Oppenheimer Multi-state Municipal Trust Inactive
Filed: 7 May 02, 12:00am
OPPENHEIMER NEW JERSEY MUNICIPAL FUND
a Series of OPPENHEIMER MULTI-STATE MUNICIPAL TRUST
6803 South Tucson Way, Englewood, CO 80112
Notice Of Special Meeting Of Shareholders To Be Held
August 5, 2002
To The Shareholders of Oppenheimer New Jersey Municipal Fund:
Notice is hereby given that a Special Meeting of the Shareholders (the "Meeting") of Oppenheimer New Jersey Municipal
Fund (the "Fund") will be held at 6803 South Tucson Way, Englewood, Colorado, 80112, at 1:00 P.M. Mountain time, on
August 5, 2002.
During the Meeting, shareholders of the Fund will vote on the following proposals and sub-proposals:
1. To elect a Board of Trustees;
2. To approve the amendment of certain fundamental investment policies of the Fund;
3. To approve an Amended and Restated Class B 12b-1 Distribution and Service Plan and Agreement (only
shareholders of Class B shares vote on this proposal); 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 April 22, 2002 are entitled to vote at the meeting. The proposals
and sub-proposals are more fully discussed in the Proxy Statement. Please read it carefully before telling us,
through your proxy or in person, how you wish your shares to be voted. The Board of Trustees of the Fund recommends a
vote to elect each of the nominees as Trustee and in favor of each proposal. WE URGE YOU TO MARK, SIGN, DATE AND MAIL
THE ENCLOSED PROXY PROMPTLY.
By Order of the Board of Trustees,
Robert G. Zack, Secretary
June 10, 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
Page
Questions and Answers -
Proposal 1: To Elect a Board of Trustees -
Introduction to Proposal 2 -
Proposal 2: To approve the amendment of certain fundamental -
investment policies of the Fund
Proposal 3: To approve an Amended and Restated Class B 12b-1 Distribution and -
Service Plan and Agreement
Information About the Fund -
Further Information About Voting and the Meeting -
Other Matters -
EXHIBIT A: Amended and Restated Class B 12b-1 Distribution and Service Plan A-1
and Agreement
OPPENHEIMER NEW JERSEY MUNICIPAL FUND
a Series of Oppenheimer Multi-State Municipal Trust
PROXY STATEMENT QUESTIONS AND ANSWERS
Q. Who is Asking for My Vote?
A. The Trustees of Oppenheimer New Jersey Municipal Fund (the "Fund") have asked that you vote on several
matters at the Special Meeting of Shareholders to be held on August 5, 2002.
Q. Who is Eligible to Vote?
A. Shareholders of record at the close of business on April 22, 2002 are entitled to vote at the Meeting or any
adjournment of the Meeting. Shareholders are entitled to cast one vote per share (and a fractional
vote for a fractional share) for each matter presented at the Meeting. It is expected that the
Notice of Meeting, proxy ballot and proxy statement will be mailed to shareholders of record on or
about June 10, 2002.
Q. On What Matters Am I Being Asked to Vote?
A. You are being asked to vote on the following proposals:
1. To elect a Board of Trustees;
2. To approve the amendment of certain fundamental investment policies of the Fund; and
3. To approve an Amended and Restated Class B 12b-1 Distribution and Service Plan and Agreement.
Q. How do the Trustees Recommend that I Vote?
A. The Trustees recommend that you vote:
1. FOR the election of all nominees as Trustees;
2. FOR the 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 the Amended and Restated Class B 12b-1 Distribution and Service Plan and 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 Trustees and
the Fund's investment advisor, OppenheimerFunds, Inc., believe that the proposed changes to the
Fund's investment policies will benefit shareholders by allowing the Fund to adapt to future changes
in the investment environment and increase the Fund's ability to take advantage of investment
opportunities.
Q. How Can I Vote?
A. You can vote in four (4) different ways:
o By mail, with the enclosed ballot
o In person at the Meeting (if you are a record owner)
o By telephone (please see the insert for instructions)
o Online, via the Internet (please see the insert for instructions)
Voting by telephone or via the Internet is convenient and can help reduce the Fund's expenses.
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Whichever method you choose, please take the time to read the full text of the proxy statement
before you vote.
Please be advised that the deadlines for voting by telephone and the Internet are 3:00 p.m. (EST)
on the last business day before the Meeting.
Q. How Will My Vote Be Recorded?
A. Proxy ballots that are properly signed, dated and received at or prior to the Meeting, or any adjournment
thereof, will be voted as specified. If you specify a vote for any of the proposals, your proxy
will be voted as indicated. If you sign and date the proxy ballot, but do not specify a vote for
one or more of the proposals, your shares will be voted in favor of the Trustees' recommendations.
Telephonic and Internet votes will be recorded according to the telephone and Internet voting
procedures, respectively, 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. (EST) on the last business day before the Meeting if you are a record
owner.
Q. How Can I Get More Information About the Fund?
Copies of the Fund's annual report dated July 31, 2001 and semi-annual report dated January 31, 2002
have previously been mailed to Shareholders. If you would like to have copies of the Fund's most
recent annual and semi-annual reports sent to you free of charge, please call us toll-free at
1.800.708.7780, write to the Fund at OppenheimerFunds Services, P.O. Box 5270, Denver Colorado
80217-5270 or visit the Oppenheimer funds website at www.oppenheimerfunds.com.
Q. Whom Do I Call If I Have Questions?
A. Please call us at 1.800.708.7780.
The proxy statement is designed to furnish shareholders with the information necessary to vote on the matters coming before
the Meeting. If you have any questions, please call us at 1.800.708.7780.
10
OPPENHEIMER NEW JERSEY MUNICIPAL FUND
A Series of OPPENHEIMER MULTI-STATE MUNICIPAL TRUST
PROXY STATEMENT
Special Meeting of Shareholders
To Be Held August 5, 2002
This statement is furnished to the shareholders of Oppenheimer New Jersey Municipal Fund (the "Fund") in
connection with the solicitation by the Fund's Board of Trustees of proxies to be used at a special meeting of
shareholders (the "Meeting") to be held at 6803 South Tucson Way, Englewood, Colorado, 80112, at 1:00 P.M. Mountain
time, on August 5, 2002, or any adjournments thereof. It is expected that the mailing of this Proxy Statement will be
made on or about June 10, 2002.
SUMMARY OF PROPOSALS
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Proposal Shareholders Voting
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1. To Elect a Board of Trustees. All
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2. To approve the amendment of certain fundamental investment policies
for the Fund:
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A. Amend the policy prohibiting the Fund from
investing in real estate to clarify
that the Fund may invest in real estate investment trusts and All
other issuers that have interests in real estate.
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B. Amend the policy on concentration. All
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C. Amend the policy on borrowing. All
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D. Amend the policy on lending. All
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3. To approve an Amended and Restated Class B 12b-1 Distribution and Class B Shareholders Only
Service Plan and Agreement.
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PROPOSAL 1: ELECTION OF TRUSTEES
At the Meeting, eleven (11) Trustees are to be elected. If elected, the Trustees will serve indefinite
terms until a special shareholder meeting is called for the purpose of voting for Trustees 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 Massachusetts business trust, the Fund is not required and does not intend to hold annual shareholder
meetings for the purpose of electing Trustees. As a result, if elected, the Trustees will hold office until the next
meeting of shareholders called for the purpose of electing Trustees 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 Trustees may, in its discretion, select another person to fill the vacant position.
Although the Fund will not normally hold annual meetings of its shareholders, it may hold shareholder
meetings from time to time on important matters, and shareholders have the right to call a meeting to remove a
Trustee or to take other action described in the Fund's Declaration of Trust. Also, if at any time, less than a
majority of the trustees holding office has been elected by the shareholders, the Trustees then in office will
promptly call a shareholders' meeting for the purpose of electing Trustees.
Each of the nominees currently serves as a Trustee of the Fund. Each of the nominees has consented to be
named as such in this Proxy Statement and to serve as Trustee if elected. Each of the Trustees serves as a Trustee
of other funds in the Oppenheimer family of funds (referred to as "Board I Funds" in this Proxy Statement).
The Fund's Trustees and officers, their positions with the Fund and length of service in such positions as
well as their principal occupations and business affiliations during the past five years are listed below. Except
for Mr. Murphy, each of the Trustees is an independent trustee of the Fund ("Independent Trustee"). This means that
they are not affiliated persons or interested persons of the Fund as defined in the Investment Company Act of 1940,
(referred to in this Proxy Statement as the "1940 Act"). Mr. Murphy is an "interested trustee" of the Fund, because
he is affiliated with OppenheimerFunds, Inc. (the "Manager") by virtue of his positions as an officer and director of
the Manager, and as a shareholder of its parent company. Mr. Murphy was elected as a Trustee of the Fund by the
Independent Trustees with the understanding that in the event he ceases to be the chief executive officer of the
Manager, he will resign as a trustee of the Fund and the other Board I Funds for which he is a trustee or director.
All information is as of December 31, 2001.
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 Trustees have unanimously
(except for Mr. Reynolds, who abstained) determined that the consulting arrangements between The Directorship Search
Group, Inc. and Massachusetts Mutual Life Insurance Company were not material business or professional relationships
that would compromise Mr. Reynolds' status as an Independent Trustee. Nonetheless, to assure certainty as to
determinations of the Board
and the Independent Trustees as to matters upon which the 1940 Act or the rules thereunder require approval by a
majority of Independent Trustees, Mr. Reynolds will not be counted for purposes of determining whether a quorum of
Independent Trustees was present or whether a majority of Independent Trustees approved the matter.
Messrs. Galli and Spiro have had no material business relationship with the Manager or its affiliates within
the past two years. However, within the past five years and before becoming Independent Trustees they had been
officers of the Manager and owned shares of its parent company. In 1997, Mr. Galli sold his remaining shares of the
Manager's parent company for a cash payment of approximately $7,851,200. In 1997, Mr. Spiro sold shares of the
Manager's parent company for a cash payment of approximately $9,814,000. In 1999, Mr. Spiro sold his remaining
shares of the Manager's parent company for a cash payment of approximately $9,399,000.
Nominees for Independent Trustee
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Name, Address,1 Age, Principal Occupation(s) During Past 5 Years / Other Dollar Range Aggregate Dollar
Range of Shares
of Shares Beneficially
Position(s) Held with Owned in the Owned in the
Fund and Length of Trusteeships/Directorships Held by Nominee / Number of Fund (as of Board I Funds
Service (as applicable)2 Portfolios in Fund Complex Overseen by Nominee 12/31/01) (as of 12/31/01)
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Leon Levy, Chairman of General Partner of Odyssey Partners, L.P. (investment $0 None
the Board of Trustees, partnership) (since 1982) and Chairman of the Board of
Trustee since 1994 Avatar Holdings, Inc. (real estate development) (since
Age: 76 1981). Oversees 31 portfolios in the OppenheimerFunds
complex.
