Oppenheimer Government Money Market Fund Inactive
Filed: 28 May 02, 12:00am
OPPENHEIMER MONEY MARKET FUND, INC.
6803 South Tucson Way, Englewood, CO 80112
Notice Of Meeting Of Shareholders To Be Held
July 29, 2002
To The Shareholders of Oppenheimer Money Market Fund, Inc:
Notice is hereby given that a Special Meeting of the Shareholders (the "Meeting") of Oppenheimer Money Market
Fund, Inc. (the "Fund") will be held at 6803 South Tucson Way, Englewood, Colorado, 80112, at 1:00 P.M. Mountain
time, on July 29, 2002.
During the Meeting, shareholders of the Fund will vote on the following proposals and sub-proposals:
1. To elect a Board of Directors;
2. To approve the elimination or amendment of certain fundamental investment policies of the Fund;
3. To approve a new Investment Advisory Agreement; 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 May 2, 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 Directors of the Fund
recommends a vote to elect each of the nominees as Director 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 Directors,
Robert G. Zack, Secretary
June 3, 2002
PLEASE RETURN YOUR PROXY BALLOT PROMPTLY.
YOUR VOTE IS IMPORTANT NO MATTER HOW MANY SHARES YOU OWN.
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TABLE OF CONTENTS
Proxy Statement Page
Questions and Answers
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Proposal 1: To Elect a Board of Directors
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Introduction to Proposal 2
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Proposal 2: To approve the elimination or amendment of certain fundamental
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investment policies of the Fund
Proposal 3: To approve a new Investment Advisory Agreement
Information About the Fund -
Further Information About Voting and the Meeting
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Other Matters -
Exhibit A: Proposed Investment Advisory Agreement
A-1
Exhibit B: Advisory Fees of Oppenheimer Money Market Funds
B-1
OPPENHEIMER MONEY MARKET FUND, INC.
PROXY STATEMENT QUESTIONS AND ANSWERS
Q. Who is Asking for My Vote?
A. The Directors of Oppenheimer Money Market Fund, Inc. (the "Fund") have asked that you vote on several
matters at the Special Meeting of Shareholders to be held on July 29, 2002.
Q. Who is Eligible to Vote?
A. Shareholders of record at the close of business on May 2, 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 shares) 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 June 3, 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 Directors; and
2. To approve the elimination or amendment of certain fundamental investment policies of the Fund.
3. To approve a new Investment Advisory Agreement
Q. How do the Directors Recommend that I Vote?
A. The Directors recommend that you vote:
1. FOR election of all nominees as Directors;
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 the approval of a new Investment Advisory Agreement.
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
Directors 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 to
adapt to future changes in the investment environment and increasing the Fund's ability to take
advantage of investment opportunities.
Q. What are the reasons for the proposed Investment Advisory Agreement?
A. The current agreement contains a limit on Fund expenses that is not appropriate in light of current
interest rates. This is explained in Proposal No. 3 below.
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
o By telephone (please see the insert for instructions)
Voting by telephone is convenient and can help reduce the Fund's expenses. Whichever
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method you choose, please 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 are 3:00 p.m. (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
Directors' recommendations. Telephonic votes will be recorded according to the telephone
voting procedures described in the "Further Information About Voting and the Meeting" section
below.
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. Please be advised that the deadline for revoking your proxy by
telephone or via the internet 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 semi-annual report dated January 31, 2002 and annual report dated July 31,
2001 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 1.800.525.7048, 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 1.800.525.7048.
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 1.800.525.7048.
OPPENHEIMER MONEY MARKET FUND, INC.
PROXY STATEMENT
Meeting of Shareholders
To Be Held July 29, 2002
This statement is furnished to the shareholders of Oppenheimer Money Market Fund, Inc., (the "Fund") in
connection with the solicitation by the Fund's Board of Directors 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 July 29, 2002, or any adjournments thereof. It is expected that the mailing of this Proxy
Statement will be made on or about June 3, 2002.
SUMMARY OF PROPOSALS
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Proposal Shareholders Voting
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1. To Elect a Board of Directors 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. Investing in Unseasoned Issuers All
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B. Borrowing All
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C. Lending All
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3. To Approve a New Investment Advisory Agreement All
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PROPOSAL 1: ELECTION OF DIRECTORS
At the Meeting, eleven (11) Directors are to be elected. If elected, the Directors will serve
indefinite terms until a special shareholder meeting is called for the purpose of voting for Directors and 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 Maryland corporation, the Fund is not required and does not intend to hold annual shareholder
meetings for the purpose of electing Directors. As a result, if elected, the Directors will hold office until
the next meeting of shareholders called for the purpose of electing Directors and 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 Directors 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
Director or to take other action described in the Fund's Articles of Incorporation. Also, if at any time, less
than a majority of the Directors holding office has been elected by the shareholders, the Director then in office
will promptly call a shareholders' meeting for the purpose of electing Directors.
Each of the nominees (except for Mr. Murphy and Mr. Griffiths) currently serves as a Director of the
Fund. Each of the nominees has consented to be named as such in this proxy statement and to serve as Director if
elected. Each of the Directors serves as Trustee of other funds in the Oppenheimer family of funds (the 31
Oppenheimer funds on which each of the existing Directors of the Fund serve are referred to as "Board I Funds" in
this proxy statement).
The Fund's Directors and officers, their positions with the Fund and length of service in such positions
and their principal occupations and business affiliations during the past five years are listed below. Each of
the Directors is an independent director of the Fund ("Independent Director"). If elected, Mr. Murphy will be an
"interested director" (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 will be elected as a Director of the Fund with the understanding that in the event his affiliation
with the Manager is terminated, he will resign as a director 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.
Mr. Reynolds has reported he has a controlling interest in The Directorship Search Group, Inc., a director
recruiting firm that provided consulting services to Massachusetts Mutual Life Insurance Company (which controls
the Manager) for fees aggregating $100,000 for the calendar year ended December 31, 2001, an amount representing
less than 5% of the annual revenues of The Directorship Search Group, Inc. The Independent Directors 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 Director. Nonetheless,
to assure certainty as to determinations of the Board and the Independent Directors as to matters upon which the
1940 Act or the rules thereunder require approval by a majority of Independent Directors, Mr. Reynolds will not
be counted for purposes of determining whether a quorum of Independent Directors was present or whether a
majority of Independent Directors 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 present 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.
