Definitive Proxy Statement

-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, NwXQhWOpbaBXzEoMos/ocQuuz7B97SwbgT6tSIWXYbIbBqUnXES7T3UoI2XJ39m8 Qb+knkjrAQvw3WsrPCRcgg== 0000728889-03-000506.txt : 20030811 0000728889-03-000506.hdr.sgml : 20030811 20030811161020 ACCESSION NUMBER: 0000728889-03-000506 CONFORMED SUBMISSION TYPE: DEF 14A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20020930 FILED AS OF DATE: 20030811 EFFECTIVENESS DATE: 20030811 FILER: COMPANY DATA: COMPANY CONFORMED NAME: OPPENHEIMER LIMITED TERM GOVERNMENT FUND CENTRAL INDEX KEY: 0000788303 IRS NUMBER: 366832913 STATE OF INCORPORATION: MA FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: DEF 14A SEC ACT: 1934 Act SEC FILE NUMBER: 811-04563 FILM NUMBER: 03834702 BUSINESS ADDRESS: STREET 1: 6803 SOUTH TUCSON WAY CITY: CENTENNIAL STATE: CO ZIP: 80112-3924 BUSINESS PHONE: 3036713200 MAIL ADDRESS: STREET 1: 6803 SOUTH TUCSON WAY STREET 2: 6803 SOUTH TUCSON WAY CITY: CENTENNIAL STATE: CO ZIP: 80112-3924 FORMER COMPANY: FORMER CONFORMED NAME: OPPENHEIMER GOVERNMENT SECURITIES FUND /CO/ DATE OF NAME CHANGE: 19931208 FORMER COMPANY: FORMER CONFORMED NAME: FIRST TRUST FUND /CO/ DATE OF NAME CHANGE: 19931208 FORMER COMPANY: FORMER CONFORMED NAME: OPPENHEIMER GOVERNMENT SECURITIES FUND DATE OF NAME CHANGE: 19931208 DEF 14A 1 defproxy.htm DEFINITIVE PROXY STATEMENT Definitive Proxy Statement

SCHEDULE 14A
Information Required in Proxy Statement
(Rule 14a-101)
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
(Amendment No. )

Filed by the Registrant / X /
Filed by a Party other than the Registrant / /

Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
/ X / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-12

OPPENHEIMER LIMITED-TERM GOVERNMENT FUND

(Name of Registrant as Specified in its Charter)

(Name of Person(s) Filing Proxy Statement if Other than Registrant)

Payment of Filing Fee (Check the appropriate box):

/ X / No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

(1) Title of each class of securities to which transaction applies:

(2) Aggregate number of securities to which transaction applies:

(3) Per unit price or other underlying value of transaction computed pursuant to Exchange
Act Rule 0-11 (Set forth the amount on which the filing fee is calculated and state
how it was determined):

(4) Proposed maximum aggregate value of transaction:

(5) Total fee paid:

/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid previously.
Identify the previous filing by registration statement number, or the Form or
Schedule and the date of its filing.
(1) Amount Previously Paid:

(2) Form, Schedule or Registration Statement No.: Schedule 14A

(3) Filing Party: Denis R. Molleur

(4) Date Filed: July 22, 2003

John V. Murphy
President & OppenheimerFunds Logo
Chief Executive Officer OppenheimerFunds,
Inc.
498 Seventh Avenue,
10th Floor
New York, NY 10018
www.oppenheimerfunds.com

August 22, 2003

Dear Oppenheimer Limited-Term Government Fund Shareholder,

We have scheduled a shareholder meeting on October 3, 2003 for you to decide
upon some important proposals for the Fund. Your ballot card and a detailed
statement of the issues are enclosed with this letter.

Your Board of Trustees believes the matters being proposed for approval are
in the best interests of the Fund and its shareholders and recommends a vote
"for" the election of Trustees and for each Proposal. Regardless of the
number of shares you own, it is important that your shares be represented and
voted. So we urge you to consider these issues carefully and make your vote
count.

How do you vote?

To cast your vote, simply mark, sign and date the enclosed proxy ballot and
return it in the postage-paid envelope today. You also may vote by telephone
by following the instructions on the proxy ballot. Using a touch-tone
telephone to cast your vote saves you time and helps reduce the Fund's
expenses. If you vote by phone, you do not need to mail the proxy ballot.

Remember, it can be expensive for the Fund--and ultimately for you as a
shareholder--to remail ballots if not enough responses are received to
conduct the meeting. If your vote is not received before the scheduled
meeting, you may receive a telephone call asking you to vote.

What are the issues?

o Election of Trustees. You are being asked to consider and approve the
election of eleven Trustees. You will find detailed information on the
Trustees in the enclosed proxy statement

o Approval of Elimination of a Fundamental Investment Policy. Your
approval is requested to eliminate a fundamental investment policy of the
Fund, and replace it with a non-fundamental policy.

Please read the enclosed proxy statement for complete details on these
proposals. Of course, if you have any questions, please contact your
financial advisor, or call us at 1.800.708.7780. As always, we appreciate
your confidence in OppenheimerFunds and look forward to serving you for many
years to come.

Sincerely,
John V. Murphy signature

Enclosures
XP0855.002.0803

OPPENHEIMER LIMITED-TERM GOVERNMENT FUND
PROXY CARD

PROXY FOR A SPECIAL MEETING OF SHAREHOLDERS TO BE HELD ON OCTOBER 3, 2003

The undersigned, revoking prior proxies, hereby appoints Brian Wixted, Connie
Bechtolt, Philip Vottiero, Kathleen Ives and Philip Masterson, and each of them, as
attorneys-in-fact and proxies of the undersigned, with full power of substitution,
to vote shares held in the name of the undersigned on the record date at the Special
Meeting of Shareholders of Oppenheimer Limited-Term Government Fund (the "Fund") to
be held at 6803 South Tucson Way, Centennial, Colorado, 80112, on October 3, 2003,
at 1:00 P. M. Mountain time, or at any adjournment thereof, upon the proposals
described in the Notice of Meeting and accompanying Proxy Statement, which have been
received by the undersigned.

This proxy is solicited on behalf of the Fund's Board of Trustees, and all proposals
(set forth on the reverse side of this proxy card) have been proposed by the Board
of Trustees. When properly executed, this proxy will be voted as indicated on the
reverse side or "FOR" a proposal if no choice is indicated. The proxy will be voted
in accordance with the proxy holders' best judgment as to any other matters that may
arise at the Meeting.

VOTE VIA THE TELEPHONE:
1-866-241-6192
CONTROL NUMBER: 999 9999 9999
999

Note: Please sign this proxy
exactly as your name or names
appear hereon. Each joint owner
should sign. Trustees and other
fiduciaries should indicate the
capacity in which they sign. If
a corporation, partnership or
other entity, this signature
should be that of a duly
authorized individual who should
state his or her title.

Signature

Signature of joint owner, if any

Date
OLT_13439

PLEASE VOTE ON THE REVERSE SIDE, SIGN AND DATE THIS PROXY AND RETURN PROMPTLY IN THE
ENCLOSED ENVELOPE

TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK. Example: [ ]
FOR
WITHHOLD FOR ALL
1. To elect a Board of Trustees: ALL
AUTHORITY EXCEPT
FOR
ALL
01 James C. Swain 02 John V. Murphy 03 William
L. Armstrong
04 Robert G. Avis 05 George C. Bowen 06 Edward L.
Cameron
07 Jon S. Fossel 08 Sam Freedman 09 Beverly L. Hamilton
10 Robert J. Malone 11 F. William Marshall, Jr. [ ]
[ ] [ ] 1.

IF YOU WISH TO WITHHOLD AUTHORITY TO VOTE YOUR SHARES "FOR" A PARTICULAR
NOMINEE, mark the "FOR ALL EXCEPT"
box and write the nominee's number(s) on the line provided below. Your
shares will be voted "FOR" any
remaining nominee(s).

- ------------------------------------------------------------------------------------------------------
FOR
AGAINST ABSTAIN
2. To approve the elimination of the Fund's fundamental investment policy on
Investing in U.S. Government
securities. [ ] [ ]
[ ] 2.

Vote your proxy over the phone.
Voting your proxy is important, and now it's easy.
Vote at your convenience, 24 hours a day, and save
postage costs which ultimately reduces fund expenses.
Read your Proxy Card carefully. To exercise your proxy,
just follow these three simple steps:
1. Call the toll free number: 1.866.241.6192
2. Enter the 14-digit Control Number, located on your Proxy Card.
3. Follow the voice instructions.
If you vote by phone please do not mail your Proxy Card.

Representatives from the Fund's transfer agent will be making calls to
certain shareholders letting them know that this proxy is being sent. The
following script will be used for those calls

Hello, my name is _____________________ from Shareholder Services, Inc., the
transfer agent for your Oppenheimer Limited-Term Government Fund.

I am calling you today to let you know that you will be receiving a proxy
statement and ballot for an upcoming shareholder meeting for your fund in the
next week or so.

We just wanted to let you know to expect the proxy and to ask you to please
be sure to read the proxy statement and vote your shares.

You can vote your shares by either:

1. Completing the proxy ballot and returning it in the postage paid envelope.
Please be sure to sign the ballot before you return it.
2. Voting by telephone. Your proxy will have instructions on how to do that.

Thank you for your time. We just wanted to call you and let you know that you
should expect to receive this proxy statement and to ask you to please vote.