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Robert G. Galli, A Trustee or Director of other Oppenheimer funds. $0 Over $100,000
Trustee since 1994 Formerly Vice Chairman of the Manager (October 1995 -
Age: 68 December 1997). Oversees 41 portfolios in the
OppenheimerFunds complex. From January 1997-September
1997, Mr. Galli owned shares of the Manager's parent
company valued in excess of $60,000.
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Phillip A. Griffiths, The Director of the Institute for Advanced Study, $0 Over $100,000
Trustee since 1999 Princeton, N.J. (since 1991), director of GSI Lumonics
Age: 63 (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
portfolios in the OppenheimerFunds complex.
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Benjamin Lipstein, Professor Emeritus of Marketing, Stern Graduate School $0 Over $100,000
Trustee since 1994 of Business Administration, New York University.
Age: 78 Oversees 31 portfolios in the OppenheimerFunds complex..
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Elizabeth B. Moynihan, Author and architectural historian; a trustee of the $0 $50,001 -
Trustee since 1994 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 $100,000
Council, Preservation League of New York State.
Oversees 31 portfolios in the OppenheimerFunds complex.
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Kenneth A. Randall, A director of Dominion Resources, Inc. (electric
Trustee since 1994 utility holding company) and Prime Retail, Inc. (real
Age: 74 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 $0 Over $100,000
business research) and a director of Lumbermens Mutual
Casualty Company, American Motorists Insurance Company
and American Manufacturers Mutual Insurance Company.
Oversees 31 portfolios in the OppenheimerFunds complex.
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Edward V. Regan, President, Baruch College, CUNY; a director of RBAsset
Trustee since 1994 (real estate manager); a director of OffitBank;
Age: 71 formerly Trustee, Financial Accounting Foundation (FASB
and GASB), Senior Fellow of Jerome Levy Economics
Institute, Bard College, Chairman of Municipal $0 $50,001 -
Assistance Corporation for the City of New York, New $100,000
York State Comptroller and Trustee of New York State
and Local Retirement Fund. Oversees 31 portfolios in
the OppenheimerFunds complex.
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Russell S. Reynolds, Chairman of The Directorship Search Group, Inc.
Jr., (corporate governance consulting and executive
Trustee since 1994 recruiting) (since 1993); a life trustee of
Age: 70 International House (non-profit educational $0 $10,001 - $50,000
organization), and a trustee of the Greenwich
Historical Society (since 1996). Oversees 31 portfolios
in the OppenheimerFunds complex.
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Donald W. Spiro, Vice Formerly Mr. Spiro held the following positions:
Chairman of the Board Chairman Emeritus (until August 1999), Chairman
of Trustees, (November 1987 - January 1991) and a director (January
Trustee since 1994 1969 - August 1999) of the Manager; President and
Age: 76 Director of OppenheimerFunds Distributor, Inc., a
subsidiary of the Manager and the Fund's Distributor $10,000 Over $100,000
(July 1978 - January 1992). Oversees 31 portfolios in
the OppenheimerFunds complex. From January 1997-August
1999, Mr. Spiro owned shares of the Manager's parent
company valued in excess of $60,000.
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Clayton K. Yeutter, Of Counsel, Hogan & Hartson (a law firm) (since 1993). $0 $50,001 -
Trustee since 1994 Age: Other directorships: Caterpillar, Inc. (since 1993) and
71 Weyerhaeuser Co. (since 1999). Oversees 31 portfolios $100,000
in the OppenheimerFunds complex.
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Nominee for Interested Trustee
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Name, Address,3 Age, Principal Occupation(s) During Past 5 Years / Other Dollar Aggregate Dollar
Range of
Shares Range of Shares
Owned in Owned in any of
Position(s) Held with the Fund the Oppenheimer
Fund and Length of Trusteeships/Directorships Held by Nominee / Number of (as of Funds (as of
Service4 Portfolios in Fund Complex Overseen by Nominee 12/31/01) 12/31/01)5
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John V. Murphy, Chairman, Chief Executive Officer and director (since June $0 Over $100,000
President and Trustee, 2001) and President (since September 2000) of the Manager;
Trustee since October President and a director or trustee of other Oppenheimer
2001 funds; President and a director (since July 2001) of
Age: 52 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 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 (from June 1989 to June 1998). Oversees 63
portfolios in the OppenheimerFunds complex.
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A. General Information Regarding the Board of Trustees.
The Fund is governed by a Board of Trustees, which is responsible for protecting the interests of
shareholders. The Trustees meet periodically throughout the year to oversee the Fund's activities, review its
performance and review the actions of the Manager, which is responsible for the Fund's day-to-day operations. Six
regular meetings of the Trustees were held during the fiscal year ended July 31, 2001. Each of the incumbent Trustees
was present for at least 75% of the Board of Trustees meetings held and of all committees on which that Trustee
served that were held during the period.
B. Committees of the Board of Trustees.
The Board of Trustees has appointed standing Audit, Study and Proxy Committees comprised of Independent
Trustees only. The members of the Audit Committee are Kenneth Randall (Chairman), Benjamin Lipstein and Edward Regan.
The Audit Committee held five meetings during the Fund's fiscal year ended July 31, 2001. The Audit
Committee furnishes the Board with recommendations regarding the selection of the Fund's independent auditors. Other
functions of the Audit Committee include, but are not limited to: (i) reviewing the scope and results of audits and
the audit fees charged; (ii) reviewing reports from the Fund's independent auditor regarding the Fund's internal
accounting procedures and controls; and (iii) establishing a separate line of communication between the Fund's
independent auditors and its Independent Trustees.
The members of the Study Committee are Benjamin Lipstein (Chairman), Robert Galli and Elizabeth Moynihan.
The Study Committee held seven 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 Trustees of the Fund, including a majority of
the Independent Trustees, at a meeting held August 9, 2001, selected KPMG LLP ("KPMG") as auditors of the Fund for
the fiscal year beginning 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 Trustees.
1. Audit Fees.
The aggregate fees billed by KPMG for professional services rendered for the audit of the Fund's annual
financial statements for the fiscal year ended July 31, 2001 were $16,000.
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 affiliates of the Manager for non-audit services rendered to the Manager or its affiliates 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 Trustees and Officers.
The Fund's Independent Trustees are paid a retainer plus a fixed fee for attending each meeting and are
reimbursed for expenses incurred in connection with attending such meetings. Each Board I Fund for which they serve
as a director or trustee pays a share of those expenses.
Neither the officers of the Fund nor any Trustee who is not an Independent Trustee receives any salary or
fee from the Fund. The remaining Trustees of the Fund received the compensation shown below from the Fund with
respect to the Fund's fiscal year ended July 31. 2001.
The compensation from all of the Board I Funds (including the Fund) represents compensation received as a
director, trustee or member of a committee of the boards of those funds during the calendar year 2001. Compensation
from the Fund is paid for services in the positions below their names.
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Name of Nominee and Other Fund Aggregate Retirement Number of Funds Total
Benefits Compensation
Accrued as Part which Trustee or From All
Compensation of Fund Nominee Oversees Board I Funds
Position(s) (as applicable) from Fund1 Expenses1 as of 12/31/01 (33 Funds)2
- --------------------------------------- ------------------- ------------------ ------------------- -------------------
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Leon Levy $6,941 $0 31 $171,950
Chairman
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Robert G. Galli3 $2,869 $0 41 $191,134
Study Committee Member
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Phillip Griffiths4 $2,869 $0 30 $59,529
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Benjamin Lipstein $6,000 $0 31 $148,639
Study Committee Chairman,
Audit Committee Member
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Elizabeth B. Moynihan $4,227 $0 31 $104,695
Study Committee Member
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Kenneth A. Randall $3,878 $0 31 $96,034
Audit Committee Chairman
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Edward V. Regan $2,563 $0 31 $94,995
Proxy Committee Chairman, Audit
Committee Member
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Russell S. Reynolds, Jr. $3,834 $0 31 $71,069
Proxy Committee Member
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Donald Spiro $4,227 $0 31 $63,435
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Clayton K. Yeutter5 $2,324 $0 31 $71,069
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 Trustee. No retirement benefit expenses were allocated to the
Fund for fiscal year ended July 31,2001.
2. For the 2000 calendar year.
3. Total compensation for the 2000 calendar year includes compensation received for serving as a
Trustee/Director of 10 Oppenheimer funds other than 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.
*Trustee retirement accruals were ($49,591) for the period. The aggregate compensation from the Fund does not
reflect this negative accrual.
The Fund has adopted a retirement plan that provides for payments to retired Trustees. Payments are up to
80% of the average compensation paid during a Trustee's five years of service in which the highest compensation was
received. A Trustee must serve as director or trustee for any of the New York-based Oppenheimer funds for at least 15
years to be eligible for the maximum payment. Each Trustee's retirement benefits will depend on the amount of the
Trustee's future compensation and length of service. The Fund cannot estimate the number of years of credited service
that will be used to determine those benefits at this time. Therefore, the amount of the retirement benefits cannot
be determined at this time.
The Board of Trustees has adopted a Deferred Compensation Plan for Independent Trustees that enables them to
elect to defer receipt of all or a portion of the annual fees they are entitled to receive from the Fund. Under the
plan, the compensation deferred by a Trustee is periodically adjusted as though an equivalent amount had been
invested in shares of one or more Oppenheimer funds selected by the Trustee. The amount paid to the Trustee under the
plan will be determined based upon the performance of the selected funds.
Deferral of Trustees' fees under the plan will not materially affect the Fund's assets, liabilities or net
income per share. The plan will not obligate the Fund to retain the services of any Trustee or to pay any particular
level of compensation to any Trustee. Pursuant to an order issued by the Securities and Exchange Commission, the Fund
may invest in the funds selected by the Trustee under the plan without shareholder approval.
Information is given below about the executive officers who are not Trustees of the Fund, including their
business experience during the past five years. Messrs. Murphy, Zack, Wixted, Hora, Webman, Molleur and Farrar, and
Mses. Feld and Ives, respectively, hold the same offices with one or more of the other funds in the OppenheimerFunds
complex.
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Name, Address,6 Age, Position(s) Held with Principal Occupation(s) During Past 5 Years
Fund and Length of Service7
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Jerry A. Webman, Vice President (since Senior Vice President and Senior Investment Officer and Director of
February 1996) the Fixed Income Department of the Manager (since February 1996);
Age: 52 Senior Vice President of HarbourView Asset Management Corporation
(since May 1999); a portfolio manager of other Oppenheimer funds;
before joining the Manager in February 1996, he was a Vice President
and portfolio manager with Prudential Investment Corporation (March
1986 - February 1996).
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Merrell Hora,
Vice President (since July 1999) Vice President of the Manager (since July 1999); a portfolio manager
Age: 33 of other Oppenheimer funds; formerly a Senior Quantitative Analyst
for the Fixed Income Department's Quantitative Analysis Team (July
1998 - August 2000); prior to joining the Manager in July 1998 he
was a quantitative analyst with a subsidiary of the Cargill
Financial Services Group (January 1997 - September 1997) and also
held numerous positions at the University of Minnesota from which he
obtained his Ph.D. in Economics.
