SCHEDULE 14A
Information Required in Proxy Statement
(Rule 14a-101)
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
(Amendment No. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or 14a-12
OPPENHEIMER MAIN STREET FUNDS, INC.
on behalf of its series,
Oppenheimer Main Street Growth and Income
(Name of Registrant as Specified in its Charter)
Kathleen T. Ives
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
/ / $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2)
or Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3). / / Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is
calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.: Schedule 14A
(3) Filing Party: Kathleen T. Ives
(4) Date Filed: January 9, 2001
Oppenheimer Main Street Growth & Income
Fund,
a series of Oppenheimer Main Street Funds,
[OppenheimerFunds Logo] Inc.
Proxy for Shareholders Meeting To Be Held
March 16th, 2001
Oppenheimer Main Street Growth &
Income Fund,
a series of
Oppenheimer Main Street Funds, Inc. Your shareholder vote is important!
6803 S. Tucson Way
Englewood, CO 80112-3924
The undersigned shareholder of
Oppenheimer Main Street Growth & Income
Fund, a series of Oppenheimer Main
Street Funds, Inc. (the "Fund"), does
hereby appoint Brian Wixted, Robert
Bishop, and Scott Farrar, and each of
them, as attorneys-in-fact and proxies
of the undersigned, with full power of
substitution, to attend the Meeting of
Shareholders of the Fund to be held
March 16th, 2001, at 6803 South Tucson
Way, Englewood, Colorado 80112 at 3:00
P.M., Mountain time, and at all
Adjournments thereof, and to vote the
shares held in the name of the
undersigned on the record date for said
meeting with respect to the election of
Trustees and the proposals specified on
the reverse side. Said
attorneys-in-fact shall vote in
accordance with their best judgment as
to any other matter.
To Vote By Telephone (a low-cost
method of voting your proxy):
1. Read the Proxy Statement and have
your Proxy Card at hand.
2. Call toll-free 1-888-221-0697.
3. Enter the 14-digit Control Number
found on your Proxy Card.
4. Follow the simple instructions.
Proxy solicited on behalf of the Board of
Trustees, which recommends a vote FOR the
election of all nominees for Trustee and
FOR each Proposal below. The shares
represented hereby will be voted as
indicated below or FOR if no choice is
indicated.
Your prompt response can save your Fund
money.
Please vote, sign and mail your proxy ballot (this card) in the enclosed
postage-paid envelope today, no matter how many shares you own. A majority of
the Fund's shares must be represented in person or by proxy. Please vote your
proxy so your Fund can avoid the expense of another mailing.
Keep This Portion for Your Records
Detach and Return this Portion Only
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
Oppenheimer Main Street Growth & Income Fund,
a series of Oppenheimer Main Street Funds,
Inc.
1. Election of Trustees a) W. Armstrong g) R. Kalinowski For All
(Proposal No. 1) b) R. Avis h) C. Kast Withhold All
c) G. Bowen i) R. Kirchner For All Except
d) E. Cameron j) B. Macaskill
e) J. Fossel k) F. W. Marshall To withhold
f) S. Freedman l) J. Swain authority to vote
for any individual
nominee, mark
"For All Except"
and write the
nominee's letter
on the line below.
Vote On Proposals For Against Abstain
2. Ratification of selection of Deloitte
& Touche LLP as independent auditors
(Proposal No. 2)
1. 3. Approval of the elimination of
certain fundamental restrictions of the
Fund (Proposal No. 3)
a. Purchasing securities on margin
b. Purchasing securities of issuers in
which Officers or Directors have an
interest
c. Investing in a company for the purpose
of acquiring control
d. Investing in mineral-related programs
or leases
e. Limits on investing in other investing
companies
4. Approval to change three and eliminate
one of the Fund's fundamental investment
restrictions to permit inter-fund
lending (Proposal No. 4)
a. Borrowing
b. Lending
c. Pledging of assets
d. Diversification
5. Approval of a revision to the Fund's
investment objective (Proposal No. 5)
6. Approval of an Amended and Restated
Class B 12b-1 Distribution and Service
Plan and Agreement (Class B Shareholders
only) (Proposal No. 6)
7. Approval of an Amended and Restated
Class C 12b-1 Distribution and Service
Plan and Agreement (Class C Shareholders
only) (Proposal No. 7)
NOTE: Please sign exactly as your name(s) appears hereon. When signing as
custodian, attorney, executor, administrator, trustee, etc., please give your
full title as such. All joint owners should sign this proxy. If the account is
registered in the name of a corporation, partnership or other entity, a duly
authorized individual must sign on its behalf and give title.
Signature Date
Signature (Joint Owners) Date
700_Ballot-Proxy00def.doc
OPPENHEIMER MAIN STREET GROWTH & INCOME
FUND
a series of Oppenheimer Main Street Funds,
Inc.
6803 South Tucson Way, Englewood, CO
80112
Notice Of Meeting Of Shareholders To Be
Held
March 16, 2001
To The Shareholders of Oppenheimer
Main Street Growth & Income Fund:
Notice is hereby given that a Meeting of the Shareholders (the "Meeting") of
Oppenheimer Main Street Growth & Income Fund (the "Fund"), a series of the
Oppenheimer Main Street Funds, Inc., will be held at 6803 South Tucson Way,
Englewood, Colorado, 80112, at 3:00 P.M., Mountain time, on March 16, 2001.
During the Meeting, shareholders of the Fund will vote on the following
proposals:
1. To elect a Board of Directors;
2. To ratify the selection of
Deloitte & Touche LLP as the
independent auditor for the Fund
for the fiscal year beginning
September 1, 2000;
3. To approve the elimination of
certain fundamental investment
restrictions of the Fund;
4. To approve changes to three
and the elimination of one
fundamental investment
restrictions of the Fund to
permit inter-fund lending;
5. To approve a revision to the
Fund's investment objective;
6. To approve an Amended and
Restated Class B 12b-1
Distribution and Service
Plan (only Class B
shareholders vote on this
proposal);
7. To approve an Amended and
Restated Class C 12b-1
Distribution and Service
Plan (only Class C
shareholders vote on this
proposal); and
8. 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 December 27, 2000, are
entitled to vote at the meeting. The Proposals are more fully discussed in the
Proxy Statement. Please read it carefully before telling us, through your proxy
or in person, how you wish your shares to be voted. The Board of Directors of
Oppenheimer Main Street Funds, Inc. recommends a vote to elect each of the
nominees as Director and in favor of each Proposal. WE URGE YOU TO MARK, SIGN,
DATE AND MAIL THE ENCLOSED PROXY PROMPTLY.
By Order of the Board of Directors,
Andrew J. Donohue, Secretary
January 19, 2001
PLEASE RETURN YOUR PROXY CARD
PROMPTLY. YOUR VOTE IS
IMPORTANT NO MATTER HOW MANY
SHARES YOU OWN.
700
TABLE OF CONTENTS
Proxy Statement
Page
Questions and Answers
Proposal 1: To elect a Board of
Directors
Proposal 2: To ratify the selection
of Deloitte & Touche LLP
as the independent
auditor for the Fund for
the fiscal year
beginning September 1,
2000
Introduction to Proposals 3 and 4
Proposal 3: To approve the
elimination of certain
fundamental investment
restrictions of the Fund
Proposal 4: To approve changes to three (3) and the elimination of one (1)
fundamental investment restriction of the Fund to permit inter-fund
lending.
Proposal 5: To approve a
revision to the Fund's
investment objective
Introduction to Proposals 6 and 7
Proposal 6: To approve an Amended
and Restated Class B
12b-1 Distribution and
Service Plan and
Agreement (only Class B
shareholders vote on
this proposal)
Proposal 7: To approve an Amended
and Restated Class C
12b-1 Distribution and
Service Plan and
Agreement (only Class C
shareholders vote on
this proposal)
EXHIBITS
A Amended and Restated
Class B 12b-1 Distribution and
Service Plan and Agreement
B Amended and Restated
Class C 12b-1 Distribution and
Service Plan and Agreement
OPPENHEIMER MAIN STREET GROWTH &
INCOME FUND
a series of Oppenheimer Main Street
Funds, Inc.
PROXY STATEMENT
QUESTIONS AND ANSWERS
Q. Who is Asking for My Vote?
A. Directors of Oppenheimer Main
Street Funds, Inc. (the
Corporation) on behalf
of its series
Oppenheimer Main Street
GrowthA. & Income
Fund (the "Fund") have
asked that you vote on
several matters at the
Special Meeting of
Shareholders to be held
on March 16, 2001.
Q. Who is Eligible to Vote?
A. Shareholders of record at the
close of business on
December 27, 2000 are
entitled to vote at the
Meeting or any adjourned
meeting. Shareholders
are entitled to cast one
vote for each matter
presented at the
Meeting. The Notice of
Meeting, proxy card and
proxy statement were
mailed to shareholders
of record on or about
January 19, 2001.
Q. On What Matters Am I Being
Asked to Vote?
A. You are being asked to vote on
the following proposals:
1. To elect a Board of Directors;
2. To ratify the selection of
Deloitte & Touche LLP
as the independent
auditor for the Fund;
3. To eliminate certain
fundamental
investment
restrictions of the
Fund;
4. To approve changes to three
(3) and the
elimination of one
(1) fundamental
investment
restrictions of the
Fund to permit
inter-fund lending;
5. To approve a revision to the
Fund's investment
objective;
6. To approve an Amended and
Restated Class B
12b-1 Distribution
and Service Plan and
Agreement (only Class
B shareholders vote
on this proposal);
and
7. To approve an Amended and
Restated Class C
12b-1 Distribution
and Service Plan and
Agreement (only Class
C shareholders vote
on this proposal)
Q. How do the Directors Recommend
that I Vote?
A. The Directors recommend that
you vote:
1. FOR election of all nominees
as Directors;
2. FOR ratification of the
selection of Deloitte
& Touche LLP as the
independent auditor
for the Fund;
3. FOR the elimination of each of
the Fund's
fundamental
investment
restrictions proposed
to be eliminated;
4. FOR the changes or elimination
of the Fund's
fundamental
investment
restrictions proposed
for change or
elimination;
5. FOR approval of the revision
to the Fund's
investment objective;
6. FOR the adoption of an Amended
and Restated Class B
12b-1 Distribution
and Service Plan by
Class B shareholders;
and
7. FOR the adoption of an Amended
and Restated Class C
12b-1 Distribution
and Service Plan by
Class C shareholders.
Q. How Can I Vote?
A. You can vote in three (3)
different ways:
o By mail, with the enclosed
ballot
o By telephone, following the
simple instructions
on the proxy ballot
o In person at the Meeting.
Voting by telephone saves you time and helps reduce the Fund's
expenses. Whichever method you choose, please take the time to
read the full text of the proxy statement before you vote.
Q. How Will My Vote Be Recorded?
A. Proxy cards that are properly
signed, dated and
received at or prior to
the Meeting 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
card, but do not specify
a vote for one or more
of the proposals, your
shares will be voted in
favor of the Directors
recommendations.
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 card
to the Fund that is
received at or prior to
the Meeting, or
attending the Meeting
and voting in person.
Q. How Can I Get More Information
About the Fund?
A. A copy of the Fund's annual
report has previously
been mailed to
Shareholders. If you
would like to have
copies of the Fund's
most recent annual
report sent to you free
of charge, please call
us toll-free at
1.800.525.7048 or write
to the Fund at
OppenheimerFunds
Services, P.O. Box 5270,
Denver, Colorado,
80217-5270.
Q. Whom Do I Call If I Have
Questions?
A. Please call us at
1.800.525.7048
This Proxy Statement is designed to furnish shareholders with the information
necessary to vote on the matters coming before the Meeting. If you have any
questions, please call us at 1.800.525.7048.1.
--------------------------------------------------------------------------
OPPENHEIMER MAIN ST
FUND
a series of Oppenheimer Main Street
Funds, Inc.
