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 INTEGRITY FUNDS (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. (3) Filing Party: (4) Date Filed: John V. Murphy Chairman, President and OppenheimerFunds Logo Chief Executive Officer OppenheimerFunds, Inc. Two World Financial Center 225 Liberty Street New York, NY 10281-1008 www.oppenheimerfunds.com November 22, 2004 Dear Oppenheimer Bond Fund Shareholder, We have scheduled a shareholder meeting on January 14, 2005 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 the 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 10 Trustees. You will find detailed information on the Trustees in the enclosed proxy statement o Approval to Modify the Fund's Investment Objective. Your approval is requested to modify the Fund's investment objective 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's signature] Enclosures XP0285.002.1104 PROXY CARD PROXY CARD OPPENHEIMER BOND FUND, a series of OPPENHEIMER INTEGRITY FUNDS PROXY FOR A SPECIAL MEETING OF SHAREHOLDERS TO BE HELD ON JANUARY 14, 2005 The undersigned, revoking prior proxies, hereby appoints Brian Wixted, Philip Vottiero, and Kathleen Ives, 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 Bond Fund (the "Fund") to be held at 6803 South Tucson Way, Centennial, Colorado, 80112, on January 14, 2005, 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 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 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: [ ] 1. To elect a Board of Trustees: FOR WITHHOLD FOR ALL ALL AUTHORITY EXCEPT FOR ALL 1. 01 Robert G. Avis 02 John V. Murphy 03 William L. Armstrong 04 Jon S. Fossel 05 George C. Bowen 06 Edward L. Cameron 07 Robert J. Malone 08 Sam Freedman 09 Beverly L. Hamilton 10 F. William Marshall, Jr. 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). - ------------------------------------ 2. To approve a modification to the Fund's investment objective. FOR AGAINST ABSTAIN 2. 1.866.241.6192 Vote your OppenheimerFunds proxy over the phone. Voting your proxy is important. And now OppenheimerFunds has made it easy. Vote at your convenience, 24 hours a day, and save postage costs which ultimately reduces fund expenses. Read your Proxy Card carefully. Then, to exercise your proxy, just follow these three simple steps: 1. Call the toll free number: 1.866.241.6192 2. Follow the voice instructions. If you vote by phone please do not mail your Proxy Card. [logo] OppenheimerFunds The Right Way to Invest Oppenheimer Bond Fund 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 Bond 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 INTEGRITY FUNDS, on behalf of its series OPPENHEIMER BOND FUND 6803 South Tucson Way, Centennial, CO 80112 Notice Of Special Meeting Of Shareholders To Be Held January 14, 2005 To The Shareholders of Oppenheimer Bond Fund: Notice is hereby given that a Special Meeting of the Shareholders (the "Meeting") of Oppenheimer Bond Fund (the "Fund") will be held at 6803 South Tucson Way, Centennial, Colorado, 80112, at 1:00 P.M. Mountain time, on January 14, 2005 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 modify the Fund's investment objective; and 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 November 1, 2004 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 November 22, 2004 PLEASE RETURN YOUR PROXY BALLOT PROMPTLY. YOUR VOTE IS IMPORTANT NO MATTER HOW MANY SHARES YOU OWN. 285TABLE OF CONTENTS Page Questions and Answers 3 Proxy Statement 5 Proposal 1: To Elect a Board of Trustees 5 Proposal 2: To Approve a Modification to the Fund's Investment Objective 24 Information About the Fund 25 Further Information About Voting and the Meeting 28 Other Matters 32 OPPENHEIMER INTEGRITY FUNDS on behalf of its series OPPENHEIMER BOND 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 Bond Fund (the "Fund") are asking that you vote on two matters at the Special Meeting of Shareholders to be held on January 14, 2005. Q. Who is Eligible to Vote? A. Shareholders of record at the close of business on November 1, 2004 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 November 22, 2004. 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 a modification to the Fund's investment objective so that the Fund "seeks total return by investing mainly in debt instruments." 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 modification to the Fund's investment objective. Q. What are the Reasons for the Proposed Modification to the Fund's Investment Objective? A. As described more fully in Proposal 2 below, the Board of Trustees believes that the proposed modification to the Fund's Investment Objective will provide the Fund more investment flexibility as market conditions change (favoring income or capital growth at various times) and will help achieve better risk-adjusted and relative returns. 