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Brian W. Wixted, Senior Vice President and Treasurer of the Advisor (since March
Treasurer, Principal Financial and Accounting 1999); Treasurer (since March 1999) of HarbourView Asset Management
Officer (since April 1999) Corporation, Shareholder Services, Inc., Oppenheimer Real Asset
Age: 42 Management Corporation, Shareholder Financial Services, Inc.,
Oppenheimer Partnership Holdings, Inc., OFI Private Investments,
Inc. (since March 2000), OppenheimerFunds International Ltd. and
Oppenheimer Millennium Funds plc (since May 2000), and OAM
Institutional, Inc. (since November 2000); Treasurer and Chief
Financial Officer of Oppenheimer Trust Company, a trust company
subsidiary of the Advisor (since May 2000); Assistant Treasurer of
Oppenheimer Acquisition Corp. (since March 1999) and
OppenheimerFunds Legacy Program (since April 2000); an officer of
other Oppenheimer funds. Formerly Principal and Chief Operating
Officer, Bankers Trust Company - Mutual Fund Services Division
(March 1995 - March 1999).
- ----------------------------------------------- ----------------------------------------------------------------------
- ----------------------------------------------- ----------------------------------------------------------------------
Robert G. Zack, Senior Vice President (since May 1985) and General Counsel (since
Secretary (since November 2001) February 2002) of the Manager; Assistant Secretary of Shareholder
Age: 53 Services, Inc. (since May 1985), Shareholder Financial Services,
Inc. (since November 1989); OppenheimerFunds International Ltd. and
Oppenheimer Millennium Funds plc (since October 1997); an officer of
other Oppenheimer funds; formerly Acting General Counsel (November
2001 - February 2002) and Associate General Counsel (1984 - October
2001)
- ----------------------------------------------- ----------------------------------------------------------------------
- ----------------------------------------------- ----------------------------------------------------------------------
Scott T. Farrar, Vice President of the Manager/Mutual Fund Accounting (since May
Assistant Treasurer (since May 1996) 1996); Assistant Treasurer of Oppenheimer Millennium Funds plc and
Age: 36 OppenheimerFunds International, Ltd. (since October 1997); an
officer of other Oppenheimer Funds.
- ----------------------------------------------- ----------------------------------------------------------------------
- ----------------------------------------------- ----------------------------------------------------------------------
Denis R. Molleur, Vice President and Senior Counsel of the Manager (since July 1999);
Assistant Secretary (since November 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, Vice President and Senior Counsel of the Manager (since July 1999);
Assistant Secretary (since November 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 November 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 April 29, 2002, the Trustees and officers as a group beneficially owned less than 1% of the
outstanding Class A shares and no Class B, Class C shares of the Fund. The foregoing statement does not reflect
ownership of shares of the Fund held of record by an employee benefit plan for employees of the Manager, other than
the shares beneficially owned under the plan by the officers of the Fund listed above. In addition, each Independent
Trustee, and his or her family members, do not own securities of either the Manager or Distributor of the Board I
Funds or any person directly or indirectly controlling, controlled by or under common control with the Manager or
Distributor.
THE BOARD OF TRUSTEES UNANIMOUSLY RECOMMEND
A VOTE FOR THE ELECTION OF EACH NOMINEE AS TRUSTEE
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 Trustees without shareholder approval, although
significant changes will be described in amendments to the Fund's prospectus.
The 1940 Act requires that certain policies of the Fund be classified as fundamental. Proposal 2 is
intended to modernize the Fund's policies as well as standardize its policies by reclassifying fundamental policies
that are not required to be fundamental as non-fundamental or by eliminating them entirely. The proposals are
designed to provide the Fund with maximum flexibility to pursue its investment objective and respond to an
ever-changing investment environment. The Fund, however, has no current intention of significantly changing its
actual investment strategies should shareholders approve the proposed changes.
Subsequent to the Fund being established, certain regulatory requirements applicable to registered open-end
investment companies (referred to as "mutual funds" in this Proxy Statement) changed. For example, certain
restrictions previously imposed by state regulations were preempted by the National Securities Markets Improvement
Act of 1996 ("NSMIA"), and are no longer applicable to mutual funds. As a result, the Fund currently is subject to
several fundamental investment policies that are either more restrictive than required under current regulations or
no longer required at all.
With the passage of time, the development of new industry practices and changes in regulatory standards,
several of the Fund's fundamental policies are considered by the Trustees and the Manager to be unnecessary or
unwarranted. The standardized policies proposed below would satisfy current federal regulatory requirements and are
written to provide the Fund with flexibility to respond to future legal, regulatory, market and industry
developments. The proposed standardized changes will not affect the Fund's investment objective.
B. Why do the Fund's Trustees Recommend the Proposed Changes?
The Trustees believe standardizing and reducing the total number of investment policies that can be changed
only by a shareholder vote will assist the Fund and the Manager in maintaining compliance with the various investment
restrictions to which the Fund is subject, and will help minimize the costs and delays associated with holding future
shareholder meetings to revise fundamental investment policies that become outdated or inappropriate. The Trustees
also believe that the Manager's ability to manage the Fund's assets in a changing investment environment will be
enhanced, and that investment management opportunities will be increased by the proposed changes.
Although the Trustees believe the proposed changes in fundamental investment policies will provide the Fund
greater flexibility to respond to future investment opportunities, the Trustees do not anticipate that the changes,
either individually or together, will result in a material change in the level of risk associated with investment in
the Fund. In addition, the Fund's Trustees do not anticipate that the proposed changes will materially affect the
manner in which the Fund is managed. In the future, if the Trustees determine to change materially the manner in
which the Fund is managed, the Fund's prospectus will be amended to reflect such a change.
The recommended changes are specified below. Shareholders are requested to vote on each sub-proposal in
Proposal 2 separately. If approved, the effective date of the sub-proposals will be delayed until the Fund's
prospectus can be updated to reflect the changes. If any sub-proposal in Proposal 2 is not approved, the fundamental
investment policy or policies covered in that sub-proposal will remain unchanged.
PROPOSAL 2: TO APPROVE THE AMENDMENT OF CERTAIN FUNDAMENTAL INVESTMENT POLICIES OF THE FUND
A. Real Estate.
The Fund is currently subject to a fundamental investment policy prohibiting it from purchasing real
estate. The Fund's policy regarding investments in real estate is required to be fundamental. The Fund's Trustees
propose that the Fund's current fundamental policy be clarified and remain a fundamental policy as indicated below.
Current Fundamental Policy Proposed Fundamental Policy
-------------------------- ---------------------------
The Fund cannot invest in real estate. However, the Fund The Fund cannot invest in real estate, physical
can invest in municipal securities or other permitted commodities or commodity contracts, except to the extent
securities that are secured by real estate or interests in permitted under the 1940 Act, the rules or regulations
real estate. thereunder or any exemption therefrom, as such statute,
rules or regulations may be amended or interpreted from
time to time.
The proposed policies permit the Fund to: (1) invest in debt securities secured by real estate or interests
in real estate, or issued by companies, including real estate investment trusts, that invest in real estate or
interests in real estate; (2) invest in hedging instruments permitted by any of its other investment policies; and
(3) buy and sell options, futures, securities or other instruments backed by, or the investment return of which is
linked to changes in the price of physical commodities or currencies.
The purpose of this proposal is to clarify the Fund's permitted investments and to conform the Fund's policy
in this area with that of other Oppenheimer funds. The Trustees believe that standardized policies will assist the
Fund and the Manager in maintaining compliance with the various investment restrictions to which the Oppenheimer
funds are subject.
B. Industry Concentration.
The Fund currently has a fundamental investment policy prohibiting it from "concentrating" its investments,
that is, investing "more than 25%" of its total assets in any one industry, excluding securities issued or guaranteed
by the United States government or its agencies and instrumentalities and municipal securities in general, and New
Jersey municipal securities. Consistent with the SEC staff's interpretation of "concentration" under the 1940 Act,
the Fund interprets this policy to apply to "25% or more" of its total assets rather than "to the extent of 25%."
The Fund's Trustees propose that the Fund's industry concentration policy remain fundamental, but be amended to state
that it applies to "25% or more" of the Fund's total assets and to clarify that the policy does not apply to
investments in securities issued by other mutual funds. The Trustees believe that amending this policy as proposed
will not affect management of the Fund. The current and proposed policies are stated below.
Current Fundamental Policy Proposed Fundamental Policy
-------------------------- ---------------------------
The Fund cannot concentrate its investments to the extent The Fund cannot invest 25% or more of its total assets in
of 25% of its total assets in any industry. However, there any one industry. That limit does not apply to
is no limitation as to the Fund's investments in municipal securities issued or guaranteed by the U.S. government or
securities in general or in New Jersey municipal its agencies and instrumentalities or securities issued
securities, or in obligations issued by the U.S. Government by investment companies. Nor does that limit apply to
and its agencies or instrumentatlities. municipal securities in general, or to New Jersey
municipal securities.
The purpose of this proposal is to clarify the Fund's fundamental policy on industry concentration and to
conform the Fund's policy in this area to one that is consistent with that of other Oppenheimer funds. The Trustees
believe that standardized policies will assist the Fund and the Manager in maintaining compliance with the various
investment policies to which the Oppenheimer funds are subject. Should shareholders approve this proposal, the Fund
would be permitted to enter into a fund-of-funds arrangement.
The ability of the Fund to invest in other mutual funds is restricted by Section 12(d)(1) of the 1940 Act.
NSMIA amended Section 12 to permit mutual funds to enter into so-called fund-of-funds or master/feeder arrangements
with other mutual funds in a fund complex, and granted the SEC broad powers to provide exemptive relief for these
purposes. The Fund is a party to an exemptive order from the SEC permitting it to enter into a fund-of-funds
arrangement with other affiliated funds. Elimination of this fundamental investment policy is necessary to permit the
Fund to take advantage of the exemptive relief. However, the Fund does not currently anticipate participating in a
fund-of-funds arrangement. Although it may do so in the future should shareholders approve this proposal, the Fund's
prospectus would have to be updated to reflect such a change in policy.
An investment in another mutual fund may result in the duplication of expenses. Should the Trustees
determine in the future that the Fund's participation in fund-of-funds arrangement is in the best interests of the
Fund, the Trustees would consider and take steps to mitigate the potential for duplication of fees in determining
whether the Fund's participation in such an arrangement is suitable for the Fund and its shareholders.
C. 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. For example, borrowing may cause the value of a fund's shares to be more volatile than if
the fund did not borrow. In addition, to the extent a fund borrows, it will pay interest on the money that it
borrows, and that interest expense will raise the overall expenses of the fund and reduce its returns. The interest
payable on the borrowed amount may be more (or less) than the return the fund receives from the securities purchased
with the borrowed amount. Whether or not this sub-proposal is approved by shareholders, the Fund currently does not
anticipate that, under normal market conditions, its borrowings would exceed five (5) percent of its net assets.
The Fund is currently subject to a fundamental investment policy concerning borrowing that is more
restrictive than required by the 1940 Act. The Trustees propose that the Fund's policy on borrowing be amended to
permit the Fund to borrow as permitted under the 1940 Act. As amended, the Fund's policy on borrowing would remain a
fundamental policy changeable only by the vote of a majority of the outstanding voting securities of the Fund as
defined in the 1940 Act.
