U.S.
government or any of its agencies or instrumentalities. The Trustees propose that the Fund's policy with respect to diversification
be amended to clarify that the policy does not apply to securities of other investment companies.
The proposed change would not affect the Fund's status as a "diversified" fund. This change would be consistent with the
requirements of the 1940 Act and would promote the standardization of fundamental investment policies among the funds in the
OppenheimerFunds complex.
As amended, the policy on diversification for the Fund would remain a fundamental policy changeable by the vote of a
majority of the outstanding voting securities as defined in the 1940 Act. The current and proposed fundamental investment policies
are set forth below.
Current Fundamental Policy Proposed Fundamental Policy
-------------------------- ---------------------------
The Fund cannot invest more than 5% of the value of The Fund cannot buy securities or other instruments
its total assets in the securities of any one issuer. issued or guaranteed by any one issuer if more than 5% of
The Fund cannot acquire more than 10% of the total its total assets would be invested in securities or other
value of all outstanding securities of any one issuer. instruments of that issuer or if it would then own more
In both cases, this restriction does not apply to than 10% of that issuer's voting securities. This
securities of the U.S. government or its agencies or limitation applies to 75% of the Fund's total assets. The
instrumentalities. limit does not apply to securities issued or guaranteed
by the U.S. Government or any of its agencies or
instrumentalities or securities of other investment
companies.
The proposed policy would permit the Fund to enter into a fund-of-funds arrangement as previously discussed above in Paragraph J
("Investing in Other Investment Companies"), including the risks associated with a fund-of-funds arrangement. The Trustees believe
that amending the Fund's diversification policy as proposed would increase the Fund's investment opportunities without materially
increasing the risk of an investment in the Fund.
I. Purchasing Restricted Securities
The Fund is currently subject to a fundamental investment policy concerning the purchase of restricted securities. It is proposed
that the current fundamental policy be eliminated and replaced by a non-fundamental policy that can be changed by the Trustees in the
future without shareholder approval. The current and proposed investment policies are set forth below.
Current Fundamental Policy Proposed Non-Fundamental Policy
-------------------------- -------------------------------
The Fund cannot underwrite securities or invest in The Fund cannot invest more than 10% of its net assets in
securities that are subject to restriction on resale. illiquid or restricted securities (including repurchase
agreements maturing beyond seven (7) days).
The existing policy is not required to be a fundamental policy under the 1940 Act, and the Trustees recommend that the
Fund's current fundamental policy be replaced with the proposed non-fundamental policy in order to provide the fund with maximum
flexibility consistent with current regulatory requirements. The staff of the SEC currently takes the position that a non-money
market fund, such as the Fund, is required to limit its investments in illiquid assets (including repurchase agreements maturing
beyond seven (7) days) to 15% of net assets. The purpose of limiting a fund's investments in illiquid securities is to ensure that
the fund is able to satisfy redemption requests in accordance with its obligations under the 1940 Act.
The proposed non-fundamental policy is more conservative than current regulatory requirements. The proposed non-fundamental
policy is intended to conform the Fund's policy in this area to one that is consistent with that of other Oppenheimer funds. The
Trustees believe that standardized policies will assist the Fund and the Manager in maintaining compliance with various investment
restrictions to which the Fund is subject. The recommended change is not expected to increase the risk of an investment in the Fund.
J. Investing in Other Investment Companies.
The Fund is currently subject to a fundamental investment policy limiting its investment in securities of other investment
companies. It is proposed that the current fundamental policy be eliminated and replaced with a revised non-fundamental policy that
can be changed in the future without shareholder approval. The current and proposed investment policies are set forth below.
Current Fundamental Policy Proposed Non-Fundamental Policy
-------------------------- -------------------------------
The fund cannot invest in securities of any other The Fund cannot invest in securities of other investment
investment company, except in connection with a merger companies, except to the extent permitted under the 1940
with another investment company Act, the rules or regulations thereunder or any exemption
therefrom, as such statute, rules or regulations may be
amended or interpreted from time to time.
The existing policy is not required to be fundamental under the 1940 Act. The purpose of this proposal is to provide the Fund with
the maximum flexibility permitted by law to pursue its investment objective.
The ability of the Fund to invest in other mutual funds is restricted by Section 12(d)(1) of the 1940 Act. NSMIA amended
Section 12 to permit mutual funds to enter into so-called fund-of -funds or master/feeder arrangements with other mutual funds in a
fund complex, and granted the SEC broad powers to provide exemptive relief for these purposes. The Fund is a party to an exemptive
order from the SEC permitting it to enter into a fund-of-funds arrangement with other affiliated funds. Elimination of this
fundamental investment policy is necessary to permit the Fund to take advantage of the exemptive relief. However, the Fund does not
currently anticipate participating in a fund-of-funds arrangement. Although it may do so in the future should shareholders approve
this proposal, the Fund's prospectus would have to be updated to reflect such a change in policy.
An investment in another mutual fund may result in the duplication of expenses. Should the Trustees determine in the future
that the Fund's participation in fund-of-funds arrangement is in the best interests of the Fund, the Trustees would consider and take
steps to mitigate the potential for duplication of fees in determining whether the Fund's participation in such an arrangement is
suitable for the Fund and its shareholders.
THE BOARD OF TRUSTEES UNANIMOUSLY RECOMMENDS
THAT YOU APPROVE EACH SUB-PROPOSAL DESCRIBED ABOVE
Introduction to Proposal 3
What is a Declaration of Trust?
The Fund, like other mutual funds, is subject to comprehensive federal regulation, particularly under the 1940 Act.
Additionally, like other mutual funds, governance of the Fund is subject to the law of the state in which the Fund is organized. The
Fund is organized as a Massachusetts business trust, and therefore is subject to Massachusetts law as it applies to Massachusetts
business trusts.
Under Massachusetts law, a business trust generally operates under an organizational document known as a declaration of
trust, which sets forth various provisions related to governance of the trust and the authority of the trust to conduct its
business. As a Massachusetts business trust, the Fund is governed by a declaration of trust.
The Board of Trustees has approved an Amended and Restated Declaration of Trust for the Fund in the form attached to this
Proxy Statement as Exhibit A ("New Declaration of Trust"), and unanimously recommends that the shareholders of the Fund authorize the
Trustees to adopt the New Declaration of Trust. Adoption of the New Declaration of Trust will not result in any changes in the
Fund's Trustees or officers or in the investment policies and shareholder services described in the Fund's current prospectus.
Generally, shareholder approval is required to amend the existing Declaration of Trust ("Current Declaration of Trust"). As
a result, the Trustees approved the form of the New Declaration of Trust and recommended the submission of the New Declaration of
Trust to the Fund's shareholders for their authorization at this Meeting.
Why do the Fund's Trustees Recommend Approval of the New Declaration of Trust?
The New Declaration of Trust is a more modern form of trust instrument for a Massachusetts business trust, and going
forward, will be used as the standard Declaration of Trust for all new Oppenheimer funds organized as Massachusetts business trusts.
The Trustees believe adoption of the New Declaration of Trust will result in more efficient and economical governance of the Fund.
The New Declaration of Trust provides the Trustees with more flexibility and broader authority than under the Current
Declaration of Trust. This increased flexibility is intended to allow the Trustees to react more quickly to changes in competitive
and regulatory conditions, and as a consequence, may allow the Fund to operate in a more efficient and economical manner. Although
the New Declaration of Trust reduces or removes certain shareholder voting and other rights as more fully discussed below, adoption
of the New Declaration of Trust will not affect any of the protections afforded to shareholders under federal law.
Furthermore, adoption of the New Declaration of Trust would not alter the Trustees' existing fiduciary obligations to act
with due care and in the shareholders' best interests. Before utilizing any new flexibility that the New Declaration of Trust would
afford, the Trustees would first have to consider the shareholders' interests and then act in accordance with those interests.
PROPOSAL 3: TO AUTHORIZE THE TRUSTEES TO ADOPT
AN AMENDED AND RESTATED DECLARATION OF TRUST
Proposed Changes to the Current Declaration of Trust.
The New Declaration of Trust would amend the Current Declaration of Trust in a number of ways. The significant amendments
are submitted for a separate vote by shareholders and are set forth as Proposals 3.A., 3.B., AND 3.C. The remaining changes will be
voted on as a single proposal, 3.D. If one or more of the Proposals is not approved by shareholders, the Trustees will not include
those Proposals in the New Declaration of Trust.
In addition to the changes described below, there are other differences between the New Declaration of Trust and the Current
Declaration of Trust that the Trustees believe are non-material. The following discussion is qualified in its entirety by reference
to the New Declaration of Trust itself, which is attached as Exhibit A to this Proxy Statement.
A. Future Amendments of the Declaration of Trust.
The Current Declaration of Trust generally gives shareholders the exclusive power to amend the Declaration of Trust with
certain limited exceptions. The New Declaration of Trust, on the other hand, would permit the Trustees to amend the Declaration of
Trust without shareholder approval with certain exceptions.
Under the New Declaration of Trust, shareholders generally would have the right to vote on any amendment affecting
shareholders' right to vote, the New Declaration of Trust's amendment provisions, shareholders' rights to indemnification and
shareholders' rights to vote on the merger or sale of the Fund's, series', or class's assets to another operating mutual fund.
By allowing amendment of the Declaration of Trust without shareholder approval, the New Declaration of Trust would give the
Trustees the authority to react quickly to changes in competitive and regulatory conditions, and as a result, may allow the Fund to
operate in a more efficient and economical manner. As noted above, such increased authority would remain subordinate to the Trustees'
continuing fiduciary obligations to act with due care and in the shareholders' interest.
B. Reorganization of the Trust or its Series or Classes.
Unlike the Current Declaration of Trust, the New Declaration of Trust generally would permit the Trustees, subject to
applicable federal and state law, to reorganize the Fund or any of its series or classes into a newly formed entity without
shareholder approval. The Current Declaration of Trust requires shareholder approval in order to reorganize the Fund or any of its
series or classes. Currently, the Fund is the sole series of the Massachusetts business trust.
Under certain circumstances, it may not be in the shareholders' interests, due to the costs involved, to require a
shareholder meeting to permit the Fund or a series of the Fund to reorganize into a newly formed entity. For example, in order to
reduce the cost and scope of state regulatory constraints or to take advantage of a more favorable tax treatment offered by another
state, the Trustees may determine that it would be in the shareholders' interests to change its legal form or to reorganize the Fund
or a series of the Fund so that it is domiciled in another state. Under the Current Declaration of Trust, the Trustees cannot
effectuate such a potentially beneficial reorganization without first conducting a shareholder meeting and incurring the attendant
costs and delays.
