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 INTERNATIONAL BOND FUND
- -----------------------------------------------------------------
(Name of Registrant as Specified in its Charter)

PATRICIA C. FOSTER, ESQ.
- -----------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)

Payment of Filing Fee (Check the appropriate box):

/ / $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:
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(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:

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/ X / 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:
$125.00
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(2) Form, Schedule or Registration Statement No.:
PRELIMINARY 14A PROXY STATEMENT
- -----------------------------------------------------------------

(3) Filing Party:
PATRICIA C. FOSTER, ESQ.
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(4) Date Filed:
JULY 16, 1996
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OPPENHEIMER INTERNATIONAL BOND FUND
PROXY FOR SHAREHOLDERS MEETING TO BE HELD SEPTEMBER 26, 1996
CLASS A SHARES

Your shareholder vote is important!

Your prompt response can save your Fund the expense of another
mailing.

Please mark your proxy on the reverse side, date and sign it, and
return it promptly in the accompanying envelope, which requires
no postage if mailed in the United States.

Please detach at perforation before mailing.
- -----------------------------------------------------------------
Oppenheimer International Bond Fund
Proxy for Shareholders Meeting to be held September 26, 1996.

The undersigned Class A shareholder of Oppenheimer International
Bond Fund (the "Fund") does hereby appoint Robert Bishop, George
C. Bowen, Andrew J. Donohue, Scott T. Farrar, Rendle Myer and
each of them, as attorneys-in-fact and proxies of the
undersigned, with full power of substitution, to attend the
Meeting of Shareholders of the Fund to be held September 26,
1996, at 3410 South Galena Street, Denver, Colorado, 80231 at
10:00 A.M., Denver time, and at all adjournments thereof, and to
vote the shares held in the name of the undersigned on the record
date for said meeting for the election of Trustees and on the
proposals specified on the reverse side. Said attorneys-in-fact
shall vote in accordance with their best judgment as to any other
matter.

PROXY SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES, WHICH
RECOMMENDS A VOTE FOR THE ELECTION OF ALL NOMINEES FOR TRUSTEES
AND FOR THE PROPOSALS ON THE REVERSE SIDE. THE SHARES
REPRESENTED HEREBY WILL BE VOTED AS INDICATED ON THE REVERSE SIDE
OR FOR IF NO CHOICE IS INDICATED.

880

Oppenheimer International Bond Fund/Proxy for Shareholders
Meeting to be held September 26, 1996

Your shareholder vote is important!

Your prompt response can save your Fund money.

Please vote, sign and mail your proxy ballot (this card) in the
enclosed postage-paid envelope today, no matter how many shares
you own. A majority of the Fund's shares must be represented in
person or by proxy. Please vote your proxy so your Fund can
avoid the expense of another mailing.

Please detach at perforation before mailing.
- -----------------------------------------------------------------

1. Election of Trustees

A) Robert G. Avis F) Sam Freedman
B) William A. Baker G) C. Howard Kast
C) Charles Conrad, Jr. H) Robert M. Kirchner
D) John S. Fossel I) Bridget A. Macaskill
E) Raymond J. Kalinowski J) Ned M. Steel
K) James C. Swain

____FOR all nominees listed ____WITHHOLD AUTHORITY
except as marked to the to vote for all nominees
listed
contrary. Instruction: To above.
withhold authority to vote
for any individual nominee,
line out that nominee's name
above.

2. Ratification of selection of Deloitte & Touche LLP as
independent auditors (Proposal No. 1)

FOR____ AGAINST____ ABSTAIN____

3. Approval of the Investment Advisory Agreement (Proposal No. 2)

FOR____ AGAINST____ ABSTAIN____

4. Approval of the Class A 12b-1 Service Plan and Agreement
(Proposal No. 3)

FOR____ AGAINST____ ABSTAIN____

Dated: ___________________________,1996
(Month) (Day)

___________________________________
Signature(s)

Please read both sides of this ballot.

NOTE: PLEASE SIGN EXACTLY AS YOUR NAME(S) APPEAR HEREON. When
signing as custodian, attorney, executor, administrator, trustee,
etc., please give your full title as such. All joint owners
should sign this proxy. If the account is registered in the name
of a corporation, partnership or other entity, a duly authorized
individual must sign on behalf of such entity and give his or her
title.

880

OPPENHEIMER INTERNATIONAL BOND FUND
PROXY FOR SHAREHOLDERS MEETING TO BE HELD SEPTEMBER 26, 1996
CLASS B SHARES

Your shareholder vote is important!

Your prompt response can save your Fund the expense of another
mailing.

Please mark your proxy on the reverse side, date and sign it, and
return it promptly in the accompanying envelope, which requires no
postage if mailed in the United States.

The undersigned Class B shareholder of Oppenheimer International
Bond Fund (the "Fund") does hereby appoint Robert Bishop, George
C. Bowen, Andrew J. Donohue, Scott T. Farrar, Rendle Myer and each
of them, as attorneys-in-fact and proxies of the undersigned, with
full power of substitution, to attend the Meeting of Shareholders
of the Fund to be held September 26, 1996, at 3410 South Galena
Street, Denver, Colorado, 80231 at 10:00 A.M., Denver time, and at
all adjournments thereof, and to vote the shares held in the name
of the undersigned on the record date for said meeting for the
election of Trustees and on the proposals specified on the reverse
side. Said attorneys-in-fact shall vote in accordance with their
best judgment as to any other matter.

PROXY SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES, WHICH
RECOMMENDS A VOTE FOR THE ELECTION OF ALL NOMINEES FOR TRUSTEES AND
FOR THE PROPOSALS ON THE REVERSE SIDE. THE SHARES REPRESENTED
HEREBY WILL BE VOTED AS INDICATED ON THE REVERSE SIDE OR FOR IF NO
CHOICE IS INDICATED.

881

Oppenheimer International Bond Fund/Proxy for Shareholders Meeting
to be held September 26, 1996

Your shareholder vote is important!

Your prompt response can save your Fund money.

Please vote, sign and mail your proxy ballot (this card) in the
enclosed postage-paid envelope today, no matter how many shares you
own. A majority of the Fund's shares must be represented in person
or by proxy. Please vote your proxy so your Fund can avoid the
expense of another mailing.

Please detach at perforation before mailing.
- -----------------------------------------------------------------

1. Election of Trustees

____FOR all nominees listed ____WITHHOLD AUTHORITY
except as marked to the to vote for all nominees
contrary. Instruction: To listed above.
withhold authority to vote
for any individual nominee,
line out that nominee's name
above.

2. Ratification of selection of Deloitte & Touche LLP as
independent auditors (Proposal No. 1)

FOR____ AGAINST____ ABSTAIN____

3. Approval of the Investment Advisory Agreement (Proposal No. 2)

FOR____ AGAINST____ ABSTAIN____

4. Approval of the Class B 12b-1 Distribution and Service Plan and
Agreement (Proposal No. 4)

FOR____ AGAINST____ ABSTAIN____

Dated: ___________________________, 1996
(Month) (Day)

___________________________________
Signature(s)

Please read both sides of this ballot.

NOTE: PLEASE SIGN EXACTLY AS YOUR NAME(S) APPEAR HEREON. When
signing as custodian, attorney, executor, administrator, trustee,
etc., please give your full title as such. All joint owners should
sign this proxy. If the account is registered in the name of a
corporation, partnership or other entity, a duly authorized
individual must sign on behalf of such entity and give his or her
title.

881

OPPENHEIMER INTERNATIONAL BOND FUND
PROXY FOR SHAREHOLDERS MEETING TO BE HELD SEPTEMBER 26, 1996
CLASS C SHARES

Your shareholder vote is important!

Your prompt response can save your Fund the expense of another
mailing.

Please mark your proxy on the reverse side, date and sign it, and
return it promptly in the accompanying envelope, which requires no
postage if mailed in the United States.

The undersigned Class C shareholder of Oppenheimer International
Bond Fund (the "Fund") does hereby appoint Robert Bishop, George
C. Bowen, Andrew J. Donohue, Scott T. Farrar, Rendle Myer and each
of them, as attorneys-in-fact and proxies of the undersigned, with
full power of substitution, to attend the Meeting of Shareholders
of the Fund to be held September 26, 1996, at 3410 South Galena
Street, Denver, Colorado, 80231 at 10:00 A.M., Denver time, and at
all adjournments thereof, and to vote the shares held in the name
of the undersigned on the record date for said meeting for the
election of Trustees and on the proposals specified on the reverse
side. Said attorneys-in-fact shall vote in accordance with their
best judgment as to any other matter.

PROXY SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES, WHICH
RECOMMENDS A VOTE FOR THE ELECTION OF ALL NOMINEES FOR TRUSTEES AND
FOR THE PROPOSALS ON THE REVERSE SIDE. THE SHARES REPRESENTED
HEREBY WILL BE VOTED AS INDICATED ON THE REVERSE SIDE OR FOR IF NO
CHOICE IS INDICATED.

882

Oppenheimer International Bond Fund/Proxy for Shareholders Meeting
to be held September 26, 1996

Your shareholder vote is important!

Your prompt response can save your Fund money.

Please vote, sign and mail your proxy ballot (this card) in the
enclosed postage-paid envelope today, no matter how many shares you
own. A majority of the Fund's shares must be represented in person
or by proxy. Please vote your proxy so your Fund can avoid the
expense of another mailing.

Please detach at perforation before mailing.
- -----------------------------------------------------------------

1. Election of Trustees

2. Ratification of selection of Deloitte & Touche LLP as
independent auditors (Proposal No. 1)

FOR____ AGAINST____ ABSTAIN____

3. Approval of the Investment Advisory Agreement (Proposal No. 2)

FOR____ AGAINST____ ABSTAIN____

4. Approval of the Class C 12b-1 Distribution and Service Plan and
Agreement (Proposal No. 5)

FOR____ AGAINST____ ABSTAIN____

Dated: ___________________________, 1996
(Month) (Day)

___________________________________
Signature(s)

Please read both sides of this ballot.