PROXY ST
Meeting of S
To Be Held Ma
This statement is furnished to the
shareholders of Oppenheimer Main
Street Growth & Income Fund (the
"Fund") a series of Oppenheimer Main
Street Funds, Inc., (the
"Corporation") in connection with
the solicitation by the
Corporation's Board of Directors of
proxies to be used at a special
meeting of shareholders (the
"Meeting") to be held at 6803 South
Tucson Way, Englewood, Colorado, Shareholder Voting
80112, at 3:00 P.M., Mountain time,
on March 16, 2001, or any Pr
adjournments thereof. It is expected
that the mailing of this Proxy EMENT
Statement will be made on or about
January 19, 2001. ATreholders
h 16, 2001
SUMMARY OF PROPOSALS ha
rc
--------------------------------------------------------------------------
- -------------------------------------------------------------------------------
1. To elect a Board of Directors All
- -------------------------------------------------------------------------------
--------------------------------------------------------------------------
1. 1. 2. To ratify All
the
selection
of
Deloitte
& Touche
LLP as
the
independent
auditor
for the
Fund for
the
fiscal
year
beginning
September
1, 2000
--------------------------------------------------------------------------
--------------------------------------------------------------------------
To
approve
the
elimination
of
certain
fundamental
investment
restriction
for the
3. Fund s
--------------------------------------------------------------------------
--------------------------------------------------------------------------
a.
Purchasing
securities
on margin All
--------------------------------------------------------------------------
--------------------------------------------------------------------------
b.
Purchasing
securities
of
issuers
in which
Officers
or
Directors
have an
interest All
--------------------------------------------------------------------------
--------------------------------------------------------------------------
c.
Investing
in a
company
for the
purpose
of
acquiring
control All
--------------------------------------------------------------------------
--------------------------------------------------------------------------
d.
Investing
in All
mineral-rel
programs
or leases ated
--------------------------------------------------------------------------
--------------------------------------------------------------------------
a. a. e. Limits All
on
investing
in other
investment
companies
--------------------------------------------------------------------------
--------------------------------------------------------------------------
To All
approve
changes
to three
and the
elimination
of one of
the
Fund's
fundamental
investment
restrictions
4. to permit
inter-fund
lending
c.
Borrowing
d.
Lending
e.
Pledging
of
assets
f.
Diversification
--------------------------------------------------------------------------
--------------------------------------------------------------------------
To
approve a
revision
5. to the All
Fund's
investment
objective
--------------------------------------------------------------------------
--------------------------------------------------------------------------
6. To Class B
approve
an
Amended Shareholder
and only
Restated
Class B
12b-1 s
Distributio
and
Service n
Plan and
Agreement
--------------------------------------------------------------------------
--------------------------------------------------------------------------
7. To Class C
approve
an
Amended Shareholder
and only
Restated
Class C
12b-1 s
Distributio
and
Service n
Plan and
Agreement
--------------------------------------------------------------------------
PROPOSAL 1: ELECTION OF DIRECTORS
At the Meeting, twelve (12) Directors are to be elected to hold office
until the next meeting of shareholders called for the purpose of electing
Directors and until their successors are duly elected and shall have qualified.
The persons named as attorneys-in-fact in the enclosed proxy have advised the
Fund that unless a proxy instructs them to withhold authority to vote for all
listed nominees or any individual nominee, all validly executed proxies will be
voted by them for the election of the nominees named below as Directors of the
Fund. As a Maryland corporation the Fund does not contemplate holding annual
shareholder meetings for the purpose of electing Directors. Thus, the Directors
will be elected for indefinite terms until a special shareholder meeting is
called for the purpose of voting for Directors and until their successors are
properly elected and qualified.
Each of the nominees (except for Messrs. Armstrong, Cameron and Marshall)
currently serves as a Director of the Fund. All of the nominees have consented
to be named as such in this proxy statement and have consented to serve as
Directors if elected.
Each nominee indicated below by an asterisk is an "interested person" (as
that term is defined in the Investment Company Act of 1940, referred to in this
Proxy Statement as the "1940 Act") of the Fund due to the positions indicated
with the Fund's investment advisor, OppenheimerFunds, Inc. (the "Manager") or
its affiliates, or other positions described. The beneficial ownership of Class
A shares listed below includes voting and investment control, unless otherwise
indicated below. All of the Directors own or intend to own shares in one or more
of the Denver-based funds in the OppenheimerFunds complex. If a nominee should
be unable to accept election, the Board of Directors may, in its discretion,
select another person to fill the vacant position.
Name, Age, Address Fund Shares Beneficially Owned as of
And Five-Year Business Experience December 27, 2000 and % of Class Owned
- --------------------------------- ---------------------------------------
William L. Armstrong (63) 2,733.364
11 Carriage Lane
(.000013% of Class A
shares)
Littleton, Colorado 80121
Chairman of the following private mortgage banking companies: Cherry Creek
Mortgage Company (since 1991), Centennial State Mortgage Company (since 1994),
The El Paso Mortgage Company (since 1993), Transland Financial Services, Inc.
(since 1997); Chairman of the following private companies: Frontier Real Estate,
Inc. (residential real estate brokerage) (since 1994), Frontier Title (title
insurance agency) (since 1995), Great Frontier Insurance (insurance agency)
(since 1995) and Ambassador Media Corporation (since 1984); Director of the
following public companies: Storage Technology Corporation (computer equipment
company) (since 1991), Helmerich & Payne, Inc. (oil and gas drilling/production
company) (since 1992), UNUMProvident (insurance company) (since 1991); formerly
Director of International Family Entertainment (television channel) (1992 -
1997) and Natec Resources, Inc. (air pollution control equipment and services
company) (1991-1995); formerly U.S. Senator (January 1979-January 1991).
Director/trustee of 22 investment companies in the OppenheimerFunds complex.
Name, Age, Address Fund Shares Beneficially Owned as of
And Five-Year Business Experience December 27, 2000 and % of Class Owned
- --------------------------------- ---------------------------------------
Robert G. Avis (69)* 0
10369 Clayton Road
St. Louis, Missouri 63131
Director since 1993.
Director and President of A.G. Edwards Capital, Inc. (General Partner of
private equity funds); formerly, until March 2000, Chairman, President and
Chief Executive Officer of A.G. Edwards Capital, Inc.; a Director of A.G.
Edwards & Sons and A.G. Edwards Trust Company until March 2000; formerly,
until March 1999, Vice Chairman and Director of A.G. Edwards, Inc. and Vice
Chairman of A.G. Edwards & Sons, Inc. (its brokerage company subsidiary);
until March 1999, Chairman of A.G. Edwards Trust Company and A.G.E. Asset
Management (investment advisor). Director/trustee of 23 investment companies
in the OppenheimerFunds complex.
George C. Bowen (64) 640.309
9224 Bauer Ct. (.000003% of Class A
shares)
Lone Tree, Colorado 80124
Director since 1998.
Formerly (until April 1999) Mr. Bowen held the following positions: Senior Vice
President (since September 1987) and Treasurer (since March 1985) of the
Manager; Vice President (since June 1983) and Treasurer (since March 1985) of
OppenheimerFunds Distributor, Inc. ("Distributor"); Vice President (since
October 1989) and Treasurer (since April 1986) of HarbourView Asset Management
Corporation; Senior Vice President (since February 1992), Treasurer (since July
1991); Assistant Secretary and a director (since December 1991) of Centennial
Asset Management Corporation; President, Treasurer and a director of Centennial
Capital Corporation (since June 1989); Vice President and Treasurer (since
August 1978) and Secretary (since April 1981) of Shareholder Services, Inc.;
Vice President, Treasurer and Secretary of Shareholder Financial Services, Inc.
(since November 1989); Assistant Treasurer of Oppenheimer Acquisition Corp.
(since March 1998); Treasurer of Oppenheimer Partnership Holdings, Inc. (since
November 1989); Vice President and Treasurer of Oppenheimer Real Asset
Management, Inc. (since July 1996); Treasurer of OppenheimerFunds International
Ltd. and Oppenheimer Millennium Funds plc (since October 1997). Director/trustee
of 20 investment companies in the OppenheimerFunds complex.
- -------------------
* Director who is an Interested Person of the Fund.
Name, Age, Address Fund Shares
Beneficially Owned as of
And Five-Year Business Experience December 27, 2000 and % of Class Owned
- --------------------------------- ---------------------------------------
Edward L. Cameron (62) 0
Spring Valley Road
Morristown, New Jersey 07960
Formerly (from 1974-1999) a partner with PricewaterhouseCoopers LLP (an
accounting firm) and Chairman, Price Waterhouse LLP Global Investment Management
Industry Services Group (from 1994-1998). Director/trustee of 17 investment
companies in the OppenheimerFunds complex.
Jon S. Fossel (58) 0
P.O. Box 44, Mead Street
Waccabuc, New York 10597
Director since 1990.
Formerly (until October 1996) Chairman and a director of the Manager,
President and a director of Oppenheimer Acquisition Corp., the Manager's
parent holding company, and Shareholder Services, Inc. and Shareholder
Financial Services, Inc., transfer agent subsidiaries of the Manager.
Director/trustee of 22 investment companies in the OppenheimerFunds complex.
Sam Freedman (60) 4,143.448
4975 Lakeshore Drive (.000019% of
Class A shares)
Littleton, Colorado 80123
Director since 1996.
Formerly (until October 1994) Chairman and Chief Executive Officer of
OppenheimerFunds Services; Chairman, Chief Executive Officer and a director
of Shareholder Services, Inc.; Chairman, Chief Executive Officer and director
of Shareholder Financial Services, Inc.; Vice President and director of
Oppenheimer Acquisition Corp.; and a director of OppenheimerFunds, Inc.
Director/trustee of 23 investment companies in the OppenheimerFunds complex.
Raymond J. Kalinowski (71) 0
44 Portland Drive
St. Louis, Missouri 63131
Director since 1988.
Formerly a director of Wave Technologies International, Inc. (a computer
products training company), self-employed consultant (securities matters) and
director/trustee of 23 investment companies in the OppenheimerFunds complex.
- -------------------
* Director who is an Interested Person of the Fund.
Name, Age, Address Fund Shares Beneficially Owned as of
And Five-Year Business Experience December 27, 2000 and % of Class Owned
- --------------------------------- ---------------------------------------
C. Howard Kast (79) 3,840.220
2552 East Alameda, #30 (.000018% of Class A
shares)
Denver, Colorado 80209
Director since 1988.
Formerly Managing Partner of Deloitte, Haskins & Sells (an accounting firm) and
director/trustee of 23 investment companies in the OppenheimerFunds complex.
Robert M. Kirchner (79) 0
7500 E. Arapohoe Road
Suite 250
Englewood, Colorado 80112
Director since 1988.
President of The Kirchner Company (management consultants) and director/trustee
of 23 investment companies in the OppenheimerFunds complex.
Bridget A. Macaskill* (52)
Two World Trade Center
New York, New York 10048
Director since 1995.
Chairman (since August 2000), Chief Executive Officer (since September 1995) and
a director (since December 1994) of the Manager; President (since September
1995) and a director (since October 1990) of Oppenheimer Acquisition Corp., the
Manager's parent holding company; President, Chief Executive Officer and a
director (since March 2000) of OFI Private Investments, Inc., an investment
adviser subsidiary of the Manager; Chairman and a director of Shareholder
Services, Inc. (since August 1994) and Shareholder Financial Services, Inc.
(since September 1995), transfer agent subsidiaries of the Manager; President
(since September 1995) and a director (since November 1989) of Oppenheimer
Partnership Holdings, Inc., a holding company subsidiary of the Manager;
President and a director (since October 1997) of OppenheimerFunds International
Ltd., an offshore fund management subsidiary of the Manager and of Oppenheimer
Millennium Funds plc; a director of HarbourView Asset Management Corporation
(since July 1991) and of Oppenheimer Real Asset Management, Inc. (since July
1996), investment adviser subsidiaries of the Manager; a director (since April
2000) of OppenheimerFunds Legacy Program, a charitable trust program established
by the Manager; a director of Prudential Corporation plc (a U.K. financial
service company); formerly President of the Manager (June 1991 - August 2000).