OPPENHEIMER LIMITED-TERM
GOVERNMENT FUND

6803 South Tucson Way, Centennial, CO 80112

Notice Of Special Meeting Of Shareholders
To Be Held October 3, 2003

To The Shareholders of Oppenheimer Limited-Term Government Fund:

Notice is hereby given that a Special Meeting of the Shareholders (the "Meeting") of
Oppenheimer Limited-Term Government Fund (the "Fund") will be held at 6803 South Tucson Way,
Centennial, Colorado, 80112, at 1:00 P.M. Mountain time, on October 3, 2003 and any adjustments
thereof.

During the Meeting, shareholders of the Fund will vote on the following proposals:

1. To elect a Board of Trustees;

2. To approve the elimination of the Fund's fundamental investment policy on investing in
U.S. government securities;

3. To transact such other business as may properly come before the Meeting, or any
adjournments thereof.

Shareholders of record at the close of business on August 1, 2003 are entitled to vote at the
Meeting. The proposals are more fully discussed in the attached Proxy Statement. Please read it
carefully before telling us, through your proxy or in person, how you wish your shares to be
voted. The Board of Trustees of the Fund recommends a vote to elect each of the nominees as
Trustee and in favor of each proposal. WE URGE YOU TO MARK, SIGN, DATE AND MAIL THE ENCLOSED
PROXY PROMPTLY.

By Order of the Board of Trustees,

Robert G. Zack, Secretary
August 20, 2003

PLEASE RETURN YOUR PROXY BALLOT PROMPTLY.
YOUR VOTE IS IMPORTANT NO MATTER HOW MANY SHARES YOU OWN.

855

TABLE OF CONTENTS

Page

Questions and Answers

Proxy Statement

Proposal 1: To Elect a Board of Trustees

Proposal 2: To approve the elimination of the Fund's fundamental investment policy on investing
in U.S. government securities

Information About the Fund

Further Information About Voting and the Meeting

Other Matters

OPPENHEIMER LIMITED-TERM
GOVERNMENT FUND

6803 South Tucson Way, Centennial, CO 80112

PROXY STATEMENT

QUESTIONS AND ANSWERS

Q. Who is Asking for My Vote?

A. The Trustees of Oppenheimer Limited-Term Government Fund (the "Fund") have asked that you
vote on two matters at the Special Meeting of Shareholders to be held on October 3, 2003.

Q. Who is Eligible to Vote?

A. Shareholders of record at the close of business on August 1, 2003 are entitled to vote at
the Meeting or any adjournment of the Meeting. Shareholders are entitled to cast one vote
per share (and a fractional vote for a fractional share) for each matter presented at the
Meeting. It is expected that the Notice of Meeting, Proxy Ballot and Proxy Statement will be
mailed to shareholders of record on or about August 22, 2003.

Q. On What Matters Am I Being Asked to Vote?

A. You are being asked to vote on the following proposals:

1. To elect a Board of Trustees; and

2. To approve the elimination of the Fund's fundamental investment policy on investing in
U.S. government securities.

Q. How do the Trustees Recommend that I Vote?

A. The Trustees recommend that you vote:

1. FOR election of all nominees as Trustees; and

2. FOR the elimination of the Fund's fundamental investment policy on investing in U.S.
government securities.

Q. What are the Reasons for the Proposed Change to the Fund's Fundamental Investment Policy
Concerning Investing in U.S. Government Securities?

A. The Fund has a fundamental investment policy that requires it to invest its assets only
in obligations issued or guaranteed by the U.S. government or its agencies and
instrumentalities, repurchase agreements on those securities and hedging instruments
approved by the Fund's Board of Trustees. That policy has hindered the Fund's ability to
seek competitive yields as many of the Fund's top competitors are required to invest only
80% of their assets in U.S. government securities, with the remainder in corporate bonds and
other fixed-income securities.

Q. How Can I Vote?

A. You can vote in three (3) different ways:

o By mail, with the enclosed ballot
o In person at the Meeting (if you are a record owner)
o By telephone (please see the insert for instructions)

Voting by telephone is convenient and can help reduce the Fund's expenses. Whichever method
---------- ------------------------------------
you choose, please take the time to read the full text of the proxy statement before you
vote.

Please be advised that the deadline for voting by telephone is 3:00 P.M. Eastern time ("ET")
on the last business day before the Meeting.

Q. How Will My Vote Be Recorded?

A. Proxy ballots that are properly signed, dated and received at or prior to the Meeting, or
any adjournment thereof, will be voted as specified. If you specify a vote for any of the
proposals, your proxy will be voted as indicated. If you sign and date the proxy ballot, but
do not specify a vote for one or more of the proposals, your shares will be voted in favor
of the Trustees' recommendations. Telephonic votes will be recorded according to the
telephone voting procedures described in the "Further Information About Voting and the
Meeting" section of the Proxy Statement.

How Can I Revoke My Proxy?

A. You may revoke your proxy at any time before it is voted by forwarding a written revocation
or a later-dated proxy ballot to the Fund that is received at or prior to the Meeting, or
any adjournment thereof, or by attending the Meeting, or any adjournment thereof, and
voting in person (if you are a record owner). Please be advised that the deadline for
revoking your proxy by telephone is 3:00 P.M. (ET) on the last business day before the
Meeting.

Q. How Can I Get More Information About the Fund?

A. Copies of the Fund's Annual Report dated September 30, 2002 and Semi-Annual Report dated
March 31, 2003 have previously been mailed to Shareholders. If you would like to have copies
of the Fund's most recent Annual or Semi-Annual Reports sent to you free of charge, please
call us toll-free at 1.800.708.7780, write to the Fund at OppenheimerFunds Services, P.O.
Box 5270, Denver, Colorado 80217-5270 or visit the Oppenheimer funds website at
www.oppenheimerfunds.com.

Q. Whom Do I Call If I Have Questions?

A. Please call us at 1.800.708.7780.

The proxy statement is designed to furnish shareholders with the information necessary to vote
on the matters coming before the Meeting. If you have any questions, please call us at
1.800.708.7780.

OPPENHEIMER LIMITED-TERM
GOVERNMENT FUND

6803 South Tucson Way, Centennial, CO 80112

PROXY STATEMENT

Special Meeting of Shareholders
To Be Held October 3, 2003

This statement is furnished to the shareholders of Oppenheimer Limited-Term Government Fund
(the "Fund") in connection with the solicitation by the Fund's Board of Trustees of proxies to
be used at a special meeting of shareholders (the "Meeting") to be held at 6803 South Tucson
Way, Centennial, Colorado, 80112, at 1:00 P.M. Mountain time, on October 3, 2003, or any
adjournment thereof. It is expected that the mailing of this Proxy Statement will be made on or
about August 22, 2003.

SUMMARY OF PROPOSALS

- -------------------------------------------------------------------------------
Proposal Shareholders Voting
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
1. To Elect a Board of Trustees All
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
2. To Approve the Elimination of the Fund's All
Fundamental Investment Policy on Investing in
U.S. Government Securities
- -------------------------------------------------------------------------------

PROPOSAL 1: ELECTION OF TRUSTEES

At the Meeting, eleven (11) Trustees are to be elected. If elected, the Trustees will serve
indefinite terms until their successors are properly elected and qualified. The persons named
as attorneys-in-fact in the enclosed proxy have advised the Fund that, unless a proxy ballot
instructs them to withhold authority to vote for all listed nominees or any individual nominee,
all validly executed proxies will be voted for the election of all of the nominees named below.

As a Massachusetts business trust, the Fund is not required, and does not intend, to hold
annual shareholder meetings for the purpose of electing Trustees. As a result, if elected, the
Trustees will hold office until their successors are duly elected and shall have qualified. If
a nominee should be unable to accept election, serve his or her term or resign, the Board of
Trustees may, subject to the Investment Company Act of 1940 (referred to in this proxy
statement as the "Investment Company Act"), in its discretion, select another person to fill
the vacant position.

Although the Fund will not normally hold annual meetings of its shareholders, it may hold
shareholder meetings from time to time on important matters, and shareholders have the right to
call a meeting to remove a Trustee or to take other action described in the Fund's Declaration
of Trust. Also, if at any time, less than a majority of the Trustees holding office has been
elected by the shareholders, the Trustees then in office will promptly call a shareholders'
meeting for the purpose of electing Trustees.

Each of the nominees currently serves as a Trustee of the Fund. Each of the nominees has
consented to be named as such in this proxy statement and to serve as Trustee if elected. All
present Trustees of the Fund have previously been elected by the Fund's shareholders, except
for Mrs. Hamilton and Mr. Malone who were appointed as Trustees effective June 1, 2002 and Mr.
Murphy who was appointed as a Trustee effective October 2001. Each of the Trustees serves as
trustee or director of other funds in the Oppenheimer family of funds. The Oppenheimer funds on
which each of the Trustees currently serves are referred to as "Board II Funds" in this proxy
statement.

Except for Mr. Murphy, each of the Trustees is an independent trustee of the Fund ("Independent
Trustee"). Mr. Murphy is an "Interested Trustee" (as that term is defined in the Investment
Company Act) of the Fund because he is affiliated with OppenheimerFunds, Inc. (the "Manager")
by virtue of his positions as an officer and director of the Manager, and as a shareholder of
its parent company. Mr. Murphy was elected as a Trustee of the Fund with the understanding that
in the event he ceases to be the chief executive officer of the Manager, he will resign as a
trustee of the Fund and the other Board II Funds for which he is a trustee or director.

