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:
[X] Preliminary Proxy Statement
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
[ ] Confidential for Use of the Commission Only (as permitted by Rule
14a-6(c)(2))
ROCHESTER FUND SERIES
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(Name of Registrant as Specified In Its Charter)
Patricia C. Foster, Esq.
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(Name of Person(s) Filing Proxy Statement)
[X] $125 per Exchange Act Rules 09-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2) or
Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14-a6(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:
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(3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11:(1)
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(4) Proposed maximum aggregate value of transaction:
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(1) Set forth the amount on which the filing fee is calculated and state how it
was determined.
[ ] 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:
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(2) Form, Schedule r Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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November 7, 1995
Dear Rochester Funds Shareholder,
A series of events has recently transpired that create a positive
opportunity for all shareholders of The Rochester Funds. Oppenheimer Management
Corporation has recently entered into agreements with the investment advisors of
The Rochester Funds to purchase certain assets relating to our business, subject
to certain conditions, such as shareholder approval.
I am very excited about the potential that these agreements hold for all
shareholders of The Rochester Funds. Upon completion of this transaction, our
shareholders will have access to more than thirty Oppenheimer funds for greater
investment flexibility and diversification. Plus, 24-hour telephone access,
expanded customer service, and a broader variety of financial programs and
services than we have previously been able to make available.
Because this transaction involves the appointment of Oppenheimer Management
Corporation as the new investment adviser, I personally want to reassure you
that both Michael Rosen and I will continue in our positions as portfolio
managers of our respective funds. In addition, we will maintain our investment
philosophy, and the team of people that administer our style in the everyday
management of the portfolios here at the new Rochester Division of Oppenheimer
Management Corporation.
For these reasons, I am pleased to present to you this joint proxy
statement for meetings of shareholders of The Rochester Funds to be held on
December 21, 1995. In addition to the first proposal that relates to the
appointment of Oppenheimer Management Corporation as the investment adviser to
each of the Rochester Funds, this proxy statement also describes several other
proposals that may affect your fund(s.) These proposals include the election of
new Trustees and new distribution plans for all funds, the ratification of
independent accountants for the Limited Term New York Municipal Fund and The
Bond Fund For Growth, and an investment policy change for The Bond Fund For
Growth that should provide greater investment flexibility.
Your fund's Trustees have evaluated these agreements and recommend a vote
FOR each of these proposals and FOR each Trustee nominated. A summary of their
evaluations is included in the joint proxy statement.
Your vote is important, no matter how many shares you own. Please vote on
the enclosed proxy card(s), sign and date them, and return them in the
postage-paid envelopes provided. To aid us in securing your vote, the Funds have
arranged to use the services of D.F. King & Co., Inc., a professional proxy
solicitation firm, to assist shareholders in the voting process.
We strongly urge you to vote promptly. As the date of the special meeting
approaches, if you have not yet voted, you may receive a telephone call from
D.F. King reminding you to exercise your right to vote. We hope their call does
not inconvenience you, and remind you that both the bother and expense of
follow-up solicitations can be avoided with your prompt vote today.
Please read the Proxy Statement carefully. If you have any questions
regarding this joint Proxy Statement, we ask that you address your comments and
concerns directly to us at 1- 800 (to be determined), here at our Rochester
Offices.
Your attention to this matter is of importance and benefit to all
shareholders. Thank you.
Sincerely,
(signature)
Ronald H. Fielding
President
Please Note: All proxy cards must be completed and mailed. If you own shares in
more than one Rochester Fund, you will find enclosed a specific proxy card for
each fund.
It is very important that you sign and return each proxy card.
Subsequent mailings indicate additional accounts either custodial or held
directly in your name. It is important that you respond to each mailing you
receive.
Preliminary Copy for the
Information of the Securities and
THE Exchange Commission; File Nos.
ROCHESTER 811-3614; 811-4576; 811-6332
FUNDS Rule 14a-6
IMPORTANT . . . SEND IN YOUR PROXY
It is requested that you date, complete and sign the enclosed
proxy card(s) and return the proxy card(s) promptly.
This will save the expense of follow-up letters or
telephone calls.
You may revoke your proxy in writing at any time before the
meeting or vote in person if you attend the meeting.
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NOTICE OF COMBINED SPECIAL MEETINGS OF SHAREHOLDERS
TO BE HELD ON DECEMBER 21, 1995
To the Shareholders of:
Rochester Fund Municipals
Rochester Portfolio Series-Limited Term New York Municipal Fund
Rochester Fund Series-The Bond Fund For Growth
Notice is hereby given that a Special Meeting of Shareholders of each of
the registered investment companies listed above will be held at the Hyatt
Regency Rochester, 125 East Main Street, Rochester, New York 14604, on December
21, 1995 at 4:30 p.m. New York time. The Meetings will be held for the following
purposes:
1. To consider and vote upon the approval of a new Investment Advisory
Agreement between the Fund and Oppenheimer Management Corporation (Each Fund);
2. To elect six Trustees (Each Fund);
3. To consider and vote upon the approval of an Amended and Restated
Distribution and/or Service Plan and Agreement with Oppenheimer Funds
Distributor, Inc. (Each Fund);
4. To ratify the selection of Price Waterhouse LLP as the Fund's
independent accountants for the 1995 fiscal year (Limited Term New York
Municipal Fund and The Bond Fund For Growth only);
5. To consider and vote upon a proposal to amend the fundamental investment
policies of The Bond Fund For Growth (The Bond Fund For Growth only); and
6. To transact such other business as may properly come before the Meetings
or any adjournment thereof.
The close of business on October 30, 1995 has been fixed as the Record Date
for the determination of shareholders entitled to notice of, and to vote at, the
Meeting.
November 7, 1995 By Order of the Board of Trustees
Rochester, New York PATRICIA C. FOSTER, SECRETARY
YOUR VOTE IS IMPORTANT
NO MATTER HOW MANY SHARES YOU OWN
Please indicate your voting instructions on the enclosed proxy card(s),
date and sign the proxy card(s), and return the proxy card(s) in the
accompanying envelope, which requires no postage. In order to avoid the
additional expense of further solicitation, we ask your cooperation in mailing
your proxy card(s) promptly.
JOINT PROXY STATEMENT
INTRODUCTION
This document is a joint proxy statement for Rochester Fund Municipals,
Limited Term New York Municipal Fund, and The Bond Fund For Growth. This joint
proxy statement is being furnished to the shareholders of the Funds in
connection with the solicitation of proxies by each Fund's respective Board for
use at the Meetings to be held on December 21, 1995 at 4:30 p.m. or any
adjournment or adjournments thereof. The Meetings will be held at the Hyatt
Regency Rochester, 125 East Main Street, Rochester, New York 14604. This joint
proxy statement and accompanying proxy card(s) will be first mailed on or about
November 7, 1995. Capitalized terms used both in the Notice of Special Meetings
of Shareholders and throughout this joint proxy statement are defined on page
__.
This joint proxy statement is being used in order to reduce the
preparation, printing and handling expenses that would result from the use of a
separate proxy statement for each Fund. Separate proxy cards will be included
for each Fund in which you are a record owner of shares. In order that your
shares may be represented at the meeting or any adjournment or adjournments
thereof, you are requested to: indicate your voting instructions on the proxy
card(s), date and sign the proxy card(s), and mail the proxy card(s) promptly in
the enclosed postage-paid envelope. You are requested to allow sufficient time
for the proxy card(s) to be received and tabulated by 4:30 p.m. or such later
time as the Meetings may start on December 21, 1995. It is important that you
promptly complete, date and sign each proxy card provided to you.
If each enclosed proxy card is properly executed and returned, the shares
represented thereby will be voted at the Meeting as indicated thereon with
respect to the proposals. In the absence of instructions, the shares represented
by each proxy will be voted in favor of the proposals listed on the proxy card.
The proxy may be revoked at any time prior to its exercise by (1) written
instructions addressed to the Secretary of the Fund at 350 Linden Oaks,
Rochester, New York 14625 (2) attendance at the Meeting and voting in person or
(3) timely execution and return of a new proxy card.
The proxy confers discretionary authority upon the persons named therein to
vote on other business, not currently contemplated, which may come before the
Meeting. In the event that a quorum for one or more Funds is not present at a
Meeting, an adjournment or adjournments of the Meeting may be sought with
respect to such Fund(s) by the persons named as proxies. In the event that a
quorum is present at a Meeting, but sufficient votes to approve any of the
proposals are not received, the persons named as proxies may propose one or more
adjournments of the Meeting to permit further solicitation of proxies. Under the
Amended and Restated Agreement and Declaration of Trust of each Fund, the
presence in person or by proxy of a majority of the shares entitled to vote will
constitute a quorum, but any lesser number of shares will be sufficient for
adjournments. A shareholder vote may be taken on any one of the proposals in
this joint proxy statement for a Fund prior to any adjournment if sufficient
votes with respect to that proposal have been received for approval.
1
Rochester Fund Municipals has one class of shares of beneficial interest
outstanding which, for purposes of this proxy statement, are referred to as
Class A Shares. The Limited Term New York Municipal Fund has two classes of
shares of beneficial interest outstanding: Class A Shares and Class B Shares.
The Bond Fund For Growth has three classes of shares of beneficial interest
outstanding: Class A Shares, Class B Shares and Class Y Shares. Shareholders of
each Fund will vote separately with respect to each matter proposed to them for
action, except that, with respect to Proposal 3, Shareholders of each class of
each Fund will vote separately.
The Boards have fixed the close of business on October 30, 1995, as the
Record Date for the determination of shareholders of the Funds entitled to
notice of and to vote at each of the Meetings. As of the Record Date there were
outstanding: ______ Class A Shares of Rochester Fund Municipals; ________ Class
A Shares and ________ Class B Shares of Limited Term New York Municipal Fund;
and ________ Class A Shares, ________ Class B Shares and ________ Class Y Shares
of The Bond Fund For Growth. Each share is entitled to one vote and any
fractional share is entitled to a fractional vote. As of the Record Date, to the
knowledge of each Fund and its Board, no single shareholder or "group" (as that
term is used in Section 13(d) of the Exchange Act), owned beneficially or of
record more than 5% of any class of outstanding shares of any Fund. As of the
Record Date, the executive officers and members of the Board of each Fund
beneficially owned less than 1% of each class of shares of that Fund. Set forth
below are the proposals on which shareholders of each Fund will vote.
Proposals
To Be Considered
----------------
Rochester Fund Municipals .................... 1, 2 and 3
Limited Term New York Municipal Fund ......... 1, 2, 3 and 4
The Bond Fund For Growth ..................... 1, 2, 3, 4 and 5
In considering this joint proxy statement, shareholders may wish to
limit their review to the discussions that concern the Fund(s) of which they are
shareholders. Shareholders should review the "Introduction," "Background
Regarding the Meetings," "Other Matters," and the proposals that relate to the
Fund(s) of which they are shareholders as indicated above. For convenience the
following is a table of contents of this joint proxy statement:
Page
----
Introduction ........................
Defined Terms .......................
Background Regarding the Meetings ...
Proposal 1 ..........................
Proposal 2 ..........................
Proposal 3 ..........................
Proposal 4 ..........................
Proposal 5 ..........................
Other Matters .......................
2
Proposals 1 and 5 require for approval the affirmative vote of a "majority
of the outstanding voting securities" of each Fund voting on the matter.
Proposal 3 requires for approval the affirmative vote of a "majority of the
outstanding voting securities" of each class voting on the matter. A "majority
of the outstanding voting securities" is defined in the 1940 Act to mean the
lesser of (i) 67% of the shares of the Fund or class, as applicable, present at
a meeting of its shareholders if the owners of more than 50% of the shares of
the Fund or class then outstanding are present in person or by proxy or (ii)
more than 50% of the outstanding shares of the Fund or class, as applicable.
Shareholders of each class of each Fund will vote separately on Proposal 3.
Proposal 2 requires for approval a plurality of all votes cast by the Fund's
shareholders at a meeting at which a quorum is present. Proposal 4 requires for
approval the affirmative vote of a majority of the votes cast by the Fund's
shareholders at a meeting at which a quorum is present. If Proposal 1 is not
approved by shareholders of each Fund, no election of Trustees will be held as
described in Proposal 2 and shareholder approval of the New Plans described in
Proposal 3 will not be sought.
If an enclosed proxy is properly executed and returned in time to be voted
at a Meeting, the shares represented thereby will be voted in accordance with
the instructions marked thereon. Unless instructions to the contrary are marked
thereon, a proxy which is properly executed and returned will be voted "for" the
matters listed in the accompanying Notice of Special Meetings of Shareholders
and "for" any other matters deemed appropriate. 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.
It is anticipated that proxy solicitations will be made primarily by mail.
Arrangements have been made with brokers and custodians, nominees and
fiduciaries to send proxy material to beneficial owners. In addition, the
current investment advisers of the Funds have retained D.F. King & Co., Inc., a
proxy solicitation firm, to assist in the solicitation of proxies and Boston
Financial Data Services, Inc. to tabulate the proxies. D.F. King & Co., Inc. may
call shareholders to ask if they would be willing to have their votes recorded
by telephone. The telephone voting procedure is designed to authenticate
shareholders' identities, to allow shareholders to authorize the voting of their
shares in accordance with their instructions and to confirm that their
instructions have been recorded properly. Shareholders voting by telephone will
be asked for their social security number or other identifying information and
will be given an opportunity to authorize proxies to vote their shares in
accordance with their instructions. To ensure that shareholders' instructions
have
3
been recorded correctly, shareholders will receive a confirmation of their
instructions in the mail. A special toll free number will be available in case
the information contained in the confirmation is incorrect. Although each
shareholder will receive a copy of this Proxy Statement and may vote by mail
using the enclosed proxy card(s), a shareholder's vote may be taken by
telephone. The costs of the proxy solicitation and expenses incurred in
connection with the preparation of this joint proxy statement and its enclosures
will be borne by Oppenheimer Management up to a maximum of $150,000. Any such
costs in excess of $150,000 will be borne by the current investment advisers of
the Funds. No costs related to this proxy solicitation or expenses incurred in
connection therewith will be borne by any of the Funds or their shareholders.
Copies of each Fund's 1994 Annual Report and 1995 Semi-Annual Report will be
furnished to shareholders, without charge, upon request to D.F. King & Co.,
Inc., 77 Water Street, New York, NY 10005. Such requests may be directed to D.
F. King & Co., Inc. at (800) 628-8528.
DEFINED TERMS
The following is a list of defined terms which you will find in the Notice
of Special Meetings of Shareholders and throughout the joint proxy statement.
Please refer to it while reading the joint proxy statement.
Term Definition
Acquisition Agreements Certain agreements among the current investment
advisers and their affiliates and Oppenheimer
Management
Board, Boards Each Fund's respective Board of Trustees, each a
Board and collectively the Boards
Bond Fund For Growth Rochester Fund Series --The Bond Fund For Growth
Brokers Brokers-Dealers
CCMT Capital Cash Management Trust
Closing The closing of the Transaction, which is
currently scheduled to occur on or about
January 3, 1996
Code Internal Revenue Code of 1986, as amended
Current Agreement, Each Fund's respective agreement with its
Current Agreements current investment adviser
Current Plan, Current Plans Each Fund's plan(s) adopted in accordance with
Rule 12b-1 of the 1940 Act as currently in
effect
Exchange Act Securities Exchange Act of 1934
4
FMC Fielding Management Company, Inc.
Fund or Funds Rochester Fund Municipals, Limited Term New York
Municipal Fund and The Bond Fund For Growth --
each a Fund and collectively, the Funds
Fundamental Policies Investment policies and limitations which can
only be changed upon approval of shareholders
Independent Trustees Those Trustees who are not "interested persons"
of the Funds as defined in the 1940 Act
Limited Term New York Rochester Portfolio Series -- Limited Term New
Municipal Fund York Municipal Fund
MassMutual Massachusetts Mutual Life Insurance Company
Meeting or Meetings Special shareholder meetings of the Funds to be
held on December 21, 1995 at 4:30 p.m. or any
adjournments thereof
NASD National Association of Securities Dealers, Inc.
New Plan, New Plans Proposed Amended and Restated Service Plan and
Agreements or Proposed Amended and Restated
Distribution and Service Plan and Agreements
with OFDI
OAC Oppenheimer Acquisition Corp.
OFDI Oppenheimer Funds Distributor, Inc.
Oppenheimer Management Oppenheimer Management Corporation
5
Proposed Agreement or Proposed new Investment Advisory Agreements
Agreements between each Fund and Oppenheimer Management
Proposal 1 Proposal to be voted upon by shareholders of
each Fund relating to the approval of the New
Agreements
Proposal 2 Proposal to be voted upon by shareholders of
each Fund relating to the election of Trustees
if Proposal 1 is approved by shareholders of
each Fund
Proposal 3 Proposal to be voted upon by each class of
shareholders of each Fund relating to approval
of the New Plans if Proposal 1 is approved
Proposal 4 Proposal to be voted upon by shareholders of
Limited Term New York Municipal Fund and The
Bond Fund For Growth relating to approval of
each Fund's independent accountants for the 1995
fiscal year
Purchased Assets Any assets purchased by Oppenheimer Management
under either Acquisition Agreement
RCA Rochester Capital Advisors, L.P.
RCAI Rochester Capital Advisors, Inc.
Recipients Broker-dealers, banks or other entities who may
receive payments under either the Current Plans
or the New Plans for rendering assistance in the
distribution of shares or for providing
administrative support with respect to shares
held by customers
Record Date October 30, 1995
Retirement Plan Retirement Plan for Independent Trustees of
Rochester Fund Municipals, as amended
RFD Rochester Fund Distributors, Inc.