Independent Directors
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Name, Address,1 Age, Principal Occupation(s) During Past 5 Years / Other Dollar Range of Aggregate Dollar
Range of Shares
Owned in any of
Position(s) Held with Shares Owned in the Board I
Fund and Length of Time Directorships Held by Director / Number of the Fund (as of Funds (as of
Served (as applicable)2 Portfolios in Fund Complex Overseen by Director 5/3/02) 5/3/02)
- -------------------------- ------------------------------------------------------ ----------------- ------------------
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Leon Levy, Chairman of General Partner of Odyssey Partners, L.P. $0 $0
the Board of Directors (investment partnership) (since 1982) and Chairman
Director since 1974 of the Board of Avatar Holdings, Inc. (real estate
Age: 76 development) (since 1981). Oversees 31 investment
companies in the OppenheimerFunds complex.
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Robert G. Galli, A Trustee or Director of other Oppenheimer funds. Over $100,000 Over $100,0003
Director since 1993 Formerly Vice Chairman of the Manager (October 1995
Age: 68 - December 1997). Oversees 41 investment companies
in the OppenheimerFunds complex.
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Phillip A. Griffiths, The Director of the Institute for Advanced Study, $0 Over $100,000
Nominee Princeton, N.J. (since 1991), director of GSI
Age: 63 Lumonics (since 2001) and a member of the National
Academy of 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 investment companies in the
OppenheimerFunds complex (31, if elected).
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Benjamin Lipstein, Professor Emeritus of Marketing, Stern Graduate $50,001- Over $100,000
Director since 1974 School of Business Administration, New York
Age: 78 University. Oversees 31 investment companies in the $100,000
OppenheimerFunds complex.
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Elizabeth B. Moynihan, Author and architectural historian; a trustee of the $0 $50,001 -
Director since 1992 Freer Gallery of Art and Arthur M. Sackler Gallery
Age: 72 (Smithsonian Institute), Trustees Council of the
National Building Museum; a member of the Trustees
Council, Preservation League of New York State. $100,000
Oversees 31 investment companies in the
OppenheimerFunds complex.
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Kenneth A. Randall, A director of Dominion Resources, Inc. (electric $1 - $10,000 Over $100,000
Director since 1980 utility holding company) and Prime Retail, Inc.
Age: 74 (real estate 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 director of
Lumbermens Mutual Casualty Company, American
Motorists Insurance Company and American
Manufacturers Mutual Insurance Company. Oversees 31
investment companies in the OppenheimerFunds complex.
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Edward V. Regan, President, Baruch College, CUNY; a director of
Director since 1993 RBAsset (real estate manager); a director of
Age: 71 OffitBank; formerly Trustee, Financial Accounting
Foundation (FASB and GASB), Senior Fellow of Jerome
Levy Economics Institute, Bard College, Chairman of $1 - $10,000 $50,001 -
Municipal Assistance Corporation for the City of New $100,000
York, New York State Comptroller and Trustee of New
York State and Local Retirement Fund. Oversees 31
investment companies in the OppenheimerFunds complex.
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Russell S. Reynolds, Jr., Chairman of The Directorship Search Group, Inc.
Director since 1989 (corporate governance consulting and executive
Age: 70 recruiting) (since 1993); a director of Professional
Staff Limited (a U.K. temporary staffing company)
(since 1995); a life trustee of International House $0 $10,001 - $50,000
(non-profit educational organization), and a trustee
of the Greenwich Historical Society (since 1996).
Oversees 31 investment companies in the
OppenheimerFunds complex.
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Donald W. Spiro, Vice Chairman Emeritus of the Manager (since January
Chairman of the Board of 1991). Formerly he held the following positions:
Directors, Chairman (November 1987 - January 1991) and a
Director since 1985 director (January 1969 - August 1999) of the
Age: 76 Manager; President and Director of OppenheimerFunds Over $100,000 Over $100,000
Distributor, Inc., a subsidiary of the Manager and
the Fund's Distributor (July 1978 - January 1992).
Oversees 31 investment companies in the
OppenheimerFunds complex.
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Clayton K. Yeutter, Of Counsel, Hogan & Hartson (a law firm) (since
Director since 1991 1993). Other directorships: Caterpillar, Inc. (since $50,001 -
Age: 71 1993) and Weyerhaeuser Co. (since 1999). Oversees 31 $0 $100,000
investment companies in the OppenheimerFunds complex.
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Officer and Nominee for Interested Director
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Name, Address,4 Age, Principal Occupation(s) During Past 5 Years / Other Dollar Range of Aggregate Dollar
Range of Shares
Owned in any of
Position(s) Held with Shares Owned in the Oppenheimer
Fund and Length of Time Directorships Held by Director / Number of the Fund (as of Funds (as of
Served5 Portfolios in Fund Complex Overseen by Director 5/3/02) 5/3/02)
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John V. Murphy, Chairman, Chief Executive Officer and director $10,001- Over $100,0006
President since October (since June 2001) and President (since September
2001 2000) of the Manager; President and a trustee of
Age: 52 other Oppenheimer funds; President and a director
(since July 2001) of Oppenheimer Acquisition Corp.,
the Manager's 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 $100,000
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;
Executive Vice President Director and Chief
Operating Officer (from June 1995 to January 1997)
of David L. Babson & Co., Inc., an investment
advisor; Chief Operating Officer (from March 1993 to
December 1996) of Concert Capital Management, Inc.,
an investment advisor. Oversees 63 investment
companies in the OppenheimerFunds complex (64, if
elected).
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A. General Information Regarding the Board of Directors.
The Fund is governed by a Board of Directors, which is responsible for protecting the interests of
shareholders. The Directors 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 Directors were held during the fiscal year ended July 31, 2001. Each of the incumbent
Directors was present for at least 75% of the aggregate number of meetings of the Board of Directors meetings
held and of all committees on which that Director served that were held during the period.
B. Committees of the Board of Directors.
The Board of Directors has appointed standing Audit, Study and Proxy Committees comprised of Independent
Directors only.
The members of the Audit Committee are Kenneth Randall (Chairman), Benjamin Lipstein and Edward Regan.
The Audit Committee held four meetings during the Fund's fiscal year ended July 31, 2001. The Audit Committee
furnishes the Board with recommendations regarding the selection of the independent auditor. 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 Directors.