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 December 31, 2003 and Semi-Annual Report dated June 30, 2004 have previously been mailed to Shareholders. If you would like to have copies of the Fund's most recent Annual or Semi-Annual Report 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 BOND FUND (a series of OPPENHEIMER INTEGRITY FUNDS) 6803 South Tucson Way, Centennial, CO 80112 PROXY STATEMENT Special Meeting of Shareholders To Be Held January 14, 2005 This statement is furnished to the shareholders of Oppenheimer Bond 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 January 14, 2005, or any adjournment thereof. Shareholders of record at the close of business on November 1, 2004 are entitled to vote at the Meeting. It is expected that the mailing of this Proxy Statement will be made on or about November 22, 2004. SUMMARY OF PROPOSALS - ------------------------------------------------------------------------------- Proposal Shareholders Voting - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- 1. To Elect a Board of Trustees All - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- 2. To Approve a modification to the Fund's All Investment Objective - ------------------------------------------------------------------------------- PROPOSAL 1: ELECTION OF TRUSTEES At the Meeting, ten (10) 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 person" (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 appointed 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 Trustees - ------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------- Name, Principal Occupation(s) During Past 5 Dollar Aggregate Dollar Range Of Shares Beneficially Owned in Position(s) Held Years; Range of Any of the with Fund, Other Trusteeships/Directorships Held by Shares Oppenheimer Length of Service Trustee; Beneficially Funds and Number of Portfolios in Fund Complex Owned in Overseen Age Currently Overseen by Trustee the Fund by Trustee - ------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------- As of November 1, 2004 - ------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------- William L. Chairman of the following private $0 Over Armstrong, mortgage banking companies: Cherry Creek $100,000 Chairman and Mortgage Company (since 1991), Trustee since 1999 Centennial State Mortgage Company (since Age: 67 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 39 portfolios in the OppenheimerFunds complex. - ------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------- Robert G. Avis, Formerly, Director and President of A.G. $0 Over Trustee since 1993 Edwards Capital, Inc. (General Partner $100,000 Age: 73 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 39 portfolios in the OppenheimerFunds complex. - ------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------- George C. Bowen, Formerly Assistant Secretary and a $10,001- Over Trustee since 1998 director (December 1991-April 1999) of $50,000 $100,000 Age: 68 Centennial Asset Management Corporation; President, Treasurer and a director (June 1989-April 1999) of Centennial Capital Corporation; Chief Executive Officer and a director of MultiSource Services, Inc. (March 1996-April 1999). Until April 1999 Mr. Bowen held several positions in subsidiary or affiliated companies of the Manager. Oversees 39 portfolios in the OppenheimerFunds complex. - ------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------- Edward L. Cameron, A member of The Life Guard of Mount $0 Over Trustee since 1999 Vernon, George Washington's home (since $100,000 Age: 66 June 2000). Formerly Director (March 2001-May 2002) of Genetic ID, Inc. and its subsidiaries (a privately held biotech company); a partner (July 1974-June 1999) with PricewaterhouseCoopers LLP (an accounting firm); and Chairman (July 1994-June 1998) of Price Waterhouse LLP Global Investment Management Industry Services Group. Oversees 39 portfolios in the OppenheimerFunds complex. - ------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------- Jon S. Fossel, Director (since February 1998) of Rocky $0 Over Trustee since 1990 Mountain Elk Foundation (a $100,000 Age: 61 not-for-profit foundation); a director (since 1997) of Putnam Lovell Finance (finance company); a director (since June 2002) of UNUMProvident (an insurance company). Formerly a director (October 1999-October 2003) of P.R. Pharmaceuticals (a privately held company); 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 (until October 1995) of Oppenheimer Acquisition Corp., Shareholders Services Inc. and Shareholder Financial Services, Inc. Oversees 39 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: 64 1984). Formerly (until October 1994) Mr. Freedman held several positions in subsidiary or affiliated companies of the Manager. Oversees 39 portfolios in the OppenheimerFunds complex. - ------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------- Beverly L. Trustee of Monterey International $0 $50,001- Hamilton, Studies (an educational organization) $100,000 Trustee since 2002 (since February 2000); a director of The Age: 58 California Endowment (a philanthropic organization) (since April 2002) and of Community Hospital of Monterey Peninsula (educational organization) (since February 2002); a director of America Funds Emerging Markets Growth Fund (since October 1991) (an investment company); an advisor to Credit Suisse First Boston's Sprout venture capital unit. Mrs. Hamilton also is a member of the investment committees of the Rockefeller Foundation and of the University of Michigan. Formerly, Trustee of MassMutual Institutional Funds (open-end investment company) (1996-May 2004); a director of MML Series Investment Fund (April 1989-May 2004) and MML Services (April 1987-May 2004) (investment companies); member of the investment committee (2000-2003) of Hartford Hospital; an advisor (2000-2003) to Unilever (Holland)'s pension