The Fund's Trustees and length of service as well as their principal occupations and business
affiliations during the past five years are listed below. The information for the Trustees also
includes the dollar range of shares of the Fund as well as the aggregate dollar range of shares
beneficially owned in any of the Oppenheimer funds overseen by the Trustees.

The address of each Trustee in the chart below is 6803 S. Tucson Way, Centennial, CO
80112-3924. If elected, each Trustee serves for an indefinite term, until his or her
resignation, retirement, death or removal.

- ----------------------------------------------------------------------------------
Nominees for Independent Trustee
- ----------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------
Name, Position(s) Principal Occupation(s) During Past Dollar Aggregate
Dollar
Range of
Shares
Beneficially
5 Years; Other Range of Owned in
Held with Fund, Trusteeships/Directorships Held by Shares the Board
Length of Service Nominee; Number of Portfolios in Beneficially II Funds
(as applicable) Fund Complex Currently Overseen by Owned in Overseen
and Age Nominee or Trustee the Fund by Nominee
- ----------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------
As of May 23, 2003
- ----------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------
James C. Swain, Formerly, Chief Executive Officer $0 Over
Chairman and (until August 27, 2002) of the Board $100,000
Trustee since 1990 II Funds, Vice Chairman (until
Age: 69 January 2, 2002) of the Manager and
President and a director (until
1997) of Centennial Asset Management
Corporation (a wholly-owned
investment advisory subsidiary of
the Manager). Oversees 43 portfolios
in the OppenheimerFunds complex.
- ----------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------
William L. Chairman of the following private $0 $50,001-$100,000
Armstrong, mortgage banking companies: Cherry
Vice Chairman and Creek Mortgage Company (since 1991),
Trustee since 1999 Centennial State Mortgage Company
Age: 66 (since 1994), The El Paso Mortgage
Company (since 1993), Transland
Financial Services, Inc. (since
1997); Chairman of the following
private companies: Great Frontier
Insurance (insurance agency) (since
1995), Ambassador Media Corporation
and Broadway Ventures (since 1984);
a director of the following public
companies: Helmerich & Payne, Inc.
(oil and gas drilling/production
company) (since 1992) and
UNUMProvident (insurance company)
(since 1991). Mr. Armstrong is also
a Director/Trustee of Campus Crusade
for Christ and the Bradley
Foundation. Formerly a director of
the following: Storage Technology
Corporation (a publicly-held
computer equipment company)
(1991-February 2003), and
International Family Entertainment
(television channel) (1992-1997),
Frontier Real Estate, Inc.
(residential real estate brokerage)
(1994-1999), and Frontier Title
(title insurance agency) (1995-June
1999); a U.S. Senator (January
1979-January 1991). Oversees 43
portfolios in the OppenheimerFunds
complex.
- ----------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------
Robert G. Avis, Formerly, Director and President of $0 Over
Trustee since 1993 A.G. Edwards Capital, Inc. (General $100,000
Age: 72 Partner of private equity funds)
(until February 2001); Chairman,
President and Chief Executive
Officer of A.G. Edwards Capital,
Inc. (until March 2000); Vice
Chairman and Director of A.G.
Edwards, Inc. and Vice Chairman of
A.G. Edwards & Sons, Inc. (its
brokerage company subsidiary) (until
March 1999); Chairman of A.G.
Edwards Trust Company and A.G.E.
Asset Management (investment
advisor) (until March 1999); and a
Director (until March 2000) of A.G.
Edwards & Sons and A.G. Edwards
Trust Company. Oversees 43
portfolios in the OppenheimerFunds
complex.
- ----------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------
George C. Bowen, Formerly (until April 1999): Senior $10,001-$50,Over
Trustee since 1998 Vice President (from September 1987) $100,000
Age: 66 and Treasurer (from March 1985) of
the Manager; Vice President (from
June 1983) and Treasurer (since
March 1985) of OppenheimerFunds
Distributor, Inc. (a subsidiary of
the Manager); Senior Vice President
(since February 1992), Treasurer
(since July 1991) Assistant
Secretary and a director (since
December 1991) of Centennial Asset
Management Corporation; Vice
President (since October 1989) and
Treasurer (since April 1986) of
HarbourView Asset Management
Corporation (an investment advisory
subsidiary of the Manager);
President, Treasurer and a director
(June 1989-January 1990) of
Centennial Capital Corporation (an
investment advisory subsidiary of
the Manager); Vice President and
Treasurer (since August 1978) and
Secretary (since April 1981) of
Shareholder Services, Inc. (a
transfer agent subsidiary of the
Manager); Vice President, Treasurer
and Secretary (since November 1989)
of Shareholder Financial Services,
Inc. (a transfer agent subsidiary of
the Manager); Assistant Treasurer
(since March 1998) of Oppenheimer
Acquisition Corp. (the Manager's
parent corporation); Treasurer
(since November 1989) of Oppenheimer
Partnership Holdings, Inc. (a
holding company subsidiary of the
Manager); Vice President and
Treasurer (since July 1996) of
Oppenheimer Real Asset Management,
Inc. (an investment advisory
subsidiary of the Manager); Chief
Executive Officer and director
(since March 1996) of MultiSource
Services, Inc. (a broker-dealer
subsidiary of the Manager);
Treasurer (since October 1997) of
OppenheimerFunds International Ltd.
and OppenheimerFunds plc (offshore
fund management subsidiaries of the
Manager). Oversees 43 portfolios in
the OppenheimerFunds complex.
- ----------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------
Edward L. Cameron, A member of The Life Guard of Mount $0 $50,001-
Trustee since 2001 Vernon, George Washington's home $100,000
Age: 64 (since June 2000). Formerly (March
2001 - May 2002) Director of Genetic
ID, Inc. and its subsidiaries (a
privately held biotech company); a
partner with PricewaterhouseCoopers
LLP (from 1974-1999) (an accounting
firm) and Chairman (from 1994-1998),
Price Waterhouse LLP Global
Investment Management Industry
Services Group. Oversees 43
portfolios in the OppenheimerFunds
complex.
- ----------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------
Jon S. Fossel, Chairman and Director (since 1998) $0 Over
Trustee since 1990 of Rocky Mountain Elk Foundation (a $100,000
Age: 61 not-for-profit foundation); and a
director (since October 1999) of
P.R. Pharmaceuticals (a privately
held company) and UNUMProvident (an
insurance company) (since June 1,
2002). Formerly Chairman and a
director (until October 1996) and
President and Chief Executive
Officer (until October 1995) of the
Manager; President, Chief Executive
Officer and a director of
Oppenheimer Acquisition Corp.,
Shareholders Services Inc. and
Shareholder Financials Services,
Inc. (until October 1995). Oversees
43 portfolios in the
OppenheimerFunds complex.
- ----------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------
Sam Freedman, Director of Colorado Uplift (a $0 Over
Trustee since 1996 non-profit charity) (since September $100,000
Age: 62 1984). Formerly (until October 1994)
Mr. Freedman held several positions
in subsidiary or affiliated
companies of the Manager. Oversees
43 portfolios in the
OppenheimerFunds complex.
- ----------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------
Beverly L. Trustee (since 1996) of MassMutual $0 $10,001-$50,000
Hamilton, Institutional Funds and of MML
Trustee since 2002 Series Investment Fund (open-end
Age: 56 investment companies); Director of
MML Services (since April 1987) and
America Funds Emerging Markets
Growth Fund (since October 1991)
(both are investment companies), The
California Endowment (a philanthropy
organization) (since April 2002),
and Community Hospital of Monterey
Peninsula, (since February 2002); a
trustee (since February 2000) of
Monterey International Studies (an
educational organization), and an
advisor to Unilever (Holland)'s
pension fund and to Credit Suisse
First Boston's Sprout venture
capital unit. Mrs. Hamilton also is
a member of the investment
committees of the Rockefeller
Foundation, the University of
Michigan and Hartford Hospital.
Formerly, President (February
1991-April 2000) ARCO Investment
Management Company. Oversees 44
portfolios in the OppenheimerFunds
complex.
- ----------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------
Robert J. Malone, Director (since 2001) of Jones $10,001-$50,Over
Trustee since 2002 Knowledge, Inc. (a privately held $100,000
Age: 58 company), U.S. Exploration, Inc.,
(since 1997), Colorado UpLIFT (a
non-profit organization) (since
1986) and a trustee of the Gallagher
Family Foundation (non-profit
organization) (since 2000).
Formerly, Chairman of U.S. Bank (a
subsidiary of U.S. Bancorp and
formerly Colorado National Bank,)
(July 1996-April 1, 1999) and a
director of Commercial Assets, Inc.
(a REIT) (1993-2000). Oversees 44
portfolios in the OppenheimerFunds
complex.
- ----------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------
F. William Trustee (since 1996) of MassMutual $0 Over
Marshall, Jr., Institutional Funds and of MML $100,000
Trustee since 2001 Series Investment Fund (open-end
Age: 61 investment companies); Trustee
(since 1987), Chairman of the Board
(since 2003) and Chairman of the
investment committee (since 1994)
for the Worcester Polytech
Institute; President and Treasurer
(since January 1999) of the SIS Fund
(a private not for profit charitable
fund); Trustee (since 1995) of the
Springfield Library and Museum
Association; Trustee (since 1996) of
the Community Music School of
Springfield. Formerly, member of the
investment committee of the
Community Foundation of Western
Massachusetts (1998 - 2003);
Chairman (January 1999-July 1999) of
SIS & Family Bank, F.S.B. (formerly
SIS Bank); President, Chief
Executive Officer and Director (May
1993-December 1998) of SIS Bankcorp,
Inc. and SIS Bank (formerly
Springfield Institution for Savings)
and Executive Vice President
(January 1999-July 1999) of Peoples
Heritage Financial Group, Inc.
Oversees 43 portfolios in the
OppenheimerFunds complex.
- ----------------------------------------------------------------------------------

The address of Mr. Murphy in the chart below is 498 Seventh Avenue, New York, NY 10018. If
elected, Mr. Murphy will serve for an indefinite term, until his resignation, retirement, death
or removal.