6
RFS Rochester Fund Services, Inc.
RIC Regulated Investment Company under Subchapter M
of the Code
Sellers FMC, RCA, RCAI, RFD, RFS, Ronald F. Fielding and
Michael S. Rosen
SSI Shareholder Services, Inc.
The Rochester Funds Rochester Fund Municipals, Limited Term New York
Municipal Fund, The Bond Fund For Growth
Transaction Agreements entered into by Sellers with
Oppenheimer Management, pursuant to which
Oppenheimer Management has agreed to purchase
certain assets relating to the businesses of
Sellers
Trustees Members of the Boards of Trustees of the Funds
1940 Act Investment Company Act of 1940, as amended
7
BACKGROUND REGARDING THE MEETINGS
This joint proxy statement discusses proposals which are important to
shareholders of The Rochester Funds. The Sellers (including the investment
advisers of The Rochester Funds) have entered into agreements with Oppenheimer
Management, pursuant to which Oppenheimer Management has agreed to purchase
certain assets relating to the business of the Sellers. As discussed below,
shareholders of the Funds are being asked to consider proposals relating to new
arrangements in connection with the proposed Transaction, including a proposal
to approve new investment advisory agreements between each Fund and Oppenheimer
Management. Shareholder approval of the new investment advisory agreements is
required in order to consummate the Transaction. Implementation of the
Transaction will not occur unless shareholders of each Fund approve Proposal 1
which related to the new investment advisory agreements and Proposal 2 which
relates to the election of trustees. Shareholders of each class of each Fund are
also being asked to approve the New Plans as described in Proposal 3. In
addition, shareholders of The Bond Fund For Growth and the Limited Term New York
Municipal Fund are being asked to consider certain proposals applicable to those
Funds.
RCA, a registered investment adviser, which was organized as a limited
partnership under the laws of the State of New York in 1993, currently provides
investment advisory services to Rochester Fund Municipals and the Limited Term
New York Municipal Fund. FMC, a registered investment adviser which was
organized as a corporation under the laws of the State of New York in 1982, has
provided investment advisory services to mutual funds and other institutional
clients since 1982. FMC currently provides investment advisory services to The
Bond Fund For Growth. The management of FMC and RCA believe that the proposed
Transaction has the potential to offer current shareholders of The Rochester
Funds benefits which are not currently available to them, including a wide array
of investment alternatives currently offered by Oppenheimer Management and
Oppenheimer Management's considerable experience in the management of mutual
funds, which may complement the current management's expertise in the management
of certain fixed income mutual funds. In addition, as a condition of the
proposed acquisition by Oppenheimer Management, Ronald H. Fielding and Michael
S. Rosen, the current portfolio managers of the Funds, will enter into
employment agreements with Oppenheimer Management, each for a term of five
years, subject to earlier termination under specified circumstances. While the
Transaction would involve the appointment of Oppenheimer Management as the new
investment adviser to each of The Rochester Funds, it is expected that Messrs.
Fielding and Rosen would remain responsible for the day-to-day management of the
investment portfolios which they now manage and that there would be continuity
of portfolio management. In addition to the portfolio management function, it is
expected that certain other functions relating to The Rochester Funds would
remain in Rochester, New York and that these functions would be provided by the
new Rochester Division of Oppenheimer Management. Upon completion of the
Transaction, Oppenheimer Management would become the investment adviser to each
of The Rochester Funds and certain affiliates of Oppenheimer Management would
assume the functions of transfer agent and principal underwriter for each Fund.
As described in more detail in Proposal 1, shareholders of each Fund are
being asked to approve a new investment advisory agreement with Oppenheimer
Management. A favorable vote on Proposal 1 also will constitute a vote to
approve termination of the existing
8
investment advisory agreement between each Fund and its current investment
adviser, subject to the completion of the Transaction in accordance with certain
agreements among the Sellers and Oppenheimer Management. The Acquisition
Agreements are described in more detail in Proposal 1. If Proposal 1 is approved
by shareholders of each Fund, an election of trustees will be held as described
in Proposal 2 and shareholders of each class of shares of each Fund will vote
upon the approval of an Amended and Restated Distribution and/or Service Plan
and Agreement with OFDI, an affiliate of Oppenheimer Management.
Oppenheimer Management, a corporation organized under the laws of the State
of Colorado, is registered as an investment adviser under the Investment
Advisers Act of 1940. Oppenheimer Management (including a subsidiary) currently
provides investment advisory services to more than 45 registered investment
companies. Oppenheimer Management and its subsidiaries are engaged principally
in the business of managing, distributing and servicing registered investment
companies. Oppenheimer Management owns all of the outstanding stock of
Oppenheimer Funds Distributor, Inc., SSI and Shareholder Financial Services,
Inc. Oppenheimer Management is a wholly-owned subsidiary of OAC, which is
controlled by MassMutual, a mutual life insurance company located at 1295 State
Street, Springfield, MA 01111, that also advises pension plans and investment
companies. OAC acquired Oppenheimer Management on October 22, 1990. As indicated
below, the common stock of OAC is owned by (1) certain officers and/or directors
of Oppenheimer Management, (2) MassMutual and (3) another investor. No
institution or person holds 5% or more of OAC's outstanding common stock except
MassMutual. MassMutual has been engaged in the life insurance business since
1851.
The common stock of OAC is divided into three classes. At June 30, 1995
MassMutual held (1) all of the 2,160,000 shares of Class A voting stock, (2)
470,021 shares of Class B voting stock, and (3) 940,067 shares of Class C
non-voting stock. This collectively represented 81.3% of the voting power of OAC
as of that date. Certain officers and/or directors of Oppenheimer Management
held (1) 654,788 shares of the Class B voting stock, representing 14.9% of the
outstanding common stock and 10.2% of the voting power, and (2) options acquired
without cash payment which, when they become exercisable, allow the holders to
purchase up to 810,771 shares of Class C non-voting stock. That group includes
Bridget A. Macaskill, George C. Bowen, and Andrew J. Donohue who will serve as
officers of the Fund if the proposed Transaction described in the proxy
statement is consummated. Ms. Macaskill is also a nominee to the Board of each
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 Oppenheimer Management). 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, according to a schedule that commenced
on September 30, 1995. During the period from November 1, 1994 to June 30, 1995,
Ms. Macaskill surrendered to OAC 20,000 stock appreciation rights issued in
tandem with the Class B OAC options, for cash payments aggregating $1,375,800
(subject to adjustment of the formula price) by OAC or MassMutual to be made as
follows: one-third of the amount due (1) within 30 days of the transaction, (2)
by the first anniversary following the transaction (with interest), and (3) by
the second anniversary following the transaction (with interest).
The principal executive officers and directors of Oppenheimer Management
are as follows: Jon S. Fossel, Chairman of the Board and a Director; Bridget A.
Macaskill, President,
9
Chief Executive Officer, Chief Operating Officer and a Director; Donald W.
Spiro, Chairman Emeritus and a Director; Robert G. Galli, Vice Chairman; James
C. Swain, Vice Chairman of the Board and a Director; Robert C. Doll, O. Leonard
Darling and James Ruff, Executive Vice Presidents; Tilghman G. Pitts III,
Executive Vice President and Director, Andrew J. Donohue, Executive Vice
President and General Counsel; Kenneth C. Eich, Executive Vice President and
Chief Financial Officer; George C. Bowen, Senior Vice President and Treasurer;
Victor Babin, Robert A. Densen, Loretta McCarthy, Robert Patterson, Richard
Rubenstein, Nancy Sperte, Arthur Steinmetz, Ralph Stellmacher, William L. Wilby
and Robert G. Zack, Senior Vice Presidents; Barbara Hennigar, President and
Chief Executive Officer of Oppenheimer Shareholder Services, a Division of
Oppenheimer Management. The business location of all such persons is Two World
Trade Center, New York, NY, except for the following individuals who are located
at Oppenheimer Management's office at 3410 S. Galena Street, Denver, CO 80231:
Messrs. Bowen and Eich and Ms. Hennigar.
10
PROPOSAL 1. APPROVAL OF THE NEW INVESTMENT ADVISORY AGREEMENT BETWEEN EACH
FUND AND OPPENHEIMER MANAGEMENT
Summary of the Proposed Transaction
On September 9, 1995, RCA, which provides investment advisory services to
Rochester Fund Municipals and the Limited Term New York Municipal Fund, RCAI,
and Messrs. Fielding and Rosen entered into an agreement with Oppenheimer
Management which contemplates the sale to Oppenheimer Management of certain
assets relating to the business of RCA and the assumption of certain liabilities
by Oppenheimer Management. In addition, on September 9, 1995, FMC, which
provides investment advisory services to The Bond Fund For Growth and other
clients, RFD, RFS, and Messrs. Fielding and Rosen entered into an agreement with
Oppenheimer Management which contemplates the sale to Oppenheimer Management of
certain assets relating to the respective businesses of FMC, RFD, and RFS and
the assumption by Oppenheimer Management of certain liabilities of FMC, RFD and
RFS. Approval of this Proposal 1 by shareholders of each Fund is a condition to
the consummation of the Transaction contemplated by these Acquisition
Agreements.
Under the terms of the Acquisition Agreements, Oppenheimer Management has
agreed to make payments to the various Sellers in consideration for the
Purchased Assets as follows. Oppenheimer Management will pay Sellers $70 million
in cash at the Closing and will cause OAC to issue to Messrs. Fielding and Rosen
subsequent to Closing the number of shares of its Class B Common Stock having an
approximate aggregate value as of the date of issuance of $11,303,000. These
payments are subject to downward adjustment if total net assets of The Rochester
Funds are less than $2.2 billion as of the date of Closing. As additional
contingent consideration after the Closing, Oppenheimer Management will cause
OAC to grant Sellers rights to receive additional cash payments equal to the
value on March 31, 2001 of the number of shares of OAC Class C Common Stock
which could have been purchased on January 1, 1996 for a consideration of up to
$20 million, provided that actual average management fees for 1997, 1998 and
1999 derived by Oppenheimer Management from mutual funds managed by Messrs.
Fielding and Rosen meet or exceed certain targets. As further contingent cash
consideration after the Closing, Oppenheimer Management has agreed to pay to
Sellers a cash payment which is equivalent to three times the increase in the
average management fee received by Oppenheimer Management from the mutual funds
managed by Messrs. Fielding and Rosen for 1997, 1998 and 1999 over a base
management fee average. The additional contingent consideration which is payable
after the Closing is subject to forfeiture or proration if the employment by
Oppenheimer Management of Mr. Fielding or Mr. Rosen terminates for certain
reasons.
Seventy percent of the outstanding capital stock of RCAI is owned by Mr.
Fielding, the President and a trustee of each of The Rochester Funds. The
balance of the outstanding capital stock of RCAI is owned by Mr. Rosen, the Vice
President and a trustee of each of The Rochester Funds. RCAI owns a one percent
interest in RCA. Messrs. Fielding and Rosen own 54.3% and 22.3%, respectively,
of RCA. The remainder of the interests in RCA are owned by trusts of which the
minor children of Messrs. Fielding and Rosen are beneficiaries. Mr. Fielding
owns 70% of the outstanding capital stock of both FMC and RFS. Mr. Fielding and
members of his family own 70% of the outstanding capital stock of RFD. The
balance of the
11
outstanding capital stock of FMC, RFS and RFD is owned by Mr. Rosen. As a result
their equity ownership of the various Sellers, Mr. Fielding's interest in the
Transaction is $________ plus his share of any contingent consideration and Mr.
Rosen's interest in the Transaction is $________ plus his share of any
contingent consideration.
As contemplated by the Acquisition Agreements, Messrs. Fielding and Rosen
will enter into employment agreements with Oppenheimer Management, subject to
and contemporaneously with the Closing providing, among other things, for an
employment period of five years at an annual salary of $200,000 plus bonuses
based upon certain performance criteria. In addition, Messrs. Fielding and Rosen
will enter into non-competition agreements with Oppenheimer Management which
provide that for a period of 15 years subsequent to the Closing they will not,
without the prior written approval of Oppenheimer Management, engage in certain
business activities in the continental United States. However, upon the
termination of their employment by Oppenheimer Management at the end of the term
of employment as defined in the non-competition agreements, Messrs. Fielding and
Rosen will be permitted to engage in certain investment advisory activities as
specified therein. The Transaction is expected to be completed on or about
January 3, 1996. The Closing of the Transaction is subject to certain conditions
(which may be waived or modified by the parties). Those conditions include among
other things, the following actions by the shareholders of each of the Rochester
Funds: (a) approval of new investment advisory agreements for each Rochester
Fund; (b) approval of new distribution plans for each class of each Rochester
Fund; and (c) election of the successor Trustees. In addition, various
agreements with Oppenheimer Management and/or its affiliates are to have been
approved by the Boards of each of the Rochester Funds. Upon completion of the
Transaction, Oppenheimer Management will become the investment adviser to each
of The Rochester Funds and affiliates of Oppenheimer Management, OFDI and SSI,
will become principal underwriter and transfer agent, respectively, for each of
The Rochester Funds. In addition, the portfolio management function and certain
other functions relating to The Rochester Funds would remain in Rochester, New
York and the persons presently performing some of these functions are expected
to become employees of the newly formed Rochester Division of Oppenheimer
Management.
Factors Considered by the Boards of Trustees
In Approving the Investment Advisory Agreements
On April 26, 1995, the Boards of The Rochester Funds were advised that
management of each Fund's respective investment adviser was engaged in
discussions relating to the possible sale of the assets of RCA, FMC and the
affiliated corporations which currently serve as principal underwriter and
shareholder services agent for the Funds. At a series of meetings of the
Independent Trustees of the Funds and the Boards of the Funds, including the
Independent Trustees, held in July, August, September and October of 1995, the
Trustees considered the proposed Transaction and the implications of the
Transaction for each Fund and its shareholders. A majority of the Independent
Trustees participated in all of the meetings in person. In addition, the
Independent Trustees met separately in connection with this matter on at least
three occasions with legal counsel who regularly represents the Independent
Trustees.
12
In connection with their consideration of the Proposed Agreements with
Oppenheimer Management, the Boards, including the Independent Trustees,
conducted an extensive due diligence investigation with respect to the proposed
Transaction. Their due diligence activities included, with the assistance of
legal counsel, a request for and review of detailed information which they
considered necessary to evaluate the Proposed Agreements and the new
arrangements contemplated by the Proposed Agreements.
The Trustees considered, among other factors, the historical results of the
Funds' advisory relationships with their respective investment advisers, the
services provided to the Funds under the Current Agreements and the structure of
the proposed Transaction. They considered the fact that although, upon
completion of the Transaction, many of the functions now conducted by RCA and
FMC and their affiliates would be consolidated with existing operations of
Oppenheimer Management, certain aspects of "The Rochester Funds" identity would
be maintained through the continuation of certain operations in Rochester, New
York as a division of Oppenheimer Management.
In addition, the Trustees considered what impact the proposed transaction
is expected to have on shareholders of the Funds, including the fact that, after
the consummation of the Transaction, no change is anticipated in the personnel
managing the portfolios of the Funds on a day-to-day basis and that there would
be continuity of the portfolio management function. It was noted that Messrs.
Fielding and Rosen, President and Vice-President, respectively, of both FMC and
RCAI, will under the terms of the Acquisition Agreements enter into employment
agreements with Oppenheimer Management for a period of five years. They also
will continue to be subject to non-competition agreements for a period of 15
years subsequent to the completion of the Transaction and, thus, would be
precluded from engaging in professional pursuits which would be competitive with
and, thus, might be disadvantageous to the Funds for such period of time.
The Trustees were provided with information relating to the prior
investment performance of each Fund. It was noted that, in the opinion of the
Trustees, performance of each Fund had been commendable in both short-term and
long-term periods, especially in relation to each Fund's peer group. In this
regard the Trustees noted that a continuation of the existing portfolio
management team and the continuity of portfolio management philosophy
contemplated by the Transaction should be beneficial to shareholders of each of
the Funds.
The Trustees considered the fact that the advisory fee schedules would
remain the same under the Proposed Agreements as under the Current Agreements
and that the terms of the Proposed Agreements do not differ materially from
those of the Current Agreements. They focused on the costs associated with the
Transaction and the representations of the parties to the Transaction that the
Funds and their shareholders would not bear such costs. In addition, the
Trustees also considered the fact that Oppenheimer Management and its affiliates
with whom each Fund would enter into a contractual relationship have agreed that
for a period of three years following the completion of the Transaction, the fee
schedules under such agreements would not be increased from the fee schedules
under existing agreements. The Trustees also considered the fact that although
the terms of certain of the Funds' distribution plans adopted in accordance with
Rules 12b-1 under the 1940 Act permit the utilization of Fund assets in amounts
which exceed limitations which have been
13
established by the Board, Oppenheimer Management [and its affiliate, OFDI] have
agreed that it will not seek to increase the limits which have been established
by the Board for a period of two years following the Closing.