fund; and President (February 1991-April 2000) of ARCO Investment Management Company. Oversees 38 portfolios in the OppenheimerFunds complex. - ------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------- Robert J. Malone, Chairman, Chief Executive Officer and $0 Over Trustee since 2002 Director of Steele Street State Bank (a $100,000 Age: 60 commercial banking entity) (since August 2003); director of Colorado UpLIFT (a non-profit organization) (since 1986); trustee (since 2000) of the Gallagher Family Foundation (non-profit organization). Formerly, Chairman of U.S. Bank-Colorado (a subsidiary of U.S. Bancorp and formerly Colorado National Bank,) (July 1996-April 1, 1999), a director of: Commercial Assets, Inc. (a REIT) (1993-2000), Jones Knowledge, Inc. (a privately held company) (2001-July 2004) and U.S. Exploration, Inc. (oil and gas exploration) (1997-February 2004). Oversees 38 portfolios in the OppenheimerFunds complex. - ------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------- F. William Trustee of MassMutual Institutional $0 Over Marshall, Jr., Funds (since 1996) and MML Series $100,000 Trustee since 2000 Investment Fund (since 1987) (both Age: 62 open-end investment companies) and the Springfield Library and Museum Association (since 1995) (museums) and the Community Music School of Springfield (music school) (since 1996); Trustee (since 1987), Chairman of the Board (since 2003) and Chairman of the investment committee (since 1994) for the Worcester Polytech Institute (private university); and President and Treasurer (since January 1999) of the SIS Fund (a private not for profit charitable fund). 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) (commercial bank); and Executive Vice President (January 1999-July 1999) of Peoples Heritage Financial Group, Inc. (commercial bank). Oversees 39 portfolios in the OppenheimerFunds complex. - ------------------------------------------------------------------------------------- The address of Mr. Murphy in the chart below is Two World Financial Center, 225 Liberty Street, 11th Floor, New York, NY 10281-1008. Mr. Murphy serves for an indefinite term, until his resignation, death or removal. - ------------------------------------------------------------------------------------- Nominee for Interested Trustee and Officer - ------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------- Name, Principal Occupation(s) During Past 5 Dollar Aggregate Dollar Range Of Shares Beneficially Owned in Years; Range of Any of the Position(s) Held Other Trusteeships/Directorships Held by Shares Oppenheimer with Fund, Trustee; Beneficially Funds Length of Service, Number of Portfolios in Fund Complex Owned in Overseen Age Currently Overseen by Trustee the Fund by Trustee - ------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------- As of November 1, 2004 - ------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------- John V. Murphy, Chairman, Chief Executive Officer and $0 Over President and director (since June 2001) and President $100,000 Trustee and (since September 2000) of the Manager; Principal President and a director or trustee of Executive Officer other Oppenheimer funds; President and a since 2001 director (since July 2001) of Oppenheimer Age: 55 Acquisition Corp. (the Manager's parent holding company) and of Oppenheimer Partnership Holdings, Inc. (a holding company subsidiary of the Manager); a director (since November 2001) of OppenheimerFunds Distributor, Inc. (a subsidiary of the Manager); Chairman and a director (since July 2001) of Shareholder Services, Inc. and of Shareholder Financial Services, Inc. (transfer agent subsidiaries of the Manager); President and a director (since July 2001) of OppenheimerFunds Legacy Program (a charitable trust program established by the Manager); a director of the following investment advisory subsidiaries of the Manager: OFI Institutional Asset Management, Inc., Centennial Asset Management Corporation, Trinity Investment Management Corporation and Tremont Capital Management, Inc. (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.; 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 the shares of Babson Capital Management LLC); a member of the Investment Company Institute's Board of Governors (elected to serve from October 3, 2003 through September 30, 2006). 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 63 portfolios as Trustee/Director and 21 portfolios as Officer 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. Ten meetings of the Trustees were held during the fiscal year ended December 31, 2003. 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, Review and Governance Committees. The Audit Committee is comprised solely of Independent Trustees. The members of the Audit Committee are Edward L. Cameron (Chairman), George C. Bowen, Robert J. Malone and F. William Marshall, Jr. The Audit Committee held 6 meetings during the fiscal year ended December 31, 2003. 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) reviewing 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) exercising 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 audit and non-audit service, including tax service, for the Fund and the Manager and certain affiliates of the Manager that is not prohibited by the Sarbanes-Oxley Act. The members of the Review Committee are Jon S. Fossel (Chairman), Robert G. Avis, Sam Freedman, and Beverly Hamilton. The Review Committee, comprised solely of Independent Trustees, held 6 meetings during the fiscal year ended December 31, 2003. 