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, 2001. 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 one meeting during the fiscal year ended July 31, 2001. 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 Directors of the Fund, including a majority
of the Independent Directors, at a meeting held August 8, 2001, selected KPMG LLP ("KPMG") as auditors of the
Fund for the fiscal year beginning August 1, 2001. KPMG also serves as auditors for certain other funds for
which the Manager acts as investment advisor.
During the fiscal year ended July 31, 2001, KPMG 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 Directors.
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, 2001 were $30,000.
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, 2001. 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, 2001.
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 Directors and Officers.
Each of the current Directors also serves as a trustee or director of other Oppenheimer funds (referred
to as "Board I Funds"). The Fund's Independent Directors 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 Fund in the
OppenheimerFunds complex for which they serve as a director or trustee pays a share of those expenses.
The officers of the Fund receive no salary or fee from the Fund. The Independent Directors of the Fund
received the compensation shown below from the Fund with respect to the Fund's fiscal year ended July 31, 2001.
Although Mr. Griffiths, who is not currently a Director of the Fund, did not receive any compensation from the
Fund for the period shown, he is included in the chart below because he received compensation from other Board I
Funds.
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 is paid for services in the positions below their names.
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Director's Name and Other Fund Aggregate Retirement Number of Boards Total
Benefits Compensation
Accrued as Part on which Director From all
Compensation of Fund Served as of Oppenheimer Funds
Position(s) (as applicable) from Fund1 Expenses1 12/31/01 (31 Funds)2
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Leon Levy $11,408 $32,043 31 $173,700
Chairman
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Robert G. Galli3 $4,715 $643 41 $202,886
Study Committee Member
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Phillip Griffiths4 $0 $0 30 $54,889
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Benjamin Lipstein $9,860 $15,067 31 $150,152
Study Committee Chairman,
Audit Committee Member
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Elizabeth B. Moynihan $6,948 $11,421 31 $105,760
Study Committee Member
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Kenneth A. Randall $6,373 $15,646 31 $97,012
Audit Committee Chairman
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Edward V. Regan $4,212 $13,887 31 $95,960
Proxy Committee Chairman, Audit
Committee Member
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Russell S. Reynolds, Jr. $6,301 $6,488 31 $71,792
Proxy Committee Member
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Donald Spiro $6,948 $204 31 $64,080
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Clayton K. Yeutter5 $3,820 $11,668 31 $71,792
Proxy Committee Member
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1. For the fiscal year ended July 31, 2001. Aggregate compensation includes fees, deferred compensation,
if any, and retirement plan benefits accrued for a Director. No retirement benefit expenses were allocated
to the Fund for fiscal year ended July 31, 2001.
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 $266 deferred under Deferred Compensation Plan described
below.
5. Aggregate compensation from the Fund includes $51 deferred under Deferred Compensation Plan described
below.
The Fund has adopted a retirement plan that provides for payments to retired Directors. Payments are up
to 80% of the average compensation paid during a Director's five years of service in which the highest
compensation was received. A Director must serve as director or trustee for any of the New York-based Oppenheimer
funds for at least 15 years to be eligible for the maximum payment. Each Director's retirement benefits will
depend on the amount of the compensation received by the Director for service in future years as well as the
Director'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 Directors has adopted a Deferred Compensation Plan for Independent Directors 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 Director is periodically adjusted as though an equivalent amount
had been invested in shares of one or more Oppenheimer funds selected by the Director. The amount paid to the
Director under the plan will be determined based upon the performance of the selected funds.
Deferral of Director's 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 Director or to pay any
particular level of compensation to any Director. Pursuant to an order issued by the Securities and Exchange
Commission, the Fund may invest in the funds selected by the Director under the plan without shareholder approval.
Information is given below about the executive officers who are not Directors (or nominees to the Board)
of the Fund, including their business experience during the past five years. Messrs. Murphy, Zack, Wixted,
Molleur, and Mses. Feld and Ives respectively hold the same offices with the other funds in the Oppenheimer
family of funds.
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Name, Address,6 Age, Position(s) Held with Principal Occupation(s) During Past 5 Years
Fund and Length of Time Served7
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Angelo Manioudakis, Vice President Senior Vice President of the Manager (since April 2002); an officer
Portfolio Manager (since 2002) and portfolio manager of other Oppenheimer funds; formerly Executive
Age: 35 Director and portfolio manager for Miller, Anderson & Sherrerd, a
division of Morgan Stanley Investment Management (August 1993-April
2002).
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Barry D. Weiss, Vice President and Portfolio Vice President of the Manager (since July 2001); an officer and
Manager (since 2000) portfolio manager of other Oppenheimer funds; formerly Assistant
Age: 37 Vice President and Senior Credit Analyst of the Manager (February
2000-June 2001). Prior to joining the Manager in February 2000, he
was Associate Director, Structured Finance, Fitch IBCA Inc. (April
1998 - February 2000); News Director, Fitch Investors Service
(September 1996 - April 1998); and Senior Budget Analyst, City of
New York, Office of Management & Budget (February 1990 - September
1996).
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Carol E. Wolf, Vice President and Portfolio Senior Vice President (since June 2000) of the Manager; an officer
Manager (since 1987) and portfolio manager of other Oppenheimer funds; formerly Vice
Age: 50. President of the Manager (June 1990 - June 2000).
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- ----------------------------------------------- ----------------------------------------------------------------------
Brian W. Wixted, Treasurer, Principal Senior Vice President and Treasurer (since March 1999) of the
Financial and Accounting Officer (since March Manager; Treasurer (since March 1999) of HarbourView Asset
1999) Management Corporation, Shareholder Services, Inc., Oppenheimer Real
Age: 42 Asset 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 October 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.
- ----------------------------------------------- ----------------------------------------------------------------------
- ----------------------------------------------- ----------------------------------------------------------------------
Denis R. Molleur, Assistant Secretary Vice President and Senior Counsel of the Manager (since July 1999);
(since October 2001) an 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);
(since October 2001) an 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
(since October 2001) 1998); an officer of other Oppenheimer funds; formerly an Assistant
Age: 36 Vice 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 May 2, 2002, the Directors, nominees for Director and officers, individually and as a group, beneficially
owned less than 1% of the outstanding shares of the Fund.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS
A VOTE FOR THE ELECTION OF EACH NOMINEE AS DIRECTOR
Introduction to Proposal 2
A. 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 Directors 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 Directors 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. The proposed standardized changes will not affect the Fund's investment objective.
