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Oppenheimer Emerging Growth Fund
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6803 South Tucson Way, Englewood, Colorado  80112
1-800-525-7048

 Statement of Additional Information dated February 28, 2002

         This  Statement  of  Additional  Information  is  not a  Prospectus.  This  document  contains  additional
information  about the Fund and  supplements  information in the  Prospectus  dated February 28, 2002. It should be
read  together  with the  Prospectus.  You can obtain the  Prospectus  by  writing  to the Fund's  Transfer  Agent,
OppenheimerFunds  Services,  at P.O. Box 5270,  Denver,  Colorado  80217,  or by calling the Transfer  Agent at the
toll-free   number  shown  above,   or  by  downloading   it  from  the   OppenheimerFunds   Internet   website  at
WWW.OPPENHEIMERFUNDS.COM.
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Contents
                                                                                                          Page
About the Fund
Additional Information About the Fund's Investment Policies and Risks...................................  2
     The Fund's Investment Policies.....................................................................  2
     Other Investment Techniques and Strategies.........................................................  5
     Investment Restrictions............................................................................  18
How the Fund is Managed ................................................................................  20
     Organization and History...........................................................................  20
     Trustees and Officers..............................................................................  22
     The Manager........................................................................................  27
Brokerage Policies of the Fund..........................................................................  28
Distribution and Service Plans..........................................................................  30
Performance of the Fund.................................................................................  33

About Your Account
How To Buy Shares.......................................................................................  36
How To Sell Shares......................................................................................  45
How To Exchange Shares..................................................................................  49
Dividends, Capital Gains and Taxes......................................................................  52
Additional Information About the Fund...................................................................  54

Financial Information About the Fund
Independent Auditors' Report............................................................................  55
Financial Statements....................................................................................  56

Appendix A: Industry Classifications....................................................................  A-1
Appendix B: Special Sales Charge Arrangements and Waivers...............................................  B-1







ABOUT THE FUND

Additional Information About the Fund's Investment Policies and Risks

         The investment  objective,  the principal investment policies and the main risks of the Fund are described
in the  Prospectus.  This  Statement  of  Additional  Information  contains  supplemental  information  about those
policies and risks and the types of securities  that the Fund's  investment  Manager,  OppenheimerFunds,  Inc., can
select for the Fund.  Additional  information is also provided about the strategies that the Fund may use to try to
achieve its objective.

The Fund's  Investment  Policies.  The  composition of the Fund's  portfolio and the techniques and strategies that
the Fund's Manager may use in selecting  portfolio  securities will vary over time. The Fund is not required to use
all of the investment  techniques and strategies  described below at all times in seeking its goal. It may use some
of the special investment techniques and strategies at some times or not at all.

         |X| Investments in Equity  Securities.  The Fund focuses its investments in equity securities of companies
that the Manager  believes have higher growth  rates,  which will  generally be companies in the early growth phase
of their business cycle.  Equity  securities  include common stocks,  preferred  stocks,  rights and warrants,  and
securities  convertible into common stock.  The Fund does not limit its holdings of equity  securities to companies
of any  particular  market  capitalization  range.  Current  income is not a  criterion  used to  select  portfolio
securities.  However,  certain debt  securities  may be selected for the Fund's  portfolio for  defensive  purposes
(including debt securities that the Manager believes may offer some  opportunities  for capital  appreciation  when
stocks are  disfavored).  Other debt securities may be selected  because they are convertible into common stock, as
discussed below in "Convertible Securities.

                  |_| Over-the-Counter  Securities.  The securities Fund may invest in issuers traded on securities
exchanges or in the over-the-counter  market. The over-the-counter  markets,  both in the U.S. and abroad, may have
less liquidity  than  securities  exchanges.  That can affect the price the Fund is able to obtain when it wants to
sell a security.

                  |_| Convertible  Securities.  While some convertible  securities are a form of debt security,  in
many cases their conversion  feature  (allowing  conversion into equity  securities)  causes them to be regarded by
the Manager more as "equity  equivalents." As a result,  the rating assigned to the security has less impact on the
Manager's  investment  decision with respect to convertible  debt  securities  than in the case of  non-convertible
fixed-income  securities.  To determine whether convertible  securities should be regarded as "equity equivalents,"
the Manager examines the following factors:
(1)      whether,  at the option of the investor,  the convertible  security can be exchanged for a fixed number of
              shares of common stock of the issuer,
(2)      whether the issuer of the  convertible  securities  has restated its earnings per share of common stock on
              a fully diluted basis (considering the effect of conversion of the convertible securities), and
(3)      the extent to which the  convertible  security  may be a  defensive  "equity  substitute,"  providing  the
              ability to participate in any appreciation in the price of the issuer's common stock.

         Convertible  securities  rank senior to common stock in a  corporation's  capital  structure and therefore
are subject to less risk than common stock in case of the issuer's bankruptcy or liquidation.

         The value of a convertible  security is a function of its "investment  value" and its "conversion  value."
If the investment value exceeds the conversion  value, the security will behave more like a debt security,  and the
security's  price will likely  increase  when interest  rates fall and decrease  when  interest  rates rise. If the
conversion  value exceeds the  investment  value,  the security will behave more like an equity  security:  it will
likely sell at a premium over its conversion  value,  and its price will tend to fluctuate  directly with the price
of the underlying security.

         The Fund has no limitations on the ratings of the  convertible  debt  securities that it can buy. They can
include  securities that are  investment-grade  or below  investment  grade.  Securities that are below  investment
grade  (which are often  referred  to as junk  bonds),  whether  they are rated by a  nationally-recognized  rating
organization or are unrated  securities that the Manager deems to be below investment  grade, have greater risks of
default than investment-grade  securities.  Additionally,  debt securities are subject to interest rate risk. Their
values  tend to fall when  interest  rates rise.  The Fund does not  anticipate  that it will invest a  substantial
amount of its assets in these types of securities.

                  |_| Rights and  Warrants.  The Fund may invest in  warrants  or rights.  Warrants  basically  are
options to purchase equity  securities at specific prices valid for a specific period of time.  Their prices do not
necessarily  move  parallel  to the prices of the  underlying  securities.  Rights are  similar  to  warrants,  but
normally  have a short  duration  and are  distributed  directly  by the  issuer to its  shareholders.  Rights  and
warrants have no voting rights, receive no dividends and have no rights with respect to the assets of the issuer.

                  |_| Preferred  Stock.  Preferred  stock,  unlike common stock, has a stated dividend rate payable
from the  corporation's  earnings.  Preferred  stock  dividends may be cumulative or  non-cumulative.  "Cumulative"
dividend  provisions  require all or a portion of prior unpaid dividends to be paid before dividends can be paid on
the issuer's common stock.  Preferred stock may be "participating"  stock, which means that it may be entitled to a
dividend exceeding the stated dividend in certain cases.

         If interest rates rise, the fixed dividend on preferred stocks may be less  attractive,  causing the price
of preferred stocks to decline.  Preferred stock may have mandatory sinking fund provisions,  as well as provisions
allowing  calls or  redemptions  prior to maturity,  which can also have a negative  impact on prices when interest
rates  decline.  Preferred  stock  generally  has  a  preference  over  common  stock  on  the  distribution  of  a
corporation's assets in the event of liquidation of the corporation.  The rights of preferred stock on distribution
of a corporation's  assets in the event of a liquidation are generally  subordinate to the rights associated with a
corporation's debt securities.

         |X|  Foreign  Securities.  The Fund can  purchase  equity  securities  issued  or  guaranteed  by  foreign
companies.  "Foreign  securities"  include  equity and debt  securities  of companies  organized  under the laws of
countries  other than the United  States.  They may be traded on foreign  securities  exchanges  or in the  foreign
over-the-counter markets.

         Securities of foreign  issuers that are  represented  by American  Depository  Receipts are not considered
"foreign securities" for the purpose of the Fund's investment allocations.  That is because they are not subject to
many of the special  considerations  and risks,  discussed below, that apply to foreign  securities traded and held
abroad.

         Investing  in foreign  securities  offers  potential  benefits  not  available  from  investing  solely in
securities of domestic  issuers.  They include the  opportunity  to invest in foreign  issuers that appear to offer
growth  potential,  or in foreign  countries with economic  policies or business cycles different from those of the
U.S., or to reduce  fluctuations in portfolio  value by taking  advantage of foreign stock markets that do not move
in a manner parallel to U.S.  markets.  The Fund will hold foreign currency only in connection with the purchase or
sale of foreign  securities.  The Fund intends to typically  invest no more than 10% of its total assets in foreign
securities.

                  |_|  Risks  of  Foreign   Investing.   Investments  in  foreign   securities  may  offer  special
opportunities for investing but also present special additional risks and  considerations not typically  associated
with investments in domestic securities. Some of these additional risks are:
o        reduction of income by foreign taxes;
o        fluctuation  in value of  foreign  investments  due to  changes  in  currency  rates or  currency  control
             regulations (for example, currency blockage);
o        transaction charges for currency exchange;
o        lack of public information about foreign issuers;
o        lack of uniform accounting,  auditing and financial  reporting  standards in foreign countries  comparable
             to those applicable to domestic issuers;
o        less volume on foreign exchanges than on U.S. exchanges;
o        greater volatility and less liquidity on foreign markets than in the U.S.;
o        less governmental regulation of foreign issuers, stock exchanges and brokers than in the U.S.;
o        greater difficulties in commencing lawsuits;
o        higher brokerage commission rates than in the U.S.;
o        increased risks of delays in settlement of portfolio  transactions  or loss of certificates  for portfolio
             securities;
o        possibilities in some countries of expropriation,  confiscatory taxation,  political,  financial or social
             instability or adverse diplomatic developments; and
o        unfavorable differences between the U.S. economy and foreign economies.

         In the past, U.S.  government  policies have discouraged  certain  investments  abroad by U.S.  investors,
through taxation or other restrictions, and it is possible that such restrictions could be re-imposed.

                  |_| Special Risks of Emerging and Developing Markets.  Securities in emerging and developing
market countries may offer special investment opportunities but investments in these countries present risks not
found in more mature markets. Securities may be more difficult to sell at an acceptable price and their prices
may be more volatile than securities of companies in more developed markets. Settlements of trades may be subject
to greater delays so that the Fund may not receive the proceeds of a sale of a security on a timely basis.

Emerging markets may have less developed trading markets and exchanges. Emerging countries may have less
developed legal and accounting systems and investments may be subject to greater risks of government restrictions
on withdrawing the sales proceeds of securities from the country. Economies of developing countries may be more
dependent on relatively few industries that may be highly vulnerable to local and global changes. Governments may
be more unstable and present greater risks of nationalization or restrictions on foreign ownership of stocks of
local companies. These investments may be substantially more volatile than stocks of issuers in the U.S. and
other developed countries and may be very speculative.


         |X| Portfolio  Turnover.  "Portfolio  turnover"  describes the rate at which the Fund traded its portfolio
securities  during its last fiscal year.  For example,  if a fund sold all of its  securities  during the year, its
portfolio  turnover rate would have been 100%  annually.  The Fund's  portfolio  turnover rate will  fluctuate from
year to year, and the Fund expects to have a portfolio turnover rate of more than 100% annually.

         Increased portfolio turnover creates higher brokerage and transaction costs for the Fund,
which may reduce its overall  performance.  Additionally,  the realization of capital gains from selling  portfolio
securities may result in distributions  of taxable  long-term  capital gains to  shareholders,  since the Fund will
normally  distribute all of its capital gains realized each year, to avoid excise taxes under the Internal  Revenue
Code.

Other  Investment  Techniques and Strategies.  In seeking its objective,  the Fund from time to time can employ the
types of investment  strategies and investments  described below. It is not required to use all of these strategies
at all times, and at times may not use them.

         |X| Investing in Small,  Unseasoned  Companies.  The Fund can invest in  securities  of small,  unseasoned
companies.  These are companies that have been in operation for less than three years,  including the operations of
any  predecessors.  Securities of these  companies may be subject to volatility in their prices.  They might have a
limited  trading market,  which could  adversely  affect the Fund's ability to dispose of them and could reduce the
price  the  Fund  might be able to  obtain  for  them.  Other  investors  that own a  security  issued  by a small,
unseasoned  issuer for which there is limited  liquidity  might trade the security  when the Fund is  attempting to
dispose of its holdings of that  security.  In that case the Fund might receive a lower price for its holdings than
might otherwise be obtained.

         |X| Illiquid and  Restricted  Securities.  Under the policies  and  procedures  established  by the Fund's
Board of Trustees,  the Manager determines the liquidity of certain of the Fund's  investments.  To enable the Fund
to sell its holdings of a restricted  security not  registered  under the Securities Act of 1933, the Fund may have
to cause those  securities to be registered.  The expenses of registering  restricted  securities may be negotiated
by the Fund with the  issuer  at the time the Fund buys the  securities.  When the Fund must  arrange  registration
because the Fund wishes to sell the security,  a  considerable  period may elapse  between the time the decision is
made to sell the security and the time the  security is  registered  so that the Fund could sell it. The Fund would
bear the risks of any downward price fluctuation during that period.

         The Fund can also  acquire  restricted  securities  through  private  placements.  Those  securities  have
contractual  restrictions on their public resale.  Those  restrictions might limit the Fund's ability to dispose of
the securities and might lower the amount the Fund could realize upon the sale.

         The Fund has limitations  that apply to purchases of restricted  securities,  as stated in the Prospectus.
Those  percentage  restrictions  do not limit  purchases  of  restricted  securities  that are eligible for sale to
qualified  institutional  purchasers  under Rule 144A of the Securities Act of 1933, if those  securities have been
determined to be liquid by the Manager under  Board-approved  guidelines.  Those  guidelines  take into account the
trading  activity for such securities and the availability of reliable  pricing  information,  among other factors.
If there is a lack of trading  interest in a particular  Rule 144A security,  the Fund's  holdings of that security
may be considered to be illiquid.

         Illiquid  securities  include  repurchase  agreements  maturing in more than seven days and  participation
interests that do not have puts exercisable within seven days.

         |X| Loans of Portfolio Securities.  To raise cash for liquidity purposes,  the Fund can lend its portfolio
securities  to  brokers,  dealers  and other  types of  financial  institutions  approved  by the  Fund's  Board of
Trustees.  These  loans  are  limited  to not more  than 25% of the  value of the  Fund's  total  assets.  The Fund
currently  does not intend to engage in loans of  securities,  but if it does so, such loans will not likely exceed
5% of the Fund's total assets.

         There  are some  risks in  connection  with  securities  lending.  The Fund  might  experience  a delay in
receiving  additional  collateral to secure a loan, or a delay in recovery of the loaned securities if the borrower
defaults.  The Fund must receive collateral for a loan. Under current  applicable  regulatory  requirements  (which
are  subject to  change),  on each  business  day the loan  collateral  must be at least  equal to the value of the
loaned  securities.  It must consist of cash,  bank letters of credit,  securities  of the U.S.  government  or its
agencies  or  instrumentalities,  or other  cash  equivalents  in which  the Fund is  permitted  to  invest.  To be
acceptable  as  collateral,  letters of credit  must  obligate a bank to pay  amounts  demanded  by the Fund if the
demand  meets the  terms of the  letter.  The terms of the  letter  of  credit  and the  issuing  bank both must be
satisfactory to the Fund.

         When it lends  securities,  the Fund  receives  amounts  equal to the  dividends  or  interest  on  loaned
securities.  It also  receives  one or more of (a)  negotiated  loan  fees,  (b)  interest  on  securities  used as
collateral,  and (c) interest on any short-term debt securities  purchased with such loan  collateral.  Either type
of  interest  may be  shared  with  the  borrower.  The  Fund  may also  pay  reasonable  finder's,  custodian  and
administrative  fees in  connection  with these  loans.  The terms of the Fund's loans must meet  applicable  tests
under the Internal  Revenue Code and must permit the Fund to reacquire  loaned  securities  on five days' notice or
in time to vote on any important matter.

         |X|  Inter-Fund  Loans.  Subject to SEC approval,  the Fund may lend its assets to  affiliated  investment
companies (for example, other funds in the OppenheimerFunds complex).

                 Implementation of inter-fund lending would be accomplished  consistent with applicable  regulatory
requirements,  including the provisions of any order the SEC might issue to the Fund and other  Oppenheimer  funds.
The Fund has not yet  decided  to  apply  for such an order  and  there is no  guarantee  any such  order  would be
granted,  even if applied for.  Until the SEC has approved an  inter-fund  lending  application,  the Fund will not
engage in lending with affiliated investment companies.

                  The  reason for  lending  money to an  affiliated  fund is that the  lending  fund may be able to
obtain a higher rate of return than it could from interest rates on alternative short-term  investments.  To assure
that the  Fund  will  not be  disadvantaged  by  making  loans to  affiliated  funds,  certain  safeguards  will be
implemented.  An  example of the types of  safeguards  which the SEC may  require  may  include  some or all of the
following:  the Fund will not lend money to  affiliated  funds unless the interest  rate on such loan is determined
to be  reasonable  under  the  circumstances;  the Fund may not make  interfund  loans in excess of 7.5% of its net
assets;  an interfund  loan to any one affiliated  fund shall not exceed 5% of the Fund's net assets;  an interfund
loan may not be  outstanding  for more than seven days;  each  interfund  loan may be called on one business  day's
notice;  and the Manager will provide the Trustees  reports on all inter-fund loans  demonstrating  that the Fund's
participation is appropriate and that the loan is consistent with its investment objectives and policies.

         |X|  Borrowing  for  Leverage.  The Fund has the  ability to borrow  from banks on an  unsecured  basis to
invest the borrowed funds in portfolio  securities.  This  speculative  technique is known as "leverage."  The Fund
may borrow only from banks. Under current regulatory  requirements,  borrowings can be made only to the extent that
the value of the  Fund's  assets,  less its  liabilities  other than  borrowings,  is equal to at least 300% of all
borrowings  (including  the proposed  borrowing).  If the value of the Fund's  assets fails to meet this 300% asset
coverage requirement,  the Fund will reduce its bank debt within three days to meet the requirement.  To do so, the
Fund might have to sell a portion of its investments at a disadvantageous time.

         The Fund will pay interest on these loans,  and that interest  expense will raise the overall  expenses of
the Fund and reduce its returns.  If it does borrow,  its expenses  will be greater than  comparable  funds that do
not borrow for  leverage.  Additionally,  the Fund's net asset  value per share might  fluctuate  more than that of
funds that do not borrow.  Currently,  the Fund does not contemplate  using this  technique,  but if it does so, it
will not likely do so to a substantial degree.

         |X| Derivatives.  The Fund can invest in a variety of derivative  investments to seek income for liquidity
needs or for hedging purposes.  Some derivative  investments the Fund can use are the hedging instruments described
below in this  Statement  of  Additional  Information.  However,  the Fund  does  not use,  and does not  currently
contemplate using, derivatives or hedging instruments to a significant degree.
         Some of the  derivative  investments  the Fund can use include  debt  exchangeable  for common stock of an
issuer or  "equity-linked  debt  securities" of an issuer.  At maturity,  the debt security is exchanged for common
stock of the issuer or it is payable in an amount  based on the price of the  issuer's  common stock at the time of
maturity.  Both  alternatives  present a risk that the amount  payable at maturity  will be less than the principal
amount of the debt because the price of the issuer's common stock might not be as high as the Manager expected.

         |X| Hedging.  Although the Fund does not  anticipate  the extensive use of hedging  instruments,  the Fund
can use them.  It is not required to do so in seeking its goal.  In the broadest  sense,  options,  futures and the
other hedging  instruments  described  below may be considered  as  derivative  investments.  To attempt to protect
against  declines in the market value of the Fund's  portfolio,  to permit the Fund to retain  unrealized  gains in
the value of portfolio  securities  which have  appreciated,  or to facilitate  selling  securities  for investment
reasons, the Fund could:
             |_| sell futures contracts,
             |_| buy puts on such futures or on securities, or
             |_| write covered calls on securities or futures.  Covered calls can also be used to seek income,  but
                 the Manager does not expect to engage extensively in that practice.

         The Fund can use hedging to establish a position in the  securities  market as a temporary  substitute for
purchasing  particular  securities.  In that case the Fund would  normally seek to purchase the securities and then
terminate  that  hedging  position.  The Fund might also use this type of hedge to attempt to protect  against  the
possibility that its portfolio  securities  would not be fully included in a rise in value of the market.  To do so
the Fund could:
             |_| buy futures, or
             |_| buy calls on such futures or on securities.
         If the  Fund  hedges  with  futures  and/or  options  on  futures,  it will be  incidental  to the  Fund's
activities  in the  underlying  cash market.  The  particular  hedging  instruments  the Fund can use are described
below.  The Fund may employ new hedging  instruments  and strategies when they are developed,  if those  investment
methods are consistent  with the Fund's  investment  objective and are  permissible  under  applicable  regulations
governing the Fund.

                  |_|  Futures.  The Fund can buy and sell  futures  contracts  that  relate to (1)  stock  indices
(these are referred to as "stock index  futures"),  (2)  securities  indices  (these are referred to as  "financial
futures"),  (3) debt securities (these are referred to as "interest rate futures"),  (4) foreign  currencies (these
are referred to as "forward contracts"), and (5) commodities (these are referred to as "commodity futures").

         A stock index is used as the basis for trading  stock index  futures.  In some cases these  futures may be
based on stocks of issuers in a particular  industry or group of industries.  A stock index assigns relative values
to the common  stocks  included  in the index and its value  fluctuates  in response to the changes in value of the
underlying  stocks.  A stock index cannot be purchased or sold directly.  Financial  futures are similar  contracts
based on the future  value of the basket of  securities  that  comprise  the index.  These  contracts  obligate the
seller to deliver,  and the purchaser to take,  cash to settle the futures  transaction.  There is no delivery made
of the  underlying  securities to settle the futures  obligation.  Either party may also settle the  transaction by
entering into an offsetting contract.


         The Fund can invest a portion of its assets in  commodity  futures  contracts.  Commodity  futures  may be
based upon  commodities  within five main commodity  groups:  (1) energy,  which  includes crude oil,  natural gas,
gasoline and heating oil; (2) livestock,  which includes  cattle and hogs; (3)  agriculture,  which includes wheat,
corn, soybeans,  cotton,  coffee,  sugar and cocoa; (4) industrial metals,  which includes aluminum,  copper, lead,
nickel,  tin and zinc; and (5) precious  metals,  which includes gold,  platinum and silver.  The Fund may purchase
and sell commodity  futures  contracts,  options on futures  contracts and options and futures on commodity indices
with respect to these five main  commodity  groups and the  individual  commodities  within each group,  as well as
other types of commodities.

         An interest  rate future  obligates  the seller to deliver (and the purchaser to take) cash or a specified
type of debt  security  to settle the  futures  transaction.  Either  party  could  also  enter into an  offsetting
contract to close out the position.

         No money is paid or  received  by the Fund on the  purchase  or sale of a  future.  Upon  entering  into a
futures  transaction,  the Fund will be required to deposit an initial margin  payment with the futures  commission
merchant (the "futures  broker").  Initial margin  payments will be deposited with the Fund's  custodian bank in an
account registered in the futures broker's name.  However,  the futures broker can gain access to that account only
under specified  conditions.  As the future is marked to market (that is, its value on the Fund's books is changed)
to reflect changes in its market value,  subsequent margin payments,  called variation  margin,  will be paid to or
by the futures broker daily.

         At any time prior to expiration  of the future,  the Fund may elect to close out its position by taking an
opposite  position,  at which time a final  determination  of variation margin is made and any additional cash must
be paid by or released to the Fund.  Any loss or gain on the future is then  realized by the Fund for tax purposes.
All futures  transactions  (except  forward  contracts) are effected  through a  clearinghouse  associated with the
exchange on which the contracts are traded.

                  |_| Put and Call  Options.  The Fund can buy and sell certain  kinds of put options  ("puts") and
call options  ("calls").  The Fund may can and sell  exchange-traded  and  over-the-counter  put and call  options,
including index options,  securities  options,  currency  options,  commodities  options,  and options on the other
types of futures described above.

                  |_| Writing  Covered Call Options.  The Fund can write (that is, sell) covered calls. If the Fund
sells a call option,  it must be covered.  That means the Fund must own the security  subject to the call while the
call is  outstanding,  or, for certain  types of calls,  the call may be covered by  segregating  liquid  assets to
enable the Fund to satisfy its  obligations  if the call is exercised.  Up to 25% of the Fund's total assets may be
subject to calls the Fund writes.

         When the Fund  writes a call on a  security,  it receives  cash (a  premium).  The Fund agrees to sell the
underlying  security to a purchaser of a corresponding  call on the same security during the call period at a fixed
exercise  price  regardless  of market price  changes  during the call period.  The call period is usually not more
than nine months.  The exercise  price may differ from the market price of the  underlying  security.  The Fund has
the risk of loss that the price of the  underlying  security may decline  during the call period.  That risk may be
offset to some extent by the  premium the Fund  receives.  If the value of the  investment  does not rise above the
call price,  it is likely that the call will lapse  without being  exercised.  In that case the Fund would keep the
cash premium and the investment.

         When  the  Fund  writes  a call on an  index,  it  receives  cash (a  premium).  If the  buyer of the call
exercises  it, the Fund will pay an amount of cash equal to the  difference  between the closing  price of the call
and the exercise  price,  multiplied by a specified  multiple that  determines the total value of the call for each
point of difference.  If the value of the underlying  investment  does not rise above the call price,  it is likely
that the call will lapse without being exercised. In that case, the Fund would keep the cash premium.

         The Fund's  custodian bank, or a securities  depository  acting for the custodian,  will act as the Fund's
escrow agent,  through the facilities of the Options Clearing  Corporation  ("OCC"), as to the investments on which
the Fund has written  calls  traded on  exchanges  or as to other  acceptable  escrow  securities.  In that way, no
margin will be required for such  transactions.  OCC will release the securities on the expiration of the option or
when the Fund enters into a closing transaction.

         When the Fund  writes an  over-the-counter  ("OTC")  option,  it will  enter  into an  arrangement  with a
primary U.S.  government  securities  dealer which will  establish a formula  price at which the Fund will have the
absolute  right to  repurchase  that OTC option.  The formula  price will  generally  be based on a multiple of the
premium received for the option,  plus the amount by which the option is exercisable  below the market price of the
underlying  security (that is, the option is "in the money").  When the Fund writes an OTC option, it will treat as
illiquid (for purposes of its  restriction on holding  illiquid  securities)  the  mark-to-market  value of any OTC
option it holds, unless the option is subject to a buy-back agreement by the executing broker.

         To terminate its  obligation  on a call it has written,  the Fund may purchase a  corresponding  call in a
"closing purchase  transaction." The Fund will then realize a profit or loss, depending upon whether the net of the
amount of the option  transaction  costs and the  premium  received on the call the Fund wrote is more or less than
the price of the call the Fund  purchases to close out the  transaction.  The Fund may realize a profit if the call
expires  unexercised,  because the Fund will retain the  underlying  security  and the premium it received  when it
wrote the call. Any such profits are considered  short-term  capital gains for federal income tax purposes,  as are
the  premiums on lapsed  calls.  When  distributed  by the Fund they are taxable as  ordinary  income.  If the Fund
cannot  effect a  closing  purchase  transaction  due to the lack of a market,  it will  have to hold the  callable
securities until the call expires or is exercised.

         The Fund can also write calls on a futures  contract  without  owning the futures  contract or  securities
deliverable  under  the  contract.  To do so,  at the time the call is  written,  the Fund  must  cover the call by
identifying on its books an equivalent  dollar amount of liquid assets.  The Fund will segregate  additional liquid
assets if the value of the segregated  assets drops below 100% of the current value of the future.  Because of this
segregation  requirement,  in no  circumstances  would the Fund's  receipt of an exercise  notice as to that future
require the Fund to deliver a futures  contract.  It would simply put the Fund in a short futures  position,  which
is permitted by the Fund's hedging policies.

                  |_| Writing Put Options.  The Fund may sell put  options.  A put option on  securities  gives the
purchaser  the right to sell,  and the writer the  obligation  to buy, the  underlying  investment  at the exercise
price  during the  option  period.  The Fund will not write  puts if, as a result,  more than 50% of the Fund's net
assets would be required to be segregated to cover such put options.

         If the Fund writes a put, the put must be covered by liquid assets  identified  on the Fund's  books.  The
premium  the Fund  receives  from  writing  a put  represents  a  profit,  as long as the  price of the  underlying
investment  remains equal to or above the exercise price of the put. However,  the Fund also assumes the obligation
during the option period to buy the underlying  investment  from the buyer of the put at the exercise  price,  even
if the value of the investment  falls below the exercise price. If a put the Fund has written expires  unexercised,
the  Fund  realizes  a gain in the  amount  of the  premium  less the  transaction  costs  incurred.  If the put is
exercised,  the Fund must fulfill its obligation to purchase the underlying  investment at the exercise price. That
price will  usually  exceed the market value of the  investment  at that time.  In that case,  the Fund may incur a
loss if it  sells  the  underlying  investment.  That  loss  will be  equal  to the sum of the  sale  price  of the
underlying  investment and the premium  received minus the sum of the exercise price and any transaction  costs the
Fund incurred.

         When writing a put option on a security,  to secure its obligation to pay for the underlying  security the
Fund will  deposit  in escrow  liquid  assets  with a value  equal to or  greater  than the  exercise  price of the
underlying  securities.  The Fund therefore  forgoes the opportunity of investing the segregated  assets or writing
calls against those assets.

         As long as the Fund's  obligation as the put writer  continues,  it may be assigned an exercise  notice by
the  broker-dealer  through  which the put was sold.  That  notice will  require  the Fund to take  delivery of the
underlying  security and pay the exercise  price.  The Fund has no control over when it may be required to purchase
the underlying  security,  since it may be assigned an exercise  notice at any time prior to the termination of its
obligation as the writer of the put. That  obligation  terminates upon expiration of the put. It may also terminate
if, before it receives an exercise notice,  the Fund effects a closing purchase  transaction by purchasing a put of
the same  series as it sold.  Once the Fund has been  assigned  an  exercise  notice,  it  cannot  effect a closing
purchase transaction.

         The Fund may decide to effect a closing  purchase  transaction to realize a profit on an  outstanding  put
option it has  written  or to  prevent  the  underlying  security  from being  put.  Effecting  a closing  purchase
transaction  will also permit the Fund to write  another put option on the  security,  or to sell the  security and
use the  proceeds  from the sale for  other  investments.  The Fund  will  realize  a profit or loss from a closing
purchase  transaction  depending on whether the cost of the  transaction is less or more than the premium  received
from writing the put option.  Any profits from writing puts are  considered  short-term  capital  gains for federal
tax purposes, and when distributed by the Fund, are taxable as ordinary income.

                  |_| Purchasing  Calls and Puts. The Fund can purchase  calls to protect  against the  possibility
that the Fund's  portfolio  will not  participate in an anticipated  rise in the securities  market.  When the Fund
buys a call (other than in a closing purchase  transaction),  it pays a premium. The Fund then has the right to buy
the underlying  investment from a seller of a corresponding  call on the same investment  during the call period at
a fixed  exercise  price.  The Fund  benefits  only if it sells the call at a profit or if, during the call period,
the market price of the  underlying  investment is above the sum of the call price plus the  transaction  costs and
the premium paid for the call and the Fund  exercises  the call.  If the Fund does not exercise the call or sell it
(whether or not at a profit),  the call will become  worthless at its  expiration  date. In that case the Fund will
have paid the premium but lost the right to purchase the underlying investment.

         The Fund can buy puts whether or not it holds the underlying  investment in its  portfolio.  When the Fund
purchases  a put,  it pays a premium  and,  except  as to puts on  indices,  has the  right to sell the  underlying
investment to a seller of a put on a corresponding investment during the put period at a fixed exercise price.

         Buying a put on securities  or futures the Fund owns enables the Fund to attempt to protect  itself during
the put period  against a decline in the value of the  underlying  investment  below the exercise  price by selling
the  underlying  investment at the exercise  price to a seller of a  corresponding  put. If the market price of the
underlying  investment  is equal to or above the  exercise  price and,  as a result,  the put is not  exercised  or
resold,  the put will become  worthless at its  expiration  date.  In that case the Fund will have paid the premium
but lost the right to sell the underlying  investment.  However, the Fund may sell the put prior to its expiration.
That sale may or may not be at a profit.

         Buying a put on an investment  the Fund does not own (such as an index or future)  permits the Fund either
to resell the put or to buy the  underlying  investment  and sell it at the exercise  price.  The resale price will
vary  inversely to the price of the  underlying  investment.  If the market price of the  underlying  investment is
above the  exercise  price  and,  as a result,  the put is not  exercised,  the put will  become  worthless  on its
expiration date.

         When the Fund  purchases  a call or put on an index or future,  it pays a premium,  but  settlement  is in
cash rather  than by delivery of the  underlying  investment  to the Fund.  Gain or loss  depends on changes in the
index in question (and thus on price movements in the securities  market  generally) rather than on price movements
in individual securities or futures contracts.