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 Manager and the services provided to the Fund by the transfer agent and the Manager. 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. The members of the Governance Committee are Robert Malone (Chairman), William Armstrong, Beverly Hamilton and F. William Marshall, Jr. The Governance Committee is comprised solely of Independent Trustees. The Governance Committee was established in August 2004 and did not hold any meetings during the Fund's fiscal year ended December 31, 2003. The Governance Committee is expected to consider general governance matters, including a formal process for shareholders to send communications to the Board and the qualifications of candidates for board positions including consideration of any candidate recommended by shareholders. The Governance Committee has not yet adopted a charter, but anticipates that it will do so by the end of this calendar year. The Committee has temporarily adopted the process previously adopted by the Audit Committee regarding shareholder submission of nominees for board positions. Shareholders may submit names of individuals, accompanied by complete and properly supported resumes, for the Governance 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 for trustees and independent trustees to recommend to the Board and/or shareholders and may identify candidates other than those submitted by Shareholders. The 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. Shareholders who desire to communicate with the Board should address correspondence to the Board of Trustees of Oppenheimer Bond Fund, or to an individual Trustee c/o the Secretary of the Fund at 6803 South Tucson Way, Centennial, CO 80112 and may submit their correspondence electronically at WWW.OPPENHEIMERFUNDS.COM under the caption "contact us." If your correspondence is intended for a particular Trustee, please indicate the name of the Trustee for whom it is intended. The sender should indicate in the address whether it is intended for the entire board, the Independent Trustees as a group, or to an individual Trustee. The Governance Committee will consider if a different process should be recommended to the Board. 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 December 15, 2003, selected Deloitte & Touche LLP ("Deloitte") as auditors of the Fund for the fiscal year beginning January 1, 2004. Deloitte also serves as auditors for certain other funds for which the Manager acts as investment advisor and formerly (until 12/31/03) provided certain auditing and non-auditing services for the Manager, the Manager's parent company and its subsidiaries. 1. Audit Fees. During the fiscal years ended December 31, 2002 and December 2003, 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 December 31, 2002 were $15,500 and for the fiscal year ended December 31, 2003 were $16,000. 2. Audit-Related Fees There were no audit-related fees billed by Deloitte for services rendered to the Fund for the fiscal years ended December 31, 2002 and December 31, 2003. During the fiscal years ended December 31, 2002 and 2003, Deloitte billed the Manager or the Manager's parent company and certain affiliated companies that provide ongoing services to the Fund. Deloitte was paid a total of $65,000 in 2002 and $75,000 in 2003 for those services. Such fees were paid for due diligence related to mergers and acquisitions, accounting consultations and audits in connection with acquisitions, internal control reviews and consultation concerning financial accounting and reporting standards. 3. Tax Fees There were no tax fees billed by Deloitte for services rendered to the Fund for the fiscal years ended December 31, 2002 and December 31, 2003. Deloitte provided certain tax accounting and other consulting services to the Manager or the Manager's parent company and certain affiliated companies that provide ongoing services to the Fund. Deloitte was paid a total of $6,500 in 2002 and $11,600 in 2003 for those services. Such fees were paid for tax compliance, tax planning and tax advice. Tax compliance generally involves preparation of original and amended tax returns, claims for a refund and tax payment-planning services. Tax planning and tax advice includes assistance with tax audits and appeals, tax advice related to mergers and acquisitions and requests for rulings or technical advice from taxing authorities. 4. 