B. Why do the Fund's Directors Recommend the Proposed Changes?
The Directors 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 Directors 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 Directors believe the proposed changes in fundamental investment policies will provide the
Fund greater flexibility to respond to future investment opportunities, the Directors 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 Directors do not anticipate that the proposed changes will
materially affect the manner in which the Fund is managed. In the future, if the Directors 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 RESTRICTIONS OF THE FUND
A. Investing in Unseasoned Issuers.
The Fund is currently subject to a fundamental investment restriction limiting its investment in
securities of issuers that have been in operation less than three years ("unseasoned issuers"). It is proposed
that the current fundamental restriction be eliminated. The current fundamental restriction is set forth below.
Current Fundamental Policy
--------------------------
The Fund cannot invest more than 5% of its total assets in securities of companies
that have operated less than three years, including the operations of predecessors.
This restriction was originally adopted to address state or "Blue Sky" requirements in connection with
the registration of shares of the Fund for sale in a particular state or states. The Board recommends that
shareholders eliminate this fundamental investment restriction. Under NSMIA, this restriction no longer applies
to the Fund. The Board believes that elimination of this restriction would increase the Fund's flexibility when
choosing investments in the future, without materially increasing the risk of an investment in the Fund.
The Fund invests a portion of its assets in asset-backed commercial paper, backed by pools of assets,
including automobile and credit-card receivables, and residential mortgage and home equity loans. These
instruments pass the payments on the underlying obligations through to the security holders (less certain fees).
Whether or not the issuers of those obligations - generally a trust or special purpose corporation - have been in
operation for three years is much less important in determining the creditworthiness of that issuer and other
factors, including the following: (i) changes in the market's perception of the asset backing the security, (ii)
the overall structure of the obligation, (iii) the experience of those managing the investments for that
obligation and (iv) the creditworthiness of the servicing agent for the loan pool, the originator of the loans,
or the financial institution providing support to the obligation such as any credit enhancement or back-up
liquidity. The Fund has no current intention of investing to a substantial degree in unseasoned issuers other
than those described in this paragraph - whether or not this proposal is adopted.
B. 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.
There are risks associated with borrowing. Borrowing exposes shareholders and their investments in a
fund to a greater risk of loss. 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 dos 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 Directors 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 borrowings to
5% of its assets. The Fund's current policy also prohibits the Fund from borrowing for investment or leverage
purposes. The Directors propose that the current policy on borrowing be amended to permit the Fund to borrow as
permitted under the 1940 Act, and that the current fundamental investment policy concerning the pledging,
mortgaging or hypothecating of the Fund's assets be eliminated.
Current Fundamental Policy Proposed Fundamental Policy
-------------------------- ---------------------------
The Fund cannot borrow money in excess of 5% of the The Fund may borrow money, except to the extent
value of its total assets. The Fund may borrow only as a permitted under the 1940 Act, the rules or regulations
temporary measure for extraordinary or emergency thereunder or any exemption therefrom that is
purposes. applicable to the Fund, as such statute, rules or
regulations may be amended or interpreted from time to
time.
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 C ("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 Directors 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.
C. 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.
Current Fundamental Policy Proposed Fundamental Policy
- -------------------------- ---------------------------
The Fund cannot make loans, except through the The Fund cannot make loans, except to the extent
purchase of the types of debt securities described in permitted under the 1940 Act, the rules or regulations
the Prospectus or through repurchase agreements; the thereunder or any exemption therefrom that is applicable
Fund may lend securities as described under "Loans of to the Fund, as such statute, rules or regulations may be
Portfolio Securities" in the Statement of Additional amended or interpreted from time to time.
Information.
Currently, the 1940 Act permits (a) lending of securities, (b) purchasing debt instruments or similar evidences
of indebtedness, and (c) investing in repurchase agreements. 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 reflect the 1940 Act's current
restrictions regarding lending. The Fund, however, currently does not anticipate making loans, which are subject
to the risk that the borrower may fail to pay interest under the terms of the loan or repay the principal amount
to the borrower.
If this sub-proposal and the borrowing sub-proposal described above in Paragraph B ("Borrowing") are
approved by shareholders, and the Fund were to obtain the necessary regulatory relief, it would be possible for
the Fund to lend to and borrow from 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 Directors were to determine that it was in the Fund's best interest to lend to or borrow
from other Oppenheimer funds, the Fund's prospectus would be updated to reflect such a practice.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS
THAT YOU APPROVE EACH SUB-PROPOSAL DESCRIBED ABOVE
APPROVAL OF PROPOSED INVESTMENT ADVISORY AGREEMENT
(Proposal No. 3)
The Fund has an Investment Advisory Agreement dated October 22, 1990, with the Manager (the "Current Agreement")
which was approved by shareholders of the Fund at a meeting held on that date. At a meeting of the Fund's Board
of Directors held on February 14, 2002, the Board, including a majority of the Directors who are not "interested
persons" (as defined in the Investment Company Act) of the Fund or the Manager, and who have no direct or
indirect financial interest in the operations of the current Agreement or in any related Agreements, (i) approved
the terms of a new Investment Advisory Agreement (the "Proposed Agreement") between the Fund and the Manager and
(ii) determined to recommend the Proposed Agreement for approval by the shareholders.
The Proposed Agreement is contained in Exhibit A to this Proxy Statement. If approved by shareholders at this
meeting, the Proposed Agreement will be effective on the following business day and continue in effect until
December 31, 2002, and thereafter from year to year unless terminated, but only so long as such continuance is
approved in accordance with the Investment Company Act.
The Proposed Agreement differs from the Current Agreement in that the Proposed Agreement contains a contractual
undertaking by the Manager to limit fund expenses. Under the Current Agreement, the Manager guarantees that the
total expenses of the Fund in any calendar year, exclusive of taxes, interest and brokerage fees, shall not
exceed the lesser of (a) 1% of average annual net assets of the Fund, or (b) 25% of the total annual investment
income of the Fund. There is no similar provision in the Proposed Agreement. Prior to February 1, 2002, no
refund has ever been required under that expense limitation. However, due to the impact on Fund income of the
dramatic decrease in interest rates paid by the obligations in which the Fund invests, the Manager reimbursed the
Fund $1,492,731 during the fiscal quarter ended April 30, 2002 so that the Fund's total expenses would not exceed
25% of the total annual investment income of the Fund. If the Proposed Agreement had been in effect during that
period, the Manager would not have made that reimbursement, which reduced Fund expenses.