         The Fund may buy a call or put only if,  after the  purchase,  the value of all call and put options  held
by the Fund will not exceed 5% of the Fund's total assets.

                  |_| Buying and Selling  Options on Foreign  Currencies.  The Fund can buy and sell calls and puts
on foreign  currencies.  They include puts and calls that trade on a securities or  commodities  exchange or in the
over-the-counter  markets  or are quoted by major  recognized  dealers  in such  options.  The Fund could use these
calls and puts to try to protect  against  declines in the dollar value of foreign  securities and increases in the
dollar cost of foreign securities the Fund wants to acquire.

         If the Manager  anticipates  a rise in the dollar value of a foreign  currency in which  securities  to be
acquired are  denominated,  the increased cost of those  securities may be partially  offset by purchasing calls or
writing  puts on that  foreign  currency.  If the Manager  anticipates  a decline in the dollar  value of a foreign
currency,  the decline in the dollar value of portfolio securities  denominated in that currency might be partially
offset by writing calls or purchasing puts on that foreign  currency.  However,  the currency rates could fluctuate
in a direction  adverse to the Fund's  position.  The Fund will then have  incurred  option  premium  payments  and
transaction costs without a corresponding benefit.

         A call the Fund  writes  on a foreign  currency  is  "covered"  if the Fund  owns the  underlying  foreign
currency  covered by the call or has an absolute  and  immediate  right to acquire that  foreign  currency  without
additional cash  consideration (or it can do so for additional cash  consideration  held in a segregated account by
its custodian bank) upon conversion or exchange of other foreign currency held in its portfolio.

         The Fund  could  write a call on a  foreign  currency  to  provide a hedge  against a decline  in the U.S.
dollar  value of a  security  which the Fund  owns or has the right to  acquire  and  which is  denominated  in the
currency  underlying  the option.  That decline might be one that occurs due to an expected  adverse  change in the
exchange rate. This is known as a "cross-hedging"  strategy. In those circumstances,  the Fund covers the option by
maintaining  cash,  U.S.  government  securities or other liquid,  high-grade debt securities in an amount equal to
the exercise price of the option, in a segregated account with the Fund's custodian bank.

                  |_| Risks of Hedging with Options and Futures.  The use of hedging  instruments  requires special
skills and  knowledge of  investment  techniques  that are  different  than what is required  for normal  portfolio
management.  If the Manager uses a hedging  instrument at the wrong time or judges market  conditions  incorrectly,
hedging  strategies  may reduce  the Fund's  return.  The Fund  could also  experience  losses if the prices of its
futures and options positions were not correlated with its other investments.

         The Fund's option  activities  could affect its portfolio  turnover  rate and brokerage  commissions.  The
exercise of calls written by the Fund might cause the Fund to sell related  portfolio  securities,  thus increasing
its turnover  rate. The exercise by the Fund of puts on securities  will cause the sale of underlying  investments,
increasing  portfolio  turnover.  Although  the  decision  whether to  exercise a put it holds is within the Fund's
control,  holding a put might cause the Fund to sell the related  investments  for reasons  that would not exist in
the absence of the put.

         The Fund could pay a brokerage  commission  each time it buys a call or put,  sells a call or put, or buys
or sells an underlying  investment in connection  with the exercise of a call or put.  Those  commissions  could be
higher on a relative  basis than the  commissions  for direct  purchases  or sales of the  underlying  investments.
Premiums paid for options are small in relation to the market value of the  underlying  investments.  Consequently,
put and call options  offer large amounts of leverage.  The leverage  offered by trading in options could result in
the Fund's net asset value being more sensitive to changes in the value of the underlying investment.

         If a covered  call  written by the Fund is exercised on an  investment  that has  increased in value,  the
Fund will be required to sell the  investment  at the call price.  It will not be able to realize any profit if the
investment has increased in value above the call price.

         An option position may be closed out only on a market that provides  secondary  trading for options of the
same series,  and there is no assurance that a liquid  secondary market will exist for any particular  option.  The
Fund might  experience  losses if it could not close out a position because of an illiquid market for the future or
option.

         There is a risk in using short hedging by selling futures or purchasing puts on  broadly-based  indices or
futures to attempt to protect against  declines in the value of the Fund's portfolio  securities.  The risk is that
the prices of the futures or the applicable  index will correlate  imperfectly with the behavior of the cash prices
of the Fund's securities.  For example,  it is possible that while the Fund has used hedging instruments in a short
hedge,  the market might advance and the value of the securities  held in the Fund's  portfolio  might decline.  If
that occurred,  the Fund would lose money on the hedging  instruments and also experience a decline in the value of
its portfolio securities.  However,  while this could occur for a very brief period or to a very small degree, over
time the value of a  diversified  portfolio of  securities  will tend to move in the same  direction as the indices
upon which the hedging instruments are based.

         The risk of imperfect  correlation  increases as the composition of the Fund's portfolio diverges from the
securities  included in the  applicable  index.  To compensate  for the imperfect  correlation  of movements in the
price of the  portfolio  securities  being hedged and movements in the price of the hedging  instruments,  the Fund
might use hedging  instruments  in a greater  dollar  amount than the dollar amount of portfolio  securities  being
hedged.  It might do so if the  historical  volatility  of the prices of the portfolio  securities  being hedged is
more than the historical volatility of the applicable index.

         The ordinary  spreads between prices in the cash and futures  markets are subject to  distortions,  due to
differences in the nature of those markets.  First,  all  participants  in the futures market are subject to margin
deposit and maintenance  requirements.  Rather than meeting additional margin deposit  requirements,  investors may
close futures contracts through  offsetting  transactions which could distort the normal  relationship  between the
cash and futures  markets.  Second,  the  liquidity of the futures  market  depends on  participants  entering into
offsetting  transactions  rather than making or taking delivery.  To the extent participants decide to make or take
delivery,  liquidity in the futures market could be reduced,  thus producing  distortion.  Third, from the point of
view of speculators,  the deposit  requirements in the futures market are less onerous than margin  requirements in
the  securities  markets.  Therefore,  increased  participation  by  speculators  in the  futures  market may cause
temporary price distortions.

         The Fund can use hedging  instruments  to  establish a position in the  securities  markets as a temporary
substitute  for the  purchase of  individual  securities  (long  hedging) by buying  futures  and/or  calls on such
futures,  broadly-based  indices or on  securities.  It is  possible  that when the Fund does so the  market  might
decline.  If the Fund then concludes not to invest in securities  because of concerns that the market might decline
further or for other  reasons,  the Fund will  realize a loss on the  hedging  instruments  that is not offset by a
reduction in the price of the securities purchased.

                  |_| Forward Contracts.  Forward contracts are foreign currency exchange contracts.  They are used
to buy or sell  foreign  currency for future  delivery at a fixed  price.  The Fund uses them to "lock in" the U.S.
dollar  price of a security  denominated  in a foreign  currency  that the Fund has  bought or sold,  or to protect
against  possible losses from changes in the relative values of the U.S.  dollar and a foreign  currency.  The Fund
limits its exposure in foreign currency  exchange  contracts in a particular  foreign currency to the amount of its
assets denominated in that currency or a closely-correlated  currency.  The Fund may also use "cross-hedging" where
the Fund hedges against changes in currencies other than the currency in which a security it holds is denominated.

         Under a forward  contract,  one party  agrees to  purchase,  and another  party agrees to sell, a specific
currency at a future date.  That date may be any fixed number of days from the date of the contract  agreed upon by
the parties.  The transaction  price is set at the time the contract is entered into. These contracts are traded in
the inter-bank  market  conducted  directly  among currency  traders  (usually  large  commercial  banks) and their
customers.

         The Fund can use forward  contracts to protect against  uncertainty in the level of future exchange rates.
The use of  forward  contracts  does not  eliminate  the  risk of  fluctuations  in the  prices  of the  underlying
securities  the Fund owns or intends to acquire,  but it does fix a rate of exchange in advance.  Although  forward
contracts  may reduce the risk of loss from a decline  in the value of the hedged  currency,  at the same time they
limit any potential gain if the value of the hedged currency increases.

         When the Fund  enters into a contract  for the  purchase  or sale of a security  denominated  in a foreign
currency,  or when it  anticipates  receiving  dividend  payments in a foreign  currency,  the Fund might desire to
"lock-in" the U.S. dollar price of the security or the U.S. dollar equivalent of the dividend  payments.  To do so,
the Fund could enter into a forward  contract for the purchase or sale of the amount of foreign  currency  involved
in the underlying  transaction,  in a fixed amount of U.S. dollars per unit of the foreign currency. This is called
a  "transaction  hedge." The  transaction  hedge will protect the Fund against a loss from an adverse change in the
currency  exchange  rates during the period between the date on which the security is purchased or sold or on which
the payment is declared, and the date on which the payments are made or received.

         The Fund could also use forward  contracts to lock in the U.S. dollar value of portfolio  positions.  This
is called a "position  hedge." When the Fund believes  that foreign  currency  might suffer a  substantial  decline
against  the U.S.  dollar,  it could  enter  into a forward  contract  to sell an amount of that  foreign  currency
approximating  the value of some or all of the Fund's portfolio  securities  denominated in that foreign  currency.
When the Fund  believes that the U.S.  dollar might suffer a substantial  decline  against a foreign  currency,  it
could enter into a forward  contract to buy that foreign  currency for a fixed dollar  amount.  Alternatively,  the
Fund could enter into a forward  contract to sell a different  foreign  currency for a fixed U.S.  dollar amount if
the Fund believes that the U.S.  dollar value of the foreign  currency to be sold pursuant to its forward  contract
will fall whenever  there is a decline in the U.S.  dollar value of the currency in which  portfolio  securities of
the Fund are denominated. That is referred to as a "cross hedge."

         The Fund will cover its short  positions  in these  cases by  identifying  to its  custodian  bank  assets
having a value equal to the  aggregate  amount of the Fund's  commitment  under  forward  contracts.  The custodian
bank will,  in turn,  identify  such  assets on its  records as  segregated.  The Fund will not enter into  forward
contracts or maintain a net exposure to such  contracts if the  consummation  of the contracts  would  obligate the
Fund to deliver an amount of foreign  currency in excess of the value of the Fund's  portfolio  securities or other
assets denominated in that currency or another currency that is the subject of the hedge.

         However,  to avoid excess  transactions  and  transaction  costs,  the Fund may maintain a net exposure to
forward  contracts  in excess of the value of the  Fund's  portfolio  securities  or other  assets  denominated  in
foreign  currencies if the excess amount is "covered" by liquid securities  denominated in any currency.  The cover
must be at least  equal at all times to the amount of that  excess.  As one  alternative,  the Fund may  purchase a
call  option  permitting  the Fund to  purchase  the  amount of foreign  currency  being  hedged by a forward  sale
contract at a price no higher than the forward  contract  price.  As another  alternative,  the Fund may purchase a
put option  permitting the Fund to sell the amount of foreign currency subject to a forward purchase  contract at a
price as high or higher than the forward contact price.

         The precise  matching of the amounts under  forward  contracts  and the value of the  securities  involved
generally  will not be possible  because the future value of  securities  denominated  in foreign  currencies  will
change as a consequence of market  movements  between the date the forward contract is entered into and the date it
is sold.  In some cases the Manager  might decide to sell the security and deliver  foreign  currency to settle the
original purchase  obligation.  If the market value of the security is less than the amount of foreign currency the
Fund is obligated to deliver,  the Fund might have to purchase  additional foreign currency on the "spot" (that is,
cash)  market to settle the security  trade.  If the market  value of the  security  instead  exceeds the amount of
foreign  currency  the Fund is  obligated  to deliver to settle the trade,  the Fund might have to sell on the spot
market some of the foreign currency  received upon the sale of the security.  There will be additional  transaction
costs on the spot market in those cases.

         The  projection  of  short-term  currency  market  movements is extremely  difficult,  and the  successful
execution  of a  short-term  hedging  strategy  is  highly  uncertain.  Forward  contracts  involve  the risk  that
anticipated  currency  movements  will not be  accurately  predicted,  causing the Fund to sustain  losses on these
contracts and to pay additional  transactions  costs. The use of forward  contracts in this manner might reduce the
Fund's  performance if there are unanticipated  changes in currency prices to a greater degree than if the Fund had
not entered into such contracts.

         At or before the  maturity of a forward  contract  requiring  the Fund to sell a currency,  the Fund might
sell a portfolio  security and use the sale proceeds to make delivery of the currency.  In the alternative the Fund
might retain the  security and offset its  contractual  obligation  to deliver the currency by  purchasing a second
contract.  Under that  contract the Fund will obtain,  on the same maturity  date,  the same amount of the currency
that it is obligated to deliver.  Similarly,  the Fund might close out a forward contract  requiring it to purchase
a specified  currency by entering into a second contract  entitling it to sell the same amount of the same currency
on the maturity  date of the first  contract.  The Fund would  realize a gain or loss as a result of entering  into
such an  offsetting  forward  contract  under  either  circumstance.  The gain or loss will depend on the extent to
which the exchange rate or rates between the  currencies  involved  moved between the execution  dates of the first
contract and offsetting contract.

         The costs to the Fund of  engaging  in  forward  contracts  varies  with  factors  such as the  currencies
involved,  the length of the contract period and the market  conditions then prevailing.  Because forward contracts
are usually  entered into on a principal  basis,  no brokerage  fees or  commissions  are  involved.  Because these
contracts  are not  traded  on an  exchange,  the  Fund  must  evaluate  the  credit  and  performance  risk of the
counterparty under each forward contract.

         Although  the Fund  values its assets  daily in terms of U.S.  dollars,  it does not intend to convert its
holdings of foreign  currencies  into U.S.  dollars on a daily basis.  The Fund may convert  foreign  currency from
time to time, and will incur costs in doing so. Foreign  exchange  dealers do not charge a fee for conversion,  but
they do seek to realize a profit  based on the  difference  between  the prices at which they buy and sell  various
currencies.  Thus,  a dealer  might  offer to sell a foreign  currency  to the Fund at one rate,  while  offering a
lesser rate of exchange if the Fund desires to resell that currency to the dealer.

                  |_| Regulatory  Aspects of Hedging  Instruments.  When using futures and options on futures,  the
Fund is required to operate  within  certain  guidelines  and  restrictions  with  respect to the use of futures as
established by the Commodities  Futures Trading Commission (the "CFTC").  In particular,  the Fund is exempted from
registration  with the CFTC as a "commodity  pool operator" if the Fund complies with the  requirements of Rule 4.5
adopted by the CFTC.  The Rule does not limit the  percentage  of the Fund's  assets  that may be used for  futures
margin and related  options  premiums  for a bona fide hedging  position.  However,  under the Rule,  the Fund must
limit its  aggregate  initial  futures  margin and related  options  premiums to not more than 5% of the Fund's net
assets for hedging  strategies  that are not  considered  bona fide hedging  strategies  under the Rule.  Under the
Rule,  the Fund must also use short  futures and options on futures  solely for bona fide hedging  purposes  within
the meaning and intent of the applicable provisions of the Commodity Exchange Act.

         Transactions in options by the Fund are subject to limitations  established by the option  exchanges.  The
exchanges  limit the  maximum  number of  options  that may be  written  or held by a single  investor  or group of
investors  acting in concert.  Those  limits apply  regardless  of whether the options were written or purchased on
the same or different  exchanges or are held in one or more accounts or through one or more different  exchanges or
through  one or more  brokers.  Thus,  the number of  options  that the Fund may write or hold may be  affected  by
options written or held by other  entities,  including other  investment  companies  having the same advisor as the
Fund (or an advisor that is an affiliate of the Fund's  advisor).  The  exchanges  also impose  position  limits on
futures  transactions.  An exchange may order the liquidation of positions found to be in violation of those limits
and may impose certain other sanctions.

         Under the Investment  Company Act, when the Fund purchases a future,  it must maintain liquid assets in an
amount equal to the market value of the  securities  underlying the future,  less the margin deposit  applicable to
it.

                  |_| Tax Aspects of Certain Hedging  Instruments.  Certain foreign currency exchange  contracts in
which the Fund may invest are treated as "Section  1256  contracts"  under the Internal  Revenue  Code. In general,
gains or losses relating to Section 1256 contracts are  characterized  as 60% long-term and 40% short-term  capital
gains or losses under the Code.  However,  foreign  currency  gains or losses  arising from Section 1256  contracts
that are forward  contracts  generally are treated as ordinary income or loss. In addition,  Section 1256 contracts
held by the Fund at the end of each  taxable  year are  "marked-to-market,"  and  unrealized  gains or  losses  are
treated as though they were  realized.  These  contracts also may be  marked-to-market  for purposes of determining
the excise tax  applicable  to investment  company  distributions  and for other  purposes  under rules  prescribed
pursuant to the Internal Revenue Code. An election can be made by the Fund to exempt those  transactions  from this
marked-to-market treatment.

         Certain  forward  contracts  the Fund  enters  into may  result in  "straddles"  for  federal  income  tax
purposes.  The straddle  rules may affect the character  and timing of gains (or losses)  recognized by the Fund on
straddle  positions.  Generally,  a loss sustained on the disposition of a position making up a straddle is allowed
only to the  extent  that  the loss  exceeds  any  unrecognized  gain in the  offsetting  positions  making  up the
straddle.  Disallowed loss is generally  allowed at the point where there is no unrecognized gain in the offsetting
positions making up the straddle, or the offsetting position is disposed of.

         Under the Internal Revenue Code, the following gains or losses are treated as ordinary income or loss:
(1)      gains or losses  attributable  to  fluctuations  in  exchange  rates that occur  between the time the Fund
              accrues  interest or other  receivables  or accrues  expenses or other  liabilities  denominated in a
              foreign currency and the time the Fund actually  collects such receivables or pays such  liabilities,
              and
(2)      gains or losses  attributable  to  fluctuations  in the value of a foreign  currency  between  the date of
              acquisition  of a debt  security  denominated  in a foreign  currency  or  foreign  currency  forward
              contracts and the date of disposition.


         Currency gains and losses are offset  against  market gains and losses on each trade before  determining a
net "Section 988" gain or loss under the Internal  Revenue Code for that trade,  which may increase or decrease the
amount of the Fund's investment income available for distribution to its shareholders.

         |X| Temporary Defensive  Investments.  When market conditions are unstable,  or the Manager believes it is
otherwise  appropriate  to reduce  holdings  in stocks,  the Fund can invest in a variety  of debt  securities  for
defensive  purposes.  The Fund can also purchase these securities for liquidity  purposes to meet cash needs due to
the  redemption  of Fund  shares,  or to hold  while  waiting  to  reinvest  cash  received  from the sale of other
portfolio securities. The Fund can buy:
|_|      high-quality (rated in the top rating categories of  nationally-recognized  rating organizations or deemed
                 by the Manager to be of  comparable  quality),  short-term  money  market  instruments,  including
                 those issued by the U. S. Treasury or other government agencies,
|_|      commercial paper (short-term,  unsecured,  promissory notes of domestic or foreign companies) rated in the
                 top rating category of a nationally-recognized rating organization,
|_|      debt obligations of corporate  issuers,  rated  investment-grade  (rated at least Baa by Moody's Investors
                 Service,  Inc.  or at least  BBB by  Standard  & Poor's  Corporation,  or a  comparable  rating by
                 another rating  organization),  or unrated  securities  judged by the Manager to have a comparable
                 quality to rated securities in those categories,
|_|      preferred stocks,
|_|      certificates  of deposit  and  bankers'  acceptances  of domestic  and foreign  banks and savings and loan
                 associations, and
|_|      repurchase agreements.

         Short-term debt securities  would normally be selected for defensive or cash management  purposes  because
they can  normally be disposed of quickly,  are not  generally  subject to  significant  fluctuations  in principal
value and their value will be less subject to interest rate risk than longer-term debt securities.

         |X| Repurchase Agreements.  The Fund can acquire securities subject to repurchase agreements.  It might do
so for  liquidity  purposes to meet  anticipated  redemptions  of Fund  shares,  or pending the  investment  of the
proceeds  from sales of Fund  shares,  or pending the  settlement  of  portfolio  securities  transactions,  or for
temporary defensive purposes, as described below.

         In a  repurchase  transaction,  the Fund  buys a  security  from,  and  simultaneously  resells  it to, an
approved  vendor for delivery on an  agreed-upon  future date.  The resale price  exceeds the purchase  price by an
amount that reflects an agreed-upon  interest rate  effective for the period during which the repurchase  agreement
is in effect.  Approved vendors include U.S.  commercial  banks,  U.S. branches of foreign banks, or broker-dealers
that have been designated as primary dealers in government  securities.  They must meet credit  requirements set by
the Manager from time to time.

         The majority of these  transactions  run from day to day, and  delivery  pursuant to the resale  typically
occurs  within one to five days of the  purchase.  Repurchase  agreements  having a maturity  beyond seven days are
subject to the Fund's limits on holding illiquid  investments.  The Fund will not enter into a repurchase agreement
that causes more than 10% of its net assets to be subject to repurchase  agreements  having a maturity beyond seven
days.  There is no limit on the  amount of the Fund's net  assets  that may be  subject  to  repurchase  agreements
having maturities of seven days or less.

         Repurchase  agreements,  considered  "loans" under the Investment  Company Act, are  collateralized by the
underlying security.  The Fund's repurchase  agreements require that at all times while the repurchase agreement is
in effect,  the value of the  collateral  must  equal or exceed the  repurchase  price to fully  collateralize  the
repayment  obligation.  However,  if the vendor fails to pay the resale price on the  delivery  date,  the Fund may
incur costs in disposing of the  collateral  and may  experience  losses if there is any delay in its ability to do
so. The Manager will  monitor the vendor's  creditworthiness  to confirm that the vendor is  financially  sound and
will continuously monitor the collateral's value.

Investment Restrictions

         |X| What Are  "Fundamental  Policies?"  Fundamental  policies are those policies that the Fund has adopted
to govern its  investments  that can be changed only by the vote of a "majority" of the Fund's  outstanding  voting
securities.  Under the  Investment  Company  Act, a  "majority"  vote is defined as the vote of the  holders of the
lesser of:
             |_| 67% or more of the  shares  present  or  represented  by proxy at a  shareholder  meeting,  if the
                 holders of more than 50% of the outstanding shares are present or represented by proxy, or
             |_| more than 50% of the outstanding shares.

         The Fund's investment  objective is a fundamental  policy.  Other policies  described in the Prospectus or
this Statement of Additional  Information are  "fundamental"  only if they are identified as such. The Fund's Board
of Trustees can change  non-fundamental  policies without  shareholder  approval.  However,  significant changes to
investment  policies will be described in  supplements or updates to the Prospectus or this Statement of Additional
Information, as appropriate. The Fund's most significant investment policies are described in the Prospectus.

         |X| What are the Fund's  Additional  Fundamental  Policies?  The  following  investment  restrictions  are
fundamental policies of the Fund.

             |_| The Fund  cannot  buy  securities  issued or  guaranteed  by any one issuer if more than 5% of its
                 total  assets  would be  invested in  securities  of that issuer or if it would then own more than
                 10% of that  issuer's  voting  securities.  This  limitation  applies to 75% of the  Fund's  total
                 assets.  The  limit  does not apply to  securities  issued  by the U.S.  government  or any of its
                 agencies or instrumentalities or securities of other investment companies.

                The Fund  cannot  concentrate  investments.  That  means it cannot  invest 25% or more of its total
                 assets in companies in any one  industry.  Obligations  of the U.S.  government,  its agencies and
                 instrumentalities  are not  considered  to be  part of an  "industry"  for  the  purposes  of this
                 restriction.

|_|      The Fund cannot  make loans  except (a) through  lending of  securities  in an amount not to exceed 25% of
                  its  total  assets,  (b)  through  the  purchase  of debt  securities  or  similar  evidences  of
                  indebtedness,  (c) through an interfund  lending  program (if applicable)  with other  affiliated
                  funds,  provided that no such loan may be made of, as a result, the aggregate of such loans would
                  exceed  331/3%  of the  value of its total  assets  (taken  at  market  value at the time of such
                  loans), and (d) through repurchase agreements.

             |_| The Fund  cannot  borrow,  other  than  from  banks and only to the  extent  that the value of the
                 Fund's  assets,  less its  liabilities  other  than  borrowings,  is equal to at least 300% of all
                 borrowings (including the proposed borrowing).

             |_| The Fund cannot  invest in real  estate or in  interests  in real  estate.  However,  the Fund can
                 purchase  readily-marketable  securities  of  companies  holding  real estate or interests in real
                 estate.

             |_| The Fund cannot underwrite  securities of other companies.  A permitted exception is in case it is
                 deemed to be an underwriter  under the  Securities Act of 1933 when reselling any securities  held
                 in its own portfolio.

             |_| The Fund  cannot  issue  "senior  securities,"  but  this  does not  prohibit  certain  investment
                 activities  for which assets of the Fund are designated as  segregated,  or margin,  collateral or
                 escrow  arrangements  are  established,  to  cover  the  related  obligations.  Examples  of those
                 activities  include  borrowing  money,   reverse  repurchase   agreements,   delayed-delivery  and
                 when-issued  arrangements  for  portfolio  securities  transactions,  and contracts to buy or sell
                 derivatives, hedging instruments, options or futures.

         |X|  Non-Fundamental  Investment  Restrictions.  The  following  operating  policies  of the  Fund are not
fundamental  policies and, as such, may be changed,  provided such change is consistent with the Investment Company
Act of 1940 and other  applicable  regulations,  by vote of a majority  of the  Fund's  Board of  Trustees  without
shareholder approval.  These additional restrictions provide that:


             |_| The Fund cannot invest in companies for the purpose of acquiring control or management of them.

             |_| The Fund cannot  purchase  securities  on margin.  However,  the Fund may make margin  deposits in
                 connection  with  any of the  hedging  instruments  permitted  by  any  of its  other  fundamental
                 policies.

             |_| The Fund cannot make short sales of securities except "short sales against-the-box."


             |_| The Fund cannot  invest in interests  in oil,  gas or other  mineral  exploration  or  development
                 programs.

             |_| The Fund  cannot  pledge,  mortgage  or  hypothecate  any of its  assets.  However,  this does not
                 prohibit  the  escrow  arrangements  contemplated  by the put and call  activities  of the Fund or
                 other  collateral  or  margin  arrangements  in  connection  with any of the  hedging  instruments
                 permitted by any of its other policies.


         Unless the Prospectus or this  Statement of Additional  Information  states that a percentage  restriction
applies on an on-going  basis,  it applies  only at the time the Fund makes an  investment,  with the  exception of
the Fund's borrowing  policy . The Fund need not sell securities to meet the percentage  limits if the value of the
investment increases in proportion to the size of the Fund.

         For purposes of the Fund's policy not to  concentrate  its  investments as described  above,  the Fund has
adopted the industry  classifications  set forth in Appendix A to this  Statement of  Additional  Information.  The
industry classifications is not a fundamental policy.

How the Fund is Managed

Organization and History.  The Fund is an open-end,  diversified  management  investment  company with an unlimited
number of authorized  shares of beneficial  interest.  The Fund was organized as a Massachusetts  business trust in
March, 2000.

         |X| Classes of Shares.  The Board of  Trustees  has the power,  without  shareholder  approval,  to divide
unissued  shares of the Fund into two or more  classes.  The Board  has done so,  and the Fund  currently  has five
classes of  shares:  Class A, Class B,  Class C,  Class N and Class Y. All  classes  invest in the same  investment
portfolio.  Only retirement plans may purchase Class N shares.  Only certain  institutional  investors may elect to
purchase Class Y shares. Each class of shares:
o        has its own dividends and distributions,
o        pays certain expenses which may be different for the different classes,
o        may have a different net asset value,
o        may have separate  voting rights on matters in which  interests of one class are different  from interests
             of another class, and
o        votes as a class on matters that affect that class alone.

         Shares are freely transferable,  and each share of each class has one vote at shareholder  meetings,  with
fractional shares voting  proportionally  on matters submitted to the vote of shareholders.  Each share of the Fund
represents an interest in the Fund proportionately equal to the interest of each other share of the same class.

         The  Trustees are  authorized  to create new series and classes of shares.  The  Trustees  may  reclassify
unissued  shares of the Fund into additional  series or classes of shares.  The Trustees also may divide or combine
the shares of a class into a greater or lesser  number of shares  without  changing  the  proportionate  beneficial
interest of a shareholder in the Fund.  Shares do not have  cumulative  voting rights or preemptive or subscription
rights. Shares may be voted in person or by proxy at shareholder meetings.

         |X| Meetings of Shareholders.  As a Massachusetts business trust, the Fund is not required to hold, and
does not plan to hold, regular annual meetings of shareholders. The Fund will hold meetings when required to do
so by the Investment Company Act or other applicable law. It will also do so when a shareholder meeting is called
by the Trustees or upon proper request of the shareholders.

         Shareholders have the right, upon the declaration in writing or vote of two-thirds of the outstanding
shares of the Fund, to remove a Trustee.  The Trustees will call a meeting of shareholders to vote on the removal
of a Trustee upon the written request of the record holders of 10% of its outstanding shares.  If the Trustees
receive a request from at least 10 shareholders stating that they wish to communicate with other shareholders to
request a meeting to remove a Trustee, the Trustees will then either make the Fund's shareholder list available
to the applicants or mail their communication to all other shareholders at the applicants' expense. The
shareholders making the request must have been shareholders for at least six months and must hold shares of the
Fund valued at $25,000 or more or constituting at least 1% of the Fund's outstanding shares, whichever is less.
The Trustees may also take other action as permitted by the Investment Company Act.

         |X|  Shareholder and Trustee Liability.  The Fund's Declaration of Trust contains an express disclaimer
of shareholder or Trustee liability for the Fund's obligations. It also provides for indemnification and
reimbursement of expenses out of the Fund's property for any shareholder held personally liable for its
obligations.  The Declaration of Trust also states that upon request, the Fund shall assume the defense of any
claim made against a shareholder for any act or obligation of the Fund and shall satisfy any judgment on that
claim.  Massachusetts law permits a shareholder of a business trust (such as the Fund) to be held personally
liable as a "partner" under certain circumstances. However, the risk that a Fund shareholder will incur financial
loss from being held liable as a "partner" of the Fund is limited to the relatively remote circumstances in which
the Fund would be unable to meet its obligations.

         The Fund's contractual arrangements state that any person doing business with the Fund (and each
shareholder of the Fund) agrees under its Declaration of Trust to look solely to the assets of the Fund for
satisfaction of any claim or demand that may arise out of any dealings with the Fund. Additionally, the Trustees
shall have no personal liability to any such person, to the extent permitted by law.

Board of Trustees

         The Fund is governed by a Board of Trustees, which is responsible for protecting the interests of
shareholders under Massachusetts law. The Trustees meet periodically throughout the year to oversee the Fund's
activities, review its performance, and review the actions of the Manager.  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.

         The Board of Trustees has an Audit  Committee,  a Study  Committee and a Proxy  Committee.  The members of
the Audit  Committee are Kenneth Randall  (Chairman),  Benjamin  Lipstein and Edward V. Regan.  The Audit Committee
held five meetings  during the Fund's fiscal year ended October 31, 2001.  The Audit  Committee  provides the Board
with  recommendations  regarding the selection of the Fund's independent  auditor. The Audit Committee also reviews
the scope and  results  of audits  and the audit fees  charged  and  reviews  reports  from the Fund's  independent
auditor concerning the Fund's internal accounting procedures and controls.

         The  Trustees  have  appointed a Proxy  Committee,  comprised  of Edward V. Regan  (Chairman),  Russell S.
Reynolds,  Jr. and Clayton K. Yeutter.  The Proxy  Committee met ___ times during the fiscal year ended October 31,
2001.  The Proxy  Committee:  (i)  provides  the Board with  recommendations  for proxy voting by the Board I Funds
pursuant to  "Recommended  Proxy Voting  Guidelines"  adopted by the Board,  and (ii) monitors  proxy voting by the
Board I Funds through its review of reports of proxies voted by those funds.

         The members of the Study  Committee are Robert G. Galli,  Benjamin  Lipstein  (Chairman)  and Elizabeth B.
Moynihan.  The Study  Committee held seven meetings during the Fund's fiscal year ended October 31, 2001. The Study
Committee  evaluates  and reports to the Board on the Fund's  contractual  arrangements  including  the  Investment
Advisory and Distribution  Agreements,  transfer and shareholder agency agreements and custodian agreements as well
as the policies and procedures  adopted by the Fund to comply with the Investment  Company Act and other applicable
law.