The Trustees considered various additional factors relevant to the
situation, including the nature of the anticipated benefits to be derived from
the proposed Transaction. The Trustees considered the fact that, in their
opinion, Oppenheimer Management is a relatively large, well-established firm
with substantial resources and stature in the financial services industry. The
Trustees also took into consideration the fact that Oppenheimer Management's
considerable experience in the management of fixed income and equity mutual
funds may complement the current advisers' traditional focus on the management
of fixed income mutual funds and that the Transaction would permit existing
shareholders of The Rochester Funds to access a more diversified mutual fund
product line within the Oppenheimer Funds. They considered the fact that
shareholders of The Rochester Funds would be able to exchange their shares for
shares of 35 additional funds at relative net asset values and without paying
any front-end sales load. In this regard the Trustees acknowledged the fact that
operations systems currently in place may preclude shareholders who avail
themselves of this exchange privilege from subsequently exchanging their shares
of an Oppenheimer Management fund for shares of one of The Rochester Funds. In
addition, the Trustees discussed the fact that the combination may enhance the
Funds' distribution efforts by providing them with a larger and more diverse
sales force, as well as through access to distribution channels different from
those currently available to The Rochester Funds. They concluded that the
potential for enhancement with respect to both shareholder servicing and
distribution capabilities of the larger organization would assist The Rochester
Funds in maintaining their competitive position the mutual fund industry in the
future. The Trustees also considered Oppenheimer Management's reputation,
integrity and stability.
In the course of their review of the proposed Transaction, the Boards,
including the Independent Trustees, had opportunities to meet with senior
management of Oppenheimer Management. The Boards were advised by Oppenheimer
Management that it has no present intention to recommend changes in the
investment objectives and policies of The Rochester Funds. The Boards also
considered the fact that, after discussions with senior management of
Oppenheimer Management, they were satisfied that there would be a degree
continuity of experience offered by each Fund's current Trustees which would
result from the renomination of one Independent Trustee and the appointment of a
second Independent Trustee as a consultant as described in Proposal 2. In
connection with all aspects of their review, the Independent Trustees were
represented by legal counsel.
After considering these and other factors, each Board, including in each
instance the Independent Trustees, determined that the terms of the Proposed
Agreement are reasonable, fair and in the best interests of each Fund and its
shareholders, and that the fees payable thereunder are fair and reasonable in
light of the usual and customary charges made by others for services of the same
nature and quality. Accordingly, each Board concluded that the appointment of
Oppenheimer Management to serve as investment adviser to each Fund is desirable
and in the best interests of each Fund and its shareholders. Each Board approved
the submission of the Proposed Agreements to shareholders of the Funds in light
of the proposed Transaction with Oppenheimer Management and recommend approval
of the Proposed Agreements, subject to the completion of the Transaction. A
favorable vote on
14
Proposal 1 also will constitute a vote to approve termination of each of the
Current Agreements between each Fund and its current investment adviser, subject
to the completion of the Transaction in accordance with the Acquisition
Agreements. If shareholder approval is obtained for this Proposal 1, the Current
Agreements will remain in effect until the Closing of the Transaction and the
effectiveness of the Proposed Agreements will occur simultaneously with the
Closing. If Proposal 1 is approved by shareholders of each Fund, an election of
trustees will be held as described in Proposal 2.
The Proposed New Investment Advisory Agreements
If approved by the shareholders of the Funds, the Proposed Investment
Advisory Agreements will become effective at the Closing, which is anticipated
to be held on or about January 3, 1996. The following summary of the terms of
each Proposed Agreement is qualified in its entirety by reference to the form of
such agreements which is attached to this proxy statement as Exhibit A, together
with the fee schedule for each of the Proposed Agreements. Each of the proposed
agreements is identical in all material respects except that the fee schedule
for each is different. Attached to the Proxy Statement as Exhibit B is a list of
other funds managed by Oppenheimer Management that have similar investment
objectives to those of the Funds, their net assets and the rate of the advisory
fees paid to Oppenheimer Management.
Services To Be Performed
Under each Proposed Agreement, Oppenheimer Management will act as the
investment adviser for the Fund and will supervise the investment program of the
Fund. Each Proposed Agreement provides that Oppenheimer Management will provide
administrative services for the Fund including the completion and maintenance of
records, preparation and filing of reports required by the Securities and
Exchange Commission, reports to shareholders and composition of proxy statements
and registration statements required by Federal and state securities laws.
Oppenheimer Management will furnish the Funds with office space, facilities and
equipment, and at its own expense, provide such offices for the Fund as the
Board may request. The administrative services to be provided by Oppenheimer
Management under each Proposed Agreement will be at its own expense.
Expenses not assumed by Oppenheimer Management under each Proposed
Agreement or paid by Oppenheimer Funds Distributor, Inc. will be paid by the
Fund, including interest, taxes, brokerage commissions, insurance premiums,
compensation, expenses and fees of non-interested Trustees, legal and audit
expenses, transfer agent and custodian fees and expenses, registration fees,
expenses of printing and mailing reports and proxy statements to shareholders,
expenses of shareholder meetings and non-recurring expenses including
litigation. Each Proposed Agreement contains no expense limitation.
Independently of the Proposed Agreement, Oppenheimer Management has agreed not
to seek an in increase any fee schedules under the Proposed Agreements for a
period of three years following the Closing. On the Record Date, the net assets
of each of the Funds were as follows: Rochester Fund Municipals $_______;
Limited Term New York Municipal Fund $_______; and The Bond Fund For Growth
$________.
15
Although each Proposed Agreement provides that Oppenheimer Management may
enter into subadvisory agreements with other affiliated or unaffiliated
registered investment advisers in order to obtain specialized services for the
Funds provided that the Funds are not required to pay any additional fees for
such services, there is no current intention to do so. Both the Current
Agreement between RCA and Rochester Fund Municipals and the Current Agreement
between RCA and Limited Term New York Municipal Fund permit RCA to delegate any
of the investment advisory services to be provided thereunder to other
affiliated or unaffiliated registered investment advisors, subject to Board
approval and such other approvals as may be required under the 1940 Act and,
provided that the Funds are not required to pay any additional fees for such
services. The Current Agreement between FMC and The Bond Fund For Growth does
not contain a similar provision.
Limitation of Liability
The Proposed Agreements provide that in the absence of willful misfeasance,
bad faith or gross negligence in the performance of its duties or reckless
disregard for its obligations and duties thereunder, Oppenheimer Management will
not be liable for any loss sustained by reason of good faith errors or omissions
in connection with any matters to which the Proposed Agreements relate. The
existing Current Agreements contain a similar provision.
Termination
The Proposed Agreements may be terminated by Oppenheimer Management or
by a Fund at any time without penalty upon 60 days' written notice to the other
party. Termination by a Fund must be approved by the vote of a majority of the
Trustees or by a vote of a majority of the outstanding shares of a Fund. The
Proposed Agreements will terminate in the event of an "assignment," as required
by the 1940 Act. The Current Agreements contain a similar provision.
Portfolio Transactions and Brokerage
The Proposed Agreements contain provisions relating to the selection of
brokers for the Funds' portfolio transactions. Oppenheimer Management and its
subadvisor, if any, may use such brokers as may, in their best judgment based on
all relevant factors, implement the policy of the Funds to achieve best
execution of portfolio transactions. While Oppenheimer Management need not seek
advance competitive bidding or base its selection on posted rates, it is
expected to be aware of the current rates of most eligible brokers and to
minimize the commissions paid to the extent consistent with the interests and
policies of the Funds as established by their respective Boards and the
provisions of the Proposed Agreement. The Current Agreements contain similar
provisions. The Current Agreement between The Bond Fund For Growth and FMC does
not contemplate the utilization of a subadvisor.
The Proposed Agreements also provide that, consistent with obtaining
the best execution of the Fund's portfolio transactions, Oppenheimer Management
and any subadvisor, in the interest of the Funds, may select brokers other than
affiliated brokers, because they provide brokerage and/or research services to
the Funds and/or other accounts of Oppenheimer Management or any subadvisor. The
commissions paid to such brokers may be higher than another qualified broker
would have charged if a good faith determination is made by Oppenheimer
Management or any subadvisor that the commissions are reasonable in relation to
the services provided, viewed either in terms of that transaction or Oppenheimer
Management's or any subadvisor's overall responsibilities to all its accounts.
No specific dollar value need be put on the services, some of which may or may
not be used by Oppenheimer Management or any subadvisor for the benefit of the
Funds or other of its advisory clients. To show that the determinations were
made in good faith Oppenheimer
16
Management or any subadvisor must be prepared to show that the amount of such
commissions paid over a representative period selected by the Board was
reasonable in relation to the benefits to the Fund. The Proposed Agreements
recognize that an affiliated broker-dealer may act as one of the regular brokers
for the Funds provided that any commissions paid to such broker are paid in
accordance with procedures adopted by the Board under applicable rules of the
Securities and Exchange Commission.
The Current Investment Advisory Agreements
Rochester Fund Municipals
RCA, 350 Linden Oaks, Rochester, NY 14625, currently provides investment
advisory services to Rochester Fund Municipals pursuant to a Current Agreement
dated May 1, 1994, as amended on May 1, 1995. The Current Agreement initially
was approved by a majority of the Board, including the Independent Trustees, on
April 19, 1994. The Current Agreement also was approved by shareholders of the
Fund on that day in connection with a proposal to appoint RCA as investment
adviser to the Fund. Prior to May 1, 1994, FMC, an affiliate of RCA, served as
investment adviser to the Fund. On April 25, 1995, shareholders of the Fund
approved an amendment to the Current Agreement which involved only a change in
the schedule of fees payable thereunder. That amended Current Agreement most
recently was approved by a majority of the Board, including a majority of the
Independent Trustees, on April 12, 1995. Under the Current Agreement, RCA
furnishes investment advisory services, certain administrative services and
adequate office facilities. In return, the Fund pays RCA an annual fee, computed
and payable monthly as a percentage of the Fund's average daily net assets as
follows: 0.54% on assets from $0 to $100 million, 0.52% on assets from $100
million to $250 million, 0.47% on assets from $250 million to $2 billion, 0.46%
on assets from $2 billion to $5 billion and 0.45% on assets in excess of $5
billion. For the eight month period from May 1, 1994 through December 31, 1994,
RCA received fees of $5,010,516 for investment advisory services pursuant to the
Current Agreement. FMC, the Fund's previous investment adviser, received fees of
$2,552,432 for investment advisory services performed from January 1, 1994
through April 30, 1994. For the year ended December 31, 1994, the Fund paid fees
of $1,709,156 to RFS, its shareholder services agent, for accounting,
administration and recordkeeping services. The Fund also paid fees as permitted
by its Distribution Plan adopted under Rule 12b-1 to RFD, its principal
underwriter, of $3,150,402, from which RFD made service fee payments to
broker-dealers and financial institutions of $1,609,589.
Limited Term New York Municipal Fund
RCA also provides investment advisory services to the Limited Term New York
Municipal Fund pursuant to a Current Agreement dated December 20, 1993. The
Current Agreement initially was approved by a majority of the Board, including a
majority of the Independent Trustees, on July 22, 1993 and was most recently
approved by a majority of the Board, including a majority of the Independent
Trustees, on April 12, 1995. Under the Current Agreement, RCA furnishes
investment advisory services, certain administrative services and adequate
office facilities. In return, the Fund pays RCA an annual fee, computed
17
and payable monthly as a percentage of the Fund's average daily net assets as
follows: 0.50% on assets from $0 to $100 million, 0.45% on assets from $100
million to $250 million, 0.40% on assets from $250 million to $2 billion and
0.39% on assets in excess of $2 billion. RCA received fees of $2,154,234 for
investment advisory services provided to the Fund during the fiscal year ended
December 31, 1994. During fiscal 1994, the Fund paid fees of $406,122 to RFS,
its shareholder services agent, for accounting, administration and recordkeeping
services. The Fund also paid fees as permitted by its Distribution Plan adopted
under Rule 12b-1 to RFD, its principal underwriter, of $1,237,020, from which
RFD made service fee payments to broker-dealers and financial institutions of
$1,221,579.
The Bond Fund For Growth
FMC, 350 Linden Oaks, Rochester, NY, provides investment advisory services
to The Bond Fund For Growth pursuant to a Current Agreement dated April 10,
1986. The Current Agreement initially was approved by a majority of the Board,
including a majority of the Independent Trustees, on January 23, 1986, and was
most recently approved by a majority of the Board, including a majority of the
Independent Trustees, on April 12, 1995. Under the Current Agreement, FMC
furnishes investment advisory services, certain administrative services and
adequate office facilities. In return, the Fund pays FMC an annual fee, computed
and payable monthly as a percentage of the Fund's average daily net assets as
follows: 0.625% on assets from $0 to $50 million, 0.500% on assets from $50
million to $300 million and 0.4375% on assets in excess of $300 million. FMC
received fees of $596,082 for investment advisory services provided to the Fund
during the fiscal year ended December 31, 1994. During fiscal 1994, the Fund
paid fees of $165,127 to RFS, its shareholder services agent, for accounting,
administration and recordkeeping services. The Fund also paid fees as permitted
by its Distribution Plan adopted under Rule 12b-1 to RFD, its principal
underwriter of $794,543, from which RFD made service fee payments to
broker-dealers and financial institutions of $509,750.
Terms of the Current Agreements
Each of the Current Agreements states that each Fund will bear the cost of
salaries and expenses of any officers or employees of the Funds who are not
affiliated with the investment adviser and that the Funds will bear expenses
(other than those expenses expressly assumed by the investment adviser),
including, but not limited to: (1) taxes and governmental fees; (2) brokerage
commissions and other expenses incurred in acquiring or disposing of portfolio
securities; (3) the expenses of registering and qualifying its shares with the
Securities and Exchange Commission and with various state securities
commissions; (4) its accounting and legal costs (5) its insurance premiums; (6)
fees and expenses of its custodian and transfer agent and any related services;
(7) expenses of preparation and distribution to existing shareholders of
reports, proxies and prospectuses; (8) expenses of shareholder meetings; (9) the
fees and expenses (including legal fees and disbursements) of the Funds'
Trustees who are not officers or employees of the investment adviser that are
not otherwise deemed to be "interested persons" within the meaning of the 1940
Act; (10) expenses of obtaining quotations on each Fund's portfolio securities
and pricing of each Fund's shares; and (11) interest expenses.
The Current Agreements provide that the investment adviser shall not be
liable for any
18
act or omission arising out of any services rendered thereunder, except by
reason of willful misfeasance, bad faith or gross negligence in performance of
the investment adviser's duties or by reason of reckless disregard of the
investment adviser's obligations and duties thereunder. Each of the Current
Agreements will continue for successive periods of twelve months, provided that
each such continuance is specifically approved annually by (i) the vote of a
majority of the Independent Trustees, cast in person at a meeting called for the
purpose of voting on such approval and (ii) either (a) by the vote of a majority
of the outstanding voting securities of that Fund (as defined in the 1940 Act)
or by the vote of a majority of that Fund's entire Board. The Current Agreements
may be terminated at any time without payment of any penalty by each Fund or by
the investment adviser, on sixty (60) days' written notice to the other party.
Each of the Current Agreements provides that it shall automatically terminate in
the event of its assignment.
Vote Required
As provided under the 1940 Act, approval of a Proposed Agreement will
require the vote of a majority of the outstanding shares of each Fund voting
separately with respect to its Proposed Agreement. Under the 1940 Act, the vote
of a "majority of the outstanding voting securities" of an investment company
(or a series thereof) means the vote, at a duly-called annual or special meeting
of shareholders, of 67% or more of the shares present at such meeting, if the
holders of more than 50% of the outstanding shares of such company or series are
present or represented by proxy, or of more than 50% of the total outstanding
shares of such company or series, whichever is less.
THE BOARD OF TRUSTEES OF EACH FUND, INCLUDING THE TRUSTEES WHO ARE NOT
INTERESTED PERSONS OF EACH FUND, UNANIMOUSLY RECOMMEND THAT THE SHAREHOLDERS OF
EACH FUND VOTE TO APPROVE THE PROPOSED AGREEMENT WITH OPPENHEIMER MANAGEMENT.
19
PROPOSAL 2. ELECTION OF TRUSTEES
If Proposal 1 is approved by shareholders of each Fund, proxies not
indicating a contrary intention will be voted in favor of the election of the
six persons named below as Trustees, to hold office for an indefinite period and
until their successors are elected and qualified.
Each Board is recommending the election of one Trustee, John Cannon, who
is currently a Trustee of the Funds and is not an "interested person" of
Oppenheimer Management, RFD or RCA, four Trustees who are not currently Trustees
of the Funds and are not "interested persons" of Oppenheimer Management, RFD, or
RCA, and one Trustee, Bridget A. Macaskill, who is an "interested person" of
Oppenheimer Management but not of RFD or RCA. The following individuals who
currently serve as Trustees of each Fund are not standing for re-election and,
upon Closing, will resign if their successors have been elected as proposed:
Robert E. Brown, Elton J. Burgett, Joseph A. Burnett, Angelo A. Constanza,
Ronald H. Fielding, Dr. Marvin Hoffman, Michael S. Rosen and Eric W. Zaenglein.
Mr. Zaenglein, who is not an "interested person" of Oppenheimer Management, RCA
or FMC, will be appointed as a consultant to each Fund's Board for a period of
at least two years following the Closing at an annual aggregate salary of
$15,600 plus expenses incurred in connection with his attendance at Board
meetings.
Each nominee has consented to being named as a nominee in the Proxy
Statement. Should any nominee become unable or unwilling to serve, the persons
appointed as proxies shall vote for the election of such other person or persons
as the Boards shall recommend. The Boards have no reason to believe that any
person nominated will be unable or unwilling to serve if elected to office.
The following table shows the nominees who are standing for election and
their principal occupation which, unless specific dates are shown, are of more
than five years duration, although the titles held may not have been the same
throughout. The table also shows how long the nominee has served on the Boards
of the Funds; if no date is shown, the nominee is standing for election for the
first time at this Meeting.