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 years ended December 31, 2002 and December 31, 2003. During the fiscal years ended December 31, 2002 and 2003, Deloitte billed $3,500 and $0, respectively, to the Manager or the Manager's parent company and certain affiliated companies that provide ongoing services to the Fund. Such fees were paid for services provided to the Fund's Board of Trustees with respect to the annual renewal of the Fund's investment advisory agreement. During its regularly scheduled periodic meetings, the Audit Committee will pre-approve all audit, audit-related, tax and other services to be provided by Deloitte. The Audit Committee has delegated pre-approval authority to its Chairman for any subsequent new engagements that arise between regularly scheduled meeting dates provided that any fees such pre-approved are presented to the Audit Committee at its next regularly scheduled meeting. Pre-approval of non-audit services is waived provided that: 1) the aggregate amount of all such services provided constitutes no more than five percent of the total amount of fees paid by the Fund to it principal accountant during the fiscal year in which services are provided 2) such services were not recognized by the Fund at the time of engagement as non-audit services and 3) such services are promptly brought to the attention of the Audit Committee and approved prior to the completion of the audit. The Audit Committee approved 100% of the services under "Audit-Related Fees," "Tax Fees" and "All Other Fees" since the effective date of the Sarbanes-Oxley Act. As set forth above, the aggregate non-audit fees billed by Deloitte for services rendered to the Manager as well as the Manager's parent company and certain affiliated companies that provide ongoing services to the Fund for the fiscal years ended December 31, 2002 and 2003 were $75,000 and $86,600, respectively. The Audit Committee of the Fund's Board of Trustees has considered whether the provision of non-audit services that were rendered to the Manager as well as the Manager's parent company and certain affiliated companies that provide ongoing services to the Fund that were not pre-approved is compatible with maintaining 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 December 31, 2003. The compensation from all 39 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 2003. - ------------------------------------------------------------------------------- Trustee Name and Other Fund Aggregate Compensation Total Compensation From Fund and Fund Complex Paid to Position(s) (as applicable) from Fund1 Trustees* - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- William L. Armstrong $1,921 $118,649 Chairman of the Board - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- Robert G. Avis $1,643 $101,499 Review Committee Member - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- George C. Bowen $1,643 $101,499 Audit Committee Member - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- Edward L. Cameron $1,870 $115,503 Audit Committee Chairman - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- Jon S. Fossel $1,870 $115,503 Review Committee Chairman - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- Sam Freedman $1,643 $101,499 Review Committee Member - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- Beverly Hamilton $1,6222 $150,5423,4 Review Committee Member - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- Robert J. Malone $1,6225 $100,1793 Audit Committee Member - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- F. William Marshall, Jr. $1,643 $149,4996 Audit Committee Member - ------------------------------------------------------------------------------- 1. Aggregate Compensation from Fund includes fees and deferred compensation, if any, for a Trustee. 2. Includes $1,622 deferred under Deferred Compensation Plan described below. 3. "Total Compensation From Fund and Fund Complex" paid to 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 37 Oppenheimer funds at December 31, 2003). 4. Includes $50,363 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. 5. Includes $1,622 deferred under Deferred Compensation Plan described below. 6. Includes $48,000 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 and the Fund do 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 them to elect to defer receipt of all or a portion of the annual fees they are entitled to receive from the Fund. Under the plan, the compensation deferred by a Trustee is periodically adjusted as though an equivalent amount had been invested in shares of one or more Oppenheimer funds selected by the Trustee. The amount paid to the Trustee under the plan will be determined based upon the performance of the selected funds. Deferral of Trustee's fees under the plan will not materially affect the Fund's assets, liabilities and net income per share. The plan will not obligate the Fund to retain the services of any Trustee or to pay any particular level of compensation to any Trustee. Pursuant to an Order issued by the SEC, the Fund may invest in the funds selected by the Trustee under the plan without shareholder approval for the limited purpose of determining the value of the Trustee's deferred fee account. 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. Manioudakis, Gillespie, Miao and Zack and Messes. Bloomberg and Lee, Two World Financial Center, 225 Liberty Street, New York, NY 10281-1008, for Messrs. Vandehey, Vottiero, Petersen and Wixted and Ms. Ives, 6803 S. Tucson Way, Centennial, CO 80112-3924. Each Officer serves for an annual term or until his or her earlier resignation, death or removal. - ------------------------------------------------------------------------------------- Officers of the Fund - ------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------- Name, Principal Occupation(s) During Past 5 Years Position(s) Held with Fund, Length of Service, Age - ------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------- Angelo Manioudakis, Senior Vice President of the Manager (since April 2002), of Vice President and HarbourView Asset Management Corporation (since April, 2002 Portfolio Manager and of OFI Institutional Asset Management, Inc. (since June since 2002 2002); an officer of 14 portfolios in the OppenheimerFunds Age: 37 complex. Formerly Executive Director and portfolio manager for Miller, Anderson & Sherrerd, a division of Morgan Stanley Investment Management (August 1993-April 2002). - ------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------- Mark S. Vandehey, Senior Vice President and Chief Compliance Officer (since Vice President and March 2004) of the Manager; Vice President (since June Chief Compliance 1983) of OppenheimerFunds Distributor, Inc., Centennial Officer since 2004 Asset Management Corporation and Shareholder Services, Inc. Age: 54 Formerly (until February 2004) Vice President and Director of Internal Audit of the Manager. An officer of 84 portfolios in the Oppenheimer funds complex. - ------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------- Brian W. Wixted, Senior Vice President and Treasurer (since March 1999) of Treasurer, Principal the Manager; Treasurer of HarbourView Asset Management Financial and Corporation, Shareholder Financial Services, Inc., Accounting Officer Shareholder Services, Inc., Oppenheimer Real Asset since 1999 Management Corporation, and Oppenheimer Partnership Age: 45 Holdings, Inc. (since March 1999), of OFI Private Investments, Inc. (since March 2000), of OppenheimerFunds International Ltd. and OppenheimerFunds plc (since May 2000), of OFI Institutional Asset Management, Inc. (since November 2000), and of OppenheimerFunds Legacy Program (a Colorado non-profit corporation) (since June 2003); Treasurer and Chief Financial Officer (since May 2000) of OFI Trust Company (a trust company subsidiary of the Manager); Assistant Treasurer (since March 1999) of Oppenheimer Acquisition Corp. Formerly Assistant Treasurer of Centennial Asset Management Corporation (March 1999-October 2003) and OppenheimerFunds Legacy Program (April 2000-June 2003); Principal and Chief Operating Officer (March 1995-March 1999) at Bankers Trust Company-Mutual Fund Services Division. An officer of 84 portfolios in the OppenheimerFunds complex. - ------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------- Brian Petersen, Assistant Vice President of the Manager since August 2002; Assistant Treasurer formerly Manager/Financial Product Accounting (November since 2004 1998-July 2002) of the Manager. An officer of 83 portfolios Age: 34 in the OppenheimerFunds complex. - ------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------- Philip Vottiero, Vice President/Fund Accounting of the Manager since March Assistant Treasurer 2002. Formerly Vice President/Corporate Accounting of the since 2002 Manager (July 1999-March 2002) prior to which he was Chief Age: 41 Financial Officer at Sovlink Corporation (April 1996-June 1999). An officer of 84 portfolios in the OppenheimerFunds complex. - ------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------- Robert G. Zack, Executive Vice President (since January 2004) and General Vice President & Counsel (since February 2002) of the Manager; General Secretary since 2001 Counsel and a director (since November 2001) of the Age: 56 Distributor; General Counsel (since November 2001) of Centennial Asset Management Corporation; Senior Vice President and General Counsel (since November 2001) of HarbourView Asset Management Corporation; Secretary and General Counsel (since November 2001) of Oppenheimer Acquisition Corp.; Assistant Secretary and a director (since October 1997) of OppenheimerFunds International Ltd. and OppenheimerFunds plc; Vice President and a director (since November 2001) of Oppenheimer Partnership Holdings, Inc.; a director (since November 2001) of Oppenheimer Real Asset Management, Inc.; Senior Vice President, General Counsel and a director (since November 2001) of Shareholder Financial Services, Inc., Shareholder Services, Inc., OFI Private Investments, Inc. and OFI Trust Company; Vice President (since November 2001) of OppenheimerFunds Legacy Program; Senior Vice President and General Counsel (since November 2001) of OFI Institutional Asset Management, Inc.; a director (since June 2003) of OppenheimerFunds (Asia) Limited. Formerly Senior Vice President (May 1985-December 2003), 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); and OppenheimerFunds International Ltd. (October 1997-November 2001). An officer of 84 portfolios in the OppenheimerFunds complex. - ------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------- Kathleen T. Ives, Vice President (since June 1998) and Senior Counsel and Assistant Secretary Assistant Secretary (since October 2003) of the Manager; since 2001 Vice President (since 1999) and Assistant Secretary (since Age: 38 October 2003) of the Distributor; Assistant Secretary (since October 2003) of Centennial Asset Management Corporation; Vice President and Assistant Secretary (since 1999) of Shareholder Services, Inc.; Assistant Secretary (since December 2001) of OppenheimerFunds Legacy Program and of Shareholder Financial Services, Inc.. Formerly an Assistant Counsel (August 1994-October 2003) and Assistant Vice President of the Manager (August 1997-June 1998). An officer of 84 portfolios in the OppenheimerFunds complex. - ------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------- Dina C. Lee, Assistant Vice