In contrast, the New Declaration of Trust would give the Trustees the flexibility to reorganize the Fund or any of its
series into a newly formed entity and achieve potential shareholder benefits without incurring the delay and costs of a proxy
solicitation. Such flexibility should help to assure that the Fund operates under the most appropriate form of organization.
Nonetheless, the Trustees have no intention of reorganizing the Fund into a newly formed entity at this time, and before
allowing a reorganization to proceed without shareholder approval, the Trustees would have a fiduciary responsibility to first
determine that the proposed transaction is in the shareholders' interest. Any exercise of the Trustees' increased authority under the
New Declaration of Trust is subject to applicable requirements of the 1940 Act and Massachusetts law. Of course, in all cases, the
New Declaration of Trust would require that shareholders receive written notification of any reorganization.
The New Declaration of Trust would not give the Trustees the authority to merge the Fund or a series of the Fund with
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another operating mutual fund or sell all or a portion of the assets of the Fund or a series to another operating mutual fund without
first seeking shareholder approval. Under the New Declaration of Trust, shareholder approval would still be required for those
transactions.
C. Involuntary Redemptions.
The New Declaration of Trust would clarify that the Fund may redeem shares of a class or series held by a shareholder for
any reason, including but not limited to the following: reimbursing the Fund or the Fund's distributor for the shareholder's failure
to make timely and good payment for shares of the Fund; failure to supply a tax identification number required to establish an
account; pursuant to authorization by a shareholder to pay fees or make other payments to third parties; failure to maintain a
minimum account balance as established by the Trustees from time to time in order to promote administrative efficiencies and cost
savings for the Fund; or adverse tax or other legal consequences to the Fund or the other shareholders as a result of the existence
or nature of a shareholder's interest in the Fund.
The Current Declaration of Trust also permits the Trustees to involuntarily redeem shares, but in more limited
circumstances. Although the Trustees are authorized to involuntarily redeem shares without prior notice under both the Current
Declaration of Trust and the New Declaration Trust, the Fund generally would provide prior notice of any plan to involuntarily redeem
shares absent extraordinary circumstances.
Of course, the exercise of the power granted to the Trustees under either the Current Declaration of Trust or the New
Declaration Trust to involuntarily redeem shares would be subject to the Trustees' fiduciary obligation to the shareholders and any
applicable provisions under the 1940 Act and the rules adopted thereunder. The staff of the Securities and Exchange Commission takes
the position that the 1940 Act generally prohibits involuntary redemptions. However, in limited circumstances, the staff has granted
enforcement no-action relief for involuntary redemptions.
D. Other Changes Under the New Declaration of Trust.
In addition to the changes described above, the New Declaration of Trust would modify the Current Declaration of Trust in a
number of important ways, including, but not limited to, the following.
a. The New Declaration of Trust would clarify that no shareholders of any series or class shall have a claim on the assets of
another series or class.
b. As a general matter, the New Declaration of Trust would modify the Current Declaration of Trust to incorporate appropriate
references to classes of shares.
c. The New Declaration of Trust would modify the Current Declaration of Trust by changing the par value of the Trust's shares
from no par value to $.001 par value.
d. The New Declaration of Trust would modify the Current Declaration of Trust by giving the Trustees the power to effect a
reverse stock split, and to make distributions in-kind.
e. The New Declaration of Trust would modify the Current Declaration of Trust so that all shares of all series vote together on
issues to be voted on unless (i) separate series or class voting is otherwise required by the 1940 Act or the
instrument establishing such Shares, in which case the provisions of the 1940 Act or such instrument, as
applicable, will control, or (ii) the issue to be voted on affects only particular series or classes, in which
case only the series or classes affected will be entitled to vote.
f. The New Declaration of Trust would clarify that proxies may be voted pursuant to any computerized, telephonic or electronic
means, that shareholders receive one vote per share and a proportional fractional vote for each fractional
share, and that, at a meeting, shareholders may vote on issues with respect to which a quorum is present, while
adjourning with respect to issues for which a quorum is not present.
g. The New Declaration of Trust would clarify various existing trustee powers. For example, the New Declaration of Trust
clarifies that the Trustees may: appoint and terminate agents and consultants and hire and terminate employees;
in addition to banks and trust companies, the Trustees may employ as fund custodian, companies that are members
of a national securities exchange or other entities permitted under the 1940 Act; retain one or more transfer
agents and employ sub-agents; delegate authority to investment advisors and other agents or independent
contractors; pledge, mortgage or hypothecate the assets of the Trust; operate and carry on the business of an
investment company; the Trustees may sue or be sued in the name of the Trust; make loans of cash and/or
securities; enter into joint ventures, general or limited partnerships and other combinations or associations;
endorse or guarantee the payment of any notes or other obligations of any person or make contracts of guarantee
or suretyship or otherwise assume liability for payment; purchase insurance and/or bonding; pay pensions and
adopt retirement, incentive and benefit plans; and adopt 12b-1 plans (subject to shareholder approval).
h. The New Declaration of Trust would clarify that a trust is created and not a partnership, joint stock association,
corporation, bailment, or any other form of legal relationship, and expressly disclaims shareholder and Trustee
liability for the acts and obligations of the Trust. Both the Current Declaration of Trust and the New
Declaration of Trust provide that neither the shareholders nor the Trustees shall be liable for obligations of
the Fund. The express disclaimer of shareholder and Trustee liability for obligations of the Fund in the New
Declaration of Trust is intended solely to clarify that provision. In addition, as required by the 1940 Act,
both the Current Declaration of Trust and the New Declaration of Trust provide that nothing in them shall
protect an officer or Trustee of the Fund from liability related to their willful misfeasance, bad faith, gross
negligence or reckless disregard for their duties.
i. The New Declaration of Trust would clarify that the Trustees shall not be responsible or liable for any neglect or
wrongdoing of any officer, agent, employee, consultant, adviser, administrator, distributor or principal
underwriter, custodian or transfer agent of the Trust nor shall a Trustee be responsible for the act or
omission of any other Trustee. As previously noted, both the Current Declaration of Trust and the New
Declaration of Trust provide that nothing in them shall protect an officer or Trustee of the Fund from
liability related to their willful misfeasance, bad faith, gross negligence or reckless disregard for their
duties.
A vote in favor of this proposal will authorize the Trustees to adopt all of the other changes to the New Declaration of
Trust, except those specifically set forth in Proposals 3.A-3.C. upon which shareholders are voting separately.
THE BOARD OF TRUSTEES UNANIMOUSLY RECOMMENDS
THAT YOU APPROVE EACH SUB-PROPOSAL DESCRIBED ABOVE
INFORMATION ABOUT THE FUND
CORPORATE PROJECTS PREPARES THIS INFORMATION AUTOMATICALLY BASED ON THE PROXY TIMELINE SCHEDULE. IF YOU DO NOT RECEIVE TIMELY,
CONTACT ROBIN LUCAS 8-2977, RHONDA ROHRER 8-4457 OR ELLEN PENNER 8-1732
Fund Information. As of the close of business on RECORD DATE August 26, 2002, the Fund had ____________________ shares outstanding,
consisting of _______________________ Class A, ________________ Class B and _______________ Class C. Each share has voting rights as
stated in this Proxy Statement and is entitled to one vote for each share (and a fractional vote for a fractional share).
Beneficial Owners. Occasionally, the number of shares of the Fund held in "street name" accounts of various securities dealers for
the benefit of their clients as well as the number of shares held by other shareholders of record may exceed 5% of the total shares
outstanding. As of August 26, 2002, the only persons who owned of record or were known by the Fund to own beneficially 5% or more of
any class of the Fund's outstanding shares were:
The Manager, the Distributor and the Transfer Agent. Subject to the authority of the Board of Trustees, the Manager is responsible
for the day-to-day management of the Fund's business pursuant to its investment advisory agreement with the Fund. OppenheimerFunds
Distributor, Inc. (the "Distributor"), a wholly owned subsidiary of the Manager, is the general distributor of the Fund's shares.
OppenheimerFunds Services, a division of the Manager, located at 6803 South Tucson Way, Englewood, CO 80112, serves as the transfer
and shareholder servicing agent (the "Transfer Agent") for the Fund, for which it was paid $345,079 by the Fund during the fiscal
year ended July 31, 2002.
The Manager (including affiliates and subsidiaries) managed assets of more than $130 billion at June 30, 2002, including more than 65
funds having more than 6.3 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 498 Seventh Avenue, New York, New York 10018. 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 December 31, 2001, MassMutual held (i) all of the 21,600,000 shares of
Class A voting stock, (ii) 12,642,025 shares of Class B voting stock, and (iii) 21,178,801 shares of Class C non-voting stock. This
collectively represented 95.35% of the outstanding common stock and 96.46% of the voting power of OAC as of that date. Certain
officers and/or directors of the Manager held (i) 884,810 shares of the Class B voting stock, representing 1.52% of the outstanding
common stock and 2.49% of the voting power, (ii) 537,090 shares of Class C non-voting stock, and (iii) options acquired without cash
payment which, when they become exercisable, allow the holders to purchase up to 8,395,700 shares of Class C non-voting stock. That
group includes persons who serve as officers of the Fund and John V. Murphy, who serves as a Trustee of the Fund.
Holders of OAC Class B and Class C common stock may put (sell) their shares and vested options to OAC or MassMutual at a formula
price (based on, among other things, the revenue, income, working capital, and excess cash 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.
There were no transactions by a person who serves as a Trustee of the Fund during the period June 30, 2000 to December 31, 2001.
During that period, Mr. Swain sold 93,000 Class B shares to MassMutual for a cash payment of $4,278,930 and surrendered for
cancellation 203,423 options to MassMutual for combined cash payments of $8,759,036. During the period, Mr. Bowen sold 11,420 Class
B shares to MassMutual for a cash payment of $357,789 and surrendered for cancellation 237,640 options to MassMutual for combined
cash payments of $1,978,140.
The names and principal occupations of the executive officers and directors of the Manager are as follows: John Murphy, Chairman,
President, Chief Executive Officer and a director; Jeremy Griffiths, Executive Vice President, Chief Financial Officer and a
director; O. Leonard Darling, Vice Chairman, Executive Vice President, Chief Investment Officer and a director; George Batejan,
Executive Vice President and Chief Information Officer; Robert G. Zack, Senior Vice President and General Counsel; Craig Dinsell,
James Ruff and Andrew Ruotolo, Executive Vice Presidents; Brian W. Wixted, Senior Vice President and Treasurer; and Charles Albers,
Victor Babin, Bruce Bartlett, Robert A. Densen, Ronald H. Fielding, P. Lyman Foster, Robert B. Grill, Robert Guy, Steve Ilnitzki,
Lynn Oberist Keeshan, Thomas W. Keffer, Avram Kornberg, Chris Leavy, Angelo Manioudakis, Andrew J. Mika, David Negri, David
Robertson, Richard Rubinstein, Arthur Steinmetz, John Stoma, Jerry A. Webman, William L. Wilby, Donna Winn, Kenneth Winston, Carol
Wolf, Kurt Wolfgruber and Arthur J. Zimmer, Senior Vice Presidents. These officers are located at one of the three offices of the
Manager: 498 Seventh Avenue, New York, NY 10018; 6803 South Tucson Way, Englewood, CO 80112; and 350 Linden Oaks, Rochester, NY
14625-2807.