Trustees and Officers of the Fund. The Fund's Trustees and officers and their positions held with the Fund and
length of service in such position(s) and their principal occupations and business affiliations during the past
five years are listed below.  Each of the Trustees except Mr. Murphy are independent trustees, as defined in the
Investment Company Act.  Mr. Murphy is an "interested trustee," because he is affiliated with the Manager by
virtue of his positions as an officer and director of the Manager, and as a shareholder of its parent company.
Mr. Murphy was elected as a Trustee of the Fund with the understanding that in the event his affiliation with the
Manager is terminated, he will resign as a trustee of the Fund and the other Board I Funds for which he is a
trustee or director. All information is as of December 31, 2001. All of the Trustees are Trustees or Directors of
the following Oppenheimer Funds1 (referred to as "Board I Funds"):

Oppenheimer California Municipal Fund                            Oppenheimer Money Market Fund, Inc.
Oppenheimer Capital Appreciation Fund                            Oppenheimer Multiple Strategies Fund
Oppenheimer Capital Preservation Fund                            Oppenheimer Multi-Sector Income Trust
Oppenheimer Concentrated Growth Fund                             Oppenheimer Multi-State Municipal Trust
Oppenheimer Developing Markets Fund                              Oppenheimer Municipal Bond Fund
Oppenheimer Discovery Fund                                       Oppenheimer New York Municipal Fund
Oppenheimer Emerging Growth Fund                                 Oppenheimer Series Fund, Inc.
Oppenheimer Emerging Technologies Fund                           Oppenheimer Special Value Fund
Oppenheimer Enterprise Fund                                      Oppenheimer Trinity Core Fund
Oppenheimer Europe Fund                                          Oppenheimer Trinity Large Cap Growth Fund
Oppenheimer Global Fund                                          Oppenheimer Trinity Value Fund
Oppenheimer Global Growth & Income Fund                          Oppenheimer U.S. Government Trust
Oppenheimer Gold & Special Minerals Fund
Oppenheimer Growth Fund
Oppenheimer International Growth Fund
Oppenheimer International Small Company Fund

         In addition to being a trustee or director of the Board I Funds,  Mr.  Galli is also a director or trustee
of 10 other portfolios in the OppenheimerFunds complex.

         Messrs. Spiro, Murphy, Bishop, Farrar, Molleur, Wixted and Zack, and Ms. Feld, Ms. Ives and Ms. Granger,
respectively hold the same offices with the other Board I Funds as with the Fund. As of February 1, 2002, the
Trustees and officers of the Fund as a group owned of record or beneficially less than 1% of each class of shares
of the Fund. The foregoing statement does not reflect ownership of shares of the Fund held of record by an
employee benefit plan for employees of the Manager, other than the shares beneficially owned under the plan by
the officers of the Fund listed above. In addition, each Independent Trustee, and his or her family members, do
not own securities of either the Manager or Distributor of the Board I Funds or any person directly or indirectly
controlling, controlled by or under common control with the Manager or Distributor. Mr. Reynolds has reported
that he has a controlling interest in The Directorship Search Group, Inc., a director recruiting firm that
provided consulting services to Massachusetts Mutual Life Insurance Company (which controls the Manager and the
Distributor) aggregating $100,000 for the calendar year ended December 31, 2001, an amount representing less than
5% of the firm's annual revenues.  The Independent Trustees have unanimously (except for Mr. Reynolds'
abstention) determined that the consulting arrangements between The Directorship Group, Inc. and Massachusetts
Mutual Life Insurance Company were not material business or professional relationships that would compromise Mr.
Reynolds' status as an Independent Trustee.
Independent Trustees
-------------------------- ------------------------------------------------------ ----------------- ------------------
Name, Address2 Age,                                                                                 Aggregate Dollar
Position(s) Held with      Principal Occupation(s) During Past 5 Years / Other    Dollar Range of    Range of Shares
Fund and Length of Time    Trusteeships Held by Trustee / Number of Portfolios    Shares Owned in    Owned in any of
Served3                    in Fund Complex Overseen by Trustee                        the Fund      the Board I Funds
-------------------------- ------------------------------------------------------ ----------------- ------------------
-------------------------- ------------------------------------------------------ ----------------- ------------------
Leon Levy, Chairman of     General Partner of Odyssey Partners, L.P.                     $0                $0
the Board of Trustees      (investment partnership) (since 1982) and Chairman
Trustee (since 2000)       of the Board of Avatar Holdings, Inc. (real estate
Age: 76                    development) (since 1981). Director/trustee of 31
                           investment companies in the OppenheimerFunds complex.
-------------------------- ------------------------------------------------------ ----------------- ------------------
-------------------------- ------------------------------------------------------ ----------------- ------------------
Robert G. Galli,           A Trustee or Director of other Oppenheimer funds.
Trustee (since 2000)       Formerly Vice Chairman of the Manager (October 1995
Age: 68                    - December 1997). Director/trustee of 41 investment     $Over 100,000    Over $100,0004
                           companies in the OppenheimerFunds complex.
-------------------------- ------------------------------------------------------ ----------------- ------------------
-------------------------- ------------------------------------------------------ ----------------- ------------------
Phillip A. Griffiths,      The Director of the Institute for Advanced Study,
Trustee (since 2000)       Princeton, N.J. (since 1991), director of GSI
Age: 63                    Lumonics (since 2001) and a member of the National
                           Academy of Sciences (since 1979); formerly (in
                           descending chronological order) a director of
                           Bankers Trust Corporation, Provost and Professor of           $0                $0
                           Mathematics at Duke University, a director of
                           Research Triangle Institute, Raleigh, N.C., and a
                           Professor of Mathematics at Harvard University.
                           Director/trustee of 30 investment companies in the
                           OppenheimerFunds complex.
-------------------------- ------------------------------------------------------ ----------------- ------------------
-------------------------- ------------------------------------------------------ ----------------- ------------------
Benjamin Lipstein,         Professor Emeritus of Marketing, Stern Graduate
Trustee (since 2000)       School of Business Administration, New York
Age: 78                    University. Director/trustee of 31 investment                 $0           Over $100,000
                           companies in the OppenheimerFunds complex.
-------------------------- ------------------------------------------------------ ----------------- ------------------
-------------------------- ------------------------------------------------------ ----------------- ------------------
Elizabeth B. Moynihan,     Author and architectural historian; a trustee of the
Trustee (since 2000)       Freer Gallery of Art and Arthur M. Sackler Gallery
Age: 72                    (Smithsonian Institute), Trustees Council of the
                           National Building Museum; a member of the Trustees            $0             $50,001 -
                           Council, Preservation League of New York State.                              $100,000
                           Director/trustee of 31 investment companies in the
                           OppenheimerFunds complex.
-------------------------- ------------------------------------------------------ ----------------- ------------------
-------------------------- ------------------------------------------------------ ----------------- ------------------
Kenneth A. Randall,        A director of Dominion Resources, Inc. (electric
Trustee (since 2000)       utility holding company) and Prime Retail, Inc.
Age: 74                    (real estate investment trust); formerly a director
                           of Dominion Energy, Inc. (electric power and oil &
                           gas producer), President and Chief Executive Officer
                           of The Conference Board, Inc. (international
                           economic and business research) and a director of             $0           Over $100,000
                           Lumbermens Mutual Casualty Company, American
                           Motorists Insurance Company and American
                           Manufacturers Mutual Insurance Company.
                           Director/trustee of 31 investment companies in the
                           OppenheimerFunds complex.
-------------------------- ------------------------------------------------------ ----------------- ------------------
-------------------------- ------------------------------------------------------ ----------------- ------------------
Edward V. Regan,           President, Baruch College, CUNY; a director of
Trustee (since 2000)       RBAsset (real estate manager); a director of
Age: 71                    OffitBank; formerly Trustee, Financial Accounting
                           Foundation (FASB and GASB), Senior Fellow of Jerome
                           Levy Economics Institute, Bard College, Chairman of                          $50,001 -
                           Municipal Assistance Corporation for the City of New          $0             $100,000
                           York, New York State Comptroller and Trustee of New
                           York State and Local Retirement Fund.
                           Director/trustee of 31 investment companies in the
                           OppenheimerFunds complex.
-------------------------- ------------------------------------------------------ ----------------- ------------------
-------------------------- ------------------------------------------------------ ----------------- ------------------
Russell S. Reynolds, Jr.,  Chairman of The Directorship Search Group, Inc.
Trustee (since 2000)       (corporate governance consulting and executive
Age: 70                    recruiting) (since 1993); a director of Professional
                           Staff Limited (a U.K. temporary staffing company)
                           (since 1995); a life trustee of International House           $0         $10,001 - $50,000
                           (non-profit educational organization), and a trustee
                           of the Greenwich Historical Society (since 1996).
                           Director/trustee of 31 investment companies in the
                           OppenheimerFunds complex.
-------------------------- ------------------------------------------------------ ----------------- ------------------
-------------------------- ------------------------------------------------------ ----------------- ------------------
Donald W. Spiro, Vice      Formerly he held the following positions: Chairman
Chairman of the Board of   Emeritus (until August 1999), Chairman (November
Trustees,                  1987 - January 1991) and a director (January 1969 -
Trustee (since 2000)       August 1999) of the Manager; President and Director
Age: 76                    of OppenheimerFunds Distributor, Inc., a subsidiary           $0           Over $100,000
                           of the Manager and the Fund's Distributor (July 1978
                           - January 1992). Director/trustee of 31 investment
                           companies in the OppenheimerFunds complex.
-------------------------- ------------------------------------------------------ ----------------- ------------------
-------------------------- ------------------------------------------------------ ----------------- ------------------
Clayton K. Yeutter,        Of Counsel, Hogan & Hartson (a law firm) (since               $0                $0
Trustee (since 2000)       1993). Other directorships: Caterpillar, Inc. (since
Age: 71                    1993); Zurich Financial Services (since 1998);
                           ConAgra, Inc. (since 1993); FMC Corporation (since
                           1993); Texas Instruments Incorporated (since 1993);
                           and Weyerhaeuser Co. (since 1999); formerly a
                           director of Farmers Group Inc. (1994-2000), Zurich
                           Allied AG (1998-2000) and of Allied Zurich Plc.
                           (1998-2000). Director/trustee of 31 investment
                           companies in the OppenheimerFunds complex.
                           Director/trustee of 31 investment companies in the
                           OppenheimerFunds complex.
-------------------------- ------------------------------------------------------ ----------------- ------------------






Interested Trustee and Officer

-------------------------- ------------------------------------------------------ ----------------- ------------------
Name, Address,5 Age,       Principal Occupation(s) During Past 5 Years / Other    Dollar Range of   Aggregate Dollar
                                                                                                     Range of Shares
Position(s) Held with                                                                                Owned in any of
Fund and Length of Time    Trusteeships Held by Trustee / Number of Portfolios    Shares Owned in    the Oppenheimer
Served6                    in Fund Complex Overseen by Trustee                        the Fund      Funds7
-------------------------- ------------------------------------------------------ ----------------- ------------------
-------------------------- ------------------------------------------------------ ----------------- ------------------
John V. Murphy,            Chairman, Chief Executive Officer and director                $0             $50,001 -
President and Trustee      (since June 2001) and President (since September
Trustee (since October     2000) of the Manager; President and a trustee of
2001) Age: 52              other Oppenheimer funds; President and a director
                           (since July 2001) of Oppenheimer Acquisition Corp.,
                           the Manager's parent holding company and of
                           Oppenheimer Partnership Holdings, Inc., a holding
                           company subsidiary of the Manager; 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: OAM Institutional, Inc. and Centennial
                           Asset Management Corporation (since November 2001),
                           HarbourView Asset Management Corporation and OFI
                           Private Investments, Inc. (since July 2002);
                           President (since November 1, 2001) and a director
                           (since July 2001) of Oppenheimer Real Asset
                           Management, Inc., an investment advisor subsidiary
                           of the Manager; a director (since November 2001) of
                           Trinity Investment Management Corp. and Tremont                              $100,000
                           Advisers, Inc., investment advisory affiliates of
                           the Manager; Executive Vice President (since
                           February 1997) of Massachusetts Mutual Life
                           Insurance Company, the Manager's parent company; a
                           director (since June 1995) of DBL Acquisition
                           Corporation; formerly Chief Operating Officer (from
                           September 2000 to June 2001) of the Manager;
                           President and trustee (from November 1999 to
                           November 2001) of MML Series Investment Fund and
                           MassMutual Institutional Funds, open-end investment
                           companies; a director (from September 1999 to August
                           2000) of C.M. Life Insurance Company; President,
                           Chief Executive Officer and director (from September
                           1999 to August 2000) of MML Bay State Life Insurance
                           Company; a director (from June 1989 to June 1998) of
                           Emerald Isle Bancorp and Hibernia Savings Bank,
                           wholly-owned subsidiary of Emerald Isle Bancorp;
                           Executive Vice President Director and Chief
                           Operating Officer (from June 1995 to January 1997)
                           of David L. Babson & Co., Inc., an investment
                           advisor; Chief Operating Officer (from March 1993 to
                           December 1996) of Concert Capital Management, Inc.,
                           an investment advisor. Director/trustee of 63
                           investment companies in the OppenheimerFunds complex.
-------------------------- ------------------------------------------------------ ----------------- ------------------

Officers of the Fund

----------------------------------------------- ----------------------------------------------------------------------
Name, Address,8 Age, Position(s) Held with      Principal Occupation(s) During Past 5 Years
Fund and Length of Time Served9
----------------------------------------------- ----------------------------------------------------------------------
----------------------------------------------- ----------------------------------------------------------------------
Laura Granger, Portfolio Manager, Age: 41       Vice  President  of the  Manager  (since  October  2000);  formerly a

                                                portfolio manager at Fortis Advisors (July  1998-October  2000) prior
                                                to which she was  portfolio  manager  at  General  Motors  Investment
                                                Management (July 1993-July 1998).
----------------------------------------------- ----------------------------------------------------------------------
----------------------------------------------- ----------------------------------------------------------------------
Brian W. Wixted, Treasurer, Principal           Senior Vice President and Treasurer (since March 1999) of the
Financial and Accounting Officer (since 2000)   Manager; Treasurer (since March 1999) of HarbourView Asset
Age: 42                                         Management Corporation, Shareholder Services, Inc., Oppenheimer Real
                                                Asset Management Corporation, Shareholder Financial Services, Inc.
                                                and Oppenheimer Partnership Holdings, Inc., of OFI Private
                                                Investments, Inc. (since March 2000) and of OppenheimerFunds
                                                International Ltd. and Oppenheimer Millennium Funds plc (since May
                                                2000); Treasurer and Chief Financial Officer (since May 2000) of
                                                Oppenheimer Trust Company; Assistant Treasurer (since March 1999) of
                                                Oppenheimer Acquisition Corp.; an officer of other Oppenheimer
                                                funds; formerly Principal and Chief Operating Officer, Bankers Trust
                                                Company - Mutual Fund Services Division (March 1995 - March 1999);
                                                Vice President and Chief Financial Officer of CS First Boston
                                                Investment Management Corp. (September 1991 - March 1995).
----------------------------------------------- ----------------------------------------------------------------------
----------------------------------------------- ----------------------------------------------------------------------
Robert J. Bishop, Assistant Treasurer           Vice President of the Manager/Mutual Fund Accounting (since May
(since 2000)                                    1996); an officer of other Oppenheimer funds; formerly an Assistant
Age: 42                                         Vice President of the Manager/Mutual Fund Accounting (April 1994 -
                                                May 1996) and a Fund Controller of the Manager.
----------------------------------------------- ----------------------------------------------------------------------
----------------------------------------------- ----------------------------------------------------------------------
Scott T. Farrar, Assistant Treasurer            Vice President of the Manager/Mutual Fund Accounting (since May
(since 2000)                                    1996); Assistant Treasurer of Oppenheimer Millennium Funds plc
Age: 36                                         (since October 1997); an officer of other Oppenheimer Funds;
                                                formerly an Assistant Vice President of the Manager/Mutual Fund
                                                Accounting (April 1994 - May 1996), and a Fund Controller of the
                                                Manager.
----------------------------------------------- ----------------------------------------------------------------------
----------------------------------------------- ----------------------------------------------------------------------
Robert G. Zack, Secretary                       Senior Vice President (since May 1985) and Acting General Counsel
(since October 2001)                            (since November 2001) of the Manager; Assistant Secretary of
Age: 53                                         Shareholder Services, Inc. (since May 1985), Shareholder Financial
                                                Services, Inc. (since November 1989); OppenheimerFunds International
                                                Ltd. and Oppenheimer Millennium Funds plc (since October 1997); an
                                                officer of other Oppenheimer funds.
----------------------------------------------- ----------------------------------------------------------------------
----------------------------------------------- ----------------------------------------------------------------------
Denis R. Molleur, Assistant Secretary           Vice President and Senior Counsel of the Manager (since July 1999);
(since October 2001)                            an officer of other Oppenheimer funds; formerly a Vice President and
Age: 44                                         Associate Counsel of the Manager (September 1995 - July 1999).
----------------------------------------------- ----------------------------------------------------------------------
----------------------------------------------- ----------------------------------------------------------------------
Katherine P. Feld, Assistant Secretary          Vice President and Senior Counsel of the Manager (since July 1999);
(since October 2001)                            an officer of other Oppenheimer funds; formerly a Vice President and
Age: 43                                         Associate Counsel of the Manager (June 1990 - July 1999).
----------------------------------------------- ----------------------------------------------------------------------
----------------------------------------------- ----------------------------------------------------------------------
Kathleen T. Ives, Assistant Secretary           Vice President and Assistant Counsel of the Manager (since June
(since October 2001)                            1998); an officer of other Oppenheimer funds; formerly an Assistant
Age: 36                                         Vice President and Assistant Counsel of the Manager (August 1997 -
                                                June 1998); and Assistant Counsel of the Manager (August 1994-August
                                                1997).
----------------------------------------------- ----------------------------------------------------------------------






























         |X|  Remuneration of Trustees.  The officers of the Fund and one Trustee of the Fund (Mr.  Murphy) who are
affiliated  with the Manager  receive no salary or fee from the Fund.  The remaining  Trustees of the Fund received
the  compensation  shown below.  The  compensation  from the Fund was paid during its fiscal year ended October 31,
2001. The compensation  from all of the Board I Funds represents  compensation  received as a director,  trustee or
member of a committee of the boards of those funds during the calendar year 2001.








------------------------------------ -------------------------- ------------------------- ----------------------------
                                                                                                     Total
                                                                       Retirement                Compensation
                                             Estimated                  Benefits                   From all
                                      Aggregate Compensation        Accrued as Part           Board I Oppenheimer
Trustee's Name                              from Fund1                  of Fund                Funds (33 Funds)2
and Position                                                            Expenses
------------------------------------ -------------------------- ------------------------- ----------------------------
------------------------------------ -------------------------- ------------------------- ----------------------------
Leon Levy                                      $121                       $20                      $173,700
Chairman
------------------------------------ -------------------------- ------------------------- ----------------------------
------------------------------------ -------------------------- ------------------------- ----------------------------
Robert G. Galli3                               $121                       $59                      $202,886
Study Committee Member
------------------------------------ -------------------------- ------------------------- ----------------------------
------------------------------------ -------------------------- ------------------------- ----------------------------
Phillip Griffiths4                              $48                       $16                       $54,889

------------------------------------ -------------------------- ------------------------- ----------------------------
------------------------------------ -------------------------- ------------------------- ----------------------------
Benjamin Lipstein                               $91                        $3                      $150,152
Study Committee Chairman,
Audit Committee Member
------------------------------------ -------------------------- ------------------------- ----------------------------
------------------------------------ -------------------------- ------------------------- ----------------------------
Elizabeth B. Moynihan                          $139                       $77                      $105,760
Study Committee Member
------------------------------------ -------------------------- ------------------------- ----------------------------
------------------------------------ -------------------------- ------------------------- ----------------------------
Kenneth A. Randall                             $103                       $47                       $97,012
Audit Committee Member
------------------------------------ -------------------------- ------------------------- ----------------------------
------------------------------------ -------------------------- ------------------------- ----------------------------
Edward V. Regan                                $137                       $81                       $95,960
Proxy Committee Chairman, Audit
Committee Member
------------------------------------ -------------------------- ------------------------- ----------------------------
------------------------------------ -------------------------- ------------------------- ----------------------------
Russell S. Reynolds, Jr.                        $92                       $50                       $71,792
Proxy Committee Member
------------------------------------ -------------------------- ------------------------- ----------------------------
------------------------------------ -------------------------- ------------------------- ----------------------------
Donald Spiro                                    $56                       $19                       $64,080

------------------------------------ -------------------------- ------------------------- ----------------------------
------------------------------------ -------------------------- ------------------------- ----------------------------
Clayton K. Yeutter5                             $80                       $38                       $71,792
Proxy Committee Member
------------------------------------ -------------------------- ------------------------- ----------------------------
1  Aggregate  compensation includes fees, deferred  compensation,  if any, and retirement plan benefits accrued for
   a Trustee or Director, if any.  For the fiscal year ended October 31, 2001
2  For the 2001 calendar year.
3        Total  compensation  for the 2001  calendar  year includes  $97,126  compensation  received for serving as
     Trustee or Director of 10 other Oppenheimer funds.
4        Includes $32 deferred under Deferred Compensation Plan described below.
5        Includes $11 deferred under Deferred Compensation Plan described below.

         |X|  Retirement  Plan for Trustees.  The Fund has adopted a retirement  plan that provides for payments to
retired  Trustees.  Payments  are up to 80% of the  average  compensation  paid  during a  Trustee's  five years of
service in which the highest  compensation  was  received.  A Trustee  must serve as trustee for any of the Board I
Funds for at least 15 years to be  eligible  for the maximum  payment.  Each  Trustee's  retirement  benefits  will
depend on the amount of the  Trustee's  future  compensation  and length of service.  Therefore the amount of those
benefits  cannot be determined at this time, nor can we estimate the number of years of credited  service that will
be used to determine those benefits.


         |X| Deferred  Compensation  Plan for Trustees.  The Board of Trustees has adopted a Deferred  Compensation
Plan for  disinterested  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 Trustees'  fees under the plan will not materially  affect the Fund's  assets,  liabilities or
net income per share.  The plan will not  obligate  the Fund to retain the  services  of any  Trustee or to pay any
particular  level of  compensation  to any  Trustee.  Pursuant to an Order  issued by the  Securities  and Exchange
Commission,  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.

         |X| Major  Shareholders.  As of February 8, 2002,  the only people who owned of record or was known by the
Fund to beneficially  own 5% or more of any class of the Fund's  outstanding  Class A, Class B, Class C, Class N or
Class Y shares were:

OppenheimerFunds  Inc., C/O VP Financial Analysis,  6803 South Tucson Way, Englewood,  Colorado  80112-3924,  which
owned 1,010,000.000 Class A shares (32.07% of the Class A shares then outstanding).

Gera Limited, A Limited Partnership, 7575 Katy Freeway, Apt. 27, Houston, Texas 77024-2117,
which owned 25,531.634 Class C shares, (7.65% of the Class C shares then outstanding).

Persumma Financial  Services,  Mass Mutual Financial Group, 1295 State Street, # N328,  Springfield,  Massachusetts
01111-0001, which owned 60,058.935 Class Y shares (99.83% of the Class Y shares then outstanding).

P. Holt & L.  Silverman TR,  Quality  Systems Inc  Retirement  Savings Plan,  Attn:  Paul Holt,  17822 17th Street,
Tustin,  California  92780-2151,  which  owned  3,641.695  Class  N  shares  (30.34%  of the  Class N  shares  then
outstanding).

RPSS TR Rollover IRA, FBO Richard C. Blackwell,  P.O. Box 1632,  Midland,  Texas 79702-1632,  which owned 2,316.333
Class N shares (19.30% of the Class N shares then outstanding).

RPSS TR Rollover IRA, FBO Roger L. Brown, 912 Cleta Drive,  Ballwin,  Missouri,  63021-6570,  which owned 2,237.346
Class N shares (18.64% of the Class N shares then outstanding).

RPSS TR Rollover IRA, FBO Jimmy D. Edwards,  3306 Emerson CV, Lago Vista,  Texas 78645-6600,  which owned 1,905.921
Class N shares (15.88% of the Class N shares then outstanding).

R. Sandrow & D. Keyes TRS,  Sandrow & Keyes MDPA 401K PSP, FBO David B. Keyes,  8940 North  Kendall  Drive,  Miami,
Florida 33176-2148, which owned 1,576.729 Class N shares (13.13% of the Class N shares then outstanding).

         |X| The  Manager.  The  Manager is  wholly-owned  by  Oppenheimer  Acquisition  Corp.,  a holding  company
controlled by Massachusetts Mutual Life Insurance Company.

         |X| Code of Ethics.  The Fund, the Manager and the  Distributor  have a Code of Ethics.  It is designed to
detect and prevent  improper  personal  trading by certain  employees,  including  portfolio  managers,  that would
compete  with or take  advantage  of the Fund's  portfolio  transactions.  Covered  persons  include  persons  with
knowledge of the  investments  and  investment  intentions of the Fund and other funds advised by the Manager.  The
Code of Ethics does permit  personnel  subject to the Code to invest in securities,  including  securities that may
be purchased or held by the Fund,  subject to a number of  restrictions  and controls.  Compliance with the Code of
Ethics is carefully monitored and enforced by the Manager.

         The Code of Ethics is an exhibit to the  Fund's  registration  statement  filed  with the  Securities  and
Exchange  Commission  and can be reviewed and copied at the SEC's Public  Reference  Room in  Washington,  D.C. You
can  obtain  information  about  the  hours  of  operation  of the  Public  Reference  Room by  calling  the SEC at
1-202-942-8090.  The Code of Ethics can also be viewed as part of the Fund's  registration  statement  on the SEC's
EDGAR  database  at the SEC's  Internet  website at  HTTP://WWW.SEC.GOV.  Copies may be  obtained,  after  paying a
                                                     ------------------
duplicating fee, by electronic request at the following E-mail address:  publicinfo@sec.gov.,  or by writing to the
SEC's Public Reference Section, Washington, D.C. 20549-0102.

         |X| The Investment  Advisory  Agreement.  The Manager provides investment advisory and management services
to the Fund  under an  investment  advisory  agreement  between  the  Manager  and the Fund.  The  Manager  selects
securities  for the Fund's  portfolio and handles its  day-to-day  business.  The portfolio  manager of the Fund is
employed by the Manager and is the person who is  principally  responsible  for the  day-to-day  management  of the
Fund's  portfolio.  Other members of the Manager's Equity Portfolio Team provide the portfolio manager with counsel
and support in managing the Fund's portfolio.

         The  agreement  requires the Manager,  at its expense,  to provide the Fund with  adequate  office  space,
facilities  and  equipment.  It  also  requires  the  Manager  to  provide  and  supervise  the  activities  of all
administrative  and  clerical  personnel  required  to  provide  effective   administration  for  the  Fund.  Those
responsibilities  include  the  compilation  and  maintenance  of  records  with  respect  to its  operations,  the
preparation and filing of specified  reports,  and composition of proxy materials and  registration  statements for
continuous public sale of shares of the Fund.

         The Fund pays expenses not expressly  assumed by the Manager  under the advisory  agreement.  The advisory
agreement lists examples of expenses paid by the Fund. The major categories  relate to interest,  taxes,  brokerage
commissions,  fees to certain  Trustees,  legal and audit expenses,  custodian and transfer agent  expenses,  share
issuance costs,  certain printing and registration costs and non-recurring  expenses,  including  litigation costs.
The  management  fees paid by the Fund to the Manager are  calculated  at the rates  described  in the  Prospectus,
which are applied to the assets of the Fund as a whole.  The fees are  allocated to each class of shares based upon
the relative proportion of the Fund's net assets represented by that class.

                         --------------------- --------------------------------------------

                         Fiscal   Year  ended   Management Fees Paid to OppenheimerFunds,
                         10/31:                                   Inc.
                         --------------------- --------------------------------------------
                         --------------------- --------------------------------------------
                                 2001                           $201,820
                         --------------------- --------------------------------------------

         The investment  advisory  agreement states that in the absence of willful  misfeasance,  bad faith,  gross
negligence  in the  performance  of its duties or  reckless  disregard  of its  obligations  and  duties  under the
investment  advisory  agreement,  the  Manager  is not liable for any loss the Fund  sustains  for any  investment,
adoption of any investment policy, or the purchase, sale or retention of any security.

         The agreement permits the Manager to act as investment  advisor for any other person,  firm or corporation
and to use  the  name  "Oppenheimer"  in  connection  with  other  investment  companies  for  which  it may act as
investment  advisor or general  distributor.  If the Manager shall no longer act as investment advisor to the Fund,
the Manager may withdraw the right of the Fund to use the name "Oppenheimer" as part of its name.

            For the most recent  renewal of the Fund's  investment  advisory  agreement in December 2001, the Board
considered,  with its  counsel:  (i) the  quality  and extent of the  services  to be  provided  to the Fund by the
Manager;  (ii)  the  depth  of  organization,  expertise  and  experience  of  the  Manager;  (iii)  the  financial
resources  of the  Manager;  (iv) the  ability of the Manager to retain and attract  qualified  personnel;  (v) the
performance  of assets  managed  by the  Manager in the  Fund's  investment  style;  (vi)  benefits  derived by the
Manager from its relationship with the Fund,  including  receipt of tangible and intangible  research by allocating
the Fund's  brokerage per section 28(e) of the Securities  Exchange Act of 1934;  and (vii) the overall  experience
and  reputation  of the Manager in  providing  such  services  to  investment  companies.  In  addition,  the Board
reviewed and discussed the terms and conditions of the investment  advisory  agreement.  Based upon its review, the
Board of Trustees  concluded that the terms of the Fund's investment  advisory  agreement are reasonable,  fair and
in the  best  interests  of the Fund  and its  shareholders,  and  that  the  fees  provided  therein  are fair and
reasonable  in light of the usual and  customary  charges  made by  others  for  services  of the same  nature  and
quality.

|X|           Annual Approval of Investment Advisory Agreement. Each year, the Board of Trustees including a
majority of the Independent Trustees is required to approve the renewal of the investment advisory agreement. The
Investment Company Act requires that the Board request and evaluate and the Manager provide such information as
may be reasonably necessary to evaluate the terms of the investment advisory agreement.  The Board employs an
independent consultant to prepare a report that provides such information as the Board requests for this
purpose.

         The Board also receives information about the 12b-1 distribution fees the Fund pays.  These distribution
fees are reviewed and approved at a different time of the year.

         The Board reviewed the foregoing information in arriving at its decision to renew the investment
advisory agreement.  Among other factors, the Board considered:
o        The nature, cost, and quality of the services provided to the Fund and its shareholders;
o        The profitability of the Fund to the Manager;
o        The investment performance of the Fund in comparison to regular market indices
o        Economies of scale that may be available to the Fund from the Manager;
o        Fees paid by other mutual funds for similar services;
o        The value and quality of any other benefits or services received by the Fund from its relationship with
                  the Manager, and
o        The direct and indirect benefits the Manager received from its relationship with the Fund.  These
                  included services provided by the General Distributor and the Transfer Agent, and brokerage and
                  soft dollar arrangements permissible under Section 28(e) of the Securities Exchange Act.

         The Board considered that the Manager must be able to pay and retain high quality personnel at
competitive rates to provide services to the Fund.  The Board also considered that maintaining the financial
viability of the Manager is important so that the Manager will be able to continue to provide quality services to
the Fund and its shareholders in adverse times.  The Board also considered the investment performance of other
mutual funds advised by the Manager. The Board is aware that there are alternatives to the use of the Manager.

         These matters were also considered by the Independent Trustees meeting separately from the full Board
with experienced Counsel to the Fund who assisted the Board in its deliberations.  The Fund's Counsel is
independent of the Manager within the meaning and intent of the SEC Rules regarding the independence of counsel.

         In arriving at a decision, the Board did not single out any one factor or group of factors as being more
important than other factors, but considered all factors together.  The Board judged the terms and conditions of
the Agreement, including the investment advisory fee, in light of all of the surrounding circumstances.

Brokerage Policies of the Fund

Brokerage  Provisions of the Investment Advisory  Agreement.  One of the duties of the Manager under the investment
advisory  agreement  is to arrange  the  portfolio  transactions  for the Fund.  The  advisory  agreement  contains
provisions  relating to the employment of broker-dealers to effect the Fund's portfolio  transactions.  The Manager
is authorized by the advisory agreement to employ  broker-dealers,  including "affiliated" brokers, as that term is
defined in the Investment  Company Act. The Manager may employ  broker-dealers  that the Manager thinks in its best
judgment,  based on all relevant factors,  will implement the policy of the Fund to obtain, at reasonable  expense,
the "best execution" of the Fund's  portfolio  transactions.  "Best execution" means prompt and reliable  execution
at the most favorable price obtainable.  The Manager need not seek competitive  commission bidding.  However, it is
expected to be aware of the current rates of eligible  brokers and to minimize the  commissions  paid to the extent
consistent with the interests and policies of the Fund as established by its Board of Trustees.

         Under the investment  advisory  agreement,  the Manager may select brokers  (other than  affiliates)  that
provide  brokerage  and/or  research  services for the Fund and/or the other accounts over which the Manager or its
affiliates have investment  discretion.  The commissions paid to such brokers may be higher than another  qualified
broker would charge,  if the Manager makes a good faith  determination  that the  commission is fair and reasonable
in relation to the services  provided.  Subject to those  considerations,  as a factor in selecting brokers for the
Fund's  portfolio  transactions,  the Manager may also  consider  sales of shares of the Fund and other  investment
companies for which the Manager or an affiliate serves as investment advisor.

Brokerage  Practices  Followed  by the  Manager.  The  Manager  allocates  brokerage  for the Fund  subject  to the
provisions of the investment  advisory  agreement and the  procedures and rules  described  above.  Generally,  the
Manager's  portfolio traders allocate brokerage based upon  recommendations  from the Manager's portfolio managers.
In certain  instances,  portfolio  managers may directly place trades and allocate  brokerage.  In either case, the
Manager's executive officers supervise the allocation of brokerage.