President and Assistant Counsel of the Assistant Secretary Manager (since December 2000); formerly an attorney and since 2004 Assistant Secretary of Van Eck Global (until December Age: 34 2000). An officer of 84 portfolios in the OppenheimerFunds complex. - ------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------- Lisa I. Bloomberg, Vice President and Associate Counsel of the Manager since Assistant Secretary May 2004; formerly First Vice President and Associate since 2004 General Counsel of UBS Financial Services Inc. (formerly, Age: 36 PaineWebber Incorporated) (May 1999 - April 2004) prior to which she was an Associate at Skaden, Arps, Slate, Meagher & Flom, LLP (September 1996 - April 1999). An officer of 84 portfolios in the OppenheimerFunds complex. - ------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------- Phillip S. Gillespie, Senior Vice President and Deputy General Counsel of the Assistant Secretary Manager since September 2004. Formerly Mr. Gillespie held since 2004 the following positions at Merrill Lynch Investment Age: 40 Management: First Vice President (2001-September 2004); Director (from 2000) and Vice President (1998-2000). An officer of 74 portfolios in the OppenheimerFunds complex. - ------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------- Wayne Miao, Assistant Vice President and Assistant Counsel of the Assistant Secretary Manager since June 2004. Formerly an Associate with Sidley since 2004 Austin Brown & Wood LLP (September 1999 - May 2004). An Age: 31 officer of 74 portfolios in the OppenheimerFunds complex. - ------------------------------------------------------------------------------------- All officers serve at the pleasure of the Board. As of November 1, 2004, 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, does 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 A MODIFICATION TO THE FUND'S INVESTMENT OBJECTIVE The Board of Trustees has approved, and recommends that shareholders of the Fund approve, a proposal to modify the fundamental investment objective of the Fund. The current investment objective of the Fund is to "seek a high level of current income by investing mainly in debt instruments." If the proposal is approved, the Fund will modify its investment objective so that it "seeks total return by investing mainly in debt instruments." Total return is generally comprised of both capital appreciation and current income. The Board of Trustees believes the proposed modification is in the best interests of the Fund and its shareholders. - --------------------------------------------------------------------------------- Current Investment Objective Proposed Investment Objective ---------------------------- ----------------------------- The Fund seeks a high level of current The Fund seeks total return by income by investing mainly in debt investing mainly in debt instruments. instruments. - --------------------------------------------------------------------------------- If the proposal is approved, the Fund will try to achieve the goal of total return through current income and capital appreciation consistent with disciplined risk taking. The Fund will continue to invest mainly in investment grade debt securities. The Board of Trustees believes that making the goal of total return an explicit part of the Fund's investment strategies will provide the Fund more investment flexibility as market conditions change (favoring income or capital growth at various times) and help achieve better risk-adjusted and relative returns. The Board of Trustees does not believe that this modification to the investment objective will result in a significant change in the Fund's current investment strategy. Along with the Fund's name change and investment policy modifications discussed below, the modification to the Fund's investment objective will, however, allow the Fund to better compete more directly against a number of large, general-purpose bond funds. In addition to approving the investment objective modification, the Board of Trustees has also approved changing the name of the Fund to "Oppenheimer Core Bond Fund" and certain investment policies of the Fund. These changes will be effective on or about January 21, 2005 and are not contingent on shareholders' approval of the Fund's investment objective modification. The Board approved (i) limiting the Fund's investments in below-investment grade securities to 20% from 35% and (ii) the Fund seeking to maintain an average effective portfolio duration of three to six years and an average credit quality of "A-" or higher. You should be aware that as a result of these changes, the Fund may be expected to have a lower yield. The Board of Trustees believes these changes are in the best interest of the Fund and its shareholders and would reduce the over-all risk of the Fund. 