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.
285
TABLE 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
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Proposal Shareholders Voting
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1. To Elect a Board of Trustees All
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2. To Approve a modification to the Fund's All
Investment Objective
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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.
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Nominees for Independent Trustees
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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
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As of November 1, 2004
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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- -------------------------------------------------------------------------------------
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.
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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.
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Nominee for Interested Trustee and Officer
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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
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As of November 1, 2004
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- -------------------------------------------------------------------------------------
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.
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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