- ----------------------------------------------------------------------------------
Nominee for Interested Trustee
- ----------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------
Name, Position(s) Principal Occupation(s) During Past 5 Dollar Aggregate
Dollar
Range Of
Shares
Beneficially
Owned in
Range of Any of the
Held with Fund, Years; Other Shares Oppenheimer
Length of Service Trusteeships/Directorships Held by BeneficiallyFunds
(as applicable) Nominee; Number of Portfolios in Fund Owned in Overseen
and Age Complex Overseen by Nominee or Trustee the Fund by Nominee
- ----------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------
As of May 23, 2003
- ----------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------
John V. Murphy Chairman, Chief Executive Officer and $0 Over
President and director (since June 2001) and $100,000
Trustee, President (since September 2000) of
since 2001 the Manager; President and a director
Age: 54 or trustee of other Oppenheimer
funds; President and a director
(since July 2001) of Oppenheimer
Acquisition Corp. and of Oppenheimer
Partnership Holdings, Inc.; a
director (since November 2001) of
OppenheimerFunds Distributor, Inc.;
Chairman and a director (since July
2001) of Shareholder Services, Inc.
and of Shareholder Financial
Services, Inc.; President and a
director (since July 2001) of
OppenheimerFunds Legacy Program (a
charitable trust program established
by the Manager); a director of the
following investment advisory
subsidiaries of OppenheimerFunds,
Inc.: OFI Institutional Asset
Management, Inc. and Centennial Asset
Management Corporation (since
November 2001), HarbourView Asset
Management Corporation and OFI
Private Investments, Inc. (since July
2001); President (since November 1,
2001) and a director (since July
2001) of Oppenheimer Real Asset
Management, Inc.; a director (since
November 2001) of Trinity Investment
Management Corp. and Tremont
Advisers, Inc. (investment advisory
affiliates of the Manager); Executive
Vice President (since February 1997)
of Massachusetts Mutual Life
Insurance Company (the Manager's
parent company); a director (since
June 1995) of DLB Acquisition
Corporation (a holding company that
owns shares of David L. Babson &
Company, Inc.); formerly, Chief
Operating Officer (September
2000-June 2001) of the Manager;
President and trustee (November
1999-November 2001) of MML Series
Investment Fund and MassMutual
Institutional Funds (open-end
investment companies); a director
(September 1999-August 2000) of C.M.
Life Insurance Company; President,
Chief Executive Officer and director
(September 1999-August 2000) of MML
Bay State Life Insurance Company; a
director (June 1989-June 1998) of
Emerald Isle Bancorp and Hibernia
Savings Bank (a wholly-owned
subsidiary of Emerald Isle Bancorp).
Oversees 75 portfolios in the
OppenheimerFunds complex.
- ----------------------------------------------------------------------------------

A. General Information Regarding the Board of Trustees.

The Fund is governed by a Board of Trustees, which is responsible for protecting the interests
of shareholders. The Trustees meet periodically throughout the year to oversee the Fund's
activities, review its performance and review the actions of the Manager, which is responsible
for the Fund's day-to-day operations. Six regular meetings of the Trustees were held during the
fiscal year ended September 30, 2002. Each of the incumbent Trustees was present for at least
75% of the aggregate number of Board of Trustees meetings and committees on which that Trustee
served that were held during the period.

B. Committees of the Board of Trustees.

The Board of Trustees has appointed standing Audit and Review Committees. Both Committees are
comprised of Independent Trustees only.

The members of the Audit Committee are Edward L. Cameron (Chairman), William L. Armstrong,
George C. Bowen and Robert J. Malone. The Audit Committee held seven meetings during the fiscal
year ended September 30, 2002. The Audit Committee furnishes the Board with recommendations
regarding the selection of the Fund's independent auditors. Other main functions of the Audit
Committee include, but are not limited to: (i) reviewing the scope and results of financial
statement audits and the audit fees charged; (ii) reviewing reports from the Fund's independent
auditors regarding the Fund's internal accounting procedures and controls; (iii) review reports
from the Manager's Internal Audit Department; (iv) maintaining a separate line of communication
between the Fund's independent auditors and its Independent Trustees; and (v) exercise all
other functions outlined in the Audit Committee Charter including but not limited to reviewing
the independence of the Fund's independent auditors and the pre-approval of the performance by
the Fund's independent auditors of any non-audit service, including tax service, for the Fund
that is not prohibited by the Sarbanes-Oxley Act.

The Audit Committee's functions include selecting and nominating, to the full Board, nominees
for election as Trustees, and selecting and nominating Independent Trustees for election. The
Audit Committee may, but need not, consider the advice and recommendation of the Manager and
its affiliates in selecting nominees. The full Board elects new Trustees except for those
instances when a shareholder vote is required.

To date, the Committee has been able to identify from its own resources an ample number of
qualified candidates. Nonetheless, shareholders may submit names of individuals, accompanied by
complete and properly supported resumes, for the Audit Committee's consideration by mailing
such information to the Committee in care of the Fund. The Committee may consider such persons
at such time as it meets to consider possible nominees. The Committee, however, reserves sole
discretion to determine the candidates to present to the Board and/or shareholders when it
meets for the purpose of considering potential nominees.

The members of the Review Committee are Jon S. Fossel (Chairman), Robert G. Avis, Sam Freedman,
Beverly L. Hamilton and F. William Marshall, Jr. The Review Committee held seven meetings
during the fiscal year ended September 30, 2002. Among other functions, the Review Committee
reviews reports and makes recommendations to the Board concerning the fees paid to the Fund's
transfer agent and the services provided to the Fund by the transfer agent. The Review
Committee also reviews the Fund's investment performance and policies and procedures adopted by
the Fund to comply with Investment Company Act and other applicable law.

Based on the Audit Committee's recommendation, the Board of Trustees of the Fund, including a
majority of the Independent Trustees, at a meeting held October 22, 2002, selected Deloitte &
Touche LLP ("Deloitte") as auditors of the Fund for the fiscal year beginning October 1, 2002.
Deloitte also serves as auditors for certain other funds for which the Manager acts as
investment advisor and provides certain auditing and non-auditing services for the Manager and
its subsidiaries.

1. Audit Fees.

During the fiscal years ended September 30, 2001 and September 30, 2002, Deloitte performed
audit services for the Fund including the audit of the Fund's financial statements, review of
the Fund's annual report and registration statement amendment, consultation on financial
accounting and reporting matters and meetings with the Board of Trustees. The aggregate fees
billed by Deloitte for those services for the fiscal year ended September 30, 2001 were $24,000
and for the fiscal year ended September 30, 2002 were $26,000.

2. All Other Fees.

There were no fees billed by Deloitte for services rendered to the Fund other than the services
described above under "Audit Fees" for the fiscal year ended September 30, 2002. During the
fiscal years ended September 30, 2001 and 2002, Deloitte audited the Manager's financial
statements as well as the financial statements of the Manager's parent company and certain
affiliated companies that provide ongoing services to the Fund. Deloitte was paid a total of
$240,400 in 2001 and $282,800 in 2002 for those services. Additionally, Deloitte provided
certain tax accounting and other consulting services to the parent company of the Manager.
Deloitte was paid a total of $138,513 in 2001 and $77,900 in 2002 for those services. There
were no other non-audit fees billed by Deloitte for services rendered to the Manager, or any
entity controlling, controlled by or under common control with the Manager that provides
ongoing services to the Fund for the fiscal years ended September 30, 2001 or 2002.

The Audit Committee of the Fund's Board of Trustees considered whether the provision of these
non-audit services is compatible with maintaining Deloitte's independence with respect to the
audit services it provides to the Fund and concluded that the provision of such services did
not compromise Deloitte's independence.

Representatives of Deloitte are not expected to be present at the Meeting but will be available
should any matter arise requiring their presence.

C. Additional Information Regarding Trustees.

The Fund's Independent Trustees are paid a retainer plus a fixed fee for attending each meeting
and are reimbursed for expenses incurred in connection with attending such meetings. Each Board
II Fund for which they serve as a director or trustee pays a share of those expenses.

The officers of the Fund and one Trustee of the Fund (Mr. Murphy) are affiliated with the
Manager and receive no salary or fee from the Fund. The remaining Trustees of the Fund received
the compensation shown below from the Fund with respect to the Fund's fiscal year ended
September 30, 2002. The compensation from all 43 of the Board II Funds (including the Fund)
represents compensation received for serving as a director or trustee and member of a committee
(if applicable) of the boards of those funds during the calendar year 2002.