The Manager determined that this is an appropriate time to propose the elimination of an expense limitation based
on the Fund's total annual investment income, now that such limitation is dramatically reducing the management
fee to which the Manager is entitled for providing the Fund with investment advisory and related services. The
impact on future Fund expense levels of removing this limitation is dependent upon future interest rates of debt
securities in which the Fund invests, which cannot be predicted. If the Proposed Agreement is approved, the
Manager will voluntarily undertake that it will pay all Fund expenses (exclusive of non-recurring and
extraordinary or exceptional costs and expenses) if and to the extent necessary for the Fund to maintain a stable
net asset value of $1.00 per share. The Manager would reserve the right to amend or terminate that voluntary
expense assumption at any time.
The management fee rate under the Current and Proposed Agreements are the same. The management fee payable
monthly to the Manager is computed on the net assets of the Fund as of the close of business each day at the
annual rate of 0.45% of the first $500 million of net assets; 0.425% of the next $500 million; 0.40% of the next
$500 million, and 0.375% of aggregate net assets in excess of $1.5 billion. During the fiscal year ended July 31,
2001, the Fund paid the Manager a fee of $8,118,471 under the Current Agreement, which is also the amount the
Fund would have paid had the Proposed Agreement been in effect during that period (whether or not the proposed
voluntary expense undertaking described above was in effect). The reimbursement discussed above had the effect
of reducing the management fee paid by the Fund during the fiscal quarter ended April 30, 2002 from $1,971,092 to
$478,361. The Manager also acts as investment adviser to other money market funds that have similar or comparable
investment objectives. A list of those funds and the net assets and advisory fee rates paid by those funds is
contained in Exhibit B to this Proxy Statement.
The Proposed Agreement and the Current Agreement (hereinafter jointly referred to as the "Agreements") are the
same other than the change in the expense limitation described above, the date of the Agreements, and the
Manager's name (which changed from Oppenheimer Management Corporation on January 5, 1996). The Agreements
require the Manager, at its expense, to provide the Fund with adequate office space, facilities and equipment as
well as to provide, and supervise the activities of all administrative and clerical personnel required to provide
effective administration for the Fund, including the compilation and maintenance of records with respect to its
operations, the preparation and filing of specified reports, and composition of proxy materials and registration
statements for continuous public sale of shares of the Fund. Expenses not expressly assumed by the Manager under
the Agreements or by the distributor of the Fund's shares are paid by the Fund. The Agreements list examples of
expenses paid by the Fund, the major categories of which relate to interest, taxes, brokerage commissions, fees
to certain Directors, legal and audit expenses, custodian and transfer agent expenses, share certificate issuance
costs, certain printing and registration costs, and non-recurring expenses, including litigation.
The Agreements provide that in the absence of willful misfeasance, bad faith or gross negligence in the
performance of its duties or reckless disregard of its obligations under the Agreements, the Manager is not
liable for any loss sustained by reason of any investment, or the purchase, sale or retention of any security, or
for any act or omission in performing the services required by the Agreements. The Agreements permit the Manager
to act as investment adviser for any other person, firm or corporation and to use the name "Oppenheimer" in
connection with other investment companies for which it may act as investment adviser. If the Manager shall no
longer act as investment adviser to the Fund, the right of the Fund to use the name "Oppenheimer" as part of its
name may be withdrawn.
Brokerage. Most purchases made by the Fund are principal transactions at net prices, so the Fund incurs little or
no brokerage costs. The Fund deals directly with the selling or purchasing principal or market maker without
incurring charges for the services of a broker on its behalf unless the Manager determines that a better price or
execution may be obtained by using the services of a broker. Purchases of portfolio securities from underwriters
include a commission or concession paid by the issuer to the underwriter, and purchases from dealers include a
spread between the bid and asked prices.
The Fund seeks to obtain prompt execution of orders at the most favorable net price. If dealers are used for
portfolio transactions, transactions may be directed to dealers for their execution and research services. The
research services provided by a particular broker may be useful only to one or more of the advisory accounts of
the Manager and its affiliates. Investment research received for the commissions of those other accounts may be
useful both to the Fund and one or more of such other accounts. Investment research services may be supplied to
the Manager by a third party at the instance of a broker through which trades are placed. It may include
information and analyses on particular companies and industries as well as market or economic trends and
portfolio strategy, receipt of market quotations for portfolio evaluations, information systems, computer
hardware and similar products and services. If a research service also assists the Manager in a non-research
capacity (such as bookkeeping or other administrative functions), then only the percentage or component that
provides assistance to the Manager in the investment decision-making process may be paid in commission dollars.
The research services provided by brokers broaden the scope and supplement the research activities of the
Manager. That research provides additional views and comparisons for consideration, and helps the Manager obtain
market information for the valuation of securities held in the Fund's portfolio or being considered for
purchase.
Subject to applicable rules covering the Manager's activities in this area, sales of shares of the Fund and/or
the other investment companies managed by the Manager or distributed by the Distributor may also be considered as
a factor in the direction of transactions to dealers. That must be done in conformity with the price, execution
and other considerations and practices discussed above. Those other investment companies may also give similar
consideration relating to the sale of the Fund's shares. No portfolio transactions are handled by any securities
dealer affiliated with the Manager.
Fees and Expenses of the Fund. The Fund pays a variety of expenses directly for investment management,
administration and other services. Those expenses are subtracted from the Fund's assets to calculate the Fund's
net asset value per share. All shareholders therefore pay those expenses indirectly. The numbers below are based
upon the Fund's expenses during its fiscal year ended July 31, 2001 and are the same (i) under the Current
Agreement, and (ii) on a pro forma basis, assuming that the Proposed Agreement had been in effect during that
period.
Annual Fund Operating Expenses (deducted from Fund assets):
(% of average daily net assets)
------------------------------------------------------- ----------------------------------------------------
Management Fees 0.41%
------------------------------------------------------- ----------------------------------------------------
------------------------------------------------------- ----------------------------------------------------
Distribution (12b-1) Fees None
------------------------------------------------------- ----------------------------------------------------
------------------------------------------------------- ----------------------------------------------------
Other Expenses 0.27%
------------------------------------------------------- ----------------------------------------------------
------------------------------------------------------- ----------------------------------------------------
Total Annual Operating Expenses 0.68%
------------------------------------------------------- ----------------------------------------------------
"Other expenses" in the table include transfer agent fees, custodial fees, and accounting and legal expenses the
Fund pays. The Fund's transfer agent has voluntarily agreed to limit transfer and shareholder servicing fees to
0.35% per annum, effective October 1, 2001. That undertaking is not related to or affected by this proposal and
may be amended or withdrawn at any time.