The current and proposed fundamental investment policies are set forth below. The current policy on
borrowing requires the Fund to borrow only from banks for temporary purposes, and limits the Fund's borrowings for
this purpose to 10% of its assets. The Fund's current policy also limits the Fund's borrowings from banks for
investment purposes to 5% of the Fund's total assets. The Trustees propose that the current policy be amended to
permit the Fund to borrow as permitted under the 1940 Act.
Current Fundamental Policy Proposed Fundamental Policy
-------------------------- ---------------------------
The Fund cannot borrow money or securities for any purposes The Fund may not borrow money, except to the extent
except that (a) borrowing up to 10% of the Fund's total permitted under the 1940 Act, the rules or regulations
assets from banks and/or affiliated investment companies as thereunder or any exemption therefrom that is applicable
a temporary measure for extraordinary or emergency purposes to the Fund, as such statute, rules or regulations may be
and (b) borrowing up to 5% of the Fund's total assets for amended or interpreted from time to time.
investment purposes, is permitted. As fundamental policy,
borrowings can be made only to the extent that the value of
the Fund's assets, less its liabilities other than
borrowings, is equal to at least 300% of all borrowings
(including the proposed borrowing).
Currently, under the 1940 Act, the maximum amount a mutual fund may borrow from banks 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 2.D. ("Lending") are approved
by shareholders, and the Fund were to seek and obtain the necessary regulatory relief, it would be possible for the
Fund to borrow from and lend to other Oppenheimer funds whose policies permit such activity and that have obtained
the necessary regulatory relief as well. If all of the pre-conditions noted in the preceding sentence were satisfied
and the Fund's Trustees were to determine that it was in the Fund's best interest to borrow from or lend to other
Oppenheimer funds, the Fund's prospectus would be updated to reflect such a practice.
D. Lending.
Under the 1940 Act, a fund's policy regarding lending must be fundamental. It is proposed that the current
fundamental policy be replaced by a revised fundamental policy that permits the Fund to engage in lending to the
extent the Fund's lending is consistent with the 1940 Act, the rules thereunder or any exemption from the 1940 Act
that is applicable to the Fund. In addition, the Fund also proposes to clearly state that investments in debt
instruments or other similar evidences of indebtedness are not prohibited by the Fund's investment policy on making
loans.
Current Fundamental Policy Proposed Fundamental Policy
-------------------------- ---------------------------
The Fund cannot make loans except (a) by lending The Fund cannot make loans, except to the extent
portfolio securities, (b) through the purchase of debt permitted under the 1940 Act, the rules or regulations
instruments or similar evidences of indebtedness, (c) thereunder or any exemption therefrom that is applicable
through repurchase agreements, and (d) through an to the Fund, as such statute, rules or regulations may be
interfund lending program with other affiliated amended or interpreted from time to time.
funds. No such loan may be made through interfund
lending if, as a result, the aggregate of those loans
would exceed 33 1/3% of the value of the Fund's total
assets (taken at market value at the time the loan is
made).
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.
If this sub-proposal and the borrowing sub-proposal described above in Paragraph 2.C. ("Borrowing") are
approved by shareholders, and the Fund were to seek and 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 Trustees 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 TRUSTEES UNANIMOUSLY RECOMMENDS
THAT YOU APPROVE EACH SUB-PROPOSAL DESCRIBED ABOVE
PROPOSAL 3: APPROVAL OF A NEW CLASS B 12b-1
DISTRIBUTION AND SERVICE PLAN AND AGREEMENT
Class B shares were first offered to the public on March 1, 1994. At that time, the Fund had adopted a
Distribution and Service Plan and Agreement for Class B shares. In 1994, the Board of Trustees approved an amendment
to the Fund's Class B Distribution and Service Plan to eliminate a provision that would require the Fund to continue
to make payments to OppenheimerFunds Distributor, Inc. (the "Distributor") after a termination of the Distribution
and Service Plan Agreement.
At a meeting of the Board of Trustees held April 13, 2000, the Manager proposed the adoption of a new
Distribution and Service Plan (the "Proposed Plan"), which is a "compensation type plan" instead of the current
"reimbursement type plan." The Fund's Board of Trustees, including a majority of the Independent Trustees, approved
the Proposed Plan, subject to shareholder approval, and determined to recommend the Proposed Plan for approval by the
shareholders. A copy of the Proposed Plan is attached as Exhibit A to this proxy statement, and is hereby submitted
to Class B shareholders for approval.
Rule 12b-1 of the 1940 Act permits the Fund to adopt both the Proposed Plan and the current Distribution and
Service Plan and Agreement (the "Current Plan") and each plan conforms with the rules of the National Association of
Securities Dealers, Inc. ("NASD"). The payments under the Proposed Plan will remain subject to the limits imposed by
the NASD.
Description of the Distribution and Service Plans. Under both the Proposed Plan and the Current Plan, the Fund makes
payments to the Distributor for its services in connection with the distribution of Class B Shares and the personal
service and maintenance of accounts that hold Class B shares. The Fund pays the Distributor an asset-based sales
charge of 0.75% per year of Class B shares outstanding for no more than six years, and the Fund also pays the
Distributor a service fee of 0.25% per year. Each fee is computed on the average annual net assets of Class B shares
of the Fund.
Service Fee. Under the Proposed Plan and the Current Plan, the Distributor pays certain brokers, dealers, banks or
other persons or entities ("Recipients") a service fee of 0.25% for providing personal services to Class B
shareholders and for maintenance of shareholder accounts by those Recipients. The services rendered by Recipients in
connection with personal services and the maintenance of Class B shareholder accounts may include, but are not be
limited to, the following: answering routine inquiries from the Recipient's customers concerning the Fund, assisting
in the establishment and maintenance of accounts or sub-accounts in the Fund and processing share redemption
transactions, making the Fund's investment plans and dividend payment options available, and providing such other
information and services in connection with the rendering of personal services and/or the maintenance of accounts, as
the Distributor or the Fund may reasonably request. The Distributor is permitted under the Proposed and Current
Plans to retain service fee payments to compensate it for rendering such services.
Under both the Proposed Plan and the Current Plan, service fee payments by the Distributor to Recipients are
made (i) in advance for the first year Class B shares are outstanding, following the purchase of shares, in an amount
equal to 0.25% of the net asset value of the shares purchased by the Recipient or its customers and (ii) thereafter,
on a quarterly basis, computed as of the close of business each day at an annual rate of 0.25% of the net asset value
of Class B shares held in accounts of the Recipient or its customers. The Distributor retains the service fee during
the first year shares are outstanding. In the event Class B shares are redeemed less than one year after the date
such shares were sold, the Recipient is obligated to repay to the Distributor on demand a pro rata portion of such
advance service fee payments, based on the ratio of the remaining period to one year.
The main difference between the proposed and current plan for the payment of the service fee is that under
the current Plan, the Fund reimburses the Distributor for service fee payments made to Recipients. Under the
Proposed Plan, the Fund will pay the Distributor a service fee at a flat rate of 0.25% per annum without regard to
the Distributor's expenses. Under the Current Plan, the full 0.25% service fee paid by the Fund is, in effect,
passed through the Distributor and paid to Recipients for the Recipient's services in servicing accounts and personal
services to account holders. It is anticipated that under the Proposed Plan the full 0.25% service fee currently paid
by the Fund will continue to be passed through the Distributor and paid to Recipients. The amount of the service fee
payments made by the Fund is not expected to increase as a result of this proposal should the Proposed Plan be
approved by shareholders.
Asset-Based Sales Charge. The Current Plan, a reimbursement type plan, provides that the Fund will pay the
Distributor on a monthly basis an asset-based sales charge at an annual rate of 0.75% of the net asset value of Class
B Shares outstanding to reimburse the Distributor for its expenses in rendering services in connection with the
distribution of the Fund's Class B shares. Under the Current Plan, the distribution assistance and administrative
support services rendered by the Distributor in connection with the sales of Class B shares may include: (i) paying
sales commissions to any broker, dealer, bank or other institution that sells the Fund's Class B shares; (ii) paying
compensation to and expenses of personnel of the Distributor who support distribution of Class B shares by
Recipients; (iii) paying or reimbursing the Distributor for interest and other borrowing costs incurred on any
unreimbursed expenses carried forward to subsequent fiscal quarters; (iv) other direct distribution costs of the type
approved by the Board, including without limitation the costs of sales literature, advertising and prospectuses
(other than those furnished to current shareholders) and state "blue sky" registration expenses; and (v) any services
rendered by the Distributor that a Recipient may render as described above.
The Proposed Plan, a compensation type plan, provides that the Fund will pay the Distributor on a monthly
basis an asset-based sales charge at an annual rate of 0.75% of the net asset value of Class B Shares outstanding to
compensate the Distributor for providing distribution assistance in connection with the distribution of the Fund's
Class B Shares. Under the Proposed Plan, the distribution assistance and administrative support services rendered by
the Distributor in connection with the distribution of Class B Shares may include: (i) paying sales commissions to
any broker, dealer, bank or other person or entity that sells and services the Fund's Class B Shares; (ii) paying
compensation to and expenses of personnel of the Distributor who support distribution of Class B Shares by
Recipients; (iii) obtaining financing or providing such financing from its own resources, or from an affiliate, for
interest and other borrowing costs of the Distributor's unreimbursed expenses, incurred in rendering distribution
assistance and administrative support services for Class B Shares; and (iv) paying certain other direct distribution
expenses.
Other distribution assistance rendered by Recipients under either Plan may include, but shall not be limited
to, the following: distributing sales literature and prospectuses other than those furnished to current Class B
shareholders, providing compensation to and paying expenses of personnel of the Recipient who support the
distribution of Class B shares by the Recipient, and providing such other information and services in connection with
the distribution of Class B shares as the Distributor or the Fund may reasonably request.
The Proposed Plan provides that payments may be made in connection with Class B Shares acquired (i) by
purchase, (ii) in exchange for shares of another investment company for which the Distributor serves as distributor
or sub-distributor, or (iii) pursuant to a plan of reorganization to which the Fund is a party.
Under both Plans, the Distributor pays sales commissions from its own resources to Recipients at the time of
sale currently equal to 3.75% of the purchase price of Fund shares sold by such Recipient, and advances the first
year service fee of 0.25%. The Proposed Plan provides that the Distributor may advance the service fee for the first
year at the time of sale, pay the service fee quarterly or pay the service fee more frequently than quarterly. The
Proposed Plan also provides that the Distributor may pay the asset-based sales charge on Class B shares instead of
paying the commission. The Distributor retains the service fee and the asset-based sales charge during the first
year shares are outstanding to recoup the sales commissions it pays, the advances of service fee payments it makes,
and its financing costs. Thereafter, the Distributor pays the service fee to Recipients and retains the asset-based
sales charge.