- -------------------------------------------------------------------------------
Name of Trustee or Aggregate Total Compensation
From Fund and Fund
Nominee and Other Fund Compensation Complex Paid to
Position(s) (as applicable) from Fund1 Trustee or Nominee*
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
James C. Swain $9,820 $177,996
Chairman of the Board of Trustees
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
William L. Armstrong $5,801 $92,076
Audit Committee Member
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Robert G. Avis $5,844 $92,199
Review Committee Member
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
George C. Bowen $5,586 $91,124
Audit Committee Member
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Edward L. Cameron $5,575 $99,743
Audit Committee Chairman
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Jon S. Fossel $6,192 $94,590
Review Committee Chairman
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Sam Freedman $6,135 $92,199
Review Committee Member
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Beverly L. Hamilton2 $2,156 $113,6593
Review Committee Member
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Robert J. Malone2 $2,1564 $58,326
Audit Committee Member
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
F. William Marshall, Jr. $5,143 $138,1245
Review Committee Member
- -------------------------------------------------------------------------------

1. Aggregate Compensation from Fund includes fees and deferred compensation, if any, for a
Trustee.
2. Mrs. Hamilton and Mr. Malone were elected as Trustees of the Board II Funds effective June
1, 2002. Compensation for Mrs. Hamilton and Mr. Malone was paid by all the Board II Funds, with
the exception of Oppenheimer Senior Floating Rate Fund for which they currently do not serve as
Trustees (total of 42 Oppenheimer funds).
3. Includes $55,333 compensation (of which 100% was deferred under a deferred compensation
plan) paid to Mrs. Hamilton for serving as a trustee by two open-end investment companies
(MassMutual Institutional Funds and MML Series Investment Fund) the investment adviser for
which is the indirect parent company of the Fund's Manager. The Manager also serves as the
Sub-Advisor to the MassMutual International Equity Fund, a series of MassMutual Institutional
Funds.
4. Includes $2,156 deferred under Deferred Compensation Plan described below.
5. Includes $47,000 compensation paid to Mr. Marshall for serving as a trustee by two open-end
investment companies (MassMutual Institutional Funds and MML Series Investment Fund) the
investment adviser for which is the indirect parent company of the Fund's Manager. The Manager
also serves as the Sub-Advisor to the MassMutual International Equity Fund, a series of
MassMutual Institutional Funds.
* For purposes of this section only, "Fund Complex" includes the Oppenheimer funds, MassMutual
Institutional Funds and MML Series Investment Fund in accordance with the instructions for Form
N-1A. The Manager does not consider MassMutual Institutional Funds and MML Series Investment
Fund to be part of the OppenheimerFunds "Fund Complex" as that term may be otherwise
interpreted.

The Board of Trustees has adopted a Deferred Compensation Plan for Independent Trustees that
enables Trustees to elect to defer receipt of all or a portion of the annual fees they are
entitled to receive from the Fund. Under the plan, the compensation deferred by a Trustee is
periodically adjusted as though an equivalent amount had been invested in shares of one or more
Oppenheimer funds selected by the Trustee. The amount paid to the Trustee under the plan will
be determined based upon the performance of the selected funds. Deferral of Trustees' fees
under the plan will not materially affect the Fund's assets, liabilities or net income per
share. The plan will not obligate the Fund to retain the services of any Trustee or to pay any
particular amount of compensation to any Trustee.

D. Information regarding Officers.

Information is given below about the executive officers who are not Trustees or nominees for
Trustee of the Fund, including their business experience during the past five years. Each
officer holds the same offices with one or more of the other funds in the OppenheimerFunds
complex.

The address of the Officers in the chart below is as follows: for Messrs. Molleur and Zack and
Ms. Feld, 498 Seventh Avenue, New York, NY 10018, for Messrs. Masterson, Vottiero and Wixted
and Mses. Bechtolt and Ives, 6803 S. Tucson Way, Centennial, CO 80112-3924 and for Mr.
Manioudakis, 10 St. James Avenue, Boston, MA 02116. Each Officer serves for an indefinite term
until his or her earlier resignation, death, disqualification or removal. In light of Mr.
Murphy's nomination as a trustee, his biographical information is provided above.

- ---------------------------------------------------------------------------------
Name, Address, Age, Principal Occupation(s) During Past 5 Years
Position(s) Held with Fund and
Length of Service
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Angelo Manioudakis, Senior Vice President of the Manager (since
Vice President and Portfolio April 2002); an officer of 12 portfolios in the
Manager since 2002 OppenheimerFunds complex; formerly Executive
Age: 36 Director and portfolio manager for Miller,
Anderson & Sherrerd, a division of Morgan
Stanley Investment Management (August
1993-April 2002).
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Brian W. Wixted, Senior Vice President and Treasurer (since
Treasurer since 1999 March 1999) of the Manager; Treasurer (since
Age: 43 March 1999) of HarbourView Asset Management
Corporation, Shareholder Services, Inc.,
Oppenheimer Real Asset Management Corporation,
Shareholder Financial Services, Inc.,
Oppenheimer Partnership Holdings, Inc., OFI
Private Investments, Inc. (since March 2000),
OppenheimerFunds International Ltd. and
OppenheimerFunds plc (offshore fund management
subsidiaries of the Manager) (since May 2000)
and OFI Institutional Asset Management, Inc.
(since November 2000); Treasurer and Chief
Financial Officer (since May 2000) of
Oppenheimer Trust Company (a trust company
subsidiary of the Manager); Assistant Treasurer
(since March 1999) of Oppenheimer Acquisition
Corp. and OppenheimerFunds Legacy Program
(since April 2000); formerly Principal and
Chief Operating Officer (March 1995-March
1999), Bankers Trust Company-Mutual Fund
Services Division. An officer of 91 portfolios
in the OppenheimerFunds complex.
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Connie Bechtolt, Assistant Vice President of the Manager (since
Assistant Treasurer since 2002 September 1998); formerly Manager/Fund
Age: 40 Accounting (September 1994-September 1998) of
the Manager. An officer of 91 portfolios in the
OppenheimerFunds complex.
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Philip Vottiero, Vice President/Fund Accounting of the Manager
Assistant Treasurer since 2002 (since March 2002); formerly Vice
Age: 40 President/Corporate Accounting of the Manager
(July 1999-March 2002) prior to which he was
Chief Financial Officer at Sovlink Corporation
(April 1996-June 1999). An officer of 91
portfolios in the OppenheimerFunds complex.
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Robert G. Zack, Senior Vice President (since May 1985) and
Vice President and Secretary General Counsel (since February 2002) of the
since 2001 Manager; General Counsel and a director (since
Age: 55 November 2001) of OppenheimerFunds Distributor,
Inc.; Senior Vice President and General Counsel
(since November 2001) of HarbourView Asset
Management Corporation; Vice President and a
director (since November 2000) of Oppenheimer
Partnership Holdings, Inc.; Senior Vice
President, General Counsel and a director
(since November 2001) of Shareholder Services,
Inc., Shareholder Financial Services, Inc., OFI
Private Investments, Inc., Oppenheimer Trust
Company and OFI Institutional Asset Management,
Inc.; General Counsel (since November 2001) of
Centennial Asset Management Corporation; a
director (since November 2001) of Oppenheimer
Real Asset Management, Inc.; Assistant
Secretary and a director (since November 2001)
of OppenheimerFunds International Ltd.; Vice
President (since November 2001) of
OppenheimerFunds Legacy Program; Secretary
(since November 2001) of Oppenheimer
Acquisition Corp.; formerly Acting General
Counsel (November 2001-February 2002) and
Associate General Counsel (May 1981-October
2001) of the Manager; Assistant Secretary of
Shareholder Services, Inc. (May 1985-November
2001), Shareholder Financial Services, Inc.
(November 1989-November 2001); OppenheimerFunds
International Ltd. and OppenheimerFunds plc
(October 1997-November 2001). An officer of 91
portfolios in the OppenheimerFunds complex.
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Katherine P. Feld, Vice President and Senior Counsel (since July
Assistant Secretary since 2001 1999) of the Manager; Vice President (since
Age: 45 June 1990) of OppenheimerFunds Distributor,
Inc.; Director, Vice President and Assistant
Secretary (since June 1999) of Centennial Asset
Management Corporation; Vice President (since
1997) of Oppenheimer Real Asset Management,
Inc.; formerly Vice President and Associate
Counsel of the Manager (June 1990-July 1999).
An officer of 91 portfolios in the
OppenheimerFunds complex.
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Kathleen T. Ives, Vice President and Assistant Counsel (since
Assistant Secretary since 2001 June 1998) of the Manager; Vice President
Age: 37 (since 1999) of OppenheimerFunds Distributor,
Inc.; Vice President and Assistant Secretary
(since 1999) of Shareholder Services, Inc.;
Assistant Secretary (since December 2001) of
OppenheimerFunds Legacy Program and Shareholder
Financial Services, Inc.; formerly Assistant
Vice President and Assistant Counsel of the
Manager (August 1997-June 1998); Assistant
Counsel of the Manager (August 1994-August
1997). An officer of 91 portfolios in the
OppenheimerFunds complex.
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Philip T. Masterson, Vice President and Assistant Counsel of the
Assistant Secretary since 2002 Manager (since July 1998); formerly, an
Age: 39 associate with Davis, Graham, & Stubbs LLP
(January 1997-June 1998). An officer of 91
portfolios in the OppenheimerFunds complex.
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Denis R. Molleur, Vice President and Senior Counsel of the
Assistant Secretary since 2001 Manager (since July 1999); formerly a Vice
Age: 45 President and Associate Counsel of the Manager
(September 1995-July 1999). An officer of 82
portfolios in the OppenheimerFunds complex.
- ---------------------------------------------------------------------------------

All officers serve at the pleasure of the Board. As of August 4, 2003, the Trustees, nominees
for Trustee and officers, individually and as a group, beneficially owned less than 1% of the
outstanding Class A shares and no Class B, Class C, Class N or Class Y shares of the Fund. The
foregoing statement does not reflect ownership of shares of the Fund held of record by an
employee benefit plan for employees of the Manager, other than the shares beneficially owned
under the plan by the officers of the Fund listed above. In addition, each Independent Trustee,
and his or her family members, do not own securities of either the Manager or OppenheimerFunds
Distributor, Inc. (the "Distributor" of the Board II Funds) or any person directly or
indirectly controlling, controlled by or under common control with the Manager or Distributor.