Custodian. Citibank, N.A., 399 Park Avenue, New York, NY 10043, acts as custodian of the Fund's securities and other assets.
Reports to Shareholders and Financial Statements. The Annual Report to Shareholders of the Fund, including financial statements of
the Fund for the fiscal year ended July 31, 2002, has previously been sent to shareholders. The Semi-Annual Report to Shareholders of
the Fund as of January 31, 2002 also has previously been sent to shareholders. Upon request, shareholders may obtain without charge a
copy of the Annual Report and Semi-Annual Report by writing the Fund at the address above, or calling the Fund at 1.800.708.7780 or
visiting the Manager's website at www.oppenheimerfunds.com. The Fund's transfer agent will provide a copy of the reports promptly
upon request.
To avoid sending duplicate copies of materials to households, the Fund mails only one copy of each annual and semi-annual report to
shareholders having the same last name and address on the Fund's records. The consolidation of these mailings, called householding,
benefits the Fund through reduced mailing expenses.
If you want to receive multiple copies of these materials or request householding in the future, you may call the Transfer Agent at
1.800.708.7780. You may also notify the Transfer Agent in writing. Individual copies of prospectuses and reports will be sent to you
within 30 days after the Transfer Agent receives your request to stop householding.
FURTHER INFORMATION ABOUT VOTING AND THE MEETING
Solicitation of Proxies. The cost of preparing, printing and mailing the proxy ballot, notice of meeting, and this Proxy Statement
and all other costs incurred with the solicitation of proxies, including any additional solicitation by letter, telephone or
otherwise, will be paid by the Fund. In addition to solicitations by mail, officers of the Fund or officers and employees of the
Transfer Agent, without extra compensation, may conduct additional solicitations personally or by telephone.
Proxies also may be solicited by a proxy solicitation firm hired at the Fund's expense to assist in the solicitation of proxies.
Currently, if the Fund determines to retain the services of a proxy solicitation firm, the Fund anticipates retaining Alamo Direct
Mail Services, Inc. Any proxy solicitation firm engaged by the Fund, among other things, will be: (i) required to maintain the
confidentiality of all shareholder information; (ii) prohibited from selling or otherwise disclosing to any third party shareholder
information; and (iii) required to comply with applicable state telemarketing laws.
If the Fund does engage a proxy solicitation firm, as the Meeting date approaches, certain shareholders of the Fund may receive
telephone calls from a representative of the solicitation firm if their vote has not yet been received. Authorization to permit the
solicitation firm to execute proxies may be obtained by telephonic instructions from shareholders of the Fund. Proxies that are
obtained telephonically will be recorded in accordance with the procedures set forth below. These procedures have been designed to
reasonably ensure that the identity of the shareholder providing voting instructions is accurately determined and that the voting
instructions of the shareholder are accurately recorded.
In all cases where a telephonic proxy is solicited, the solicitation firm representative is required to ask for each shareholder's
full name, address, the last four digits of the shareholder's social security or employer identification number, title (if the
shareholder is authorized to act on behalf of an entity, such as a corporation) and to confirm that the shareholder has received the
Proxy Statement and ballot in the mail. If the information solicited agrees with the information provided to the solicitation firm,
the solicitation firm representative has the responsibility to explain the process, read the proposals listed on the proxy ballot,
and ask for the shareholder's instructions on such proposals. The solicitation firm representative, although he or she is permitted
to answer questions about the process, is not permitted to recommend to the shareholder how to vote. The solicitation firm
representative may read any recommendation set forth in the Proxy Statement. The solicitation firm representative will record the
shareholder's instructions. Within 72 hours, the shareholder will be sent a confirmation of his or her vote asking the shareholder
to call the solicitation firm immediately if his or her instructions are not correctly reflected in the confirmation.
It is anticipated the cost of engaging a proxy solicitation firm would not exceed plus the additional out-of-pocket costs, that may
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be substantial, incurred in connection with contacting those shareholders that have not voted. 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 expenses.
If the shareholder wishes to participate in the Meeting, but does not wish to give his or her proxy telephonically, the shareholder
may still submit the proxy ballot originally sent with the Proxy Statement in the postage paid envelope provided or attend in
person. Should shareholders require additional information regarding the proxy ballot or a replacement proxy ballot, they may
contact us toll-free at 1.800.708.7780. Any proxy given by a shareholder, whether in writing or by telephone, is revocable as
described below under the paragraph entitled "Revoking a Proxy."
Please take a few moments to complete your proxy ballot promptly. You may provide your completed proxy ballot via facsimile,
telephonically or by mailing the proxy ballot in the postage paid envelope provided. You also may cast your vote by attending the
Meeting in person if you are a record owner.
Telephone Voting. The Fund has arranged to have votes recorded by telephone. Shareholders must enter a unique control number found
on their respective proxy ballots before providing voting instructions by telephone. After a shareholder provides his or her voting
instructions, those instructions are read back to the shareholder and the shareholder must confirm his or her voting instructions
before disconnecting the telephone call. The voting procedures used in connection with telephone voting are designed to reasonably
authenticate the identity of shareholders, to permit shareholders to authorize the voting of their shares in accordance with their
instructions and to confirm that their instructions have been properly recorded.
Voting By Broker-Dealers. Shares owned of record by a broker-dealer for the benefit of its customers ("street account shares") will
be voted by the broker-dealer based on instructions received from its customers. If no instructions are received, the broker-dealer
may (if permitted by applicable stock exchange rules) vote, as record holder of such shares, for the election of Trustees and on the
Proposals in the same proportion as that broker-dealer votes street account shares for which it has received voting instructions in
time to be voted. Beneficial owners of street account shares cannot vote in person at the meeting. Only record owners may vote in
person at the meeting.
A "broker non-vote" is deemed to exist when a proxy received from a broker indicates that the broker does not have discretionary
authority to vote the shares on that matter. Abstentions and broker non-votes will have the same effect as a vote against the
proposal.
Quorum. A majority of the shares outstanding and entitled to vote, present in person or represented by proxy, constitutes a quorum at
the Meeting. Shares over which broker-dealers have discretionary voting power, shares that represent broker non-votes and shares
whose proxies reflect an abstention on any item are all counted as shares present and entitled to vote for purposes of determining
whether the required quorum of shares exists.
Required Vote. Persons nominated as Trustees must receive a plurality of the votes cast, which means that the eleven (11) nominees
receiving the highest number of affirmative votes cast at the Meeting will be elected as long as the votes FOR a nominee exceed the
votes AGAINST that nominee. Approval of Proposals 2 through 3 requires the affirmative vote of a "majority of the outstanding voting
securities" (as defined in the 1940 Act) of the Fund voting in the aggregate and not by class. As defined in the 1940 Act, the vote
of a majority of the outstanding shares means the vote of (1) 67% or more of the Fund's outstanding shares present at a meeting, if
the holders of more than 50% of the outstanding shares of the Fund are present or represented by proxy; or (2) more than 50% of the
Fund's outstanding shares, whichever is less.
How are votes counted? The individuals named as proxies on the proxy ballots (or their substitutes) will vote according to your
directions if your proxy ballot is received and properly executed, or in accordance with the instructions you provide if you vote by
telephone. You may direct the proxy holders to vote your shares on a proposal by checking the appropriate box "FOR" or "AGAINST," or
instruct them not to vote those shares on the proposal by checking the "ABSTAIN" box. Alternatively, you may simply sign, date and
return your proxy ballot with no specific instructions as to the proposals. If you properly execute and return a proxy ballot but
fail to indicate how the votes should be cast, the proxy ballot will be voted in favor of the election of each of the nominees named
in this Proxy Statement for Trustee and in favor of each Proposal.
Shares of the Fund may be held by certain institutional investors for the benefit of their clients. If the institutional investor
does not timely receive voting instructions from its clients with respect to such Shares, the institutional investor may be
authorized to vote such Shares, as well as Shares the institutional investor itself owns, in the same proportion as Shares for which
voting instructions from clients are timely received.
Revoking a Proxy. You may revoke a previously granted proxy at any time before it is exercised by (1) delivering a written notice to
the Fund expressly revoking your proxy, (2) signing and forwarding to the Fund a later-dated proxy, or (3) attending the Meeting and
casting your votes in person if you are a record owner. Granted proxies typically will be voted at the final meeting, but may be
voted at an adjourned meeting if appropriate. Please be advised that the deadline for revoking your proxy by telephone is 3:00 p.m.
(ET) on the last business day before the Meeting.
Shareholder Proposals. The Fund is not required and does not intend to hold shareholder meetings on a regular basis. Special meetings
of shareholders may be called from time to time by either the Fund or the shareholders (for certain matters and under special
conditions described in the Statement of Additional Information). Under the proxy rules of the SEC, shareholder proposals that meet
certain conditions may be included in a fund's proxy statement for a particular meeting. Those rules currently require that for
future meetings, the shareholder must be a record or beneficial owner of Fund shares either (i) with a value of at least $2,000 or
(ii) in an amount representing at least 1% of the fund's securities to be voted, at the time the proposal is submitted and for one
year prior thereto, and must continue to own such shares through the date on which the meeting is held. Another requirement relates
to the timely receipt by the fund of any such proposal. Under those rules, a proposal must have been submitted a reasonable time
before the Fund began to print and mail this Proxy Statement in order to be included in this Proxy Statement. A proposal submitted
for inclusion in the Fund's proxy material for the next special meeting after the meeting to which this Proxy Statement relates must
be received by the Fund a reasonable time before the Fund begins to print and mail the proxy materials for that meeting. Notice of
shareholder proposals to be presented at the Meeting must have been received within a reasonable time before the Fund began to mail
this Proxy Statement. 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 because there are other requirements under the proxy rules for such inclusion.
OTHER MATTERS
The Trustees do not intend to bring any matters before the Meeting other than Proposals 1 through 3 and the Trustees and the
Manager are not aware of any other matters to be brought before the Meeting by others. Because 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 (or their substitutes) to vote the proxy in accordance with their judgment on such matters.