NOTE: PLEASE SIGN EXACTLY AS YOUR NAME(S) APPEAR HEREON. When
signing as custodian, attorney, executor, administrator, trustee,
etc., please give your full title as such. All joint owners should
sign this proxy. If the account is registered in the name of a
corporation, partnership or other entity, a duly authorized
individual must sign on behalf of such entity and give his or her
title.

882

OPPENHEIMER INTERNATIONAL BOND FUND

3410 South Galena Street, Denver, Colorado 80231

Notice Of Meeting Of Shareholders
To Be Held September 26, 1996

To The Class A, Class B and Class C Shareholders of
Oppenheimer International Bond Fund:

Notice is hereby given that a Meeting of the Class A, Class B and
Class C shareholders of Oppenheimer International Bond Fund (the
"Fund") will be held at 3410 South Galena Street, Denver, Colorado
80231, at 10:00 A.M., Denver time, on Thursday September 26, 1996,
or any adjournments thereof (the "Meeting"), for the following
purposes:

To be voted on by holders of:

Class A Shares Class B Shares Class C Shares

X X X (a) To elect eleven
Trustees to hold office until
the next meeting of shareholders
called for the purpose of electing
Trustees and until their successors
are elected and shall qualify;

X X X (b) To ratify the selection of
Deloitte and Touche LLP as the
independent certified public
accountants and auditors of the
Fund for the periods from the Fund's
inception (June 15, 1995) through
September 30, 1996 and for the fiscal
year beginning October 1, 1996
(Proposal No. 1);

X X X (c) To approve the Investment
Advisory Agreement between the
Fund and OppenheimerFunds, Inc.
(Proposal No. 2);

X (d) To approve the Fund's Class
A 12b-1 Service Plan and
Agreement (only shareholders of
Class A shares vote on this
proposal) (Proposal No. 3);

X (e) To approve the Fund's Class
B 12b-1 Distribution and Service
Plan and Agreement(only
shareholders of Class B shares
vote on this proposal) (Proposal
No. 4);

X (f) To approve the Fund's Class
C 12b-1 Distribution and Service
Plan and Agreement (only
shareholders of Class C shares
vote on this proposal) (Proposal
No. 5); and

X X X (g) 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 July 19, 1996
are entitled to vote at the Meeting. The Proposals are more fully
discussed in the Proxy Statement. Please read it carefully before
telling us, through your proxy or in person, how you wish your
shares to be voted. The Board of Trustees of the Fund recommends
a vote to elect each of its nominees as Trustee and in favor of the
Proposals. WE URGE YOU TO SIGN, DATE AND MAIL THE ENCLOSED PROXY
PROMPTLY.

By Order of the Board of Trustees,

Andrew J. Donohue, Secretary
August 16, 1996

Shareholders who do not expect to attend the Meeting are requested
to indicate voting instructions on the enclosed proxy and to date,
sign and return it in the accompanying postage-paid envelope. To
avoid unnecessary expense and duplicate mailings, we ask your
cooperation in promptly mailing your proxy no matter how large or
small your holdings may be.

OPPENHEIMER INTERNATIONAL BOND FUND

3410 South Galena Street, Denver, Colorado 80231

PROXY STATEMENT

Meeting Of Shareholders
To Be Held September 26, 1996

This Proxy Statement is furnished to the Class A, Class B and Class
C shareholders of Oppenheimer International Bond Fund (the "Fund")
in connection with the solicitation by the Fund's Board of Trustees
of proxies to be used at the Meeting of Shareholders to be held at
3410 South Galena Street, Denver, Colorado 80231, at 10:00 A.M.,
Denver time, on September 26, 1996, or any adjournments thereof
(the "Meeting"). It is expected that the mailing of this Proxy
Statement will be made on or about August 16, 1996. For free
copies of the annual and semi-annual reports covering the
operations of the Fund for the period from June 15, 1995
(inception) to September 30, 1995 (the "fiscal period ended") and
for the six months ended March 31, 1996, respectively, call
OppenheimerFunds Services, the Fund's transfer agent, at 1-800-525-7048.

The enclosed proxy, if properly executed and returned, will be
voted (or counted as an abstention or withheld from voting) in
accordance with the choices specified thereon, and will be included
in determining whether there is a quorum to conduct the Meeting.
The proxy will be voted in favor of the nominees for Trustees named
in this Proxy Statement unless a choice is indicated to withhold
authority to vote for all listed nominees or any individual
nominee. The proxy will be voted in favor of each of the proposals
unless a choice is indicated to vote against or to abstain from
voting on that proposal. Shares owned of record by broker-dealers
for the benefit of their customers ("street account shares") will
be voted by the broker-dealer based on instructions received from
its customers. If no instructions are received, the broker-dealer
may (if permitted under applicable stock exchange rules), as record
holder, vote such shares in the same proportion as that broker-dealer
votes street account shares for which voting instructions
were timely received. Shares represented in person or by proxy
(including shares which abstain or do not vote with respect to one
or more proposals presented for shareholder approval, including
"broker non-votes")will be counted for purposes of determining the

number of shares that are present and are entitled to vote with
respect to any particular proposal, but will not be counted as a
vote in favor of such proposal. Accordingly, an abstention from
voting on a proposal or a broker non-vote will have the same legal
effect as a vote against the proposal. "Broker non-votes" exist
where a proxy received from a broker indicates that the broker does
not have discretionary authority to vote the shares on the matter.
If a shareholder executes and returns a proxy but fails to indicate
how the votes should be cast, the proxy will be voted in favor of
the election of each of the nominees named herein for Trustee and
in favor of each of the proposals.

The proxy may be revoked at any time prior to the voting by: (1)
writing to the Secretary of the Fund at 3410 South Galena Street,
Denver, Colorado 80231; (2) attending the Meeting and voting in
person; or (3) signing and returning a new proxy (if returned and
received in time to be voted).

The cost of the preparation and distribution of these proxy
materials is an expense of the Fund. In addition to the
solicitation of proxies by mail, proxies may be solicited by
officers or employees of the Fund's transfer agent, personally or
by telephone or telegraph; any expenses so incurred will also be
borne by the Fund. Brokers, banks and other fiduciaries may be
required to forward soliciting material to their principals and to
obtain authorization for the execution of proxies. For those
services they will be reimbursed by the Fund for their out-of-pocket expenses.

Shares Outstanding and Entitled to Vote. As of July 19, 1996, the
record date, there were 13,267,786.201 shares of the Fund issued
and outstanding consisting of 6,725,784.653 Class A shares,
5,432,026.158 Class B shares and 1,109,975.390 Class C shares.
Each Class A, Class B and Class C share of the Fund has voting
rights as stated in this Proxy Statement and is entitled to one
vote for each share (and a fractional vote for a fractional share)
held of record at the close of business on the record date. As of
July 12, 1996, the only entity owning of record or known by the
management of the Fund to be the beneficial owner of 5% or more of
the outstanding Class A, Class B, or Class C shares of the Fund was
Merrill Lynch Pierce Fenner & Smith, Inc., 4800 Deer Lake Drive,
Jacksonville, Florida 32246 which owns 359,250 class c shares
(32.9%).

ELECTION OF TRUSTEES

At the Meeting, eleven Trustees are to be elected to hold office
until the next meeting of shareholders called for the purpose of
electing Trustees and until their successors shall be duly elected
and shall have qualified. The persons named as attorneys-in-fact
in the enclosed proxy have advised the Fund that unless the proxy
instructs them to withhold authority to vote for all listed
nominees or any individual nominee, all validly executed proxies
will be voted by them for the election of the nominees named below
as Trustees of the Fund. As a Massachusetts business trust, the
Fund does not contemplate holding annual shareholder meetings for
the purpose of electing Trustees. Thus, the Trustees will be
elected for indefinite terms until a Shareholders meeting is called
for the purpose of voting for Trustees and until their successors
are elected and shall qualify.

Each of the nominees, is presently a Trustee of the Fund and, if
elected, has agreed to continue to serve as Trustee.

Each of the nominees is also a trustee, director or managing
general partner of Oppenheimer Total Return Fund, Inc., Oppenheimer
Equity Income Fund, Oppenheimer Cash Reserves, Centennial America
Fund, L.P., Oppenheimer Variable Account Funds, Oppenheimer
Champion Income Fund, Oppenheimer High Yield Fund, Oppenheimer Main
Street Funds, Inc., Oppenheimer Strategic Income Fund, Oppenheimer
Strategic Income & Growth Fund, Oppenheimer Integrity Funds,
Oppenheimer Limited-Term Government Fund, Oppenheimer Tax-Exempt
Fund, Centennial Money Market Trust, Centennial Government Trust,
Centennial New York Tax Exempt Trust, Centennial California Tax
Exempt Trust, Daily Cash Accumulation Fund, Inc., Centennial
Tax-Exempt Trust, Panorama Series Fund, Inc. and The
New York Tax-Exempt Income Fund, Inc. (together with the Fund, the
"Denver Oppenheimer Funds"), except that Mr. Fossel and Ms. Macaskill are
not directors or trustees of Oppenheimer Strategic Income Fund,
Oppenheimer Integrity Funds and Panorama Series Fund, Inc. Ms.
Macaskill and Mr. Swain are President and Chairman, respectively,
of all the Denver Oppenheimer Funds.

The nominees indicated below by an asterisk are "interested
persons" (as that term is defined in the Investment Company Act of

1940, as amended, hereinafter referred to as the "Investment
Company Act") of the Fund or the Fund's investment adviser,
OppenheimerFunds, Inc.(the "Manager") due to the positions
indicated with the Manager or its affiliates or other positions
described. The year given below indicates when the nominees first
became a trustee or director of any of the Denver Oppenheimer Funds
without a break in service. If a nominee should be unable to
accept election, the Board of Trustees may, in its discretion,
select another person to fill the vacant position. As of July 12,
1996, none of the Trustees and officers of the Fund beneficially
owned shares of the Fund.