Asset-based sales charge payments are designed to permit an investor to purchase shares of the Fund without
paying a front-end sales load and at the same time permit the Distributor to compensate Recipients in connection with
the sale of Class B shares of the Fund. The Distributor and the Fund anticipate that it will take a number of years
for the Distributor to recoup the sales commissions paid to Recipients and other distribution-related expenses, from
the Fund's payments to the Distributor under the Class B Plan, and from the contingent deferred sales charge deducted
from redemption proceeds for Class B shares redeemed within six years of their purchase, as described in the Fund's
prospectus.
Like the Current Plan, the Proposed Plan contains a provision which provides that the Board may allow the
Fund to continue payments to the Distributor for Class B shares sold prior to termination of the Plan. Pursuant to
this provision, payment of the service fee and the asset-based sales charge could be continued by the Board after
termination.
Like the service fee, the main difference between the Proposed and Current Plans regarding payment of the
asset-based sales charge is that under the Current Plan, the Fund reimburses the Distributor for its services
rendered and, under the Proposed Plan, the Fund will pay the Distributor at a flat rate of 0.75% per annum without
regard to the Distributor's expenses. As discussed below, it is possible that the Fund will, over time, pay more
under the Proposed Plan than under the Current Plan. This possibility is due to the fact that the length of time
over which the Fund's payments will continue under the Proposed Plan is not limited by any reimbursement factor, and
the Fund's payments may thus continue for a longer period of time than under the Current Plan.
Additional Information. Both Plans have the effect of increasing annual expenses of Class B Shares of the Fund by up
to 1.00% of the class's average annual net assets from what those expenses would otherwise be. Payments by the Fund
to the Distributor under the Current Plan for the fiscal year ended July 31, 2001 were $328,466 (1.00% of the Fund's
average net assets represented by Class B Shares during that period) of which the Distributor paid $1,386,753 to an
affiliate of the Distributor and retained $281,627 as reimbursement for Class B sales commissions and service fee
advances, as well as financing costs. The balance was paid to Recipients not affiliated with the Distributor.
If the Class B shareholders approve this Proposal, the Proposed Plan shall, unless terminated as described
below, become effective upon shareholder approval or such later date as the Fund's officers may determine and
continue in effect until July 31, 2002 and from year to year thereafter only so long as such continuance is
specifically approved, at least annually, by the Fund's Board of Trustees and its Independent Trustees by a vote cast
in person at a meeting called for the purpose of voting on such continuance. Either plan may be terminated at any
time by a vote of a majority of the Independent Trustees or by a vote of the holders of a majority (as defined in the
1940 Act) of the Fund's outstanding Class B shares. Neither the Current Plan nor the Proposed Plan may be amended to
increase materially the amount of payments to be made without approval by Class B shareholders. All material
amendments to either plan must be approved by a majority of the Independent Trustees. If the Class B shareholders do
not approve this Proposal, the Current Plan will remain in effect.
Each of the Proposed Plan and the Current Plan provides that while it is in effect, the selection and
nomination of those Trustees of the Fund who are not "interested persons" of the Fund or the Manager is committed to
the discretion of the Independent Trustees. This requirement does not prevent the involvement of others in such
selection and nomination if the final decision on any such selection or nomination is approved by a majority of the
Independent Trustees.
Under either plan, the Board of Trustees may determine that no payment for service fees or asset-based sales
charge will be made to any Recipient in any quarter if the aggregate net asset value of all Fund shares held by the
Recipient for itself and its customers does not exceed a minimum amount, if any, that may be fixed from time to time
by a majority of the Independent Trustees. Under both Plans, the Board of Trustees has set the fee at the maximum
rate and set no minimum amount. Each plan permits the Distributor and the Manager to make additional distribution
payments to Recipients from their own resources (including profits from management fees) at no cost to the Fund. The
Distributor and the Manager may, in their sole discretion, increase or decrease the amount of distribution assistance
payments they make to Recipients from their own assets.
Analysis of the Proposed Plan by the Board of Trustees. In considering whether to recommend the Proposed Plan for
approval, the Board requested and evaluated information it deemed necessary to make an informed determination. The
Board, including the Independent Trustees, did not single out any factor or group of factors as being more important
than other factors, but considered such matters together in arriving at its decision. The Board found that there is
a reasonable likelihood that the Proposed Plan benefits the Fund and its Class B shareholders by providing financial
incentives to financial intermediaries to attract new Class B shareholders to the Fund and by assisting the efforts
of the Fund and the Distributor to service and retain existing shareholders and attract new investors.
The Proposed Plan enables the Fund and the Distributor to offer investors in the Fund alternative ways to
purchase shares. This arrangement allows the Fund to be competitive with similar funds, including funds that impose
sales charges, provide financial incentives to institutions that direct investors to such funds, and provide
shareholder servicing and administrative services.
The Distributor identified two main difficulties with the Current Plan. These involve accurately following
certain distribution expenses when exchanges among the funds occur, and the Distributor's inability to recover its
distribution-related expenses incurred when funds enter into reorganization agreements.
The Fund and the other mutual funds in the OppenheimerFunds complex have arrangements so that a shareholder
of one fund may exchange his or her shares for the shares of one or more other Oppenheimer funds. Over time, a
shareholder will enter into a number of exchanges.
The Distributor advised the Board that the Distributor could not at this time design and implement an
expedient and cost-effective accounting system to follow expenses of the sales commission, service fee payment and
other distribution-related expenses on a per share basis as exchanges occur. As a result, the Distributor may not
receive full reimbursement for its distribution-related expenses under the Current Plan.
It occasionally happens that, for various reasons, it is desirable for one fund to reorganize into another
fund when it is anticipated that such a reorganization will benefit the funds involved. When reorganizations occur,
the Distributor currently must write off and thus is unable to recover previously spent, but unrecovered,
distribution expenses for the fund which will go out of existence.
The compensation type Plan proposed for approval will eliminate the foregoing difficulties and allow the
Distributor to continue to provide exchanges and reorganizations without having to risk the loss of, in some cases,
substantial amounts of money previously spent for distribution. The Proposed Plan expressly provides that the
distribution and administrative support services under the plan may be rendered in connection with Class B shares
issued by the Fund in exchanges for other Oppenheimer funds and in a reorganization with another mutual fund.
The Distributor advised the Board that under the Proposed Plan, it will be able to track its expenses of
distribution for the OppenheimerFunds complex, and that it will also be able reasonably to identify its distribution
costs with respect to the Fund and each other Oppenheimer fund by allocating the Distributor's distribution expenses
among the funds in the complex according to sales. While not a precise method, the Board concluded that this method
of allocating distribution expenses to the Fund is a reasonable manner by which to identify the Distributor's
expenses in distributing the Fund's shares.
The Board considered that a wide range of different situations might occur in the future regarding the sale
and redemption of Fund shares. It is possible under the current reimbursement Plan for the Fund's payments to be
substantially reduced or cease when limited to reimbursement to the Distributor for its costs. The Board concluded
that this type of situation is unlikely to occur. The Board also recognized that superior investment performance
could result in larger amounts paid by the Fund under the Proposed Plan and the Distributor's recovery of more Plan
payments from the Fund than the Distributor had expended on the Fund. Other differing scenarios were also reviewed.
The level of annual payments by the Fund under the Proposed Plan will not increase over, and are not
anticipated to be less than, the amounts currently paid by the Fund. Under the Proposed Plan, however, over time,
the Fund's Plan payments may exceed the amount which the Fund might pay under the Current Plan. The length of time
over which the Fund's payments will continue under the Proposed Plan is not limited by any reimbursement factor, and
the Fund's payments may thus continue for a longer period of time than under the Current Plan, potentially increasing
the amount of Plan payments which reduce the dividends and total return on Fund shares. The Board also recognized
that Class B shares convert to Class A shares at the end of six years after their purchase.
The Board concluded that it is extremely difficult to predict purchases, sales and exchanges by
shareholders, and how future individual, market and economic events may influence individual investor decisions. The
Board thus concluded that it is not reasonably possible to determine with any degree of certainty at this time
whether the Fund will pay more under the Proposed Plan than it would under the Current Plan. The Distributor has
agreed to provide the Board with certain quarterly reports as to the amount of payments made by the Fund under the
Proposed Plan and the purpose for which payments were made (similar to the reports the Distributor currently provides
to the Trustees under the Current Plan). The Distributor will provide extensive annual reports to the Board which
set forth the Distributor's allocated distribution-related expenses and recovery of expenses by the Distributor from
the asset-based sales charges and contingent deferred sales charges, and information on sales, redemptions and
exchanges of Fund shares and related data.
The Board determined that under these quarterly and annual reports, the Board will be provided with adequate
information about the payments which the Fund makes to the Distributor, about the payments which the Distributor
makes and receives in connection with the distribution of the Fund's shares, and about the Distributor's other
distribution expenses. The Board anticipates that with this information, the Board will be able to review each year
the benefits which the Fund is receiving from the plan payments it makes to determine if the Fund is benefiting at a
level commensurate with those payments.
Stimulation of distribution of mutual fund shares and providing for shareholder services and account
maintenance services by payments to a mutual fund's distributor and to brokers, dealers, banks and other financial
institutions has become common in the mutual fund industry. Competition among brokers and dealers for these types of
payments has intensified. The Trustees concluded that promotion, sale and servicing of mutual fund shares and
shareholders through various brokers, dealers, banks and other financial institutions is a successful way of
distributing shares of a mutual fund. The Trustees concluded that without an effective means of selling and
distributing Fund shares and servicing shareholders and providing account maintenance, shareholders may redeem
shares, or not buy more shares, and if assets decline, expenses may increase on a per share basis. By providing an
alternative means of acquiring Fund shares, the Distribution and Service Plan proposed for shareholder approval is
designed to stimulate sales by and services from many types of financial institutions.
The Trustees recognize that the Manager will benefit from the Proposed Plan through larger investment
advisory fees resulting from an increase in Fund assets, because its investment advisory fees are based upon a
percentage of net assets of the Fund. The Manager was also advised by the Trustees that a compensation plan could
possibly decrease the time necessary for the Distributor to recover, and could possibly increase the likelihood that
the Distributor might actually recover, the costs of distributing Class B shares. If either were to occur, the
profits of the Manager, which is the parent company of the Distributor, would be increased. The Board, including
each of the Independent Trustees, determined that the Proposed Plan is in the best interests of the Fund, and that
its adoption has a reasonable likelihood of benefiting the Fund and its Class B shareholders. In its annual review
of the Proposed Plan, the Board will consider the continued appropriateness of the distribution and service plan,
including the level of payments provided for therein.
THE BOARD OF TRUSTEES UNANIMOUSLY RECOMMENDS
THAT YOU APPROVE THIS PROPOSAL
INFORMATION ABOUT THE FUND
Fund Information. As of April 29, 2002, the Fund had 8,805,204.750 shares outstanding, consisting of 4,014,578.913
Class A, 3,824,533.704 Class B, 966,092.133 shares. 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 April 29, 2002, the only persons who owned of record or
were known by the Fund to own beneficially 5% or more of any class of the Fund's outstanding shares were: (i) Merrill
Lynch Pierce Fenner and Smith, for the sole benefit of its customers, 4800 Deer Lake Drive East, Jacksonville,
Florida 32246, which owned 335,629.545 Class A shares (8.36% of the Class A shares then outstanding); (ii) Evelyn M.