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 November 1, 2004, the Fund had 63,485,417.527 shares outstanding, consisting of 32,720,187.419 Class A, 14,764,526.182 Class B, 8,033,715.770 Class C, 2,331,796.023 Class N and 5,635,192.133 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 November 1, 2004, 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 32246-6484, which owned 172,535.220 Class N shares (representing approximately 7.39% of the Fund's then outstanding Class N shares), for the benefit of its customers. R.E. Svensk & M. Reynolds TR, Exporters Insurance Services, 335 Madison Avenue, New York, NY 10017-4611, which owned 132,240.697 Class N shares (representing approximately 5.67% of the Fund's then outstanding Class N shares). Oppenheimer Capital Preservation Fund, 6803 South Tucson Way, Englewood, CO 80112-3924, which owned 2,208,375.073 Class Y shares (representing approximately 39.18% of the Fund's then outstanding Class Y shares), for the benefit of its shareholders. Oregon College Savings Plan Conservative Portfolio, c/o OppenheimerFunds, Inc., P.O. Box 5270, Denver, CO 80217-5270, which owned 807,831.345 Class Y shares (representing approximately 14.33% of the Fund's then outstanding Class Y shares). Oregon College Savings Plan Moderate Portfolio, c/o OppenheimerFunds, Inc., P.O. Box 5270, Denver, CO 80217-5270, which owned 728,852.668 Class Y shares (representing approximately 12.93% of the Fund's then outstanding Class Y shares). Oregon College Savings Plan Balanced Portfolio, c/o OppenheimerFunds, Inc., P.O. Box 5270, Denver, CO 80217-5270, which owned 714,887.601 Class Y shares (representing approximately 12.68% of the Fund's then outstanding Class Y shares). Oregon College Savings Plan Aggresive Portfolio, c/o OppenheimerFunds, Inc., P.O. Box 5270, Denver, CO 80217-5270, which owned 700,519.525 Class Y shares (representing approximately 12.43% of the Fund's then outstanding Class Y shares). 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 Two World Financial Center, 225 Liberty Street, 11th Floor, New York, NY 10281-1008. 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 $1,730,004 by the Fund during the fiscal year ended December 31, 2003. The Manager (including affiliates and subsidiaries) currently manages investment companies, including the Oppenheimer funds, with assets of more than $155 billion as of September 30, 2004, including other Oppenheimer with 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 Two World Financial Center,225 Liberty Street, 11th Floor, New York, NY 10281-1008. 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 September 30, 2004, 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 96.808% of the outstanding common stock and 97.889% of the voting power of OAC as of that date. Certain officers and/or directors of the Manager held (i) 366,486 shares of the Class B voting stock, representing 0.64% of the outstanding common stock and 1.5% of the voting power, (ii) 183,039 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 10,641,501 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 October 1999, the only transaction by a person who will serve, if elected, as a Trustee of the Fund was by Mr. Bowen. During that 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 V. Murphy, Chairman, President, Chief Executive Officer and a director; Andrew Ruotolo, Executive Vice President and a director; Kurt Wolfgruber, Executive Vice President, Chief Investment Officer and a director; Robert G. Zack, Executive Vice President and General Counsel; Craig Dinsell and James Ruff, Executive Vice Presidents; Brian W. Wixted, Senior Vice President and Treasurer; Mark Vandehey, Senior Vice President and Chief Compliance Officer, and Bruce Dunbar, George Evans, Ronald H. Fielding, John Forrest, Phillip S. Gillespie, Robert B. Grill, Steve Ilnitzki, Lynn Oberist Keeshan, Thomas W. Keffer, Martin S.Korn, Chris Leavy, Angelo Manioudakis, Charles McKenzie, Andrew J. Mika, Nikolaos D. Monoyios, David Pfeffer, David Poiesz, David Robertson, Keith Spencer, Arthur Steinmetz, John Stoma, Martin Telles, Jerry A. Webman, Diederick Werdmolder, William L. Wilby, Donna Winn, Philip Witkower, Carol Wolf and Arthur J. Zimmer, Senior Vice Presidents. These officers are located at one of the four offices of the Manager: Two World Financial Center,225 Liberty Street, 11th Floor, New York, NY 10281-1008; 6803 South Tucson Way, Centennial, CO 80112; 350 Linden Oaks, Rochester, NY 14625-2807 or 10 St. James Avenue, Boston, MA 02116. Custodian. J.P. Morgan Chase Bank, 4 Chase Metro Tech Center, Brooklyn, NY 11245, 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 December 31, 2003, has previously been sent to shareholders. The Semi-Annual Report to Shareholders of the Fund as of June 30 2004 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 equally by the Fund and the Manager. 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, 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. Please have the proxy ballot in hand and call the number on the enclosed form and follow the instructions. 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 Proposal 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 modify the Fund's investment objective. 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 ten (10) 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. This which means the lesser of (i) 67% or more of the voting securities of the Fund present or represented by proxy at the Meeting, if the holders of more than 50% of the Fund's outstanding voting securities are present or represented by proxy, or (ii) more than 50% of the outstanding voting securities of the Fund. 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 November 22, 2004
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DEF 14A Filing
Oppenheimer Integrity Funds DEF 14ADefinitive proxy
Filed: 19 Nov 04, 12:00am