The following example is intended to help you compare the cost of investing in the Fund with the cost of
investing in other mutual funds. The example assumes that you invest $10,000 in shares of the Fund for the time
periods indicated and then redeem all of your shares at the end of those periods. The example also assumes that
your investment has a 5% return each year and that the Fund's operating expenses remain the same as during the
Fund's fiscal year ended July
31, 2001 - whether the Current or Proposed Agreement is in effect. Your actual costs may be higher or lower,
because expenses will vary over time. Based on these assumptions, your expenses would be as follows, whether or
not you redeem your investment at the end of each period:
------------------------- ----------------------------- ---------------------------- -----------------------
1 Year 3 Years 5 Years 10 Years
------------------------- ----------------------------- ---------------------------- -----------------------
------------------------- ----------------------------- ---------------------------- -----------------------
$69 $218 $379 $847
------------------------- ----------------------------- ---------------------------- -----------------------
Considerations by the Board of Directors. In connection with the approval of the Proposed Agreement and the
annual review and renewal of the Current Agreement, most recently conducted by the Board on December 5, 2001, the
Manager provided extensive information to the Independent Directors. The Independent Directors were provided
with data as to the qualifications of the Manager's personnel, the quality and extent of the services rendered
and its commitment to its mutual fund advisory business. The Independent Directors also considered data
presented by the Manager showing the extent to which it had expanded its investment personnel and other services
dedicated to the short-term fixed income area of its mutual fund advisory activities. The Independent Directors
were advised that (i) due to changes in regulatory requirements since the Fund was established in 1974, it was no
longer necessary to include a contractual expense limitation in the Fund's investment advisory agreement; and
(ii) if such a contractual provision were included in the Proposed Agreement, another shareholder meeting (and
the requisite expenses of that meeting) might be required in order to modify it at any future date. After
reviewing this and other information, the Independent Directors concluded that the expense limitation in the
Current Agreement is not reasonable in the current interest rate environment, and that it is not appropriate to
include any expense limitation as a contractual provision in the Fund's investment advisory contract.
Analysis of Nature, Quality and Extent of Services. In determining whether to approve the Proposed Agreement and
to recommend its approval by the Fund's shareholders, the Independent Directors particularly considered: (1) the
effect of the proposed investment management fee on the expense ratio of the Fund; (2) the investment record of
the Manager in managing the Fund, and the investment record of other investment companies for which it acts as
investment adviser and (3) data as to investment performance, advisory fees and expense ratios of other
investment companies not advised by the Manager but believed to be in the same overall investment and size
category as the Fund. The Independent Directors also considered the following factors, among others: (1) the
necessity of the Manager maintaining and enhancing its ability to retain and attract capable personnel to serve
the Fund; (2) the Manager's overall profitability; (3) possible economies of scale; (4) other benefits to the
Manager from serving as investment manager to the Fund, as well as benefits to its affiliates acting as principal
underwriter and its division acting as transfer agent to the Fund; (5) current and developing conditions in the
financial services industry, including the entry into the industry of larger and highly capitalized companies
which are spending and appear to be prepared to continue to spend substantial sums to engage personnel and to
provide services to competing investment companies; and (6) the financial resources of the Manager and the
desirability of appropriate incentives to assure that the Manager will continue to furnish high quality services
to the Fund.
Analysis of Profitability of the Manager. The Independent Directors were advised that the Manager does not
maintain its financial records on a fund-by-fund basis. However, the Manager does provide the Independent
Directors on an annual basis with its allocation of expenses on a fund-by-fund basis. The Independent Directors
considered information provided by the Manager regarding its profitability and also considered comparative
information relating to the profitability of other mutual fund investment managers.
Determination by the Independent Directors and the Board of Directors. After completion of its review, the
Independent Directors recommended that the Board of Directors approve, and the Board unanimously approved, the
Proposed Agreement.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS
A VOTE IN FAVOR OF APPROVING THE
PROPOSED INVESTMENT ADVISORY AGREEMENT
INFORMATION ABOUT THE FUND
Fund Information. The Fund has a single class of outstanding shares. As of the close of business on May 2, 2002,
the record date, the Fund had 1,947,740,126.485 shares outstanding and entitled to vote. 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 May 2, 2002, no 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 other than the
Manager, which held 131,266,198.8 shares (6.73% of the shares then outstanding).
The Manager, the Distributor and the Transfer Agent. Subject to the authority of the Board of Directors, 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 $3,645,823 by the Fund during the fiscal year
ended July 31, 2001. The Distributor and the Transfer Agent will continue to provide services to the Fund after
the Proposed Agreement is approved.
The Manager (including affiliates and subsidiaries) managed assets of more than $130 billion at December 31,
2001, 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 Advisor 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, including John V. Murphy, who is a nominee
for Director 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 Advisor). 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.
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 and Semi-Annual Reports to Shareholders of the Fund,
including financial statements of the Fund for the fiscal year ended July 31, 2001 and the six months ended
January 31, 2002, have 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, calling the Fund at
1.800.525.7048 or visiting the Manager's web site 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 1.800.525.7048. 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, 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 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 $17,500 plus the additional
----
out-of-pocket costs, that may 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 1.800.525.7048. 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 promptly. You may provide your completed proxy 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 Directors 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.
Voting by the Director for OppenheimerFunds-Sponsored Retirement Plans. Shares held in
OppenheimerFunds-sponsored retirement accounts for which votes are not received as of the last business day
before the Meeting Date, will be voted by the trustee for such accounts in the same proportion as Shares for
which voting instructions from the Fund's other shareholders have been timely received.
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 Directors 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 and 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 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 but fail to
indicate how the votes should be cast, the proxy will be voted in favor of the election of each of the nominees
named in this Proxy Statement for Director 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 Directors do not intend to bring any matters before the Meeting other than Proposals 1 through 4 and
the Directors 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 Directors,
Robert G. Zack, Secretary
June 3, 2002
EXHIBIT A
PROPOSED INVESTMENT ADVISORY AGREEMENT
AGREEMENT made as of the 14th day of February, 2002, by and between OPPENHEIMER MONEY MARKET FUND, INC.