20
Trustee
Name, Age and Address Since Principal Occupation During Past 5 Years
- ---------------------------------- -------- ----------------------------------------------------------
John Cannon ........................... 1992 President, AMA Investment Advisers, Inc., a mutual
Age: 65 fund investment adviser, 1976-1991; Senior Vice
620 Sentry Parkway West Suite 220 President AMA Investment Advisers, Inc., 1991-1993;
Blue Bell, PA 19422 President of AMA Family of Funds, 1976-1991; Chairman
and Treasurer, CDC Associates, Inc., registered investment
adviser, 1993-present; Director, Neuberger & Berman Income
Managers Trust, Neuberger & Berman Income Funds and
Neuberger & Berman Income Trust, 1995-present.
Paul Y. Clinton ....................... Director, External Affairs, Kravco Corporation, a
Age: 64 national real estate owner and property management
946 Morris Avenue corporation; formerly President of Essex Management
Bryn Mawr, PA 19010 Corporation, a management consulting company; Trustee
of Capital Cash Management Trust, Prime Cash Fund and
Short Term Asset Reserves, each of which is a
money-market fund; Director of Quest for Value Fund,
Inc., Quest for Value Global Equity Fund, Inc., Quest
for Value Global Funds, Inc., and Quest Cash Reserves,
Inc., Trustee of Quest for Value Accumulation Trust, all
of which are open-end investment companies. Formerly a
general partner of Capital Growth Fund, a venture
capital partnership; formerly a general partner of Essex
Limited Partnership, an investment partnership; formerly
President of Geneve Corp., a venture capital fund;
formerly Chairman of Woodland Capital Corp., a small
business investment company; formerly Vice President of
W.R. Grace & Co.
21
Trustee
Name, Age and Address Since Principal Occupation During Past 5 Years
- ---------------------------------- -------- ----------------------------------------------------------
Thomas W. Courtney, C.F.A. ............ Principal of Courtney Associates, Inc., a venture
Age: 61 capital firm; former General Partner of Trivest
P.O. Box 580 Venture Fund, a private venture capital fund; former
Sewickley, PA 15143 President of Investment Counseling Federated
Investors, Inc.; Trustee of Cash Assets Trust, a money
market fund; Director of Quest Cash Reserves, Inc.,
Quest for Value Fund, Inc., Quest for Value Global
Equity Fund, Inc., and Quest for Global Value Funds,
Inc., Trustee of Quest for Value Accumulation Trust, all
of which are open-end investment companies; former
President of Boston Company Institutional Investors;
Trustee of Hawaiian Tax-Free Trust and Tax Free Trust of
Arizona, tax-exempt bond funds; Director of several
privately owned corporations; former Director of
Financial Analysts Federation.
22
Trustee
Name, Age and Address Since Principal Occupation During Past 5 Years
- ---------------------------------- -------- ----------------------------------------------------------
Lacy B. Herrman ....................... President and Chairman of the Board of Aquila
Age: 66 Management Corporation (since 1984) and of Incap
380 Madison Avenue Management Corporation (since 1982), the sponsoring
Suite 2300 organizations and Administrator and/or Sub-Advisor to
New York, NY 10017 the following open-end investment companies, and
Chairman of the Board of Trustees and President of each:
Churchill Cash Reserves Trust (since 1985), Short Term
Asset Reserves (since 1984), Cash Assets Trust (since
1984), U.S. Treasuries Cash Assets Trust (since 1988),
Tax-Free Cash Assets Trust (since 1988), Prime Cash Fund
(since 1982), Oxford Cash Management Fund (1982-1988)
and Trinity Liquid Assets Trust (1982-1985), each of
which is a money market fund, and of Churchill Tax-Free
Fund of Kentucky (since 1986), Tax-Free Fund of Colorado
(since 1986), Tax-Free Trust of Oregon (since 1985),
Tax-Free Fund of Arizona (since 1985), and Hawaiian
Tax-Free Trust (since 1984), each of which is a tax-free
municipal bond fund; Vice President, Director,
Secretary, and formerly Treasurer of Aquila
Distributors, Inc. (since 1981), distributor of most of
the above funds; President and Chairman of the Board of
Trustees of CCMT, a money market fund (since 1981) and
an Officer and Trustee/Director of its predecessors
(since 1974); President and Director of STCM Management
Company, Inc., sponsor and sub-advisor to CCMT; General
Partner of Tamarack Associates (1966-1984), a private
investment partnership, and Chairman of the Board and
President of various of its subsidiaries through 1986.
Director of Quest Cash Reserve, Inc., Quest for Value
Fund, Inc., Quest for Value Global Equity Fund, Inc. and
Quest for Value Global Funds, Inc., Trustee of Quest for
Value Accumulation Trust and The Saratoga Advantage
Trust, each of which is an open-end investment company.
23
Trustee
Name, Age and Address Since Principal Occupation During Past 5 Years
- ---------------------------------- -------- ----------------------------------------------------------
George Loft ........................... Private Investor; Director of Quest Cash Reserves, Inc.,
Age: 80 Quest for Value Fund, Inc., Quest for Value
51 Herrick Road Global Equity Fund., Inc., and Quest for Value Global
Sharon, CT 06069 Funds, Inc., Trustee of Quest for Value Accumulation
Trust and The Saratoga Advantage Trust, all of which are
open-end investment companies, and Director of Quest for
Value Dual Purpose Fund, Inc., a closed-end investment
company.
Bridget A. Macaskill .................. Chief Executive Officer of Oppenheimer Management
Age: 47 since September, 1995, President of Oppenheimer
Two World Trade Center Management since 1991, Chief Operating Officer of
New York, NY 10048 Oppenheimer Management since 1991; and Executive Vice
President of Oppenheimer Management from 1987-1991. Vice
President, Director of OAC, Director of Oppenheimer
Partnership Holdings, Inc., Chairman and a Director of
SSI, Director of Main Street Advisers, Inc., and
Director of Harbourview Asset Management Corporation,
all of which are subsidiaries of Oppenheimer Management;
Director of New York based Oppenheimer Funds since 1995.
As noted above, the following nominees currently serve as trustees of
certain of the Quest for Value Funds: Mr. Clinton, Mr. Courtney, Mr. Clinton and
Mr. Loft. It is anticipated that during the fourth quarter of 1995, Oppenheimer
Management will become the investment adviser to and OFDI will become the
principal underwriter of the Quest for Value Funds other than the following:
Quest Cash Reserves, Inc., Quest for Value Accumulation Trust and Quest for
Value Dual Purpose Fund, Inc.
Oppenheimer Management, RFD and RCA have agreed to comply and use all
reasonable efforts to cause compliance with the provisions of Section 15(f) of
the 1940 Act. Section 15(f) provides, in pertinent part, that an investment
adviser and its affiliates may receive any amount or benefit in connection with
a sale of such investment adviser which results in an assignment of an
investment advisory contract if (1) for a period of three years after the time
of such event, at least 75% of the members of the board of trustees of the
investment company which it advises are not "interested persons" (as defined in
the 1940 Act) of the new or old investment adviser, and (2) there is no "unfair
burden" imposed on the investment company as a result of the transaction. For
this purpose, "unfair burden" is defined to include any arrangement during the
two-year period after the transactions whereby the investment adviser or
predecessor or successor investment adviser, or any interested person of any
such adviser, receives or is entitled to receive any compensation directly or
indirectly (i) from any person in connection with the purchase or sale of
securities or other
24
property to, from, or on behalf of the investment company other than bona fide
ordinary compensation as principal underwriter for such company, or (ii) from
the investment company or its security holders for other than bona fide
investment advisory or other services. No compensation arrangements of the types
described above are contemplated in the proposed Transaction. If all six
nominees are elected, five of the six Trustees (over 75%) will not be
"interested persons" of Oppenheimer Management, RFD, RCA or any of their
affiliates.
The Boards' Executive Committee develops and executes policies of each
respective Fund, as delegated and directed by the Trustees, during the periods
between meetings of the Board. The Executive Committee is currently composed of
Messrs. Brown, Cannon and Fielding. The Boards' Investment Policy Committee
monitors the composition of, and transactions in, each Fund's respective
portfolio to insure consistency with the stated investment objective and
policies of each respective Fund. The Investment Policy Committee is currently
composed of Messrs. Burgett, Cannon, Costanza and Hoffman. The Boards' Audit
Committee oversees internal accounting controls and reviews the reports and
recommendations of the independent auditors of each respective Fund. The Audit
Committee currently consists of Messrs. Burnett, Costanza and Zaenglein. The
Boards' 12b-1 Committee reviews each respective Fund's expenditures made
pursuant to each Fund's respective 12b-1 Distribution Plan and provides reports
to the Board on such expenditures. The 12b-1 Committee is currently composed of
Messrs. Burnett, Cannon and Zaenglein.
In addition, each Board has a Nominating Committee which selects and
evaluates candidates for trusteeships and makes recommendations of persons to
the Board to fill vacancies created between meetings. As long as each Fund's
respective Distribution Plan pursuant to Rule 12b-1 under the 1940 Act is in
effect, each respective Fund is required to commit the selection and nomination
of candidates for trustees who are not "interested persons" to the discretion of
other trustees of the Funds who are also not such "interested persons". The
Nominating Committee, which is currently composed of Messrs. Burgett, Burnett,
Cannon, Costanza, Hoffman, and Zaenglein, currently has no procedures for the
submission of recommendations by shareholders.
During the fiscal year ended December 31, 1994, each Board held four
regular quarterly meetings and the Trustees who are not "interested persons" of
RFD or RCA held two special meetings. The Investment Policy Committee of each
Fund met four times, the Audit Committee of each Fund met four times, and the
12b-1 Committee of each Fund met four times. Neither the Nominating Committee
nor the Executive Committee of any Fund met during this period. All of the
incumbent Trustees attended at least 75% of the Board meetings and committee
meetings they were required to attend.
Compensation of Trustees
No current officer or Trustee of the Funds who is an "interested person" as
defined in the 1940 Act receives any salary or fee from the Funds for the
performance of his or her respective duties. The following table sets forth the
aggregate compensation received from the Funds by the Funds' Trustees during the
fiscal year ended December 31, 1994.
25
Aggregate Aggregate Aggregate
Compensation from Compensation Compensation from Total
the Bond Fund For from Rochester Limited Term New Compensation From
Name of Trustee Growth Fund Municipals York Municipal Fund Fund Complex(1)
--------------- ----------------- ---------------- -------------------- -------------------
Robert E. Brown* ................ -0- -0- -0- -0-
Elton J. Burgett ................ $650 $11,300 $2,050 $14,500
Joseph A. Burnett ............... $900 $15,300 $2,550 $19,500
John Cannon ..................... $750 $12,900 $2,250 $16,500
Angelo A. Constanza ............. $850 $14,500 $2,450 $18,500
Ronald H. Fielding* ............. -0- -0- -0- -0-
Marvin J. Hoffman ............... $650 $11,300 $2,050 $14,500
Michael S. Rosen* ............... -0- -0- -0- -0-
Eric W. Zaenglein ............... $900 $15,300 $2,550 $19,500
- -----------
(1) Reflects compensation received during the fiscal year ended December 31,
1994 from all registered investment companies within the Fund Complex
which, as of that date, consisted of Rochester Fund Municipals, Limited
Term New York Municipal Fund, The Bond Fund For Growth and Rochester Tax
Managed Fund, Inc. Subsequent to the fiscal year ended December 31, 1994,
The Bond Fund For Growth acquired all of the assets and liabilities of
Rochester Tax Managed Fund, Inc. in a tax-free reorganization.
* These Trustees and Officers are "interested persons" of the Funds as
defined in the 1940 Act. Mr. Brown is an "interested person" of the Funds
because he is a partner in the law firm of Boylan, Brown, Code, Fowler,
Vigdor & Wilson, which firm serves as counsel to each Fund's investment
adviser and principal underwriter and regularly represents Rochester Fund
Municipals and the Limited Term New York Municipal Fund in connection with
the purchase of securities. Messrs. Fielding and Rosen are "interested
persons" of the Funds because they are officers and shareholders of each
Fund's investment adviser and principal underwriter.
The Board of Rochester Fund Municipals has adopted a Retirement Plan for
Independent Trustees of that Fund. Under the terms of the Retirement Plan, as
amended on October 16, 1995, an eligible Trustee (an Independent Trustee who has
served as such for at least three years prior to retirement) may receive an
annual benefit equal to the product of $1500 multiplied by the number of years
of service as an Independent Trustee up to a maximum of nine years. The maximum
annual benefit which may be paid to an eligible Trustee under the Retirement
Plan is $13,500. The Retirement Plan will be effective for all eligible Trustees
who have dates of retirement occurring on or after December 31, 1994. Subject to
certain exceptions, retirement is mandatory at age 72 in order to qualify for
the Retirement Plan. Although the Retirement Plan permits Eligible Trustees to
elect early retirement at age 63, retirement benefits are not payable to
Eligible Trustees who elect early retirement until age 65. It is anticipated
that upon the Closing of the Transaction each of the Independent Trustees who is
not standing for re-election will be eligible to receive benefits under the
Retirement Plan. The Retirement Plan provides that no Independent Trustee who is
elected as a Trustee of Rochester Fund Municipals after ________, 1995 will be
eligible to receive benefits thereunder.
26
The following table sets forth information about the current officers of the
Funds.
Name and Age Principal Occupation During Past Five Years Title With Each Fund
- ------------ ------------------------------------------- ---------------------
Ronald H. Fielding Chairman of the Board and director, RFD President and Trustee
Age: 46 (1982-present); President and director, FMC
(1982-present); President and director, RCAI,
the General Partner of RCA (1993-present);
President and director, RFS (1986-present);
President, Rochester Fund Municipals (1986-
present); President, Rochester Tax Managed
Fund, Inc., (1982-present); President, The
Bond Fund For Growth (1986-present);
President, Limited Term New York Municipal
Fund (1991-present).
Patricia C. Foster Attorney, Adair & Stoner (1990-1993); Trustee Secretary
Age: 52 of Rochester Fund Municipals (1986-1993);
Trustee of Limited Term New York Municipal
Fund (1991-1993); Director of Rochester Tax
Managed Fund, Inc., (1983-1993); Trustee of
The Bond Fund For Growth (1985-1993);
Secretary and General Counsel, RCAI, the
General Partner of RCA, Secretary and General
Counsel, FMC, Secretary and General Counsel,
RFD, and Secretary and General Counsel, RFS
(1993-present).
Hilda I. Miller Senior Vice President-Operations and Treasurer
Age: 65 Treasurer, RFS (1987-present); Vice President
and Treasurer, FMC (1988-present); Treasurer,
RFD (1988-present).
Michael S. Rosen Vice President, RFS (1986-present); President Vice President
Age: 34 and director, RFD (1986-present); Portfolio and Trustee
Manager, The Bond Fund For Growth
(1986-present); Vice President, and director,
FMC (1988-present); Vice President and
director, RCAI, the General Partner of RCA
(1993-present).
27
Upon the Closing, it is anticipated that the foregoing officers of the
Funds will resign from their current positions and that Oppenheimer Management
will propose to the Trustees that Bridget A. Macaskill be elected Chairman of
the Board and President, that George Bowen be elected Treasurer, and that Andrew
J. Donohue be elected Secretary. In addition, it is anticipated that Oppenheimer
Management will propose to the Trustees that Mr. Fielding be elected
Vice-President of Rochester Fund Municipals and the Limited Term New York
Municipal Fund and that Mr. Rosen be elected Vice-President of The Bond Fund For
Growth. The address of Ms. Macaskill and Mr. Donohue is Oppenheimer Management
Corporation, 2 World Trade Center, New York, NY 10048. The address of Messrs.
Fielding and Rosen is 350 Linden Oaks, Rochester, NY 14625. Mr. Bowen's address
is Oppenheimer Management Corporation, 3410 S. Galena Street, Denver, CO 80231.
The following table provides information about Messrs. Bowen and Donohue:
Name and Age Principal Occupation During Past Five Years
- ------------ -------------------------------------------
George C. Bowen Senior Vice President and Treasurer of Oppenheimer
Age: 59 Management; Vice President and Treasurer of
Oppenheimer Funds Distributor, Inc. and Harbour
View Asset Management Corporation; President,
Treasurer and Director of Centennial Capital
Corporation; Senior Vice President; Treasurer and
Secretary of Shareholder Services, Inc.; Vice
President, Treasurer and Secretary of Shareholder
Financial Services, Inc.; and an officer of
various Oppenheimer Funds.
Andrew J. Donohue Executive Vice President and General Counsel of
Age: 45 Oppenheimer Management and Oppenheimer Funds
Distributor, Inc.; officer of various Oppenheimer
Funds; Partner, Kraft & McManimon (law firm)
________ to ________; Officer of First Investors
Corporation (registered broker-dealer), officer
and director of First Investors Management
Company, Inc. (registered broker-dealer and
registered investment adviser), director and
officer of First Investors Family of Funds and
First Investors Life Insurance Company,
________ to ________.
Vote Required
A plurality of all the votes cast by the shareholders of each Fund at the
Meeting, if a quorum is present at the Meeting, is sufficient to elect the
nominees. If Proposal 1 is not approved by the shareholders, no election of
Trustees will be held and the current officers and Trustees of the Funds will
continue in office.
THE BOARD OF TRUSTEES OF EACH FUND UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE
TO ELECT EACH OF THE NOMINEES.