THE BOARD OF TRUSTEES UNANIMOUSLY RECOMMENDS
A VOTE FOR THE ELECTION OF EACH NOMINEE AS TRUSTEE

PROPOSAL 2: TO APPROVE THE ELIMINATION OF THE FUND'S FUNDAMENTAL INVESTMENT POLICY ON INVESTING
IN U.S. GOVERNMENT SECURITIES

The Fund, as a matter of fundamental policy, invests only in obligations issued or guaranteed
by the U.S. government or its agencies and instrumentalities, repurchase agreements on those
securities and hedging instruments approved by its Board of Trustees. This fundamental policy
was added when the Fund was organized in 1986 to enable the Fund's shares to be marketed to
credit unions, banks and other institutions whose own investment policies limited their
investment to mutual funds investing only in U.S. government securities. In the ensuing years,
the Manager has observed that such a policy has hindered its ability to seek competitive yields
compared to other funds in the Lipper Short U.S. Government category which may invest up to 20%
of their assets in fixed-income securities which are not U.S. government securities.
Additionally, the Fund has long ceased to be targeted to credit unions and banks, and therefore
the rationale for the original limitation no longer applies.

The Trustees recommend replacing the Fund's fundamental policy on investing in U.S. government
securities with a revised, non-fundamental policy which will require that the Fund invest at
least 80% of its assets in U.S. government securities. If shareholders approve this change, the
remaining 20% of the Fund's assets may be invested in mortgage-backed securities that are not
issued or guaranteed by the U.S. government, its agencies or instrumentalities, asset-backed
securities, investment grade corporate debt obligations (having a rating, at the time of
acquisition by the Fund of at least BBB by Standard & Poor's Rating Service or Baa by Moody's
Investors Service or a comparable rating by another nationally-recognized securities rating
organization, or, if unrated, deemed by the Manager to have a comparable rating) and certain
other high quality debt obligations. The current fundamental policy and proposed
non-fundamental policy are listed below.

Current Fundamental Policy Proposed Non-Fundamental Policy
-------------------------- -------------------------------
The Fund invests only in U.S. The Fund invests at least 80% of its
government debt securities, net assets (plus borrowings used for
repurchase agreements on those investment purposes) in debt
securities and hedging instruments securities issued by the U.S.
approved by its Board of Trustees. government, its agencies and
instrumentalities, repurchase
agreements on those securities and
hedging instruments approved by its
Board of Trustees.

By investing in the types of non-U.S. government securities described below the Fund may
experience higher yields. However, shareholders should be aware that with increased yield comes
increased risk such as credit/default risk and interest rate risk. Credit/default risk is the
risk that the issuer of a debt security might not make interest and principal payments on the
security as it becomes due. A downgrade in an issuer's credit rating or other adverse news
about an issuer can reduce the value of that issuer's securities. Securities directly issued by
the U.S. Treasury and certain agencies that are backed by the full faith and credit of the U.S.
government have little credit risk, and securities issued by other agencies of the U.S.
government generally have low credit risks. Securities issued by private issuers have greater
credit risks. If an issuer fails to pay interest, the Fund's income may be reduced. If an
issuer fails to repay principal, the value of that security and of the Fund's shares may be
reduced.

As stated above, if shareholders approve this Proposal, the Fund may invest in corporate debt
securities rated investment grade. While securities rated "Baa" by Moody's or "BBB" by S&P or
Fitch are investment grade and are not regarded as junk bonds, those securities may be subject
to special risks and have some speculative characteristics.

Debt securities are also subject to interest rate risk. The values of debt securities are
subject to change when prevailing interest rates change. When interest rates fall, the values
of already-issued debt securities generally rise. When interest rates rise, the values of
already-issued debt securities generally fall, and they may sell at a discount from their face
amount. The magnitude of these fluctuations will often be greater for longer-term debt
securities than shorter-term debt securities. The Fund's share prices can go up or down when
interest rates change because of the effect of the changes on the value of the Fund's
investments in debt securities.

The following are descriptions of the types of securities in which the Fund may invest the
remaining 20% of its assets if shareholders approve this proposal and the risks associated with
those securities.

Mortgage-related securities are a form of derivative investment collateralized by pools of
commercial or residential mortgages. Pools of mortgage loans are assembled as securities for
sale to investors by government agencies or entities or by private issuers. These securities
include collateralized mortgage obligations ("CMOs"), mortgage pass-through securities,
stripped mortgage pass-through securities, interests in real estate mortgage investment
conduits ("REMICs") and other real estate-related securities.

Mortgage-related securities that are issued or guaranteed by agencies or instrumentalities of
the U.S. government have relatively little credit risk (depending on the nature of the issuer)
but are subject to interest rate risks and prepayment risks, as described in the Prospectus.

As with other debt securities, the prices of mortgage-related securities tend to move inversely
to changes in interest rates. The Fund can buy mortgage-related securities that have interest
rates that move inversely to changes in general interest rates, based on a multiple of a
specific index. Although the value of a mortgage-related security may decline when interest
rates rise, the converse is not always the case.

In periods of declining interest rates, mortgages are more likely to be prepaid. Therefore, a
mortgage-related security's maturity can be shortened by unscheduled prepayments on the
underlying mortgages. Therefore, it is not possible to predict accurately the security's yield.
The principal that is returned earlier than expected may have to be reinvested in other
investments having a lower yield than the prepaid security. Therefore, these securities may be
less effective as a means of "locking in" attractive long-term interest rates, and they may
have less potential for appreciation during periods of declining interest rates, than
conventional bonds with comparable state maturities.

Prepayment risks can lead to substantial fluctuations in the value of a mortgage-related
security. In turn, this can affect the value of the Fund's shares. If a mortgage-related
security has been purchased at a premium, all or part of the premium the Fund paid may be lost
if there is a decline in the market value of the security, whether that results from interest
rate changes or prepayments on the underlying mortgages. In the case of stripped
mortgage-related securities, if they experience greater rates of prepayment than were
anticipated, the Fund may fail to recoup its initial investment on the security.

During periods of rapidly rising interest rates, prepayments of mortgage-related securities may
occur at slower than expected rates. Slower prepayments effectively may lengthen a
mortgage-related security's expected maturity. Generally, that would cause the value of the
security to fluctuate more widely in responses to changes in interest rates. If the prepayments
on the Fund's mortgage-related securities were to decrease broadly, the Fund's effective
duration and therefore its sensitivity to interest rates, would increase.

As with other debt securities, the values of mortgage-related securities may be affected by
changes in the market's perception of the creditworthiness of the entity issuing the securities
or guaranteeing them. Their values may also be affected by changes in government regulations
and tax policies.

Asset-backed securities are fractional interests in pools of loans collateralized by the loans
or other assets or receivables. They are typically issued by trusts and special purpose
corporations that pass the income from the underlying pool to the buyer of the interest. These
securities are subject to prepayment risks and the risk of default by the issuer as well as by
the borrowers of the underlying loans in the pool.

Private-Issuer Securities do not offer any credit backing of the U.S. government. These include
multi-class debt or pass-through certificates secured by mortgage loans. They may be issued by
banks, savings and loans, mortgage bankers or special trusts. Private issuer securities are
subject to the credit risks of the issuers. There is the risk that the issuers may not make
timely payment of interest or repay principal when due, although in some cases those payment
obligations may be supported by insurance or guarantees. The Fund will limit its investments in
private issuer securities to securities rated within the four highest rating categories of
Moody's Investors Service, Inc. or Standard & Poor's Rating Service and unrated securities that
the Manager deems comparable to rated securities in those categories. These are known as
"investment-grade" securities. The Fund will not be required to automatically dispose of a
security if its rating falls after the Fund buys it. However, the Manager will evaluate those
securities to determine whether to keep them in the Fund's portfolio.

Zero-Coupon bonds pay no interest. They are issued at a substantial discount from their face
value. They may be securities issued by the U.S. government or private issuers.

"Stripped" securities are the separate income or principal components of a debt security. Some
CMOs or other mortgage-related securities may be stripped, with each component having a
different proportion of principal or interest payments. One class might receive all the
interest and the other all the principal payments.

Zero-coupon and stripped securities are subject to greater fluctuations in price from interest
rate changes than typical interest-bearing debt securities. The Fund may have to pay out the
imputed income on zero coupon securities without receiving the cash currently, causing the Fund
to sell portfolio securities that it otherwise might have continued to hold or to use cash
flows from other sources such as the sale of Fund shares.

Stripped securities are particularly sensitive to changes in interest rates. The values of
interest-only and principal-only mortgage-related securities are very sensitive to changes in
interest rates and prepayments of underlying mortgages. The market for these securities may be
limited, making it difficult for the Fund to sell its holdings at an acceptable price.