President and a director/trustee of 56 Oppenheimer funds.
- -------------------
* Director who is an Interested Person of the Fund.
Name, Age, Address Fund Shares Beneficially Owned as of
And Five-Year Business Experience December 27, 2000 and % of Class
- --------------------------------- ---------------------------------------
Owned
F. William Marshall, Jr. (58) 0
87 Ely Road
Longmeadow, Massachusetts 01106
Formerly Chairman (1999) SIS & Family Bank, F.S.B. (formerly SIS Bank);
President, Chief Executive Officer and Director (1993-1999), SIS Bankcorp.,
Inc. and SIS Bank (formerly, Springfield Institution for Savings); Executive
Vice President (1999), Peoples Heritage Financial Group, Inc.; Chairman and
Chief Executive Officer (1990-1993), Bank of Ireland First Holdings, Inc. and
First New Hampshire Banks; Trustee (since 1996), MassMutual Institutional
Funds (open-end investment company); Trustee (since 1996), MML Series
Investment Fund (open-end investment company). Director/trustee of 16
investment companies in the OppenheimerFunds complex.
James C. Swain* (66) 0
6803 South Tucson Way
Englewood, Colorado 80112
Director since 1988.
Vice Chairman of the Manager (since September 1988); formerly President and a
director of Centennial Asset Management Corporation, an investment advisor
subsidiary of the Manager and Chairman of the Board of Shareholder Services,
Inc. Director/trustee and Chairman of the Board of 23 investment companies in
the OppenheimerFunds complex.
- -------------------
* Director who is an Interested Person of the Fund.
Under the Investment Company Act of 1940 (the "1940 Act"), the Board of
Directors may fill vacancies on the Board of Directors or appoint new
Directors only if, immediately thereafter, at least two-thirds of the
Directors will have been elected by shareholders. Currently, four ( Mr.
Avis, Mr. Bowen, Mr. Freedman and Ms. Macaskill) of the Corporation's
Directors have not been elected by shareholders. In addition, the Board of
Directors has nominated Mr. Armstrong, Mr. Cameron and Mr. Marshall to become
independent Directors of the Fund. In light of the fact that only five of
the Fund's Directors have been elected by shareholders, it follows that a
meeting of shareholders needs to be held to elect Directors.
Under the 1940 Act, the Fund is also required to call a meeting of
shareholders promptly to elect Directors if at any time less than a majority of
the Directors have been elected by shareholders. By holding a meeting to elect
Directors at this time, the Fund may be able to delay the time at which another
shareholder meeting is required for the election of Directors, which will result
in a savings of the costs associated with holding a meeting.
The primary responsibility for the management of the Fund rests with the
Board of Directors. The Directors meet regularly to review the activities of the
Fund and of the Manager, which is responsible for its day-to-day operations. Six
regular meetings of the Directors were held during the fiscal year ended August
31, 2000. Each of the incumbent Directors was present for at least 75% of the
meetings held of the Board and of all committees on which that Director served.
The Directors have appointed an Audit Committee, comprised of Messrs. Kast
(Chairman) and Kirchner, neither of whom is an "interested person," as defined
in the 1940 Act, of the Manager or the Fund. Mr. Cameron will become a member of
the Audit Committee if approved as a Director of the Fund by shareholders. The
Committee met four times during the fiscal year ended August 31, 2000. The Board
of Directors does not have a standing nominating or compensation committee. The
Audit Committee furnishes the Board with recommendations regarding the selection
of the independent auditor. The other functions of the Committee include (i)
reviewing the methods, scope and results of audits and the fees charged; (ii)
reviewing the adequacy of the Fund's internal accounting procedures and
controls; (iii) establishing a separate line of communication between the Fund's
independent auditors and its independent Directors, and selecting and nominating
the independent Directors.
The Directors who are not affiliated with the investment advisor
("Non-affiliated Directors") are paid a retainer plus a fixed fee from the Fund
for attending each meeting and are reimbursed for expenses incurred in
connection with attending such meetings. Each of the current Directors also
serves as directors or trustees of other Denver-based investment companies in
the OppenheimerFunds complex. Each Fund for which they serve as a director or
trustee pays a share of these expenses.
The officers of the Fund are affiliated with the Manager. They and the
Directors of the Fund who are affiliated with the Manager (Ms. Macaskill and Mr.
Swain) receive no salary or fee from the Fund. The remaining Directors of the
Fund received the compensation shown below from the Fund during the fiscal year
ended August 31, 2000, and from all of the Denver-based Oppenheimer funds
(including the Fund) for which they served as Director, Trustee or Managing
General Partner during the calendar year ended December 31, 2000. Compensation
is paid for services in the positions below their names:
- --------------------------------------------------------------------------------
Director's Name and Aggregate Number of Boards Total
Other Positions Compensation Within Oppenheimer Compensation
from Fund 3 Funds Complex on From all
Which Director Served Oppenheimer
as of 12/31/00 Funds1
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Robert G. Avis $9,287 23 $72,000
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
George C. Bowen $5,802 20 $55,948
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Jon. S. Fossel $9,706 22 $77,800
Review Committee Member 2
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Sam Freedman $10,106 23 $80,100
Chairman, Review Committee2
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Raymond J. Kalinowski $9,803 23 $73,500
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
C. Howard Kast $11,006 23 $86,150
Chairman, Audit Committee,
Review Committee Member
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Robert M. Kirchner $9,614 23 $76,950
Audit Committee Member2
- --------------------------------------------------------------------------------
1. For the 2000 calendar year.
2. Committee position held during a portion of the period shown. 3. For the
Fund's fiscal year end 8/31/00. Effective July 1, 2000 Ned M. Steel and William
A. Baker resigned as Directors of the Fund and subsequently became Directors
Emeritus of the Fund. For the fiscal year ended August 31, 2000, Messers. Steel
and Baker each received $9,287 aggregate compensation from the Fund and for the
calendar year ended December 31, 1999, each received $67,998 total compensation
from all Denver-based Oppenheimer funds.
The Board of Directors has also adopted a Deferred Compensation Plan for
Non-affiliated Directors that enables Directors to elect to defer receipt of all
or a portion of the annual fees they are entitled to receive from the Fund. As
of December 31, 2000, none of the Directors elected to do so. Under the plan,
the compensation deferred by a Director is periodically adjusted as though an
equivalent amount had been invested in shares of one or more Oppenheimer funds
selected by the Director. The amount paid to the Director under the plan will be
determined based upon the performance of the selected funds. Deferral of
Directors' fees under the plan will not materially affect the Fund's assets,
liabilities or net income per share. The plan will not obligate the Fund to
retain the services of any Director or to pay any particular amount of
compensation to any Director.
Each officer of the Fund is elected by the Directors to serve an annual
term. Information is given below about the executive officers who are not
Directors of the Fund, including their business experience during the past five
years. Messrs. Donohue, Wixted, Bishop, Zack and Farrar serve in a similar
capacity with several other funds in the OppenheimerFunds complex.
Name, Age, Address and Five-Year Business Experience
Charles Albers, Vice President and Portfolio Manager, Age: 60.
Two World Trade Center, New York, New York 10048-0203
Senior Vice President of the Manager (since June 1998); a Certified Financial
Analyst; an officer of other Oppenheimer funds. From 1972 until April 28, 1998,
portfolio manager at Guardian Investor Services, the investment management
subsidiary of The Guardian Life Insurance Company.
Nikolaos D. Monoyios, Vice President and Portfolio Manager, Age: 51.
Two World Trade Center, New York, New York 10048-0203
Vice President of the Manager (since June 1998); a Certified Financial Analyst;
an officer of other Oppenheimer funds. From 1979 until April 28, 1998, portfolio
manager at Guardian Investor Services, the investment management subsidiary of
The Guardian Life Insurance Company.
Andrew J. Donohue, Secretary since 1996; Age: 50
Two World Trade Center, New York, New York 10048
Executive Vice President and Secretary (since January 1993), General Counsel
(since October 1991) and a Director (since September 1995) of the Manager;
Executive Vice President and General Counsel (since September 1993) and a
director (since January 1992) of the Distributor; Executive Vice President,
General Counsel and a director of HarbourView Asset Management Corporation,
Shareholder Services, Inc., Shareholder Financial Services, Inc. and (since
September 1995) Oppenheimer Partnership Holdings, Inc.; President and a director
of Centennial Asset Management Corporation (since September 1995); President,
General Counsel and a director of Oppenheimer Real Asset Management, Inc. (since
July 1996); General Counsel (since May 1996) and Secretary (since April 1997) of
Oppenheimer Acquisition Corp.; Vice President and a director of OppenheimerFunds
International Ltd. and Oppenheimer Millennium Funds plc (since October 1997); a
director (since April 2000) of OppenheimerFunds Legacy Program, a charitable
trust program sponsored by the Manager; an officer of other Oppenheimer funds.
Brian W. Wixted, Treasurer since April, 1999; Age: 41
6803 South Tucson Way, Englewood, Colorado 80112
Senior Vice President and Treasurer (since April 1999) of the Manager; Treasurer
(since March 1999) of HarbourView Asset Management Corporation, Shareholder
Services, Inc., Shareholder Financial Services, Inc. and Oppenheimer Partnership
Holdings, Inc. (since April 1999); Assistant Treasurer of Oppenheimer
Acquisition Corp. (since April 1999); Assistant Secretary of Centennial Asset
Management Corporation (since April 1999); formerly Principal and Chief
Operating Officer, Bankers Trust Company - Mutual Fund Services Division (March
1995 - March 1999); Vice President and Chief Financial Officer of CS First
Boston Investment Management Corp. (September 1991 - March 1995); and Vice
President and Accounting Manager, Merrill Lynch Asset Management (November 1987
- - September 1991).
Robert G. Zack, Assistant Secretary since 1988; Age: 52
Two World Trade Center, New York, New York 10048
Senior Vice President (since May 1985) and Associate General Counsel (since
May 1981) of the Manager, Assistant Secretary of Shareholder Services, Inc.
(since May 1985), and Shareholder Financial Services, Inc. (since November
1989); Assistant Secretary of OppenheimerFunds International Ltd. and
Oppenheimer Millennium Funds plc (since October 1997); an officer of other
Oppenheimer funds.
Robert J. Bishop, Assistant Treasurer since April 1994; Age: 42
6803 South Tucson Way, Englewood, Colorado 80112
Vice President of the Manager/Mutual Fund Accounting (since May 1996); an
officer of other Oppenheimer funds; formerly an Assistant Vice President of the
Manager/Mutual Fund Accounting (April 1994 - May 1996), and a Fund Controller
for the Manager.
Scott T. Farrar, Assistant Treasurer since April 1994; Age: 35
6803 South Tucson Way, Englewood, Colorado 80112
Vice President of the Manager/Mutual Fund Accounting (since May 1996); Assistant
Treasurer of Oppenheimer Millennium Funds plc (since October 1997); an officer
of other Oppenheimer funds; formerly an Assistant Vice President of the
Manager/Mutual Fund Accounting (April 1994 - May 1996), and a Fund Controller
for the Manager.
All officers serve at the pleasure of the Board.
As of December 27, 2000, the Directors and officers as a group beneficially
owned 11,357.611 shares, or less than 1% of the outstanding Class A, Class B,
Class C or Class Y shares of the Fund.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF EACH NOMINEE AS
DIRECTOR.
PROPOSAL 2: RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
The Board of Directors of Oppenheimer Main Street Funds, Inc., including a
majority of the Directors who are not "interested persons" (as defined in the
1940 Act) of the Corporation or the Manager, selected Deloitte & Touche LLP
("Deloitte") as auditors of the Fund for the fiscal year beginning September 1,
2000. Deloitte also serves as auditors for the Manager and certain other funds
for which the Manager acts as investment advisor. At the Meeting, a resolution
will be presented for the shareholders' vote to ratify the selection of Deloitte
as auditors. Representatives of Deloitte are not expected to be present at the
Meeting but will have the opportunity to make a statement if they desire to do
so and will be available should any matter arise requiring their presence.