28
PROPOSAL 3. APPROVAL OF THE NEW DISTRIBUTION PLAN FOR EACH FUND WITH RESPECT
TO EACH OF ITS CLASSES OF SHARES
As described more fully in Proposal 1, upon completion of the Transaction,
Oppenheimer Management will become the investment adviser to and OFDI will
become the principal underwriter of each of The Rochester Funds. It is proposed
that, contemporaneously with the Closing, each of the Funds enter into an
Amended and Restated Distribution and/or Service Plan and Agreement with OFDI
with respect to each of its classes of shares currently outstanding. A form of
Amended and Restated Distribution and Service Plan and Agreement is attached to
this proxy statement as Exhibit C. A form of Amended and Restated Service Plan
and Agreement is attached to this proxy statement as Exhibit D. Except with
respect to the fee structures for the new Plans, the following summary of the
terms of the New Plans is qualified in its entirety by reference to such
exhibits. Each of the New Plans was approved on October 16, 1995 by the Trustees
of the relevant Fund, including the Independent Trustees, subject to the
approval by the shareholders and to the Closing of the Transaction. Shareholders
of each class of shares of each Fund will vote separately on the approval of the
New Plan with respect to that class.
If the New Plans are approved by shareholders, each New Plan will become
effective at the Closing and the corresponding Current Plan will terminate. If
the New Plans are not approved by shareholders, the Board of Trustees will
determine what, if any, amendments to the Current Plans are appropriate within
the parameters of their authority.
The fees payable by each class of shares of the Funds under the New Plans
will be at the same rate as is provided in the corresponding Current Plans. The
maximum fees payable under each Current Plan and each New Plan will consist of a
service fee at the annual rate of 0.25% of the average net assets of the shares.
In addition, certain of the Current Plans and New Plans provide for payment of
an asset-based sales charge or a distribution fee at an annual rate as a
percentage of the average net assets attributable to shares of the relevant
class. Shareholders of each class of each Fund are referred to the relevant
description of the Current Plan for a summary of such fees.
The Current Plans
Fee Structure of Current Plan for Class A Shares of Rochester Fund
Municipals
Current Plan for Class A Shares of Rochester Fund Municipals, which was
most recently approved by the Board, including the Independent Trustees, on
April 12, 1995 and amended as of May 1, 1995, permits the payment to RFD, the
Fund's principal underwriter, of a service fee of up to 0.25% per annum of
average net assets of the Fund. The Current Plan authorizes RFD to make service
fee payments to various Recipients, including broker-dealers and banks, for
services performed in connection with the maintenance of shareholder accounts.
RFD is authorized under the terms of the Current Plan to retain a portion of
amounts payable as a service fee for those shareholder accounts as to which it
is the broker of record and provides administrative services. Although the terms
of the Current Plan permit payments by the Fund thereunder of up to 0.25% per
annum of the Fund's average net assets, the Board of Trustees of the Fund has
approved service fee payments thereunder of only 0.15% per annum of the Fund's
average net assets. Oppenheimer Management and
29
OFDI have agreed that for a period of two years following the Closing, they will
not seek to increase the rate of the service fee payable under the New Plan from
that currently authorized by the Board of Trustees. During the fiscal year ended
December 31, 1994, the Fund paid fees under the Current Plan of $3,150,402,
consisting of service fee payments of $1,629,270 and an asset based sales charge
of $1,521,132. The Current Plan was amended by the Board of Trustees on May 1,
1995, to eliminate the asset based sales charge of up to 0.10% which was
intended to reimburse RFD for expenses incurred by it as a result of activities
intended to result in the sale of Fund shares.
Fee Structure of Current Plan for Class A Shares of Limited Term New York
Municipal Fund
The Current Plan for Class A Shares of Limited Term New York Municipal Fund
was most recently approved by the Board, including the Independent Trustees, on
April 12, 1995. The Current Plan was redesignated as a distribution plan for
Class A Shares on May 1, 1995, at which time the only class of shares of
beneficial interest of the Fund outstanding prior to May 1, 1995 was
redesignated as Class A Shares. The Current Plan permits the payment to RFD, the
Fund's principal underwriter, of a service fee of up to 0.25% per annum of
average net assets of the Fund. The Current Plan authorizes RFD to make service
fee payments to various Recipients, including broker-dealers and banks, for
services performed in connection with the maintenance of shareholder accounts.
RFD is authorized under the terms of the Current Plan to retain a portion of
amounts payable as a service fee for those shareholder accounts as to which it
is the broker of record and provides administrative services. During the fiscal
year ended December 31, 1994, the Fund paid service fees under the Current Plan
of $1,237,020.
Fee Structure of Current Plan for Class B Shares of Limited Term New York
Municipal Fund
The Current Plan for Class B Shares of Limited Term New York Municipal Fund
was approved by the Board, including the Independent Trustees, on April 26,
1995, and was implemented on May 2, 1995, contemporaneously with the
introduction of Class B Shares for sale to the public. The Current Plan permits
the payment to RFD, the Fund's principal underwriter, of a service fee of up to
0.25% per annum of average net assets of the Fund. The Current Plan authorizes
RFD to make service fee payments to various Recipients, including broker-dealers
and banks, for services performed in connection with the maintenance of
shareholder accounts. RFD is authorized under the terms of the Current Plan to
retain a portion of amounts payable as a service fee for those shareholder
accounts as to which it is the broker of record and provides administrative
services. In addition, the Current Plan permits the Fund to pay RFD an
asset-based sales charge of up to 0.75% per annum of average net assets
attributable to Class B Shares. The asset-based sales charge is intended to
compensate RFD for activities undertaken by it which are primarily intended to
result in the sale of Class B Shares of the Fund. Although the Current Plan
permits the payment of an asset-based sales charge at the annual rate of up to
0.75% of the average net assets attributable to Class B Shares, the Board of
Trustees of the Fund has authorized the payment of an asset-based sales charge
of only 0.50% per annum of average net assets. Oppenheimer Management and OFDI
have agreed that for a period of two years following the Closing, it will not
seek to increase the rate of the asset-based sales charge payable under the New
Plan for Class B Shares of Limited Term New York Municipal Fund from that
currently authorized by the Board of Trustees.
30
Fee Structure of Current Plan for Class A Shares of The Bond Fund For Growth
The Current Plan for Class A Shares of The Bond Fund For Growth was most
recently reviewed by the Board, including the Independent Trustees, on April 12,
1995. The Current Plan was redesignated as a distribution plan for Class A
Shares on May 1, 1995, at which time the only shares of beneficial interest of
the Fund outstanding prior to May 1, 1995 were redesignated as Class A Shares.
The Current Plan permits the payment to RFD, the Fund's principal underwriter,
of a service fee of up to 0.25% per annum of average net assets of the Fund. The
Current Plan authorizes RFD to make service fee payments to various Recipients,
including broker-dealers and banks, for services performed in connection with
the maintenance of shareholder accounts. RFD is authorized under the terms of
the Current Plan to retain a portion of amounts payable as a service fee for
those shareholder accounts as to which it is the broker of record and provides
administrative services. In addition, the Current Plan permits the Fund to pay
RFD asset-based sales charge of up to 0.50% per annum of average net assets
attributable to Class B Shares. The asset-based sales charge is intended to
compensate RFD for activities undertaken by it which are primarily intended to
result in the sale of Class B Shares of the Fund. During the fiscal year ended
December 31, 1994, the Fund paid fees under the Current Plan of $794,543,
consisting of service fee payments of $264,848 and an asset based sales charge
of $529,695.
Fee Structure of Current Plan for Class B Shares of The Bond Fund For Growth
The Current Plan for Class B Shares of The Bond Fund For Growth was
approved by the Board, including the Independent Trustees, on April 26, 1995,
and was implemented on May 2, 1995, contemporaneously with the introduction of
Class B Shares for sale to the public. The Current Plan permits the payment to
RFD, the Fund's principal underwriter, of a service fee of up to 0.25% per annum
of average net assets of the Fund. The Current Plan authorizes RFD to make
service fee payments to various Recipients, including broker-dealers and banks,
for services performed in connection with the maintenance of shareholder
accounts. RFD is authorized under the terms of the Current Plan to retain a
portion of amounts payable as a service fee for those shareholder accounts as to
which it is the broker of record and provides administrative services. In
addition, the Current Plan permits the Fund to pay RFD asset-based sales charge
of up to 0.75% per annum of average net assets attributable to Class B Shares.
The asset-based sales charge is intended to compensate RFD for activities
undertaken by it which are primarily intended to result in the sale of Class B
Shares of the Fund.
Fee Structure for Class Y Shares of The Bond Fund For Growth
The Current Plan for Class Y Shares of The Bond Fund For Growth was
approved by the Board, including the Independent Trustees, on April 12, 1995,
and was implemented on May 2, 1995, contemporaneously with the introduction of
Class Y Shares for sale to the public. The Current Plan permits the payment to
RFD, the Fund's principal underwriter, of a service fee of up to 0.25% per annum
of average net assets of the Fund. The Current Plan authorizes RFD to make
service fee payments to various Recipients, including broker-dealers and banks,
for services performed in connection with the maintenance of shareholder
accounts. RFD is authorized under the terms of the Current Plan to retain a
portion of amounts payable as a service fee for those shareholder accounts as to
which it is the broker of record and provides administrative services.
31
Additional Terms of the Current Plans
Each Current Plan provides that it shall continue in effect only so long as
such continuance is specifically approved at least annually by the Board and by
the Independent Trustees of the Fund, that it may not be amended to increase
materially the amount to be spent for distribution thereunder without
shareholder approval and all material amendments must be approved by both the
Board and the Independent Trustees of the Fund. While each Current Plan is in
effect, the Board is required to review all expenditures made thereunder on a
quarterly basis and the selection and nomination of Independent Trustees must be
committed to the discretion of the existing Independent Trustees of the Fund.
Each Current Plan may be terminated by a majority vote of the Independent
Trustees or by a majority vote of the relevant class of shares. The Current
Plans are intended to comply with the Rules of Fair Practice of the NASD and
Rule 12b-1 under the 1940 Act.
The New Plans
OFDI will be authorized under the New Plans to pay various Recipients,
including broker dealers and banks, that render assistance in the distribution
of shares or provide administrative support with respect to shares held by
customers. The service fee payments made under the New Plans will compensate
OFDI and the Recipients for providing administrative support with respect to the
shareholder accounts. The distribution fee payments made under the Plans will
compensate OFDI and the Recipients for providing distribution assistance in
connection with the sale of a particular class Fund shares.
The New Plans provide that payments may be made by Oppenheimer Management
or OFDI to the Recipients from its own resources or from borrowing. Like the
Current Plans, the New Plans may not be amended to increase materially the
amount of payments to be made without the approval of the relevant class of
shareholders of each Fund.
If the New Plans are approved by a separate vote of the class of
shareholders to which the New Plan relates, each Plan will remain in effect only
if its continuance is specifically approved at least annually by the vote of
both a majority of the Trustees and a majority of the Independent Trustees. The
New Plans may be terminated at any time by a vote of a majority of the
Independent Trustees or by a vote of a majority of the relevant class of Shares
of a Fund. In the event of such termination, the Board, including the
Independent Trustees, shall determine whether OFDI is entitled to payment by a
Fund of all or portion of the service fee and/or the distribution fee with
respect to shares sold prior to the effective date of such termination.
The service fee and the distribution fee payable under the New Plans are
subject to reduction or elimination under the limits imposed by the Rules of
Fair Practice of the NASD. Like the Current Plans, the New Plans are intended to
comply with applicable NASD rules and Rule 12b-1 adopted under the 1940 Act.
Rule 12b-1 requires that the selection and nomination of trustees who are not
"interested persons" of a Fund be committed to the discretion of the Independent
Trustees and that the trustees receive quarterly reports on the payments made
under any distribution plan and the purposes for those payments.
32
Evaluation by the Board of Trustees
The Trustees of each Fund, including the Independent Trustees, believe that
the adoption of a distribution plan under Rule 12b-1 is an essential component
of the marketing strategy of each class of shares of each Fund, especially in
view of historic sales data which underscores the significant role which
broker-dealers continue to play in the selection of investment products for
retail clients. In addition, the Trustees believe past experience with those
Current Plans for which historic sales data is available has shown that the
maintenance of a distribution plan under Rule 12b-1 has been in the best
interests of each such Fund and its shareholders. In their deliberations, the
Trustees considered such factors as they deemed relevant under the
circumstances. Each Board considered the fact that fee structures under the New
Plans would be identical to the fee structures under the relevant Current Plans.
In addition, the Board of Rochester Fund Municipals and the Board of The Bond
Fund For Growth considered the fact that Oppenheimer Management [and OFDI] have
agreed that for a period of two years subsequent to the Closing, no increase
will be sought in the fees payable under the New Plan for Class A Shares of
Rochester Fund Municipals or the New Plan for Class B Shares of The Bond Fund
For Growth beyond the levels which have been approved by the existing Board.
Thus, although the New Plan for Class A Shares of Rochester Fund Municipals,
like the Current Plan, permits the payment of a service fee of up to 0.25% per
annum of average net assets, the rate of the service fee would remain at 0.15%
per annum of average net assets for a period of two years following the Closing.
In addition, although the New Plan for Class B Shares of The Bond Fund For
Growth, like the Current Plan, permits the payment of a distribution fee of up
to 0.75% per annum of average net assets, the rate of the distribution fee would
remain at 0.50% for a period of two years following the Closing. The Board also
considered the potential benefit to each Fund of the proposed method of
distribution through OFDI, the potential conflicts of interest inherent in the
use of Fund assets to pay for distribution expenses, the relationship of the
fees under the New Plans to the overall cost structure of each Fund, and the
potential benefits to existing shareholders of continued asset growth, including
the potential to benefit from increased economies of scale.
Vote Required
Approval of each New Plan for each class of shares of any Fund will require
the vote of a "majority of the outstanding voting securities" of that class of
Shares of the Fund, which means, with respect to such class, the vote of 67% or
more of the shares present at the Meeting, if the holders of more than 50% of
the outstanding shares are present or represented by proxy, or the vote of more
than 50% of the total outstanding shares, whichever is less.
THE BOARD OF TRUSTEES OF EACH FUND, INCLUDING THE INDEPENDENT TRUSTEES,
UNANIMOUSLY RECOMMEND THAT THE NEW PLANS BE APPROVED BY SHAREHOLDERS OF EACH
RESPECTIVE CLASS OF EACH FUND.
33
PROPOSAL 4. RATIFICATION OF THE SELECTION OF PRICE WATERHOUSE LLP AS
INDEPENDENT ACCOUNTANTS
The Boards of The Bond Fund For Growth and the Limited Term New York
Municipal Fund, including a majority of the Independent Trustees of each Fund,
have selected the firm of Price Waterhouse LLP as the independent accountants to
examine each Fund's financial statements for the fiscal year ended December 31,
1995, and to include its opinion in the Fund's financial statements filed with
the Securities and Exchange Commission. The shares represented by proxy, unless
otherwise specified, will be voted for the ratification of such selection.
Representatives of Price Waterhouse LLP are expected to be present at the
Meetings. They will have the opportunity to make a statement if they desire to
do so and will be available to answer appropriate questions.
Required Vote
This ratification of the selection of the independent accountants requires
the affirmative vote of a majority of the votes cast by the shareholders of the
Limited Term New York Municipal Fund and the Bond Fund For Growth at the
Meeting, provided that a quorum (consisting of a majority of the total number of
outstanding shares of each of these Funds) is present.
THE BOARD OF TRUSTEES OF THE BOND FUND FOR GROWTH AND THE LIMITED TERM NEW YORK
MUNICIPAL FUND RECOMMEND RATIFICATION OF THE SELECTION OF PRICE WATERHOUSE LLP
AS INDEPENDENT ACCOUNTANTS.
34
PROPOSAL 5. TO APPROVE AN AMENDMENT TO THE FUNDAMENTAL INVESTMENT POLICIES OF
THE FUND.
The 1940 Act requires a registered investment company like The Bond Fund
For Growth to specify in its registration statement certain investment policies
and limitations which are Fundamental Policies and, as such, can only be changed
upon approval by shareholders. The Fund's current Fundamental Policies include a
restriction which provides that as to 50% of its total assets, the Fund may not
acquire more than 10% of the voting securities of any issuer. This Fundamental
Policy is not required by any federal or state rule or regulation. FMC believes
that the elimination of this Fundamental Policy will provide the Fund with
greater flexibility in managing its investment portfolio.
If shareholder approval is obtained for this Proposal 5, as to 50% of its
total assets, the Fund will be permitted to make investments in excess of 10% of
the voting securities of an issuer. The Fund would continue to be subject to a
Fundamental Policy relating to the balance of 50% of its total assets which
provides, among other things, that the Fund may not make any investment if, as a
result thereof, its investment in the outstanding voting securities of any
issuer would exceed 10%. If the Fund exercises the flexibility which would
result from the elimination of this Fundamental Policy, the Fund will be subject
to additional responsibilities and constraints under the federal securities
laws. In addition, concentration of the Fund's assets in the securities of
relatively few issuers could result in greater fluctuation in the total market
value of the Fund's portfolio. Any economic, political or regulatory
developments affecting the value of the securities in the Fund's portfolio could
have a greater impact on the total value of the portfolio than would be the case
if the portfolio were diversified among more issuers. The Fund currently holds
the securities of many different issuers in order to lower such risks and it
generally intends to continue to do so.
The Board of Trustees has considered such factors as it deemed relevant
under the circumstances and believes that the proposed amendment to the Fund's
Fundamental Policies is in the best interest of the Fund's shareholders. The
Board of Trustees recommends that shareholders vote FOR this Proposal 5 to
eliminate the Fundamental Policy which provides that as to 50% of its total
assets, the Fund may not acquire more than 10% of the voting securities of any
issuer.