Shares Beneficially
Name and Other Business Experience Owned as of
Information During the Past Five Years July 12, 1996

Robert G. Avis<F1> Vice Chairman of A.G. Edwards None
first became a & Sons, Inc.(a broker-dealer)
Trustee or and A.G.Edwards, Inc.(its
Director in 1993. parent holding company);
Age: 65 Chairman of A.G.E. Asset
Management and A.G. Edwards
Trust Company (its affiliated
investment adviser and trust
company, respectively).

William A. Baker Management Consultant. None
first became a
Trustee or
Director in 1966.
Age: 81

Charles Conrad, Jr. Chairman and CEO of Universal None
first became a Space Lines, Inc.(a space
Trustee or services management company);
Director in 1970. formerly Vice President of
Age: 66 McDonnell Douglas Space
Systems Co. and associated
with the National Aeronautics
and Space Administration.

Shares
Beneficially
Name and Other Business Experience Owned as of
Information During the Past Five Years July 12, 1996

Jon S. Fossel<F1> Chairman of the Manager; a None
first became a director of Oppenheimer
Trustee or Acquisition Corporation
a director ("OAC"), the Manager's parent
Director in 1990. holding company, Shareholder
Age: 54 Services, Inc. ("SSI"), a
transfer agent subsidiary
of the Manager; formerly
President the Manager.

Sam Freedman Formerly, Chairman and Chief None
first became a Executive Officer of
Trustee or OppenheimerFunds Services,
Director in 1996. a transfer agent division
Age: 55 of the Manager; Chairman,
Chief Executive Officer and
Director of SSI; Chairman,
Chief Executive Officer
and Director of Shareholder
Financial Services, Inc.
("SFSI"), a transfer agent
subsidiary of the Manager;
Vice President and Director
of OAC; Director of the
Manager.

Raymond J. Kalinowski Director of Wave Technologies None
first became a International, Inc.(a computer
Trustee or products training company);
Director in 1988. Formerly Vice Chairman and a
Age: 67 director of A.G. Edwards, Inc.,
(parent holding company of A.G.
Edwards & Sons, Inc., a
broker-dealer, of which he was
Senior Vice President.)

C. Howard Kast Formerly Managing Partner of None
first became Deloitte and Touche LLP,
a Trustee or (an accounting firm).
Director in 1988.
Age: 74

Robert M. Kirchner President of The Kirchner None
first became a Company (management
Trustee or consultants).
Director in 1963.
Age: 74

Shares
Beneficially
Name and Other Business Experience Owned as of
Information During the Past Five Years July 12, 1996

Bridget A. Macaskill<F1>President, Chief Executive None
first become a Officer and a Director of
Trustee or the Manager; Chairman and
Director in 1995. a Director of SSI and SFSI;
Age: 48 President and a Director of
OAC, HarbourView Asset
Management Corporation
("HarbourView"), a subsidiary
of the Manager and Oppenheimer
Partnership Holdings, Inc., a
holding company subsidiary of
the Manager; a director of
Oppenheimer Real Asset
Management, Inc. ("Real
Asset");formerly Executive
Vice President of the Manager.

Ned M. Steel Chartered property and None
first became a casualty underwriter;
Trustee or Director of Visiting Nurse
Director in 1963. Corporation of Colorado;
Age: 81 formerly Senior Vice President
and a director of Van Gilder
Insurance Corp. (insurance
brokers).

James C. Swain<F1> Vice Chairman of the Manager; None
first became a formerly President and a
Trustee or director of Centennial Asset
Director in 1969. Management Corporation
Age: 62 ("Centennial"), an investment
adviser subsidiary of the
Manager, and formerly Chairman
of the Board of SSI.

<F1>

- ----------------------
A trustee who is an "interested person" of the Fund or the Manager
under the Investment Company Act.

Vote Required. The affirmative vote of a majority of the votes
cast by shareholders of the Fund without regard to class is
required for the election of a nominee as Trustee. The Board of
Trustees recommends a vote for the election of each nominee.

Functions of the Board of Trustees. The primary responsibility for
the management of the Fund rests with the Board of Trustees. The
Trustees meet regularly to review the activities of the Fund and
the Manager, which is responsible for the Fund's day-to-day
operations. Two regular meetings of the Board were held in the
period from June 15, 1995 (inception) to September 30, 1995 and all
of the Trustees except Mr. Fossel, Ms. Macaskill and Mr. Freedman,
who were elected after September 30, 1995, were present for all of
those meetings. The Trustees of the Fund have appointed an Audit
and Review Committee (the "Audit Committee"), comprised of Messrs.
Baker (Chairman), Conrad and Kirchner, none of whom is an
"interested person" (as that term is defined in the Investment
Company Act) of the Manager or the Fund. The functions of the
Audit Committee include (i) making recommendations to the Board
concerning the selection of independent auditors for the Fund; (ii)
reviewing the methods, scope and results of audits and the fees
charged; (iii) reviewing the adequacy of the Fund's internal
accounting procedures and controls; and (iv) establishing a
separate line of communication between the Fund's independent
auditors and its independent Trustees. The Audit Committee met two
times during the fiscal period ended September 30, 1995 and all
members attended all of the meetings held during this period. The
Board of Trustees does not have a standing nominating or
compensation committee.

Remuneration of Trustees. The officers of the Fund are affiliated
with the Manager. They and the Trustees of the Fund who are
affiliated with the Manager (Ms. Macaskill and Messrs. Fossel and
Swain) receive no salary or fee from the Fund. The remaining
Trustees of the Fund (excluding Mr. Freedman, who did not become a
Trustee until June 27, 1996)received the compensation shown below
from the Fund, during its fiscal period ended September 30, 1995,
and from all 21 of the Denver Oppenheimer Funds (including the Fund
and excluding Panorama Series Fund, Inc.) for which they served as
a trustee, director or managing general partner. Compensation is
paid for service in the positions listed beneath their names:

Total
Compensation
Aggregate From All
Compensation Denver
Name and Position from Fund<F1> Oppenheimer Funds<F2>

Robert G. Avis $0 $53,000
Trustee
William A. Baker $0 $73,255
Audit and Review Committee Chairman and Trustee
Charles Conrad, Jr. $0 $64,309
Audit and Review Committee Member and Trustee
Raymond J. Kalinowski $0 $65,000
Risk Management Oversight
Committee Member and Trustee
C. Howard Kast $0 $65,000
Risk Management Oversight
Committee Member and Trustee
Robert M. Kirchner $0 $68,292
Audit and Review Committee Member and Trustee
Ned M. Steel $0 $53,000
Trustee

- -------------------------
<F1>There were no payments to Trustees during fiscal period ended
September 30, 1995

<F2>For the 1995 calendar year, during which the Denver Oppenheimer
Funds listed in the first paragraph of this section included
Oppenheimer Strategic Investment Grade Bond Fund and Oppenheimer
Strategic Short-Term Income Fund(which ceased operations following
the acquisition of their assets by other Oppenheimer Funds.)

Officers of the Fund. Each officer of the Fund is elected by the
Trustees to serve an annual term. Information is given below about
the Fund's executive officers who are not Trustees of the Fund,
including their business experience during the past five years.
Messrs. Bishop, Bowen, Donohue, Farrar and Zack serve in a similar
capacity with the other Denver Oppenheimer Funds.

Ashwin K. Vasan, Vice President and Portfolio Manager; Age 34.
Vice President of the Manager; an officer of other
Oppenheimer funds; formerly a Securities Analyst for the
Manager prior to which he was a Securities Analyst for
Citibank, N.A.

Andrew J. Donohue, Vice President and Secretary; Age 45.
Executive Vice President and General Counsel of the Manager
and OppenheimerFunds Distributor, Inc. (the "Distributor");
President and a Director of Centennial; Executive Vice
President, General Counsel and Director of HarbourView, SFSI,
SSI and Oppenheimer Partnership Holding, Inc.; President and
a director of Real Asset; General Counsel of OAC, Executive
Vice President, Chief Legal Officer and a director of
Multi-Source Servies (a broker-dealer); an officer of other
Oppenheimer funds; formerly, Senior Vice President and
Associate General Counsel of the Manager and the Distributor,
Partner in Kraft & McManimon (a law firm), an officer of
First Investors Corporation (a broker-dealer) and First
Investors Management Company, Inc. (broker-dealer and
investment adviser), director and an officer of First
Investors Family of Funds and First Investors Life Insurance
Company.

George C. Bowen, Vice President, Treasurer and Assistant Secretary;
Age 59.
Senior Vice President and Treasurer of the Manager; Vice
President and Treasurer of the Distributor and HarbourView;
Senior Vice President, Treasurer, Assistant Secretary and a
director of Centennial; Vice President, Treasurer and
Secretary of SSI and SFSI; Treasurer of OAC; Vice President
and Treasurer of Real Asset, Chief Exective Officer,
Treasurer and a director of Multi Source Service, Inc.; and
an officer of other Oppenheimer funds.

Robert G. Zack, Assistant Secretary; Age 48.
Senior Vice President and Associate General Counsel of the
Manager; Assistant Secretary of SSI and SFSI; an officer of
other Oppenheimer funds.

Robert J. Bishop, Assistant Treasurer; Age 37.
Vice President of the Manager/Mutual Fund Accounting; an
officer of other Oppenheimer funds; previously a Fund
Controller for the Manager, prior to which he was an
Accountant for Yale & Seffinger, P.C., an accounting firm and
previously an Accountant and Commissions Supervisor for
Stuart James Company Inc., a broker-dealer.