In the event a quorum is not present or sufficient votes in favor of one or more Proposals set forth in the Notice of
Meeting of Shareholders are not received by the date of the Meeting, the persons named in the enclosed proxy (or their substitutes)
may propose and approve one or more adjournments of the Meeting to permit further solicitation of proxies. All such adjournments will
require the affirmative vote of a majority of the shares present in person or by proxy at the session of the Meeting to be adjourned.
The persons named as proxies on the proxy ballots (or their substitutes) will vote the Shares present in person or by proxy
(including broker non-votes and abstentions) in favor of such an adjournment if they determine additional solicitation is warranted
and in the interests of the Fund's shareholders. A vote may be taken on one or more of the proposals in this proxy statement prior to
any such adjournment if a quorum is present, sufficient votes for its approval have been received and it is otherwise appropriate.
By Order of the Board of Trustees,
Robert G. Zack, Secretary
September 17, 2002
EXHIBIT A
AMENDED AND RESTATED
DECLARATION OF TRUST
OF
OPPENHEIMER MUNICIPAL BOND FUND
(formerly "Oppenheimer Tax-Free Bond Fund")
This AMENDED AND RESTATED DECLARATION OF TRUST, made as of November 22, 2002, by and among the individuals executing this
Amended and Restated Declaration of Trust as the Trustees.
WHEREAS, the Trustees established Oppenheimer Tax-Free Bond Fund (the "Trust") as a trust fund under the laws of the
Commonwealth of Massachusetts, for the investment and reinvestment of funds contributed thereto, under a Declaration of Trust dated
February 25, 1987, as amended by Amended and Restated Declarations of Trust dated March 11, 1993, August 21, 1995 and September 16,
1996.
WHEREAS, the Trustees desire to make certain permitted changes to said Declaration of Trust;
WHEREAS, the Trustees desire to further amend such Declaration of Trust, as amended, without shareholder approval, as
permitted under ARTICLE SEVENTH, to change the name of the Trust and its series;
NOW, THEREFORE, the Trustees declare that all money and property contributed to the trust fund hereunder shall henceforth be
held and managed under this Amended and Restated Declaration of Trust IN TRUST as herein set forth below.
FIRST: This Trust shall be known as OPPENHEIMER MUNICIPAL BOND FUND. The address of Oppenheimer Municipal Bond Fund is
6803 South Tucson Way, Englewood, CO 80112. The Registered Agent for Service is CT Corporation System, 101 Federal Street, Boston,
MA 02110.
SECOND: Whenever used herein, unless otherwise required by the context or specifically provided:
1. All terms used in this Declaration of Trust that are defined in the 1940 Act (defined below) shall have the meanings
given to them in the 1940 Act.
2. "Board" or "Board of Trustees" or the "Trustees" means the Board of Trustees of the Trust.
3. "By-Laws" means the By-Laws of the Trust as amended from time to time.
4. "Class" means a class of a series of Shares of the Trust established and designated under or in accordance with the
provisions of Article FOURTH.
5. "Commission" means the Securities and Exchange Commission.
6. "Declaration of Trust" shall mean this Amended and Restated Declaration of Trust as it may be amended or restated
from time to time.
7. The "1940 Act" refers to the Investment Company Act of 1940 and the Rules and Regulations of the Commission
thereunder, all as amended from time to time.
8. "Series" refers to series of Shares of the Trust established and designated under or in accordance with the
provisions of Article FOURTH.
9. "Shareholder" means a record owner of Shares of the Trust.
10. "Shares" refers to the transferable units of interest into which the beneficial interest in the Trust or any Series
or Class of the Trust (as the context may require) shall be divided from time to time and includes fractions of Shares as well as
whole Shares.
11. The "Trust" refers to the Massachusetts business trust created by this Declaration of Trust, as amended or restated
from time to time.
12. "Trustees" refers to the individual trustees in their capacity as trustees hereunder of the Trust and their
successor or successors for the time being in office as such trustees.
THIRD: The purpose or purposes for which the Trust is formed and the business or objects to be transacted, carried on and
promoted by it are as follows:
1. To hold, invest or reinvest its funds, and in connection therewith to hold part or all of its funds in cash, and to
purchase or otherwise acquire, hold for investment or otherwise, sell, sell short, assign, negotiate, transfer, exchange or otherwise
dispose of or turn to account or realize upon, securities (which term "securities" shall for the purposes of this Declaration of
Trust, without limitation of the generality thereof, be deemed to include any stocks, shares, bonds, financial futures contracts,
indexes, debentures, notes, mortgages or other obligations, and any certificates, receipts, warrants or other instruments
representing rights to receive, purchase or subscribe for the same, or evidencing or representing any other rights or interests
therein, or in any property or assets) created or issued by any issuer (which term "issuer" shall for the purposes of this
Declaration of Trust, without limitation of the generality thereof be deemed to include any persons, firms, associations,
corporations, syndicates, business trusts, partnerships, investment companies, combinations, organizations, governments, or
subdivisions thereof) and in financial instruments (whether they are considered as securities or commodities); and to exercise, as
owner or holder of any securities or financial instruments, all rights, powers and privileges in respect thereof; and to do any and
all acts and things for the preservation, protection, improvement and enhancement in value of any or all such securities or financial
instruments.
2. To borrow money and pledge assets in connection with any of the objects or purposes of the Trust, and to issue notes
or other obligations evidencing such borrowings, to the extent permitted by the 1940 Act and by the Trust's fundamental investment
policies under the 1940 Act.
3. To issue and sell its Shares in such Series and Classes and amounts and on such terms and conditions, for such
purposes and for such amount or kind of consideration (including without limitation thereto, securities) now or hereafter permitted
by the laws of the Commonwealth of Massachusetts and by this Declaration of Trust, as the Trustees may determine.
4. To purchase or otherwise acquire, hold, dispose of, resell, transfer, reissue or cancel its Shares, or to classify
or reclassify any unissued Shares or any Shares previously issued and reacquired of any Series or Class into one or more Series or
Classes that may have been established and designated from time to time, all without the vote or consent of the Shareholders of the
Trust, in any manner and to the extent now or hereafter permitted by this Declaration of Trust.
5. To conduct its business in all its branches at one or more offices in New York, Colorado and elsewhere in any part
of the world, without restriction or limit as to extent.
6. To carry out all or any of the foregoing objects and purposes as principal or agent, and alone or with associates or
to the extent now or hereafter permitted by the laws of Massachusetts, as a member of, or as the owner or holder of any stock of, or
share of interest in, any issuer, and in connection therewith or make or enter into such deeds or contracts with any issuers and to
do such acts and things and to exercise such powers, as a natural person could lawfully make, enter into, do or exercise.
7. To do any and all such further acts and things and to exercise any and all such further powers as may be necessary,
incidental, relative, conducive, appropriate or desirable for the accomplishment, carrying out or attainment of all or any of the
foregoing purposes or objects.
The foregoing objects and purposes shall, except as otherwise expressly provided, be in no way limited or restricted
by reference to, or inference from, the terms of any other clause of this or any other Article of this Declaration of Trust, and
shall each be regarded as independent and construed as powers as well as objects and purposes, and the enumeration of specific
purposes, objects and powers shall not be construed to limit or restrict in any manner the meaning of general terms or the general
powers of the Trust now or hereafter conferred by the laws of the Commonwealth of Massachusetts nor shall the expression of one thing
be deemed to exclude another, though it be of a similar or dissimilar nature, not expressed; provided, however, that the Trust shall
not carry on any business, or exercise any powers, in any state, territory, district or country except to the extent that the same
may lawfully be carried on or exercised under the laws thereof.
FOURTH:
1. The beneficial interest in the Trust shall be divided into Shares, all without par value, but the Trustees shall
have the authority from time to time, without obtaining shareholder approval, to create one or more Series of Shares in addition to
the Series specifically established and designated in part 3 of this Article FOURTH, and to divide the shares of any Series into two
or more Classes pursuant to Part 2 of this Article FOURTH, all as they deem necessary or desirable, to establish and designate such
Series and Classes, and to fix and determine the relative rights and preferences as between the different Series of Shares or Classes
as to right of redemption and the price, terms and manner of redemption, liabilities and expenses to be borne by any Series or Class,
special and relative rights as to dividends and other distributions and on liquidation, sinking or purchase fund provisions,
conversion on liquidation, conversion rights, and conditions under which the several Series or Classes shall have individual voting
rights or no voting rights. Except as aforesaid, all Shares of the different Series shall be identical.
(a) The number of authorized Shares and the number of Shares of each Series and each Class of a Series that may
be issued is unlimited, and the Trustees may issue Shares of any Series or Class of any Series for such consideration and on such
terms as they may determine (or for no consideration if pursuant to a Share dividend or split-up), all without action or approval of
the Shareholders. All Shares when so issued on the terms determined by the Trustees shall be fully paid and non-assessable. The
Trustees may classify or reclassify any unissued Shares or any Shares previously issued and reacquired of any Series into one or more
Series or Classes of Series that may be established and designated from time to time. The Trustees may hold as treasury Shares (of
the same or some other Series), reissue for such consideration and on such terms as they may determine, or cancel, at their
discretion from time to time, any Shares of any Series reacquired by the Trust.
(b) The establishment and designation of any Series or any Class of any Series in addition to that established
and designated in part 3 of this Article FOURTH shall be effective with the effectiveness of an instrument setting forth such
establishment and designation and the relative rights and preferences of such Series or such Class of such Series or as otherwise
provided in such instrument. At any time that there are no Shares outstanding of any particular Series previously established and
designated, the Trustees may by an instrument executed by a majority of their number abolish that Series and the establishment and
designation thereof. If and to the extent the instrument referred to in this paragraph shall be an amendment to this Declaration of
Trust, and the Trustees may make any such amendment without shareholder approval.
(c) Any Trustee, officer or other agent of the Trust, and any organization in which any such person is
interested may acquire, own, hold and dispose of Shares of any Series or Class of any Series of the Trust to the same extent as if
such person were not a Trustee, officer or other agent of the Trust; and the Trust may issue and sell or cause to be issued and sold
and may purchase Shares of any Series or Class of any Series from any such person or any such organization subject only to the
general limitations, restrictions or other provisions applicable to the sale or purchase of Shares of such Series or Class generally.
2. The Trustees shall have the authority from time to time, without obtaining shareholder approval, to divide the
Shares of any Series into two or more Classes as they deem necessary or desirable, and to establish and designate such Classes. In
such event, each Class of a Series shall represent interests in the designated Series of the Trust and have such voting, dividend,
liquidation and other rights as may be established and designated by the Trustees. Expenses and liabilities related directly or
indirectly to the Shares of a Class of a Series may be borne solely by such Class (as shall be determined by the Trustees) and, as
provided in Article FIFTH, a Class of a Series may have exclusive voting rights with respect to matters relating solely to such
Class. The bearing of expenses and liabilities solely by a Class of Shares of a Series shall be appropriately reflected (in the
manner determined by the Trustees) in the net asset value, dividend and liquidation rights of the Shares of such Class of a Series.