         Transactions  in  securities  other than those for which an exchange is the primary  market are  generally
done with  principals or market  makers.  In  transactions  on foreign  exchanges,  the Fund may be required to pay
fixed brokerage  commissions and therefore would not have the benefit of negotiated  commissions  available in U.S.
markets.  Brokerage  commissions  are  paid  primarily  for  transactions  in  listed  securities  or  for  certain
fixed-income  agency  transactions in the secondary  market.  Otherwise  brokerage  commissions are paid only if it
appears  likely that a better price or execution  can be obtained by doing so. In an option  transaction,  the Fund
ordinarily  uses the same broker for the purchase or sale of the option and any  transaction  in the  securities to
which the option relates.

         Other funds  advised by the Manager have  investment  policies  similar to those of the Fund.  Those other
funds may  purchase or sell the same  securities  as the Fund at the same time as the Fund,  which could affect the
supply and price of the securities.  If two or more funds advised by the Manager  purchase the same security on the
same day from the same  dealer.  The  transactions  under  those  combined  orders  are  averaged  as to price  and
allocated in accordance with the purchase or sale orders actually placed for each account.

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

         The investment  advisory agreement permits the Manager to allocate  brokerage for research  services.  The
research  services  provided by a particular  broker may be useful only to one or more of the advisory  accounts of
the Manager and its affiliates.  The investment  research  received for the commissions of those other accounts may
be useful both to the Fund and one or more of the Manager's  other  accounts.  Investment  research may be supplied
to the Manager by a third party at the instance of a broker through which trades are placed.

         Investment  research services include  information and analysis on particular  companies and industries as
well  as  market  or  economic  trends  and  portfolio  strategy,  market  quotations  for  portfolio  evaluations,
information  systems,  computer hardware and similar products and services.  If a research service also assists the
Manager  in a  non-research  capacity  (such as  bookkeeping  or other  administrative  functions),  then  only the
percentage or component that provides  assistance to the Manager in the investment  decision-making  process may be
paid in commission dollars.

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

         The research  services  provided by brokers broadens the scope and supplements the research  activities of
the Manager.  That research provides  additional views and comparisons for consideration,  and helps the Manager to
obtain  market  information  for the valuation of  securities  that are either held in the Fund's  portfolio or are
being  considered  for  purchase.  The Manager  provides  information  to the Board about the  commissions  paid to
brokers furnishing such services,  together with the Manager's  representation  that the amount of such commissions
was reasonably related to the value or benefit of such services.

                        ---------------------------- ----------------------------------------

                         Fiscal Year Ended 10/31:      Total Brokerage Commissions Paid by
                                                                    the Fund1
                        ---------------------------- ----------------------------------------
                        ---------------------------- ----------------------------------------
                                   2001                             $32,4182
                        ---------------------------- ----------------------------------------
1.       Amounts do not include spreads or concessions on principal transactions on a net trade basis.
2.       In the fiscal year ended  10/31/01,  the amount of  transactions  to brokers for research  services was $0
     and the amount of the commissions paid to broker-dealers for those services was $0.

Distribution and Service Plans

The  Distributor.  Under its General  Distributor's  Agreement  with the Fund, the  Distributor  acts as the Fund's
principal  underwriter in the continuous  public offering of the Fund's classes of shares.  The  Distributor  bears
the  expenses  normally  attributable  to  sales,  including  advertising  and the  cost of  printing  and  mailing
prospectuses,  other than those  furnished to existing  shareholders.  The  Distributor  is not obligated to sell a
specific number of shares.

         The sales charges and concessions paid to, or retained by, the Distributor from the sale of shares
during the Fund's three most recent fiscal years, and the contingent deferred sales charges retained by the
Distributor on the redemption of shares for the most recent fiscal year are shown in the tables below.



                    ------------------- ------------------------- -------------------------------


                                          Aggregate Front-End        Class A Front-End Sales
                    Fiscal Year Ended    Sales Charges on Class        Charges Retained by
                          10/31:                A Shares                   Distributor1
                    ------------------- ------------------------- -------------------------------
                    ------------------- ------------------------- -------------------------------
                           2001                 $114,339                     $31,486
                    ------------------- ------------------------- -------------------------------
1.       Includes amounts retained by a broker-dealer that is an affiliate or a parent of the Distributor.


  ----------------------- -------------------- ----------------------- ------------------- ------------------------


                            Concessions on      Concessions on Class     Concessions on    Concessions on Class N
    Fiscal Year Ended       Class A Shares      B Shares Advanced by     Class C Shares      Shares Advanced by
          10/31:              Advanced by           Distributor1          Advanced by           Distributor1
                             Distributor1                                 Distributor1
  ----------------------- -------------------- ----------------------- ------------------- ------------------------
  ----------------------- -------------------- ----------------------- ------------------- ------------------------
           2001                 $2,636                $85,427               $13,024                 $2192
  ----------------------- -------------------- ----------------------- ------------------- ------------------------
1.       The  Distributor  advances  concession  payments to dealers  for  certain  sales of Class A shares and for
      sales of Class B, Class C and Class N shares from its own resources at the time of sale.
2.       The inception date of Class N shares was March 1, 2001.

----------------- --------------------------- ------------------------- -------------------------- ---------------------------


                      Class A Contingent         Class B Contingent        Class C Contingent          Class N Contingent
  Fiscal Year       Deferred Sales Charges     Deferred Sales Charges    Deferred Sales Charges      Deferred Sales Charges
  Ended 10/31      Retained by Distributor    Retained by Distributor    Retained by Distributor    Retained by Distributor
----------------- --------------------------- ------------------------- -------------------------- ---------------------------
----------------- --------------------------- ------------------------- -------------------------- ---------------------------
      2001                    $0                       $3,697                    $1,058                        $0
----------------- --------------------------- ------------------------- -------------------------- ---------------------------


Distribution  and  Service  Plans.  The Fund has  adopted a Service  Plan for Class A shares and  Distribution  and
Service Plans for Class B, Class C and Class N shares under Rule 12b-1 of the  Investment  Company Act. Under those
plans  the  Fund  pays  the  Distributor  for all or a  portion  of its  costs  incurred  in  connection  with  the
distribution and/or servicing of the shares of the particular class.

         Under the plans,  the Manager and the  Distributor  may make  payments  to  affiliates  and, in their sole
discretion,  from time to time,  may use their own  resources  (at no direct cost to the Fund) to make  payments to
brokers,  dealers or other financial  institutions for distribution and administrative  services they perform.  The
Manager  may use its profits  from the  advisory  fee it  receives  from the Fund.  In their sole  discretion,  the
Distributor  and the Manager may increase or decrease the amount of payments  they make from their own resources to
plan recipients.

         Unless a plan is terminated as described  below,  the plan  continues in effect from year to year but only
if the  Fund's  Board  of  Trustees  and its  Independent  Trustees  specifically  vote  annually  to  approve  its
continuance.  Approval  must be by a vote  cast in  person  at a  meeting  called  for the  purpose  of  voting  on
continuing  the plan. A plan may be  terminated at any time by the vote of a majority of the  Independent  Trustees
or by the vote of the  holders of a  "majority"  (as  defined in the  Investment  Company  Act) of the  outstanding
shares of that class.

         The Board of Trustees and the  Independent  Trustees  must approve all material  amendments  to a plan. An
amendment to increase  materially  the amount of payments to be made under a plan must be approved by  shareholders
of the class  affected by the  amendment.  Because  Class B shares of the Fund  automatically  convert into Class A
shares after six years,  the Fund must obtain the approval of both Class A and Class B shareholders  for a proposed
material  amendment to the Class A Plan that would materially  increase payments under the Plan. That approval must
be by a "majority" (as defined in the  Investment  Company Act) of the shares of each Class,  voting  separately by
class.


         While the Plans are in effect,  the Treasurer of the Fund shall provide  separate  written  reports on the
plans to the Board of  Trustees at least  quarterly  for its review.  The  Reports  shall  detail the amount of all
payments  made under a plan and the  purpose for which the  payments  were made.  Those  reports are subject to the
review and approval of the Independent Trustees.

         Each plan states that while it is in effect,  the selection and  nomination of those  Trustees of the Fund
who are not  "interested  persons" of the Fund is committed to the  discretion of the  Independent  Trustees.  This
does not prevent the  involvement of others in the selection and  nomination  process as long as the final decision
as to selection or nomination is approved by a majority of the Independent Trustees.

         Under the  plans  for a class,  no  payment  will be made to any  recipient  in any  quarter  in which the
aggregate  net asset  value of all Fund  shares of that class held by the  recipient  for itself and its  customers
does not  exceed a minimum  amount,  if any,  that may be set from time to time by a  majority  of the  Independent
Trustees. The Board of Trustees has set no minimum amount of assets to qualify for payments under the plans.

         |X| Class A Service Plan Fees.  Under the Class A service plan,  the  Distributor  currently uses the fees
it  receives  from the Fund to pay  brokers,  dealers and other  financial  institutions  (they are  referred to as
"recipients")  for personal  services and account  maintenance  services they provide for their  customers who hold
Class A shares.  The services include,  among others,  answering  customer  inquiries about the Fund,  assisting in
establishing  and  maintaining  accounts in the Fund,  making the Fund's  investment  plans available and providing
other  services  at the  request of the Fund or the  Distributor.  While the plan  permits  the Board to  authorize
payments to the  Distributor  to reimburse  itself for services  under the plan, the Board has not yet done so. The
Distributor  makes  payments to plan  recipients  quarterly  at an annual  rate not to exceed  0.25% of the average
annual net assets consisting of Class A shares held in the accounts of the recipients or their customers.

      For the fiscal period ended October 31, 2001,  payments under the Class A plan totaled $24,226,  all of which
was paid by the Distributor to recipients.  That included $1,333 paid to an affiliate of the  Distributor's  parent
company.  Any  unreimbursed  expenses  the  Distributor  incurs  with  respect to Class A shares in any fiscal year
cannot be recovered in subsequent  years.  The  Distributor  may not use payments  received the Class A Plan to pay
any of its interest expenses, carrying charges, or other financial costs, or allocation of overhead.

         |X| Class B,  Class C and Class N Service  and  Distribution  Plan  Fees.  Under the Class B,  Class C and
Class N plans,  service fees and distribution  fees are computed on the average of the net asset value of shares in
the  respective  class,  determined  as of the close of each regular  business day during the period.  The Class B,
Class C and Class N plans provide for the Distributor to be compensated at a flat rate,  whether the  Distributor's
distribution  expenses  are more or less than the  amounts  paid by the Fund under the plans  during the period for
which the fee is paid.  The types of services that  recipients  provide are similar to the services  provided under
the Class A service plan, described above.

         The Class B, Class C and the Class N plans permit the  Distributor  to retain both the  asset-based  sales
charges and the  service  fees or to pay  recipients  the service  fee on a  quarterly  basis,  without  payment in
advance.  However, the Distributor  currently intends to pay the service fee to recipients in advance for the first
year after the shares are purchased.  After the first year shares are  outstanding,  the Distributor  makes service
fee  payments  quarterly  on those  shares.  The advance  payment is based on the net asset  value of shares  sold.
Shares  purchased by exchange do not qualify for the advance  service fee  payment.  If Class B, Class C or Class N
shares are redeemed during the first year after their  purchase,  the recipient of the service fees on those shares
will be obligated  to repay the  Distributor  a pro rata portion of the advance  payment of the service fee made on
those shares.

         The  Distributor  retains the  asset-based  sales charge on Class B shares.  The  Distributor  retains the
asset-based  sales  charge on Class C shares  during  the first year the shares are  outstanding  and  retains  the
asset-based  sales  charge on Class N shares  during the first 18 months the  shares are  outstanding.  It pays the
asset-based  sales charge as an ongoing  commission  to the recipient on Class C shares  outstanding  for a year or
more and to the  recipient  on  Class N shares  outstanding  for 18  months  or  more.  If a dealer  has a  special
agreement with the  Distributor,  the Distributor  will pay the Class B, Class C and/or Class N service fee and the
asset-based  sales  charge to the dealer  quarterly  in lieu of paying the sales  commissions  and  service  fee in
advance at the time of purchase.

         The  asset-based  sales  charges  on Class B,  Class C and Class N shares  allow  investors  to buy shares
without a front-end sales charge while allowing the Distributor to compensate  dealers that sell those shares.  The
Fund pays the  asset-based  sales charges to the Distributor  for its services  rendered in  distributing  Class B,
Class C and Class N shares. The payments are made to the Distributor in recognition that the Distributor:

o        pays sales  commissions  to  authorized  brokers and dealers at the time of sale and pays  service fees as
         described above,
o        may finance  payment of sales  commissions  and/or the  advance of the  service fee payment to  recipients
         under the plans,  or may  provide  such  financing  from its own  resources  or from the  resources  of an
         affiliate,
o        employs personnel to support distribution of Class B, Class C and Class N shares, and
o        bears the costs of sales literature,  advertising and prospectuses  (other than those furnished to current
         shareholders) and state "blue sky" registration fees and certain other distribution expenses.
o        may not be able to adequately compensate dealers that sell Class B, Class C and Class N shares without
         receiving payment under the plans and therefore may not be able to offer such Classes for sale absent
         the plans,
o        receives payments under the plans consistent with the service fees and asset-based sales charges paid by
         other non-proprietary funds that charge 12b-1 fees,
o        may use the payments under the plan to include the Fund in various third-party distribution programs
         that may increase sales of Fund shares,
o        may experience increased difficulty selling the Fund's shares if payments under the plan are
         discontinued because most competitor funds have plans that pay dealers for rendering distribution
         services as much or more than the amounts currently being paid by the Fund, and
o        may not be able to continue providing, at the same or at a lesser cost, the same quality distribution
         sales efforts and services, or to obtain such services from brokers and dealers, if the plan payments
         were to be discontinued.

         When Class B, Class C or Class N shares are sold without the designation of a broker-dealer, the
Distributor is automatically designated as the broker-dealer of record. In those cases, the Distributor retains
the service fee and asset-based sales charge paid on Class B, Class C and Class N shares.

         The  Distributor's  actual  expenses  in selling  Class B, Class C and Class N shares may be more than the
payments it receives from the  contingent  deferred  sales charges  collected on redeemed  shares and from the Fund
under the plans.  If either the Class B, Class C or Class N plan is terminated  by the Fund,  the Board of Trustees
may allow the Fund to  continue  payments of the  asset-based  sales  charge to the  Distributor  for  distributing
shares before the plan was terminated.







  ------------------------------------------------------------------------------------------------------------------
                     Distribution Fees Paid to the Distributor in the Fiscal Year Ended 10/31/01
  ------------------------------------------------------------------------------------------------------------------
  ---------------------- -------------------- --------------------- ------------------------- ----------------------
                                                                         Distributor's            Distributor's
                                                                           Aggregate              Unreimbursed
                                Total                Amount               Unreimbursed            Expenses as %
                              Payments            Retained by               Expenses              of Net Assets
          Class              Under Plan1          Distributor              Under Plan               of Class
  ---------------------- -------------------- --------------------- ------------------------- ----------------------
  ---------------------- -------------------- --------------------- ------------------------- ----------------------
  Class B Plan                 $22,449              $20,188                 $73,416                   1.90%
  ---------------------- -------------------- --------------------- ------------------------- ----------------------
  ---------------------- -------------------- --------------------- ------------------------- ----------------------
  Class C Plan                 $10,157               $7,338                 $10,948                   0.46%
  ---------------------- -------------------- --------------------- ------------------------- ----------------------
  ---------------------- -------------------- --------------------- ------------------------- ----------------------
  Class N Plan                   $56                  $52                     $349                    1.03%
  ---------------------- -------------------- --------------------- ------------------------- ----------------------
1.       Includes  amounts paid to an affiliate of the  Distributor's  parent company:  $88 (Class B), $3 (Class C)
     and $0 (Class N).

         All payments  under the Class B, Class C and the Class N plans are subject to the  limitations  imposed by
the Conduct  Rules of the  National  Association  of  Securities  Dealers,  Inc. on payments of  asset-based  sales
charges and service fees.

Performance of the Fund

Explanation  of  Performance  Terminology.  The  Fund  uses  a  variety  of  terms  to  illustrate  its  investment
performance.  Those terms include  "cumulative  total return," "average annual total return," "average annual total
return at net asset  value"  and  "total  return at net asset  value."  An  explanation  of how total  returns  are
calculated  is set  forth  below.  For  periods  of less than one year,  the Fund may  quote its  performance  on a
non-annualized  basis.  You can obtain  current  performance  information  by calling the Fund's  Transfer Agent at
1-800-525-7048 or by visiting the OppenheimerFunds Internet website at HTTP://WWW.OPPENHEIMERFUNDS.COM.
                                                                       -------------------------------

         The  Fund's  illustrations  of its  performance  data in  advertisements  must  comply  with  rules of the
Securities and Exchange  Commission.  Those rules  describe the types of performance  data that may be used and how
it is to be  calculated.  In  general,  any  advertisement  by the Fund of its  performance  data must  include the
average  annual total returns for the advertised  class of shares of the Fund.  Those returns must be shown for the
1-, 5- and 10-year  periods  (or the life of the class,  if less)  ending as of the most  recently  ended  calendar
quarter prior to the publication of the advertisement (or its submission for publication).

         Use of  standardized  performance  calculations  enables an investor to compare the Fund's  performance to
the  performance  of other funds for the same periods.  However,  a number of factors  should be considered  before
using the Fund's performance information as a basis for comparison with other investments:
         |_| Total returns measure the  performance of a hypothetical  account in the Fund over various periods and
do not show the performance of each  shareholder's  account.  Your account's  performance  will vary from the model
performance  data if your  dividends  are  received in cash,  or you buy or sell shares  during the period,  or you
bought your shares at a different time and price than the shares used in the model.
         |_| The Fund's  performance  returns do not reflect  the effect of taxes on  dividends  and capital  gains
distributions.
         |_| An investment in the Fund is not insured by the FDIC or any other government agency.
         |_| The  principal  value of the Fund's  shares and total  returns are not  guaranteed  and normally  will
fluctuate on a daily basis.
         |_| When an investor's shares are redeemed, they may be worth more or less than their original cost.
         |_| Total returns for any given past period  represent  historical  performance  information  and are not,
and should not be considered, a prediction of future returns.

         The  performance  of each class of shares is shown  separately,  because the  performance of each class of
shares will usually be different.  That is because of the different  kinds of expenses each class bears.  The total
returns  of each  class of  shares of the Fund are  affected  by  market  conditions,  the  quality  of the  Fund's
investments,  the  maturity  of debt  investments,  the types of  investments  the Fund  holds,  and its  operating
expenses that are allocated to the particular class.

         |X| Total  Return  Information.  There are  different  types of "total  returns"  to  measure  the  Fund's
performance.  Total return is the change in value of a  hypothetical  investment  in the Fund over a given  period,
assuming  that all  dividends  and capital gains  distributions  are  reinvested in additional  shares and that the
investment is redeemed at the end of the period.  Because of differences in expenses for each class of shares,  the
total returns for each class are  separately  measured.  The cumulative  total return  measures the change in value
over the entire period (for example,  ten years).  An average  annual total return shows the average rate of return
for each year in a period that would produce the cumulative total return over the entire period.  However,  average
annual total returns do not show actual year-by-year  performance.  The Fund uses standardized calculations for its
total returns as prescribed by the SEC. The methodology is discussed below.

         In  calculating  total  returns  for Class A  shares,  the  current  maximum  sales  charge of 5.75% (as a
percentage  of the  offering  price) is deducted  from the  initial  investment  ("P")  (unless the return is shown
without sales charge,  as described  below).  For Class B shares,  payment of the  applicable  contingent  deferred
sales  charge is applied,  depending on the period for which the return is shown:  5.0% in the first year,  4.0% in
the  second  year,  3.0% in the third and fourth  years,  2.0% in the fifth  year,  1.0% in the sixth year and none
thereafter.  For Class C shares,  the 1.0% contingent  deferred sales charge is deducted for returns for the 1-year
period.  For  Class N  shares,  the  1.0%  contingent  deferred  sales  charge  is  deducted  for  returns  for the
life-of-class periods as applicable. There is no sales charge on Class Y shares.

                  |_| Average  Annual Total Return.  The "average  annual total return" of each class is an average
annual  compounded  rate of return for each year in a specified  number of years. It is the rate of return based on
the change in value of a  hypothetical  initial  investment of $1,000 ("P" in the formula  below) held for a number
of years ("n" in the formula) to achieve an Ending  Redeemable  Value  ("ERV" in the  formula) of that  investment,
according to the following formula:

                                        ERV-P
                                        ----- = Total Return
                                          P

                  |_| Cumulative Total Return.  The "cumulative  total return"  calculation  measures the change in
value of a  hypothetical  investment of $1,000 over an entire  period of years.  Its  calculation  uses some of the
same  factors as average  annual  total  return,  but it does not  average  the rate of return on an annual  basis.
Cumulative total return is determined as follows:

                                            1/n
                                        ERV
                                        ---  - 1 = Average Annual Total Return
                                         P

                  |_| Total  Returns at Net Asset Value.  From time to time the Fund may also quote a cumulative or
an average annual total return "at net asset value"  (without  deducting sales charges) for Class A, Class B, Class
C or Class N  shares.  There is no sales  charge on Class Y shares.  Each is based on the  difference  in net asset
value per share at the  beginning and the end of the period for a  hypothetical  investment in that class of shares
(without   considering   front-end  or  contingent  deferred  sales  charges)  and  takes  into  consideration  the
reinvestment of dividends and capital gains distributions.

------------------------------------------------------------------------------------------------------------------------------
                                   The Fund's Total Returns for the Periods Ended 10/31/01
------------------------------------------------------------------------------------------------------------------------------
------------ -------------------------------- --------------------------------------------------------------------------------
             Cumulative Total Returns (10                              Average Annual Total Returns
Class    of  years or Life of Class)
Shares
------------ -------------------------------- --------------------------------------------------------------------------------
------------ -------------------------------- ------------------------- --------------------------- --------------------------
                                                                                  5-Year                     10-Year
                                                       1-Year               (or life-of-class)         (or life-of-class)
------------ -------------------------------- ------------------------- --------------------------- --------------------------
------------ --------------- ---------------- ---------- -------------- ------------ -------------- ------------ -------------
              After Sales     Without Sales   After         Without        After        Without        After        Without
              Charge (MOP)    Charge (NAV)    Sales      Sales Charge      Sales     Sales Charge      Sales     Sales Charge
                                               Charge        (NAV)        Charge         (NAV)        Charge         (NAV)
                                                (MOP)                      (MOP)                       (MOP)
------------ --------------- ---------------- ---------- -------------- ------------ -------------- ------------ -------------
------------ --------------- ---------------- ---------- -------------- ------------ -------------- ------------ -------------
Class A         -20.10%1        -15.22%1         N/A          N/A           N/A           N/A           N/A          N/A
------------ --------------- ---------------- ---------- -------------- ------------ -------------- ------------ -------------
------------ --------------- ---------------- ---------- -------------- ------------ -------------- ------------ -------------
Class B         -20.16%1        -15.97%1         N/A          N/A           N/A           N/A           N/A          N/A
------------ --------------- ---------------- ---------- -------------- ------------ -------------- ------------ -------------
------------ --------------- ---------------- ---------- -------------- ------------ -------------- ------------ -------------
Class C         -16.72%1        -15.88%1         N/A          N/A           N/A           N/A           N/A          N/A
------------ --------------- ---------------- ---------- -------------- ------------ -------------- ------------ -------------
------------ --------------- ---------------- ---------- -------------- ------------ -------------- ------------ -------------
Class N             0.81%2       1.81%2          N/A          N/A           N/A           N/A           N/A          N/A
------------ --------------- ---------------- ---------- -------------- ------------ -------------- ------------ -------------
------------ --------------- ---------------- ---------- -------------- ------------ -------------- ------------ -------------
Class Y         -14.99%1        -14.99%1         N/A          N/A           N/A           N/A           N/A          N/A
------------ --------------- ---------------- ---------- -------------- ------------ -------------- ------------ -------------

1.    Inception of Class A, Class B, Class C, and Class Y: 11/1/00.
2.       Inception of Class N: 3/01/01.


Other Performance Comparisons.  The Fund compares its performance annually to that of an appropriate  broadly-based
market index in its Annual Report to  shareholders.  You can obtain that  information  by  contacting  the Transfer
Agent at the addresses or telephone  numbers shown on the cover of this  Statement of Additional  Information.  The
Fund may also compare its performance to that of other  investments,  including other mutual funds, or use rankings
of its performance by independent ranking entities. Examples of these performance comparisons are set forth below.

         |X|  Lipper  Rankings.  From time to time the Fund may  publish  the  ranking  of the  performance  of its
classes of shares by Lipper  Analytical  Services,  Inc.  Lipper is a  widely-recognized  independent  mutual  fund
monitoring service.  Lipper monitors performance of regulated investment  companies,  including the Fund, and ranks
their  performance for various periods based on investment  styles.  The Lipper  performance  rankings are based on
total returns that include the  reinvestment  of capital gain  distributions  and income  dividends but do not take
sales charges or taxes into  consideration.  Lipper also publishes  "peer-group"  indices of the performance of all
mutual funds in a category that it monitors and averages of the performance of the funds in particular categories.

         |X| Morningstar  Ratings and Rankings.  From time to time the Fund may publish the star rating and ranking
of the performance of its classes of shares by Morningstar,  Inc., an independent  mutual fund monitoring  service.
Morningstar  rates and ranks mutual  funds in broad  investment  categories:  domestic  stock funds,  international
stock  funds,  taxable  bond funds and  municipal  bond funds.  The Fund is included  in the  domestic  stock funds
category.

         Morningstar proprietary star rankings reflect historical risk-adjusted total investment return.  For
each fund with at least a three-year history, Morningstar calculates a Morningstar RatingTM metric each month by
subtracting the return on a 90-day U.S. Treasury Bill from the fund's load-adjusted return for the same period,
and then adjusting this excess return for risk.  The top 10% of funds in each broad asset class receive 5 stars,
the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars and the bottom 10%
receive 1 star.  The Overall Morningstar Rating for a fund is derived from a weighted average of the performance
figures associated with its three-, five- and ten-year (if applicable) Morningstar Ratings metrics.

         The Fund may also compare its total  return  ranking to that of other funds in its  Morningstar  category,
in addition to its star  ratings.  Those total  return  rankings  are  percentages  from one percent to one hundred
percent and are not risk adjusted.  For example,  if a fund is in the 94th  percentile,  that means that 94% of the
funds in the same category performed better than it did.

         |X| Performance  Rankings and Comparisons by Other Entities and  Publications.  From time to time the Fund
may include in its advertisements and sales literature  performance  information about the Fund cited in newspapers
and other  periodicals  such as The New York Times,  The Wall Street Journal,  Barron's,  or similar  publications.
That information may include  performance  quotations from other sources,  including  Lipper and  Morningstar.  The
performance of the Fund's classes of shares may be compared in  publications  to the  performance of various market
indices or other  investments,  and  averages,  performance  rankings or other  benchmarks  prepared by  recognized
mutual fund statistical services.

         Investors may also wish to compare the returns on the Fund's share  classes to the return on  fixed-income
investments  available  from banks and  thrift  institutions.  Those  include  certificates  of  deposit,  ordinary
interest-paying  checking and savings  accounts,  and other forms of fixed or variable time  deposits,  and various
other  instruments  such as Treasury  bills.  However,  the Fund's  returns and share price are not  guaranteed  or
insured  by the FDIC or any other  agency  and will  fluctuate  daily,  while bank  depository  obligations  may be
insured by the FDIC and may  provide  fixed  rates of return.  Repayment  of  principal  and payment of interest on
Treasury securities is backed by the full faith and credit of the U.S. government.

         From time to time the Fund may include in its advertisements and sales literature the total return performance of a
hypothetical investment account that includes shares of the fund and other Oppenheimer funds. The combined
account may be part of an illustration of an asset allocation model or similar presentation. The account
performance may combine total return performance of the fund and the total return performance of other
Oppenheimer funds included in the account. Additionally, from time to time, the Fund's advertisements and sales
literature may include, for illustrative or comparative purposes, statistical data or other information about
general or specific market and economic conditions. That may include, for example,
o        information  about the  performance  of certain  securities  or  commodities  markets or segments of those
     markets,
o        information about the performance of the economies of particular countries or regions,
o        the earnings of companies  included in segments of particular  industries,  sectors,  securities  markets,
     countries or regions,
o        the availability of different types of securities or offerings of securities,
o        information  relating  to the gross  national  or gross  domestic  product of the  United  States or other
     countries or regions,
o        comparisons  of  various  market   sectors  or  indices  to  demonstrate   performance,   risk,  or  other
     characteristics of the Fund.

ABOUT YOUR ACCOUNT

How to Buy Shares

         Additional  information  is presented  below about the methods that can be used to buy shares of the Fund.
Appendix B contains more  information  about the special  sales charge  arrangements  offered by the Fund,  and the
circumstances in which sales charges may be reduced or waived for certain classes of investors.

AccountLink.  When shares are purchased  through  AccountLink,  each purchase must be at least $25.  Shares will be
purchased two regular  business days  following the regular  business day you instruct the  Distributor to initiate
the Automated  Clearing House ("ACH")  transfer to buy the shares.  That  instruction must be received prior to the
close of The New York  Stock  Exchange  that day.  Dividends  will  begin to accrue  on shares  purchased  with the
proceeds of ACH  transfers on the  business day after the shares are  purchased.  The Exchange  normally  closes at
4:00 P.M., but may close earlier on certain days.  The proceeds of ACH transfers are normally  received by the Fund
3 days after the transfers are  initiated.  If the proceeds of the ACH transfer are not received on a timely basis,
the Distributor  reserves the right to cancel the purchase order.  The Distributor and the Fund are not responsible
for any delays in purchasing shares resulting from delays in ACH transmissions.

Reduced  Sales  Charges.  As discussed in the  Prospectus,  a reduced sales charge rate may be obtained for Class A
shares under Right of  Accumulation  and Letters of Intent  because of the economies of sales efforts and reduction
in expenses  realized by the  Distributor,  dealers and brokers  making such sales.  No sales  charge is imposed in
certain  other  circumstances  described in Appendix B to this  Statement  of  Additional  Information  because the
Distributor or dealer or broker incurs little or no selling expenses.

|X|      Right of Accumulation.  To qualify for the lower sales charge rates that apply to larger purchases of
Class A shares, you and your spouse can add together:
o        Class A, Class B and Class N shares you purchase for your individual accounts (including IRAs and 403(b)
                  plans), or for your joint accounts, or for trust or custodial accounts on behalf of your
                  children who are minors, and
o        Current purchases of Class A, Class B and Class N shares of the Fund and other Oppenheimer funds to
                  reduce the sales charge rate that applies to current purchases of Class A shares, and
o        Class A, Class B and Class N shares of Oppenheimer funds you previously purchased subject to an initial
                  or contingent deferred sales charge to reduce the sales charge rate for current purchases of
                  Class A shares, provided that you still hold your investment in one of the Oppenheimer funds.

         A fiduciary can count all shares purchased for a trust,  estate or other fiduciary account  (including one
or more employee  benefit plans of the same  employer) that has multiple  accounts.  The  Distributor  will add the
value,  at current  offering  price,  of the shares you  previously  purchased  and  currently  own to the value of
current  purchases to determine  the sales charge rate that  applies.  The reduced  sales charge will apply only to
current purchases. You must request it when you buy shares.

         |X| The Oppenheimer  Funds.  The Oppenheimer  funds are those mutual funds for which the Distributor  acts
as the distributor or the sub-distributor and currently include the following in addition to the Fund:

Oppenheimer Bond Fund                                         Oppenheimer Municipal Bond Fund
Oppenheimer California Municipal Fund                         Oppenheimer New York Municipal Fund
Oppenheimer Capital Appreciation Fund                         Oppenheimer New Jersey Municipal Fund
Oppenheimer Capital Preservation Fund                         Oppenheimer Pennsylvania Municipal Fund
Oppenheimer Capital Income Fund                               Oppenheimer Quest Balanced Value Fund
Oppenheimer Champion Income Fund                              Oppenheimer Quest Capital Value Fund, Inc.
Oppenheimer Concentrated Growth Fund                          Oppenheimer Quest Global Value Fund, Inc.
Oppenheimer Convertible Securities Fund                       Oppenheimer Quest Opportunity Value Fund
Oppenheimer Developing Markets Fund                           Oppenheimer Quest Value Fund, Inc.
Oppenheimer Disciplined Allocation Fund                       Oppenheimer Real Asset Fund
Oppenheimer Discovery Fund                                    Oppenheimer Rochester National Municipals Fund
Oppenheimer Emerging Growth Fund                              Oppenheimer Senior Floating Rate Fund
Oppenheimer Emerging Technologies Fund                        Oppenheimer Small Cap Value Fund
Oppenheimer Enterprise Fund                                   Oppenheimer Special Value Fund
Oppenheimer Europe Fund                                       Oppenheimer Strategic Income Fund
Oppenheimer Global Fund                                       Oppenheimer Total Return Fund, Inc.
Oppenheimer Global Growth & Income Fund                       Oppenheimer Trinity Core Fund
Oppenheimer Gold & Special Minerals Fund                      Oppenheimer Trinity Large Cap Growth Fund
Oppenheimer Growth Fund                                       Oppenheimer Trinity Value Fund
Oppenheimer High Yield Fund                                   Oppenheimer U.S. Government Trust
Oppenheimer Intermediate Municipal Fund                       Oppenheimer Value Fund
Oppenheimer International Bond Fund                           Limited-Term New York Municipal Fund
Oppenheimer International Growth Fund                         Rochester Fund Municipals
Oppenheimer International Small Company Fund                  OSM1- Gartmore Millennium Growth Fund II
Oppenheimer Limited-Term Government Fund                      OSM1 - Jennison Growth Fund
Oppenheimer Main Street Growth & Income Fund                  OSM1 - Mercury Advisors S&P 500 Index
Oppenheimer Main Street Opportunity Fund                      OSM1 - Mercury Advisors Focus Growth Fund
Oppenheimer Main Street Small Cap Fund                        OSM1 - QM Active Balanced Fund
Oppenheimer MidCap Fund                                       OSM1 - Salomon Brothers Capital Fund
Oppenheimer Multiple Strategies Fund

and the following money market funds:
      Centennial America Fund, L. P.                                Centennial New York Tax Exempt Trust
      Centennial California Tax Exempt Trust                        Centennial Tax Exempt Trust
      Centennial Government Trust                                   Oppenheimer Cash Reserves
      Centennial Money Market Trust                                 Oppenheimer Money Market Fund, Inc.
1 "OSM" stands for Oppenheimer Select Managers

         There is an  initial  sales  charge on the  purchase  of Class A shares of each of the  Oppenheimer  funds
except the money market funds. Under certain circumstances  described in this Statement of Additional  Information,
redemption proceeds of certain money market fund shares may be subject to a contingent deferred sales charge.

         |X| Letters of Intent.  Under a Letter of Intent,  if you  purchase  Class A shares or Class A and Class B
shares of the Fund and other  Oppenheimer  funds  during a 13-month  period,  you can reduce the sales  charge rate
that applies to your purchases of Class A shares.  The total amount of your intended  purchases of both Class A and
Class B shares will  determine the reduced sales charge rate for the Class A shares  purchased  during that period.
You can include purchases made up to 90 days before the date of the Letter.