Vote Required
As provided under the 1940 Act, approval of the amendment to the Fund's
Fundamental Policies will require the vote of a majority of the outstanding
shares of the Fund. Under the 1940 Act, the vote of a "majority of the
outstanding voting securities" of an investment company means the vote, at a
duly-called annual or special meeting of shareholders, of 67% or more of the
shares present at such meeting, if the holders of more than 50% of the
outstanding shares of such company or series are present or represented by
proxy, or of more than 50% of the total outstanding shares of such company or
series, whichever is less.
THE BOARD OF TRUSTEES OF THE BOND FUND FOR GROWTH RECOMMENDS THAT YOU VOTE FOR
THIS PROPOSAL 5 TO APPROVE THE ELIMINATION OF THE FUNDAMENTAL POLICY DESCRIBED
HEREIN.
35
OTHER MATTERS
The Boards do not intend to present, and have no knowledge that anyone else
will present, matters at the Meeting other than those referred to above. If any
other matters properly come before the Meeting, however, the persons named as
proxies intend to vote the shares represented by the enclosed proxy in
accordance with their best judgement.
A shareholder proposal intended to be presented at any meeting hereafter
called must be received by the Funds within a reasonable time before the
solicitation relating thereto is made in order to be included in the proxy and
form of proxy related to such meeting. Under the Amended or Restated Agreement
and Declaration of Trust of each Fund, meetings of shareholders are required to
be held only when necessary under the 1940 Act. Therefore, there may be no
annual or special meetings of shareholders unless required by the 1940 Act. The
submission by a shareholder of a proposal for inclusion in the proxy statement
does not guarantee that it will be included. Shareholder proposals are subject
to certain regulations under federal securities laws.
Shareholders are urged to vote, sign, and mail their proxies immediately.
36
EXHIBIT A
FORM OF INVESTMENT ADVISORY AGREEMENT
AGREEMENT, made the ____ day of January, 1996, by and between
_________________, a Massachusetts business trust (hereinafter referred to as
the "Fund"), and OPPENHEIMER MANAGEMENT CORPORATION (hereinafter referred to as
"OMC").
WHEREAS, the Fund is an open-end, non-diversified management investment
company registered as such with the Securities and Exchange Commission (the
"Commission") pursuant to the Investment Company Act of 1940 (the "Investment
Company Act"), and OMC is an investment adviser registered as such with the
Commission under the Investment Advisers Act of 1940;
WHEREAS, the Fund has Shares of beneficial interest to be issued by the
Fund ("Shares") pursuant to the Fund's registration statement;
WHEREAS, the Fund desires that OMC shall act as its investment adviser
pursuant to this Agreement;
NOW, THEREFORE, in consideration of the mutual promises and covenants
hereinafter set forth, it is agreed by and between the parties, as follows:
1. General Provisions:
The Fund hereby employs OMC and OMC hereby undertakes to act as the
investment adviser of the Fund in connection with, and for the benefit of, the
Fund and to perform for the Fund such other duties and functions in connection
with the Fund for the period and on such terms as set forth in this Agreement.
OMC shall, in all matters, give to the Fund and its Board of Trustees (the
"Trustees") the benefit of its best judgment, effort, advice and recommendations
and shall, at all times conform to, and use its best efforts to enable the Fund
to conform to (i) the provisions of the Investment Fund Act and any rules or
regulations thereunder; (ii) any other applicable provisions of state or Federal
law; (iii) the provisions of the Declaration of Trust and By-Laws of the Fund as
amended from time to time; (iv) policies and determinations of the Trustees; (v)
the fundamental policies and investment restrictions of the Fund as reflected in
the registration statement of the Fund under the Investment Company Act or as
such policies may, from time to time, be amended and (vi) the Prospectus and
Statement of Additional Information of the Fund in effect from time to time. The
appropriate officers and employees of OMC shall be available upon reasonable
notice for consultation with any of the Trustees and officers of the Fund with
respect to any matters dealing with the business and affairs of the Fund
including the valuation of portfolio securities of the Fund which are either not
registered for public sale or not traded on any securities market.
2. Investment Management:
(a) OMC shall, subject to the direction and control by the Trustees, (i)
regularly provide investment advise and recommendations to the Fund with respect
to the investments, investment policies and the purchase and sale of securities
and other investments for the Fund; (ii) supervise continuously the investment
program of the Fund and the composition of its portfolio and determine what
securities shall be purchased or sold by the Fund; and (iii) arrange, subject to
the provisions of paragraph 7 hereof, for the purchase of securities and other
investments for the Fund and the sale of securities and other investments held
in the portfolio of the Fund.
(b) Provided that the Fund shall not be required to pay any compensation
for services under this Agreement other than as provided by the terms of the
Agreement and subject to the provisions of paragraph 7 hereof, OMC may obtain
investment information, research or assistance from any other person, firm or
corporation to supplement, update or otherwise improve its investment management
services including entering into sub-advisory agreements with other affiliated
or unaffiliated registered investment advisors to obtain specialized services.
(c) Provided that nothing herein shall be deemed to protect OMC from
willful misfeasance, bad faith or gross negligence in the performance of its
duties, or reckless disregard of its obligations and duties under this
Agreement, OMC shall not be liable for any loss sustained by reason of good
faith errors or omissions in connection with any matters to which this Agreement
relates.
(d) Nothing in this Agreement shall prevent OMC or any entity controlling,
controlled by or under common control with OMC or any officer thereof from
acting as investment adviser for any other person, firm or corporation or in any
way limit or restrict OMC or any of its directors, officers, stockholders or
employees from buying, selling or trading any securities or other investments
for its or their own account or for the account of others for whom it or they
may be acting, provided that such activities will not adversely affect or
otherwise impair the performance by OMC of its duties and obligations under this
Agreement.
3. Other Duties of OMC:
OMC shall, at its own expense, provide and supervise the activities of all
administrative and clerical personnel as shall be required to provide effective
corporate administration for the Fund, including the compilation and maintenance
of such records with respect to its operations as may reasonably be required;
the preparation and filing of such reports with respect thereto as shall be
required by the Commission; composition of periodic reports with respect to
operations of the Fund for its shareholders; composition of proxy materials for
meetings of the Fund's shareholders; and the composition of such registration
statements as may be required by Federal and state securities laws for
continuous public sale of Shares of the Fund. OMC shall, at its own cost and
expense, also provide the Fund with adequate office space, facilities and
equipment. OMC shall, at its own expenses, provide such officers for the Fund as
the Board of Trustees may request.
4. Allocation of Expenses:
All other costs and expenses of the Fund not expressly assumed by OMC under
this Agreement, or to be paid by the Distributor of the Shares of the Fund,
shall be paid by the Fund, including, but not limited to: (i) interest, taxes
and governmental fees; (ii) brokerage commissions and other expenses incurred in
acquiring or disposing of the portfolio securities and other investments of the
Fund; (iii) insurance premiums for fidelity and other coverage requisite to its
operations; (iv) compensation and expenses of its Trustees other than those
affiliated with OMC; (v) legal and audit expenses; (vi) custodian and transfer
agent fees and expenses; (vii) expenses incident to the redemption of its
Shares; (viii) expenses incident to the issuance of its Shares against payment
therefor by or on behalf of the subscribers thereto; (ix) fees and expenses,
other than as hereinabove provided, incident to the registration under Federal
and state securities laws of Shares of the Fund for public sale; (x) expenses of
printing and mailing reports, notices and proxy materials to shareholders of the
Fund; (xi) except as noted above, all other expenses incidental to holding
meetings of the Fund's shareholders; and (xii) such extraordinary non-recurring
expenses as may arise, including litigation, affecting the
A-2
Fund and any legal obligation which the Fund may have to indemnify its officers
and Trustees with respect thereto. Any officers or employees of OMC (or any
entity controlling, controlled by, or under common control with OMC) who also
serve as officers, Trustees or employees of the Fund shall not receive any
compensation from the Fund thereof for their services.
5. Compensation of OMC:
The Fund agrees to pay OMC and OMC agrees to accept as full compensation
for the performance of all functions and duties on its part to be performed
pursuant to the provisions hereof, a fee computed on the total net asset value
of the Fund as of the close of each business day and payable monthly at the
annual rate for each Series set forth on Schedule A hereto.
6. Use of Name "Oppenheimer" or "Rochester":
OMC hereby grants to the Fund a royalty-free, non-exclusive license to use
the name "Oppenheimer" or "Rochester" in the name of the Fund for the duration
of this Agreement and any extensions or renewals thereof. To the extent
necessary to protect OMC's rights to the name "Oppenheimer" or "Rochester" under
applicable law, such license shall allow OMC to inspect and, subject to control
by the Fund's Board, control the nature and quality of services offered by the
Fund under such name and may, upon termination of this Agreement, be terminated
by OMC, in which event the Fund shall promptly take whatever action may be
necessary to change its name and discontinue any further use of the name
"Oppenheimer" or "Rochester" in the name of the Fund or otherwise. The name
"Oppenheimer" and "Rochester" may be used or licensed by OMC in connection with
any of its activities, or licensed by OMC to any other party.
7. Portfolio Transactions and Brokerage:
(a) OMC (and any Sub Advisor) is authorized, in arranging the purchase and
sale of the portfolio securities and other investments of the Fund to employ or
deal with such members of securities or commodities exchanges, brokers or
dealers (hereinafter "broker-dealers"), including "affiliated" broker-dealers
(as that term is defined in the Investment Company Act), as may, in its best
judgment, implement the policy of the Fund to obtain, at reasonable expense, the
"best execution" (prompt and reliable execution at the most favorable security
price obtainable) of the portfolio transactions of the Fund as well as to
obtain, consistent with the provisions of subparagraph (c) of this paragraph 7,
the benefit of such investment information or research as will be of significant
assistance to the performance by OMC (and any Sub Advisor) of its (their)
investment management functions.
(b) OMC (and any Sub Advisor) shall select broker-dealers to effect the
portfolio transactions of the Fund on the basis of its estimate of their ability
to obtain best execution of particular and related portfolio transactions. The
abilities of a broker-dealer to obtain best execution of particular portfolio
transaction(s) will be judged by OMC (or any Sub Advisor) on the basis of all
relevant factors and considerations including, insofar as feasible, the
execution capabilities required by the transaction or transactions; the ability
and willingness of the broker-dealer to facilitate the portfolio transactions of
the Fund by participating therein for its own account; the importance to the
Fund of speed, efficiency or confidentiality; the broker-dealer's apparent
familiarity with sources from or to whom particular securities or other
investments might be purchased or sold; as well as any other matters relevant to
the selection of a broker-dealer for particular and related transactions of the
Fund.
A-3
(c) OMC (and any Sub Advisor) shall have discretion, in the interests of
the Fund, to allocate brokerage on the portfolio transactions of the Fund to
broker-dealers, other than an affiliated broker-dealer, qualified to obtain best
execution of such transactions who provide brokerage and/or research services
(as such services are defined in Section 28(e)(3) of the Securities Exchange Act
of 1934) for the Fund and/or other accounts for which OMC or its affiliates (or
any Sub Advisor) exercise "investment discretion" (as that term is defined in
Section 3(a)(35) of the Securities Exchange Act of 1934) and to cause the Fund
to pay such broker-dealers a commission for effecting a portfolio transaction
for the Fund that is in excess of the amount of commission another broker-dealer
adequately qualified to effect such transaction would have charged for effecting
that transaction, if OMC (or any Sub Advisor) determines, in good faith, that
such commission is reasonable in relation to the value of the brokerage and/or
research services provided by such broker-dealer viewed in terms of either that
particular transaction or the overall responsibilities of OMC or its affiliates
(or any Sub Advisor) with respect to accounts as to which they exercise
investment discretion. In reaching such determination, OMC (or any Sub Advisor)
will not be required to place or attempt to place a specific dollar value on the
brokerage and/or research services provided or being provided by such
broker-dealer. In demonstrating that such determinations were made in good
faith, OMC (and any Sub Advisor) shall be prepared to show that all commissions
were allocated for purposes contemplated by this Agreement and that the total
commissions paid by the Fund over a representative period selected by the Fund's
Trustees were reasonable in relation to the benefits to the Fund.
(d) OMC (or any Sub Advisor) shall have no duty or obligation to seek
advance competitive bidding for the most favorable commission rate applicable to
any particular portfolio transactions or to select any broker-dealer on the
basis of its purported or "posted" commission rate but will, to the best of its
ability, endeavor to be aware of the current level of the charges of eligible
broker-dealers and to minimize the expense incurred by the Fund for effecting
its portfolio transactions to the extent consistent with the interests and
policies of the Fund as established by the determinations of the Board of
Trustees of the Fund and the provisions of this paragraph 7.
(e) The Fund recognizes that an affiliated broker-dealer: (I) may act as
one of the Fund's regular brokers for the Fund so long as it is lawful for it so
to act; (ii) may be a major recipient of brokerage commissions paid by the Fund;
and (iii) may effect portfolio transactions for the Fund only if the
commissions, fees or other renumeration received or to be received by it are
determined in accordance with procedures contemplated by any rule, regulation or
order adopted under the Investment Company Act to be within the permissible
level of such commissions.
(f) Subject to the foregoing provisions of this paragraph 7, OMC (and any
Sub Advisor) may also consider sales of Shares of the Fund and the other funds
advised by OMC and its affiliates as a factor in the selection of broker-dealers
for its portfolio transactions.
8. Duration:
This Agreement will take effect on the date first set forth above. Unless
earlier terminated pursuant to paragraph 10 hereof, this Agreement shall remain
in effect for a period of two (2) years and thereafter from year to year, so
long as such continuance shall be approved at least annually by the Fund's Board
of Trustees, including the vote of the majority of the Trustees of the Fund who
are not parties to this Agreement or "interested persons" (as defined in the
Investment Fund Act) of any such party, cast in person at a meeting called for
the purpose of voting on such approval, or by the holders of a "majority" (as
defined in the Investment Fund Act) of the outstanding voting securities of the
Fund and by such a vote of the Fund's Board of Trustees.
A-4
9. Disclaimer of Shareholder or Trustee Liability:
OMC understands and agrees that the obligations of the Fund under this
Agreement are not binding upon any shareholder or Trustee of the Fund
personally, but bind only the Fund and the Fund's property; OMC represents that
it has notice of the provisions of the Declaration of Trust of the Fund
disclaiming shareholder or Trustee liability for acts or obligations of the
Fund.
10. Termination.
This Agreement may be terminated (I) by OMC at any time without penalty
upon sixty days' written notice to the Fund (which notice may be waived by the
Fund); or (ii) by the Fund at any time without penalty upon sixty days' written
notice to OMC (which notice may be waived by OMC) provided that such termination
by the Fund shall be directed or approved by the vote of a majority of all of
the Trustees of the Fund then in office or by the vote of the holders of a
"majority" of the outstanding voting securities of the Fund (as defined in the
Investment Company Act).
11. Assignment or Amendment:
This Agreement may not be amended, or the rights of OMC hereunder sold,
transferred, pledged or otherwise in any manner encumbered without the
affirmative vote or written consent of the holders of the "majority" of the
outstanding voting securities of the Fund. This Agreement shall automatically
and immediately terminate in the event of its "assignment," as defined in the
Investment Company Act.
12. Definitions:
The terms and provisions of the Agreement shall be interpreted and defined
in a manner consistent with the provisions and definitions contained in the
Investment Company Act.
13. Accounting, Administration and Recordkeeping Agreement:
Notwithstanding any provision of this Agreement to the contrary, OMC is not
required under this Agreement to perform for the Fund any duties or functions
set forth in the Accounting, Administration and Recordkeeping Agreement between
the Fund and OMC.