The division of the Shares of a Series into Classes and the terms and conditions pursuant to which the Shares of the Classes of a
Series will be issued must be made in compliance with the 1940 Act. No division of Shares of a Series into Classes shall result in
the creation of a Class of Shares having a preference as to dividends or distributions or a preference in the event of any
liquidation, termination or winding up of the Trust, to the extent such a preference is prohibited by Section 18 of the 1940 Act as
to the Trust.
The relative rights and preferences of shares of different classes shall be the same in all respects except that, and unless
and until the Board of Trustees shall determine otherwise: (i) when a vote of Shareholders is required under this Declaration of
Trust or when a meeting of Shareholders is called by the Board of Trustees, the Shares of a Class shall vote exclusively on matters
that affect that Class only; (ii) the expenses and liabilities related to a Class shall be borne solely by such Class (as determined
and allocated to such Class by the Trustees from time to time in a manner consistent with parts 2 and 3 of Article FOURTH); and (iii)
pursuant to paragraph 10 of Article NINTH, the Shares of each Class shall have such other rights and preferences as are set forth
from time to time in the then effective prospectus and/or statement of additional information relating to the Shares. Dividends and
distributions on one Class may differ from the dividends and distributions on another Class, and the net asset value of the Shares of
one Class may differ from the net asset value of another Class.
3. Without limiting the authority of the Trustees set forth in part 1 of this Article FOURTH to establish and designate
any further Series, the Trustees hereby establish one Series of Shares having the same name as the Trust. Said Shares shall be
divided into such number of Classes as shall be set forth from time to time in the then effective prospectus and/or statement of
additional information relating to the Fund. The Shares of that Series and any Shares of any further Series or Classes that may from
time to time be established and designated by the Trustees shall (unless the Trustees otherwise determine with respect to some
further Series or Classes at the time of establishing and designating the same) have the following relative rights and preferences:
(a) Assets Belonging to Series. All consideration received by the Trust for the issue or sale of Shares of a
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particular Series, together with all assets in which such consideration is invested or reinvested, all income, earnings, profits, and
proceeds thereof, including any proceeds derived from the sale, exchange or liquidation of such assets, and any funds or payments
derived from any reinvestment of such proceeds in whatever form the same may be, shall irrevocably belong to that Series for all
purposes, subject only to the rights of creditors, and shall be so recorded upon the books of account of the Trust. Such
consideration, assets, income, earnings, profits, and proceeds thereof, including any proceeds derived from the sale, exchange or
liquidation of such assets, and any funds or payments derived from any reinvestment of such proceeds, in whatever form the same may
be, together with any General Items allocated to that Series as provided in the following sentence, are herein referred to as
"assets belonging to" that Series. In the event that there are any assets, income, earnings, profits, and proceeds thereof, funds,
or payments which are not readily identifiable as belonging to any particular Series (collectively "General Items"), the Trustees
shall allocate such General Items to and among any one or more of the Series established and designated from time to time in such
manner and on such basis as they, in their sole discretion, deem fair and equitable; and any General Items so allocated to a
particular Series shall belong to that Series. Each such allocation by the Trustees shall be conclusive and binding upon the
shareholders of all Series for all purposes.
(b) (1) Liabilities Belonging to Series. The liabilities, expenses, costs, charges and reserves
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attributable to each Series shall be charged and allocated to the assets belonging to each particular Series. Any general
liabilities, expenses, costs, charges and reserves of the Trust which are not identifiable as belong to any particular Series shall
be allocated and charged by the Trustees to and among any one or more of the Series established and designated from time to time in
such manner and on such basis as the Trustees in their sole discretion deem fair and equitable. The liabilities, expenses, costs,
charges and reserves allocated and so charged to each Series are herein referred to as "liabilities belonging to" that Series. Each
allocation of liabilities, expenses, costs, charges and reserves by the Trustees shall be conclusive and binding upon the
shareholders of all Series for all purposes.
(2) Liabilities Belonging to a Class. If a Series is divided into more than one Class, the
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liabilities, expenses, costs, charges and reserves attributable to a Class shall be charged and allocated to the Class to which such
liabilities, expenses, costs, charges or reserves are attributable. Any general liabilities, expenses, costs, charges or reserves
belonging to the Series which are not identifiable as belonging to any particular Class shall be allocated and charged by the
Trustees to and among any one or more of the Classes established and designated from time to time in such manner and on such basis as
the Trustees in their sole discretion deem fair and equitable. The allocations in the two preceding sentences shall be subject to
the 1940 Act or any release, rule, regulation, interpretation or order thereunder relating to such allocations. The liabilities,
expenses, costs, charges and reserves allocated and so charged to each Class are herein referred to as "liabilities belonging to"
that Class. Each allocation of liabilities, expenses, costs, charges and reserves by the Trustees shall be conclusive and binding
upon the holders of all Classes for all purposes.
(c) Dividends. Dividends and distributions on Shares of a particular Series or Class may be paid to the
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holders of Shares of that Series or Class, with such frequency as the Trustees may determine, which may be daily or otherwise
pursuant to a standing resolution or resolutions adopted only once or with such frequency as the Trustees may determine, from such of
the income, capital gains accrued or realized, and capital and surplus, from the assets belonging to that Series, as the Trustees may
determine, after providing for actual and accrued liabilities belonging to such Series or Class. All dividends and distributions on
Shares of a particular Series or Class shall be distributed pro rata to the Shareholders of such Series or Class in proportion to the
number of Shares of such Series or Class held by such Shareholders at the date and time of record established for the payment of such
dividends or distributions, except that in connection with any dividend or distribution program or procedure the Trustees may
determine that no dividend or distribution shall be payable on Shares as to which the Shareholder's purchase order and/or payment
have not been received by the time or times established by the Trustees under such program or procedure. Such dividends and
distributions may be made in cash or Shares or a combination thereof as determined by the Trustees or pursuant to any program that
the Trustees may have in effect at the time for the election by each Shareholder of the mode of the making of such dividend or
distribution to that Shareholder. Any such dividend or distribution paid in Shares will be paid at the net asset value thereof as
determined in accordance with paragraph 13 of Article SEVENTH.
(d) Liquidation. In the event of the liquidation or dissolution of the Trust, the Shareholders of each Series
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and all Classes of each Series that has been established and designated shall be entitled to receive, as a Series or Class, when and
as declared by the Trustees, the excess of the assets belonging to that Series over the liabilities belonging to that Series or
Class. The assets so distributable to the Shareholders of any particular Class and Series shall be distributed among such
Shareholders in proportion to the number of Shares of such Class of that Series held by them and recorded on the books of the Trust.
(e) Transfer. All Shares of each particular Series or Class shall be transferable, but transfers of Shares of
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a particular Class and Series will be recorded on the Share transfer records of the Trust applicable to such Series or Class of that
Series only at such times as Shareholders shall have the right to require the Trust to redeem Shares of such Series or Class of that
Series and at such other times as may be permitted by the Trustees.
(f) Equality. All Shares of each particular Series shall represent an equal proportionate interest in the
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assets belonging to that Series (subject to the liabilities belonging to such Series or any Class of that Series), and each Share of
any particular Series shall be equal to each other Share of that Series and shares of each Class of a Series shall be equal to each
other Share of such Class; but the provisions of this sentence shall not restrict any distinctions permissible under subsection (c)
of part (2) of this Article FOURTH that may exist with respect to Shares of the different Classes of a Series. The Trustees may from
time to time divide or combine the Shares of any particular Class or Series into a greater or lesser number of Shares of that Class
or Series without thereby changing the proportionate beneficial interest in the assets belonging to that Class or Series or in any
way affecting the rights of Shares of any other Class or Series and shares of each Class of a Series shall be equal to each other
Share of such Class.
(g) Fractions. Any fractional Share of any Class and Series, if any such fractional Share is outstanding,
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shall carry proportionately all the rights and obligations of a whole Share of that Class and Series, including those rights and
obligations with respect to voting, receipt of dividends and distributions, redemption of Shares, and liquidation of the Trust.
(h) Conversion Rights. Subject to compliance with the requirements of the 1940 Act, the Trustees shall have
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the authority to provide that (i) holders of Shares of any Series shall have the right to exchange said Shares into Shares of one or
more other Series of Shares, (ii) holders of shares of any Class shall have the right to exchange said Shares into Shares of one or
more other Classes of the same or a different Series, and/or (iii) the Trust shall have the right to carry out exchanges of the
aforesaid kind, in each case in accordance with such requirements and procedures as may be established by the Trustees.
(i) Ownership of Shares. The ownership of Shares shall be recorded on the books of the Trust or of a transfer
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or similar agent for the Trust, which books shall be maintained separately for the Shares of each Class and Series that has been
established and designated. No certification certifying the ownership of Shares need be issued except as the Trustees may otherwise
determine from time to time. The Trustees may make such rules as they consider appropriate for the issuance of Share certificates,
the use of facsimile signatures, the transfer of Shares and similar matters. The record books of the Trust as kept by the Trust or
any transfer or similar agent, as the case may be, shall be conclusive as to who are the Shareholders and as to the number of Shares
of each Class and Series held from time to time by each such Shareholder.
(j) Investments in the Trust. The Trustees may accept investments in the Trust from such persons and on such
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terms and for such consideration, not inconsistent with the provisions of the 1940 Act, as they from time to time authorize. The
Trustees may authorize any distributor, principal underwriter, custodian, transfer agent or other person to accept orders for the
purchase or sale of Shares that conform to such authorized terms and to reject any purchase or sale orders for Shares whether or not
conforming to such authorized terms.
FIFTH: The following provisions are hereby adopted with respect to voting Shares of the Trust and certain other rights:
1. The Shareholders shall have the power to vote (a) for the election of Trustees when that issue is submitted to them,
(b) with respect to the amendment of this Declaration of Trust except where the Trustees are given authority to amend the Declaration
of Trust without shareholder approval, (c) to the same extent as the shareholders of a Massachusetts business corporation, as to
whether or not a court action, proceeding or claim should be brought or maintained derivatively or as a class action on behalf of the
Trust or the Shareholders, and (d) with respect to those matters relating to the Trust as may be required by the 1940 Act or required
by law, by this Declaration of Trust, or the By-Laws of the Trust or any registration statement of the Trust filed with the
Commission or any State, or as the Trustees may consider desirable.
2. The Trust will not hold shareholder meetings unless required by the 1940 Act, the provisions of this Declaration of
Trust, or any other applicable law. The Trustees may call a meeting of shareholders.