Scott T. Farrar, Assistant Treasurer; Age 30.
Vice President of the Manager/Mutual Fund Accounting; an
officer of other Oppenheimer funds; previously a Fund
Controller for the Manager, prior to which he was an
International Mutual Fund Supervisor for Brown Brothers
Harriman & Co., a bank, and previously a Senior Fund
Accountant for State Street Bank & Trust Company.

RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
(Proposal No. 1)

The Investment Company Act requires that independent certified
public accountants and auditors ("auditors") be selected annually
by the Board of Trustees and that such selection be ratified by the
shareholders at the next-convened annual meeting of the Fund, if
one is held. The Board of Trustees of the Fund, including a
majority of the Trustees who are not "interested persons" (as
defined in the Investment Company Act) of the Fund, or the Manager
selected Deloitte & Touche LLP ("Deloitte") as auditors of the Fund
for the periods from June 15, 1995 (inception) through September
30, 1996 and for the fiscal year beginning October 1, 1996.
Deloitte also serves as auditors for the Manager and certain other
funds for which the Manager acts as investment adviser. At the
Meeting, a resolution will be presented for the Class A, Class B,
and Class C shareholders' vote voting in the aggregate to ratify
the selection of Deloitte as auditors. Representatives of Deloitte
are not expected to be present at the Meeting, but they will have
the opportunity to make a statement if they desire to do so. They
will be available should any matter arise requiring their presence.
The Board of Trustees recommends approval of the selection of
Deloitte as auditors of the Fund.

APPROVAL OF INVESTMENT ADVISORY AGREEMENT
(Proposal No. 2)

The Fund has an Investment Advisory Agreement dated June 5, 1995,
with the Manager (the "Agreement") which was submitted to and
approved by the Manager as the Fund's initial sole shareholder, and
by the Fund's Board of Trustees at a meeting held February 28,
1995. At the time the Agreement was entered into, the Manager's
name was Oppenheimer Management Corporation but the Manager's name
was changed to OppenheimerFunds, Inc. in January, 1996. The Fund
is submitting the Agreement to shareholders for approval at this
meeting which is the first-convened shareholders meeting. A copy
of the Agreement is appended hereto as Exhibit A. The Board,
including a majority of the Trustees who are not "interested
persons" (as defined in the Investment Company Act) of the Fund or
the Manager, and who have no direct or indirect financial interest
in the operation of the Agreement ("Independent Trustees"),
approved the terms of the Agreement between the Fund and the
Manager. If approved by the shareholders at this meeting, the
Agreement will continue in effect until December 31, 1996, and
thereafter from year to year unless terminated, but only so long as
such continuance is approved in accordance with the Investment
Company Act. In considering whether to approve the Agreement, the
Board requested and evaluated information necessary to make an
informed determination.

Under the Agreement, the management fee payable monthly to the
Manager is computed on the net assets of the Fund as of the close
of business each day at the annual rates of 0.75% of the first $200
million of net assets; 0.72% of the next $200 million; 0.69% of the
next $200 million; 0.66% on the next $200 million; 0.60% on the
next $200 million and 0.50% of net assets in excess of $1 billion.

For the fiscal period ended September 30, 1995, the Fund paid a
management fee of $8,252 under the Agreement. The Manager also acts
as investment adviser to seven other funds that have investment
objectives similar to that of the Fund. A list of those funds,
their net assets and advisory fee rates paid by those funds is
included as Exhibit B to this Proxy Statement. The Manager also
receives $1,500 per annum to prepare the income tax return for the
Fund.

OppenheimerFunds Services ("OFS"), is the transfer agent for the
Fund and received $860 from the Fund for such services during the
fiscal period ended September 30, 1995. If the Agreement is
approved, OFS will continue to act as transfer agent for the Fund.

Under the Agreement, the Manager supervises the investment
operations of the Fund and the composition of its portfolio and
furnishes the Fund advice and recommendations with respect to
investments, investment policies and the purchase and sale of
securities. The Agreement requires the Manager, at its expense, to
provide the Fund with adequate office space, facilities and
equipment as well as to provide, and supervise the activities of
all administrative and clerical personnel required to provide
effective administration for the Fund, including the compilation
and maintenance of records with respect to its operations, the
preparation and filing of specified reports, and composition of
proxy materials and registration statements for continuous public
sale of shares of the Fund. Expenses not expressly assumed by the
Manager under the Agreement or by the distributor of the Fund's
shares are paid by the Fund. The Agreement lists examples of
expenses paid by the Fund, the major categories of which relate to
interest, taxes, brokerage commissions, fees to certain Trustees,
legal and audit expenses, custodian and transfer agent expenses,
share certificate issuance costs, certain printing and registration
costs, and non-recurring expenses, including litigation.

The Agreement contains no expense limitation. However,
independently of the Agreement, the Manager has undertaken that the
total expenses of the Fund in any fiscal year (including the
management fee but excluding taxes, interest, brokerage
commissions, distribution assistance payments and any extraordinary
non-recurring expenses, such as litigation) shall not exceed the
most stringent applicable regulatory limitation. The payment of
the management fee at the end of any month will be reduced so that
there will not be any accrued but unpaid liability under this
expense limitation. As in the case of some of the funds listed in
Exhibit B, the Manager reserves the right to change or eliminate
this expense limitation at any time.

The Agreement provides that in the absence of willful misfeasance,
bad faith or gross negligence in the performance of its duties or
reckless disregard of its obligations under the Agreement, the
Manager is not liable for any loss resulting from a good faith
error or omission on its part in performing the services required
by the Agreement. The Agreement permits the Manager to act as

investment adviser for any other person, firm or corporation and to
use the name "Oppenheimer" in connection with other investment
companies for which it may act as investment adviser. If the
Manager shall no longer act as investment adviser to the Fund, the
right of the Fund to use the name "Oppenheimer" as part of its name
may be withdrawn.

Brokerage Provisions of the Agreement. One of the duties of the
Manager under the Agreement is to arrange the portfolio
transactions for the Fund. The Agreement contains provisions
relating to the employment of broker-dealers ("brokers") to effect
the Fund's portfolio transactions. In doing so, the Manager is
authorized by the Agreement to employ brokers, including
"affiliated" brokers, as that term is defined in the Investment
Company Act, as may, in its best judgment based on all relevant
factors, implement the policy of the Fund to obtain, at reasonable
expense, the "best execution" (prompt and reliable execution at the
most favorable price obtainable) of such transactions. The Manager
need not seek competitive commission bidding, but is expected to
minimize the commissions paid to the extent consistent with the
interest and policies of the Fund as established by its Board of
Trustees. Purchases of securities from underwriters include a
commission or concession paid by the issuer to the underwriter and
purchases from dealers include a spread between the bid and asked
price.

Under the Agreement, the Manager is authorized to select brokers
that provide brokerage and/or research services for the Fund and/or
the other accounts over which the Manager or its affiliates have
investment discretion. The commissions paid to such brokers may be
higher than another qualified broker would have charged if a good
faith determination is made by the Manager that the commission is
fair and reasonable in relation to the services provided. Subject
to the foregoing considerations, the Manager may also consider
sales of shares of the Fund and other investment companies managed
by the Manager or its affiliates as a factor in the selection of
brokers for the Fund's portfolio transactions.

Description of Brokerage Practices. Subject to the provisions of
the Agreement, the procedures and rules described above,
allocations of brokerage are made by Manager's portfolio traders
based upon recommendations from the Manager's portfolio managers.
In certain instances, portfolio managers may directly place trades
and allocate brokerage, also subject to the provisions of the
Agreement and the procedures and rules described above. In either
case, brokerage is allocated under the supervision of the Manager's
executive officers. Transactions in securities other than those

for which an exchange is the primary market are generally done with
principals or market makers. Brokerage commissions are paid
primarily for effecting transactions in listed securities or for
certain fixed-income agency transactions in the secondary market
and are otherwise paid only if it appears likely that a better
price or execution can be obtained. No brokerage commissions were
paid to any broker affiliated with either the Fund or the Manager
during the fiscal period ended September 30, 1995.

Most purchases of money market instruments and debt obligations are
principal transactions at net prices. Instead of using a broker
for those transactions, the Fund normally deals directly with the
selling or purchasing principal or market maker unless it
determines that a better price or execution can be obtained by
using a broker. Purchases of these securities from underwriters
include a commission or concession paid by the issuer to the
underwriter. Purchases from dealers include a spread between the
bid and asked prices. The Fund seeks to obtain prompt execution of
these orders at the most favorable net price. Options commissions
may be relatively higher than those which would apply to direct
purchases and sales of portfolio securities.

When the Fund engages in an option transaction, ordinarily the same
broker will be used for the purchase or sale of the option and any
transaction in the securities to which the option relates. When
possible, concurrent orders to purchase or sell the same security
by more than one of the accounts managed by the Manager or its
affiliates are combined. The transactions effected pursuant to
such combined orders are averaged as to price and allocated in
accordance with the purchase or sale orders actually placed for
each account.

The research services provided by a particular broker may be useful
only to one or more of the advisory accounts of the Manager and its
affiliates, and investment research received for the commissions of
those other accounts may be useful both to the Fund and one or more
of such other accounts. Such research, which may be supplied by a
third party at the instance of a broker, includes information and
analyses on particular companies and industries as well as market
or economic trends and portfolio strategy, receipt of market
quotations for portfolio evaluations, information systems, computer
hardware and similar products and services. If a research service
also assists the Manager in a non-research capacity (such as
bookkeeping or other administrative functions), then only the
percentage or component that provides assistance to the Manager in
the investment decision-making process may be paid in commission

dollars. The Board permits the Manager to use concessions on
fixed-price offerings of fixed income securities to obtain research
in the same manner as for agency transactions. The Board also
permits the Manager to use stated commissions on secondary
fixed-income agency trades to obtain research where the broker has
represented to the Manager that: (i) the trade is not from or for
the broker's own inventory, (ii) the trade was executed by the
broker on an agency basis at the stated commission, and (iii) the
trade is not a riskless principal transaction.