(the "Fund"), and OPPENHEIMERFUNDS, INC. (hereinafter called ("OFI").
WHEREAS, the Fund is an open-end, diversified management investment company registered as such with the
Securities and Exchange Commission (the "Commission") pursuant to the Investment Company Act of 1940 (the
"Investment Company Act"), and OFI is a registered investment adviser;
NOW, THEREFORE, in consideration of the mutual promises and covenants hereinafter set forth, it is
agreed by and between the parties, as follows:
1. General Provision.
The Fund hereby employs OFI and OFI hereby undertakes to act as the investment adviser of the Fund and
to perform for the Fund such other duties and functions as are hereinafter set forth. OFI shall, in all matters,
give to the Fund and its Board of Directors the benefit of its best judgment, effort, advice and recommendations
and shall, at all times conform to, and use its best efforts to enable the Fund to conform to (i) the provisions
of the Investment Company Act and any rules or regulations thereunder; (ii) any other applicable provisions of
state or federal law; (iii) the provisions of the Articles of Incorporation and By-Laws of the Fund as amended
from time to time; (iv) policies and determinations of the Board of Directors of the Fund; (v) the fundamental
policies and investment restrictions of the Fund as reflected in its registration statement under the Investment
Company Act or as such policies may, from time to time, be amended by the Fund's shareholders; and (vi) the
Prospectus and Statement of Additional Information of the Fund in effect from time to time. The appropriate
officers and employees of OFI shall be available upon reasonable notice for consultation with any of the
Directors and officers of the Fund with respect to any matters dealing with the business and affairs of the Fund
including the valuation of any of the Fund's portfolio securities which are either not registered for public sale
or not being traded on any securities market.
2. Investment Management.
(a) OFI shall, subject to the direction and control by the Fund's Board of Directors, (i) regularly
provide investment advice and recommendations to the Fund with respect to its investments, investment policies
and the purchase and sale of securities; (ii) supervise continuously the investment program of the Fund and the
composition of its portfolio and determine what securities shall be purchased or sold by the Fund; and (iii)
arrange, subject to the provisions of paragraph "7" hereof, for the purchase of securities and other investments
for the Fund and the sale of securities and other investments held in the portfolio of the Fund.
(b) Provided that the Fund shall not be required to pay any compensation other than as provided by the
terms of this Agreement and subject to the provisions of paragraph "7" hereof, OFI may obtain investment
information, research or assistance from any other person, firm or corporation to supplement, update or otherwise
improve its investment management services.
(c) Provided that nothing herein shall be deemed to protect OFI from willful misfeasance, bad faith or
gross negligence in the performance of its duties, or reckless disregard of its obligations and duties under the
Agreement, OFI shall not be liable for any loss sustained by reason of good faith errors or omissions in
connection with any matters to which this Agreement relates.
(d) Nothing in this Agreement shall prevent OFI or any officer thereof from acting as investment adviser
for any other person, firm or corporation and shall not in any way limit or restrict OFI or any of its directors,
officers or employees from buying, selling or trading any securities for its own account or for the account of
others for whom it or they may be acting, provided that such activities will not adversely affect or otherwise
impair the performance by OFI of its duties and obligations under this Agreement and under the Investment
Advisers Act of 1940.
3. Other Duties of OFI.
OFI shall, at its own expense, provide and supervise the activities of all administrative and clerical
personnel as shall be required to provide effective corporate administration for the Fund, including the
compilation and maintenance of such records with respect to its operations as may reasonably be required; the
preparation and filing of such reports with respect thereto as shall be required by the Commission; composition
of periodic reports with respect to its operations for the shareholders of the Fund; composition of proxy
materials for meetings of the Fund's shareholders and the composition of such registration statements as may be
required by federal securities laws for continuous public sale of shares of the Fund. OFI shall, at its own cost
and expense, also provide the Fund with adequate office space, facilities and equipment.
4. Allocation of Expenses.
All other costs and expenses not expressly assumed by OFI under this Agreement, or to be paid by the
General Distributor of the shares of the Fund, shall be paid by the Fund, including, but not limited to (i)
interest and taxes; (ii) brokerage commissions; (iii) premiums for fidelity and other insurance coverage
requisite to its operations; (iv) the fees and expenses of its Directors; (v) legal and audit expenses; (vi)
custodian and transfer agent fees and expenses; (vii) expenses incident to the redemption of its shares; (viii)
expenses incident to the issuance of its shares against payment therefor by or on behalf of the subscribers
thereto; (ix) fees and expenses, other than as hereinabove provided, incident to the registration under federal
securities laws of shares of the Fund for public sale; (x) expenses of printing and mailing reports, notices and
proxy materials to shareholders of the Fund; (xi) except as noted above, all other expenses incidental to holding
meetings of the Fund's shareholders; and (xii) such extraordinary non-recurring expenses as may arise, including
litigation affecting the Fund and any obligation which the Fund may have to indemnify its officers and Directors
with respect thereto. Any officers or employees of OFI or any entity controlling, controlled by or under common
control with OFI, who may also serve as officers, Directors or employees of the Fund shall not receive any
compensation from the Fund for their services.
5. Compensation of OFI.
The Fund agrees to pay OFI and OFI agrees to accept as full compensation for the performance of all
functions and duties on its part to be performed pursuant to the provisions hereof, a fee computed on the
aggregate net assets of the Fund as of the close of each business day at the following annual rates:
.45% of the first $500 million of aggregate net assets;
.425% of the next $500 million of net assets;
.40% of the next $500 million of net assets; and
.375% of aggregated net assets in excess of $1.5 billion.
6. Use of Name "Oppenheimer."
OFI hereby grants to the Fund a royalty-free, non-exclusive license to use the name "Oppenheimer" in the
name of the Fund for the duration of this Agreement and any extensions or renewals thereof. Such license may,
upon termination of this Agreement, be terminated by OFI, in which event the Fund shall promptly take whatever
action may be necessary to change its name and discontinue any further use of the name "Oppenheimer" in the name
of the Fund or otherwise. The name "Oppenheimer" may be used or licensed by OFI in connection with any of its
activities or licensed by OFI to any other party.
7. Portfolio Transactions and Brokerage.
OFI is authorized, in arranging the Fund's portfolio transactions, to employ or deal with such members
of securities or commodities exchanges, brokers or dealers, including "affiliated" broker dealers (as that term
is defined in the Investment Company Act) (hereinafter "broker-dealers"), as may, in its best judgment, implement
the policy of the Fund to obtain, at reasonable expense, the "best execution" (prompt and reliable execution at
the most favorable security price obtainable) of the Fund's portfolio transactions as well as to obtain the
benefit of such investment information or research as may be of significant assistance to the performance by OFI
of its investment management functions.