         A Letter of Intent is an investor's  statement in writing to the  Distributor of the intention to purchase
Class A shares or Class A and Class B shares of the Fund (and other  Oppenheimer  funds)  during a 13-month  period
(the "Letter of Intent period").  At the investor's  request,  this may include  purchases made up to 90 days prior
to the date of the Letter.  The Letter states the  investor's  intention to make the aggregate  amount of purchases
of shares which,  when added to the investor's  holdings of shares of those funds,  will equal or exceed the amount
specified  in the Letter.  Purchases  made by  reinvestment  of  dividends or  distributions  of capital  gains and
purchases made at net asset value without sales charge do not count toward satisfying the amount of the Letter.

         A Letter  enables  an  investor  to count  the Class A and Class B shares  purchased  under the  Letter to
obtain the reduced  sales  charge rate on  purchases  of Class A shares of the Fund (and other  Oppenheimer  funds)
that applies  under the Right of  Accumulation  to current  purchases of Class A shares.  Each  purchase of Class A
shares under the Letter will be made at the offering  price  (including  the sales charge) that applies to a single
lump-sum purchase of shares in the amount intended to be purchased under the Letter.

         In submitting a Letter,  the investor makes no commitment to purchase shares.  However,  if the investor's
purchases  of shares  within  the  Letter of Intent  period,  when  added to the value (at  offering  price) of the
investor's  holdings  of  shares on the last day of that  period,  do not equal or  exceed  the  intended  purchase
amount,  the investor  agrees to pay the  additional  amount of sales charge  applicable  to such  purchases.  That
amount is  described  in "Terms of  Escrow,"  below  (those  terms may be amended by the  Distributor  from time to
time).  The  investor  agrees  that shares  equal in value to 5% of the  intended  purchase  amount will be held in
escrow by the Transfer  Agent subject to the Terms of Escrow.  Also,  the investor  agrees to be bound by the terms
of the Prospectus,  this Statement of Additional  Information and the Application  used for a Letter of Intent.  If
those  terms are  amended,  as they may be from time to time by the Fund,  the  investor  agrees to be bound by the
amended terms and that those amendments will apply automatically to existing Letters of Intent.

         If the total  eligible  purchases  made  during  the  Letter of Intent  period do not equal or exceed  the
intended  purchase amount,  the commissions  previously paid to the dealer of record for the account and the amount
of sales charge retained by the  Distributor  will be adjusted to the rates  applicable to actual total  purchases.
If total eligible  purchases during the Letter of Intent period exceed the intended  purchase amount and exceed the
amount needed to qualify for the next sales charge rate  reduction set forth in the  Prospectus,  the sales charges
paid will be adjusted to the lower rate.  That  adjustment  will be made only if and when the dealer returns to the
Distributor  the excess of the amount of  commissions  allowed or paid to the dealer over the amount of commissions
that apply to the actual amount of purchases.  The excess  commissions  returned to the Distributor will be used to
purchase  additional  shares for the  investor's  account at the net asset value per share in effect on the date of
such purchase, promptly after the Distributor's receipt thereof.

         The  Transfer  Agent  will not hold  shares  in  escrow  for  purchases  of  shares  of the Fund and other
Oppenheimer  funds by  OppenheimerFunds  prototype 401(k) plans under a Letter of Intent.  If the intended purchase
amount under a Letter of Intent entered into by an  OppenheimerFunds  prototype 401(k) plan is not purchased by the
plan  by the  end of the  Letter  of  Intent  period,  there  will  be no  adjustment  of  commissions  paid to the
broker-dealer or financial institution of record for accounts held in the name of that plan.

         In determining  the total amount of purchases made under a Letter,  shares  redeemed by the investor prior
to the  termination  of the Letter of Intent  period will be deducted.  It is the  responsibility  of the dealer of
record  and/or the  investor  to advise the  Distributor  about the Letter in placing any  purchase  orders for the
investor during the Letter of Intent period. All of such purchases must be made through the Distributor.

         |_| Terms of Escrow That Apply to Letters of Intent.

         1. Out of the initial  purchase (or subsequent  purchases if necessary) made pursuant to a Letter,  shares
of the Fund equal in value up to 5% of the  intended  purchase  amount  specified  in the  Letter  shall be held in
escrow by the Transfer Agent. For example,  if the intended purchase amount is $50,000,  the escrow shall be shares
valued in the amount of $2,500  (computed at the offering  price  adjusted for a $50,000  purchase).  Any dividends
and capital gains distributions on the escrowed shares will be credited to the investor's account.

         2. If the total  minimum  investment  specified  under the Letter is completed  within the  thirteen-month
Letter of Intent period, the escrowed shares will be promptly released to the investor.

         3. If, at the end of the  thirteen-month  Letter of Intent  period  the total  purchases  pursuant  to the
Letter  are less than the  intended  purchase  amount  specified  in the  Letter,  the  investor  must remit to the
Distributor  an amount equal to the  difference  between the dollar amount of sales  charges  actually paid and the
amount of sales  charges  which would have been paid if the total amount  purchased had been made at a single time.
That sales charge  adjustment  will apply to any shares  redeemed  prior to the  completion  of the Letter.  If the
difference  in sales  charges is not paid within  twenty days after a request from the  Distributor  or the dealer,
the  Distributor  will,  within sixty days of the  expiration of the Letter,  redeem the number of escrowed  shares
necessary to realize such difference in sales charges.  Full and fractional  shares remaining after such redemption
will be released  from  escrow.  If a request is received to redeem  escrowed  shares  prior to the payment of such
additional sales charge, the sales charge will be withheld from the redemption proceeds.

         4. By signing the Letter,  the  investor  irrevocably  constitutes  and  appoints  the  Transfer  Agent as
attorney-in-fact to surrender for redemption any or all escrowed shares.

         5. The shares  eligible  for  purchase  under the Letter  (or the  holding of which may be counted  toward
completion of a Letter) include:
(a)      Class A shares  sold with a  front-end  sales  charge or subject to a Class A  contingent  deferred  sales
                  charge,
(b)      Class B shares of other Oppenheimer funds acquired subject to a contingent deferred sales charge, and
(c)      Class A or Class B  shares  acquired  by  exchange  of  either  (1)  Class A  shares  of one of the  other
                  Oppenheimer  funds that were acquired  subject to a Class A initial or contingent  deferred sales
                  charge or (2) Class B shares of one of the other  Oppenheimer  funds that were  acquired  subject
                  to a contingent deferred sales charge.

         6. Shares held in escrow  hereunder  will  automatically  be exchanged for shares of another fund to which
an exchange is requested,  as described in the section of the Prospectus  entitled "How to Exchange Shares" and the
escrow will be transferred to that other fund.

Asset  Builder  Plans.  To establish an Asset Builder Plan to buy shares  directly  from a bank  account,  you must
enclose a check (the  minimum  $25) for the initial  purchase  with your  application.  Shares  purchased  by Asset
Builder  Plan  payments  from bank  accounts  are  subject to the  redemption  restrictions  for  recent  purchases
described in the  Prospectus.  Asset Builder Plans are available only if your bank is an ACH member.  Asset Builder
Plans may not be used to buy shares for OppenheimerFunds  employer-sponsored  qualified retirement accounts.  Asset
Builder  Plans also enable  shareholders  of  Oppenheimer  Cash  Reserves to use their fund account to make monthly
automatic purchases of shares of up to four other Oppenheimer funds.

         If you make  payments  from your bank  account to purchase  shares of the Fund,  your bank account will be
debited  automatically.  Normally  the debit  will be made two  business  days  prior to the  investment  dates you
selected on your  Application.  Neither the  Distributor,  the Transfer Agent nor the Fund shall be responsible for
any delays in purchasing shares that result from delays in ACH transmissions.

         Before you establish Asset Builder  payments,  you should obtain a prospectus of the selected fund(s) from
your  financial  advisor (or the  Distributor)  and  request an  application  from the  Distributor.  Complete  the
application  and return it. You may change  the amount of your Asset  Builder  payment or you can  terminate  these
automatic  investments  at any time by writing to the  Transfer  Agent.  The Transfer  Agent  requires a reasonable
period  (approximately  15 days) after receipt of your  instructions to implement them. The Fund reserves the right
to amend, suspend, or discontinue offering Asset Builder plans at any time without prior notice.

Retirement  Plans.  Certain  types of  retirement  plans are entitled to purchase  shares of the Fund without sales
charge or at reduced sales charge rates,  as described in Appendix B to this  Statement of Additional  Information.
Certain special sales charge  arrangements  described in that Appendix apply to retirement  plans whose records are
maintained  on a daily  valuation  basis by Merrill  Lynch  Pierce  Fenner & Smith,  Inc.  ("Merrill  Lynch") or an
independent  record keeper that has a contract or special  arrangement  with Merrill Lynch. If on the date the plan
sponsor  signed the Merrill  Lynch record  keeping  service  agreement  the plan has less than $3 million in assets
(other than assets  invested in money market funds)  invested in applicable  Investments,  then the retirement plan
may purchase only Class B shares of the  Oppenheimer  funds.  Any retirement  plans in that category that currently
invest in Class B shares of the Fund will have their  Class B shares  converted  to Class A shares of the Fund when
the plan's applicable investments reach $5 million.

Cancellation  of Purchase  Orders.  Cancellation  of purchase  orders for the Fund's  shares (for  example,  when a
purchase  check is  returned  to the Fund  unpaid)  causes a loss to be  incurred  when the net asset  value of the
Fund's shares on the  cancellation  date is less than on the purchase date. That loss is equal to the amount of the
decline in the net asset value per share  multiplied  by the number of shares in the purchase  order.  The investor
is responsible  for that loss. If the investor fails to compensate the Fund for the loss, the  Distributor  will do
so. The Fund may  reimburse  the  Distributor  for that amount by redeeming  shares from any account  registered in
that investor's name, or the Fund or the Distributor may seek other redress.

Classes of Shares.  Each class of shares of the Fund  represents an interest in the same  portfolio of  investments
of the Fund. However,  each class has different  shareholder  privileges and features.  The net income attributable
to Class B, Class C or Class N shares  and the  dividends  payable  on Class B,  Class C or Class N shares  will be
reduced by incremental  expenses borne solely by that class.  Those expenses include the asset-based  sales charges
to which Class B, Class C and Class N are subject.

         The  availability  of different  classes of shares  permits an investor to choose the method of purchasing
shares that is more  appropriate  for the investor.  That may depend on the amount of the  purchase,  the length of
time the investor  expects to hold  shares,  and other  relevant  circumstances.  Class A shares  normally are sold
subject to an initial  sales charge.  While Class B, Class C shares and Class N have no initial  sales charge,  the
purpose of the  deferred  sales charge and  asset-based  sales charge on Class B, Class C and Class N shares is the
same as that of the initial sales charge on Class A shares - to compensate  the  Distributor  and brokers,  dealers
and  financial  institutions  that sell shares of the Fund. A salesperson  who is entitled to receive  compensation
from his or her firm for selling Fund shares may receive  different  levels of  compensation  for selling one class
of shares rather than another.

         The  Distributor  will not  accept any order in the  amount of  $500,000  or more for Class B shares or $1
million or more for Class C shares on behalf of a single  investor (not  including  dealer "street name" or omnibus
accounts).  That is because  generally it will be more advantageous for that investor to purchase Class A shares of
the Fund.

         |X| Class A Shares Subject to a Contingent Deferred Sales Charge. For purchases of Class A shares
subject to a contingent deferred sales charge as described in the Prospectus, no sales concessions will be paid
to the broker-dealer of record, as described in the Prospectus, on sales of Class A shares purchased with the
redemption proceeds of shares of another mutual fund offered as an investment option in a retirement plan in
which Oppenheimer funds are also offered as investment options under a special arrangement with the Distributor,
if the purchase occurs more than 30 days after the Oppenheimer funds are added as an investment option under that
plan. Additionally, that concession will not be paid on purchases of shares by a retirement plan made with the
redemption proceeds of Class N shares of one or more Oppenheimer funds held by the plan for more than 18 months.

         |X| Class B  Conversion.  Under  current  interpretations  of  applicable  federal  income  tax law by the
Internal  Revenue  Service,  the conversion of Class B shares to Class A shares after six years is not treated as a
taxable  event for the  shareholder.  If those laws or the IRS  interpretation  of those laws  should  change,  the
automatic  conversion  feature may be  suspended.  In that event,  no further  conversions  of Class B shares would
occur while that  suspension  remained  in effect.  Although  Class B shares  could then be  exchanged  for Class A
shares on the basis of relative net asset value of the two  classes,  without the  imposition  of a sales charge or
fee, such exchange could constitute a taxable event for the shareholder,  and absent such exchange,  Class B shares
might continue to be subject to the asset-based sales charge for longer than six years.

         |X|  Availability of Class N Shares.  In addition to the description of the types of retirement plans
which may purchase Class N shares contained in the prospectus, Class N shares also are offered to the following:

o        to all rollover IRAs,
o        to all direct rollovers from OppenheimerFunds-sponsored Pinnacle and Ascender retirement plans,
o        to all trustee-to-trustee IRA transfers,
o        to all 90-24 type 403(b) transfers,
o        to Group Retirement Plans (as defined in Appendix _ to this Statement of Additional Information) which
                      have entered into a special agreement with the Distributor for that purpose,
o        to Retirement Plans qualified under Sections 401(a) or 401(k) of the Internal Revenue Code, the
                      recordkeeper or the plan sponsor for which has entered into a special agreement with the
                      Distributor,
o        to Retirement Plans of a plan sponsor where the aggregate assets of all such plans invested in the
                      Oppenheimer funds is $500,000 or more,
o        to OppenheimerFunds-sponsored Ascender 401(k) plans that pay for the purchase with the redemption
                      proceeds of Class A shares of one or more Oppenheimer funds.

The sales concession and the advance of the service fee, as described in the Prospectus, will not be paid to
dealers of record on sales of Class N shares on:

o        purchases of Class N shares in amounts of $500,000 or more by a retirement plan that pays for the
     purchase with the redemption proceeds of Class A shares of one or more Oppenheimer funds (other than
     rollovers from an OppenheimerFunds-sponsored Pinnacle or Ascender 401(k) plan to any IRA invested in the
     Oppenheimer funds),
o        purchases of Class N shares in amounts of $500,000 or more by a retirement plan that pays for the
     purchase with the redemption proceeds of  Class C shares of one or more Oppenheimer funds held by the plan
     for more than one year (other than rollovers from an OppenheimerFunds-sponsored Pinnacle or Ascender 401(k)
     plan to any IRA invested in the Oppenheimer funds), and
o        on purchases of Class N shares by an OppenheimerFunds-sponsored Pinnacle or Ascender 401(k) plan made
     with the redemption proceeds of Class A shares of one or more Oppenheimer funds.

         |X|  Allocation of Expenses.  The Fund pays expenses  related to its daily  operations,  such as custodian
fees,  Trustees'  fees,  transfer agency fees,  legal fees and auditing  costs.  Those expenses are paid out of the
Fund's assets and are not paid directly by  shareholders.  However,  those  expenses  reduce the net asset value of
shares, and therefore are indirectly borne by shareholders through their investment.

         The  methodology  for calculating  the net asset value,  dividends and  distributions  of the Fund's share
classes  recognizes two types of expenses.  General expenses that do not pertain  specifically to any one class are
allocated  pro rata to the shares of all classes.  The  allocation  is based on the  percentage of the Fund's total
assets that is represented by the assets of each class, and then equally to each  outstanding  share within a given
class.  Such general expenses  include  management fees,  legal,  bookkeeping and audit fees,  printing and mailing
costs of shareholder reports,  Prospectuses,  Statements of Additional  Information and other materials for current
shareholders,  fees to unaffiliated Trustees,  custodian expenses, share issuance costs,  organization and start-up
costs, interest, taxes and brokerage commissions, and non-recurring expenses, such as litigation costs.

         Other  expenses  that are  directly  attributable  to a  particular  class are  allocated  equally to each
outstanding  share  within that class.  Examples of such  expenses  include  distribution  and service plan (12b-1)
fees,  transfer and shareholder  servicing agent fees and expenses and shareholder  meeting expenses (to the extent
that such expenses pertain only to a specific class).

Determination  of Net Asset  Values Per Share.  The net asset  values per share of each class of shares of the Fund
are  determined  as of the close of business of The New York Stock  Exchange on each day that the Exchange is open.
The  calculation  is done by dividing the value of the Fund's net assets  attributable  to a class by the number of
shares of that class that are  outstanding.  The  Exchange  normally  closes at 4:00 P.M.,  New York time,  but may
close  earlier  on some  other  days (for  example,  in case of weather  emergencies  or on days  falling  before a
holiday).  The Exchange's  most recent annual  announcement  (which is subject to change) states that it will close
on New Year's Day,  Presidents'  Day,  Martin Luther King, Jr. Day, Good Friday,  Memorial Day,  Independence  Day,
Labor Day, Thanksgiving Day and Christmas Day. It may also close on other days.

         Dealers  other than  Exchange  members  may  conduct  trading in certain  securities  on days on which the
Exchange is closed  (including  weekends and U.S.  holidays) or after 4:00 P.M. on a regular  business day. Because
the Fund's net asset  values will not be  calculated  on those days,  the Fund's net asset  values per share may be
significantly on such days when shareholders may not purchase or redeem shares.  Additionally,  trading on European
and Asian stock  exchanges  and  over-the-counter  markets  normally is completed  before the close of The New York
Stock Exchange.

         Changes in the values of  securities  traded on foreign  exchanges  or markets as a result of events  that
occur after the prices of those  securities are  determined,  but before the close of The New York Stock  Exchange,
will not be reflected  in the Fund's  calculation  of its net asset  values that day unless the Manager  determines
that the event is likely to effect a material  change in the value of the  security.  The  Manager,  or an internal
valuation  committee  established  by the Manager,  as  applicable,  may  establish a valuation,  under  procedures
established  by the Board and  subject to the  approval,  ratification  and  confirmation  by the Board at its next
ensuing meeting.


         |X| Securities  Valuation.  The Fund's Board of Trustees has  established  procedures for the valuation of
the Fund's securities. In general those procedures are as follows:

         |_| Equity securities traded on a U.S. securities exchange or on NASDAQ are valued as follows:
(1)      if last sale  information  is regularly  reported,  they are valued at the last reported sale price on the
                  principal exchange on which they are traded or on NASDAQ, as applicable, on that day, or
(2)      if last sale  information is not available on a valuation  date, they are valued at the last reported sale
                  price  preceding the  valuation  date if it is within the spread of the closing "bid" and "asked"
                  prices on the valuation date or, if not, at the closing "bid" price on the valuation date.
         |_|  Equity  securities  traded  on a  foreign  securities  exchange  generally  are  valued in one of the
following ways:
(1)      at the last sale price available to the pricing service approved by the Board of Trustees, or
(2)      at the last sale price  obtained by the  Manager  from the report of the  principal  exchange on which the
                  security is traded at its last trading session on or immediately before the valuation date, or
(3)      at the mean  between  the "bid" and  "asked"  prices  obtained  from the  principal  exchange on which the
                  security  is  traded  or, on the  basis of  reasonable  inquiry,  from two  market  makers in the
                  security.
         |_| Long-term  debt  securities  having a remaining  maturity in excess of 60 days are valued based on the
mean between the "bid" and "asked" prices  determined by a portfolio  pricing service  approved by the Fund's Board
of Trustees or obtained by the Manager from two active  market  makers in the  security on the basis of  reasonable
inquiry.
         |_| The following  securities are valued at the mean between the "bid" and "asked" prices  determined by a
pricing  service  approved by the Fund's Board of Trustees or obtained by the Manager from two active market makers
in the security on the basis of reasonable inquiry:
(1)      debt instruments that have a maturity of more than 397 days when issued,
(2)      debt  instruments  that had a maturity of 397 days or less when  issued and have a  remaining  maturity of
                  more than 60 days, and
(3)      non-money  market  debt  instruments  that had a maturity of 397 days or less when issued and which have a
                  remaining maturity of 60 days or less.
         |_| The following  securities are valued at cost,  adjusted for  amortization of premiums and accretion of
discounts:
(1)      money  market debt  securities  held by a non-money  market fund that had a maturity of less than 397 days
                  when issued that have a remaining maturity of 60 days or less, and
(2)      debt instruments held by a money market fund that have a remaining maturity of 397 days or less.
         |_| Securities  (including  restricted  securities)  not having  readily-available  market  quotations are
valued at fair  value  determined  under the  Board's  procedures.  If the  Manager  is unable to locate two market
makers willing to give quotes,  a security may be priced at the mean between the "bid" and "asked" prices  provided
by a single active market maker (which in certain cases may be the "bid" price if no "asked" price is available).

         In the case of U.S.  government  securities,  mortgage-backed  securities,  corporate  bonds  and  foreign
government  securities,  when last sale  information  is not  generally  available,  the  Manager  may use  pricing
services  approved by the Board of Trustees.  The pricing  service may use "matrix"  comparisons  to the prices for
comparable  instruments on the basis of quality,  yield, and maturity.  Other special factors may be involved (such
as the tax-exempt  status of the interest paid by municipal  securities).  The Manager will monitor the accuracy of
the pricing  services.  That monitoring may include  comparing prices used for portfolio  valuation to actual sales
prices of selected securities.

         The closing prices in the London foreign  exchange  market on a particular  business day that are provided
to the Manager by a bank,  dealer or pricing  service  that the Manager has  determined  to be reliable are used to
value  foreign  currency,  including  forward  contracts,  and to  convert  to U.S.  dollars  securities  that  are
denominated in foreign currency.

         Puts,  calls,  and futures are valued at the last sale price on the  principal  exchange on which they are
traded or on NASDAQ,  as  applicable,  as determined by a pricing  service  approved by the Board of Trustees or by
the  Manager.  If there  were no sales  that day,  they  shall be valued  at the last sale  price on the  preceding
trading day if it is within the spread of the  closing  "bid" and "asked"  prices on the  principal  exchange or on
NASDAQ on the  valuation  date.  If not, the value shall be the closing bid price on the  principal  exchange or on
NASDAQ on the valuation  date.  If the put,  call or future is not traded on an exchange or on NASDAQ,  it shall be
valued by the mean between  "bid" and "asked"  prices  obtained by the Manager from two active  market  makers.  In
certain cases that may be at the "bid" price if no "asked" price is available.

         When the Fund  writes an  option,  an amount  equal to the  premium  received  is  included  in the Fund's
Statement of Assets and Liabilities as an asset.  An equivalent  credit is included in the liability  section.  The
credit is adjusted  ("marked-to-market")  to reflect the current  market value of the option.  In  determining  the
Fund's gain on  investments,  if a call or put written by the Fund is exercised,  the proceeds are increased by the
premium received.  If a call or put written by the Fund expires,  the Fund has a gain in the amount of the premium.
If the Fund enters  into a closing  purchase  transaction,  it will have a gain or loss,  depending  on whether the
premium received was more or less than the cost of the closing  transaction.  If the Fund exercises a put it holds,
the amount the Fund receives on its sale of the  underlying  investment is reduced by the amount of premium paid by
the Fund.

How to Sell Shares

         The  information  below  supplements  the terms and conditions for redeeming  shares set forth in
the Prospectus.

Reinvestment  Privilege.  Within  six  months  of a  redemption,  a  shareholder  may  reinvest  all or part of the
redemption proceeds of:
         |_| Class A shares  purchased  subject to an initial  sales charge or Class A shares on which a contingent
deferred sales charge was paid, or
         |_| Class B shares that were subject to the Class B contingent deferred sales charge when redeemed.

         The  reinvestment  may be made without sales charge only in Class A shares of the Fund or any of the other
Oppenheimer  funds into which shares of the Fund are  exchangeable as described in "How to Exchange  Shares" below.
Reinvestment  will be at the net asset value next  computed  after the Transfer  Agent  receives  the  reinvestment
order. The shareholder  must ask the Transfer Agent for that privilege at the time of reinvestment.  This privilege
does not apply to Class C or Class Y shares.  The Fund may  amend,  suspend  or cease  offering  this  reinvestment
privilege at any time as to shares redeemed after the date of such amendment, suspension or cessation.

         Any capital gain that was realized when the shares were  redeemed is taxable,  and  reinvestment  will not
alter any capital  gains tax payable on that gain.  In general  gains and losses on the  redemption  of shares will
be long-term  capital  gains or losses if the shares have been held for more than one year.  Gains or losses on the
redemption  of shares  will be  short-term  gains or losses if the shares  have been held for one year or less.  If
there has been a capital loss on the redemption,  some or all of the loss may not be tax  deductible,  depending on
the timing and amount of the  reinvestment.  Under the Internal  Revenue Code, if the  redemption  proceeds of Fund
shares on which a sales charge was paid are  reinvested in shares of the Fund or another of the  Oppenheimer  funds
within  90 days of  payment  of the  sales  charge,  the  shareholder's  basis in the  shares of the Fund that were
redeemed  may not include the amount of the sales  charge  paid.  That would  reduce the loss or increase  the gain
recognized  from the redemption.  However,  in that case the sales charge would be added to the basis of the shares
acquired by the  reinvestment  of the redemption  proceeds.  In addition,  if a shareholder  realizes a loss on the
redemption  of the  shares  in the Fund and  reinvests  in shares  in the Fund  within 30 days  before or after the
redemption or exchange,  the transactions  may be subject to the "wash sale" rules,  resulting in a postponement of
the  recognition  of such loss for tax  purposes.  Any loss  realized by  shareholders  upon a redemption of shares
within six months of the date of their  purchase  will be treated as  long-term  capital  loss to the extent of any
distributions of net long-term capital gains with respect to such shares during the six-month period.

Payments "In Kind." The Prospectus  states that payment for shares  tendered for  redemption is ordinarily  made in
cash.  However,  under  certain  circumstances,  the Board of Trustees of the Fund may  determine  that it would be
detrimental to the best interests of the remaining  shareholders of the Fund to make payment of a redemption  order
wholly  or  partly  in  cash.  In that  case,  the Fund may pay the  redemption  proceeds  in whole or in part by a
distribution "in kind" of liquid securities from the portfolio of the Fund, in lieu of cash.

         The Fund has elected to be governed by Rule 18f-1 under the  Investment  Company Act. Under that rule, the
Fund is  obligated  to redeem  shares  solely in cash up to the lesser of  $250,000  or 1% of the net assets of the
Fund during any 90-day period for any one  shareholder.  If shares are redeemed in kind, the redeeming  shareholder
might incur  brokerage or other costs in selling the securities for cash.  The Fund will value  securities  used to
pay  redemptions  in kind using the same method the Fund uses to value its  portfolio  securities  described  above
under  "Determination  of Net Asset Values Per Share." That  valuation  will be made as of the time the  redemption
price is determined.

Involuntary  Redemptions.  The Fund's Board of Trustees has the right to cause the  involuntary  redemption  of the
shares  held in any  account if the  aggregate  net asset  value of those  shares is less than $500 or such  lesser
amount as the Board may fix.  The Board will not cause the  involuntary  redemption  of shares in an account if the
aggregate  net asset  value of such  shares  has  fallen  below  the  stated  minimum  solely as a result of market
fluctuations.  If the Board  exercises this right, it may also fix the  requirements  for any notice to be given to
the  shareholders  in  question  (not less than 30 days).  The Board may  alternatively  set  requirements  for the
shareholder  to  increase  the  investment,  or set other  terms and  conditions  so that the  shares  would not be
involuntarily redeemed.

Transfers of Shares.  A transfer of shares to a different  registration  is not an event that  triggers the payment
of sales  charges.  Therefore,  shares are not subject to the payment of a contingent  deferred sales charge of any
class at the time of  transfer to the name of another  person or entity.  It does not matter  whether the  transfer
occurs by absolute assignment,  gift or bequest, as long as it does not involve,  directly or indirectly,  a public
sale of the shares.  When shares subject to a contingent  deferred sales charge are  transferred,  the  transferred
shares will remain  subject to the  contingent  deferred  sales charge.  It will be calculated as if the transferee
shareholder  had  acquired  the  transferred  shares in the same  manner  and at the same time as the  transferring
shareholder.

         If less than all shares  held in an account  are  transferred,  and some but not all shares in the account
would be subject to a  contingent  deferred  sales  charge if  redeemed  at the time of  transfer,  the  priorities
described  in the  Prospectus  under "How to Buy Shares" for the  imposition  of the Class B or Class C  contingent
deferred sales charge will be followed in determining the order in which shares are transferred.

Distributions From Retirement Plans.  Requests for distributions from  OppenheimerFunds-sponsored  IRAs,  403(b)(7)
custodial   plans,   401(k)   plans  or  pension  or   profit-sharing   plans  should  be  addressed  to  "Trustee,
OppenheimerFunds  Retirement  Plans," c/o the Transfer  Agent at its address  listed in "How To Sell Shares" in the
Prospectus or on the back cover of this Statement of Additional Information. The request must:
(1)      state the reason for the distribution;
(2)      state the owner's awareness of tax penalties if the distribution is premature; and
(3)      conform to the requirements of the plan and the Fund's other redemption requirements.

         Participants (other than self-employed  persons) in  OppenheimerFunds-sponsored  pension or profit-sharing
plans with shares of the Fund held in the name of the plan or its  fiduciary  may not directly  request  redemption
of their accounts. The plan administrator or fiduciary must sign the request.

         Distributions  from  pension  and profit  sharing  plans are  subject to  special  requirements  under the
Internal  Revenue Code and certain  documents  (available  from the Transfer Agent) must be completed and submitted
to the Transfer Agent before the  distribution  may be made.  Distributions  from  retirement  plans are subject to
withholding  requirements  under the Internal  Revenue Code, and IRS Form W-4P  (available from the Transfer Agent)
must be submitted to the Transfer Agent with the distribution  request, or the distribution may be delayed.  Unless
the shareholder has provided the Transfer Agent with a certified tax  identification  number,  the Internal Revenue
Code requires that tax be withheld from any distribution  even if the shareholder  elects not to have tax withheld.
The Fund, the Manager,  the Distributor,  and the Transfer Agent assume no  responsibility  to determine  whether a
distribution  satisfies the  conditions of applicable  tax laws and will not be  responsible  for any tax penalties
assessed in connection with a distribution.

Special  Arrangements  for  Repurchase of Shares from Dealers and Brokers.  The  Distributor is the Fund's agent to
repurchase  its  shares  from  authorized  dealers or brokers  on behalf of their  customers.  Shareholders  should
contact their broker or dealer to arrange this type of redemption.  The repurchase  price per share will be the net
asset value next computed after the Distributor  receives an order placed by the dealer or broker.  However, if the
Distributor  receives a repurchase  order from a dealer or broker after the close of The New York Stock Exchange on
a regular  business  day,  it will be  processed  at that day's net asset  value if the order was  received  by the
dealer or broker from its customers prior to the time the Exchange  closes.  Normally,  the Exchange closes at 4:00
P.M.,  but may do so earlier on some days.  Additionally,  the order must have been  transmitted to and received by
the Distributor prior to its close of business that day (normally 5:00 P.M.).

         Ordinarily,  for accounts  redeemed by a broker-dealer  under this procedure,  payment will be made within
three business days after the shares have been redeemed upon the Distributor's  receipt of the required  redemption
documents  in  proper  form.  The  signature(s)  of the  registered  owners  on the  redemption  documents  must be
guaranteed as described in the Prospectus.