The research services provided by brokers broaden the scope and
supplement the research activities of the Manager, by making
available additional views for consideration and comparisons, and
by enabling the Manager to obtain market information for the
valuation of securities held in the Fund's portfolio or being
considered for purchase. The Board of Trustees, including the
Independent Trustees, annually reviews information furnished by the
Manager as to the commissions paid to brokers furnishing such
services so that the Board may ascertain whether the amount of such
commissions was reasonably related to the value or benefit of such
services.

The Manager and the Distributor. Subject to the authority of the
Board of Trustees, the Manager is responsible for the day-to-day
management of the Fund's business, pursuant to its Investment
Advisory Agreement with the Fund. OppenheimerFunds Distributor,
Inc., (the "Distributor") a wholly-owned subsidiary of the Manager,
is the general distributor of the Fund's shares.

The Manager (including a subsidiary) currently manages investment
companies, including other Oppenheimer funds, with assets of more
than $50 billion as of June 30, 1996, and with more than three
million shareholder accounts. The Manager is a wholly-owned
subsidiary of Oppenheimer Acquisition Corp. ("OAC"), a holding
company controlled by Massachusetts Mutual Life Insurance Company
("MassMutual"). The Manager, the Distributor and OAC are located
at Two World Trade Center, New York, New York 10048. MassMutual is
located at 1295 State Street, Springfield, Massachusetts 01111.
OAC acquired the Manager on October 22, 1990. As indicated below,
the common stock of OAC is owned by (i) certain officers and/or
directors of the Manager, (ii) MassMutual and (iii) another
investor. No institution or person holds 5% or more of OAC's
outstanding common stock except MassMutual. MassMutual has engaged
in the life insurance business since 1851.

The common stock of OAC is divided into three classes. At June 30,
1996, MassMutual held (i) all of the 2,160,000 shares of Class A

voting stock, (ii) 526,105 shares of Class B voting stock, and
(iii) 1,328,053 shares of Class C non-voting stock. This
collectively represented 84.0% of the outstanding common stock and
92.3% of the voting power of OAC as of that date. Certain officers
and/or directors of the Manager held (i) 598,704 shares of the
Class B voting stock, representing 12.5% of the outstanding common
stock and 6.0% of the voting power, and (ii) options acquired
without cash payment which, when they become exercisable, allow the
holders to purchase up to 627,362 shares of Class C non-voting
stock. That group includes persons who serve as officers of the
Fund and Ms. Macaskill and Messrs. Fossel and Swain who serve as
Trustees of the Fund. Holders of OAC Class B and Class C common
stock may put (sell) their shares and vested options to OAC or
MassMutual at a formula price (based on earnings of the Manager).
MassMutual may exercise call (purchase) options on all outstanding
shares of both such classes of common stock and vested options at
the same formula price. From the period September 1, 1994 to March
31, 1996, the only transactions by persons who serve as Trustees of
the Fund were by Ms. Macaskill, who surrendered to OAC 20,000 stock
appreciation rights issued in tandem with the Class C OAC options,
for cash payments aggregating $1,421,800 and Mr. Freedman, who
surrendered to OAC 45,474 stock appreciation rights issued in
tandem under the Class C OAC options, for a cash payment of
$4,497,833.34. Mr. Freedman no longer holds any OAC stock or
options, and is no longer affiliated with the Manager or any of its
affiliates.

The names and principal occupations of the executive officers and
directors of the Manager are as follows: Jon S. Fossel, Chairman;
Bridget A. Macaskill, Chief Executive Officer, President and a
director; Donald W. Spiro, Chairman Emeritus; Robert G. Galli, Vice
Chairman, James C. Swain, Vice Chairman; Robert C. Doll, Executive
Vice President and a director; O. Leonard Darling, Janess Ruff,
Loretta McCarthy and Nancy Sperte, Executive Vice Presidents;
Tilghman G. Pitts III, Executive Vice President; Andrew J. Donohue,
Executive Vice President, General Counsel and a director; George C.
Bowen, Senior Vice President and Treasurer; Peter M. Antos, Victor
Babin, Robert A. Densen, Ronald H. Fielding, Robert Patterson,
Richard H. Rubinstein, Arthur Steinmetz, Ralph Stellmacher, John
Stoma, Jerry A. Webman, William L. Wilby and Robert G. Zack, Senior
Vice Presidents. These officers are located at one of the three
offices of the Manager: Two World Trade Center, New York, New York
10048-0203; 3410 South Galena Street, Denver, Colorado 80231-5099
and 350 Linden Oaks, Rochester, New York 14625-2807.

Considerations by the Board of Trustees. The Agreement was
approved and adopted by the Board, including the Independent

Trustees, when the Fund was being organized. The Manager advised
the Board at that time that the proposed investment advisory fee
was fair and reasonable and was expected to provide adequate
compensation to the Manager in light of the operations of the Fund
and the Manager's duties and responsibilities under the Agreement.
The Board also recognized that the terms and conditions of the
Agreement were substantially the same as the terms and conditions
in the other investment advisory agreements between the Manager or
its affiliates with the other Denver Oppenheimer Funds. The Board
also noted that the investment advisory fee rate was the same fee
rate charged to a number of similar mutual funds in the Denver
complex.

In their deliberations, the Board of Trustees including the
Independent Trustees took cognizance of extensive information and
materials which the Manager had recently provided to them in
connection with their annual review of the investment advisory
agreements and investment advisory fee rates for the other
Oppenheimer funds and data reviewed on other recent occasions when
the Board and the Independent Trustees considered investment
advisory fee rate increases requested by the Manager with respect
to other funds. That information included data as to the financial
stability and qualifications of the Manager and its personnel, the
nature, quality and extent of the services rendered and the
Manager's commitment to its mutual fund advisory business. The
Trustees also considered the extent to which the Manager had
expanded its personnel and other services dedicated to portfolio
management functions.

Analysis of Nature, Quality and Extent of Services. The
Independent Trustees considered, among other factors: (1) the
necessity of the Manager maintaining and enhancing its ability to
retain and attract capable personnel to serve the Fund; (2) the
investment record of the Manager in managing investment companies
for which it acts as investment adviser; (3) the Manager's overall
profitability; (4) possible economies of scale which the Manager
passes on to the Fund; (5) data as to advisory fees of other
investment companies not advised by the Manager but believed to be
in the same overall investment category as the Fund; (6) other
benefits to the Manager from serving as investment manager to the
Fund, as well as benefits to its affiliate acting as principal
underwriter and its division acting as transfer agent to the Fund;
(7) current and developing conditions in the financial services
industry, including the entry into the industry of larger and
highly capitalized companies which are spending and appear to be
prepared to continue to spend substantial sums to engage personnel

and to provide services to competing investment companies; (8) the
financial resources of the Manager and the desirability of
appropriate incentives to assure that the Manager will continue to
furnish high quality services to the Fund; and (9) the higher costs
of doing business and investing in foreign countries and foreign
markets.

Analysis of Profitability of the Manager. The Independent
Trustees considered information provided by the Manager regarding
its profitability and also considered comparative information
relating to the profitability of other mutual fund investment
managers.

Determination by the Independent Trustees and the Board of
Trustees. After completion of its review, the Independent Trustees
recommended that the Board of Trustees approve, and the Board
unanimously approved, the Agreement.

Vote Required. An affirmative vote of the holders of a "majority"
(as defined in the Investment Company Act) of all outstanding
voting securities of the Fund is required for approval of the
Agreement; the classes do not vote separately. Such "majority" vote
is defined in the Investment Company Act as the vote of the holders
of the lesser of: (i) 67% or more of the voting securities present
or represented by proxy at the shareholders meeting, if the holders
of more than 50% of the outstanding voting securities are present
or represented by proxy, or (ii) more than 50% of the outstanding
voting securities. The Board of Trustees recommends a vote in
favor of approving the Investment Advisory Agreement.

APPROVAL OF THE FUND'S CLASS A 12b-1
SERVICE PLAN AND AGREEMENT
(Proposal No. 3)

NOTE: This Proposal applies to Class A Shareholders only.

Class A shares were first offered to the public on June 15, 1995.
At that time, the Fund had adopted a Service Plan and Agreement for
Class A shares pursuant to Rule 12b-1 of the Investment Company
Act, in conformity with the National Association of Securities
Dealers, Inc. ("NASD") Rule which permits the Fund to pay up to
0.25% of its average annual net assets as a service fee to
reimburse the Distributor for all or a portion of its costs
incurred in providing personal service and maintenance of accounts
that hold Class A shares. The Manager, as the sole initial
shareholder of the Fund's Class A shares, approved the Service Plan
for the Class A shares of the Fund (the "Service Plan") under Rule

12b-1 of the Investment Company Act. At a meeting of the Fund's
Board of Trustees held February 28, 1995, the Fund's Board of
Trustees, including a majority of the Independent Trustees,
approved the Service Plan, and determined to recommend the Service
Plan for approval by the Class A shareholders. The Service Plan
was renewed for one year on October 24, 1995. A copy of the
Service Plan is attached as Exhibit C to this Proxy Statement. The
Service Plan is being submitted to shareholders for approval at the
meeting which is the first convened shareholders meeting.

If the Class A shareholders approve this proposal, the Service Plan
shall, unless terminated as described below, continue in effect
from year to year only so long as such continuance is specifically
approved at least annually by the Fund's Board of Trustees and its
Independent Trustees by a vote cast in person at a meeting called
for the purpose of voting on such continuance. The Service Plan
may be terminated at any time by a vote of a majority of the
Independent Trustees or by a vote of the holders of a "majority"
(as defined in the Investment Company Act) of the Fund's
outstanding Class A shares. The Service Plan may not be amended to
increase materially the amount of payments to be made without
approval by the Class A shareholders. All material amendments must
be approved by the Independent Trustees.