Although the revised, non-fundamental policy could be changed by the Trustees in the future
without shareholder approval, shareholders would receive at least 60 days' prior notice of any
proposed material change in the Fund's policy regarding the minimum amount it invests in U.S.
government securities. Approval of this proposal will not affect the Fund's investment
objective of seeking high current return and safety of principal or the Fund's limited duration
policy.

THE BOARD OF TRUSTEES UNANIMOUSLY RECOMMENDS
THAT YOU APPROVE THE PROPOSAL DESCRIBED ABOVE

INFORMATION ABOUT THE FUND

Fund Information. As of the close of business on August 4, 2003, the Fund had 314,508,681.708
shares outstanding, consisting of 140,540,823.675 Class A, 75,199,033.491 Class B,
71,824,473.526 Class C, 4,147,050.297 Class N and 22,797,300.719 Class Y shares. Each share has
voting rights as stated in this Proxy Statement and is entitled to one vote for each share (and
a fractional vote for a fractional share).

Beneficial Owners. Occasionally, the number of shares of the Fund held in "street name"
accounts of various securities dealers for the benefit of their clients as well as the number
of shares held by other shareholders of record may exceed 5% of the total shares outstanding.
As of August 1, 2003, the only persons who owned of record or were known by the Fund to
beneficially own 5% or more of any class of the Fund's outstanding shares were:

Merrill Lynch Pierce Fenner & Smith, 4800 Deer Lake Drive E., 3rd Floor, Jacksonville, FL
32246, which owned 7,675,637.142 Class C shares (representing approximately 10.68% of the
Fund's then-outstanding Class C shares), for the benefit of its customers.

Merrill Lynch Pierce Fenner & Smith, 4800 Deer Lake Drive E., 3rd Floor, Jacksonville, FL
32246, which owned 458,383.665 Class N shares (representing approximately 11.05% of the Fund's
then-outstanding Class N shares), for the benefit of its customers.

Oppenheimer Capital Preservation Fund, 6803 South Tucson Way, Englewood, CO 80112, which owned
22,644,966.789 Class Y shares (representing approximately 99.33% of the Fund's then-outstanding
Class Y shares), for the benefit of its shareholders.

The Manager, the Distributor and the Transfer Agent. Subject to the authority of the Board of
Trustees, the Manager is responsible for the day-to-day management of the Fund's business
pursuant to its investment advisory agreement with the Fund. OppenheimerFunds Distributor, Inc.
(the "Distributor"), a wholly owned subsidiary of the Manager, is the general distributor of
the Fund's shares. The Manager and the Distributor are located at 498 Seventh Avenue, New York,
NY 10018. OppenheimerFunds Services, a division of the Manager, located at 6803 South Tucson
Way, Centennial, CO 80112, serves as the transfer and shareholder servicing agent (the
"Transfer Agent") for the Fund, for which it was paid $2,948,149 by the Fund during the fiscal
year ended September 30, 2002.

The Manager (including affiliates and subsidiaries) currently manages investment companies,
including the Oppenheimer funds, with assets of more than $130 billion as of June 30, 2003,
including more than 65 funds having more than 7 million shareholder accounts. The Manager is a
wholly owned subsidiary of Oppenheimer Acquisition Corp. ("OAC"), a holding company controlled
by Massachusetts Mutual Life Insurance Company ("MassMutual"). The Manager, the Distributor and
OAC are located at 498 Seventh Avenue, New York, New York 10018. MassMutual is located at 1295
State Street, Springfield, Massachusetts 01111. OAC acquired the Manager on October 22, 1990.
As indicated below, the common stock of OAC is owned by (i) certain officers and/or directors
of the Manager, (ii) MassMutual and (iii) another investor. No institution or person holds 5%
or more of OAC's outstanding common stock except MassMutual. MassMutual has engaged in the life
insurance business since 1851.

The common stock of OAC is divided into three classes. At February 28, 2003, MassMutual held
(i) all of the 21,600,000 shares of Class A voting stock, (ii) 12,642,025 shares of Class B
voting stock, and (iii) 21,178,801 shares of Class C non voting stock in OAC. This collectively
represented 96.116% of the outstanding common stock and 97.065% of the voting power of OAC as
of that date. Certain officers and/or directors of the Manager held (i) 663,481 shares of the
Class B voting stock, representing .0115% of the outstanding common stock and .0188% of the
voting power, (ii) 297,684 shares of Class C non voting stock, and (iii) options acquired
without cash payment which, when they become exercisable, allow the holders to purchase up to
$8.3 million shares of Class C non voting stock. That group includes persons who serve as
officers of the Fund and John V. Murphy, who serves as a Trustee of the Fund.

Holders of OAC Class B and Class C common stock may put (sell) their shares and vested options
to OAC or MassMutual at a formula price (based on, among other things, the revenue, income,
working capital, and excess cash of the Manager). MassMutual may exercise call (purchase)
options on all outstanding shares of both such classes of common stock and vested options at
the same formula price. Since August 1998, the only transactions by a person who served or will
serve, if elected, as a Trustee of the Fund were by Mr. Swain and Mr. Bowen. During that
period, Mr. Swain sold 93,000 Class B shares to MassMutual for a cash payment of $4,278,930 and
surrendered for cancellation 263,423 options to MassMutual for combined cash payments of
$11,328,836. During the period, Mr. Bowen sold 11,420 Class B shares to MassMutual for a cash
payment of $357,789 and surrendered for cancellation 237,640 options to MassMutual for combined
cash payments of $1,978,140.

The names and principal occupations of the executive officers and directors of the Manager are
as follows: John Murphy, Chairman, President, Chief Executive Officer and a director; Kurt
Wolfgruber, Executive Vice President and Chief Investment Officer; Robert G. Zack, Senior Vice
President and General Counsel; Andrew Ruotolo, Executive Vice President and a director; Craig
Dinsell and James Ruff, Executive Vice Presidents; Brian W. Wixted, Senior Vice President and
Treasurer; and Charles Albers, Bruce Bartlett, Robert Bonomo, Bruce Dunbar, Ronald H. Fielding,
John Forrest, P. Lyman Foster, Robert B. Grill, Robert Guy, Ruggero deRossi, Steve Ilnitzki,
Lynn Oberist Keeshan, Thomas W. Keffer, Chris Leavy, Angelo Manioudakis, Charles McKenzie,
Andrew J. Mika, David Robertson, Keith Spencer, Arthur Steinmetz, John Stoma, Martin Telles,
Jerry A. Webman, William L. Wilby, Donna Winn, Kenneth Winston, Philip Witkower, Carol Wolf and
Arthur J. Zimmer, Senior Vice Presidents. These officers are located at one of the three
offices of the Manager: 498 Seventh Avenue, New York, NY 10018; 6803 South Tucson Way,
Centennial, CO 80112; and 350 Linden Oaks, Rochester, NY 14625-2807.

Custodian. Citibank, N.A., 399 Park Avenue, New York, NY 10043, acts as custodian of the Fund's
securities and other assets.

Reports to Shareholders and Financial Statements. The Annual Report to Shareholders of the
Fund, including financial statements of the Fund for the fiscal year ended September 30, 2002,
has previously been sent to shareholders. The Semi-Annual Report to Shareholders of the Fund as
of March 31, 2003 also has previously been sent to shareholders. Upon request, shareholders may
obtain without charge a copy of the Annual Report and Semi-Annual Report by writing the Fund at
the address above, or calling the Fund at 1.800.708.7780 or visiting the Manager's website at
www.oppenheimerfunds.com. The Fund's transfer agent will provide a copy of the reports promptly
upon request.

To avoid sending duplicate copies of materials to households, the Fund mails only one copy of
each prospectus and annual and semi-annual report to shareholders having the same last name and
address on the Fund's records. The consolidation of these mailings, called householding,
benefits the Fund through reduced mailing expenses.

If you want to receive multiple copies of these materials or request householding in the
future, you may call the Transfer Agent at 1.800.708.7780. You may also notify the Transfer
Agent in writing. Individual copies of prospectuses and reports will be sent to you within 30
days after the Transfer Agent receives your request to stop householding.

FURTHER INFORMATION ABOUT VOTING AND THE MEETING

Solicitation of Proxies. The cost of preparing, printing and mailing the proxy ballot, notice
of meeting, and this Proxy Statement and all other costs incurred with the solicitation of
proxies, including any additional solicitation by letter, telephone or otherwise, will be paid
by the Fund. In addition to solicitations by mail, officers of the Fund or officers and
employees of the Transfer Agent, without extra compensation, may conduct additional
solicitations personally or by telephone.

Proxies also may be solicited by a proxy solicitation firm hired at the Fund's expense to
assist in the solicitation of proxies. Currently, if the Fund determines to retain the services
of a proxy solicitation firm, the Fund anticipates retaining Alamo Direct Mail Services, Inc.
Any proxy solicitation firm engaged by the Fund, among other things, will be: (i) required to
maintain the confidentiality of all shareholder information; (ii) prohibited from selling or
otherwise disclosing shareholder information to any third party; and (iii) required to comply
with applicable telemarketing laws.

If the Fund does engage a proxy solicitation firm, as the Meeting date approaches, certain
shareholders may receive telephone calls from a representative of the solicitation firm if
their vote has not yet been received. Authorization to permit the solicitation firm to execute
proxies may be obtained by telephonic instructions from shareholders of the Fund. Proxies that
are obtained telephonically will be recorded in accordance with the procedures set forth below.
These procedures have been designed to reasonably ensure that the identity of the shareholder
providing voting instructions is accurately determined and that the voting instructions of the
shareholder are accurately recorded.