THE BOARD OF DIRECTORS RECOMMENDS APPROVAL OF THE SELECTION OF DELOITTE & TOUCHE
LLP AS AUDITORS OF THE FUND.
Introduction to Proposals 3 and 4
The Fund is subject to certain investment restrictions which govern the
Fund's investment activities. Under the 1940 Act, certain investment
restrictions are required to be "fundamental," which means that they can only be
changed by a shareholder vote. An investment company may designate additional
restrictions as fundamental, and it may also adopt "non-fundamental"
restrictions, which may be changed by the Directors without shareholder
approval. The Fund has adopted certain fundamental investment restrictions that
are set forth in its Statement of Additional Information, which cannot be
changed without the requisite shareholder approval described below under
"Further Information about Voting at the Meeting." Restrictions that the Fund
has not specifically designated as being fundamental are considered to be
"non-fundamental" and may be changed by the Directors without shareholder
approval.
After the Fund was established in 1988, certain legal and regulatory
requirements applicable to registered investment companies (also referred to as
"funds") changed. For example, certain restrictions imposed by state laws and
regulations were preempted by the National Securities Markets Improvement Act of
1996 ("NSMIA") and therefore are no longer applicable to funds. As a result of
NSMIA, the Fund currently is subject to several fundamental investment
restrictions that are either more restrictive than required under current law,
or which are no longer required at all. A number of the fundamental restrictions
that the Fund has adopted in the past also reflect regulatory, business or
industry conditions, practices or requirements which at one time, for a variety
of reasons, led to the imposition of limitations on the management of the Fund's
investments. With the passage of time, the development of new practices and
changes in regulatory standards, several of these fundamental restrictions are
considered by Fund management to be unnecessary or unwarranted. In addition
other fundamental restrictions reflect federal regulatory requirements which
remain in effect, but which are not required to be stated as fundamental
restrictions. Accordingly, the Directors recommend that the Fund's shareholders
approve the amendment or elimination of certain of the Fund's current
fundamental investment restrictions. Certain sub-proposals request that
shareholders approve the elimination of a fundamental investment restriction. If
those sub-proposals are approved by shareholders, the Board may adopt
non-fundamental investment policies or modify existing non-fundamental
investment policies at any time without shareholder approval. The purpose of
each sub-proposal is to provide the Fund with the maximum flexibility permitted
by law to pursue its investment objectives and policies and to standardize the
Fund's policy in this area to one which is expected to become standard for all
Oppenheimer funds. The proposed standardized restrictions satisfy current
federal regulatory requirements and are written to provide flexibility to
respond to future legal, regulatory, market or technical changes.
By both standardizing and reducing the total number of investment
restrictions that can be changed only by a shareholder vote, the Directors
believe that it will assist the Fund and the Manager in maintaining compliance
with the various investment restrictions to which the Oppenheimer funds are
subject, and that the Fund will be able to minimize the costs and delays
associated with holding future shareholder meetings to revise fundamental
investment restrictions that have become outdated or inappropriate. The
Directors also believe that the investment advisor'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 these changes.
The proposed standardized changes will not affect the Fund's investment
objective. Although the proposed changes in fundamental investment restrictions
will provide the Fund greater flexibility to respond to future investment
opportunities, the Board does not anticipate that the changes, individually or
in the aggregate, will result in a material change in the level of investment
risk associated with investment in the Fund. The Board does not anticipate that
the proposed changes will materially affect the manner in which the Fund is
managed. If the Board determines in the future to change materially the manner
in which the Fund is managed, the prospectus will be amended.
The recommended changes are specified below. Shareholders are requested to
vote on each Sub-Proposal in Proposal 3 separately. If approved, the effective
date of these Proposals may be delayed until the Fund's updated Prospectus
and/or Statement of Additional Information can reflect the changes. If any
Sub-Proposal in Proposal 3 is not approved or if Proposal 4 is not approved, the
fundamental investment restriction covered in that Proposal or Sub-Proposal will
remain unchanged.
PROPOSAL 3: TO APPROVE THE ELIMINATION OF CERTAIN FUNDAMENTAL INVESTMENT
RESTRICTIONS OF THE FUND
A. Purchasing Securities on Margin
The Fund is currently subject to a fundamental investment restriction
prohibiting it from purchasing securities on margin. The existing restriction is
not required to be a fundamental restriction under the 1940 Act. It is proposed
that this current fundamental investment restriction prohibiting purchases of
securities on margin be eliminated. The current fundamental investment
restriction is set forth below.
Current
The Fund cannot purchase securities on margin. However, the Fund can
make margin deposits when using hedging instruments permitted by any
of its other policies.
Margin purchases involve the purchase of securities with money borrowed
from a broker. "Margin" is the cash or eligible securities that the borrower
places with a broker as collateral against the loan. The Fund's current
fundamental investment restriction prohibits it from purchasing securities on
margin, except the Fund can make margin deposits in connection with its use of
hedging instruments. Policies of the SEC allow mutual funds to make initial and
variation margin payments in connection with the purchase and sale of futures
contracts and options on futures contracts. In the futures markets, "margin"
payments are akin to a "performance bond," rather than a loan to purchase
securities as is the case in the securities markets. As a result, futures
margins typically range from 2-5% of the value of the underlying contract and
are marked-to-market on a daily basis.
Elimination of this fundamental investment restriction is unlikely to
affect the management of the Fund. The 1940 Act prohibitions on margin and short
sales will continue to apply to the Fund. Elimination of this restriction would
not affect the Fund's ability to purchase securities on margin.
B. Purchasing Securities of Issuers in Which Officers or Directors Have an
Interest
The Fund is currently subject to a fundamental investment restriction
prohibiting it from purchasing the securities of an issuer if the officers and
directors of the Fund or the Manager individually own 1/2 of 1% of such
securities and together own more than 5% of such securities. It is proposed that
the current fundamental restriction be eliminated. The current fundamental
investment restriction is set forth below.
Current
The Fund cannot invest in or hold securities of any issuer if
officers and Directors of the Fund or the Manager individually
beneficially own more than 1/2 of 1% of the securities of that
issuer and together own more than 5% of the securities of that
issuer.
This restriction was originally adopted to address state or "Blue Sky"
requirements in connection with the registration of shares of the Fund for sale
in a particular state or states. The Board recommends that shareholders
eliminate this fundamental investment restriction. Under NSMIA, this restriction
no longer applies to the Fund. In addition, the Board believes that its
elimination could increase the Fund's flexibility when choosing investments in
the future.
C. Investing in a Company for the Purpose of Acquiring Control
The Fund is currently subject to a fundamental investment restriction
prohibiting it from investing in portfolio companies for the purpose of
acquiring control. It is proposed that the current fundamental restriction be
eliminated. Although the Fund has no intention of investing for the purpose of
acquiring control of a company, it believes that this restriction is
unnecessary, and may, in fact reduce possible investment opportunities. The
current fundamental investment restriction is set forth below.
Current
The Fund cannot invest in companies for the purpose of acquiring
control or management of those companies.
Elimination of the above fundamental investment restriction is not
expected to have a significant impact on the Fund's investment practices or
management because the Fund currently has no intention of investing in companies
for the purpose of obtaining or exercising management or control. A Fund might
be considered to be investing for control if it purchases a large percentage of
the securities of a single issuer. This restriction was intended to ensure that
a mutual fund would not be engaged in the business of managing another company.
This restriction was originally adopted to address state or "Blue Sky"
requirements in connection with the registration of shares of the Fund for sale
in a particular state or states. The Board recommends that shareholders
eliminate this fundamental investment restriction. Under NSMIA, this restriction
no longer applies to the Fund. In addition, the Board believes that its
elimination could increase the Fund's flexibility when choosing investments in
the future.
D. Investing in Mineral-Related Programs or Leases
The Fund is currently subject to a fundamental investment restriction
prohibiting it from investing in mineral-related programs or leases. It is
proposed that the current fundamental restriction be eliminated. The current
fundamental restriction is set forth below.
Current
The Fund cannot invest in oil, or gas exploration or development
programs.
This restriction was originally adopted to address state or "Blue Sky"
requirements in connection with the registration of shares of the Fund for sale
in a particular state or states. The Board recommends that shareholders
eliminate this fundamental investment restriction. Under NSMIA, this restriction
no longer applies to the Fund. In addition, the Board believes that its
elimination could increase the Fund's flexibility when choosing investments in
the future.
E. Limits on Investing in Other Investment Companies
The Fund currently is subject to a fundamental investment limitation
concerning its investments in other investment companies. It is proposed that
this current fundamental policy prohibiting the Fund's investments in other
open-end investment companies and limiting the Fund's investments in closed-end
investment companies and small business investment companies to no more than 5%
of its net assets be eliminated. The current fundamental investment policy is
set forth below.
Current
The Fund cannot invest in other open-end investment companies or
invest more than 5% of its net assets through open market purchases
in closed-end investment companies, including small business
investment companies. The Fund cannot make any such investment at
commission rates in excess of normal brokerage commissions.
The existing policy is not required to be a fundamental investment policy
under the 1940 Act, and is more restrictive than the requirements of the 1940
Act. Elimination of this fundamental restriction will allow the Fund to purchase
securities of other investment companies to the extent permitted by law,
regulation and exemptions, subject to approval by the Board of Directors.
If this proposed change is approved by shareholders, the Fund would be
permitted, subject to Board approval, to invest all its assets in one or more
investment companies advised by the Manager or a subsidiary. Other than the
possibility of adopting this "fund of funds" structure, which the Manager is not
proposing at this time, the Fund currently has no plan to purchase a significant
amount of shares of other investment companies. An investment in another
investment company may result in the duplication of certain expenses.
The purpose of this proposal is to provide the Fund with the maximum
flexibility permitted by law to pursue its investment objective and to conform
the Fund's policy in this area to one which is expected to become standard for
all Oppenheimer funds. The Board believes 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.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU APPROVE EACH
SUB-PROPOSAL DESCRIBED ABOVE
PROPOSAL 4: APPROVE CHANGES TO CERTAIN FUNDAMENTAL INVESTMENT
RESTRICTIONS OF THE FUND
Proposal Number 4 is composed of four separate proposed changes to the
Fund's current investment policies. The Board believes that under appropriate
circumstances, the Fund should be permitted to lend money to and borrow money
from other Oppenheimer mutual funds (referred to as "inter-fund lending") and
pledge its assets as collateral for the loan as explained in the following
proposals. All four of these proposals must be approved together if the
inter-fund lending arrangements are to be implemented and shareholders are
requested to vote to approve or disapprove all three together.
A. Borrowing.
The 1940 Act imposes certain restrictions on the borrowing activities of
registered investment companies. The restrictions on borrowing are generally
designed to protect shareholders and their investment by restricting a fund's
ability to subject its assets to claims of creditors who might have a claim to
the fund's assets that would take priority over the claims of shareholders. A
fund's borrowing restriction must be a fundamental investment restriction.
Under the 1940 Act, a fund may borrow from banks up to one-third of its
total assets (including the amount borrowed). In addition, a fund may borrow up
to 5% of its total assets for temporary purposes from any person. Section 18 of
the 1940 Act deems a loan temporary if it is repaid within 60 days and not
extended or renewed. Funds typically 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.
The Board proposes that the Fund's restriction on borrowing be amended to
permit the Fund to borrow from banks and/or affiliated investment companies up
to one-third of its total assets (including the amount borrowed). As amended,
the Fund's restriction on borrowing would remain a fundamental restriction
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 restrictions are set forth
below.
Current
The Fund can borrow money from banks on an unsecured basis and invest the
borrowed funds to increase its securities holdings. The Fund may borrow only if
it maintains a 300% ratio of assets to borrowings at all times.
Proposed
The Fund cannot borrow money in excess of 331/3% of the value of its total
assets (including the amount borrowed). The Fund may borrow only from banks
and/or affiliated investment companies. With respect to this fundamental policy,
the Fund can borrow only if it maintains a 300% ratio of assets to borrowings at
all times in the manner set forth in the Investment Company Act of 1940.