Description of the Service Plan. Under the Service Plan, the Fund
reimburses the Distributor quarterly for all or a portion of its
costs incurred in connection with the service and maintenance of
shareholder accounts that hold Class A Shares of the Fund. The
Distributor is reimbursed for quarterly payments made to certain
dealers, brokers, banks or other persons or entities ("Recipients")
that have rendered personal services in connection with the
personal service and maintenance of shareholder accounts. Such
services may include but are not limited to answering routine
inquiries from the Recipient's customers concerning the Fund,
providing such customers with information on their investment in
shares, assisting in the establishment and maintenance of accounts
or sub-accounts in the Fund, making the Fund's investment plan and
dividend payment options available, and providing such other
information and customer liaison services and the maintenance of
accounts as the Distributor or the Fund may reasonably request.
Payments by the Distributor to Recipients will be made quarterly
and computed as of the close of business each day at an annual rate
not to exceed 0.25% of the net assets of Class A shares of the Fund
held in accounts of the Recipient or its customers. The Service
Plan has the effect of increasing annual expenses of Class A shares
of the Fund by up to 0.25% of the class's average annual net assets
from what its expenses would be otherwise. Currently, the

Distributor is not permitted to retain any part of the payments
made by the Fund under the Service Plan.

Under the Service Plan, the Board may determine that no payment
will be made to any Recipient in any quarter if the aggregate net
asset value of all Class A Fund shares held by the Recipient for
itself and its customers does not exceed a minimum amount, if any,
that may be determined from time to time by a majority of the
Independent Trustees. Initially, the Board of Trustees has set the
fee at the maximum rate and set no minimum amount. The Service
Plan permits the Distributor and the Manager to make additional
distribution payments to Recipients from their own resources
(including profits from management fees) at no cost to the Fund.
The Distributor and the Manager may, in their sole discretion,
increase or decrease the amount of distribution assistance payments
they make to Recipients from their own assets. Any expenses
accrued under the Service Plan by the Distributor in one fiscal
quarter of the Fund may not be paid from service fees received from
the Fund in subsequent periods. Thus, if the Service Plan were
terminated, no amounts (other than amounts accrued prior to
termination but not yet paid) would be owed by the Fund to the
Distributor or to Recipients. In addition, Service Plan fees
received from the Fund may not be used to pay any interest expense,
carrying charges or other financial costs, or allocation of
overhead of the Distributor.

For fiscal period ended September 30, 1995, payments under the
Service Plan totaled $1,750, all of which was paid by the
Distributor to Recipients, including $32 to an affiliate.

Additional Information. While the Service Plan is in effect, the
Treasurer of the Fund shall provide a written report to the Fund's
Board of Trustees at least quarterly on the amount of all payments
made pursuant to the Service Plan, the purpose for which the
payment was made and the identity of each Recipient that received
any such payment. Each report, including the allocations on which
such payments are based, will be subject to the review and approval
of the Independent Trustees in the exercise of their fiduciary
duty. The Service Plan further provides that while it is in
effect, the selection and nomination of those Trustees of the Fund
who are not "interested persons" of the Fund is committed to the
discretion of the Independent Trustees. This does not prevent the
involvement of others in such selection and nomination if the final
decision on any such selection or nomination is approved by a
majority of the Independent Trustees.

Analysis of the Service Plan by the Board of Trustees. In
considering whether to recommend the Class A Service Plan for
approval, the Board requested and evaluated information it deemed
necessary to make an informed determination. The Board found that
there is a reasonable likelihood that the Service Plan will benefit
the Fund and its Class A shareholders by providing financial
incentives to financial intermediaries to attract new Class A
shareholders to the Fund and by assisting the efforts of the Fund
and the Distributor to retain existing investments and attract new
investments. The Service Plan should enable the Fund to be
competitive with similar funds, including funds which impose sales
charges, that provide financial incentives to institutions that
direct investors to such funds, and which provide shareholder
servicing and administrative services.

The Board concluded that it is likely that the Service Plan will
benefit Class A shareholders of the Fund by enabling the Fund to
maintain or increase its present asset base in the face of
competition from a variety of financial products. The Trustees
recognized that payments made pursuant to the Service Plan might be
offset in part by economies of scale associated with the growth of
the Fund's assets. With larger assets, the Class A shareholders
should benefit from reduced Class A expenses per share because the
effective investment advisory fee rate will decline as assets
increase under the proposed Investment Advisory Agreement. Costs
of shareholder administration and transfer agency operations will
be spread among a larger number of shareholders as the Fund grows
larger, thereby reducing the Fund's expense ratio. The Board found
that a positive flow of new investment money is desirable primarily
to offset the potentially adverse effects that might result from a
pattern of net redemptions. Net cash outflow increases the
likelihood that the Fund will have to dispose of portfolio
securities for other than investment purposes. Net cash inflow
minimizes the need to sell securities to meet redemptions when
investment considerations would dictate otherwise, reduces daily
liquidity requirements, and may assist in a prompt restructuring of
the portfolio without the need to dispose of present holdings.

financial institutions is a successful way of distributing shares
of a mutual fund. The Trustees concluded that without an effective
means of selling and distributing Fund shares and servicing
shareholders and providing account maintenance, the Fund may not
grow and expenses may remain higher on a per share basis that those
of competing funds. The Service Plan is designed to stimulate
sales by and services from many types of financial institutions.

The Trustees recognize that the Manager will benefit from the
implementation of the Service Plan through larger investment
advisory fees resulting from an increase in Fund assets, since its
fees are based upon a percentage of net assets of the Fund. The
Board, including each of the Independent Trustees, determined that
the Service Plan would be in the best interests of the Fund, and
that its implementation and continuation has a reasonable
likelihood of benefiting the Fund and its Class A shareholders. In
its annual review of the Service Plan, the Board will consider the
continued appropriateness of the Service Plan, including the level
of payments provided for therein.

Vote Required. Pursuant to Rule 12b-1 under the Investment Company
Act and the Service Plan, an affirmative vote of the holders of a
"majority" (as defined in the Investment Company Act) of the Fund's
Class A shares is required for approval of the Service Plan for
this class. The requirements for such "majority" vote under the
Investment Company Act are as described in Proposal No. 2. A vote
in favor of this Proposal shall be deemed a vote to approve
previous payments by the Fund under the Service Plan and to approve
the Service Plan. The Board of Trustees recommends a vote in favor
of approving this Proposal.

APPROVAL OF THE FUND'S CLASS B 12b-1 DISTRIBUTION
AND SERVICE PLAN AND AGREEMENT
(Proposal No. 4)

NOTE: This Proposal applies to Class B Shareholders only.

Class B shares were first offered to the public on June 15, 1995.
At that time, the Fund had adopted a Distribution and Service Plan
and Agreement for Class B shares pursuant to Rule 12b-1 of the
Investment Company Act (the "Class B Plan"), in conformity with the
NASD Rule which permits the Fund to pay up to 0.25% of its average
annual net assets as a service fee and up to 0.75% of its average
annual assets as an asset-based sales charge. The Manager, as the
sole initial shareholder of the Fund's Class B shares, approved the
Class B Plan. At a meeting of the Fund's Board of Trustees held
April 18, 1995, the Fund's Board of Trustees, including a majority

of the Independent Trustees, approved the Class B Plan and
determined to recommend the Class B Plan for approval by the Class
B shareholders. The Class B Plan was renewed for one year on
October 24, 1995. A copy of the Class B Plan is attached as
Exhibit D to this Proxy Statement. The Class B Plan is being
submitted to shareholders for approval at this meeting which is the
first convened shareholders meeting.

Description of the Class B Distribution and Service Plan. Under
the Class B Plan, the Fund compensates the Distributor for its
services in connection with the distribution of Class B Shares and
the personal service and maintenance of accounts that hold Class B
shares. The Fund pays the Distributor an asset-based sales charge
of 0.75% per annum and also pays the Distributor a service fee of
0.25% per annum, each of which is computed on the average annual
net assets of Class B shares of the Fund.

The Class B Plan provides for payments for two different
distribution related functions. The Distributor pays certain
brokers, dealers, banks or other persons or entities ("Recipients")
a service fee of 0.25% for personal services to Class B
shareholders and maintenance of shareholder accounts by those
Recipients. The services rendered by Recipients in connection with
personal services and the maintenance of Class B shareholder
accounts may include, but shall not be limited to, the following:
answering routine inquiries from the Recipient's customers
concerning the Fund, providing such customers with information on
their investment in shares, assisting in the establishment and
maintenance of accounts or sub-accounts in the Fund, making the
Fund's investment plans and dividend payment options available, and
providing such other information and customer liaison services and
the maintenance of accounts as the Distributor or the Fund may
reasonably request. The Distributor is permitted under the Class
B Plan to retain service fee payments to compensate it for
rendering such services.

Service fee payments by the Distributor to Recipients are made (i)
in advance for the first year Class B shares are outstanding,
following the purchase of shares, in an amount not to exceed 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 not to
exceed 0.25% of the net asset value of Class B shares held in
accounts of the Recipient or its customers. The Distributor
retains the service fee during the first year shares are
outstanding. In the event Class B shares are redeemed less than
one year after the date such shares were sold, the Recipient is

obligated to repay to the Distributor on demand a pro rata portion
of such advance service fee payments, based on the ratio of the
remaining period to one year.