8. Duration.
This Agreement will take effect on the business day immediately following its approval by the vote of
the holders of a "majority" (as defined in the Investment Company Act) of the outstanding voting securities of
the Fund. As of that date, it replaces the Fund's investment advisory agreement dated October 22, 1990. Unless
earlier terminated pursuant to paragraph 9 hereof, this Agreement shall remain in effect until two years from the
date of execution hereof, and thereafter will continue in effect from year to year, so long as such continuance
shall be approved at least annually by the Fund's Board of Directors, including the vote of the majority of the
Directors of the Fund who are not parties to this Agreement or "interested persons" (as defined in the Investment
Company Act) of any such party, cast in person at a meeting called for the purpose of voting on such approval, or
by the holders of a "majority" (as defined in the Investment Company Act) of the outstanding voting securities of
the Fund and by such a vote of the Fund's Board of Directors.
9. Termination.
This Agreement may be terminated (i) by OFI at any time without penalty upon giving the Fund sixty days'
written notice (which notice may be waived by the Fund); or (ii) by the Fund at any time without penalty upon
sixty days' written notice to OFI (which notice may be waived by OFI) provided that such termination by the Fund
shall be directed or approved by the vote of a majority of all of the Directors of the Fund then in office or by
the vote of the holders of a "majority" (as defined in the Investment Company Act) of the outstanding voting
securities of the Fund.
10. Assignment or Amendment.
This Agreement may not be amended without the affirmative vote or written consent of the holders of a
"majority" of the outstanding voting securities of the Fund, and shall automatically and immediately terminate in
the event of its "assignment," as defined in the Investment Company Act.
11. Definitions.
The terms and provisions of this Agreement shall be interpreted and defined in a manner consistent with
the provisions and definitions of the Investment Company Act.
[SIGNATURE LINES OMITTED]
EXHIBIT B
ADVISORY FEES OF OPPENHEIMER MONEY MARKET FUNDS
- ---------------------------------------- -------------------------------------- --------------------------------------
Approximate Net Assets Advisory Fee Rate
as of 12/31/01 as % of Average
Name of Fund ($ Millions) Net Assets
- ---------------------------------------- -------------------------------------- --------------------------------------
- ---------------------------------------- -------------------------------------- --------------------------------------
Centennial America Fund, L.P. $49.62 .45% of the first $500 million of
average net assets, .40% of average
annual net assets over $500 million.
- ---------------------------------------- -------------------------------------- --------------------------------------
- ---------------------------------------- -------------------------------------- --------------------------------------
Centennial California Tax Exempt Trust $164.51 .50% of the first $250 million
of average annual net assets, .475%
of the next $250 million of average
annual net assets, .45% of the next
$250
million of average annual net
assets, .425% of the next $250
million of average annual net assets
and .40% of average annual net
assets in excess of $1 billion.
- ---------------------------------------- -------------------------------------- --------------------------------------
- ---------------------------------------- -------------------------------------- --------------------------------------
Centennial New York Tax Exempt Trust $77.73 .50% of the first $250 million
of average annual net assets, .475%
of the next $250 million of average
annual net assets, .45% of the next
$250
million of average annual net
assets, .425% of the next $250
million of average annual net assets
and .40% of average annual net
assets in excess of $1 billion.
- ---------------------------------------- -------------------------------------- --------------------------------------
- ---------------------------------------- -------------------------------------- --------------------------------------
Oppenheimer Cash Reserves $808.19 .50% of the first $250 million
of average annual net assets, .475%
of the next $250 million of average
annual net assets, .45% of the next
$250
million of average annual net
assets, .425% of the next $250
million of average annual net assets
and .40% of average annual net
assets in excess of $1 billion.
- ---------------------------------------- -------------------------------------- --------------------------------------
- ---------------------------------------- -------------------------------------- --------------------------------------
Centennial Money Market Trust $22,861.09 .50% of the first $250 million of
average annual net assets, .475% of
the next $250 million of average
annual net assets, .45% of the next
$250 million of average annual net
assets, .425% of the next $250
million of average annual net
assets, .40% of the next $250
million of average annual net assets
and .375% of the next $250 million
of average annual net assets, .35%
of the next $500 million of average
annual net assets and .325% of
average annual net assets over $2
billion.
- ---------------------------------------- -------------------------------------- --------------------------------------
- ---------------------------------------- -------------------------------------- --------------------------------------
Centennial Government Trust $1,651.93 .50% of the first $250 million of
average annual net assets, .475% of
the next $250 million of average
annual net assets, .45% of the next
$250 million of average annual net
assets, .425% of the next $250
million of average annual net
assets, .40% of the next $250
million of average annual net assets
and .375% of the next $250 million
of average annual net assets, .35%
of the next $500 million of average
annual net assets and .325% of
average annual net assets over $2
billion.
- ---------------------------------------- -------------------------------------- --------------------------------------
- ---------------------------------------- -------------------------------------- --------------------------------------
Centennial Tax Exempt Trust $1,850.75 .50% of the first $250 million
of average annual net assets, .475%
of the next $250 million of average
annual net assets, .45% of the next
$250
million of average annual net
assets, .425% of the next $250
million of average annual net assets
and .40% of average annual net
assets in excess of $1 billion.
- ---------------------------------------- -------------------------------------- --------------------------------------
- ---------------------------------------- -------------------------------------- --------------------------------------
Oppenheimer Money $370.23 .45% of the first $500 million of
Fund/VA average annual net assets, .425% of
(a series of Oppenheimer the next $500 million of average
Variable Account Funds) annual net assets, .40% of the next
$500 million of average annual net
assets and .375% of average annual
net assets in excess of $1.5 billion.
- ---------------------------------------- -------------------------------------- --------------------------------------
- ---------------------------------------- -------------------------------------- --------------------------------------
Oppenheimer Money Market Fund, Inc. $1,910.00 .45% of the first $500 million of
average annual net assets, .425% of
the next $500 million of average
annual net assets, .40% of the next
$500 million of average annual net
assets and .375% of average annual
net assets in excess of $1.5 billion.
- ---------------------------------------- -------------------------------------- --------------------------------------