Automatic  Withdrawal  and  Exchange  Plans.  Investors  owning  shares  of the Fund  valued  at $5,000 or more can
authorize  the  Transfer  Agent to redeem  shares  (having a value of at least  $50)  automatically  on a  monthly,
quarterly,  semi-annual or annual basis under an Automatic  Withdrawal Plan. Shares will be redeemed three business
days prior to the date  requested by the  shareholder  for receipt of the payment.  Automatic  withdrawals of up to
$1,500 per month may be requested by telephone if payments are to be made by check payable to all  shareholders  of
record.  Payments  must also be sent to the address of record for the  account  and the address  must not have been
changed within the prior 30 days. Required minimum distributions from  OppenheimerFunds-sponsored  retirement plans
may not be arranged on this basis.

         Payments are normally made by check,  but  shareholders  having  AccountLink  privileges  (see "How To Buy
Shares") may arrange to have Automatic  Withdrawal Plan payments  transferred to the bank account designated on the
Account  Application  or by  signature-guaranteed  instructions  sent to the  Transfer  Agent.  Shares are normally
redeemed  pursuant to an Automatic  Withdrawal  Plan three  business days before the payment  transmittal  date you
select in the Account Application.  If a contingent deferred sales charge applies to the redemption,  the amount of
the check or payment will be reduced accordingly.

         The Fund cannot  guarantee  receipt of a payment on the date  requested.  The Fund  reserves  the right to
amend,  suspend or discontinue  offering these plans at any time without prior notice.  Because of the sales charge
assessed on Class A share  purchases,  shareholders  should not make  regular  additional  Class A share  purchases
while  participating  in an  Automatic  Withdrawal  Plan.  Class B,  Class C and Class N  shareholders  should  not
establish automatic  withdrawal plans,  because of the potential imposition of the contingent deferred sales charge
on such  withdrawals  (except where the Class B, Class C and Class N contingent  deferred sales charge is waived as
described in Appendix B to this Statement of Additional Information below).

         By  requesting  an  Automatic  Withdrawal  or  Exchange  Plan,  the  shareholder  agrees  to the terms and
conditions  that apply to such plans,  as stated below.  These  provisions  may be amended from time to time by the
Fund and/or the Distributor. When adopted, any amendments will automatically apply to existing Plans.

         |X| Automatic  Exchange Plans.  Shareholders can authorize the Transfer Agent to exchange a pre-determined
amount  of  shares  of the Fund for  shares  (of the same  class) of other  Oppenheimer  funds  automatically  on a
monthly,  quarterly,  semi-annual or annual basis under an Automatic  Exchange Plan. The minimum amount that may be
exchanged to each other fund account is $25.  Instructions should be provided on the  OppenheimerFunds  Application
or signature-guaranteed  instructions.  Exchanges made under these plans are subject to the restrictions that apply
to exchanges as set forth in "How to Exchange  Shares" in the  Prospectus and below in this Statement of Additional
Information.

         |X| Automatic  Withdrawal  Plans.  Fund shares will be redeemed as necessary to meet withdrawal  payments.
Shares  acquired  without a sales charge will be redeemed  first.  Shares  acquired with  reinvested  dividends and
capital gains  distributions will be redeemed next,  followed by shares acquired with a sales charge, to the extent
necessary to make  withdrawal  payments.  Depending  upon the amount  withdrawn,  the  investor's  principal may be
depleted. Payments made under these plans should not be considered as a yield or income on your investment.

         The  Transfer  Agent  will  administer  the  investor's   Automatic  Withdrawal  Plan  as  agent  for  the
shareholder(s)  (the  "Planholder") who executed the Plan  authorization and application  submitted to the Transfer
Agent.  Neither the Fund nor the Transfer  Agent shall incur any liability to the  Planholder  for any action taken
or not taken by the Transfer  Agent in good faith to administer  the Plan.  Share  certificates  will not be issued
for shares of the Fund  purchased for and held under the Plan,  but the Transfer  Agent will credit all such shares
to the account of the  Planholder on the records of the Fund.  Any share  certificates  held by a Planholder may be
surrendered  unendorsed  to the Transfer  Agent with the Plan  application  so that the shares  represented  by the
certificate may be held under the Plan.

         For accounts subject to Automatic  Withdrawal Plans,  distributions of capital gains must be reinvested in
shares of the Fund,  which will be done at net asset value without a sales charge.  Dividends on shares held in the
account may be paid in cash or reinvested.

         Shares will be redeemed to make  withdrawal  payments at the net asset value per share  determined  on the
redemption  date.  Checks or AccountLink  payments  representing  the proceeds of Plan withdrawals will normally be
transmitted  three  business  days prior to the date  selected for receipt of the payment,  according to the choice
specified in writing by the Planholder. Receipt of payment on the date selected cannot be guaranteed.

         The amount and the interval of  disbursement  payments and the address to which checks are to be mailed or
AccountLink  payments  are to be sent may be changed  at any time by the  Planholder  by  writing  to the  Transfer
Agent.  The  Planholder  should allow at least two weeks' time after  mailing such  notification  for the requested
change to be put in effect.  The  Planholder  may, at any time,  instruct the Transfer  Agent by written  notice to
redeem all, or any part of, the shares held under the Plan.  That notice must be in proper form in accordance  with
the  requirements  of the  then-current  Prospectus of the Fund. In that case,  the Transfer  Agent will redeem the
number of shares  requested  at the net asset  value per share in effect and will mail a check for the  proceeds to
the Planholder.

         The Planholder may terminate a Plan at any time by writing to the Transfer  Agent.  The Fund may also give
directions  to the Transfer  Agent to  terminate a Plan.  The  Transfer  Agent will also  terminate a Plan upon its
receipt of evidence satisfactory to it that the Planholder has died or is legally  incapacitated.  Upon termination
of a Plan by the Transfer  Agent or the Fund,  shares that have not been  redeemed  will be held in  uncertificated
form in the name of the Planholder.  The account will continue as a  dividend-reinvestment,  uncertificated account
unless and until  proper  instructions  are received  from the  Planholder,  his or her  executor or  guardian,  or
another authorized person.

         To use shares held under the Plan as  collateral  for a debt,  the  Planholder  may request  issuance of a
portion of the shares in  certificated  form.  Upon written  request from the  Planholder,  the Transfer Agent will
determine the number of shares for which a  certificate  may be issued  without  causing the  withdrawal  checks to
stop. However, should such uncertificated shares become exhausted, Plan withdrawals will terminate.

         If the  Transfer  Agent ceases to act as transfer  agent for the Fund,  the  Planholder  will be deemed to
have appointed any successor transfer agent to act as agent in administering the Plan.

How to Exchange Shares

         As stated in the Prospectus, shares of a particular class of Oppenheimer funds having more than one
class of shares may be exchanged only for shares of the same class of other Oppenheimer funds.  Shares of
Oppenheimer funds that have a single class without a class designation are deemed "Class A" shares for this
purpose. You can obtain a current list showing which funds offer which classes by calling the Distributor at
1.800.525.7048.
o        All of the Oppenheimer funds currently offer Class A, B and C shares except Oppenheimer Money Market
     Fund, Inc., Centennial Money Market Trust, Centennial Tax Exempt Trust, Centennial Government Trust,
     Centennial New York Tax Exempt Trust, Centennial California Tax Exempt Trust, and Centennial America Fund,
     L.P., which only offer Class A shares.
o        Class B, Class C and Class N shares of Oppenheimer Cash Reserves are generally available only by
     exchange from the same class of shares of other Oppenheimer funds or through OppenheimerFunds-sponsored
     401(k) plans.
o        Only certain Oppenheimer funds currently offer Class Y shares. Class Y shares of Oppenheimer Real Asset
     Fund may not be exchanged for shares of any other fund.
o        Only certain Oppenheimer funds currently offer Class N shares, which are only offered to retirement
     plans as described in the Prospectus. Class N shares can be exchanged only for Class N shares of other
     Oppenheimer funds.
o        Class M shares of Oppenheimer Convertible Securities Fund may be exchanged only for Class A shares of
     other Oppenheimer funds. They may not be acquired by exchange of shares of any class of any other
     Oppenheimer funds except Class A shares of Oppenheimer Money Market Fund or Oppenheimer Cash Reserves
     acquired by exchange of Class M shares.
o        Class X shares of Limited Term New York Municipal Fund can be exchanged only for Class B shares of other
     Oppenheimer funds and no exchanges may be made to Class X shares.
o        Shares of Oppenheimer Capital Preservation Fund may not be exchanged for shares of Oppenheimer Money
     Market Fund, Inc., Oppenheimer Cash Reserves or Oppenheimer Limited-Term Government Fund.  Only participants
     in certain retirement plans may purchase shares of Oppenheimer Capital Preservation Fund, and only those
     participants may exchange shares of other Oppenheimer funds for shares of Oppenheimer Capital Preservation
     Fund.
o        Class A shares of Oppenheimer Senior Floating Rate Fund are not available by exchange of shares of
     Oppenheimer Money Market Fund or Class A shares of Oppenheimer Cash Reserves. If any Class A shares of
     another Oppenheimer fund that are exchanged for Class A shares of Oppenheimer Senior Floating Rate Fund are
     subject to the Class A contingent deferred sales charge of the other Oppenheimer fund at the time of
     exchange, the holding period for that Class A contingent deferred sales charge will carry over to the Class
     A shares of Oppenheimer Senior Floating Rate Fund acquired in the exchange. The Class A shares of
     Oppenheimer Senior Floating Rate Fund acquired in that exchange will be subject to the Class A Early
     Withdrawal Charge of Oppenheimer Senior Floating Rate Fund if they are repurchased before the expiration of
     the holding period.
o        Class A, Class B, Class C and Class Y Shares of Oppenheimer Select Managers Mercury Advisors S&P Index
     Fund and Oppenheimer Select Managers QM Active Balanced Fund are only available to retirement plans and are
     available only by exchange from the same class of shares of other Oppenheimer funds held by retirement plans.

         Class A shares of  Oppenheimer  funds may be  exchanged  at net asset value for shares of any money market
fund  offered  by the  Distributor.  Shares of any money  market  fund  purchased  without  a sales  charge  may be
exchanged for shares of  Oppenheimer  funds offered with a sales charge upon payment of the sales charge.  They may
also be used to purchase shares of Oppenheimer funds subject to an early withdrawal  charge or contingent  deferred
sales charge.

         Shares of Oppenheimer Money Market Fund, Inc. purchased with the redemption proceeds of shares of other
mutual funds (other than funds managed by the Manager or its subsidiaries) redeemed within the 30 days prior to
that purchase may subsequently be exchanged for shares of other Oppenheimer funds without being subject to an
initial sales charge or contingent deferred sales charge. To qualify for that privilege, the investor or the
investor's dealer must notify the Distributor of eligibility for this privilege at the time the shares of
Oppenheimer Money Market Fund, Inc. are purchased.  If requested, they must supply proof of entitlement to this
privilege.

         Shares of the Fund acquired by reinvestment of dividends or distributions from any of the other
Oppenheimer funds or from any unit investment trust for which reinvestment arrangements have been made with the
Distributor may be exchanged at net asset value for shares of any of the Oppenheimer funds.

         The Fund may amend, suspend or terminate the exchange privilege at any time.  Although the Fund may
impose these changes at any time, it will provide you with notice of those changes whenever it is required to do
so by applicable law.  It may be required to provide 60 days notice prior to materially amending or terminating
the exchange privilege.  That 60-day notice is not required in extraordinary circumstances.

|X| How Exchanges  Affect  Contingent  Deferred  Sales Charges.  No contingent  deferred sales charge is imposed on
exchanges of shares of any class purchased  subject to a contingent  deferred sales charge.  However,  when Class A
shares  acquired  by  exchange  of Class A  shares  of  other  Oppenheimer  funds  purchased  subject  to a Class A
contingent  deferred  sales  charge are redeemed  within 18 months of the end of the calendar  month of the initial
purchase of the exchanged Class A shares,  the Class A contingent  deferred sales charge is imposed on the redeemed
shares.  The Class B contingent  deferred  sales  charge is imposed on Class B shares  acquired by exchange if they
are  redeemed  within 6 years of the  initial  purchase of the  exchanged  Class B shares.  The Class C  contingent
deferred  sales charge is imposed on Class C shares  acquired by exchange if they are redeemed  within 12 months of
the initial  purchase of the exchanged Class C shares.  The Class N contingent  deferred sales charge is imposed on
Class N shares  acquired  by  exchange  if they are  redeemed  within  18  months of the  initial  purchase  of the
exchanged Class N shares or the plan's initial purchase of the exchanged Class N shares.

         When Class B, Class C or Class N shares are redeemed to effect an exchange,  the  priorities  described in
"How To Buy  Shares"  in the  Prospectus  for the  imposition  of the Class B,  Class C or the  Class N  contingent
deferred  sales  charge  will be  followed  in  determining  the order in which the  shares are  exchanged.  Before
exchanging  shares,  shareholders  should take into  account how the exchange  may affect any  contingent  deferred
sales charge that might be imposed in the subsequent  redemption of remaining  shares.  Shareholders  owning shares
of more than one class must specify which class of shares they wish to exchange.

         |X| Limits on  Multiple  Exchange  Orders.  The Fund  reserves  the right to reject  telephone  or written
exchange  requests  submitted  in bulk by anyone on behalf of more than one account.  The Fund may accept  requests
for  exchanges  of up to 50 accounts  per day from  representatives  of  authorized  dealers  that qualify for this
privilege.

         |X|  Telephone  Exchange  Requests.  When  exchanging  shares by  telephone,  a  shareholder  must have an
existing  account  in the fund to which  the  exchange  is to be  made.  Otherwise,  the  investors  must  obtain a
Prospectus  of that fund before the  exchange  request may be  submitted.  If all  telephone  lines are busy (which
might occur, for example,  during periods of substantial  market  fluctuations),  shareholders might not be able to
request exchanges by telephone and would have to submit written exchange requests.

                  |_| Processing  Exchange  Requests.  Shares to be exchanged are redeemed on the regular  business
day the Transfer  Agent  receives an exchange  request in proper form (the  "Redemption  Date").  The Fund reserves
the right,  in its  discretion,  to refuse any exchange  request  that may  disadvantage  it. For  example,  if the
receipt of multiple  exchange  requests from a dealer might require the  disposition  of portfolio  securities at a
time or at a price that might be  disadvantageous  to the Fund, the Fund may refuse the request.  When you exchange
some or all of your shares from one fund to another,  any special  account feature such as an Asset Builder Plan or
Automatic  Withdrawal  Plan,  will be switched to the new fund account unless you tell the Transfer Agent not to do
so. However,  special  redemption and exchange features such as Automatic  Exchange Plans and Automatic  Withdrawal
Plans cannot be switched to an account in Oppenheimer Senior Floating Rate Fund.

         In  connection  with any  exchange  request,  the number of shares  exchanged  may be less than the number
requested if the exchange or the number  requested  would  include  shares  subject to a  restriction  cited in the
Prospectus or this Statement of Additional  Information,  or would include  shares  covered by a share  certificate
that is not tendered with the request.  In those cases, only the shares available for exchange without  restriction
will be exchanged.

         The different  Oppenheimer  funds available for exchange have different  investment  objectives,  policies
and risks. A shareholder  should assure that the fund selected is appropriate  for his or her investment and should
be aware of the tax  consequences  of an exchange.  For federal  income tax purposes,  an exchange  transaction  is
treated  as a  redemption  of shares of one fund and a purchase  of shares of  another.  "Reinvestment  Privilege,"
above,  discusses some of the tax consequences of reinvestment of redemption  proceeds in such cases. The Fund, the
Distributor,  and the Transfer  Agent are unable to provide  investment,  tax or legal advice to a  shareholder  in
connection with an exchange request or any other investment transaction.

Dividends, Capital Gains and Taxes

Dividends and  Distributions.  The Fund has no fixed  dividend rate and there can be no assurance as to the payment
of any dividends or the  realization  of any capital  gains.  The dividends  and  distributions  paid by a class of
shares will vary from time to time depending on market  conditions,  the composition of the Fund's  portfolio,  and
expenses  borne by the Fund or borne  separately by a class.  Dividends are  calculated in the same manner,  at the
same  time,  and on the same day for each  class of  shares.  However,  dividends  on Class B,  Class C and Class N
shares are  expected  to be lower than  dividends  on Class A and Class Y shares.  That is because of the effect of
the  asset-based  sales charge on Class B, Class C and Class N shares.  Those  dividends will also differ in amount
as a consequence of any difference in the net asset values of the different classes of shares.

         Dividends,  distributions and proceeds of the redemption of Fund shares  represented by checks returned to
the Transfer Agent by the Postal Service as  undeliverable  will be invested in shares of Oppenheimer  Money Market
Fund,  Inc.  Reinvestment  will be made as  promptly as  possible  after the return of such checks to the  Transfer
Agent,  to enable the  investor to earn a return on  otherwise  idle funds.  Unclaimed  accounts  may be subject to
state  escheatment  laws,  and the  Fund and the  Transfer  Agent  will  not be  liable  to  shareholders  or their
representatives for compliance with those laws in good faith.

Tax Status of the Fund's Dividends, Distributions and Redemptions of Shares.  The federal tax treatment of the
Fund's dividends and capital gains distributions is briefly highlighted in the Prospectus. The following is only
a summary of certain additional tax considerations generally affecting the Fund and its shareholders.

         The tax discussion in the  Prospectus and this Statement of Additional  Information is based on tax law in
effect on the date of the Prospectus and this Statement of Additional  Information.  Those laws and regulations may
be changed by legislative,  judicial, or administrative action,  sometimes with retroactive effect. State and local
tax treatment of ordinary  income  dividends and capital gain  dividends from  regulated  investment  companies may
differ from the treatment under the Internal  Revenue Code described below.  Potential  purchasers of shares of the
Fund are urged to consult  their tax advisors  with specific  reference to their own tax  circumstances  as well as
the consequences of  federal, state and local tax rules affecting an investment in the Fund.

         |X|  Qualification as a Regulated Investment Company.  The Fund has elected to be taxed as a regulated
investment company under Subchapter M of the Internal Revenue Code of 1986, as amended. As a regulated investment
company, the Fund is not subject to federal income tax on the portion of its net investment income (that is,
taxable interest, dividends, and other taxable ordinary income, net of expenses and net short-term capital gain
in excess of long-term capital loss) and capital gain net income (that is, the excess of net long-term capital
gains over net short-term capital losses) that it distributes to shareholders. That qualification enables the
Fund to "pass through" its income and realized capital gains to shareholders without having to pay tax on them.
This avoids a "double tax" on that income and capital gains, since shareholders normally will be taxed on the
dividends and capital gains they receive from the Fund (unless their Fund shares are held in a retirement account
or the shareholder is otherwise exempt from tax). The Internal Revenue Code contains a number of complex tests
relating to qualification that the Fund might not meet in a particular year. If it did not qualify as a regulated
investment company, the Fund would be treated for tax purposes as an ordinary corporation and would receive no
tax deduction for payments made to shareholders.

         To qualify as a regulated investment company, the Fund must distribute at least 90% of its investment
company taxable income (in brief, net investment income and the excess of net short-term capital gain over net
long-term capital loss) for the taxable year. The Fund must also satisfy certain other requirements of the
Internal Revenue Code, some of which are described below.  Distributions by the Fund made during the taxable year
or, under specified circumstances, within twelve months after the close of the taxable year, will be considered
distributions of income and gains for the taxable year and will therefore count toward satisfaction of the
above-mentioned requirement.

         To qualify as a regulated investment company, the Fund must derive at least 90% of its gross income from
dividends, interest, certain payments with respect to securities loans, gains from the sale or other disposition
of stock or securities or foreign currencies (to the extent such currency gains are directly related to the
regulated investment company's principal business of investing in stock or securities) and certain other income.

         In addition to satisfying the requirements described above, the Fund must satisfy an asset
diversification test in order to qualify as a regulated investment company.  Under that test, at the close of
each quarter of the Fund's taxable year, at least 50% of the value of the Fund's assets must consist of cash and
cash items, U.S. government securities, securities of other regulated investment companies, and securities of
other issuers. As to each of those issuers, the Fund must not have invested more than 5% of the value of the
Fund's total assets in securities of each such issuer and the Fund must not hold more than 10% of the outstanding
voting securities of each such issuer. No more than 25% of the value of its total assets may be invested in the
securities of any one issuer (other than U.S. government securities and securities of other regulated investment
companies), or in two or more issuers which the Fund controls and which are engaged in the same or similar trades
or businesses. For purposes of this test, obligations issued or guaranteed by certain agencies or
instrumentalities of the U.S. government are treated as U.S. government securities.

              |X| Excise Tax on Regulated  Investment  Companies.  Under the Internal  Revenue Code, by December 31
each year, the Fund must  distribute 98% of its taxable  investment  income earned from January 1 through  December
31 of that year and 98% of its  capital  gains  realized in the period  from  November 1 of the prior year  through
October 31 of the current  year.  If it does not,  the Fund must pay an excise tax on the amounts not  distributed.
It is  presently  anticipated  that the Fund will meet those  requirements.  To meet this  requirement,  in certain
circumstances  the Fund might be required to liquidate  portfolio  investments to make sufficient  distributions to
avoid excise tax liability.  However,  the Board of Trustees and the Manager might  determine in a particular  year
that it would  be in the best  interests  of  shareholders  for the  Fund  not to make  such  distributions  at the
required levels and to pay the excise tax on the undistributed  amounts.  That would reduce the amount of income or
capital gains available for distribution to shareholders.

         |X|  Taxation of Fund Distributions.  The Fund anticipates distributing substantially all of its
investment company taxable income for each taxable year.  Those distributions will be taxable to shareholders as
ordinary income and treated as dividends for federal income tax purposes.

         Special provisions of the Internal Revenue Code govern the eligibility of the Fund's dividends for the
dividends-received deduction for corporate shareholders.  Long-term capital gains distributions are not eligible
for the deduction.  The amount of dividends paid by the Fund that may qualify for the deduction is limited to the
aggregate amount of qualifying dividends that the Fund derives from portfolio investments that the Fund has held
for a minimum period, usually 46 days. A corporate shareholder will not be eligible for the deduction on
dividends paid on Fund shares held for 45 days or less.  To the extent the Fund's dividends are derived from
gross income from option premiums, interest income or short-term gains from the sale of securities or dividends
from foreign corporations, those dividends will not qualify for the deduction. Since it is anticipated that most
of the Fund's income will be derived from interest it receives on its investments, the Fund does not anticipate
that its distributions will qualify for this deduction.

         The Fund may either retain or distribute to shareholders its net capital gain for each taxable year.
The Fund currently intends to distribute any such amounts.  If net long term capital gains are distributed and
designated as a capital gain distribution, it will be taxable to shareholders as long-term capital gain. It does
not matter how long the shareholder has held his or her shares or whether that gain was recognized by the Fund
before the shareholder acquired his or her shares.

         If the Fund elects to retain its net capital gain, the Fund will be subject to tax on it at the 35%
corporate tax rate.  If the Fund elects to retain its net capital gain, it is expected that the Fund also will
elect to have shareholders of record on the last day of its taxable year treated as if each received a
distribution of their pro rata share of such gain. As a result, each shareholder will be required to report his
or her pro rata share of such gain on their tax return as long-term capital gain, will receive a refundable tax
credit for his/her pro rata share of tax paid by the Fund on the gain, and will increase the tax basis for
his/her shares by an amount equal to the deemed distribution less the tax credit.

         Investment income that may be received by the Fund from sources within foreign countries may be subject
to foreign taxes withheld at the source.  The United States has entered into tax treaties with many foreign
countries which entitle the Fund to a reduced rate of, or exemption from, taxes on such income.

         Distributions by the Fund that do not constitute ordinary income dividends or capital gain distributions
will be treated as a return of capital to the extent of the shareholder's tax basis in their shares. Any excess
will be treated as gain from the sale of those shares, as discussed below. Shareholders will be advised annually
as to the U.S. federal income tax consequences of distributions made (or deemed made) during the year. If prior
distributions made by the Fund must be re-characterized as a non-taxable return of capital at the end of the
fiscal year as a result of the effect of the Fund's investment policies, they will be identified as such in
notices sent to shareholders.

         Distributions  by the Fund will be  treated in the  manner  described  above  regardless  of  whether  the
distributions  are paid in cash or reinvested in additional  shares of the Fund (or of another fund).  Shareholders
receiving a  distribution  in the form of  additional  shares will be treated as  receiving  a  distribution  in an
amount equal to the fair market value of the shares received, determined as of the reinvestment date.

         The Fund will be required in certain cases to withhold and remit to the U.S. Treasury 31% of ordinary
income dividends and capital gains distributions and the proceeds of the redemption of shares, paid to any
shareholder (1) who has failed to provide a correct, certified taxpayer identification number, (2) who is subject
to backup withholding for failure to report the receipt of interest or dividend income properly, or (3) who has
failed to certify to the Fund that the shareholder is not subject to backup withholding or is an "exempt
recipient" (such as a corporation).

         |X|  Tax Effects of Redemptions of Shares. If a shareholder redeems all or a portion of his/her shares,
                                                                                             -
the shareholder will recognize a gain or loss on the redeemed shares in an amount equal to the difference between
the proceeds of the redeemed shares and the shareholder's adjusted tax basis in the shares.  All or a portion of
any loss recognized in that manner may be disallowed if the shareholder purchases other shares of the Fund within
30 days before or after the redemption.

         In general, any gain or loss arising from the redemption of shares of the Fund will be considered
capital gain or loss, if the shares were held as a capital asset. It will be long-term capital gain or loss if
the shares were held for more than one year.  However, any capital loss arising from the redemption of shares
held for six months or less will be treated as a long-term capital loss to the extent of the amount of capital
gain dividends received on those shares. Special holding period rules under the Internal Revenue Code apply in
this case to determine the holding period of shares and there are limits on the deductibility of capital losses
in any year.

         |X|  Foreign Shareholders.  Taxation of a shareholder who under United States law is a nonresident alien
individual, foreign trust or estate, foreign corporation, or foreign partnership depends on whether the
shareholder's income from the Fund is effectively connected with a U.S. trade or business carried on by such
shareholder.

         If the income from the Fund is not effectively connected with a U.S. trade or business carried on by a
foreign shareholder, ordinary income dividends paid to such foreign shareholder will be subject to U.S.
withholding tax. The rate of the tax depends on a number of factors. If the income from the Fund is effectively
connected with a U.S. trade or business carried on by a foreign shareholder, then ordinary income dividends,
capital gain dividends, and any gains realized upon the sale of shares of the Fund will be subject to U.S.
federal income tax at the rates applicable to U.S. citizens or domestic corporations.

         In the case of a foreign non-corporate shareholder, the Fund may be required to withhold U.S. federal
income tax at a rate of 31% on distributions that are otherwise exempt from withholding tax (or taxable at a
reduced treaty rate) unless the shareholder furnishes the Fund with proper notification of their foreign status.

         The tax consequences to a foreign shareholder entitled to claim the benefits of an applicable tax treaty
may be different from those described herein.  Foreign shareholders are urged to consult their own tax advisors
with respect to the particular tax consequences to them of an investment in the Fund, including the applicability
of foreign taxes.

Dividend  Reinvestment  in Another  Fund.  Shareholders  of the Fund may elect to  reinvest  all  dividends  and/or
capital  gains  distributions  in shares of the same  class of any of the other  Oppenheimer  funds  listed  above.
Reinvestment  will be made  without  sales  charge  at the net  asset  value  per  share in  effect at the close of
business on the payable date of the dividend or  distribution.  To elect this option,  the shareholder  must notify
the Transfer Agent in writing and must have an existing  account in the fund selected for  reinvestment.  Otherwise
the shareholder  first must obtain a prospectus for that fund and an application  from the Distributor to establish
an account.  Dividends and/or  distributions from shares of certain other Oppenheimer funds (other than Oppenheimer
Cash Reserves) may be invested in shares of this Fund on the same basis.

Additional Information About the Fund

The Distributor.  The Fund's shares are sold through dealers,  brokers and other financial institutions that have a
sales  agreement  with  OppenheimerFunds  Distributor,  Inc., a  subsidiary  of the Manager that acts as the Fund's
Distributor.  The Distributor also distributes  shares of the other  Oppenheimer funds and is  sub-distributor  for
funds managed by a subsidiary of the Manager.

The Transfer Agent.  OppenheimerFunds  Services,  the Fund's  Transfer  Agent, is a division of the Manager.  It is
responsible for maintaining the Fund's  shareholder  registry and shareholder  accounting  records,  and for paying
dividends and distributions to shareholders.  It also handles shareholder  servicing and administrative  functions.
It serves as the Transfer  Agent for an annual per account  fee. It also acts as  shareholder  servicing  agent for
the other  Oppenheimer  funds.  Shareholders  should direct inquiries about their accounts to the Transfer Agent at
the address and toll-free numbers shown on the back cover.

The  Custodian.  The Bank of New York is the  custodian  of the Fund's  assets.  The  custodian's  responsibilities
include  safeguarding and controlling the Fund's portfolio  securities and handling the delivery of such securities
to and from the Fund.  It will be the practice of the Fund to deal with the custodian in a manner  uninfluenced  by
any banking  relationship  the  custodian  may have with the Manager and its  affiliates.  The Fund's cash balances
with the custodian in excess of $100,000 are not protected by federal deposit  insurance.  Those uninsured balances
at times may be substantial.

Independent  Auditors.  KPMG LLP are the  independent  auditors  of the  Fund.  They  audit  the  Fund's  financial
statements and perform other related audit  services.  They also act as auditors for certain other funds advised by
the Manager and its affiliates.



INDEPENDENT AUDITORS' REPORT
--------------------------------------------------------------------------------


THE BOARD OF TRUSTEES AND SHAREHOLDERS OF
OPPENHEIMER EMERGING GROWTH FUND:

We have audited the accompanying statement of assets and liabilities of
Oppenheimer Emerging Growth Fund, including the statement of investments, as of
October 31, 2001, and the related statement of operations, the statements of
changes in net assets, and the financial highlights for the one-year period from
November 1, 2000 (inception of offering) to October 31, 2001. These financial
statements and financial highlights are the responsibility of the Fund's
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audit.

     We conducted our audit in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our procedures included confirmation of
securities owned as of October 31, 2001, by correspondence with the custodian
and brokers or by other appropriate auditing procedures where replies from
brokers were not received. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.

     In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
Oppenheimer Emerging Growth Fund as of October 31, 2001, the results of its
operations, the changes in its net assets and the financial highlights for the
one-year period from November 1, 2000 (inception of offering) to October 31,
2001, in conformity with accounting principles generally accepted in the United
States of America.