The current restriction on borrowing states that the Fund may borrow from
banks. The Board proposes that this restriction be amended to permit the Fund to
borrow money from banks and/or from affiliated investment companies provided
such borrowings do not exceed 331/3% of its total assets and the Fund maintains
the 300% asset coverage required under the 1940 Act.
Permitting the Fund to borrow money from affiliated funds (for example,
those funds in the OppenheimerFunds complex) would afford the Fund the
flexibility to use the most cost-effective alternative to satisfy its borrowing
requirements. The Trustees believe that the Fund may be able to obtain lower
interest rates on its borrowings from affiliated funds than it would through
traditional bank channels.
Current law prohibits the Fund from borrowing from other funds of the
OppenheimerFunds complex. Before an inter-fund lending arrangement can be
established, the Fund must obtain approval from the SEC. Implementation of
inter-fund lending would be accomplished consistent with applicable regulatory
requirements, including the provisions of any order the SEC might issue to the
Fund and other Oppenheimer funds. The Fund has not yet decided to apply for such
an order and there is no guarantee any such order would be granted, even if
applied for. Until the SEC has approved an inter-fund lending application, the
Fund will not engage in borrowing from affiliated investment companies.
Currently, the Fund does not anticipate that its borrowing would exceed 5% of
its net assets.
The Fund will not borrow from affiliated funds unless the terms of the
borrowing arrangement are at least as favorable as the terms the Fund could
otherwise negotiate with a third party. To assure that the Fund will not be
disadvantaged by borrowing from an affiliated Fund, certain safeguards may be
implemented. An example of the types of safeguards which the SEC may require may
include some or all of the following: the fund will not borrow money from
affiliated funds unless the interest rate is more favorable than available bank
loan rates; the Fund's borrowing from affiliated funds must be consistent with
its investment objective and investment policies; the loan rates will be
determined by a pre-established formula based on quotations from independent
banks; if the Fund has outstanding borrowings from all sources greater than 10%
of its total assets, then the Fund must secure each additional outstanding
inter-fund loan by segregating liquid assets of the Fund as collateral; the Fund
cannot borrow from an affiliated fund in excess of 125% of its total redemptions
for the preceding seven days; each inter-fund loan may be repaid on any day by
the Fund; and the Trustees will be provided with a report of all inter-fund
loans and the Trustees will monitor all such borrowings to ensure that the
Fund's participation is appropriate.
In determining to recommend the proposed amendment to shareholders for
approval, the Board considered the possible risks to the Fund from participation
in the inter-fund lending program. There is a risk that a borrowing fund could
have a loan called on one days' notice. In that circumstance, the borrowing fund
might have to borrow from a bank at a higher interest cost if money to lend were
not available from another Oppenheimer fund. The Board considered that the
benefits to the Fund of participating in the program outweigh the possible risks
to the Fund from such participation.
Shareholders are being asked to approve an amendment to the Fund's
fundamental policy on borrowing and are also being asked to approve an amendment
to the Fund's fundamental restriction on lending, pledging of assets, and
diversification as described below. If this Proposal 4 is adopted, the Fund,
subject to its investment objectives and policies and SEC approval, will be able
to participate in the inter-fund lending program as both a lender and a
borrower.
B. Lending.
Under the 1940 Act, a fund's restriction regarding lending must be
fundamental. Under its current restriction, the Fund is permitted to enter into
repurchase agreements, which may be considered a loan, and is permitted to lend
its portfolio securities.
It is proposed that the current fundamental restriction be amended to
permit the Fund to lend its assets to affiliated investment companies (for
example, other funds in the OppenheimerFunds complex). 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
restriction on making loans. Before an inter-fund lending arrangement can be
established, the Fund must obtain approval from the SEC. Implementation of
inter-fund lending would be accomplished consistent with applicable regulatory
requirements, including the provisions of any order the SEC might issue to the
Fund and other Oppenheimer funds. The Fund has not yet decided to apply for such
an order and there is no guarantee any such order would be granted, even if
applied for. Until the SEC has approved an inter-fund lending application, the
Fund will not engage in lending with affiliated investment companies. As
amended, the restriction on lending for the Fund would remain a fundamental
restriction changeable only by the vote of a majority of the outstanding voting
securities as defined in the 1940 Act of the Fund. The current and proposed
fundamental investment restrictions are set forth below.
- -----------------------------------------
Current
- -----------------------------------------
- -----------------------------------------
The Fund cannot lend money except in
connection with the acquisition of debt
securities which the Fund's investment
policies and restrictions permit it to
purchase. The Fund can also make loans
of portfolio securities, subject to
restrictions stated under "Loans of
Portfolio Securities."
- -----------------------------------------
- -----------------------------------------
Proposed
- -----------------------------------------
- -----------------------------------------
The Fund cannot make loans except (a) through lending of securities, (b) through
the purchase of debt instruments or similar evidences of indebtedness, (c)
through an interfund lending program with other affiliated funds, and (d)
through repurchase agreements.
- -----------------------------------------
The reason for lending money to an affiliated fund is that the lending
fund may be able to obtain a higher rate of return than it could from interest
rates on alternative short-term investments. To assure that the Fund will not be
disadvantaged by making loans to affiliated funds, certain safeguards will be
implemented. An example of the types of safeguards which the SEC may require may
include some or all of the following: the Fund will not lend money to affiliated
funds unless the interest rate on such loan is determined to be reasonable under
the circumstances; the Fund may not make interfund loans in excess of 7.5% of
its net assets; an interfund loan to any one affiliated fund shall not exceed 5%
of the Fund's net assets; an interfund loan may not be outstanding for more than
seven days; each interfund loan may be called on one business day's notice; and
the Manager will provide the Directors reports on all inter-fund loans
demonstrating that the Fund's participation is appropriate and that the loan is
consistent with its investment objectives and policies.
When the Fund lends assets to another affiliated fund, the lending fund is
subject to credit risks that the borrowing fund may fail to repay the loan. The
Directors believe that the risk is minimal.
C. Pledging of Assets.
The Fund is currently subject to a fundamental investment restriction that
prohibits pledging of its assets. It is proposed that this current fundamental
investment restriction be eliminated. The current fundamental investment
restriction is set forth below.
Current
The Fund cannot pledge, mortgage or otherwise encumber, transfer or
assign any of its assets to secure a debt. Collateral arrangements
for premium or margin payments in connection with hedging
instruments are not deemed to be a pledged assets.
The existing restriction is not required to be fundamental under the 1940
Act, and therefore, the Board believes that the Fund should be provided with the
maximum flexibility permitted by law to pursue its investment objectives. The
1940 Act prohibitions on borrowing (as reflected in the Fund's non-fundamental
policy on borrowing) would continue to apply, whereby the Fund may borrow from
banks and invest the borrowed funds in portfolio securities provided 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).
Therefore, the Fund will be able to pledge up to 33 1/3 % of its total assets
for borrowing money.
D. Diversification.
The Fund is currently subject to a fundamental investment restriction
concerning the diversification of Fund assets. It is proposed that this current
restriction be amended to exclude securities of other investment companies from
the restriction. As amended, the restriction would remain fundamental,
changeable only by the vote of a majority of the outstanding voting securities
of that Fund as defined in the 1940 Act. The current and proposed fundamental
investment restrictions are set forth below.
Current
The Fund cannot buy securities issued or guaranteed by any one issuer
if more than 5% of its total assets would be invested in securities of
that issuer or it would then own more than 10% of that issuer's voting
securities. This limitation applies only to 75% of the Fund's total
assets. The limit does not apply to securities issued by the U.S.
Government or any of its agencies or instrumentalities.
Proposed
The Fund cannot buy securities issued or guaranteed by any one issuer
if more than 5% of its total assets would be invested in securities of
that issuer or it would then own more than 10% of that issuer's voting
securities. This limit applies to 75% of the Fund's total assets. The
limit does not apply to securities issued by the U.S. Government or any
of its agencies or instrumentalities, or securities of other investment
companies.
The percentage limits in the current and proposed fundamental investment
restrictions are imposed by the 1940 Act. It is proposed that the current
restriction be amended to permit the Fund to lend its assets to affiliated
investment companies (for example, other funds in the OppenheimerFunds complex),
as discussed above. Although this change also would permit the Fund to enter
into a fund-of-funds arrangement if permitted by a SEC exemptive order to which
the Fund is a party, the Fund currently does not anticipate participating in a
fund-of-funds arrangement by investing in securities of other investment
companies. Nonetheless, if the Fund entered into a fund-of-funds arrangement in
the future, such an arrangement may result in the duplication of expenses.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU APPROVE THIS
PROPOSAL
PROPOSAL 5: APPROVAL OF A REVISION TO THE FUND'S INVESTMENT OBJECTIVE
The current investment objective of the Fund is to seek a high total
return, which includes current income and capital appreciation in the value of
its shares, from equity and debt securities. The Fund currently invests mainly
in common stocks of U.S. companies of different capitalization ranges, presently
focusing on large-capitalization issuers. The Fund currently does not emphasize
investments in debt securities, such as bonds and debentures. As of November 30,
2000, the percentage of net assets invested in debt securities was less than 1%
of the Fund's invested net assets.
Therefore, the Board recommends revising the Fund's investment objective
to more accurately describe the investment policies of the Fund.
- -----------------------------------------
Current Investment Objective
- -----------------------------------------
- -----------------------------------------
The Fund seeks a high total return, which includes current income and capital
appreciation in the value of its shares, from equity and debt securities.
- -----------------------------------------
- -----------------------------------------
Revised Investment Objective
- -----------------------------------------
- -----------------------------------------
The Fund seeks a high total return.
- -----------------------------------------
If the change is approved, the investment objective of the fund will
remain seeking high total return. Total Return is generally comprised of both
capital appreciation and current income. The Board believes that the shorter
proposed investment objective more accurately describes the investment objective
of the fund and the way that the fund is managed. Accordingly, the Board does
not believe this change will change have a material impact on the Fund or the
investment policies of the Fund.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU APPROVE THIS PROPOSAL
Introduction to Proposals 6 and 7
At a meeting of the Board of Directors held February 29, 2000, the Manager
proposed the adoption of Distribution and Service Plans for Class B and Class C
shares (the "Proposed Plans"). The Proposed Plans are "compensation type plans"
instead of the current "reimbursement type plans" (the "Current Plans"). The
Fund's Board of Directors, including a majority of the Independent Directors,*
approved the Amended and Restated Distribution and Service Plans, subject to
shareholder approval, and determined to recommend the proposed plans for
approval by the Class B and Class C shareholders, respectively. The differences
between the Current Plans and the Proposed Plans are described below in
Proposals 6 & 7.
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* Directors who are not "interested persons" (as defined in the 1940 Act) of the
Fund or the Manager and who have no direct or indirect financial interest in the
operation of the Fund's 12b-1 plans or in any related agreements.
Analysis of the Proposed Plans by the Board of Directors. In considering whether
to recommend the Proposed Plans for approval, the Board requested and evaluated
information it deemed necessary to make an informed determination. The Board,
including the Independent Directors, 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 Plans benefit the Fund and its Class B and Class C
shareholders by providing financial incentives to financial intermediaries to
attract new Class B and Class C shareholders to the Fund and by assisting the
efforts of the Fund and the Distributor to service and retain existing
shareholders and attract new investors. The Proposed Plans enable the Fund and
the Distributor to offer investors in the Fund alternative ways to purchase
shares. These arrangements allow 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 Plans. 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. Frequently, a shareholder
will enter into a number of exchanges.
The Distributor advised the Board that it 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 Plans.
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 plans 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 Plans expressly
provide that the distribution and administrative support services under the
plans may be rendered in connection with Class B and Class C shares issued by
the Fund in exchange for other Oppenheimer funds and in a reorganization with
another mutual fund.
The Distributor advised the Board that under the Proposed Plans, 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 payments under
the proposed Plans will remain subject to the limits imposed on asset-based
sales charges by the NASD.
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 Plans 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 Plans 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 Plans will not
increase over, and are not anticipated to be less than, the amounts currently
paid by the Fund. Under the Proposed Plans, however, over time, the Fund's Plan
payments may exceed the amount which the Fund might pay under the Current Plans.