Spiro, Donald W. Spiro Trust, FBO McKenzie Reed Gaw, 399 Ski Trail, Smoke Rise NJ 07405-2247, which owned 18.175
Class A shares (.000452% of the Class A shares then outstanding); (iii) Merrill Lynch Pierce Fenner and Smith, for
the sole benefit of its customers, 4800 Deer Lake Drive East, Jacksonville, Florida 32246, which owned 311,391.467
Class B shares (8.14% of the Class B shares then outstanding); (iv) Merrill Lynch Pierce Fenner and Smith, for the
sole benefit of its customers, 4800 Deer Lake Drive East, Jacksonville, Florida 32246, which owned 186,802.326 Class
C shares (19.33% of the Class C shares then outstanding).
The Manager, the Distributor and the Transfer Agent. Subject to the authority of the Board of Trustees, the Manager
is responsible for the day-to-day management of the Fund's business pursuant to its investment advisory agreement
with the Fund. OppenheimerFunds Distributor, Inc. (the "Distributor"), a wholly owned subsidiary of the Manager, is
the general distributor of the Fund's shares. OppenheimerFunds Services, a division of the Manager, located at 6803
South Tucson Way, Englewood, CO 80112, serves as the transfer and shareholder servicing agent (the "Transfer Agent")
for the Fund, for which it was paid $39,406 by the Fund during the fiscal year ended July 31, 2001.
The Manager (including affiliates and subsidiaries) managed assets of more than $130 billion at March 31, 2002,
including more than 60 mutual funds having more than 6.3 million shareholder accounts. The Manager is a wholly owned
subsidiary of Oppenheimer Acquisition Corp. ("OAC"), a holding company controlled by Massachusetts Mutual Life
Insurance Company ("MassMutual"). The Manager, the Distributor and OAC are located at 498 Seventh Avenue, New York,
New York 10018. MassMutual is located at 1295 State Street, Springfield, Massachusetts 01111. OAC acquired the
Manager on October 22, 1990. As indicated below, the common stock of OAC is owned by (i) certain officers and/or
directors of the Manager, (ii) MassMutual and (iii) another investor. No institution or person holds 5% or more of
OAC's outstanding common stock except MassMutual. MassMutual has engaged in the life insurance business since 1851.
The common stock of OAC is divided into three classes. At December 31, 2001, MassMutual held (i) all of the
21,600,000 shares of Class A voting stock, (ii) 12,642,025 shares of Class B voting stock, and (iii) 21,178,801
shares of Class C non-voting stock. This collectively represented 95.35% of the outstanding common stock and 96.46%
of the voting power of OAC as of that date. Certain officers and/or directors of the Manager held (i) 884,810 shares
of the Class B voting stock, representing 1.52% of the outstanding common stock and 2.49% of the voting power, (ii)
537,090 shares of Class C non-voting stock, and (iii) options acquired without cash payment which, when they become
exercisable, allow the holders to purchase up to 8,395,700 shares of Class C non-voting stock. That group includes
persons who serve as officers of the Fund and John V. Murphy, who serves as a Trustee of the Fund.
Holders of OAC Class B and Class C common stock may put (sell) their shares and vested options to OAC or MassMutual
at a formula price (based on, among other things, the revenue, income, working capital, and excess cash of the
Manager). MassMutual may exercise call (purchase) options on all outstanding shares of both such classes of common
stock and vested options at the same formula price. There were no transactions by a person who serves as a Trustee of
the Fund during the period June 30, 2000 to December 31, 2001.
The names and principal occupations of the executive officers and directors of the Manager are as follows: John
Murphy, Chairman, President, Chief Executive Officer and a director; Jeremy Griffiths, Executive Vice President,
Chief Financial Officer and a director; O. Leonard Darling, Vice Chairman, Executive Vice President, Chief Investment
Officer and a director; George Batejan, Executive Vice President and Chief Information Officer; Robert G. Zack,
Senior Vice President and General Counsel; Craig Dinsell, James Ruff and Andrew Ruotolo, Executive Vice Presidents;
Brian W. Wixted, Senior Vice President and Treasurer; and Charles Albers, Victor Babin, Bruce Bartlett, Robert A.
Densen, Ronald H. Fielding, P. Lyman Foster, Robert B. Grill, Robert Guy, Steve Ilnitzki, Lynn Oberist Keeshan,
Thomas W. Keffer, Avram Kornberg, Chris Leavy, Angelo Manioudakis, Andrew J. Mika, David Negri, David Robertson,
Richard Rubinstein, Arthur Steinmetz, John Stoma, Jerry A. Webman, William L. Wilby, Donna Winn, Kenneth Winston,
Carol Wolf, Kurt Wolfgruber and Arthur J. Zimmer, Senior Vice Presidents. These officers are located at one of the
three offices of the Manager: 498 Seventh Avenue, New York, NY 10018; 6803 South Tucson Way, Englewood, CO 80112;and
350 Linden Oaks, Rochester, NY 14625-2807.
Custodian. Citibank, N.A., 399 Park Avenue, New York, NY 10043, acts as custodian of the Fund's securities and other
assets.
Reports to Shareholders and Financial Statements. The Annual Report to Shareholders of the Fund, including financial
statements of the Fund for the fiscal year ended July 31, 2001, has previously been sent to shareholders. The
Semi-Annual Report to Shareholders of the Fund as of January 31, 2002 also has previously been sent to shareholders.
Upon request, shareholders may obtain without charge a copy of the Annual Report and Semi-Annual Report by writing
the Fund at the address above, or calling the Fund at 1.800.708.7780 or visiting the Manager's website at
www.oppenheimerfunds.com. The Fund's transfer agent will provide a copy of the reports promptly upon request.
To avoid sending duplicate copies of materials to households, the Fund mails only one copy of each annual and
semi-annual report to shareholders having the same last name and address on the Fund's records. The consolidation of
these mailings, called householding, benefits the Fund through reduced mailing expenses.
If you want to receive multiple copies of these materials or request householding in the future, you may call the
Transfer Agent at 1.800.708.7780. You may also notify the Transfer Agent in writing. Individual copies of
prospectuses and reports will be sent to you within 30 days after the Transfer Agent receives your request to stop
householding.
FURTHER INFORMATION ABOUT VOTING AND THE MEETING
Solicitation of Proxies. The cost of preparing, printing and mailing the proxy ballot, notice of meeting, and this
Proxy Statement and all other costs incurred with the solicitation of proxies, including any additional solicitation
by letter, telephone or otherwise, will be paid by the Fund. In addition to solicitations by mail, officers of the
Fund or officers and employees of the Transfer Agent, without extra compensation, may conduct additional
solicitations personally or by telephone.
Proxies also may be solicited by a proxy solicitation firm hired at the Fund's expense to assist in the solicitation
of proxies. As the Meeting date approaches, certain shareholders of the Fund may receive telephone calls from a
representative of the solicitation firm if their vote has not yet been received. Authorization to permit the
solicitation firm to execute proxies may be obtained by telephonic instructions from shareholders of the Fund.
Proxies that are obtained telephonically will be recorded in accordance with the procedures set forth below. These
procedures have been designed to reasonably ensure that the identity of the shareholder providing voting instructions
is accurately determined and that the voting instructions of the shareholder are accurately recorded.
In all cases where a telephonic proxy is solicited, the solicitation firm representative is required to ask for each
shareholder's full name, address, the last four digits of the shareholder's social security or employer
identification number, title (if the shareholder is authorized to act on behalf of an entity, such as a corporation)
and to confirm that the shareholder has received the Proxy Statement and ballot in the mail. If the information
solicited agrees with the information provided to the solicitation firm, the solicitation firm representative has the
responsibility to explain the process, read the proposals listed on the proxy ballot, and ask for the shareholder's
instructions on such proposals. The solicitation firm representative, although he or she is permitted to answer
questions about the process, is not permitted to recommend to the shareholder how to vote. The solicitation firm
representative may read any recommendation set forth in the Proxy Statement. The solicitation firm representative
will record the shareholder's instructions. Within 72 hours, the shareholder will be sent a letter or mailgram to
confirm his or her vote and asking the shareholder to call the solicitation firm immediately if his or her
instructions are not correctly reflected in the confirmation.
It is anticipated that the cost of engaging a proxy solicitation firm would not exceed $15,000 plus the additional
----
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 1.800.708.7780. Any proxy given by a shareholder,
whether in writing or by telephone, is revocable as described below under the paragraph entitled "Revoking a Proxy."
Please take a few moments to complete your proxy ballot promptly. You may provide your completed proxy ballot via
facsimile, telephonically or by mailing the proxy ballot in the postage paid envelope provided. You also may cast
your vote by attending the Meeting in person if you are a record owner.
Telephone Voting. The Fund has arranged to have votes recorded by telephone. Shareholders must enter a unique
control number found on their respective proxy ballots before providing voting instructions by telephone. After a
shareholder provides his or her voting instructions, those instructions are read back to the shareholder and the
shareholder must confirm his or her voting instructions before disconnecting the telephone call. The voting
procedures used in connection with telephone voting are designed to reasonably authenticate the identity of
shareholders, to permit shareholders to authorize the voting of their shares in accordance with their instructions
and to confirm that their instructions have been properly recorded.
Online Voting. The Fund has arranged to have votes transmitted via the Internet, using the website
https://vote.proxy-direct.com. Shareholders who log on to that website must enter a unique control number found on
their respective proxy ballots before providing voting instructions. After a shareholder provides his or her voting
instructions, those instructions are transmitted back to the shareholder, and the shareholder must confirm his or her
voting instructions before signing off that website. These online voting procedures 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 transmitted.
Voting By Broker-Dealers. Shares owned of record by a broker-dealer for the benefit of its customers ("street account
shares") will be voted by the broker-dealer based on instructions received from its customers. If no instructions are
received, the broker-dealer may (if permitted by applicable stock exchange rules) vote, as record holder of such
shares, for the election of Trustees and on the Proposals in the same proportion as that broker-dealer votes street
account shares for which it has received voting instructions in time to be voted. Beneficial owners of street account
shares cannot vote in person at the meeting. Only record owners may vote in person at the meeting.
A "broker non-vote" is deemed to exist when a proxy received from a broker indicates that the broker does not have
discretionary authority to vote the shares on that matter. Abstentions and broker non-votes will have the same effect
as a vote against the proposal.
Quorum. A majority of the shares outstanding and entitled to vote, present in person or represented by proxy,
constitutes a quorum at the Meeting. Shares over which broker-dealers have discretionary voting power, shares that
represent broker non-votes and shares whose proxies reflect an abstention on any item are all counted as shares
present and entitled to vote for purposes of determining whether the required quorum of shares exists.