/s/ KPMG LLP
------------
KPMG LLP

Denver, Colorado
November 21, 2001




STATEMENT OF INVESTMENTS OCTOBER 31, 2001

                                                         MARKET VALUE
                                                 SHARES    SEE NOTE 1
=========================================================================
COMMON STOCKS--88.5%
-------------------------------------------------------------------------
 BASIC MATERIALS--1.0%
-------------------------------------------------------------------------
 CHEMICALS--1.0%
 Cabot Microelectronics Corp.(1)                  1,800   $ 119,304
-------------------------------------------------------------------------
 Visionics Corp.(1)                               9,000     142,740
                                                          ---------------
                                                            262,044


-------------------------------------------------------------------------
 CAPITAL GOODS--3.9%
-------------------------------------------------------------------------
 INDUSTRIAL SERVICES--2.0%
 Corporate Executive Board Co.(1)                 4,500     137,565
-------------------------------------------------------------------------
 Right Management Consultants, Inc.(1)            6,000     208,620
-------------------------------------------------------------------------
 Stericycle, Inc.(1)                              4,000     192,000
                                                          ---------------
                                                            538,185


-------------------------------------------------------------------------
 MANUFACTURING--1.9%
 AstroPower, Inc.(1)                              2,700     103,977
-------------------------------------------------------------------------
 Global Sports, Inc.(1)                          25,300     399,740
                                                          ---------------
                                                            503,717


-------------------------------------------------------------------------
 COMMUNICATION SERVICES--2.7%
-------------------------------------------------------------------------
 TELECOMMUNICATIONS: LONG DISTANCE--0.7%
 Intrado, Inc.(1)                                 7,000     190,050
-------------------------------------------------------------------------
 TELECOMMUNICATIONS: WIRELESS--2.0%
 AirGate PCS, Inc.(1)                             4,600     236,716
-------------------------------------------------------------------------
 UbiquiTel, Inc.(1)                              32,000     292,800
                                                          ---------------
                                                            529,516


-------------------------------------------------------------------------
 CONSUMER CYCLICALS--12.2%
-------------------------------------------------------------------------
 AUTOS & HOUSING--0.6%
 Recoton Corp.(1)                                13,000     167,050
-------------------------------------------------------------------------
 CONSUMER SERVICES--2.3%
 AmeriPath, Inc.(1)                              22,000     618,420
-------------------------------------------------------------------------
 LEISURE & ENTERTAINMENT--5.7%
 Action Performance Cos., Inc.(1)                20,000     524,200
-------------------------------------------------------------------------
 Activision, Inc.(1)                             13,000     469,950
-------------------------------------------------------------------------
 Alliance Gaming Corp.(1)                        16,000     316,800
-------------------------------------------------------------------------
 Penn National Gaming, Inc.(1)                   11,000     225,280
                                                         ----------------
                                                          1,536,230


-------------------------------------------------------------------------
 RETAIL: SPECIALTY--3.6%
 Electronics Boutique Holdings Corp.(1)          15,200     471,960
-------------------------------------------------------------------------
 Fred's, Inc.                                     7,500     245,625
-------------------------------------------------------------------------
 Movie Gallery, Inc.(1)                           9,000     247,950
                                                         ----------------
                                                            965,535



                     12 OPPENHEIMER EMERGING GROWTH FUND



                                                         MARKET VALUE
                                                 SHARES    SEE NOTE 1
-------------------------------------------------------------------------
 CONSUMER STAPLES--5.7%
-------------------------------------------------------------------------
 EDUCATION--3.8%
 Career Education Corp.(1)                       19,000     $ 495,330
-------------------------------------------------------------------------
 Corinthian Colleges, Inc.(1)                     3,800       138,814
-------------------------------------------------------------------------
 PLATO Learning, Inc.1                           14,066       199,737
-------------------------------------------------------------------------
 SmartForce plc, Sponsored ADR(1)                11,600       190,936
                                                          ---------------
                                                            1,024,817


-------------------------------------------------------------------------
 ENTERTAINMENT--1.9%
 THQ, Inc.(1)                                    10,500       522,900
-------------------------------------------------------------------------
 FINANCIAL--4.3%
-------------------------------------------------------------------------
 BANKS--0.8%
 Boston Private Financial Holdings, Inc.         11,000       223,410
-------------------------------------------------------------------------
 DIVERSIFIED FINANCIAL--2.7%
 American Capital Strategies Ltd.                14,500       359,165
-------------------------------------------------------------------------
 Doral Financial Corp.                           10,900       380,083
                                                          ---------------
                                                              739,248


-------------------------------------------------------------------------
 INSURANCE--0.8%
 HCC Insurance Holdings, Inc.                     8,000       219,920
-------------------------------------------------------------------------
 HEALTHCARE--21.5%
-------------------------------------------------------------------------
 HEALTHCARE/DRUGS--14.5%
 Antigenics, Inc.(1)                              8,000       116,880
-------------------------------------------------------------------------
 CIMA Labs, Inc.(1)                               8,000       432,400
-------------------------------------------------------------------------
 CryoLife, Inc.(1)                                5,900       193,520
-------------------------------------------------------------------------
 First Horizon Pharmaceutical Corp.(1)           14,250       375,487
-------------------------------------------------------------------------
 Impax Laboratories, Inc.(1)                     16,000       145,120
-------------------------------------------------------------------------
 Integra LifeSciences Holdings Corp.(1)          14,900       438,060
-------------------------------------------------------------------------
 Merit Medical Systems, Inc.(1)                  11,000       168,190
-------------------------------------------------------------------------
 Myriad Genetics, Inc.(1)                         8,200       377,200
-------------------------------------------------------------------------
 Pharmaceutical Resources, Inc.(1)                8,400       288,120
-------------------------------------------------------------------------
 Pharmaceutical Resources, Inc.(1),(2)            7,100       231,354
-------------------------------------------------------------------------
 Serologicals Corp.(1)                           10,700       188,855
-------------------------------------------------------------------------
 Sicor, Inc.(1)                                  16,600       311,250
-------------------------------------------------------------------------
 Taro Pharmaceutical Industries Ltd.(1)          11,400       479,940
-------------------------------------------------------------------------
 Therasense, Inc.(1)                              5,800       149,640
                                                           --------------
                                                            3,896,016


-------------------------------------------------------------------------
 HEALTHCARE/SUPPLIES & SERVICES--7.0%
 Accredo Health, Inc.(1)                          3,750       127,950
-------------------------------------------------------------------------
 American Healthways, Inc.(1)                     7,000       284,060
-------------------------------------------------------------------------
 Bioject Medical Technologies, Inc.(1)           18,400       186,024
-------------------------------------------------------------------------
 D&K Healthcare Resources, Inc.                   3,000       168,000
-------------------------------------------------------------------------
 DIANON Systems, Inc.(1)                          7,000       322,700








                     13 OPPENHEIMER EMERGING GROWTH FUND



STATEMENT OF INVESTMENTS CONTINUED




                                                         MARKET VALUE
                                                 SHARES    SEE NOTE 1
-------------------------------------------------------------------------
 HEALTHCARE/SUPPLIES & SERVICES CONTINUED
 Med-Design Corp. (The)(1)                       10,000     $ 200,500
-------------------------------------------------------------------------
 MedAmicus, Inc.(1)                              17,000       256,700
-------------------------------------------------------------------------
 Pharmaceutical Product Development, Inc.(1)      5,000       133,350
-------------------------------------------------------------------------
 SRI/Surgical Express, Inc.(1)                    8,000       196,640
                                                           --------------
                                                            1,875,924


-------------------------------------------------------------------------
 TECHNOLOGY--37.2%
-------------------------------------------------------------------------
 COMPUTER HARDWARE--2.3%
 Microsemi Corp.(1)                                13,900     486,500
-------------------------------------------------------------------------
 Read-Rite Corp.(1)                                25,600     127,488
                                                            -------------
                                                              613,988


-------------------------------------------------------------------------
 COMPUTER SERVICES--6.1%
 ChipPAC, Inc.(1)                                  40,000     199,600
-------------------------------------------------------------------------
 Emulex Corp.(1)                                   10,000     236,800
-------------------------------------------------------------------------
 Overture Services, Inc.(1)                        12,100     318,835
-------------------------------------------------------------------------
 SkillSoft Corp.(1)                                10,200     234,090
-------------------------------------------------------------------------
 Stellent, Inc.(1)                                 18,300     375,150
-------------------------------------------------------------------------
 WebEx Communications, Inc.(1)                      9,000     277,200
                                                           --------------
                                                            1,641,675


-------------------------------------------------------------------------
 COMPUTER SOFTWARE--8.3%
 Catapult Communications Corp.(1)                 5,000       113,250
-------------------------------------------------------------------------
 Informatica Corp.(1)                            24,000       222,480
-------------------------------------------------------------------------
 Manhattan Associates, Inc.(1)                   10,000       300,400
-------------------------------------------------------------------------
 McData Corp., Cl. A(1)                          13,000       191,230
-------------------------------------------------------------------------
 NetIQ Corp.(1)                                   9,000       253,350
-------------------------------------------------------------------------
 Numerical Technologies, Inc.(1)                  5,000       123,400
-------------------------------------------------------------------------
 PEC Solutions, Inc.(1)                          12,000       301,200
-------------------------------------------------------------------------
 Precise Software Solutions Ltd.(1)              28,300       540,813
-------------------------------------------------------------------------
 SonicWALL, Inc.(1)                              13,000       184,600
                                                           --------------
                                                            2,230,723


-------------------------------------------------------------------------
 COMMUNICATIONS EQUIPMENT--2.8%
 ECtel Ltd.(1)                                   15,000       207,450
-------------------------------------------------------------------------
 Finisar Corp.(1)                                27,000       211,140
-------------------------------------------------------------------------
 Powerwave Technologies, Inc.(1)                 13,000       198,900
-------------------------------------------------------------------------
 Riverstone Networks, Inc.(1)                    10,000       127,200
                                                           --------------
                                                              744,690



                     14 OPPENHEIMER EMERGING GROWTH FUND




                                                         MARKET VALUE
                                                 SHARES    SEE NOTE 1
-------------------------------------------------------------------------
 ELECTRONICS--17.7%
 Aeroflex, Inc.(1)                               16,000   $   234,720
-------------------------------------------------------------------------
 Alpha Industries, Inc.(1)                       15,300       356,184
-------------------------------------------------------------------------
 ASM International NV(1)                         19,000       302,290
-------------------------------------------------------------------------
 ATI Technologies, Inc.(1)                       16,000       132,480
-------------------------------------------------------------------------
 EDO Corp.                                       12,000       323,400
-------------------------------------------------------------------------
 Exar Corp.(1)                                   12,000       270,480
-------------------------------------------------------------------------
 Genesis Microchip, Inc.(1)                      11,500       531,415
-------------------------------------------------------------------------
 InterCept Group, Inc. (The)(1)                  13,500       481,950
-------------------------------------------------------------------------
 Kulicke & Soffa Industries, Inc.(1)             12,000       182,040
-------------------------------------------------------------------------
 O2Micro International Ltd.(1)                   31,200       448,968
-------------------------------------------------------------------------
 PDF Solutions, Inc.(1)                          12,000       199,800
-------------------------------------------------------------------------
 Pericom Semiconductor Corp.(1)                  12,700       170,815
-------------------------------------------------------------------------
 QLogic Corp.(1)                                  4,000       157,400
-------------------------------------------------------------------------
 SBS Technologies, Inc.(1)                       29,000       445,150
-------------------------------------------------------------------------
 TALX Corp.                                      18,800       319,600
-------------------------------------------------------------------------
 Zoran Corp.(1)                                   8,000       202,320
                                                          ---------------
                                                            4,759,012
                                                          ---------------
 Total Common Stocks (Cost $22,103,434)                    23,803,070

                                              Principal
                                                 Amount

=========================================================================
 REPURCHASE AGREEMENTS--13.6%

 Repurchase agreement with Banque Nationale
 De Paris, 2.57%, dated 10/31/01, to
 be repurchased at $3,653,261 on 11/1/01,
 collateralized by U.S. Treasury Bonds,
 6.25%-13.25%, 11/15/03-8/15/23,
 with a value of $3,769,466 (Cost $3,653,000)  3,653,000     3,653,000
-------------------------------------------------------------------------
 TOTAL INVESTMENTS, AT VALUE (COST $25,756,434)   102.1%    27,456,070
-------------------------------------------------------------------------
 LIABILITIES IN EXCESS OF OTHER ASSETS             (2.1)      (576,691)
                                                -------------------------
 NET ASSETS                                       100.0%   $26,879,379
                                                =========================




FOOTNOTES TO STATEMENT OF INVESTMENTS

1. Non-income-producing security.

2. Identifies issues considered to be illiquid or restricted--See Note 5 of
   Notes to Financial Statements.

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.




                     15 OPPENHEIMER EMERGING GROWTH FUND




STATEMENT OF ASSETS AND LIABILITIES OCTOBER 31, 2001



=======================================================================================

ASSETS
 Investments, at value (including repurchase agreements of $3,653,000)
 (cost $25,756,434)--see accompanying statement                          $ 27,456,070
---------------------------------------------------------------------------------------
 Receivables and other assets:
 Investments sold                                                             559,765
 Shares of beneficial interest sold                                           276,493
 Interest and dividends                                                           646
 Other                                                                            318
                                                                         --------------
 Total assets                                                              28,293,292



=======================================================================================
 LIABILITIES

 Bank overdraft                                                               153,843
---------------------------------------------------------------------------------------
 Payables and other liabilities:
 Investments purchased                                                      1,225,268
 Shares of beneficial interest redeemed                                        15,228
 Shareholder reports                                                              455
 Trustees' compensation                                                           343
 Transfer and shareholder servicing agent fees                                    162
 Other                                                                         18,614
                                                                         --------------
 Total liabilities                                                          1,413,913



=======================================================================================
 NET ASSETS                                                               $26,879,379




=======================================================================================
 COMPOSITION OF NET ASSETS
 Paid-in capital                                                          $29,995,417
---------------------------------------------------------------------------------------
 Undistributed (overdistributed) net investment income                           (411)
---------------------------------------------------------------------------------------
 Accumulated net realized gain (loss) on investment transactions           (4,815,263)
---------------------------------------------------------------------------------------
 Net unrealized appreciation (depreciation) on investments                  1,699,636
                                                                         --------------
 NET ASSETS                                                               $26,879,379
                                                                         ==============



                     16 OPPENHEIMER EMERGING GROWTH FUND





 NET ASSET VALUE PER SHARE
===========================================================================================

 CLASS A SHARES:
 Net asset value and redemption price per share (based on net assets of
 $20,391,565 and 2,412,384 shares of beneficial interest outstanding)                $8.45
 Maximum offering price per share (net asset value plus sales charge of 5.75% of
 offering price)                                                                     $8.97
-------------------------------------------------------------------------------------------
 Class B Shares:
 Net asset value, redemption price (excludes applicable contingent deferred
 sales charge) and offering price per share (based on net assets of $3,865,782
 and 461,382 shares of beneficial interest outstanding)                              $8.38
-------------------------------------------------------------------------------------------
 Class C Shares:
 Net asset value, redemption price (excludes applicable contingent deferred
 sales charge) and offering price per share (based on net assets of $2,356,454
 and 280,938 shares of beneficial interest outstanding)                              $8.39
-------------------------------------------------------------------------------------------
 Class N Shares:
 Net asset value, redemption price (excludes applicable contingent deferred
 sales charge) and offering price per share (based on net assets of $33,722 and
 4,001 shares of beneficial interest outstanding)                                    $8.43
-------------------------------------------------------------------------------------------
 Class Y Shares:
 Net asset value, redemption price and offering price per share (based on net
 assets of $231,856 and 27,375 shares of beneficial interest outstanding)            $8.47






SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.





                     17 OPPENHEIMER EMERGING GROWTH FUND





STATEMENT OF OPERATIONS
-------------------------------------------------------------------------------

For the Period from November 1, 2000 (inception of offering) to October 31, 2001


=======================================================================================================
INVESTMENT INCOME

 Interest                                                                                  $   161,348
-------------------------------------------------------------------------------------------------------
 Dividends (net of foreign withholding taxes of $273)                                           35,509
                                                                                           ------------
 Total income                                                                                  196,857

=======================================================================================================
 EXPENSES

 Management fees                                                                               201,820
-------------------------------------------------------------------------------------------------------
 Distribution and service plan fees:
 Class A                                                                                        24,226
 Class B                                                                                        22,449
 Class C                                                                                        10,157
 Class N                                                                                            56
-------------------------------------------------------------------------------------------------------
 Transfer and shareholder servicing agent fees:
 Class A                                                                                        29,552
 Class B                                                                                         4,537
 Class C                                                                                         2,079
 Class N                                                                                            26
 Class Y                                                                                           779
-------------------------------------------------------------------------------------------------------
 Legal, auditing and other professional fees                                                    21,545
-------------------------------------------------------------------------------------------------------
 Shareholder reports                                                                            16,499
-------------------------------------------------------------------------------------------------------
 Trustees' compensation                                                                            989
-------------------------------------------------------------------------------------------------------
 Custodian fees                                                                                    901
-------------------------------------------------------------------------------------------------------
 Other                                                                                          17,517
                                                                                           ------------
 Total expenses                                                                                353,132
 Less reduction to custodian expenses                                                             (901)
 Less voluntary waiver of transfer and shareholder servicing agent fees--Class Y                  (776)
                                                                                           ------------
 Net expenses                                                                                  351,455

=======================================================================================================
 NET INVESTMENT LOSS                                                                          (154,598)

=======================================================================================================
 REALIZED AND UNREALIZED GAIN (LOSS)

 Net realized gain (loss) on investments                                                    (4,815,263)
-------------------------------------------------------------------------------------------------------
 Net change in unrealized appreciation (depreciation) on investments                         1,699,636
                                                                                           ------------
 Net realized and unrealized gain (loss)                                                    (3,115,627)


=======================================================================================================
 NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS                                      $(3,270,225)
                                                                                           ============



SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.






                      18 OPPENHEIMER EMERGING GROWTH FUND






STATEMENT OF CHANGES IN NET ASSETS
--------------------------------------------------------------------------------



YEAR ENDED OCTOBER 31,                                                                          2001(1)
=======================================================================================================

 OPERATIONS

 Net investment income (loss)                                                              $  (154,598)
-------------------------------------------------------------------------------------------------------
 Net realized gain (loss)                                                                   (4,815,263)
-------------------------------------------------------------------------------------------------------
 Net change in unrealized appreciation (depreciation)                                        1,699,636
                                                                                           ------------
 Net increase (decrease) in net assets resulting from operations                            (3,270,225)

=======================================================================================================
 DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS

 Dividends from net investment income:
 Class A                                                                                       (43,026)
 Class B                                                                                        (2,238)
 Class C                                                                                          (919)
 Class N                                                                                            --
 Class Y                                                                                            (4)

=======================================================================================================
 Beneficial Interest Transactions

 Net increase (decrease) in net assets resulting from
 beneficial interest transactions:
 Class A                                                                                    23,174,455
 Class B                                                                                     4,127,837
 Class C                                                                                     2,516,150
 Class N                                                                                        35,869
 Class Y                                                                                       238,480

=======================================================================================================
 Net Assets

 Total increase                                                                             26,776,379(1)
-------------------------------------------------------------------------------------------------------
 Beginning of period                                                                           103,000(2)
                                                                                           ------------

 End of period [including undistributed (overdistributed) net
 investment income of $(411) for the year ended October 31, 2001]                          $26,879,379
                                                                                           ------------



1. For the period from November 1, 2000 (inception of offering) to
October 31, 2001.

2. Reflects the value of the Manager's initial seed money investment at
October 18, 2000.

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.




                      19 OPPENHEIMER EMERGING GROWTH FUND


FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------



                                                                  CLASS A      CLASS B     CLASS C      CLASS N       CLASS Y
                                                                     YEAR         YEAR        YEAR         YEAR          YEAR
                                                                    ENDED        ENDED       ENDED        ENDED         ENDED
                                                                  OCT. 31,     OCT. 31,    OCT. 31,     OCT. 31,      OCT. 31,
                                                                   2001(1)      2001(1)     2001(1)      2001(2)       2001(1)
===============================================================================================================================

 PER SHARE OPERATING DATA

 Net asset value, beginning of period                              $10.00       $10.00       $10.00        $8.28        $10.00
--------------------------------------------------------------------------------------------------------------------------------
 Income (loss) from investment operations:
 Net investment income (loss)                                        (.03)        (.07)        (.04)        (.05)          .02
 Net realized and unrealized gain (loss)                            (1.49)       (1.52)       (1.54)         .20         (1.51)
                                                                 ---------------------------------------------------------------
 Total income (loss) from
 investment operations                                              (1.52)       (1.59)       (1.58)         .15         (1.49)
--------------------------------------------------------------------------------------------------------------------------------
 Dividends and/or distributions to shareholders:
 Dividends from net investment income                                (.03)        (.03)        (.03)          --          (.04)
--------------------------------------------------------------------------------------------------------------------------------
 Net asset value, end of period                                     $8.45        $8.38        $8.39        $8.43         $8.47
                                                                 ===============================================================

================================================================================================================================
 TOTAL RETURN, AT NET ASSET VALUE(3)                               (15.22)%     (15.96)%     (15.88)%       1.81%       (14.99)%


================================================================================================================================
 RATIOS/SUPPLEMENTAL DATA

 NET ASSETS, END OF PERIOD (IN THOUSANDS)                         $20,392       $3,866       $2,356          $34          $232
--------------------------------------------------------------------------------------------------------------------------------
 Average net assets (in thousands)                                $16,941       $2,256       $1,022          $16          $ 30
--------------------------------------------------------------------------------------------------------------------------------
 Ratios to average net assets:(4)
 Net investment loss                                                (0.57)%      (1.78)%     (1.76)%       (1.69)%       (0.97)%
 Expenses                                                            1.58%        2.47%       2.46%         2.03%         3.87%
 Expenses, net of voluntary waiver of
 transfer agent fees--Class Y                                         N/A          N/A         N/A           N/A          1.28%
--------------------------------------------------------------------------------------------------------------------------------
 Portfolio turnover rate                                               214%        214%        214%          214%          214%


1. For the period from November 1, 2000 (inception of offering) to October 31,
2001.

2. For the period from March 1, 2001 (inception of offering) to October 31,
2001.

3. Assumes a $1,000 hypothetical initial investment on the business day before
the first day of the fiscal period (or inception of offering), with all
dividends and distributions reinvested in additional shares on the reinvestment
date, and redemption at the net asset value calculated on the last business day
of the fiscal period. Sales charges are not reflected in the total returns.
Total returns are not annualized for periods of less than one full year.

4. Annualized for periods of less than one full year.

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.

                      20 OPPENHEIMER EMERGING GROWTH FUND




NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

================================================================================
1. SIGNIFICANT ACCOUNTING POLICIES

Oppenheimer Emerging Growth Fund (the Fund) is an open-end management investment
company registered under the Investment Company Act of 1940, as amended. The
Fund's investment objective is to seek capital appreciation. The Fund's
investment advisor is OppenheimerFunds, Inc. (the Manager).

  The Fund offers Class A, Class B, Class C, Class N and Class Y shares. Class A
shares are sold at their offering price, which is normally net asset value plus
a front-end sales charge. Class B, Class C and Class N shares are sold without a
front-end sales charge but may be subject to a contingent deferred sales charge
(CDSC). Class N shares are sold only through retirement plans. Retirement plans
that offer Class N shares may impose charges on those accounts. Class Y shares
are sold to certain institutional investors without either a front-end sales
charge or a CDSC. All classes of shares have identical rights to earnings,
assets and voting privileges, except that each class has its own expenses
directly attributable to that class and exclusive voting rights with respect to
matters affecting that class. Classes A, B, C and N have separate distribution
and/or service plans. No such plan has been adopted for Class Y shares. Class B
shares will automatically convert to Class A shares six years after the date of
purchase. The following is a summary of significant accounting policies
consistently followed by the Fund.

--------------------------------------------------------------------------------
SECURITIES VALUATION. Securities listed or traded on National Stock Exchanges or
other domestic or foreign exchanges are valued based on the last sale price of
the security traded on that exchange prior to the time when the Fund's assets
are valued. In the absence of a sale, the security is valued at the last sale
price on the prior trading day, if it is within the spread of the closing bid
and asked prices, and if not, at the closing bid price. Securities (including
restricted securities) for which quotations are not readily available are valued
primarily using dealer-supplied valuations, a portfolio pricing service
authorized by the Board of Trustees, or at their fair value. Fair value is
determined in good faith under consistently applied procedures under the
supervision of the Board of Trustees. Short-term "money market type" debt
securities with remaining maturities of sixty days or less are valued at
amortized cost (which approximates market value).

--------------------------------------------------------------------------------
REPURCHASE AGREEMENTS. The Fund requires its custodian bank to take possession,
to have legally segregated in the Federal Reserve Book Entry System or to have
segregated within the custodian's vault, all securities held as collateral for
repurchase agreements. The market value of the underlying securities is required
to be at least 102% of the resale price at the time of purchase. If the seller
of the agreement defaults and the value of the collateral declines, or if the
seller enters an insolvency proceeding, realization of the value of the
collateral by the Fund may be delayed or limited.

                       21 OPPENHEIMER EMERGING GROWTH FUND



NOTES TO FINANCIAL STATEMENTS Continued
--------------------------------------------------------------------------------

================================================================================
1. SIGNIFICANT ACCOUNTING POLICIES Continued

ALLOCATION OF INCOME, EXPENSES, GAINS AND LOSSES. Income, expenses (other than
those attributable to a specific class), gains and losses are allocated daily to
each class of shares based upon the relative proportion of net assets
represented by such class. Operating expen-ses directly attributable to a
specific class are charged against the operations of that class.

--------------------------------------------------------------------------------
FEDERAL TAXES. The Fund intends to continue to comply with provisions of the
Internal Revenue Code applicable to regulated investment companies and to
distribute all of its taxable income, including any net realized gain on
investments not offset by loss carryovers, to shareholders. Therefore, no
federal income or excise tax provision is required.

As of October 31, 2001, the Fund had available for federal income tax purposes
an unused capital loss carryover as follows:

      EXPIRING
      ------------------------------
         2009             $4,433,941

--------------------------------------------------------------------------------
TRUSTEES' COMPENSATION. The Fund has adopted an unfunded retirement plan for the
Fund's independent Board of Trustees. Benefits are based on years of service and
fees paid to each trustee during the years of service. During the year ended
October 31, 2001, the Fund's projected benefit obligations were increased by
$411, resulting in an accumulated liability of $411 as of October 31, 2001.

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

--------------------------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions to
shareholders, which are determined in accordance with income tax regulations,
are recorded on the ex-dividend date.

--------------------------------------------------------------------------------
CLASSIFICATION OF DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. Net investment
income (loss) and net realized gain (loss) may differ for financial statement
and tax purposes. The character of dividends and distributions made during the
fiscal year from net investment income or net realized gains may differ from
their ultimate characterization for federal income tax purposes. Also, due to
timing of dividends and distributions, the fiscal year in which amounts are
distributed may differ from the fiscal year in which the income or realized gain
was recorded by the Fund.


                       22 OPPENHEIMER EMERGING GROWTH FUND




  The Fund adjusts the classification of distributions to shareholders to
reflect the differences between financial statement amounts and distributions
determined in accordance with income tax regulations. Accordingly, during the
year ended October 31, 2001, amounts have been reclassified to reflect a
decrease in paid-in capital of $200,374. Overdistributed net investment income
was decreased by the same amount. Net assets of the Fund were unaffected by the
reclassifications.

--------------------------------------------------------------------------------
INVESTMENT INCOME. Dividend income is recorded on the ex-dividend date or upon
ex-dividend notification in the case of certain foreign dividends where the
ex-dividend date may have passed. Non-cash dividends included in dividend
income, if any, are recorded at the fair market value of the securities
received. Interest income, which includes accretion of discount and amortization
of premium, is accrued as earned.

--------------------------------------------------------------------------------
SECURITY TRANSACTIONS. Security transactions are accounted for as of trade date.
Gains and losses on securities sold are determined on the basis of identified
cost.

--------------------------------------------------------------------------------
OTHER. The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of income and
expenses during the reporting period. Actual results could differ from those
estimates.


                       23 OPPENHEIMER EMERGING GROWTH FUND




NOTES TO FINANCIAL STATEMENTS Continued
--------------------------------------------------------------------------------

================================================================================
2. SHARES OF BENEFICIAL INTEREST

The Fund has authorized an unlimited number of no par value shares of beneficial
interest of each class. Transactions in shares of beneficial interest were as
follows:



                                                                       YEAR ENDED OCTOBER 31, 2001(1)
                                                                           SHARES           AMOUNT
---------------------------------------------------------------------------------------------------------------

 CLASS A
 Sold                                                                    3,140,502         $29,588,885
 Dividends and/or distributions reinvested                                   1,123              10,817
 Redeemed                                                                 (739,241)         (6,425,247)
                                                                       ---------------------------------
 Net increase (decrease)                                                 2,402,384         $23,174,455
                                                                       =================================

--------------------------------------------------------------------------------------------------------
 CLASS B
 Sold                                                                     673,177          $ 5,993,055
 Dividends and/or distributions reinvested                                    229                2,205
 Redeemed                                                                (212,124)          (1,867,423)
                                                                       ---------------------------------
 Net increase (decrease)                                                  461,282          $ 4,127,837
                                                                       =================================

--------------------------------------------------------------------------------------------------------
 CLASS C
 Sold                                                                     316,845          $ 2,842,900
 Dividends and/or distributions reinvested                                     94                  910
 Redeemed                                                                 (36,101)            (327,660)
                                                                       ---------------------------------
 Net increase (decrease)                                                  280,838          $ 2,516,150
                                                                       =================================

--------------------------------------------------------------------------------------------------------
 CLASS N
 Sold                                                                       4,002          $    35,879
 Dividends and/or distributions reinvested                                     --                   --
 Redeemed                                                                      (1)                 (10)
                                                                       ---------------------------------
 Net increase (decrease)                                                    4,001          $    35,869
                                                                       =================================

--------------------------------------------------------------------------------------------------------
 CLASS Y
 Sold                                                                      27,300          $   238,662
 Dividends and/or distributions reinvested                                     --                   --
 Redeemed                                                                     (25)                (182)
                                                                       ---------------------------------
 Net increase (decrease)                                                   27,275          $   238,480
                                                                       =================================



1. For the 12-month period November 1, 2000 (inception of offering) to
October 31, 2001, for Class A, B, C and Y shares and for the period from March
1, 2001 (inception of offering) to October 31, 2001, for Class N shares.



                       24 OPPENHEIMER EMERGING GROWTH FUND





================================================================================
3. PURCHASES AND SALES OF SECURITIES

The aggregate cost of purchases and proceeds from sales of securities, other
than short-term obligations, for the year ended October 31, 2001, were
$66,830,864 and $39,912,167, respectively.

As of October 31, 2001, unrealized appreciation (depreciation) based on cost of
securities for federal income tax purposes of $26,137,756 was:

          Gross unrealized appreciation                   $ 2,975,944

          Gross unrealized depreciation                    (1,657,630)
                                                          -----------
          Net unrealized appreciation (depreciation)      $ 1,318,314
                                                          ===========
================================================================================
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES

MANAGEMENT FEES. Management fees paid to the Manager were in accordance with the
investment advisory agreement with the Fund which provides for a fee at an
annual rate of 1.00% of the first $500 million of average annual net assets,
0.90% of the next $500 million and 0.85% of average annual net assets over $1
billion. The Fund's management fee for the year ended October 31, 2001 was an
annualized rate of 1.00%.

--------------------------------------------------------------------------------
TRANSFER AGENT FEES. OppenheimerFunds Services (OFS), a division of the Manager,
acts as the transfer and shareholder servicing agent for the Fund. The Fund pays
OFS an agreed upon per account fee. Effective January 1, 2001, OFS has
voluntarily undertaken to waive a portion of its transfer agent fee for Classes
A, B, C, N and Y shares. This voluntary waiver of expenses limits transfer agent
fees to 0.35% of average net assets for Classes A, B, C and N shares effective
October 1, 2001 and to 0.25% of average net assets for Class Y shares effective
January 1, 2001.

--------------------------------------------------------------------------------
DISTRIBUTION AND SERVICE PLAN FEES. Under its General Distributor's Agreement
with the Manager, the Distributor acts as the Fund's principal underwriter in
the continuous public offering of the different classes of shares of the Fund.

The compensation paid to (or retained by) the Distributor from the sale of
shares or on the redemption of shares is shown in the table below for the period
indicated.



                        AGGREGATE            CLASS A         COMMISSIONS        COMMISSIONS        COMMISSIONS         COMMISSIONS
                        FRONT-END          FRONT-END          ON CLASS A         ON CLASS B         ON CLASS C          ON CLASS N
                    SALES CHARGES      SALES CHARGES              SHARES             SHARES             SHARES              SHARES
                       ON CLASS A        RETAINED BY         ADVANCED BY        ADVANCED BY        ADVANCED BY         ADVANCED BY
 YEAR ENDED                SHARES        DISTRIBUTOR       DISTRIBUTOR(1)     DISTRIBUTOR(1)     DISTRIBUTOR(1)     DISTRIBUTOR(1)
-----------------------------------------------------------------------------------------------------------------------------------

 October 31, 2001        $114,339            $31,486               $2,636           $85,427             $13,024               $219


1. The Distributor advances commission payments to dealers for certain sales of
Class A shares and for sales of Class B, Class C and Class N shares from its own
resources at the time of sale.



                                 CLASS A                 CLASS B                  CLASS C                CLASS N
                     CONTINGENT DEFERRED     CONTINGENT DEFERRED      CONTINGENT DEFERRED    CONTINGENT DEFERRED
                           SALES CHARGES           SALES CHARGES            SALES CHARGES           SALES CHARGES
                             RETAINED BY             RETAINED BY              RETAINED BY             RETAINED BY
 YEAR ENDED                  DISTRIBUTOR             DISTRIBUTOR              DISTRIBUTOR             DISTRIBUTOR
-------------------------------------------------------------------------------------------------------------------

 October 31, 2001                    $--                  $3,697                   $1,058                     $--



                       25 OPPENHEIMER EMERGING GROWTH FUND




NOTES TO FINANCIAL STATEMENTS Continued
--------------------------------------------------------------------------------

================================================================================
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES Continued

The Fund has adopted a Service Plan for Class A shares and Distribution and
Service Plans for Class B, Class C and Class N shares under Rule 12b-1 of the
Investment Company Act. Under those plans the Fund pays the Distributor for all
or a portion of its costs incurred in connection with the distribution and/or
servicing of the shares of the particular class.

--------------------------------------------------------------------------------
CLASS A SERVICE PLAN FEES. Under the Class A service plan, the Distributor
currently uses the fees it receives from the Fund to pay brokers, dealers and
other financial institutions. The Class A service plan permits reimbursements to
the Distributor at a rate of up to a specified percent of average annual net
assets of Class A shares purchased. The Distributor makes payments to plan
recipients quarterly at an annual rate not to exceed a specified percent of the
average annual net assets consisting of Class A shares of the Fund. For the year
ended October 31, 2001, payments under the Class A plan totaled $24,226, all of
which were paid by the Distributor to recipients, and included $1,333 paid to an
affiliate of the Manager. Any unreimbursed expenses the Distributor incurs with
respect to Class A shares in any fiscal year cannot be recovered in subsequent
years.

--------------------------------------------------------------------------------
CLASS B, CLASS C AND CLASS N DISTRIBUTION AND SERVICE PLAN FEES. Under each
plan, service fees and distribution fees are computed on the average of the net
asset value of shares in the respective class, determined as of the close of
each regular business day during the period. The Class B, Class C and Class N
plans provide for the Distributor to be compensated at a flat rate, whether the
Distributor's distribution expenses are more or less than the amounts paid by
the Fund under the plan during the period for which the fee is paid.