3. At all meetings of Shareholders, each Shareholder shall be entitled to one vote on each matter submitted to a vote
of the Shareholders of the affected Series for each Share standing in his name on the books of the Trust on the date, fixed in
accordance with the By-Laws, for determination of Shareholders of the affected Series entitled to vote at such meeting (except, if
the Board so determines, for Shares redeemed prior to the meeting), and each such Series shall vote separately ("Individual Series
Voting"); a Series shall be deemed to be affected when a vote of the holders of that Series on a matter is required by the 1940 Act;
provided, however, that as to any matter with respect to which a vote of Shareholders is required by the 1940 Act or by any
applicable law that must be complied with, such requirements as to a vote by Shareholders shall apply in lieu of Individual Series
Voting as described above. If the shares of a Series shall be divided into Classes as provided in Article FOURTH, the shares of each
Class shall have identical voting rights except that the Trustees, in their discretion, may provide a Class of a Series with
exclusive voting rights with respect to matters which relate solely to such Classes. If the Shares of any Series shall be divided
into Classes with a Class having exclusive voting rights with respect to certain matters, the quorum and voting requirements
described below with respect to action to be taken by the Shareholders of the Class of such Series on such matters shall be
applicable only to the Shares of such Class. Any fractional Share shall carry proportionately all the rights of a whole Share,
including the right to vote and the right to receive dividends. The presence in person or by proxy of the holders of one-third of
the Shares, or of the Shares of any Series or Class of any Series, outstanding and entitled to vote thereat shall constitute a quorum
at any meeting of the Shareholders or of that Series or Class, respectively; provided however, that if any action to be taken by the
Shareholders or by a Series or Class at a meeting requires an affirmative vote of a majority, or more than a majority, of the shares
outstanding and entitled to vote, then in such event the presence in person or by proxy of the holders of a majority of the shares
outstanding and entitled to vote at such a meeting shall constitute a quorum for all purposes. At a meeting at which is a quorum is
present, a vote of a majority of the quorum shall be sufficient to transact all business at the meeting. If at any meeting of the
Shareholders there shall be less than a quorum present, the Shareholders or the Trustees present at such meeting may, without further
notice, adjourn the same from time to time until a quorum shall attend, but no business shall be transacted at any such adjourned
meeting except such as might have been lawfully transacted had the meeting not been adjourned.
4. Each Shareholder, upon request to the Trust in proper form determined by the Trust, shall be entitled to require the
Trust to redeem from the net assets of that Series and Class all or part of the Shares of such Series and Class standing in the name
of such Shareholder. The method of computing such net asset value, the time at which such net asset value shall be computed and the
time within which the Trust shall make payment therefor, shall be determined as hereinafter provided in Article SEVENTH of this
Declaration of Trust. Notwithstanding the foregoing, the Trustees, when permitted or required to do so by the 1940 Act, may suspend
the right of the Shareholders to require the Trust to redeem Shares.
5. No Shareholder shall, as such holder, have any right to purchase or subscribe for any Shares of the Trust which it
may issue or sell, other than such right, if any, as the Trustees, in their discretion, may determine.
6. All persons who shall acquire Shares shall acquire the same subject to the provisions of the Declaration of Trust.
7. Cumulative voting for the election of Trustees shall not be allowed.
SIXTH:
1. The persons who shall act as initial Trustees until the first meeting or until their successors are duly chosen and
qualify are the initial trustees executing this Declaration of Trust or any counterpart thereof. However, the By-Laws of the Trust
may fix the number of Trustees at a number greater or lesser than the number of initial Trustees and may authorize the Trustees to
increase or decrease the number of Trustees, to fill any vacancies on the Board which may occur for any reason including any
vacancies created by any such increase in the number of Trustees, to set and alter the terms of office of the Trustees and to
lengthen or lessen their own terms of office or make their terms of office of indefinite duration, all subject to the 1940 Act.
Unless otherwise provided by the By-Laws of the Trust, the Trustees need not be Shareholders.
2. A Trustee at any time may be removed either with or without cause by resolution duly adopted by the affirmative vote
of the holders of two-thirds of the outstanding Shares, present in person or by proxy at any meeting of Shareholders called for such
purpose; such a meeting shall be called by the Trustees when requested in writing to do so by the record holders of not less than
ten per centum of the outstanding Shares. A Trustee may also be removed by the Board of Trustees as provided in the By-Laws of the
Trust.
3. The Trustees shall make available a list of names and addresses of all Shareholders as recorded on the books of the
Trust, upon receipt of the request in writing signed by not less than ten Shareholders (who have been shareholders for at least six
months) holding in the aggregate shares of the Trust valued at not less than $25,000 at current offering price (as defined in the
then effective Prospectus and\or Statement of Additional Information relating to the Shares under the Securities Act of 1933, as
amended from time to time) or holding not less than 1% in amount of the entire amount of Shares issued and outstanding; such request
must state that such Shareholders wish to communicate with other Shareholders with a view to obtaining signatures to a request for a
meeting to take action pursuant to part 2 of this Article SIXTH and be accompanied by a form of communication to the Shareholders.
The Trustees may, in their discretion, satisfy their obligation under this part 3 by either making available the Shareholder list to
such Shareholders at the principal offices of the Trust, or at the offices of the Trust's transfer agent, during regular business
hours, or by mailing a copy of such communication and form of request, at the expense of such requesting Shareholders, to all other
Shareholders, and the Trustees may also take such other action as may be permitted under Section 16(c) of the 1940 Act.
4. The Trust may at any time or from time to time apply to the Commission for one or more exemptions from all or part
of said Section 16(c) of the 1940 Act, and, if an exemptive order or orders are issued by the Commission, such order or orders shall
be deemed part of said Section 16(c) for the purposes of parts 2 and 3 of this Article SIXTH.
SEVENTH: The following provisions are hereby adopted for the purpose of defining, limiting and regulating the powers of the
Trust, the Trustees and the Shareholders.
1. As soon as any Trustee is duly elected by the Shareholders or the Trustees and shall have accepted this Trust, the
Trust estate shall vest in the new Trustee or Trustees, together with the continuing Trustees, without any further act or conveyance,
and he or she shall be deemed a Trustee hereunder.
2. The death, declination, resignation, retirement, removal, or incapacity of the Trustees, or any one of them, shall
not operate to annul or terminate the Trust but the Trust shall continue in full force and effect pursuant to the terms of this
Declaration of Trust.
3. The assets of the Trust shall be held separate and apart from any assets now or hereafter held in any capacity other
than as Trustee hereunder by the Trustees or any successor Trustees. All of the assets of the Trust shall at all times be considered
as vested in the Trustees. No Shareholder shall have, as a holder of beneficial interest in the Trust, any authority, power or right
whatsoever to transact business for or on behalf of the Trust, or on behalf of the Trustees, in connection with the property or
assets of the Trust, or in any part thereof.
4. The Trustees in all instances shall act as principals, and are and shall be free from the control of the
Shareholders. The Trustees shall have full power and authority to do any and all acts and to make and execute, and to authorize the
officers and agents of the Trust to make and execute, any and all contracts and instruments that they may consider necessary or
appropriate in connection with the management of the Trust. The Trustees shall not in any way be bound or limited by present or
future laws or customs in regard to Trust investments, but shall have full authority and power to make any and all investments which
they, in their uncontrolled discretion, shall deem proper to accomplish the purpose of this Trust. Subject to any applicable
limitation in this Declaration of Trust or by the By-Laws of the Trust, the Trustees shall have power and authority:
(a) to adopt By-Laws not inconsistent with this Declaration of Trust providing for the conduct of the business
of the Trust and to amend and repeal them to the extent that they do not reserve that right to the Shareholders;
(b) to elect and remove such officers and appoint and terminate such officers as they consider appropriate with
or without cause, and to appoint and designate from among the Trustees such committees as the Trustees may determine, and to
terminate any such committee and remove any member of such committee;
(c) to employ as custodian of any assets of the Trust a bank or trust company or any other entity qualified and
eligible to act as a custodian, subject to any conditions set forth in this Declaration of Trust or in the By-Laws;
(d) To retain a transfer agent and shareholder servicing agent, or both;
(e) To provide for the distribution of Shares either through a principal underwriter or the Trust itself or
both;
(f) To set record dates in the manner provided for in the By-Laws of the Trust;
(g) to delegate such authority as they consider desirable to any officers of the Trust and to any agent,
custodian or underwriter;
(h) to vote or give assent, or exercise any rights of ownership, with respect to stock or other securities or
property held in Trust hereunder; and to execute and deliver powers of attorney to such person or persons as the Trustees shall deem
proper, granting to such person or persons such power and discretion with relation to securities or property as the Trustees shall
deem proper;
(i) to exercise powers and rights of subscription or otherwise which in any manner arise out of ownership of
securities held in trust hereunder;
(j) to hold any security or property in a form not indicating any trust, whether in bearer, unregistered or
other negotiable form, either in its own name or in the name of a custodian or a nominee or nominees, subject in either case to
proper safeguards according to the usual practice of Massachusetts business trusts or investment companies;
(k) to consent to or participate in any plan for the reorganization, consolidation or merger of any corporation
or concern, any security of which is held in the Trust; to consent to any contract, lease, mortgage, purchase, or sale of property
by such corporation or concern, and to pay calls or subscriptions with respect to any security held in the Trust;
(l) to compromise, arbitrate, or otherwise adjust claims in favor of or against the Trust or any matter in
controversy including, but not limited to, claims for taxes;
(m) to make, in the manner provided in the By-Laws, distributions of income and of capital gains to
Shareholders;
(n) to borrow money to the extent and in the manner permitted by the 1940 Act and the Trust's fundamental
policy thereunder as to borrowing;
(o) to enter into investment advisory or management contracts, subject to the 1940 Act, with any one or more
corporations, partnerships, trusts, associations or other persons;
(p) to change the name of the Trust or any Class or Series of the Trust as they consider appropriate without
prior shareholder approval; and
(q) to establish officers' and Trustees' fees or compensation and fees or compensation for committees of the
Trustees to be paid by the Trust or each Series thereof in such manner and amount as the Trustees may determine.
5. No one dealing with the Trustees shall be under any obligation to make any inquiry concerning the authority of the
Trustees, or to see to the application of any payments made or property transferred to the Trustees or upon their order.