______________________________
By: __________________________
Title: _______________________
OPPENHEIMER MANAGEMENT
CORPORATION
By: __________________________
Andrew J. Donohue
Executive Vice President
A-5
Schedule A
To
Investment Advisory Agreement
Between
Oppenheimer Limited Term New York Municipal Fund
and
Oppenheimer Management Corporation
- --------------------------------------------------------------------------------
Annual Fee as a Percentage of Daily Total Net Assets
================================================================================
0.50% of the first $100 million of average daily net assets
- --------------------------------------------------------------------------------
0.45% of the next $150 million of average daily net assets
- --------------------------------------------------------------------------------
0.40% of the next $1,750 million of average daily net assets
- --------------------------------------------------------------------------------
0.39% of average daily net assets over $2 billion
- --------------------------------------------------------------------------------
A-6
Schedule A
To
Investment Advisory Agreement
Between
Oppenheimer Bond Fund For Growth
and
Oppenheimer Management Corporation
- --------------------------------------------------------------------------------
Annual Fee as a Percentage of Daily Total Net Assets
================================================================================
0.625% of the first $50 million of average daily net assets
- --------------------------------------------------------------------------------
0.500% of the next $250 million of average daily net assets
- --------------------------------------------------------------------------------
0.4375% of average daily net assets over $300 million
- --------------------------------------------------------------------------------
A-7
Schedule A
To
Investment Advisory Agreement
Between
Oppenheimer/Rochester Fund Municipals
and
Oppenheimer Management Corporation
- --------------------------------------------------------------------------------
Annual Fee as a Percentage of Daily Total Net Assets
================================================================================
0.54% of the first $100 million of average daily net assets
- --------------------------------------------------------------------------------
0.52% of the next $150 million of average daily net assets
- --------------------------------------------------------------------------------
0.47% of the next $1,750 million of average daily net assets
- --------------------------------------------------------------------------------
0.46% of the next $3 billion of average daily net assets
- --------------------------------------------------------------------------------
0.45% of average daily net assets over $5 billion
- --------------------------------------------------------------------------------
A-8
EXHIBIT B
Information on Comparable Funds Managed by
Oppenheimer Management Corporation
Net Assets as Annual Rate Fee
Name of Comparable 6/30/95 (in Schedule as a %
Name of Fund Oppenheimer Fund millions of Net Assets
- ------------- ------------------ ------------- ---------------
Rochester Fund Municipals Oppenheimer New York 755.2 .60% of the first $200 million
Tax-Exempt Fund .55% of the next $100 million
Limited Term New York .50% of the next $200 million
Municipal Fund Oppenheimer New Jersey 10.8 .45% of the next $250 million
Tax-Exempt Fund .40% of the next $250 million
.35% of the net assets in
Oppenheimer Pennsylvania 76.6 excess of $1 billion
Tax-Exempt Fund
Oppenheimer Florida 25.5
Tax-Exempt Fund
Oppenheimer California 279.9
Tax-Exempt Fund
Oppenheimer Tax-Free 627.5
Bond Fund
Oppenheimer Main Street 80.9 .55% of net assets; If net assets
California Tax-Exempt Fund are less than $100 million: 0% if
less than $25 million, .15% if $25
million or more, but less than $50
million; .25% if $50 million or
more but less than $75 million;
.40% if assets are $75 million or
more, but less than $100 million
Oppenheimer Insured Tax- 84.6 .450% of first $100 million
Exempt Fund .400% of next $150 million
.375% of next $250 million
.350% of net assets in excess of
$500 million
Oppenheimer Intermediate Tax- 86.4 .500% of first $100 million
Exempt Fund .450% of next $150 million
.425% of next $250 million
.400% of net assets in excess of
$500 million
Net Assets as Annual Rate Fee
Name of Comparable 6/30/95 (in Schedule as a %
Name of Fund Oppenheimer Fund millions of Net Assets
- ------------- ------------------ ------------- ---------------
The Bond Fund For Growth Oppenheimer Bond Fund 126.2 .75% of first $200 million
.72% of next $200 million
Oppenheimer Variable Account .69% of next $200 million
Funds: .66% of next $200 million
A. Bond Fund 171.8 .60% of next $200 million
B. High Income Fund 113.4 .50% of net assets in
C. Strategic Bond 37.1 excess of $1 billion
Oppenheimer High Yield Fund 1247.5
Oppenheimer Strategic Income 4974.6
Fund
Oppenheimer Strategic Income 59.6
& Growth Fund
Oppenheimer Champion High 281.2 .70% of first $250 million
Yield Fund .65% of next $250 million
.60% of next $500 million
.55% of net assets in
excess of $1 billion
Oppenheimer Multi-Sector 292.4 .65% of end of week net assets
Income Trust (closed-end)
Oppenheimer Multi-Government 51.6 .65% of end of week net assets
Trust (closed-end)
B-2
EXHIBIT C
FORM OF AMENDED AND RESTATED
DISTRIBUTION AND SERVICE PLAN AND AGREEMENT
WITH
OPPENHEIMER FUNDS DISTRIBUTOR, INC.
FOR CLASS __ SHARES OF
------------------------------------
AMENDED AND RESTATED DISTRIBUTION AND SERVICE PLAN AND AGREEMENT (the
"Plan") dated the ___ day of January, 1996, by and between
____________________________ (the "Trust"), on behalf of
__________________________ (the "Fund"), and OPPENHEIMER FUNDS DISTRIBUTOR, INC.
(the "Distributor").
1. The Plan. This Plan is the Fund's written distribution and service plan
for Class __ shares of the Fund (the "Shares"), contemplated by Rule 12b-1 (the
"Rule") under the Investment Company Act of 1940 (the "1940 Act"), pursuant to
which the Fund will compensate the Distributor for its services in connection
with the distribution of Shares, and the personal service and maintenance of
shareholder accounts that hold Shares ("Accounts"). The Fund may act as
distributor of securities of which it is the issuer, pursuant to the Rule,
according to the terms of this Plan. The Distributor is authorized under the
Plan to pay "Recipients," as hereinafter defined, for rendering (1) distribution
assistance in connection with the sale of Shares and/or (2) administrative
support services with respect to Accounts. Such Recipients are intended to have
certain rights as third-party beneficiaries under this Plan. The terms and
provisions of this Plan shall be interpreted and defined in a manner consistent
with the provisions and definitions contained in (i) the 1940 Act, (ii) the
Rule, (iii) Article III, Section 26, of the Rules of Fair Practice of the
National Association of Securities Dealers, Inc., or its successor (the "NASD
Rules of Fair Practice") and (iv) any conditions pertaining either to
distribution-related expenses or to a plan of distribution, to which the Fund is
subject under any order on which the Fund relies, issued at any time by the
Securities and Exchange Commission.
2. Definitions. As used in this Plan, the following terms shall have the
following meanings:
(a) "Recipient" shall mean any broker, dealer, bank or other person or
entity which: (i) has rendered assistance (whether direct, administrative or
both) in the distribution of Shares or has provided administrative support
services with respect to Shares held by Customers (defined below) of the
Recipient; (ii) shall furnish the Distributor (on behalf of the Fund) with such
information as the Distributor shall reasonably request to answer such questions
as may arise concerning the sale of Shares; and (iii) has been selected by the
Distributor to receive payments under the Plan. Notwithstanding the foregoing, a
majority of the Trust's Board of Trustees (the "Board") who are not "interested
persons" (as defined in the 1940 Act) and who have no direct or indirect
financial interest in the operation of this Plan or in
any agreements relating to this Plan (the "Independent Trustees") may
remove any broker, dealer, bank or other person or entity as a Recipient,
whereupon such person's or entity's rights as a third-party beneficiary
hereof shall terminate.
(b) "Qualified Holdings" shall mean, as to any Recipient, all Shares owned
beneficially or of record by: (i) such Recipient, or (ii) such customers,
clients and/or accounts as to which such Recipient is a fiduciary or custodian
or co-fiduciary or co-custodian (collectively, the "Customers"), but in no event
shall any such Shares be deemed owned by more than one Recipient for purposes of
this Plan. In the event that more than one person or entity would otherwise
qualify as Recipients as to the same Shares, the Recipient which is the dealer
of record on the Fund's books as determined by the Distributor shall be deemed
the Recipient as to such Shares for purposes of this Plan.
3. Payments for Distribution Assistance and Administrative Support Services.
(a) The Fund will make payments to the Distributor, (i) within forty-five
(45) days of the end of each calendar quarter, in the aggregate amount of ___%
(___% on an annual basis) of the average during the calendar quarter of the
aggregate net asset value of the Shares computed as of the close of each
business day (the "Service Fee"), plus (ii) within ten (10) days of the end of
each month, in the aggregate amount of ____% (____% on an annual basis) of the
average during the month of the aggregate net asset value of Shares computed as
of the close of each business day (the "Asset-Based Sales Charge") outstanding
for six years or less (the "Maximum Holding Period"). Such Service Fee payments
received from the Fund will compensate the Distributor and Recipients for
providing administrative support services with respect to Accounts. Such
Asset-Based Sales Charge payments received from the Fund will compensate the
Distributor and Recipients for providing distribution assistance in connection
with the sale of Shares.
The administrative support services in connection with the Accounts to be
rendered by Recipients may include, but shall not be limited to, the following:
answering routine inquiries concerning the Fund, assisting in the establishment
and maintenance of accounts or sub-accounts in the Fund and processing Share
redemption transactions, making the Fund's investment plans and dividend payment
options available, and providing such other information and services in
connection with the rendering of personal services and/or the maintenance of
Accounts, as the Distributor or the Fund may reasonably request.
The distribution assistance in connection with the sale of Shares to be
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 holders of the Fund's Shares ("Shareholders"), and
providing such other information and services in connection with the
distribution of Shares as the Distributor or the Fund may reasonably request.
C-2
It may be presumed that a Recipient has provided distribution assistance or
administrative support services qualifying for payment under the Plan if it has
Qualified Holdings of Shares to entitle it to payments under the Plan. In the
event that either the Distributor or the Board should have reason to believe
that, notwithstanding the level of Qualified Holdings, a Recipient may not be
rendering appropriate distribution assistance in connection with the sale of
Shares or administrative support services for Accounts, then the Distributor, at
the request of the Board, shall require the Recipient to provide a written
report or other information to verify that said Recipient is providing
appropriate distribution assistance and/or services in this regard. If the
Distributor or the Board of Trustees still is not satisfied, either may take
appropriate steps to terminate the Recipient's status as such under the Plan,
whereupon such Recipient's rights as a third-party beneficiary hereunder shall
terminate.
(b) The Distributor shall make service fee payments to any Recipient
quarterly, within forty-five (45) days of the end of each calendar quarter, at a
rate not to exceed ____% (____% on an annual basis) of the average during the
calendar quarter of the aggregate net asset value of Shares computed as of the
close of each business day, constituting Qualified Holdings owned beneficially
or of record by the Recipient or by its Customers for a period of more than the
minimum period (the "Minimum Holding Period"), if any, to be set from time to
time by a majority of the Independent Trustees.
Alternatively, the Distributor may, at its sole option, make service fee
payments ("Advance Service Fee Payments") to any Recipient quarterly, within
forty-five (45) days of the end of each calendar quarter, at a rate not to
exceed (i) ___% of the average during the calendar quarter of the aggregate net
asset value of Shares, computed as of the close of business on the day such
Shares are sold, constituting Qualified Holdings sold by the Recipient during
that quarter and owned beneficially or of record by the Recipient or by its
Customers, plus (ii) ____% (___% on an annual basis) of the average during the
calendar quarter of the aggregate net asset value of Shares computed as of the
close of each business day, constituting Qualified Holdings owned beneficially
or of record by the Recipient or by its Customers for a period of more than one
(1) year, subject to reduction or chargeback so that the Advance Service Fee
Payments do not exceed the limits on payments to Recipients that are, or may be,
imposed by Article III, Section 26, of the NASD Rules of Fair Practice. In the
event Shares are redeemed less than one year after the date such Shares were
sold, the Recipient is obligated and will repay to the Distributor on demand a
pro rata portion of such Advance Service Fee Payments, based on the ratio of the
time such shares were held to one (1) year.
The Advance Service Fee Payments described in part (i) of this paragraph
(b) may, at the Distributor's sole option, be made more often than quarterly,
and sooner than the end of the calendar quarter. In addition, the Distributor
may make asset-based sales charge payments to any Recipient quarterly, within
forty-five (45) days of the end of each calendar quarter, at a rate not to
exceed ___% (____% on an annual basis) of the average during the calendar
quarter of the aggregate net asset value of Shares computed as of the close of
each business day, constituting Qualified Holdings owned beneficially or of
record by the Recipient or by its Customers. However, no such service fee or
asset-based sales charge payments (collectively, the "Recipient Payments") shall
be made to any Recipient for any such quarter in which its Qualified Holdings do
not equal or exceed, at the end of such quarter, the minimum amount ("Minimum
Qualified Holdings"), if any, to be set from time to time by a majority of the
Independent Trustees.
C-3
A majority of the Independent Trustees may at any time or from time to time
decrease and thereafter adjust the rate of fees to be paid to the Distributor or
to any Recipient, but not to exceed the rate set forth above, and/or direct the
Distributor to increase or decrease the Minimum Holding Period or the Minimum
Qualified Holdings. The Distributor shall notify all Recipients of the Minimum
Qualified Holdings, Maximum Holding Period and Minimum Holding Period, if any,
and the rates of Recipient Payments hereunder applicable to Recipients, and
shall provide each Recipient with written notice within thirty (30) days after
any change in these provisions. Inclusion of such provisions or a change in such
provisions in a revised current prospectus shall constitute sufficient notice.
The Distributor may make Plan payments to any "affiliated person" (as defined in
the 1940 Act) of the Distributor if such affiliated person qualifies as a
Recipient.
(c) The Service Fee and the Asset-Based Sales Charge on Shares are subject
to reduction or elimination of such amounts under the limits to which the
Distributor is, or may become, subject under Article III, Section 26, of the
NASD Rules of Fair Practice. The distribution assistance and administrative
support services to be rendered by the Distributor in connection with the Shares
may include, but shall not be limited to, the following: (i) paying sales
commissions to any broker, dealer, bank or other person or entity that sells
Shares, and\or paying such persons Advance Service Fee Payments in advance of,
and\or greater than, the amount provided for in Section 3(b) of this Agreement;
(ii) paying compensation to and expenses of personnel of the Distributor who
support distribution of Shares by Recipients; (iii) obtaining financing or
providing such financing from its own resources, or from an affiliate, for the
interest and other borrowing costs of the Distributor's unreimbursed expenses
incurred in rendering distribution assistance and administrative support
services to the Fund; (iv) paying other direct distribution costs, including
without limitation the costs of sales literature, advertising and prospectuses
(other than those furnished to current Shareholders) and state "blue sky"
registration expenses; and (v) any service rendered by the Distributor that a
Recipient may render pursuant to part (a) of this Section 3. Such services
include distribution assistance and administrative support services rendered in
connection with Shares acquired (i) by purchase, (ii) in exchange for shares of
another investment company for which the Distributor serves as distributor or
sub-distributor, or (ii) pursuant to a plan of reorganization to which the Fund
is a party. In the event that the Board should have reason to believe that the
Distributor may not be rendering appropriate distribution assistance or
administrative support services in connection with the sale of Shares, then the
Distributor, at the request of the Board, shall provide the Board with a written
report or other information to verify that the Distributor is providing
appropriate services in this regard.
(d) Under the Plan, payments may be made to Recipients: (i) by Oppenheimer
Management Corporation ("OMC") from its own resources (which may include profits
derived from the advisory fee it receives from the Fund), or (ii) by the
Distributor (a subsidiary of OMC), from its own resources, from Asset-Based
Sales Charge payments or from its borrowings.
C-4
(e) Notwithstanding any other provision of this Plan, this Plan does not
obligate or in any way make the Fund liable to make any payment whatsoever to
any person or entity other than directly to the Distributor. In no event shall
the amounts to be paid to the Distributor exceed the rate of fees to be paid by
the Fund to the Distributor set forth in paragraph (a) of this section 3.
4. Selection and Nomination of Trustees. While this Plan is in effect, the
selection and nomination of those persons to be Trustees of the Trust who are
not "interested persons" of the Trust ("Disinterested Trustees") shall be
committed to the discretion of such Disinterested Trustees. Nothing herein shall
prevent the Disinterested Trustees from soliciting the views or the involvement
of others in such selection or nomination if the final decision on any such
selection and nomination is approved by a majority of the incumbent
Disinterested Trustees.
5. Reports. While this Plan is in effect, the Treasurer of the Trust shall
provide written reports to the Trust's Board for its review, detailing services
rendered in connection with the distribution of the 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 this Plan have been complied with.
6. Related Agreements. Any agreement related to this Plan shall be in
writing and shall provide that: (i) such agreement may be terminated at any
time, without payment of any penalty, by a vote of a majority of the Independent
Trustees or by a vote of the holders of a "majority" (as defined in the 1940
Act) of the Fund's outstanding voting securities of the Class, on not more than
sixty days written notice to any other party to the agreement; (ii) such
agreement shall automatically terminate in the event of its assignment (as
defined in the 1940 Act); (iii) it shall go into effect when approved by a vote
of the Board and its Independent Trustees cast in person at a meeting called for
the purpose of voting on such agreement; and (iv) it shall, unless terminated as
herein provided, continue in effect from year to year only so long as such
continuance is specifically approved at least annually by a vote of the Board
and its Independent Trustees cast in person at a meeting called for the purpose
of voting on such continuance.
7. Effectiveness, Continuation, Termination and Amendment. This Plan has
been approved by a vote of the Board and its Independent Trustees cast in person
at a meeting called on __________, 1995, for the purpose of voting on this Plan,
and shall take effect after approved by Class __ shareholders of the Fund, at
which time it shall replace the Fund's Distribution and Service Plan and
Agreement for the Shares adopted _________. Unless terminated as hereinafter
provided, it shall continue in effect from year to year from the date first set
forth above or as the Board may otherwise determine only so long as such
continuance is specifically approved at least annually by a vote of the Board
and its Independent Trustees cast in person at a meeting called for the purpose
of voting on such continuance. This Plan may not be amended to increase
materially the amount of payments to be made without approval of the Class __
Shareholders, in the manner described above, and all material amendments must be
approved by a vote of the Board and of the Independent Trustees. This Plan may
be terminated at any time by vote of a majority of the Independent Trustees or
by the vote of the holders of a "majority" (as defined in the 1940 Act) of the
Fund's outstanding voting securities of the Class. In the event of such
termination, the Board and its Independent Trustees shall determine whether the
Distributor shall be entitled to payment from the Fund of all or a portion of
the Service Fee and/or the Asset-Based Sales Charge in respect of Shares sold
prior to the effective date of such termination.
C-5
8. Disclaimer of Shareholder and Trustee Liability. The Distributor
understands that the obligations of the Fund under this Plan are not binding
upon any Trustee of the Trust or shareholder of the Fund personally, but bind
only the Fund and the Fund's property. The Distributor represents that it has
notice of the provisions of the Declaration of Trust of the Trust disclaiming
shareholder and Trustee liability for acts or obligations of the Fund.
_________________________________, on
behalf of
-------------------------------------
By: _________________________________
OPPENHEIMER FUNDS DISTRIBUTOR, INC.
By: _________________________________
C-6
EXHIBIT D
FORM OF AMENDED AND RESTATED
SERVICE PLAN AND AGREEMENT
BETWEEN
________________________________________ AND
OPPENHEIMER FUNDS DISTRIBUTOR, INC.