In all cases where a telephonic proxy is solicited, the solicitation firm representative is
required to ask for each shareholder's full name, address, the last four digits of the
shareholder's social security or employer identification number, title (if the shareholder is
authorized to act on behalf of an entity, such as a corporation) and to confirm that the
shareholder has received the Proxy Statement and ballot in the mail. If the information
solicited agrees with the information provided to the solicitation firm, the solicitation firm
representative has the responsibility to explain the process, read the proposals listed on the
proxy ballot, and ask for the shareholder's instructions on such proposals. The solicitation
firm representative, although he or she is permitted to answer questions about the process, is
not permitted to recommend to the shareholder how to vote. The solicitation firm representative
may read any recommendation set forth in the Proxy Statement. The solicitation firm
representative will record the shareholder's instructions. Within 72 hours, the shareholder
will be sent a confirmation of his or her vote asking the shareholder to call the solicitation
firm immediately if his or her instructions are not correctly reflected in the confirmation.

It is anticipated the cost of engaging a proxy solicitation firm will not exceed $25,000 plus
the additional out-of-pocket costs, that may be substantial, incurred in connection with
contacting those shareholders that have not voted. Brokers, banks and other fiduciaries may be
required to forward soliciting material to their principals and to obtain authorization for the
execution of proxies. For those services, they will be reimbursed by the Fund for their
expenses.

If the shareholder wishes to participate in the Meeting, but does not wish to give his or her
proxy telephonically, the shareholder may still submit the proxy ballot originally sent with
the Proxy Statement in the postage paid envelope provided or attend in person. Should
shareholders require additional information regarding the proxy ballot or a replacement proxy
ballot, they may contact us toll-free at 1.800.708.7780. Any proxy given by a shareholder,
whether in writing or by telephone, is revocable as described below under the paragraph
entitled "Revoking a Proxy."

Please take a few moments to complete your proxy ballot promptly. You may provide your
completed proxy ballot via facsimile, telephonically or by mailing the proxy ballot in the
postage paid envelope provided. You also may cast your vote by attending the Meeting in person
if you are a record owner.

Telephone Voting. The Fund has arranged to have votes recorded by telephone. Shareholders must
enter a unique control number found on their respective proxy ballots before providing voting
instructions by telephone. After a shareholder provides his or her voting instructions, those
instructions are read back to the shareholder and the shareholder must confirm his or her
voting instructions before disconnecting the telephone call. The voting procedures used in
connection with telephone voting are designed to reasonably authenticate the identity of
shareholders, to permit shareholders to authorize the voting of their shares in accordance with
their instructions and to confirm that their instructions have been properly recorded.

Voting By Broker-Dealers. Shares owned of record by a broker-dealer for the benefit of its
customers ("street account shares") will be voted by the broker-dealer based on instructions
received from its customers. If no instructions are received, the broker-dealer may (if
permitted by applicable stock exchange rules) vote, as record holder of such shares, for the
election of Trustees and on the Proposals in the same proportion as that broker-dealer votes
street account shares for which it has received voting instructions in time to be voted.
Beneficial owners of street account shares cannot vote in person at the meeting. Only record
owners may vote in person at the meeting.

A "broker non-vote" is deemed to exist when a proxy received from a broker indicates that the
broker does not have discretionary authority to vote the shares on that matter. Abstentions and
broker non-votes will have the same effect as a vote against the proposal.

Voting by the Trustee for OppenheimerFunds-Sponsored Retirement Plans. Shares held in
OppenheimerFunds-sponsored retirement accounts for which votes are not received as of the last
business day before the Meeting Date, will be voted by the trustee for such accounts in the
same proportion as Shares for which voting instructions from the Fund's other shareholders have
been timely received.

Quorum. The presence in person or by proxy of the holders of record of one-third of the shares
outstanding and entitled to vote constitutes a quorum at the Meeting for purposes of electing
Trustees. The presence in person or by proxy of the holders of more than 50% of the shares
outstanding and entitled to vote constitutes a quorum at the meeting for purposes of approving
the proposal to eliminate the Fund's fundamental policy on investing in U.S. government
securities. Shares over which broker-dealers have discretionary voting power, shares that
represent broker non-votes and shares whose proxies reflect an abstention on any item are all
counted as shares present and entitled to vote for purposes of determining whether the required
quorum of shares exists.

Required Vote. Persons nominated as Trustees must receive a plurality of the votes cast, which
means that the eleven (11) nominees receiving the highest number of affirmative votes cast at
the Meeting will be elected as long as the votes FOR a nominee exceed the votes AGAINST that
nominee. Approval of Proposal 2 requires the affirmative vote of a "majority of the outstanding
voting securities" (as defined in the Investment Company Act) of the Fund voting in the
aggregate and not by class.

How are votes counted? The individuals named as proxies on the proxy ballots (or their
substitutes) will vote according to your directions if your proxy ballot is received and
properly executed, or in accordance with the instructions you provide if you vote by telephone.
You may direct the proxy holders to vote or not vote your shares on the proposal to elect
Trustees by checking the appropriate box "For" or "Withhold Authority" or you may direct the
proxy holders to vote your shares on Proposal 2 by checking the appropriate box "FOR" or
"AGAINST," or instruct them not to vote those shares on the proposal by checking the "ABSTAIN"
box. Alternatively, you may simply sign, date and return your proxy ballot with no specific
instructions as to the proposals. If you properly execute and return a proxy ballot but fail to
indicate how the votes should be cast, the proxy ballot will be voted in favor of the election
of each of the nominees named in this Proxy Statement for Trustee and in favor of Proposal 2.

Shares of the Fund may be held by certain institutional investors for the benefit of their
clients. If the institutional investor does not timely receive voting instructions from its
clients with respect to such Shares, the institutional investor may be authorized to vote such
Shares, as well as Shares the institutional investor itself owns, in the same proportion as
Shares for which voting instructions from clients are timely received.

Revoking a Proxy. You may revoke a previously granted proxy at any time before it is exercised
by (1) delivering a written notice to the Fund expressly revoking your proxy, (2) signing and
forwarding to the Fund a later-dated proxy, or (3) attending the Meeting and casting your votes
in person if you are a record owner. Granted proxies typically will be voted at the final
meeting, but may be voted at an adjourned meeting if appropriate. Please be advised that the
deadline for revoking your proxy by telephone is 3:00 P.M. (ET) on the last business day before
the Meeting.

Shareholder Proposals. The Fund is not required and does not intend to hold shareholder
meetings on a regular basis. Special meetings of shareholders may be called from time to time
by either the Fund or the shareholders (for certain matters and under special conditions
described in the Statement of Additional Information). Under the proxy rules of the SEC,
shareholder proposals that meet certain conditions may be included in a fund's proxy statement
for a particular meeting. Those rules currently require that for future meetings, the
shareholder must be a record or beneficial owner of Fund shares either (i) with a value of at
least $2,000 or (ii) in an amount representing at least 1% of the fund's securities to be
voted, at the time the proposal is submitted and for one year prior thereto, and must continue
to own such shares through the date on which the meeting is held. Another requirement relates
to the timely receipt by the Fund of any such proposal. Under those rules, a proposal must have
been submitted a reasonable time before the Fund began to print and mail this Proxy Statement
in order to be included in this Proxy Statement. A proposal submitted for inclusion in the
Fund's proxy material for the next special meeting after the meeting to which this Proxy
Statement relates must be received by the Fund a reasonable time before the Fund begins to
print and mail the proxy materials for that meeting. Notice of shareholder proposals to be
presented at the Meeting must have been received within a reasonable time before the Fund began
to mail this Proxy Statement. The fact that the Fund receives a proposal from a qualified
shareholder in a timely manner does not ensure its inclusion in the proxy material because
there are other requirements under the proxy rules for such inclusion.

OTHER MATTERS

The Trustees do not intend to bring any matters before the Meeting other than Proposals 1 and 2
and the Trustees and the Manager are not aware of any other matters to be brought before the
Meeting by others. Because matters not known at the time of the solicitation may come before
the Meeting, the proxy as solicited confers discretionary authority with respect to such
matters as properly come before the Meeting, including any adjournment or adjournments thereof,
and it is the intention of the persons named as attorneys-in-fact in the proxy (or their
substitutes) to vote the proxy in accordance with their judgment on such matters.

In the event a quorum is not present or sufficient votes in favor of one or more Proposals set
forth in the Notice of Meeting of Shareholders are not received by the date of the Meeting, the
persons named in the enclosed proxy (or their substitutes) may propose and approve one or more
adjournments of the Meeting to permit further solicitation of proxies. All such adjournments
will require the affirmative vote of a majority of the shares present in person or by proxy at
the session of the Meeting to be adjourned. The persons named as proxies on the proxy ballots
(or their substitutes) will vote the Shares present in person or by proxy (including broker
non-votes and abstentions) in favor of such an adjournment if they determine additional
solicitation is warranted and in the interests of the Fund's shareholders. A vote may be taken
on one or more of the proposals in this proxy statement prior to any such adjournment if a
quorum is present, sufficient votes for its approval have been received and it is otherwise
appropriate.

By Order of the Board of Trustees,

Robert G. Zack, Secretary
August 20, 2003

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