The Class B Plan also provides that the Fund will pay the
Distributor on a monthly basis an asset-based sales charge at an
annual rate of 0.75% of the net asset value of Class B shares
outstanding to compensate it for other services in connection with
the distribution of the Fund's Class B shares. The distribution
assistance and administrative support services rendered by the
Distributor in connection with the sales of Class B shares may
include: (i) paying sales commissions to any broker, dealer, bank
or other person or entity that sells the Fund's Class B shares,
(ii) paying compensation to and expenses of personnel of the
Distributor who support distribution of Class B shares by
Recipients, and (iii) obtaining financing or providing such
financing from its own resources, or from an affiliate, for the
interest and other borrowing costs of the Distributor's
unreimbursed expenses incurred in rendering distribution assistance
for Class B shares, and (iv) paying certain other distribution-related
expenses. The other distribution assistance in connection
with the sale of Class B shares rendered by the Distributor and
Recipients may include, but shall not be limited to, the following:
distributing sales literature and prospectuses other than those
furnished to current Class B shareholders, 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 Distributor currently pays sales commissions from its own
resources to Recipients at the time of sale equal to 3.75% of the
purchase price of Fund shares sold by such Recipient, and advances
the first year service fee of 0.25%. The Distributor retains the
asset-based sales charge as compensation for its services described
above. Asset-based sales charge payments are designed to permit an
investor to purchase shares of the Fund without the assessment of
a front-end sales load and at the same time permit the Distributor
to compensate Recipients in connection with the sale of shares of
the Fund.

The Class B Plan contains a provision which provides that the Board
may allow the Fund to continue payments to the Distributor for
Class B shares sold prior to termination of the Class B Plan.
Pursuant to this provision, payment of the asset-based sales charge
and service fee could be continued by the Board after termination.

The Class B Plan has the effect of increasing annual expenses of
Class B shares of the Fund by up to 1.00% of the class's average
annual net assets from what those expenses would otherwise be.
Payments by the Fund to the Distributor under the Class B Plan for
the period ended September 30, 1995 were $3,267 (1.00% of the
Fund's average net assets represented by Class B shares during that
period on an annualized basis), which the Distributor retained.

If the Class B shareholders approve this Proposal, the Class B Plan
shall, unless terminated as described below, continue in effect
from year to year thereafter only so long as such continuance is
specifically approved, at least annually, by the Fund's Board of
Trustees and its Independent Trustees by a vote cast in person at
a meeting called for the purpose of voting on such continuance.
The Class B Plan may be terminated at any time by a vote of a
majority of the Independent Trustees or by a vote of the holders of
a "majority" (as defined in the Investment Company Act) of the
Fund's outstanding Class B shares. The Class B Plan may not be
amended to increase materially the amount of payments to be made
without approval by Class B shareholders. All material amendments
must be approved by a majority of the Independent Trustees.

Reports. While this Class B Plan is in effect, the Treasurer of
the Fund shall provide written reports to the Fund's Board for its
review, detailing services rendered in connection with the
distribution of the Class B shares, the amount of all payments made
and the purpose for which the payments were made. The reports
shall be provided quarterly and shall state whether all provisions
of Section 3 of the Class B Plan have been complied with.

Additional Information. The Class B Plan provides that while it is
in effect, the selection and nomination of those Trustees of the
Fund who are not "interested persons" of the Fund is committed to
the discretion of the Independent Trustees. This does not prevent
the involvement of others in such selection and nomination if the
final decision on any such selection or nomination is approved by
a majority of the Independent Trustees.

Under the Class B Plan, the Board may determine that no payment
will be made to the Distributor or any Recipient in any quarter if
the aggregate net asset value of all Fund shares held by the
Recipient for itself and its customers does not exceed a minimum
amount, if any, that may be determined from time to time by a
majority of the Independent Trustees. Initially, the Board of
Trustees has set the fee at the maximum rate and set no minimum
amount. The Class B Plan permits the Distributor and the Manager

to make additional distribution payments to Recipients from their
own resources (including profits from management fees) at no cost
to the Fund. The Distributor and the Manager may, in their sole
discretion, increase or decrease the amount of distribution
assistance payments they make to Recipients from their own assets.

Analysis of the Class B Distribution and Service Plan by the Board
of Trustees. In considering whether to recommend the Class B Plan
for approval, the Board requested and evaluated information it
deemed necessary to make an informed determination. The Board
found that there is a reasonable likelihood that the Class B Plan
benefits the Fund and its Class B shareholders by providing
financial incentives to financial intermediaries to attract new
Class B shareholders to the Fund and by assisting the efforts of
the Fund and the Distributor to service and retain existing
shareholders and attract new investors. The Class B Plan enables
the Fund to be competitive with similar funds, including funds that
impose sales charges, provide financial incentives to institutions
that direct investors to such funds, and provide shareholder
servicing and administrative services.

The Board concluded that it is likely that because the Class B Plan
provides an alternative means for investors to acquire Fund shares
without paying an initial sales charge, it will benefit Class B
shareholders of the Fund by enabling the Fund to maintain or
increase its present asset base in the face of competition from a
variety of financial products. The Trustees recognized that
payments made pursuant to the Class B Plan would likely be offset
in part by economies of scale associated with the growth of the
Fund's assets. If the Fund grows as anticipated, the Class B
shareholders should benefit as Fund assets increase to the point
where the lower investment advisory fee rate will become effective.
Costs of shareholder administration and transfer agency operations
will be spread among a larger number of shareholders as the Fund
grows larger, thereby reducing the Fund's expense ratio. The Board
found that a positive flow of new investment money is desirable
primarily to offset the potentially adverse effects that might
result from a pattern of net redemptions. Net cash outflow
increases the likelihood that the Fund will have to dispose of
portfolio securities for other than investment purposes. Net cash
inflow minimizes the need to sell securities to meet redemptions
when investment considerations would dictate otherwise, reduces
daily liquidity requirements, and may assist in a prompt
restructuring of the portfolio without the need to dispose of
present holdings.

Stimulation of distribution of mutual fund shares and providing for
shareholder services and account maintenance services by payments
to a mutual fund's distributor and to brokers, dealers, banks and
other financial institutions has become common in the mutual fund
industry. Competition among brokers and dealers for these types of
payments has intensified. The Trustees concluded that promotion,
sale and servicing of mutual fund shares and shareholders through
various brokers, dealers, banks and other financial institutions is
a successful way of distributing shares of a mutual fund. The
Trustees concluded that without an effective means of selling and
distributing Fund shares and servicing shareholders and providing
account maintenance, the Fund may not grow and expenses may remain
higher on a per share basis than those of some competing funds. By
providing an alternative means of acquiring Fund shares, the Class
B Plan proposed for shareholder approval is designed to stimulate
sales by and services from many types of financial institutions.

The Trustees recognize that the Manager will benefit from the Class
B Plan through larger investment advisory fees resulting from an
increase in Fund assets, since its fees are based upon a percentage
of net assets of the Fund. The Board, including each of the
Independent Trustees, determined that the Class B Plan is in the
best interests of the Fund, and that its continuation has a
reasonable likelihood of benefiting the Fund and its Class B
shareholders. In its annual review of the Class B Plan, the Board
will consider the continued appropriateness of the Class B Plan,
including the level of payments provided for therein.

Vote Required. Pursuant to Rule 12b-1 under the Investment Company
Act, an affirmative vote of the holders of a "majority" (as defined
in the Investment Company Act) of the Fund's Class B shares is
required for approval of the Class B Plan. The requirements for
such "majority" vote under the Investment Company Act are as
described in Proposal No. 2. A vote in favor of this Proposal
shall be deemed a vote to approve previous payments made under the
Class B Plan and to approve the Class B Plan. The Board of
Trustees recommends a vote in favor of approving this Proposal.

APPROVAL OF THE FUND'S CLASS C 12b-1 DISTRIBUTION
AND SERVICE PLAN AND AGREEMENT
(Proposal No. 5)

NOTE: This Proposal applies to Class C Shareholders only.

Class C shares were first offered to the public on June 15, 1995.

At that time, the Fund had adopted a Distribution and Service Plan
and Agreement for Class C shares pursuant to Rule 12b-1 of the
Investment Company Act (the "Class C Plan"), in conformity with the
NASD Rule which permits the Fund to pay up to 0.25% of its average
annual net assets as a service fee and up to 0.75% of its average
annual assets as an asset-based sales charge. The Manager, as the
sole initial shareholder of the Fund's Class C shares approved the
Class C Plan. At a meeting of the Fund's Board of Trustees held
April 18, 1995, the Fund's Board of Trustees, including a majority
of the Independent Trustees, approved the Class C Plan, and
determined to recommend the Class C Plan for approval by the Class
C shareholders. The Class C Plan was renewed for one year on
October 24, 1995. A copy of the Class C Plan is attached as
Exhibit E to this Proxy Statement. The Class C Plan is being
submitted to shareholders for approval at this meeting which is the
first convened shareholder meeting.

Description of the Class C Distribution and Service Plan. Under
the Class C Plan, the Fund compensates the Distributor for its
services in connection with the distribution of Class C Shares and
the personal service and maintenance of accounts that hold Class C
shares. The Fund pays the Distributor an asset-based sales charge
of 0.75% per annum and also pays the Distributor a service fee of
0.25% per annum, each of which is computed on the average annual
net assets of Class C shares of the Fund.

The Class C Plan provides for payments for two different
distribution related functions. The Distributor pays certain
brokers, dealers, banks or other persons or entities ("Recipients")
a service fee of 0.25% for personal services to Class C
shareholders and maintenance of shareholder accounts by those
Recipients. The services rendered by Recipients in connection with
personal services and the maintenance of Class C shareholder
accounts may include, but shall not be limited to, the following:
answering routine inquiries from the Recipient's customers
concerning the Fund, providing such customers with information on
their investment in shares, assisting in the establishment and
maintenance of accounts or sub-accounts in the Fund, making the
Fund's investment plans and dividend payment options available, and
providing such other information and customer liaison services and
the maintenance of accounts as the Distributor or the Fund may
reasonably request. The Distributor is permitted under the Class
C Plan to retain service fee payments to compensate it for
rendering such services.