The length of time over which the Fund's payments will continue under the
Proposed Plans 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
Plans, thus potentially increasing the amount of Plan payments which reduce the
dividends and total return on Fund shares. For the Class B plan, 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 Plans than it would
under the Current Plans. 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 Plans and the purpose for which payments were made (similar to what
the Board now receives under the Current Plans). The Distributor will provide
extensive annual reports to the Board which set forth the Distributor's
allocated distribution-related expenses and recovery of money 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.
Encourging 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 Directors 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 Directors 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 Directors recognize that the Manager will benefit from the Proposed Plans
through larger investment advisory fees resulting from an increase in Fund
assets, since its investment advisory fees are based upon a percentage of net
assets of the Fund. The Board was also advised by the Manager 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 or Class C 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 Directors, determined that the Proposed Plans are in the best
interests of the Fund, and that their adoption has a reasonable likelihood of
benefiting the Fund and its Class B and Class C shareholders, respectively. In
its annual review of the Proposed Plans, the Board will consider the continued
appropriateness of the Distribution and Service Plans, including the level of
payments provided for therein.
PROPOSAL 6: APPROVAL OF AN AMENDED AND RESTATED CLASS B 12b-1 DISTRIBUTION
AND SERVICE PLAN AND AGREEMENT
Class B shares were first offered to the public on October 3, 1994. In
connection with the initial public offering of these shares, the Fund had
previously adopted a Distribution and Service Plan and Agreement (the
"Distribution and Service Plan") for Class B shares which permits the Fund to
pay up to 0.25% of its average annual net assets as a service fee and up to
0.75% of its average annual net assets as an asset-based sales charge.
At a meeting of the Board of Directors held February 29, 2000, the Manager
proposed the adoption of an Amended and Restated 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 Directors, including a majority
of the Independent Directors, approved the new Distribution and Service Plan,
subject to shareholder approval, and determined to recommend the Distribution
and Service Plan and Agreement for approval by the shareholders. A copy of the
Proposed Distribution and Service Plan is attached as Exhibit A to this proxy
statement, and is hereby submitted to Class B shareholders for approval.
Description of the Distribution and Service Plans. Under both the Proposed Plan
and the current Distribution and Service Plan and Agreement (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 annum of Class B shares outstanding for
no more than six years, and also pays the Distributor a service fee of 0.25% per
annum, each of which is computed on the average annual net assets of Class B
shares of the Fund.
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 shall 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 for rendering such services.
Service fee payments under the Proposed and Current Plans 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 not anticipated that this
arrangement will change under the Proposed Plan, and the amount of service fee
payments by the Fund is not expected to change.
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 (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 also provides that the Distributor
may pay to the dealer on a quarterly basis the service fee and the asset-based
sales charge payable on Class B shares in lieu of paying the sales commission of
3.75% and the advance of the service fee at the time of purchase. 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 before the end of 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 Plan
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 above, it is
possible that the Fund will, over time, pay more under the Proposed Plan than
under the Current Plan. This 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' 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 August 31, 2000
were $76,558,354 (1.00% of the Fund's average net assets represented by Class B
shares during that period), of which the Distributor paid $473,408 to an
affiliate of the Distributor and retained $62,624,462 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
and continue in effect until December 31, 2001 and from year to year thereafter
only so long as such continuance is specifically approved, at least annually, by
the Fund's Board of Directors and its Independent Directors 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
Directors or by a vote of the holders of a majority (as defined in the 1940 Act)
of the Fund's outstanding Class B shares. Each Plan may not be amended to
increase materially the amount of payments to be made without approval by Class
B shareholders. All material amendments must be approved by a majority of the
Independent Directors. 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 Directors of the Fund who are not
"interested persons" of the Fund or the Manager is committed to the discretion
of the Independent Directors. This does not prevent the involvement of others in
such selection and nomination if the final decision on any such selection or
nomination is approved by a majority of the Independent Directors.
Under either Plan, the Board of Directors 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 Directors.
Under both Plans, the Board of Directors 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.
Rule 12b-1 of the 1940 Act permits the Fund to adopt the Plans and each Plan
conforms with the rules of the National Association of Securities Dealers.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU APPROVE THIS PROPOSAL
PROPOSAL 7: APPROVAL OF AN AMENDED AND RESTATED CLASS C 12b-1 DISTRIBUTION
AND SERVICE PLAN AND AGREEMENT
Class C shares were first offered to the public on December 1, 1993. In
connection with the initial public offering of these shares, the Fund had
previously adopted a Distribution and Service Plan and Agreement (the
"Distribution and Service Plan") for Class C shares which permits the Fund to
pay on an annual basis up to 0.25% of its average annual net assets as a service
fee and up to 0.75% of its average annual net assets as an asset-based sales
charge.
At a meeting of the Board of Directors held February 29, 2000, the Manager
proposed the adoption of an Amended and Restated 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 Directors, including a majority
of the Independent Directors, approved the Amended and Restated Distribution and
Service Plan, subject to shareholder approval, and determined to recommend for
approval by the Class C shareholders. A copy of the Proposed Distribution and
Service Plan is attached as Exhibit B to this proxy statement.
Description of the Distribution and Service Plans. Under both the Proposed Plan
and the current Distribution and Service Plan and Agreement (the "Current
Plan"), the Fund makes payments to the Distributor in connection with the
distribution of Class C shares and the personal service and maintenance of
accounts that hold Class C shares. The Fund pays the Distributor an asset-based
sales charge of 0.75% per annum of Class C shares, and also pays the Distributor
a service fee of 0.25% per annum, each of which is computed on the average
annual net assets of Class C shares of the Fund.
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 C 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 C shareholder accounts may include but shall 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.
Service fee payments under the Proposed and Current Plans by the Distributor to
Recipients are made (i) in advance for the first year Class C shares are
outstanding, following the purchase of shares, in an amount equal to 0.25% of
the net asset value of the shares purchased by the Recipient or its customers
and (ii) thereafter, on a quarterly basis, computed as of the close of business
each day at an annual rate of 0.25% of the net asset value of Class C shares
held in accounts of the Recipient or its customers. In the event Class C shares
are redeemed less than one year after the date such shares were sold, the
Recipient is obligated to repay to the Distributor on demand a pro rata portion
of such advance service fee payments, based on the ratio of the remaining period
to one year.
The 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 not anticipated that this
arrangement will change under either plan, and the amount of service fee
payments by the Fund is not expected to change.
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 C shares
outstanding to reimburse the Distributor for its expenses in rendering services
in connection with the distribution of the Fund's Class C shares. Under the
Current Plan, the distribution assistance and administrative support services
rendered by the Distributor in connection with the sales of Class C shares may
include: (i) paying sales commissions to any broker, dealer, bank or other
institution that sells the Fund's Class C shares, and/or paying such persons
advance service fee payments in advance of and/or in amounts greater than, the
amount provided for in the Plan; (ii) paying compensation to and expenses of
personnel of the Distributor who support distribution of Class C 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 (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 C shares outstanding to compensate the
Distributor for providing distribution assistance in connection with the
distribution of the Fund's Class C shares. Under the Proposed Plan, the
distribution assistance and administrative support services rendered by the
Distributor in connection with the distribution of Class C 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 C shares, and/or paying such
persons advance service fee payments in advance of and/or in amounts greater
than, the amount provided for in the Plan; (ii) paying compensation to and
expenses of personnel of the Distributor who support distribution of Class C
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 C 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 C
shareholders, providing compensation to and paying expenses of personnel of the
Recipient who support the distribution of Class C shares by the Recipient, and
providing such other information and services in connection with the
distribution of Class C shares as the Distributor or the Fund may reasonably
request.
The Proposed Plan provides that payments may be made in connection with Class C
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 0.75% of the purchase price
of Fund shares sold by such Recipient, and advances the first year service fee
of 0.25%. The Distributor retains the 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. The Distributor plans to pay the asset-based sales charge as an
ongoing commission to Recipients on Class C shares that have been outstanding
for a year or more. 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 C shares of the Fund.
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 C shares sold prior to termination of the Distribution and Service 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 Plan
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 above, it is
possible that the Fund will, over time, pay more under the Proposed Plan than
under the Current Plan. This 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 under the Current Plan.
Additional Information. Both Plans have the effect of increasing annual expenses
of Class C shares of the Fund by up to 1.00% of the class' 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 August 31, 2000
were $20,041,200 (1.00% of the Fund's average net assets represented by Class C
shares during that period), of which the Distributor paid $296,468 to an
affiliate of the Distributor and retained $5,748,527 as reimbursement for Class
C 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 C shareholders approve this Proposal, the Proposed Plan shall,
unless terminated as described below, become effective upon shareholder approval
and continue in effect until December 31, 2001 and from year to year thereafter
only so long as such continuance is specifically approved, at least annually, by
the Fund's Board of Directors and its Independent Directors 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
Directors or by a vote of the holders of a majority (as defined in the 1940 Act)
of the Fund's outstanding Class C shares. Each Plan may not be amended to
increase materially the amount of payments to be made without approval by Class
C shareholders. All material amendments must be approved by a majority of the
Independent Directors. If Class C shareholders do not approve the Proposed Plan,
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 Directors of the Fund who are not
"interested persons" of the Fund or the Manager is committed to the discretion
of the Independent Directors. This does not prevent the involvement of others in
such selection and nomination if the final decision on any such selection or
nomination is approved by a majority of the Independent Directors.
Under either Plan, the Board of Directors 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 Directors.
Under both Plans, the Board of Directors 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.
Rule 12b-1 of the 1940 Act permits the Fund to adopt the Plans and each Plan
conforms with the rules of the National Association of Securities Dealers.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU APPROVE THIS PROPOSAL
INFORMATION ABOUT THE FUND
The SEC requires that the following information be provided to the Fund's
shareholders.
Fund Information. As of December 27, 2000, the Fund had 473,685,642.331 shares
outstanding, consisting of 218,534,794.621 Class A, 195,930,863.846 Class B,
52,658,185.194 Class C and 6,567,798.670 Class Y 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 may exceed 5% of the total shares outstanding. As of December 27, 2000,
Merrill Lynch Pierce Fenner & Smith for the sole benefit of its customers, 4800
Deer Lake Drive, Jacksonville, FL 32246, held 14,787,140.288 or 7.54% of the
outstanding Class B shares of the Fund and 8,135,105.167 or 15.74% of the
outstanding Class C shares of the Fund and Massachusetts Mutual Life Insurance
Company for the sole benefit of its customers, 1295 State Street, Springfield MA
01111, held 6,330,488.625 or 96.47% of the outstanding Class Y shares of the
Fund.
The Manager, the Distributor and the Transfer Agent. Subject to the authority of
the Board of Directors, the Manager is responsible for the day-to-day management
of the Fund's business, pursuant to its investment advisory agreement with the
Fund. OppenheimerFunds Distributor, Inc., a wholly-owned subsidiary of the
Manager, is the general distributor (the "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 Funds for an annual per account
fee.
The Manager (including subsidiaries and affiliates) currently manages investment
companies, including other Oppenheimer funds, with assets of more than $125
billion as of September 30, 2000, and with more than 5 million shareholder
accounts. The Manager is a wholly-owned subsidiary of Oppenheimer Acquisition
Corp. ("OAC"), a holding company controlled by Massachusetts Mutual Life
Insurance Company ("MassMutual"). The Manager, the Distributor and OAC are
located at Two World Trade Center, New York, New York 10048. MassMutual is
located at 1295 State Street, Springfield, Massachusetts 01111. OAC acquired the
Manager on October 22, 1990. As indicated below, the common stock of OAC is
owned by (i) certain officers and/or directors of the Manager, (ii) MassMutual
and (iii) another investor. No institution or person holds 5% or more of OAC's
outstanding common stock except MassMutual. MassMutual has engaged in the life
insurance business since 1851.