6. (a) The Trustees shall have no power to bind any Shareholder personally or to call upon any Shareholder for the
payment of any sum of money or assessment whatsoever other than such as the Shareholder may at any time personally agree to pay by
way of subscription to any Shares or otherwise. This paragraph shall not limit the right of the Trustees to assert claims against
any shareholder based upon the acts or omissions of such shareholder or for any other reason. There is hereby expressly disclaimed
shareholder and Trustee liability for the acts and obligations of the Trust. Every note, bond, contract or other undertaking issued
by or on behalf of the Trust or the Trustees relating to the Trust shall include a notice and provision limiting the obligation
represented thereby to the Trust and its assets (but the omission of such notice and provision shall not operate to impose any
liability or obligation on any Shareholder).
(b) Whenever this Declaration of Trust calls for or permits any action to be taken by the Trustees hereunder,
such action shall mean that taken by the Board of Trustees by vote of the majority of a quorum of Trustees as set forth from time to
time in the By-Laws of the Trust or as required by the 1940 Act.
(c) The Trustees shall possess and exercise any and all such additional powers as are reasonably implied from
the powers herein contained such as may be necessary or convenient in the conduct of any business or enterprise of the Trust, to do
and perform anything necessary, suitable, or proper for the accomplishment of any of the purposes, or the attainment of any one or
more of the objects, herein enumerated, or which shall at any time appear conducive to or expedient for the protection or benefit of
the Trust, and to do and perform all other acts and things necessary or incidental to the purposes herein before set forth, or that
may be deemed necessary by the Trustees.
(d) The Trustees shall have the power, to the extent not inconsistent with the 1940 Act, to determine
conclusively whether any moneys, securities, or other properties of the Trust are, for the purposes of this Trust, to be considered
as capital or income and in what manner any expenses or disbursements are to be borne as between capital and income whether or not in
the absence of this provision such moneys, securities, or other properties would be regarded as capital or income and whether or not
in the absence of this provision such expenses or disbursements would ordinarily be charged to capital or to income.
7. The By-Laws of the Trust may divide the Trustees into classes and prescribe the tenure of office of the several
classes, but no class of Trustee shall be elected for a period shorter than that from the time of the election following the division
into classes until the next meeting and thereafter for a period shorter than the interval between meetings or for a period longer
than five years, and the term of office of at least one class shall expire each year.
8. The Shareholders shall have the right to inspect the records, documents, accounts and books of the Trust, subject to
reasonable regulations of the Trustees, not contrary to Massachusetts law, as to whether and to what extent, and at what times and
places, and under what conditions and regulations, such right shall be exercised.
9. Any officer elected or appointed by the Trustees or by the Shareholders or otherwise, may be removed at any time,
with or without cause, in such lawful manner as may be provided in the By-Laws of the Trust.
10. The Trustees shall have power to hold their meetings, to have an office or offices and, subject to the provisions of
the laws of Massachusetts, to keep the books of the Trust outside of said Commonwealth at such places as may from time to time be
designated by them. Action may be taken by the Trustees without a meeting by unanimous written consent or by telephone or similar
method of communication.
11. Securities held by the Trust shall be voted in person or by proxy by the President or a Vice-President, or such
officer or officers of the Trust as the Trustees shall designate for the purpose, or by a proxy or proxies thereunto duly authorized
by the Trustees, except as otherwise ordered by vote of the holders of a majority of the Shares outstanding and entitled to vote in
respect thereto.
12. (a) Subject to the provisions of the 1940 Act, any Trustee, officer or employee, individually, or any
partnership of which any Trustee, officer or employee may be a member, or any corporation or association of which any Trustee,
officer or employee may be an officer, partner, director, trustee, employee or stockholder, or otherwise may have an interest, may be
a party to, or may be pecuniarily or otherwise interested in, any contract or transaction of the Trust, and in the absence of fraud
no contract or other transaction shall be thereby affected or invalidated; provided that in such case a Trustee, officer or employee
or a partnership, corporation or association of which a Trustee, officer or employee is a member, officer, director, trustee,
employee or stockholder is so interested, such fact shall be disclosed or shall have been known to the Trustees including those
Trustees who are not so interested and who are neither "interested" nor "affiliated" persons as those terms are defined in the 1940
Act, or a majority thereof; and any Trustee who is so interested, or who is also a director, officer, partner, trustee, employee or
stockholder of such other corporation or a member of such partnership or association which is so interested, may be counted in
determining the existence of a quorum at any meeting of the Trustees which shall authorize any such contract or transaction, and may
vote thereat to authorize any such contract or transaction, with like force and effect as if he were not so interested.
(b) Specifically, but without limitation of the foregoing, the Trust may enter into a management or investment
advisory contract or underwriting contract and other contracts with, and may otherwise do business with any manager or investment
adviser for the Trust and/or principal underwriter of the Shares of the Trust or any subsidiary or affiliate of any such manager or
investment adviser and/or principal underwriter and may permit any such firm or corporation to enter into any contracts or other
arrangements with any other firm or corporation relating to the Trust notwithstanding that the Trustees of the Trust may be composed
in part of partners, directors, officers or employees of any such firm or corporation, and officers of the Trust may have been or may
be or become partners, directors, officers or employees of any such firm or corporation, and in the absence of fraud the Trust and
any such firm or corporation may deal freely with each other, and no such contract or transaction between the Trust and any such firm
or corporation shall be invalidated or in any way affected thereby, nor shall any Trustee or officer of the Trust be liable to the
Trust or to any Shareholder or creditor thereof or to any other person for any loss incurred by it or him solely because of the
existence of any such contract or transaction; provided that nothing herein shall protect any director or officer of the Trust
against any liability to the trust or to its security holders to which he would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of his office.
(c) As used in this paragraph the following terms shall have the meanings set forth below:
(i) the term "indemnitee" shall mean any present or former Trustee, officer or employee of the
Trust, any present or former Trustee, partner, Director or officer of another trust, partnership, corporation or association whose
securities are or were owned by the Trust or of which the Trust is or was a creditor and who served or serves in such capacity at the
request of the Trust, and the heirs, executors, administrators, successors and assigns of any of the foregoing; however, whenever
conduct by an indemnitee is referred to, the conduct shall be that of the original indemnitee rather than that of the heir, executor,
administrator, successor or assignee;
(ii) the term "covered proceeding" shall mean any threatened, pending or completed action, suit
or proceeding, whether civil, criminal, administrative or investigative, to which an indemnitee is or was a party or is threatened
to be made a party by reason of the fact or facts under which he or it is an indemnitee as defined above;
(iii) the term "disabling conduct" shall mean willful misfeasance, bad faith, gross negligence
or reckless disregard of the duties involved in the conduct of the office in question;
(iv) the term "covered expenses" shall mean expenses (including attorney's fees), judgments,
fines and amounts paid in settlement actually and reasonably incurred by an indemnitee in connection with a covered proceeding; and
(v) the term "adjudication of liability" shall mean, as to any covered proceeding and as to
any indemnitee, an adverse determination as to the indemnitee whether by judgment, order, settlement, conviction or upon a plea of
nolo contendere or its equivalent.
(d) The Trust shall not indemnify any indemnitee for any covered expenses in any covered proceeding if
there has been an adjudication of liability against such indemnitee expressly based on a finding of disabling conduct.
(e) Except as set forth in paragraph (d) above, the Trust shall indemnify any indemnitee for covered
expenses in any covered proceeding, whether or not there is an adjudication of liability as to such indemnitee, such indemnification
by the Trust to be to the fullest extent now or hereafter permitted by any applicable law unless the By-laws limit or restrict the
indemnification to which any indemnitee may be entitled. The Board of Trustees may adopt bylaw provisions to implement
sub-paragraphs (c), (d) and (e) hereof.
(f) Nothing herein shall be deemed to affect the right of the Trust and/or any indemnitee to acquire and
pay for any insurance covering any or all indemnitees to the extent permitted by applicable law or to affect any other
indemnification rights to which any indemnitee may be entitled to the extent permitted by applicable law. Such rights to
indemnification shall not, except as otherwise provided by law, be deemed exclusive of any other rights to which such indemnitee may
be entitled under any statute now or hereafter enacted, By-Law, contract or otherwise.
13. The Trustees are empowered, in their absolute discretion, to establish bases or times, or both, for
determining the net asset value per Share of any Class and Series in accordance with the 1940 Act and to authorize the voluntary
purchase by any Class and Series, either directly or through an agent, of Shares of any Class and Series upon such terms and
conditions and for such consideration as the Trustees shall deem advisable in accordance with the 1940 Act.
14. Payment of the net asset value per Share of any Class and Series properly surrendered to it for redemption
shall be made by the Trust within seven days, or as specified in any applicable law or regulation, after tender of such stock or
request for redemption to the Trust for such purpose together with any additional documentation that may be reasonably required by
the Trust or its transfer agent to evidence the authority of the tenderor to make such request, plus any period of time during which
the right of the holders of the shares of such Class of that Series to require the Trust to redeem such shares has been suspended.
Any such payment may be made in portfolio securities of such Class of that Series and/or in cash, as the Trustees shall deem
advisable, and no Shareholder shall have a right, other than as determined by the Trustees, to have Shares redeemed in kind.
15. The Trust shall have the right, at any time and without prior notice to the Shareholder, to redeem Shares of
the Class and Series held by such Shareholder held in any account registered in the name of such Shareholder for its current net
asset value, if and to the extent that such redemption is necessary to reimburse either that Series or Class of the Trust or the
distributor (i.e., principal underwriter) of the Shares for any loss either has sustained by reason of the failure of such
Shareholder to make timely and good payment for Shares purchased or subscribed for by such Shareholder, regardless of whether such
Shareholder was a Shareholder at the time of such purchase or subscription, subject to and upon such terms and conditions as the
Trustees may from time to time prescribe.
EIGHTH: The name "Oppenheimer" included in the name of the Trust and of any Series shall be used pursuant to a
royalty-free, non-exclusive license from Oppenheimer Management Corporation ("OMC"), incidental to and as part of any one or more
advisory, management or supervisory contracts which may be entered into by the Trust with OMC. Such license shall allow OMC to
inspect and subject to the control of the Board of Trustees to control the nature and quality of services offered by the Trust under
such name. The license may be terminated by OMC upon termination of such advisory, management or supervisory contracts or without
cause upon 60 days' written notice, in which case neither the Trust nor any Series or Class shall have any further right to use the
name "Oppenheimer" in its name or otherwise and the Trust, the Shareholders and its officers and Trustees shall promptly take
whatever action may be necessary to change its name and the names of any Series or Classes accordingly.
NINTH:
1. In case any Shareholder or former Shareholder shall be held to be personally liable solely by reason of his
being or having been a Shareholder and not because of his acts or omissions or for some other reason, the Shareholder or former
Shareholder (or the Shareholders, heirs, executors, administrators or other legal representatives or in the case of a corporation or
other entity, its corporate or other general successor) shall be entitled out of the Trust estate to be held harmless from and
indemnified against all loss and expense arising from such liability. The Trust shall, upon request by the Shareholder, assume the
defense of any such claim made against any Shareholder for any act or obligation of the Trust and satisfy any judgment thereon.