FOR CLASS __ SHARES
AMENDED AND RESTATED SERVICE PLAN AND AGREEMENT dated the __ day of
January, 1996, by and between ___________________________ (the "Trust"), on
behalf of ________________________ (the "Fund") and OPPENHEIMER FUNDS
DISTRIBUTOR, INC. (the "Distributor").
1. The Plan. This Plan is the Fund's written service plan for its Class __
Shares described in the Fund's registration statement as of the date this Plan
takes effect, contemplated by and to comply with Article III, Section 26 of the
Rules of Fair Practice of the National Association of Securities Dealers,
pursuant to which the Fund will reimburse the Distributor for a portion of its
costs incurred in connection with the personal service and the maintenance of
shareholder accounts ("Accounts") that hold Class __ Shares (the "Shares") of
such series and class of the Fund. The Fund may be deemed to be acting as
distributor of securities of which it is the issuer, pursuant to Rule 12b-1
under the Investment Company Act of 1940 (the "1940 Act"), according to the
terms of this Plan. The Distributor is authorized under the Plan to pay
"Recipients," as hereinafter defined, for rendering services and for the
maintenance of Accounts. Such Recipients are intended to have certain rights as
third-party beneficiaries under this Plan.
2. Definitions. As used in this Plan, the following terms shall have the
following meanings:
(a) "Recipient" shall mean any broker, dealer, bank or other financial
institution which: (i) has rendered services in connection with the
personal service and maintenance of Accounts; (ii) shall furnish the
Distributor (on behalf of the Fund) with such information as the
Distributor shall reasonably request to answer such questions as may arise
concerning such service; and (iii) has been selected by the Distributor to
receive payments under the Plan. Notwithstanding the foregoing, a majority
of the Trust's Board of Trustees (the "Board") who are not "interested
persons" (as defined in the 1940 Act) and who have no direct or indirect
financial interest in the operation of this Plan or in any agreements
relating to this Plan (the "Independent Trustees") may remove any broker,
dealer, bank or other institution as a Recipient, whereupon such entity's
rights as a third party beneficiary hereof shall terminate.
(b) "Qualified Holdings" shall mean, as to any Recipient, all Shares
owned beneficially or of record by: (i) such Recipient, or (ii) such
customers, clients and/or accounts as to
which such Recipient is a fiduciary or custodian or co-fiduciary or
co-custodian (collectively, the "Customers"), but in no event shall any
such Shares be deemed owned by more than one Recipient for purposes of this
Plan. In the event that two entities would otherwise qualify as Recipients
as to the same Shares, the Recipient which is the dealer of record on the
Fund's books shall be deemed the Recipient as to such Shares for purposes
of this Plan.
3. Payments for Distribution Assistance.
(a) Under the Plan, the Fund will make payments to the Distributor, within
forty-five (45) days of the end of each calendar quarter, in the amount of the
lesser of: (i) ____% (___% on an annual basis) of the average during the
calendar quarter of the aggregate net asset value of the Shares computed as of
the close of each business day, or (ii) the Distributor's actual expenses under
the Plan for that quarter of the type approved by the Board. The Distributor
will use such fee received from the Fund in its entirety to reimburse itself for
payments to Recipients and for its other expenditures and costs of the type
approved by the Board incurred in connection with the personal service and
maintenance of Accounts including, but not limited to, the services described in
the following paragraph. The Distributor may make Plan payments to any
"affiliated person" (as defined in the 1940 Act) of the Distributor if such
affiliated person qualifies as a Recipient.
The services to be rendered by the Distributor and Recipients in connection
with the personal service and the maintenance of 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. It may be presumed that a
Recipient has provided services qualifying for compensation under the Plan if it
has Qualified Holdings of Shares to entitle it to payments under the Plan. In
the event that either the Distributor or the Board should have reason to believe
that, notwithstanding the level of Qualified Holdings, a Recipient may not be
rendering appropriate services, then the Distributor, at the request of the
Board, shall require the Recipient to provide a written report or other
information to verify that said Recipient is providing appropriate services in
this regard. If the Distributor still is not satisfied, it may take appropriate
steps to terminate the Recipient's status as such under the Plan, whereupon such
entity's rights as a third-party beneficiary hereunder shall terminate.
Payments received by the Distributor from the Fund under the Plan will not
be used to pay any interest expense, carrying charge or other financial costs,
or allocation of overhead of the Distributor, or for any other purpose other
than for the payments described in this Section 3. The amount payable to the
Distributor each quarter will be reduced to the extent that reimbursement
payments otherwise permissible under the Plan have not been authorized by the
Board of Trustees for that quarter. Any unreimbursed expenses incurred for any
quarter by the Distributor may not be recovered in later periods.
D-2
(b) The Distributor shall make payments to any Recipient quarterly,
within forty-five (45) days of the end of each calendar quarter, at a rate
not to exceed ___% (___% on an annual basis) of the average during the
calendar quarter of the aggregate net asset value of the Shares computed as
of the close of each business day of Qualified Holdings (excluding Shares
acquired in reorganizations with investment companies for which Oppenheimer
Management Corporation or an affiliate acts as investment adviser and which
have not adopted a distribution plan at the time of reorganization with the
Fund). However, no such payments shall be made to any Recipient for any
such quarter in which its Qualified Holdings do not equal or exceed, at the
end of such quarter, the minimum amount ("Minimum Qualified Holdings"), if
any, to be set from time to time by a majority of the Independent Trustees.
A majority of the Independent Trustees may at any time or from time to time
increase or decrease and thereafter adjust the rate of fees to be paid to
the Distributor or to any Recipient, but not to exceed the rate set forth
above, and/or increase or decrease the number of shares constituting
Minimum Qualified Holdings. The Distributor shall notify all Recipients of
the Minimum Qualified Holdings and the rate of payments hereunder
applicable to Recipients, and shall provide each such Recipient with
written notice within thirty (30) days after any change in these
provisions. Inclusion of such provisions or a change in such provisions in
a revised current prospectus shall be sufficient notice.
(c) Under the Plan, payments may be made to Recipients: (i) by
Oppenheimer Management Corporation ("OMC") from its own resources (which
may include profits derived from the advisory fee it receives from the
Fund), or (ii) by the Distributor (a subsidiary of OMC), from its own
resources.
4. Selection and Nomination of Trustees. While this Plan is in effect, the
selection or replacement of Independent Trustees and the nomination of those
persons to be Trustees of the Trust who are not "interested persons" of the
Trust shall be committed to the discretion of the Independent Trustees. Nothing
herein shall prevent the Independent Trustees from soliciting the views or the
involvement of others in such selection or nomination if the final decision on
any such selection and nomination is approved by a majority of the incumbent
Independent Trustees.
5. Reports. While this Plan is in effect, the Treasurer of the Trust shall
provide at least quarterly a written report to the Trust's Board for its review,
detailing the amount of all payments made pursuant to this Plan, the identity of
the Recipient of each such payment, and the purposes for which the payments were
made. The report shall state whether all provisions of Section 3 of this Plan
have been complied with. The Distributor shall annually certify to the Board the
amount of its total expenses incurred that year with respect to the personal
service and maintenance of Accounts in conjunction with the Board's annual
review of the continuation of the Plan.
6. Related Agreements. Any agreement related to this Plan shall be in
writing and shall provide that: (i) such agreement may be terminated at any
time, without payment of any penalty, by vote of a majority of the Independent
Trustees or by a vote of the holders of a "majority" (as defined in the 1940
Act) of the Fund's outstanding Shares of the Class, on not more than sixty days
written notice to any other party to the agreement; (ii) such agreement shall
automatically terminate in the event of its "assignment" (as defined in the 1940
Act); (iii) it shall go into effect when approved by a vote of the Board and its
Independent Trustees cast in person at a meeting called for the purpose of
voting on such agreement; and (iv) it shall, unless terminated as herein
provided, continue in effect from
D-3
year to year only so long as such continuance is specifically approved at least
annually by the Board and its Independent Trustees cast in person at a meeting
called for the purpose of voting on such continuance.
7. Effectiveness, Continuation, Termination and Amendment. This Plan has
been approved by a vote of the Independent Trustees cast in person at a meeting
called on __________, 1995 for the purpose of voting on this Plan, and shall
take effect after approved by Class __ shareholders of the Fund, at which time
it shall replace the Fund's Distribution Plan for Class __ shares adopted
________. Unless terminated as hereinafter provided, it shall continue in effect
from year to year from the date first set forth above or as the Board may
otherwise determine only so long as such continuance is specifically approved at
least annually by the Board and its Independent Trustees cast in person at a
meeting called for the purpose of voting on such continuance. This Plan may be
terminated at any time by vote of a majority of the Independent Trustees or by
the vote of the holders of a "majority" (as defined in the 1940 Act) of the
Fund's outstanding voting securities of the Class. This Plan may not be amended
to increase materially the amount of payments to be made without approval of the
Class __ Shareholders, in the manner described above, and all material
amendments must be approved by a vote of the Board and of the Independent
Trustees.
8. Shareholder and Trustee Liability Disclaimer. The Distributor
understands and agrees that the obligations of the Fund under this Plan are not
binding upon any shareholder of the Fund or Trustee of the Trust personally, but
only the Fund and the Fund's property. The Distributor represents that it has
notice of the provisions of the Declaration of Trust of the Trust disclaiming
shareholder and Trustee liability for acts or obligations of the Fund.
_________________________________________, on behalf of
_______________________________________________________
By:____________________________________________________
OPPENHEIMER FUNDS DISTRIBUTOR, INC.
By:____________________________________________________
D-4
PROXY
ROCHESTER FUND SERIES-THE BOND FUND FOR GROWTH
CLASS A SHARES
SPECIAL MEETING OF SHAREHOLDERS
December 21, 1995
The undersigned hereby appoints as proxies Joseph A. Burnett and Angelo A.
Costanza, each with the power of substitution, and hereby authorizes them, or
either of them, to represent and to vote, as designated below, all the Class A
Shares of Rochester Fund Series - The Bond Fund For Growth ("Fund") held of
record by the undersigned as of October 30, 1995 at the Special Meeting of
Shareholders to be held on December 21, 1995, or any adjournment thereof, with
discretionary power to vote upon such other business as may properly come before
the meeting. Unless indicated to the contrary, this proxy shall be deemed to
grant authority to vote "FOR" each proposal.
This proxy is solicited on behalf of the Board of Trustees
The undersigned hereby acknowledges receipt of the Proxy Statement prepared
on behalf of the Board of Trustees with respect to the matters designated on
this proxy.
Please date and sign this proxy and return it in the enclosed postage-paid
envelope to Boston Financial Data Services Inc., 2 Heritage Drive, Boston,
Massachusetts 02171. Indicate your vote by completely filling in the appropriate
boxes on the reverse side.
CHECK HERE IF YOU PLAN TO ATTEND THE MEETING [ ]
______________________________
Signature
______________________________ Date ________________________
Signature
Note: Please sign exactly as your name appears on the proxy. If signing for
estates, trusts or corporations, title or capacity should be stated. If shares
are held jointly, each holder must sign.
Proposal No. 1: Approve a new Investment Advisory Agreement between
the Fund and Oppenheimer Management Corporation
[ ] FOR [ ] AGAINST [ ] ABSTAIN
Proposal No. 2: Elect Trustees (INSTRUCTION: To withhold authority to vote
for any individual nominee, strike a line through the
nominee's name in the list below.)
John Cannon Paul Clinton Thomas Courtney
Lacy Herrmann George Loft Bridget Macaskill
Proposal No. 3: Approve an Amended and Restated Distribution and Service Plan
and Agreement between the Fund and Oppenheimer Funds
Distributor, Inc. for Class A Shares
[ ] FOR [ ] AGAINST [ ] ABSTAIN
Proposal No. 4: Ratify the selection of Price Waterhouse LLP as the Fund's
independent accountants for the 1995 fiscal year
[ ] FOR [ ] AGAINST [ ] ABSTAIN
Proposal No. 5: Approve amendment of the Fund's fundamental investment
policies to eliminate the policy which, as to 50% of the
total assets of the Fund, limits the amount of voting
securities of any issuer in which the Fund may invest to 10%
[ ] FOR [ ] AGAINST [ ] ABSTAIN
PLEASE SIGN AND DATE THE REVERSESIDE OF THIS CARD
PROXY
ROCHESTER FUND SERIES-THE BOND FUND FOR GROWTH
CLASS B SHARES
SPECIAL MEETING OF SHAREHOLDERS
December 21, 1995
The undersigned hereby appoints as proxies Joseph A. Burnett and Angelo A.
Costanza, each with the power of substitution, and hereby authorizes them, or
either of them, to represent and to vote, as designated below, all the Class B
Shares of Rochester Fund Series - The Bond Fund For Growth ("Fund") held of
record by the undersigned as of October 30, 1995 at the Special Meeting of
Shareholders to be held on December 21, 1995, or any adjournment thereof, with
discretionary power to vote upon such other business as may properly come before
the meeting. Unless indicated to the contrary, this proxy shall be deemed to
grant authority to vote "FOR" each proposal.
This proxy is solicited on behalf of the Board of Trustees
The undersigned hereby acknowledges receipt of the Proxy Statement prepared
on behalf of the Board of Trustees with respect to the matters designated on
this proxy.
Please date and sign this proxy and return it in the enclosed postage-paid
envelope to Boston Financial Data Services Inc., 2 Heritage Drive, Boston,
Massachusetts 02171. Indicate your vote by completely filling in the appropriate
boxes on the reverse side.
CHECK HERE IF YOU PLAN TO ATTEND THE MEETING [ ]
______________________________
Signature
______________________________ Date ________________________
Signature
Note: Please sign exactly as your name appears on the proxy. If signing for
estates, trusts or corporations, title or capacity should be stated. If shares
are held jointly, each holder must sign.
Proposal No. 1: Approve a new Investment Advisory Agreement between the Fund
and Oppenheimer Management Corporation
[ ] FOR [ ] AGAINST [ ] ABSTAIN
Proposal No. 2: Elect Trustees (INSTRUCTION: To withhold authority to vote
for any individual nominee, strike a line through the
nominee's name in the list below.)
John Cannon Paul Clinton Thomas Courtney
Lacy Herrmann George Loft Bridget Macaskill
Proposal No. 3: Approve an Amended and Restated Distribution and Service Plan
and Agreement between the Fund and Oppenheimer Funds
Distributor, Inc. for Class B Shares
[ ] FOR [ ] AGAINST [ ] ABSTAIN
Proposal No. 4: Ratify the selection of Price Waterhouse LLP as the Fund's
independent accountants for the 1995 fiscal year
[ ] FOR [ ] AGAINST [ ] ABSTAIN
Proposal No. 5: Approve amendment of the Fund's fundamental investment
policies to eliminate the policy which, as to 50% of the
total assets of the Fund, limits the amount of voting
securities of any issuer in which the Fund may invest to 10%
[ ] FOR [ ] AGAINST [ ] ABSTAIN
PLEASE SIGN AND DATE THE REVERSE SIDE OF THIS CARD
PROXY
ROCHESTER FUND SERIES-THE BOND FUND FOR GROWTH
CLASS Y SHARES
SPECIAL MEETING OF SHAREHOLDERS
December 21, 1995
The undersigned hereby appoints as proxies Joseph A. Burnett and Angelo A.
Costanza, each with the power of substitution, and hereby authorizes them, or
either of them, to represent and to vote, as designated below, all the Class Y
Shares of Rochester Fund Series - The Bond Fund For Growth ("Fund") held of
record by the undersigned as of October 30, 1995 at the Special Meeting of
Shareholders to be held on December 21, 1995, or any adjournment thereof, with
discretionary power to vote upon such other business as may properly come before
the meeting. Unless indicated to the contrary, this proxy shall be deemed to
grant authority to vote "FOR" each proposal.
This proxy is solicited on behalf of the Board of Trustees
The undersigned hereby acknowledges receipt of the Proxy Statement prepared on
behalf of the Board of Trustees with respect to the matters designated on this
proxy.
Please date and sign this proxy and return it in the enclosed postage-paid
envelope to Boston Financial Data Services Inc., 2 Heritage Drive, Boston,
Massachusetts 02171. Indicate your vote by completely filling in the appropriate
boxes on the reverse side.
CHECK HERE IF YOU PLAN TO ATTEND THE MEETING [ ]
______________________________
Signature
______________________________ Date ________________________
Signature
Note: Please sign exactly as your name appears on the proxy. If signing for
estates, trusts or corporations, title or capacity should be stated. If shares
are held jointly, each holder must sign.
Proposal No. 1: Approve a new Investment Advisory Agreement between the Fund
and Oppenheimer Management Corporation
[ ] FOR [ ] AGAINST [ ] ABSTAIN
Proposal No. 2: Elect Trustees (INSTRUCTION: To withhold authority to vote
for any individual nominee, strike a line through the
nominee's name in the list below.)
John Cannon Paul Clinton Thomas Courtney
Lacy Herrmann George Loft Bridget Macaskill
Proposal No. 3: Approve an Amended and Restated Service Plan and Agreement
between the Fund and Oppenheimer Funds Distributor, Inc. for
Class Y Shares
[ ] FOR [ ] AGAINST [ ] ABSTAIN
Proposal No. 4: Ratify the selection of Price Waterhouse LLP as the Fund's
independent accountants for the 1995 fiscal year
[ ] FOR [ ] AGAINST [ ] ABSTAIN
Proposal No. 5: Approve amendment of the Fund's fundamental investment
policies to eliminate the policy which, as to 50% of the
total assets of the Fund, limits the amount of voting
securities of any issuer in which the Fund may invest to 10%
[ ] FOR [ ] AGAINST [ ] ABSTAIN
PLEASE SIGN AND DATE THE REVERSE SIDE OF THIS CARD