The common stock of OAC is divided into three classes. Effective as of August 1,
1997, OAC declared a ten for one stock split. At June 30, 2000, on a post-split
basis, MassMutual held (i) all of the 21,600,000 shares of Class A voting stock,
(ii) 11,016,945 shares of Class B voting stock, and (iii) 18,620,836 shares of
Class C non-voting stock. This collectively represented 92.7% of the outstanding
common stock and 91.7% of the voting power of OAC as of that date. Certain
officers and/or directors of the Manager held (i) 2,583,890 shares of the Class
B voting stock, representing 4.7% of the outstanding common stock and 7.3% of
the voting power, and (ii) options acquired without cash payment which, when
they become exercisable, allow the holders to purchase up to 1,253,446 shares of
Class C non-voting stock. That group includes persons who serve as officers of
the Fund and Bridget A. Macaskill, who serves as a Director of the Fund.
Holders of OAC Class B and Class C common stock may put (sell) their shares and
vested options to OAC or MassMutual at a formula price (based on earnings of the
Manager). MassMutual may exercise call (purchase) options on all outstanding
shares of both such classes of common stock and vested options at the same
formula price. From the period July 1, 1999 to June 30, 2000, the only
transactions on a post-split basis by persons who serve as Directors of the Fund
were by Mr. Swain who exercised 50,000 options to Mass Mutual for a cash payment
of $1,712,000, and Ms. Macaskill who exercised 434,873 options to Mass Mutual
for a cash payment of $14,770,051.
The names and principal occupations of the executive officers and directors
of the Manager are as follows: Bridget A. Macaskill, Chairman, Chief
Executive Officer and a director; James C. Swain, Vice Chairman; John Murphy,
President, Chief Operating Officer; Jeremy Griffiths, Executive Vice
President and Chief Financial Officer; O. Leonard Darling, Vice Chairman,
Executive Vice President and Chief Investment Officer; Andrew J. Donohue,
Executive Vice President, General Counsel and a director; George Batejan,
Executive Vice President and Chief Information Officer, Craig Dinsell,
Loretta McCarthy, James Ruff and Andrew Ruotolo, Executive Vice Presidents;
Brian W. Wixted, Senior Vice President and Treasurer; Charles Albers, Victor
Babin, Bruce Bartlett, Robert A. Densen, Ronald H. Fielding, Robert B. Grill,
Robert Guy, Steve Ilnitzki, Lynn Oberist Keeshan, Thomas W. Keffer, Avram
Kornberg, Christopher Leavy, John S. Kowalik, Andrew J. Mika, David Negri,
David Robertson, Richard Rubinstein, Arthur Steinmetz, John Stoma, Jerry A.
Webman, William L. Wilby, Donna Winn, Carol Wolf, Kurt Wolfgruber, Robert G.
Zack, and Arthur J. Zimmer, Senior Vice Presidents. These officers are
located at one of the three offices of the Manager: Two World Trade Center,
New York, NY 10048-0203; 6803 South Tucson Way, Englewood, CO 80112; and 350
Linden Oaks, Rochester, NY 14625-2807.
Custodian. The Bank of New York, Mutual Funds Division, 100 Church Street, New
York, NY 10286, 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 August 31, 2000, has previously been sent to all shareholders.
Upon request, shareholders may obtain without charge a copy of the Annual Report
or the Semi-Annual Report as of February 29, 2000 by writing the Fund at the
address above or calling the Fund at 1.800.525.7048.
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
OppenheimerFunds Services, without extra compensation, may conduct additional
solicitations personally or by telephone. Any expenses so incurred will be borne
by OppenheimerFunds Services.
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 reasonably designed to 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), the number of shares owned 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, other
than to read any recommendation set forth in the Proxy Statement. The
solicitation firm representative will record the shareholder's instructions on
the card. 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 $30,000 plus the additional costs that would be incurred in connection
with contacting those shareholders who have not voted, (that may be
substantial). Brokers, banks and other fiduciaries may be required to forward
soliciting material to their principals and to obtain authorization for the
execution of proxies. For those services they will be reimbursed by the Fund for
their out-of-pocket expenses.
If the shareholder wishes to participate in the Meeting, but does not wish to
give his or her proxy telephonically, the shareholder may still submit the proxy
ballot originally sent with the Proxy Statement in the postage paid envelope
provided or attend in person. Should shareholders require additional information
regarding the proxy ballot or a replacement proxy ballot, they may contact us
toll-free at 1.800.525.7048. Any proxy given by a shareholder, whether in
writing or by telephone, is revocable as described below under the paragraph
entitled "Revoking a Proxy."
Please take a few moments to complete your proxy promptly. You may provide your
completed proxy via facsimile, telephonically or by mailing the proxy card in
the postage paid envelope provided. You also may cast your vote by attending the
Meeting in person.
Telephone Voting. The Fund has arranged to have votes recorded by telephone. The
voting procedures used in connection with telephone voting are designed to
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. 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.
Voting By Broker-Dealers. Shares owned of record by broker-dealers for the
benefit of their customers ("street account shares") will be voted by the
broker-dealer based on instructions received from its customers. If no
instructions are received, the broker-dealer may (if permitted by applicable
stock exchange rules) as record holder vote such shares for the election of
Directors and on the Proposals in the same proportion as that broker-dealer
votes street account shares for which voting instructions were received in time
to be voted. Beneficial owners of street accounts shares may not vote in person
at the meeting. A "broker non-vote" is deemed to exist when a proxy received
from a broker indicates that the broker does not have discretionary authority to
vote the shares on that matter. Abstentions and broker non-votes will have the
same effect as a vote against the proposal.
Voting by the Trustee for OppenheimerFunds-Sponsored Retirement Plans. Shares
held in OppenheimerFunds-sponsored retirement accounts for which votes are not
received as of the last business day before the Meeting Date, will be voted by
the trustee for such accounts in the same proportion as Shares for which voting
instructions from the Fund's other shareholders have been timely received.
Quorum. A majority of the shares outstanding and entitled to vote, present in
person or represented by proxy, constitutes a quorum at the Meeting. Shares over
which broker-dealers have discretionary voting power, shares that represent
broker non-votes and shares whose proxies reflect an abstention on any item are
all counted as shares present and entitled to vote for purposes of determining
whether the required quorum of shares exists.
Required Vote. Approval of Proposals 1 and 2 require a majority vote of the
outstanding shares present at the meeting. Approval of Proposals 3 through 5
requires the affirmative vote of a majority of the outstanding voting securities
of the Fund voting in the aggregate and not by class. Proposal 6 requires the
affirmative vote of a majority of the outstanding Class B shares. Proposal 7
requires the affirmative vote of a majority of the outstanding Class C shares.
As defined in the 1940 Act, the vote of a majority of the outstanding shares
means the vote of (1) 67% or more of the Fund's outstanding shares present at a
meeting, if the holders of more than 50% of the outstanding shares of the Fund
are present or represented by proxy; or (2) more than 50% of the Fund's
outstanding shares, whichever is less.
How are votes counted? The individuals named as proxies on the proxy ballots (or
their substitutes) will vote according to your directions if your proxy is
received and properly executed, or in accordance with the instructions you
provide if you vote by telephone. You may direct the proxy holders to vote your
shares on a proposal by checking the appropriate box "FOR" or "AGAINST," or
instruct them not to vote those shares on the proposal by checking the "ABSTAIN"
box. Alternatively, you may simply sign, date and return your proxy ballot with
no specific instructions as to the proposals. If you properly execute and return
a proxy but fail to indicate how the votes should be cast, the proxy will be
voted in favor of the election of each of the nominees named in this Proxy
Statement for Trustee and in favor of each Proposal.
Shares of the Fund may be held by insurance company separate accounts for the
benefit of insurance company contract holders. If the insurance company does not
timely receive voting instructions from contract holders with respect to such
Shares, the insurance company will vote such Shares, as well as Shares the
insurance company itself owns, in the same proportion as Shares for which voting
instructions from contract holders are timely received
Revoking a Proxy. You may revoke your previously granted proxy at any time
before it is exercised (1) by delivering a written notice to the Fund expressly
revoking your proxy if that proxy is received in time to be acted upon, (2) by
signing and forwarding to the Fund a later-dated proxy if that proxy is received
in time to be acted upon, or (3) by attending the Meeting and casting your votes
in person.
Shareholder Proposals. The Fund is not required to hold shareholder meetings on
a regular basis. Special meetings of shareholders may be called from time to
time by either the Fund or the shareholders (for certain matters and under
special conditions described in the Statement of Additional Information). Under
the proxy rules of the Securities and Exchange Commission, shareholder proposals
which meet certain conditions may be included in a Fund's proxy statement for a
particular meeting. Those rules 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 submitted for
inclusion in the Fund's proxy material for the next meeting after the meeting to
which this proxy statement relates must be received by the Fund a reasonable
time before the solicitation is made. 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, since there are other requirements under the
proxy rules for such inclusion.
OTHER MATTERS
The Board does not intend to bring any matters before the Meeting other
than Proposals 1 through 7 and the Board and the Manager are not aware of any
other matters to be brought before the Meeting by others. Since matters not
known at the time of the solicitation may come before the Meeting, the proxy as
solicited confers discretionary authority with respect to such matters as
properly come before the Meeting, including any adjournment or adjournments
thereof, and it is the intention of the persons named as attorneys-in-fact in
the proxy to vote the proxy in accordance with their judgment on such matters.
In the event 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 may propose and approve one or
more adjournments of the Meeting. If a quorum is present but sufficient votes in
favor of one or more of the Proposals have not been received, the persons named
as proxies may propose and approve one or more adjournments of the Meeting to
permit further solicitation of proxies with respect to any such proposal. 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 in favor (including broker non-votes
and shares whose proxies reflect an abstention) of such an adjournment if they
determine that 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 sufficient votes for its
approval have been received and it is otherwise appropriate.
By Order of the Board of Directors,
Andrew J. Donohue, Secretary
January 19, 2001
EXHIBIT A
OPPENHEIMER MAIN STREET GROWTH & INCOME FUND A series of
Oppenheimer Main Street Funds, Inc.
AMENDED AND RESTATED
DISTRIBUTION AND SERVICE PLAN AND AGREEMENT
With
OppenheimerFunds Distributor, Inc.
For Class B shares of
Oppenheimer Main Street Growth & Income Fund
This Distribution and Service Plan and Agreement (the "Plan") is dated as of the
__ day of _______, 2001, by and between Oppenheimer Main Street Funds, Inc. on
behalf of its series, Oppenheimer Main Street Growth & Income Fund (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 "Shares"), contemplated by 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 which the Fund will compensate the
Distributor for its services in connection with the distribution of Shares, and
the personal service and maintenance of shareholder accounts that hold Shares
("Accounts"). The Fund may act as distributor of securities of which it is the
issuer, pursuant to the Rule, according to the terms of this Plan. The terms and
provisions of this Plan shall be interpreted and defined in a manner consistent
with the provisions and definitions contained in (i) the 1940 Act, (ii) the
Rule, (iii) Rule 2830 of the Conduct Rules of the National Association of
Securities Dealers, Inc., or any amendment or successor to such rule (the "NASD
Conduct Rules") and (iv) any conditions pertaining either to
distribution-related expenses or to a plan of distribution to which the Fund is
subject under any order on which the Fund relies, issued at any time by the 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 Directors" shall mean the members of the Fund's Board of
Directors 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.
- ---------
(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 assistance 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 Services Fees. Within forty-five (45)
days of the end of each calendar quarter, the Fund will make payments in the
aggregate amount of 0.0625% (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 0.0625% (0.75% on an annual basis) of the average during the
month of the aggregate net asset value of Shares computed as of the close of
each business day (the "Asset-Based Sales Charge") outstanding until such Shares
are redeemed or converted to another class of shares of the Fund, provided
however, that a majority of the Independent Directors may, but are not obligated
to, set a time period (the "Fund Maximum Holding Period") from time to time for
making such payments. 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 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")).
(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 such quarter in which its
Qualified Holdings do not equal or exceed, at the end of such quarter, the
minimum amount ("Minimum Qualified Holdings"), if any, that may be set from time
to time by a majority of the Independent Directors. 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.