Required Vote. Persons nominated as Trustees must receive a plurality of the votes cast, which means that the eleven
(11) nominees receiving the highest number of affirmative votes cast at the Meeting will be elected as long as the
votes FOR a nominee exceed the votes AGAINST that nominee. Approval of Proposals 2 through 4 requires the affirmative
vote of a "majority of the outstanding voting securities" (as defined in the 1940 Act) of the Fund voting in the
aggregate and not by class. As defined in the 1940 Act, the vote of a majority of the outstanding shares means the
vote of (1) 67% or more of the Fund's outstanding shares present at a meeting, if the holders of more than 50% of the
outstanding shares of the Fund are present or represented by proxy; or (2) more than 50% of the Fund's outstanding
shares, whichever is less.
How are votes counted? The individuals named as proxies on the proxy ballots (or their substitutes) will vote
according to your directions if your proxy ballot is received and properly executed, or in accordance with the
instructions you provide if you vote by telephone. You may direct the proxy holders to vote your shares on a
proposal by checking the appropriate box "FOR" or "AGAINST," or instruct them not to vote those shares on the
proposal by checking the "ABSTAIN" box. Alternatively, you may simply sign, date and return your proxy ballot with
no specific instructions as to the proposals. If you properly execute and return a proxy ballot but fail to indicate
how the votes should be cast, the proxy ballot will be voted in favor of the election of each of the nominees named
in this Proxy Statement for Trustee and in favor of each Proposal.
Shares of the Fund may be held by certain institutional investors for the benefit of their clients. If the
institutional investor does not timely receive voting instructions from its clients with respect to such Shares, the
institutional investor may be authorized to vote such Shares, as well as Shares the institutional investor itself
owns, in the same proportion as Shares for which voting instructions from clients are timely received.
Revoking a Proxy. You may revoke a previously granted proxy at any time before it is exercised by (1) delivering a
written notice to the Fund expressly revoking your proxy, (2) signing and forwarding to the Fund a later-dated proxy,
or (3) attending the Meeting and casting your votes in person. 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. (EST) on the last business day before the Meeting if you are a record owner.
Shareholder Proposals. The Fund is not required and does not intend to hold shareholder meetings on a regular basis.
Special meetings of shareholders may be called from time to time by either the Fund or the shareholders (for certain
matters and under special conditions described in the Statement of Additional Information). Under the proxy rules of
the SEC, shareholder proposals that meet certain conditions may be included in a fund's proxy statement for a
particular meeting. Those rules currently require that for future meetings, the shareholder must be a record or
beneficial owner of Fund shares either (i) with a value of at least $2,000 or (ii) in an amount representing at least
1% of the fund's securities to be voted, at the time the proposal is submitted and for one year prior thereto, and
must continue to own such shares through the date on which the meeting is held. Another requirement relates to the
timely receipt by the fund of any such proposal. Under those rules, a proposal must have been submitted a reasonable
time before the Fund began to print and mail this Proxy Statement in order to be included in this Proxy Statement. A
proposal submitted for inclusion in the Fund's proxy material for the next special meeting after the meeting to which
this Proxy Statement relates must be received by the Fund a reasonable time before the Fund begins to print and mail
the proxy materials for that
meeting. Notice of shareholder proposals to be presented at the Meeting must have been received within a reasonable
time before the Fund began to mail this Proxy Statement. The fact that the Fund receives a proposal from a qualified
shareholder in a timely manner does not ensure its inclusion in the proxy material because there are other
requirements under the proxy rules for such inclusion.
OTHER MATTERS
The Trustees do not intend to bring any matters before the Meeting other than Proposals 1 through 4 and the
Trustees and the Manager are not aware of any other matters to be brought before the Meeting by others. Because
matters not known at the time of the solicitation may come before the Meeting, the proxy as solicited confers
discretionary authority with respect to such matters as properly come before the Meeting, including any adjournment
or adjournments thereof, and it is the intention of the persons named as attorneys-in-fact in the proxy (or their
substitutes) to vote the proxy in accordance with their judgment on such matters.
In the event a quorum is not present or sufficient votes in favor of one or more Proposals set forth in the
Notice of Meeting of Shareholders are not received by the date of the Meeting, the persons named in the enclosed
proxy (or their substitutes) may propose and approve one or more adjournments of the Meeting to permit further
solicitation of proxies. All such adjournments will require the affirmative vote of a majority of the shares present
in person or by proxy at the session of the Meeting to be adjourned. The persons named as proxies on the proxy
ballots (or their substitutes) will vote the Shares present in person or by proxy (including broker non-votes and
abstentions) in favor of such an adjournment if they determine additional solicitation is warranted and in the
interests of the Fund's shareholders. A vote may be taken on one or more of the proposals in this Proxy Statement
prior to any such adjournment if a quorum is present, sufficient votes for its approval have been received and it is
otherwise appropriate.
By Order of the Board of Trustees,
Robert G. Zack, Secretary
June 10, 2002
Proxy__(pre)_041002 doc
6
EXHIBIT A
Amended and Restated Distribution and Service Plan and Agreement
with
OppenheimerFunds Distributor, Inc.
For Class B Shares of
Oppenheimer New Jersey Municipal Fund, a Series of
Oppenheimer Multi-State Municipal Trust
This Amended and Restated Distribution and Service Plan and Agreement (the "Plan") is dated as of the ____
day of ______________, 2002, by and between Oppenheimer New Jersey Municipal Fund, a series of Oppenheimer
Multi-State Municipal Trust (the "Fund") and OppenheimerFunds Distributor, Inc. (the "Distributor").
1. The Plan. This Plan is the Fund's written distribution and service plan for Class B shares of the Fund (the
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"Shares"), designed to comply with the provisions of Rule 12b-1 as it may be amended from time to time (the "Rule")
under the Investment Company Act of 1940 (the "1940 Act"). Pursuant to this Plan the Fund will compensate the
Distributor for its services in connection with the distribution of Shares, and the personal service and maintenance
of shareholder accounts that hold Shares ("Accounts"). The Fund may act as distributor of securities of which it is
the issuer, pursuant to the Rule, according to the terms of this Plan. The terms and provisions of this Plan shall be
interpreted and defined in a manner consistent with the provisions and definitions contained in (i) the Fund's
Registration Statement, (ii) the 1940 Act, (iii) the Rule, (iv) Rule 2830 of the Conduct Rules of the National
Association of Securities Dealers, Inc., or any applicable amendment or successor to such rule (the "NASD Conduct
Rules") and (v) any conditions pertaining either to distribution-related expenses or to a plan of distribution to
which the Fund is subject under any order on which the Fund relies, issued at any time by the U.S. Securities and
Exchange Commission ("SEC").
2. Definitions. As used in this Plan, the following terms shall have the following meanings:
-----------
(a) "Recipient" shall mean any broker, dealer, bank or other person or entity which: (i) has rendered
assistance (whether direct, administrative or both) in the distribution of Shares or has provided administrative
support services with respect to Shares held by Customers (defined below) of the Recipient; (ii) shall furnish the
Distributor (on behalf of the Fund) with such information as the Distributor shall reasonably request to answer such
questions as may arise concerning the sale of Shares; and (iii) has been selected by the Distributor to receive
payments under the Plan.
(b) "Independent Trustees" shall mean the members of the Fund's Board of Trustees who are not
"interested persons" (as defined in the 1940 Act) of the Fund and who have no direct or indirect financial interest
in the operation of this Plan or in any agreement relating to this Plan.
(c) "Customers" shall mean such brokerage or other customers or investment advisory or other clients of
a Recipient, and/or accounts as to which such Recipient provides administrative support services or is a custodian or
other fiduciary.
(d) "Qualified Holdings" shall mean, as to any Recipient, all Shares owned beneficially or of record
by: (i) such Recipient, or (ii) such Recipient's Customers, but in no event shall any such Shares be deemed owned by
more than one Recipient for purposes of this Plan. In the event that more than one person or entity would otherwise
qualify as Recipients as to the same Shares, the Recipient which is the dealer of record on the Fund's books as
determined by the Distributor shall be deemed the Recipient as to such Shares for purposes of this Plan.
3. Payments for Distribution Assistance and Administrative Support Services.
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(a) Payments to the Distributor. In consideration of the payments made by the Fund to the Distributor
----------------------------
under this Plan, the Distributor shall provide administrative support services and distribution services to the Fund.
Such services include distribution assistance and administrative support services rendered in connection with Shares
(1) sold in purchase transactions, (2) issued in exchange for shares of another investment company for which the
Distributor serves as distributor or sub-distributor, or (3) issued pursuant to a plan of reorganization to which the
Fund is a party. If the Board believes that the Distributor may not be rendering appropriate distribution assistance
or administrative support services in connection with the sale of Shares, then the Distributor, at the request of the
Board, shall provide the Board with a written report or other information to verify that the Distributor is providing
appropriate services in this regard. For such services, the Fund will make the following payments to the Distributor:
(i) Administrative Support Service Fees. Within forty-five (45) days of the end of each calendar
-------------------------------------
quarter, the Fund will make payments in the aggregate amount of 0.25% on an annual basis of the average during that
calendar quarter of the aggregate net asset value of the Shares computed as of the close of each business day (the
"Service Fee"). Such Service Fee payments received from the Fund will compensate the Distributor for providing
administrative support services with respect to Accounts. The administrative support services in connection with
Accounts may include, but shall not be limited to, the administrative support services that a Recipient may render as
described in Section 3(b)(i) below.
(ii) Distribution Assistance Fees (Asset-Based Sales Charge). Within ten (10) days of the end of
----------------------------------------------------------
each month, the Fund will make payments in the aggregate amount of 0.75% on an annual basis of the average during the
month of the aggregate net asset value of Shares computed as of the close of each business day. Such Asset-Based
Sales Charge payments received from the Fund will compensate the Distributor for providing distribution assistance in
connection with the sale of Shares.
The distribution assistance services to be rendered by the Distributor in connection with the
Shares may include, but shall not be limited to, the following: (i) paying sales commissions to any broker, dealer,
bank or other person or entity that sells Shares, and/or paying such persons "Advance Service Fee Payments" (as
defined below) in advance of, and/or in amounts greater than, the amount provided for in Section 3(b) of this
Agreement; (ii) paying compensation to and expenses of personnel of the Distributor who support distribution of
Shares by Recipients; (iii) obtaining financing or providing such financing from its own resources, or from an
affiliate, for the interest and other borrowing costs of the Distributor's unreimbursed expenses incurred in
rendering distribution assistance and administrative support services to the Fund; and (iv) paying other direct
distribution costs, including without limitation the costs of sales literature, advertising and prospectuses (other
than those prospectuses furnished to current holders of the Fund's shares ("Shareholders")) and state "blue sky"
registration expenses.
(b) Payments to Recipients. The Distributor is authorized under the Plan to pay Recipients (1)
------------------------
distribution assistance fees for rendering distribution assistance in connection with the sale of Shares and/or (2)
service fees for rendering administrative support services with respect to Accounts. However, no such payments shall
be made to any Recipient for any quarter in which its Qualified Holdings do not equal or exceed, at the end of such
quarter, the minimum amount ("Minimum Qualified Holdings"), if any, that may be set from time to time by a majority
of the Independent Trustees. All fee payments made by the Distributor hereunder are subject to reduction or
chargeback so that the aggregate service fee payments and Advance Service Fee Payments do not exceed the limits on
payments to Recipients that are, or may be, imposed by the NASD Conduct Rules. The Distributor may make Plan payments
to any "affiliated person" (as defined in the 1940 Act) of the Distributor if such affiliated person qualifies as a
Recipient or retain such payments if the Distributor qualifies as a Recipient.