Service fee payments by the Distributor to Recipients are made (i)
in advance for the first year Class C shares are outstanding,
following the purchase of shares, in an amount not to exceed 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 not to
exceed 0.25% of the net asset value of Class C shares held in
accounts of the Recipient or its customers. The Distributor
retains the service fee during the first year shares are
outstanding. In the event Class C shares are redeemed less than
one year after the date such shares were sold, the Recipient is
obligated to repay to the Distributor on demand a pro rata portion
of such advance service fee payments, based on the ratio of the
remaining period to one year.

The Class C Plan also provides that the Fund will pay the
Distributor on a quarterly basis an asset-based sales charge at an
annual rate of 0.75% of the net asset value of Class C shares
outstanding to compensate it for other services in connection with
the distribution of the Fund's Class C shares. The Distributor
retains the asset-based sales charge during the first year shares
are outstanding. The Distributor pays the asset-based sales charge
to the Recipient as an ongoing commission and for distribution
services rendered with respect to Class C shares that have been
outstanding for more than one year. The distribution assistance
and administrative support services rendered by the Distributor in
connection with the sales of Class C shares may include: (i) paying
sales commissions to any broker, dealer, bank or other person or
entity that sells the Fund's Class C shares, (ii) paying
compensation to and expenses of personnel of the Distributor who
support distribution of Class C shares by Recipients, and (iii)
obtaining financing or providing such financing from its own
resources, or from an affiliate, for the interest and other
borrowing costs of the Distributor's unreimbursed expenses incurred
in rendering distribution assistance for Class C shares, and (iv)
paying certain other distribution-related expenses. The other
distribution assistance in connection with the sale of Class C
shares rendered by the Distributor and Recipients may include, but
shall not be limited to, the following: distributing sales
literature and prospectuses other than those furnished to current
Class C shareholders 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 Distributor currently pays sales commissions from its own
resources to Recipients at the time of sale equal to 0.75% of the
purchase price of Fund shares sold by such Recipient, and advances
the first year service fee of 0.25%. The Distributor retains the

asset-based sales charge during the first year shares are
outstanding as compensation for its services described above.
Asset-based sales charge payments are designed to permit an
investor to purchase shares of the Fund without the assessment of
a front-end sales load and at the same time permit the Distributor
to compensate Recipients in connection with the sale of shares of
the Fund.

The Class C Plan contains a provision which provides that the Board
may allow the Fund to continue payments to the Distributor for
Class C shares sold prior to termination of the Class C Plan.
Pursuant to this provision, payment of the asset-based sales charge
and service fee could be continued by the Board after termination.

The Class C Plan has the effect of increasing annual expenses of
Class C shares of the Fund by up to 1.00% of the class's average
annual net assets from what those expenses would otherwise be.
Payments by the Fund to the Distributor under the Class C Plan for
the period ended September 30, 1995 were $282 (1.00% of the Fund's
average net assets represented by Class C shares during that period
on an annualized basis), which the Distributor retained.

If the Class C shareholders approve this Proposal, the Class C Plan
shall, unless terminated as described below, continue in effect
from year to year thereafter only so long as such continuance is
specifically approved, at least annually, by the Fund's Board of
Trustees and its Independent Trustees by a vote cast in person at
a meeting called for the purpose of voting on such continuance.
The Class C Plan may be terminated at any time by a vote of a
majority of the Independent Trustees or by a vote of the holders of
a "majority" (as defined in the Investment Company Act) of the
Fund's outstanding Class C shares. The Class C Plan may not be
amended to increase materially the amount of payments to be made
without approval by Class C shareholders. All material amendments
must be approved by a majority of the Independent Trustees.

Reports. While this Class C Plan is in effect, the Treasurer of
the Fund shall provide written reports to the Fund's Board for its
review, detailing services rendered in connection with the
distribution of the Class C shares, the amount of all payments made
and the purpose for which the payments were made. The reports
shall be provided quarterly and shall state whether all provisions
of Section 3 of the Class C Plan have been complied with.

Additional Information. The Class C Plan provides that while it is
in effect, the selection and nomination of those Trustees of the
Fund who are not "interested persons" of the Fund is committed to

the discretion of the Independent Trustees. This does not prevent
the involvement of others in such selection and nomination if the
final decision on any such selection or nomination is approved by
a majority of the Independent Trustees.

Under the Class C Plan, the Board may determine that no payment
will be made to the Distributor or any Recipient in any quarter if
the aggregate net asset value of all Fund shares held by the
Recipient for itself and its customers does not exceed a minimum
amount, if any, that may be determined from time to time by a
majority of the Independent Trustees. Initially, the Board of
Trustees has set the fee at the maximum rate and set no minimum
amount. The Class C Plan permits the Distributor and the Manager
to make additional distribution payments to Recipients from their
own resources (including profits from management fees) at no cost
to the Fund. The Distributor and the Manager may, in their sole
discretion, increase or decrease the amount of distribution
assistance payments they make to Recipients from their own assets.

Analysis of the Class C Distribution and Service Plan by the Board
of Trustees. In considering whether to recommend the Class C Plan
for approval, the Board requested and evaluated information it
deemed necessary to make an informed determination. The Board
found that there is a reasonable likelihood that the Class C Plan
benefits the Fund and its Class C shareholders by providing
financial incentives to financial intermediaries to attract new
Class C shareholders to the Fund and by assisting the efforts of
the Fund and the Distributor to service and retain existing
shareholders and attract new investors. The Class C Plan enables
the Fund to be competitive with similar funds, including funds that
impose sales charges, provide financial incentives to institutions
that direct investors to such funds, and provide shareholder
servicing and administrative services.

The Board concluded that it is likely that because the Class C Plan
provides an alternative means for investors to acquire Fund shares
without paying an initial sales charge, it will benefit Class C
shareholders of the Fund by enabling the Fund to maintain or
increase its present asset base in the face of competition from a
variety of financial products. The Trustees recognized that
payments made pursuant to the Class C Plan would likely be offset
in part by economies of scale associated with the growth of the
Fund's assets. If the Fund grows as anticipated, the Class C
shareholders should benefit as Fund assets increase to the point
where the lower investment advisory fee rate will become effective.

Costs of shareholder administration and transfer agency operations
will be spread among a larger number of shareholders as the Fund
grows larger, thereby reducing the Fund's expense ratio. The Board
found that a positive flow of new investment money is desirable
primarily to offset the potentially adverse effects that might
result from a pattern of net redemptions. Net cash outflow
increases the likelihood that the Fund will have to dispose of
portfolio securities for other than investment purposes. Net cash
inflow minimizes the need to sell securities to meet redemptions
when investment considerations would dictate otherwise, reduces
daily liquidity requirements, and may assist in a prompt
restructuring of the portfolio without the need to dispose of
present holdings.

Stimulation of distribution of mutual fund shares and providing for
shareholder services and account maintenance services by payments
to a mutual fund's distributor and to brokers, dealers, banks and
other financial institutions has become common in the mutual fund
industry. Competition among brokers and dealers for these types of
payments has intensified. The Trustees concluded that promotion,
sale and servicing of mutual fund shares and shareholders through
various brokers, dealers, banks and other financial institutions is
a successful way of distributing shares of a mutual fund. The
Trustees concluded that without an effective means of selling and
distributing Fund shares and servicing shareholders and providing
account maintenance, the Fund may not grow and expenses may remain
higher on a per share basis than those of some competing funds. By
providing an alternative means of acquiring Fund shares, the Class
C Plan proposed for shareholder approval is designed to stimulate
sales by and services from many types of financial institutions.

The Trustees recognize that the Manager will benefit from the Class
C Plan through larger investment advisory fees resulting from an
increase in Fund assets, since its fees are based upon a percentage
of net assets of the Fund. The Board, including each of the
Independent Trustees, determined that the Class C Plan is in the
best interests of the Fund, and that its implementation and
continuation has a reasonable likelihood of benefiting the Fund and
its Class C shareholders. In its annual review of the Class C
Plan, the Board will consider the continued appropriateness of the
Class C Plan, including the level of payments provided for therein.

such "majority" vote under the Investment Company Act are as
described in Proposal No. 2. A vote in favor of this Proposal
shall be deemed a vote to approve previous payments made under the
Class C Plan and to approve the Class C Plan. The Board of
Trustees recommends a vote in favor of approving this Proposal.

RECEIPT OF SHAREHOLDER PROPOSALS

The Fund is not required to hold shareholder meetings on a regular
basis. Special meetings of shareholders may be called from time to
time by either the Fund or the Shareholders (under special
conditions described in the Fund's Statement of Additional
Information). Under the proxy rules of the Securities and Exchange
Commission, shareholder proposals which meet certain conditions may
be included in the Fund's proxy statement and proxy for a
particular meeting. Those rules require that for future meetings
the shareholder must be a record or beneficial owner of Fund shares
with a value of at least $1,000 at the time the proposal is
submitted and for one year prior thereto, and must continue to own
such shares through the date on which the meeting is held. Another
requirement relates to the timely receipt by the Fund of any such
proposal. Under those rules, a proposal submitted for inclusion in
the Fund's proxy material for the next meeting after the meeting to
which this proxy statement relates must be received by the Fund a
reasonable time before the solicitation is made. The fact that the
Fund receives a proposal from a qualified shareholder in a timely
manner does not ensure its inclusion in the proxy material, since
there are other requirements under the proxy rules for such
inclusion.

OTHER BUSINESS

Management of the Fund knows of no business other than the matters
specified above that will be presented at the Meeting. Since
matters not known at the time of the solicitation may come before
the Meeting, the proxy as solicited confers discretionary authority
with respect to such matters as properly come before the Meeting,
including any adjournment or adjournments thereof, and it is the
intention of the persons named as attorneys-in-fact in the proxy to
vote the proxy in accordance with their judgment on such matters.

By Order of the Board of Trustees,

Andrew J. Donohue, Secretary
August 16, 1996