(i) Service Fee. In consideration of the administrative support
services provided by a Recipient during 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 0.0625%
(0.25% on an annual basis) of the average during the calendar quarter of the
aggregate net asset value of Shares, computed as of the close of each business
day, constituting Qualified Holdings owned beneficially or of record by the
Recipient or by its Customers for a period of more than the minimum period (the
"Minimum Holding Period"), if any, that may be set from time to time by a
majority of the Independent Directors.
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: (i) "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 (ii) service fee payments at a rate not to
exceed 0.0625% (0.25% on an annual basis) of the average during the calendar
quarter of the aggregate net asset value of Shares, computed as of the close of
each business day, constituting Qualified Holdings owned beneficially or of
record by the Recipient or by its Customers for a period of more than one (1)
year. At the Distributor's sole option, the 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 Fees (Asset-Based Sales Charge)
Payments. In its sole discretion and irrespective of whichever alternative
method of making service fee payments to Recipients is selected by the
Distributor, in addition the Distributor may make distribution assistance fee
payments to a Recipient quarterly, within forty-five (45) days after the end of
each calendar quarter, at a rate not to exceed 0.1875% (0.75% on an annual
basis) of the average during the calendar quarter of the aggregate net asset
value of Shares computed as of the close of each business day constituting
Qualified Holdings owned beneficially or of record by the Recipient or its
Customers until such Shares are redeemed or converted to another class of shares
of the Fund, provided however, that a majority of the Independent Directors may,
but are not obligated, to set a time period (the "Recipient Maximum Holding
Period") for making such payments. 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 Directors may at any time or from time
to time increase or decrease the rate of fees to be paid to the Distributor or
to any Recipient, but not to exceed the rates set forth above, and/or direct the
Distributor to set, eliminate or modify any Minimum Holding Period, Minimum
Qualified Holdings, Fund Maximum Holding Period and/or Recipient Maximum Holding
Period, and/or to provide for split requirements so that different time periods
apply to shares afforded different shareholder privileges or other features,
including without limitation, different Minimum Holding Periods, Fund Maximum
Holding Periods and/or Recipient Maximum Holding Periods for shares held subject
to systematic withdrawal plans. The Distributor shall notify all Recipients of
any Minimum Holding Period, Minimum Qualified Holdings, Fund Maximum Holding
Periods and/or Recipient Maximum 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
revised current prospectus, statement of additional information or supplement to
current prospectus or statement of additional information 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 to which the Distributor is, or
may become, subject under the NASD Conduct Rules.
(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. In the event that either the
Distributor or the Board should have reason to believe that, notwithstanding the
level of Qualified Holdings, a Recipient may not be rendering appropriate
distribution assistance in connection with the sale of Shares or administrative
support services for Accounts, then the Distributor, at the request of the
Board, shall require the Recipient to provide a written report or other
information to verify that said Recipient is providing appropriate distribution
assistance and/or services in this regard. If the Distributor or the Board of
Directors still is not satisfied after the receipt of such report, either may
take appropriate steps to terminate the Recipient's status as such under the
Plan, whereupon such Recipient's rights as a third-party beneficiary hereunder
shall terminate. Additionally, in their discretion, a majority of the Fund's
Independent Directors at any time may remove any broker, dealer, bank or other
person or entity as a Recipient, where upon 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 Directors. While this Plan is in effect, the
selection and nomination of persons to be Directors of the Fund who are not
"interested persons" of the Fund ("Disinterested Directors") shall be committed
to the discretion of the incumbent Disinterested Directors. Nothing herein shall
prevent the incumbent Disinterested Directors from soliciting the views or the
involvement of others in such selection or nominations as long as the final
decision on any such selection and nomination is approved by a majority of the
incumbent Disinterested Directors.
5. Reports. While this Plan is in effect, the Treasurer of the Fund shall
provide written reports to the Fund's Board for its review, detailing 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 agreement may be terminated at any time,
without payment of any penalty, by a vote of a majority of the Independent
Directors or by a vote of the holders of a "majority" (as defined in the 1940
Act) of the Fund's outstanding Class B voting 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 Directors 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 Directors
cast in person at a meeting called for the purpose of voting on such
continuance.
7. Effectiveness, Continuation, Termination and Amendment. This Plan has been
approved by a vote of the Board and its Independent Directors cast in person at
a meeting called on February 29, 2000, for the purpose of voting on this Plan,
and shall take effect as of the date first set forth above. 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 Directors
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 Directors.
This Plan may be terminated at any time by vote of a majority of the
Independent Directors 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 Directors 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.
Oppenheimer Main Street Funds, Inc.
On behalf of its series Oppenheimer
Main Street Growth & Income Fund
By: ___________________
Andrew J. Donohue
Secretary
OppenheimerFunds Distributor, Inc.
By: __________________________
Katherine P. Feld
Vice President and Secretary
EXHIBIT B
OPPENHEIMER MAIN STREET GROWTH & INCOME FUND A series of
Oppenheimer Main Street Funds, Inc.
AMENDED AND RESTATED
DISTRIBUTION AND SERVICE PLAN AND AGREEMENT
With
OppenheimerFunds Distributor, Inc.
For Class C shares of
Oppenheimer Main Street Growth & Income Fund
This Distribution and Service Plan and Agreement (the "Plan") is dated as of the
____day of ____________, 2001, by and between Oppenheimer Main Street Funds,
Inc. on behalf of its series Oppenheimer Main Street Growth & Income Fund (the
"Fund") and OppenheimerFunds Distributor, Inc. (the "Distributor").
1. The Plan. This Plan is the Fund's written distribution and service plan for
Class C shares of the Fund (the "Shares"), contemplated by 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 which the Fund will compensate the
Distributor for its services in connection with the distribution of Shares, and
the personal service and maintenance of shareholder accounts that hold Shares
("Accounts"). The Fund may act as distributor of securities of which it is the
issuer, pursuant to the Rule, according to the terms of this Plan. The terms and
provisions of this Plan shall be interpreted and defined in a manner consistent
with the provisions and definitions contained in (i) the 1940 Act, (ii) the
Rule, (iii) 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 (iv) any conditions pertaining either to
distribution-related expenses or to a plan of distribution to which the Fund is
subject under any order on which the Fund relies, issued at any time by the 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 Directors" shall mean the members of the Fund's Board of
Directors 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.
- ---------
(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 0.0625% (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 0.0625% (0.75% on an annual basis) of the average during the
month of the aggregate net asset value of Shares computed as of the close of
each business day (the "Asset-Based Sales Charge"). 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")).
(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 Directors. 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 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 0.0625% (0.25% on an
annual basis) of the average during the calendar quarter of the aggregate net
asset value of Shares, computed as of the close of each business day,
constituting Qualified Holdings owned beneficially or of record by the Recipient
or by its Customers for a period of more than the minimum period (the "Minimum
Holding Period"), if any, that may be set from time to time by a majority of the
Independent Directors.
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 0.0625% (0.25%
on an annual basis) of the average during the calendar quarter of the aggregate
net asset value of Shares, computed as of the close of each business day,
constituting Qualified Holdings owned beneficially or of record by the Recipient
or by its Customers for a period of more than one (1) year. 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 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 0.1875% (0.75% on an annual basis) of the average during
the calendar quarter of the aggregate net asset value of Shares computed as of
the close of each business day constituting Qualified Holdings owned
beneficially or of record by the Recipient or its Customers for a period of more
than one (1) year. 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 Directors 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 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 Directors 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 amendment to or revision of the
prospectus 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 to which the Distributor is, or may
become, subject under the NASD Conduct Rules.
(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 Directors 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 Directors 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 Directors. While this Plan is in effect, the
selection and nomination of persons to be Directors of the Fund who are not
"interested persons" of the Fund ("Disinterested Directors") shall be committed
to the discretion of the incumbent Disinterested Directors. Nothing herein shall
prevent the incumbent Disinterested Directors 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 Directors.
5. Reports. While this Plan is in effect, the Treasurer of the Fund shall
provide written reports to the Fund's Board for its review, detailing 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 agreement may be terminated at any time,
without payment of any penalty, by a vote of a majority of the Independent
Directors or by a vote of the holders of a "majority" (as defined in the 1940
Act) of the Fund's outstanding voting Class C 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 Directors 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 Directors
cast in person at a meeting called for the purpose of voting on such
continuance.
7. Effectiveness, Continuation, Termination and Amendment. This Plan has been
approved by a vote of the Board and of its Independent Directors cast in person
at a meeting called on February 29, 2000, for the purpose of voting on this Plan
and shall take effect as of the date first set forth above. Unless terminated as
hereinafter provided, it shall continue in effect until December 31, 2000 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 Directors 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 C 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 Directors.
This Plan may be terminated at any time by a vote of a majority of the
Independent Directors or by the vote of the holders of a "majority" (as defined
in the 1940 Act) of the Fund's outstanding Class C voting shares. In the event
of such termination, the Board and its Independent Directors 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.
Oppenheimer Main Street Funds, Inc.
On behalf of its series, Oppenheimer
Main Street Growth & Income Fund
by: ___________________
Andrew J. Donohue
Secretary
OppenheimerFunds Distributor, Inc.
by: __________________________
Katherine P. Feld
Vice President and Secretary
sharedata\proxies\200\mainstreet\700_proxy-def00.doc
Bridget A. Macaskill
- --------------------------------------------------------------------------------
Chairman and OppenheimerFunds Logo
Chief Executive Officer Two World Trade Center,
34th Floor New York,
NY 10048-0203
800.525.7048
www.oppenheimerfunds.com
January 19, 2001
Dear Oppenheimer Main Street Growth & Income Fund Shareholder,
We have scheduled a shareholder meeting on March 16, 2001 for you to decide upon
some important proposals for the Fund. Your ballot card and a detailed statement
of the issues are enclosed with this letter.
Your Board of Directors believes the matters being proposed for approval are
in the best interests of the Fund and its shareholders and recommends a vote
"for" the election of Directors and for each Proposal. Regardless of the
number of shares you own, it is important that your shares be represented
and voted. So we urge you to consider these issues carefully and make your
vote count.
How do you vote?
To cast your vote, simply mark, sign and date the enclosed proxy ballot and
return it in the postage-paid envelope today. You also may vote by telephone
by calling the toll-free number on the proxy ballot. Using a touch-tone
telephone to cast your vote saves you time and helps reduce the Fund's
expenses. If you vote by telephone, you do not need to mail the proxy
ballot.
Remember, it can be expensive for the Fund--and ultimately for you as a
shareholder--to remail ballots if not enough responses are received to
conduct the meeting. If your vote is not received before the scheduled
meeting, you may receive a telephone call asking you to vote.
What are the issues?
o Election of Directors. You are being asked to consider and approve the
election of twelve Directors. You will find detailed information on the
Directors in the enclosed proxy statement.
o Ratification of Auditors. The Board is asking you to ratify the selection of
Deloitte & Touche LLP as independent auditors of the Fund for the current
fiscal year.
o Revision of Investment Objective. Your approval is requested to revise
the Fund's investment objective.
o Approval of Elimination of Certain Fundamental Investment
Restrictions. Your approval is requested to eliminate certain fundamental
investment restrictions of the Fund.
o Approval of Amendments to certain Fundamental Investment Restrictions.
Your approval is requested to amend certain fundamental investment
restrictions of the Fund.
o Approval of Distribution and Service Plan for Class B Shares (Class B
shareholders only). Class B shareholders are asked to approve the Fund's
Amended and Restated Class B 12b-1 Distribution and Service Plan.
o Approval of Distribution and Service Plan for Class C Shares (Class C
shareholders only). Class C shareholders are asked to approve the Fund's
Amended and Restated Class C 12b-1 Distribution and Service Plan.
Please read the enclosed proxy statement for complete details on these
proposals. Of course, if you have any questions, please contact your financial
advisor, or call us at 1-800-525-7048. As always, we appreciate your confidence
in OppenheimerFunds and look forward to serving you for many years to come.
Sincerely,
Bridget A. Macaskill's signature
Enclosures
XP0700.003.0800