In consideration of the services provided by Recipients, the Distributor shall make the following
payments to Recipients:
(i) Service Fee. In consideration of administrative support services provided by a Recipient during
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a calendar quarter, the Distributor shall make service fee payments to that Recipient quarterly, within forty-five
(45) days of the end of each calendar quarter, at a rate not to exceed 0.25% on an annual basis of the average during
the calendar quarter of the aggregate net asset value of Shares, computed as of the close of each business day,
constituting Qualified Holdings owned beneficially or of record by the Recipient or by its Customers for a period of
more than the minimum period (the "Minimum Holding Period"), if any, that may be set from time to time by a majority
of the Independent Trustees.
Alternatively, the Distributor may, at its sole option, make the following service fee payments to
any Recipient quarterly, within forty-five (45) days of the end of each calendar quarter: (A) "Advance Service Fee
Payments" at a rate not to exceed 0.25% of the average during the calendar quarter of the aggregate net asset value
of Shares, computed as of the close of business on the day such Shares are sold, constituting Qualified Holdings,
sold by the Recipient during that quarter and owned beneficially or of record by the Recipient or by its Customers,
plus (B) service fee payments at a rate not to exceed 0.25% on an annual basis of the average during the calendar
quarter of the aggregate net asset value of Shares, computed as of the close of each business day, constituting
Qualified Holdings owned beneficially or of record by the Recipient or by its Customers for a period of more than one
(1) year. At the Distributor's sole option, Advance Service Fee Payments may be made more often than quarterly, and
sooner than the end of the calendar quarter. In the event Shares are redeemed less than one year after the date such
Shares were sold, the Recipient is obligated to and will repay the Distributor on demand a pro rata portion of such
Advance Service Fee Payments, based on the ratio of the time such Shares were held to one (1) year.
The administrative support services to be rendered by Recipients in connection with the Accounts
may include, but shall not be limited to, the following: answering routine inquiries concerning the Fund, assisting
in the establishment and maintenance of accounts or sub-accounts in the Fund and processing Share redemption
transactions, making the Fund's investment plans and dividend payment options available, and providing such other
information and services in connection with the rendering of personal services and/or the maintenance of Accounts, as
the Distributor or the Fund may reasonably request.
(ii) Distribution Assistance Fee (Asset-Based Sales Charge) Payments. Irrespective of whichever
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alternative method of making service fee payments to Recipients is selected by the Distributor, in addition the
Distributor shall make distribution assistance fee payments to each Recipient quarterly, within forty-five (45) days
after the end of each calendar quarter, at a rate not to exceed 0.75% on an annual basis of the average during the
calendar quarter of the aggregate net asset value of Shares computed as of the close of each business day
constituting Qualified Holdings owned beneficially or of record by the Recipient or its Customers for a period of
more than one (1) year. Alternatively, at its sole option, the Distributor may make distribution assistance fee
payments to a Recipient quarterly, at the rate described above, on Shares constituting Qualified Holdings owned
beneficially or of record by the Recipient or its Customers without regard to the 1-year holding period described
above. Distribution assistance fee payments shall be made only to Recipients that are registered with the SEC as a
broker-dealer or are exempt from registration.
The distribution assistance to be rendered by the Recipients in connection with the sale of Shares
may include, but shall not be limited to, the following: distributing sales literature and prospectuses other than
those furnished to current Shareholders, providing compensation to and paying expenses of personnel of the Recipient
who support the distribution of Shares by the Recipient, and providing such other information and services in
connection with the distribution of Shares as the Distributor or the Fund may reasonably request.
(c) A majority of the Independent Trustees may at any time or from time to time (i) increase or
decrease the rate of fees to be paid to the Distributor or to any Recipient, but not to exceed the maximum rates set
forth above, and/or (ii) direct the Distributor to increase or decrease any Minimum Holding Period, any maximum
period set by a majority of the Independent Trustees during which fees will be paid on Shares constituting Qualified
Holdings owned beneficially or of record by a Recipient or by its Customers (the "Maximum Holding Period"), or
Minimum Qualified Holdings. The Distributor shall notify all Recipients of any Minimum Qualified Holdings, Maximum
Holding Period and Minimum Holding Period that are established and the rate of payments hereunder applicable to
Recipients, and shall provide each Recipient with written notice within thirty (30) days after any change in these
provisions. Inclusion of such provisions or a change in such provisions in a supplement or Statement of Additional
Information or amendment to or revision of the prospectus or Statement of Additional Information of the Fund shall
constitute sufficient notice.
(d) The Service Fee and the Asset-Based Sales Charge on Shares are subject to reduction or elimination
under the limits that apply to such fees under the NASD Conduct Rules relating to sales of shares of open-end funds
(e) Under the Plan, payments may also be made to Recipients: (i) by OppenheimerFunds, Inc. ("OFI") from
its own resources (which may include profits derived from the advisory fee it receives from the Fund), or (ii) by the
Distributor (a subsidiary of OFI), from its own resources, from Asset-Based Sales Charge payments or from the
proceeds of its borrowings, in either case, in the discretion of OFI or the Distributor, respectively.
(f) Recipients are intended to have certain rights as third-party beneficiaries under this Plan,
subject to the limitations set forth below. It may be presumed that a Recipient has provided distribution assistance
or administrative support services qualifying for payment under the Plan if it has Qualified Holdings of Shares that
entitle it to payments under the Plan. If either the Distributor or the Board believe that, notwithstanding the
level of Qualified Holdings, a Recipient may not be rendering appropriate distribution assistance in connection with
the sale of Shares or administrative support services for Accounts, then the Distributor, at the request of the
Board, shall require the Recipient to provide a written report or other information to verify that said Recipient is
providing appropriate distribution assistance and/or services in this regard. If the Distributor or the Board of
Trustees still is not satisfied after the receipt of such report, either may take appropriate steps to terminate the
Recipient's status as a Recipient under the Plan, whereupon such Recipient's rights as a third-party beneficiary
hereunder shall terminate. Additionally, in their discretion a majority of the Fund's Independent Trustees at any
time may remove any broker, dealer, bank or other person or entity as a Recipient, whereupon such person's or
entity's rights as a third-party beneficiary hereof shall terminate. Notwithstanding any other provision of this
Plan, this Plan does not obligate or in any way make the Fund liable to make any payment whatsoever to any person or
entity other than directly to the Distributor. The Distributor has no obligation to pay any Service Fees or
Distribution Assistance Fees to any Recipient if the Distributor has not received payment of Service Fees or
Distribution Assistance Fees from the Fund.
4. Selection and Nomination of Trustees. While this Plan is in effect, the selection and nomination of persons
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to be Trustees of the Fund who are not "interested persons" of the Fund ("Disinterested Trustees") shall be committed
to the discretion of the incumbent Disinterested Trustees. Nothing herein shall prevent the incumbent Disinterested
Trustees from soliciting the views or the involvement of others in such selection or nomination as long as the final
decision on any such selection and nomination is approved by a majority of the incumbent Disinterested Trustees.
5. Reports. While this Plan is in effect, the Treasurer of the Fund shall provide written reports to the Fund's
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Board for its review, detailing the amount of all payments made under this Plan and the purpose for which the
payments were made. The reports shall be provided quarterly, and shall state whether all provisions of Section 3 of
this Plan have been complied with.
6. Related Agreements. Any agreement related to this Plan shall be in writing and shall provide that: (i) such
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agreement may be terminated at any time, without payment of any penalty, by a vote of a majority of the Independent
Trustees or by a vote of the holders of a "majority" (as defined in the 1940 Act) of the Fund's outstanding voting
Class B shares; (ii) such termination shall be on not more than sixty days' written notice to any other party to the
agreement; (iii) such agreement shall automatically terminate in the event of its "assignment" (as defined in the
1940 Act); (iv) such agreement shall go into effect when approved by a vote of the Board and its Independent Trustees
cast in person at a meeting called for the purpose of voting on such agreement; and (v) such agreement shall, unless
terminated as herein provided, continue in effect from year to year only so long as such continuance is specifically
approved at least annually by a vote of the Board and its Independent Trustees cast in person at a meeting called for
the purpose of voting on such continuance.
7. Effectiveness, Continuation, Termination and Amendment. This Plan has been approved by a vote of the Board
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and its Independent Trustees cast in person at a meeting called on April 13, 2000, for the purpose of voting on this
Plan, and shall take effect as of the date first set forth above, at which time it shall replace the Fund's
Distribution and Service Plan for the shares dated February 10, 1994. Unless terminated as hereinafter provided, it
shall continue in effect until renewed by the Board in accordance with the Rule and thereafter from year to year or
as the Board may otherwise determine but only so long as such continuance is specifically approved at least annually
by a vote of the Board and its Independent Trustees cast in person at a meeting called for the purpose of voting on
such continuance.
This Plan may not be amended to increase materially the amount of payments to be made under this Plan,
without approval of the Class B Shareholders at a meeting called for that purpose and all material amendments must be
approved by a vote of the Board and of the Independent Trustees.
This Plan may be terminated at any time by a vote of a majority of the Independent Trustees or by the vote
of the holders of a "majority" (as defined in the 1940 Act) of the Fund's outstanding Class B voting shares. In the
event of such termination, the Board and its Independent Trustees shall determine whether the Distributor shall be
entitled to payment from the Fund of all or a portion of the Service Fee and/or the Asset-Based Sales Charge in
respect of Shares sold prior to the effective date of such termination.
8. Disclaimer of Shareholder and Trustee Liability. The Distributor understands that the obligations of the
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Fund under this Plan are not binding upon any Trustee or shareholder of the Fund personally, but bind only the Fund
and the Fund's property. The Distributor represents that it has notice of the provisions of the Declaration of Trust
of the Fund disclaiming Trustee and shareholder liability for acts or obligations of the Fund.
Oppenheimer New Jersey Municipal Fund, a series of Oppenheimer
Multi-State Municipal Trust
By: ____________________________________
OppenheimerFunds Distributor, Inc.
By: _____________________________________
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1 The address of each nominee is 6803 S. Tucson Way, Englewood, CO 80112-3924.
2 If elected, each Trustee will serve for an indefinite term, until his or her resignation, death or removal.
3 The address of Mr. Murphy is 498 Seventh Avenue, New York, NY 10018.
4 If elected, Mr. Murphy will serve for an indefinite term, until his or her resignation, death or removal.
5 Includes shares owned by Mr. Murphy in other Oppenheimer Funds for which he serves as director or trustee.
6 The address of each Officer is 498 Seventh Avenue, New York, NY 10018 except for Messrs. Farrar and Wixted and Ms.
Ives, whose address is 6803 S. Tucson Way, Englewood, CO 80112-3924 .
7 Each Officer serves for an annual term or until his or her resignation, death or removal.