2. It is hereby expressly declared that a trust and not a partnership is created hereby. No individual Trustee
hereunder shall have any power to bind the Trust, the Trust's officers or any Shareholder. All persons extending credit to, doing
business with, contracting with or having or asserting any claim against the Trust or the Trustees shall look only to the assets of
the Trust for payment under any such credit, transaction, contract or claim; and neither the Shareholders nor the Trustees, nor any
of their agents, whether past, present or future, shall be personally liable therefor; notice of such disclaimer shall be given in
each agreement, obligation or instrument entered into or executed by the Trust or the Trustees. Nothing in this Declaration of Trust
shall protect a Trustee against any liability to which such Trustee would otherwise be subject by reason of willful misfeasance, bad
faith, gross negligence or reckless disregard of the duties involved in the conduct of the office of Trustee hereunder.
3. The exercise by the Trustees of their powers and discretion hereunder in good faith and with reasonable care
under the circumstances then prevailing, shall be binding upon everyone interested. Subject to the provisions of paragraph 2 of this
Article NINTH, the Trustees shall not be liable for errors of judgment or mistakes of fact or law. The Trustees may take advice of
counsel or other experts with respect to the meaning and operations of this Declaration of Trust, applicable laws, contracts,
obligations, transactions or any other business the Trust may enter into, and subject to the provisions of paragraph 2 of this
Article NINTH, shall be under no liability for any act or omission in accordance with such advice or for failing to follow such
advice. The Trustees shall not be required to give any bond as such, nor any surety if a bond is required.
4. This Trust shall continue without limitation of time but subject to the provisions of sub-sections (a), (b),
(c) and (d) of this paragraph 4.
(a) The Trustees, with the favorable vote of the holders of a majority of the outstanding voting
securities, as defined in the 1940 Act, of any one or more Series entitled to vote, may sell and convey the assets of that Series
(which sale may be subject to the retention of assets for the payment of liabilities and expenses) to another issuer for a
consideration which may be or include securities of such issuer. Upon making provision for the payment of liabilities, by assumption
by such issuer or otherwise, the Trustees shall distribute the remaining proceeds ratably among the holders of the outstanding Shares
of the Series the assets of which have been so transferred.
(b) The Trustees, with the favorable vote of the holders of a majority of the outstanding voting
securities, as defined in the 1940 Act, of any one or more Series entitled to vote, may at any time sell and convert into money all
the assets of that Series. Upon making provisions for the payment of all outstanding obligations, taxes and other liabilities,
accrued or contingent, of that Series, the Trustees shall distribute the remaining assets of that Series ratably among the holders of
the outstanding Shares of that Series.
(c) The Trustees, with the favorable vote of the holders of a majority of the outstanding voting
securities, as defined in the 1940 Act, of any one or more Series entitled to vote, may otherwise alter, convert or transfer the
assets of that Series or those Series.
(d) Upon completion of the distribution of the remaining proceeds or the remaining assets as provided in
sub-sections (a) and (b), and in subsection (c) where applicable, the Series the assets of which have been so transferred shall
terminate, and if all the assets of the Trust have been so transferred, the Trust shall terminate and the Trustees shall be
discharged of any and all further liabilities and duties hereunder and the right, title and interest of all parties shall be
cancelled and discharged.
5. The original or a copy of this instrument and of each restated declaration of trust or instrument supplemental
hereto shall be kept at the office of the Trust where it may be inspected by any Shareholder. A copy of this instrument and of each
supplemental or restated declaration of trust shall be filed with the Secretary of the Commonwealth of Massachusetts, as well as any
other governmental office where such filing may from time to time be required. Anyone dealing with the Trust may rely on a
certificate by an officer of the Trust as to whether or not any such supplemental or restated declarations of trust have been made
and as to any matters in connection with the Trust hereunder, and, with the same effect as if it were the original, may rely on a
copy certified by an officer of the Trust to be a copy of this instrument or of any such supplemental or restated declaration of
trust. In this instrument or in any such supplemental or restated declaration of trust, references to this instrument, and all
expressions like "herein", "hereof" and "hereunder" shall be deemed to refer to this instrument as amended or affected by any such
supplemental or restated declaration of trust. This instrument may be executed in any number of counterparts, each of which shall be
deemed an original.
6. The Trust set forth in this instrument is created under and is to be governed by and construed and
administered according to the laws of the Commonwealth of Massachusetts. The Trust shall be of the type commonly called a
Massachusetts business trust, and without limiting the provisions hereof, the Trust may exercise all powers which are ordinarily
exercised by such a trust.
7. The Board of Trustees is empowered to cause the redemption of the Shares held in any account if the aggregate
net asset value of such Shares has been reduced to $200 or less upon such notice to the shareholder in question, with such permission
to increase the investment in question and upon such other terms and conditions as may be fixed by the Board of Trustees in
accordance with the 1940 Act.
8. In the event that any person advances the organizational expenses of the Trust, such advances shall become an
obligation of the Trust subject to such terms and conditions as may be fixed by, and on a date fixed by, or determined with criteria
fixed by the Board of Trustees, to be amortized over a period or periods to be fixed by the Board.
9. Whenever any action is taken under this Declaration of Trust including action which is required or permitted
by the 1940 Act or any other applicable law, such action shall be deemed to have been properly taken if such action is in accordance
with the construction of the 1940 Act or such other applicable law then in effect as expressed in "no action" letters of the staff of
the Commission or any release, rule, regulation or order under the 1940 Act or any decision of a court of competent jurisdiction,
notwithstanding that any of the foregoing shall later be found to be invalid or otherwise reversed or modified by any of the
foregoing.
10. Any action which may be taken by the Board of Trustees under this Declaration of Trust or its By-Laws may be
taken by the description thereof in the then effective prospectus and/or statement of additional information relating to the Shares
under the Securities Act of 1933 or in any proxy statement of the Trust rather than by formal resolution of the Board.
11. Whenever under this Declaration of Trust, the Board of Trustees is permitted or required to place a value on
assets of the Trust, such action may be delegated by the Board, and/or determined in accordance with a formula determined by the
Board, to the extent permitted by the 1940 Act.
12. If authorized by vote of the Trustees and, if a vote of Shareholders is required under this Declaration of
Trust, the favorable vote of the holders of a "majority" of the outstanding voting securities, as defined in the 1940 Act, entitled
to vote, or by any larger vote which may be required by applicable law in any particular case, the Trustees may amend or otherwise
supplement this instrument, by making a Restated Declaration of Trust or a Declaration of Trust supplemental hereto, which thereafter
shall form a part hereof; any such Supplemental or Restated Declaration of Trust may be executed by and on behalf of the Trust and
the Trustees by an officer or officers of the Trust.
IN WITNESS WHEREOF, the undersigned have executed this instrument as of this 22nd day of November, 2002.
SIGNATURE LINES OMITTED
PROXY CARD OPPENHEIMER MUNICIPAL BOND FUND
PROXY CARD
PROXY FOR A SPECIAL MEETING OF SHAREHOLDERS TO BE HELD ON NOVEMBER 22, 2002
The undersigned, revoking prior proxies, hereby appoints Robert Zack, Brian Wixted, Katherine Feld, Denis Molleur, and
Kathleen Ives, and each of them, as attorneys-in-fact and proxies of the undersigned, with full power of substitution,
to vote shares held in the name of the undersigned on the record date at the Special Meeting of Shareholders of
Oppenheimer Municipal Bond Fund (the "Fund") to be held at 6803 South Tucson Way, Englewood, Colorado, 80112, on
November 22, 2002, at 1:00 P. M. Mountain time, or at any adjournment thereof, upon the proposals described in the
Notice of Meeting and accompanying Proxy Statement, which have been received by the undersigned.
This proxy is solicited on behalf of the Fund's Board of Trustees, and all proposals have been proposed by the Board of
Trustees. When properly executed, this proxy will be voted as indicated on the reverse side or "FOR" a proposal if no
choice is indicated. The proxy will be voted in accordance with the proxy holders' best judgment as to any other
matters that may arise at the Meeting.
VOTE VIA THE TELEPHONE: 1-800-597-7836
CONTROL NUMBER: 999 9999 9999 999
Note: Please sign this proxy exactly as your
name or names appear hereon. Each joint
owner should sign. Trustees and other
fiduciaries should indicate the capacity in
which they sign. If a corporation,
partnership or other entity, this signature
should be that of a duly authorized
individual who should state his or her title.
Signature
Signature of joint owner, if any
Date
PLEASE VOTE ON THE REVERSE SIDE, SIGN AND DATE THIS PROXY AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK. Example: [ ]
1. To elect a Board of Trustees:
01 Leon Levy 02 Donald W. Spiro 03 John V. Murphy FOR AGAINST FOR ALL
04 Robert G. Galli 05 Phillip A. Griffiths 06 Benjamin Lipstein ALL ALL EXCEPT
07 Elizabeth B. Moynihan 08 Kenneth A. Randall 09 Edward V. Regan [ ] [ ] [ ]
10 Russell S. Reynolds, Jr. 11 Clayton K. Yeutter 10 Joel Motley
If you do not wish your shares voted "FOR" a particular nominee, mark the "For All Except" box and write
the nominee's number on the line provided below. Your shares will be voted for the remaining nominee(s).
2. To approve the elimination or amendment of certain fundamental investment policies of the Fund: FOR AGAINST ABSTAIN
A. Purchasing Securities on Margin [ ] [ ] [ ]2.A
B. Making Short Sales [ ] [ ] [ ]2.B
C. Purchasing Securities of Issuers in which Officers or Trustees have an Interest [ ] [ ] [ ]2.C
D. Investing in Real Estate [ ] [ ] [ ]2.D
E. Industry Concentration [ ] [ ] [ ]2.E
F. Borrowing [ ] [ ] [ ]2.F
G. Lending [ ] [ ] [ ]2.G
H. Diversification [ ] [ ] [ ]2.H
I. Purchasing Restricted or Illiquid Securities [ ] [ ] [ ]2.I
J. Investing in Other Investment Companies [ ] [ ] [ ]2.J
3. To Authorize the Trustees to adopt an Amended and Restated Declaration of Trust: FOR AGAINST ABSTAIN
A. Future Amendements of the Declaration of Trust. [ ] [ ] [ ]3.A
B. Reorganization of the Trust or Its Series of Classes. [ ] [ ] [ ]3.B
C. Involuntary Redemption. [ ] [ ] [ ]3.C
D. Other Changes Under the Amended and Restated Declaration of Trust. [ ] [ ] [ ]3.D