  The Distributor retains the asset-based sales charge on Class B shares. The
Distributor retains the asset-based sales charge on Class C shares during the
first year the shares are outstanding. The Distributor retains the asset-based
sales charge on Class N shares. The asset-based sales charges on Class B, Class
C and Class N shares allow investors to buy shares without a front-end sales
charge while allowing the Distributor to compensate dealers that sell those
shares.

  The Distributor's actual expenses in selling Class B, Class C and Class N
shares may be more than the payments it receives from the contingent deferred
sales charges collected on redeemed shares and asset-based sales charges from
the Fund under the plans. If any plan is terminated by the Fund, the Board of
Trustees may allow the Fund to continue payments of the asset-based sales charge
to the Distributor for distributing shares before the plan was terminated. The
plans allow for the carryforward of distribution expenses, to be recovered from
asset-based sales charges in subsequent fiscal periods.


                       26 OPPENHEIMER EMERGING GROWTH FUND





Distribution fees paid to the Distributor for the year ended October 31, 2001,
were as follows:



                                                      DISTRIBUTOR'S            DISTRIBUTOR'S
                                                          AGGREGATE                AGGREGATE
                                                       UNREIMBURSED             UNREIMBURSED
                 TOTAL PAYMENTS     AMOUNT RETAINED        EXPENSES         EXPENSES AS % OF
                     UNDER PLAN      BY DISTRIBUTOR      UNDER PLAN      NET ASSETS OF CLASS
----------------------------------------------------------------------------------------------

 Class B Plan           $22,449             $20,188         $73,416                    1.90%
 Class C Plan            10,157               7,338          10,948                    0.46
 Class N Plan                56                  52             349                    1.03



================================================================================
5. ILLIQUID OR RESTRICTED SECURITIES

As of October 31, 2001, investments in securities included issues that are
illiquid or restricted. Restricted securities are often purchased in private
placement transactions, are not registered under the Securities Act of 1933, may
have contractual restrictions on resale, and are valued under methods approved
by the Board of Trustees as reflecting fair value. A security may also be
considered illiquid if it lacks a readily available market or if its valuation
has not changed for a certain period of time. The Fund intends to invest no more
than 15% of its net assets (determined at the time of purchase and reviewed
periodically) in illiquid or restricted securities. Certain restricted
securities, eligible for resale to qualified institutional investors, are not
subject to that limitation. The aggregate value of illiquid or restricted
securities subject to this limitation as of October 31, 2001, was $231,354,
which represents 0.86% of the Fund's net assets, all of which is considered
restricted. Information concerning restricted securities is as follows:




                                                                                      UNREALIZED
                                ACQUISITION                     VALUATION AS OF      APPRECIATION
 SECURITY                              DATE        COST        OCTOBER 31, 2001     (DEPRECIATION)
-----------------------------------------------------------------------------------------------------

 STOCKS
 Pharmaceutical Resources, Inc.   8/27/01        $191,700           $231,354            $39,654



================================================================================
6. BANK BORROWINGS

The Fund may borrow from a bank for temporary or emergency purposes including,
without limitation, funding of shareholder redemptions provided asset coverage
for borrowings exceeds 300%. Effective November 13, 2001, the Fund has entered
into an agreement which enables it to participate with other Oppenheimer funds
in an unsecured line of credit with a bank, which permits borrowings up to $400
million, collectively. Interest is charged to each fund, based on its
borrowings, at a rate equal to the Federal Funds Rate plus 0.45%. Borrowings are
payable 30 days after such loan is executed. The Fund also pays a commitment fee
equal to its pro rata share of the average unutilized amount of the credit
facility at a rate of 0.08% per annum.

  The Fund had no borrowings outstanding during the year ended or at October 31,
2001.





                                                    Appendix A

                                             Industry Classifications

Aerospace/Defense                                            Food and Drug Retailers
Air Transportation                                           Gas Utilities
Asset-Backed                                                 Health Care/Drugs
Auto Parts and Equipment                                     Health Care/Supplies & Services
Automotive                                                   Homebuilders/Real Estate
Bank Holding Companies                                       Hotel/Gaming
Banks                                                        Industrial Services
Beverages                                                    Information Technology
Broadcasting                                                 Insurance
Broker-Dealers                                               Leasing & Factoring
Building Materials                                           Leisure
Cable Television                                             Manufacturing
Chemicals                                                    Metals/Mining
Commercial Finance                                           Nondurable Household Goods
Communication Equipment                                      Office Equipment
Computer Hardware                                            Oil - Domestic
Computer Software                                            Oil - International
Conglomerates                                                Paper
Consumer Finance                                             Photography
Consumer Services                                            Publishing
Containers                                                   Railroads & Truckers
Convenience Stores                                           Restaurants
Department Stores                                            Savings & Loans
Diversified Financial                                        Shipping
Diversified Media                                            Special Purpose Financial
Drug Wholesalers                                             Specialty Printing
Durable Household Goods                                      Specialty Retailing
Education                                                    Steel
Electric Utilities                                           Telecommunications - Long Distance
Electrical Equipment                                         Telephone - Utility
Electronics                                                  Textile, Apparel & Home Furnishings
Energy Services                                              Tobacco
Entertainment/Film                                           Trucks and Parts
Environmental                                                Wireless Services
Food







                                                       B-14


                                                    Appendix B

                          OppenheimerFunds Special Sales Charge Arrangements and Waivers

In certain cases, the initial sales charge that applies to purchases of Class A shares10 of the Oppenheimer funds
or the contingent deferred sales charge that may apply to Class A, Class B or Class C shares may be waived.11
That is because of the economies of sales efforts realized by OppenheimerFunds Distributor, Inc., (referred to in
this document as the "Distributor"), or by dealers or other financial institutions that offer those shares to
certain classes of investors.

Not all waivers apply to all funds. For example, waivers relating to Retirement Plans do not apply to Oppenheimer
municipal funds, because shares of those funds are not available for purchase by or on behalf of retirement
plans. Other waivers apply only to shareholders of certain funds.

For the purposes of some of the waivers described below and in the Prospectus and Statement of Additional
Information of the applicable Oppenheimer funds, the term "Retirement Plan" refers to the following types of
plans:
(1)      plans qualified under Sections 401(a) or 401(k) of the Internal Revenue Code,
(2)      non-qualified deferred compensation plans,
(3)      employee benefit plans12
(4)      Group Retirement Plans13
(5)      403(b)(7) custodial plan accounts
(6)      Individual Retirement Accounts ("IRAs"), including traditional IRAs, Roth IRAs, SEP-IRAs, SARSEPs or
                SIMPLE plans

The interpretation of these provisions as to the applicability of a special arrangement or waiver in a particular
case is in the sole discretion of the Distributor or the transfer agent (referred to in this document as the
"Transfer Agent") of the particular Oppenheimer fund. These waivers and special arrangements may be amended or
terminated at any time by a particular fund, the Distributor, and/or OppenheimerFunds, Inc. (referred to in this
document as the "Manager").

Waivers that apply at the time shares are redeemed must be requested by the shareholder and/or dealer in the
redemption request.

I.                      Applicability of Class A Contingent Deferred Sales Charges in Certain Cases

Purchases of Class A shares of Oppenheimer Funds That Are Not Subject to Initial Sales Charge but May Be Subject
to the Class A Contingent Deferred Sales Charge (unless a waiver applies).

         There is no initial sales charge on purchases of Class A shares of any of the Oppenheimer funds in the
cases listed below. However, these purchases may be subject to the Class A contingent deferred sales charge if
redeemed within 18 months of the end of the calendar month of their purchase, as described in the Prospectus
(unless a waiver described elsewhere in this Appendix applies to the redemption). Additionally, on shares
purchased under these waivers that are subject to the Class A contingent deferred sales charge, the Distributor
will pay the applicable concession described in the Prospectus under "Class A Contingent Deferred Sales
Charge."14 This waiver provision applies to:
-        Purchases of Class A shares aggregating $1 million or more.
-        Purchases of Class A shares by a Retirement Plan that was permitted to purchase such shares at net asset
         value but subject to a contingent deferred sales charge prior to March 1, 2001.
-        Purchases by an OppenheimerFunds-sponsored Rollover IRA, if the purchases are made:
(1)      through a broker, dealer, bank or registered investment advisor that has made special arrangements with
              the Distributor for those purchases, or
(2)      by a direct rollover of a distribution from a qualified Retirement Plan if the administrator of that
              Plan has made special arrangements with the Distributor for those purchases.
      -           Purchases of Class A shares by  Retirement  Plans that have any of the  following  record-keeping
      arrangements:
(1)      The record keeping is performed by Merrill Lynch Pierce Fenner & Smith, Inc. ("Merrill Lynch") on a
              daily valuation basis for the Retirement Plan. On the date the plan sponsor signs the
              record-keeping service agreement with Merrill Lynch, the Plan must have $3 million or more of its
              assets invested in (a) mutual funds, other than those advised or managed by Merrill Lynch
              Investment Management, L.P. ("MLIM"), that are made available under a Service Agreement between
              Merrill Lynch and the mutual fund's principal underwriter or distributor, and  (b) funds advised or
              managed by MLIM (the funds described in (a) and (b) are referred to as "Applicable Investments").
(2)      The record keeping for the Retirement Plan is performed on a daily valuation basis by a record keeper
              whose services are provided under a contract or arrangement between the Retirement Plan and Merrill
              Lynch. On the date the plan sponsor signs the record keeping service agreement with Merrill Lynch,
              the Plan must have $3 million or more of its assets (excluding assets invested in money market
              funds) invested in Applicable Investments.
(3)      The record keeping for a Retirement Plan is handled under a service agreement with Merrill Lynch and on
              the date the plan sponsor signs that agreement, the Plan has 500 or more eligible employees (as
              determined by the Merrill Lynch plan conversion manager).
      -           Purchases  by a Retirement  Plan whose record  keeper had a  cost-allocation  agreement  with the
      Transfer Agent on or before March 1, 2001.

II.                                Waivers of Class A Sales Charges of Oppenheimer Funds

A.  Waivers of Initial and Contingent Deferred Sales Charges for Certain Purchasers.

Class A shares purchased by the following investors are not subject to any Class A sales charges (and no
concessions are paid by the Distributor on such purchases):
-        The Manager or its affiliates.
-        Present or former officers, directors, trustees and employees (and their "immediate families") of the
         Fund, the Manager and its affiliates, and retirement plans established by them for their employees. The
         term "immediate family" refers to one's spouse, children, grandchildren, grandparents, parents,
         parents-in-law, brothers and sisters, sons- and daughters-in-law, a sibling's spouse, a spouse's
         siblings, aunts, uncles, nieces and nephews; relatives by virtue of a remarriage (step-children,
         step-parents, etc.) are included.
-        Registered management investment companies, or separate accounts of insurance companies having an
         agreement with the Manager or the Distributor for that purpose.
-        Dealers or brokers that have a sales agreement with the Distributor, if they purchase shares for their
         own accounts or for retirement plans for their employees.
-        Employees and registered representatives (and their spouses) of dealers or brokers described above or
         financial institutions that have entered into sales arrangements with such dealers or brokers (and which
         are identified as such to the Distributor) or with the Distributor. The purchaser must certify to the
         Distributor at the time of purchase that the purchase is for the purchaser's own account (or for the
         benefit of such employee's spouse or minor children).
-        Dealers, brokers, banks or registered investment advisors that have entered into an agreement with the
         Distributor providing specifically for the use of shares of the Fund in particular investment products
         made available to their clients. Those clients may be charged a transaction fee by their dealer, broker,
         bank or advisor for the purchase or sale of Fund shares.
-        Investment advisors and financial planners who have entered into an agreement for this purpose with the
         Distributor and who charge an advisory, consulting or other fee for their services and buy shares for
         their own accounts or the accounts of their clients.
-        "Rabbi trusts" that buy shares for their own accounts, if the purchases are made through a broker or
         agent or other financial intermediary that has made special arrangements with the Distributor for those
         purchases.
-        Clients of investment advisors or financial planners (that have entered into an agreement for this
         purpose with the Distributor) who buy shares for their own accounts may also purchase shares without
         sales charge but only if their accounts are linked to a master account of their investment advisor or
         financial planner on the books and records of the broker, agent or financial intermediary with which the
         Distributor has made such special arrangements . Each of these investors may be charged a fee by the
         broker, agent or financial intermediary for purchasing shares.
-        Directors, trustees, officers or full-time employees of OpCap Advisors or its affiliates, their
         relatives or any trust, pension, profit sharing or other benefit plan which beneficially owns shares for
         those persons.
-        Accounts for which Oppenheimer Capital (or its successor) is the investment advisor (the Distributor
         must be advised of this arrangement) and persons who are directors or trustees of the company or trust
         which is the beneficial owner of such accounts.
-        A unit investment trust that has entered into an appropriate agreement with the Distributor.
-        Dealers, brokers, banks, or registered investment advisors that have entered into an agreement with the
         Distributor to sell shares to defined contribution employee retirement plans for which the dealer,
         broker or investment advisor provides administration services.
-        Retirement Plans and deferred compensation plans and trusts used to fund those plans (including, for
         example, plans qualified or created under sections 401(a), 401(k), 403(b) or 457 of the Internal Revenue
         Code), in each case if those purchases are made through a broker, agent or other financial intermediary
         that has made special arrangements with the Distributor for those purchases.
-        A TRAC-2000 401(k) plan (sponsored by the former Quest for Value Advisors) whose Class B or Class C
         shares of a Former Quest for Value Fund were exchanged for Class A shares of that Fund due to the
         termination of the Class B and Class C TRAC-2000 program on November 24, 1995.
-        A qualified Retirement Plan that had agreed with the former Quest for Value Advisors to purchase shares
         of any of the Former Quest for Value Funds at net asset value, with such shares to be held through
         DCXchange, a sub-transfer agency mutual fund clearinghouse, if that arrangement was consummated and
         share purchases commenced by December 31, 1996.
B.  Waivers of Initial and Contingent Deferred Sales Charges in Certain Transactions.

Class A shares issued or purchased in the following transactions are not subject to sales charges (and no
concessions are paid by the Distributor on such purchases):
      -           Shares  issued in plans of  reorganization,  such as mergers,  asset  acquisitions  and  exchange
      offers, to which the Fund is a party.
-        Shares purchased by the reinvestment of dividends or other distributions reinvested from the Fund or
         other Oppenheimer funds (other than Oppenheimer Cash Reserves) or unit investment trusts for which
         reinvestment arrangements have been made with the Distributor.
-        Shares purchased through a broker-dealer that has entered into a special agreement with the Distributor
         to allow the broker's customers to purchase and pay for shares of Oppenheimer funds using the proceeds
         of shares redeemed in the prior 30 days from a mutual fund (other than a fund managed by the Manager or
         any of its subsidiaries) on which an initial sales charge or contingent deferred sales charge was paid.
         This waiver also applies to shares purchased by exchange of shares of Oppenheimer Money Market Fund,
         Inc. that were purchased and paid for in this manner. This waiver must be requested when the purchase
         order is placed for shares of the Fund, and the Distributor may require evidence of qualification for
         this waiver.
-        Shares purchased with the proceeds of maturing principal units of any Qualified Unit Investment Liquid
         Trust Series.
-        Shares purchased by the reinvestment of loan repayments by a participant in a Retirement Plan for which
         the Manager or an affiliate acts as sponsor.

C.  Waivers of the Class A Contingent Deferred Sales Charge for Certain Redemptions.

The Class A contingent deferred sales charge is also waived if shares that would otherwise be subject to the
contingent deferred sales charge are redeemed in the following cases:
      -           To make Automatic  Withdrawal Plan payments that are limited  annually to no more than 12% of the
      account value adjusted annually.
-        Involuntary redemptions of shares by operation of law or involuntary redemptions of small accounts
         (please refer to "Shareholder Account Rules and Policies," in the applicable fund Prospectus).
-        For distributions from Retirement Plans, deferred compensation plans or other employee benefit plans for
         any of the following purposes:
(1)      Following the death or disability (as defined in the Internal Revenue Code) of the participant or
                beneficiary. The death or disability must occur after the participant's account was established.
(2)      To return excess contributions.
(3)      To return contributions made due to a mistake of fact.
(4)      Hardship withdrawals, as defined in the plan.15
(5)      Under a Qualified Domestic Relations Order, as defined in the Internal Revenue Code, or, in the case of
                an IRA, a divorce or separation agreement described in Section 71(b) of the Internal Revenue
                Code.
(6)      To meet the minimum distribution requirements of the Internal Revenue Code.
(7)      To make "substantially equal periodic payments" as described in Section 72(t) of the Internal Revenue
                Code.
(8)      For loans to participants or beneficiaries.
(9)      Separation from service.16
(10)     Participant-directed redemptions to purchase shares of a mutual fund (other than a fund managed by the
                Manager or a subsidiary of the Manager) if the plan has made special arrangements with the
                Distributor.
(11)




         Plan termination or "in-service distributions," if the redemption proceeds are rolled over directly to
                an OppenheimerFunds-sponsored IRA.
      -           For  distributions  from 401(k)  plans  sponsored  by  broker-dealers  that have  entered  into a
      special agreement with the Distributor allowing this waiver.

                  III. Waivers of Class B, Class C and Class N Sales Charges of Oppenheimer Funds

The Class B, Class C and Class N contingent deferred sales charges will not be applied to shares purchased in
certain types of transactions or redeemed in certain circumstances described below.

A.  Waivers for Redemptions in Certain Cases.

The Class B, Class C and Class N contingent deferred sales charges will be waived for redemptions of shares in
the following cases:
-        Shares redeemed involuntarily, as described in "Shareholder Account Rules and Policies," in the
         applicable Prospectus.
-        Redemptions from accounts other than Retirement Plans following the death or disability of the last
         surviving shareholder, including a trustee of a grantor trust or revocable living trust for which the
         trustee is also the sole beneficiary. The death or disability must have occurred after the account was
         established, and for disability you must provide evidence of a determination of disability by the Social
         Security Administration.
-        Distributions from accounts for which the broker-dealer of record has entered into a special agreement
         with the Distributor allowing this waiver.
-        Redemptions of Class B shares held by Retirement Plans whose records are maintained on a daily valuation
         basis by Merrill Lynch or an independent record keeper under a contract with Merrill Lynch.
-        Redemptions of Class C shares of Oppenheimer U.S. Government Trust from accounts of clients of financial
         institutions that have entered into a special arrangement with the Distributor for this purpose.
-        Redemptions requested in writing by a Retirement Plan sponsor of Class C shares of an Oppenheimer fund
         in amounts of $500,000 or more and made more than 12 months after the Retirement Plan's first purchase
         of Class C shares, if the redemption proceeds are invested in Class N shares of one or more Oppenheimer
         funds.
-        Distributions17 from Retirement Plans or other employee benefit plans for any of the following purposes:
(1)      Following the death or disability (as defined in the Internal Revenue Code) of the participant or
                beneficiary. The death or disability must occur after the participant's account was established
                in an Oppenheimer fund.
(2)      To return excess contributions made to a participant's account.
(3)      To return contributions made due to a mistake of fact.
(4)      To make hardship withdrawals, as defined in the plan.18
(5)      To make distributions required under a Qualified Domestic Relations Order or, in the case of an IRA, a
                divorce or separation agreement described in Section 71(b) of the Internal Revenue Code.
(6)      To meet the minimum distribution requirements of the Internal Revenue Code.
(7)      To make "substantially equal periodic payments" as described in Section 72(t) of the Internal Revenue
                Code.
(8)      For loans to participants or beneficiaries.19
(9)




         On account of the participant's separation from service.20
(10)     Participant-directed redemptions to purchase shares of a mutual fund (other than a fund managed by the
                Manager or a subsidiary of the Manager) offered as an investment option in a Retirement Plan if the
                plan has made special arrangements with the Distributor.
(11)     Distributions made on account of a plan termination or "in-service" distributions, if the redemption
                proceeds are rolled over directly to an OppenheimerFunds-sponsored IRA.
(12)     For distributions from a participant's account under an Automatic Withdrawal Plan after the participant
                reaches age 59 1/2, as long as the aggregate value of the distributions does not exceed 10% of the
                account's value, adjusted annually.
         (13)   Redemptions of Class B shares under an Automatic Withdrawal Plan for an account other than a
                Retirement Plan, if the aggregate value of the redeemed shares does not exceed 10% of the
                account's value, adjusted annually.
         (14)   For distributions from 401(k) plans sponsored by broker-dealers that have entered into a special
                arrangement with the Distributor allowing this waiver.
         -    Redemptions  of Class B shares or Class C shares under an Automatic  Withdrawal  Plan from an account
other than a Retirement  Plan if the  aggregate  value of the redeemed  shares does not exceed 10% of the account's
value annually.

B.  Waivers for Shares Sold or Issued in Certain Transactions.

The contingent deferred sales charge is also waived on Class B and Class C shares sold or issued in the following
cases:
-        Shares sold to the Manager or its affiliates.
-        Shares sold to registered management investment companies or separate accounts of insurance companies
              having an agreement with the Manager or the Distributor for that purpose.
-        Shares issued in plans of reorganization to which the Fund is a party.
-        Shares sold to present or former officers, directors, trustees or employees (and their "immediate
              families" as defined above in Section I.A.) of the Fund, the Manager and its affiliates and
              retirement plans established by them for their employees.

IV.       Special Sales Charge Arrangements for Shareholders of Certain Oppenheimer Funds Who Were Shareholders of
                                                Former Quest for Value Funds

The initial and contingent deferred sales charge rates and waivers for Class A, Class B and Class C shares
described in the Prospectus or Statement of Additional Information of the Oppenheimer funds are modified as
described below for certain persons who were shareholders of the former Quest for Value Funds.  To be eligible,
those persons must have been shareholders on November 24, 1995, when OppenheimerFunds, Inc. became the investment
advisor to those former Quest for Value Funds.  Those funds include:

    Oppenheimer Quest Value Fund, Inc.                     Oppenheimer Small Cap Value Fund
    Oppenheimer Quest Balanced Value Fund                  Oppenheimer Quest Global Value Fund, Inc.
    Oppenheimer Quest Opportunity Value Fund

         These arrangements also apply to shareholders of the following funds when they merged (were reorganized)
into various Oppenheimer funds on November 24, 1995:

  Quest for Value U.S. Government Income Fund               Quest for Value New York Tax-Exempt Fund
  Quest for Value Investment Quality Income Fund            Quest for Value National Tax-Exempt Fund
  Quest for Value Global Income Fund                        Quest for Value California Tax-Exempt Fund

         All of the funds listed above are referred to in this Appendix as the "Former Quest for Value Funds."
The waivers of initial and contingent deferred sales charges described in this Appendix apply to shares of an
Oppenheimer fund that are either:
      -           acquired by such  shareholder  pursuant to an exchange of shares of an Oppenheimer  fund that was
      one of the Former Quest for Value Funds, or
         -        purchased  by such  shareholder  by  exchange  of shares of  another  Oppenheimer  fund that were
acquired  pursuant  to the merger of any of the Former  Quest for Value Funds into that other  Oppenheimer  fund on
November 24, 1995.

A.  Reductions or Waivers of Class A Sales Charges.

         - -  Reduced Class A Initial Sales Charge Rates for Certain Former Quest for Value Funds Shareholders.

Purchases by Groups and Associations.  The following table sets forth the initial sales charge rates for Class A
shares purchased by members of "Associations" formed for any purpose other than the purchase of securities. The
rates in the table apply if that Association purchased shares of any of the Former Quest for Value Funds or
received a proposal to purchase such shares from OCC Distributors prior to November 24, 1995.

------------------------------ ---------------------------- ---------------------------- ----------------------------
Number of Eligible Employees   Initial Sales Charge as a    Initial Sales Charge as a    Concession as % of
or Members                     % of Offering Price          % of Net Amount Invested     Offering Price
------------------------------ ---------------------------- ---------------------------- ----------------------------
------------------------------ ---------------------------- ---------------------------- ----------------------------
9 or Fewer                                2.50%                        2.56%                        2.00%
------------------------------ ---------------------------- ---------------------------- ----------------------------
------------------------------ ---------------------------- ---------------------------- ----------------------------
At  least  10  but  not  more             2.00%                        2.04%                        1.60%
than 49
------------------------------ ---------------------------- ---------------------------- ----------------------------

         For purchases by Associations having 50 or more eligible employees or members, there is no initial sales
charge on purchases of Class A shares, but those shares are subject to the Class A contingent deferred sales
charge described in the applicable fund's Prospectus.

         Purchases made under this arrangement qualify for the lower of either the sales charge rate in the table
based on the number of members of an Association, or the sales charge rate that applies under the Right of
Accumulation described in the applicable fund's Prospectus and Statement of Additional Information. Individuals
who qualify under this arrangement for reduced sales charge rates as members of Associations also may purchase
shares for their individual or custodial accounts at these reduced sales charge rates, upon request to the
Distributor.

         - -  Waiver of Class A Sales Charges for Certain Shareholders.  Class A shares purchased by the
following investors are not subject to any Class A initial or contingent deferred sales charges:
              -   Shareholders who were shareholders of the AMA Family of Funds on February 28, 1991 and who
                  acquired shares of any of the Former Quest for Value Funds by merger of a portfolio of the AMA
                  Family of Funds.
              -   Shareholders who acquired shares of any Former Quest for Value Fund by merger of any of the
                  portfolios of the Unified Funds.
         - -  Waiver of Class A Contingent Deferred Sales Charge in Certain Transactions.  The Class A contingent
deferred sales charge will not apply to redemptions of Class A shares purchased by the following investors who
were shareholders of any Former Quest for Value Fund:

         Investors who purchased Class A shares from a dealer that is or was not permitted to receive a sales
load or redemption fee imposed on a shareholder with whom that dealer has a fiduciary relationship, under the
Employee Retirement Income Security Act of 1974 and regulations adopted under that law.
B.  Class A, Class B and Class C Contingent Deferred Sales Charge Waivers.

         - -  Waivers for Redemptions of Shares Purchased Prior to March 6, 1995.  In the following cases, the
contingent deferred sales charge will be waived for redemptions of Class A, Class B or Class C shares of an
Oppenheimer fund. The shares must have been acquired by the merger of a Former Quest for Value Fund into the fund
or by exchange from an Oppenheimer fund that was a Former Quest for Value Fund or into which such fund merged.
Those shares must have been purchased prior to March 6, 1995 in connection with:
                  -        withdrawals  under an automatic  withdrawal  plan holding only either Class B or Class C
                  shares if the annual  withdrawal  does not exceed 10% of the initial value of the account  value,
                  adjusted annually, and
                  -        liquidation of a  shareholder's  account if the aggregate net asset value of shares held
                  in the account is less than the required minimum value of such accounts.

         - -  Waivers for Redemptions of Shares Purchased on or After March 6, 1995 but Prior to November 24,
1995.  In the following cases, the contingent deferred sales charge will be waived for redemptions of Class A,
Class B or Class C shares of an Oppenheimer fund. The shares must have been acquired by the merger of a Former
Quest for Value Fund into the fund or by exchange from an Oppenheimer fund that was a Former Quest For Value Fund
or into which such Former Quest for Value Fund merged. Those shares must have been purchased on or after March 6,
1995, but prior to November 24, 1995:
-        redemptions  following the death or disability of the  shareholder(s)  (as evidenced by a determination of
                  total disability by the U.S. Social Security Administration);
-        withdrawals  under an automatic  withdrawal plan (but only for Class B or Class C shares) where the annual
                  withdrawals do not exceed 10% of the initial value of the account value; adjusted annually, and
                  -        liquidation of a  shareholder's  account if the aggregate net asset value of shares held
                  in the account is less than the required minimum account value.

         A shareholder's account will be credited with the amount of any contingent deferred sales charge paid on
the redemption of any Class A, Class B or Class C shares of the Oppenheimer fund described in this section if the
proceeds are invested in the same Class of shares in that fund or another Oppenheimer fund within 90 days after
redemption.

    V. Special Sales Charge Arrangements for Shareholders of Certain Oppenheimer Funds Who Were Shareholders of
                                   Connecticut Mutual Investment Accounts, Inc.

The initial and contingent deferred sale charge rates and waivers for Class A and Class B shares described in the
respective Prospectus (or this Appendix) of the following Oppenheimer funds (each is referred to as a "Fund" in
this section):
     Oppenheimer U. S. Government Trust,
     Oppenheimer Bond Fund,
     Oppenheimer Value Fund and
     Oppenheimer Disciplined Allocation Fund
are modified as described below for those Fund shareholders who were shareholders of the following funds
(referred to as the "Former Connecticut Mutual Funds") on March 1, 1996, when OppenheimerFunds, Inc. became the
investment advisor to the Former Connecticut Mutual Funds:

Connecticut Mutual Liquid Account                             Connecticut Mutual Total Return Account
Connecticut Mutual Government Securities Account              CMIA LifeSpan Capital Appreciation Account
Connecticut Mutual Income Account                             CMIA LifeSpan Balanced Account
Connecticut Mutual Growth Account                             CMIA Diversified Income Account


A.  Prior Class A CDSC and Class A Sales Charge Waivers.

         -    Class A Contingent Deferred Sales Charge. Certain shareholders of a Fund and the other Former
Connecticut Mutual Funds are entitled to continue to make additional purchases of Class A shares at net asset
value without a Class A initial sales charge, but subject to the Class A contingent deferred sales charge that
was in effect prior to March 18, 1996 (the "prior Class A CDSC"). Under the prior Class A CDSC, if any of those
shares are redeemed within one year of purchase, they will be assessed a 1% contingent deferred sales charge on
an amount equal to the current market value or the original purchase price of the shares sold, whichever is
smaller (in such redemptions, any shares not subject to the prior Class A CDSC will be redeemed first).

         Those shareholders who are eligible for the prior Class A CDSC are:
(1)      persons whose purchases of Class A shares of a Fund and other Former Connecticut Mutual Funds were
                $500,000 prior to March 18, 1996, as a result of direct purchases or purchases pursuant to the
                Fund's policies on Combined Purchases or Rights of Accumulation, who still hold those shares in
                that Fund or other Former Connecticut Mutual Funds, and
(2)      persons whose intended purchases under a Statement of Intention entered into prior to March 18, 1996,
                with the former general distributor of the Former Connecticut Mutual Funds to purchase shares
                valued at $500,000 or more over a 13-month period entitled those persons to purchase shares at
                net asset value without being subject to the Class A initial sales charge.

         Any of the Class A shares of a Fund and the other Former Connecticut Mutual Funds that were purchased at
net asset value prior to March 18, 1996, remain subject to the prior Class A CDSC, or if any additional shares
are purchased by those shareholders at net asset value pursuant to this arrangement they will be subject to the
prior Class A CDSC.

         -    Class A Sales Charge Waivers. Additional Class A shares of a Fund may be purchased without a sales
charge, by a person who was in one (or more) of the categories below and acquired Class A shares prior to March
18, 1996, and still holds Class A shares:
(1)      any purchaser, provided the total initial amount invested in the Fund or any one or more of the Former
                Connecticut Mutual Funds totaled $500,000 or more, including investments made pursuant to the
                Combined Purchases, Statement of Intention and Rights of Accumulation features available at the
                time of the initial purchase and such investment is still held in one or more of the Former
                Connecticut Mutual Funds or a Fund into which such Fund merged;
(2)      any participant in a qualified plan, provided that the total initial amount invested by the plan in the
                Fund or any one or more of the Former Connecticut Mutual Funds totaled $500,000 or more;
(3)      Directors of the Fund or any one or more of the Former Connecticut Mutual Funds and members of their
                immediate families;
(4)      employee benefit plans sponsored by Connecticut Mutual Financial Services, L.L.C. ("CMFS"), the prior
                distributor of the Former Connecticut Mutual Funds, and its affiliated companies;
(5)      one or more members of a group of at least 1,000 persons (and persons who are retirees from such group)
                engaged in a common business, profession, civic or charitable endeavor or other activity, and the
                spouses and minor dependent children of such persons, pursuant to a marketing program between
                CMFS and such group; and
(6)      an institution acting as a fiduciary on behalf of an individual or individuals, if such institution was
                directly compensated by the individual(s) for recommending the purchase of the shares of the Fund
                or any one or more of the Former Connecticut Mutual Funds, provided the institution had an
                agreement with CMFS.

         Purchases of Class A shares made pursuant to (1) and (2) above may be subject to the Class A CDSC of the
Former Connecticut Mutual Funds described above.

         Additionally, Class A shares of a Fund may be purchased without a sales charge by any holder of a
variable annuity contract issued in New York State by Connecticut Mutual Life Insurance Company through the
Panorama Separate Account which is beyond the applicable surrender charge period and which was used to fund a
qualified plan, if that holder exchanges the variable annuity contract proceeds to buy Class A shares of the
Fund.

B.  Class A and Class B Contingent Deferred Sales Charge Waivers.

In addition to the waivers set forth in the Prospectus and in this Appendix, above, the contingent deferred sales
charge will be waived for redemptions of Class A and Class B shares of a Fund and exchanges of Class A or Class B
shares of a Fund into Class A or Class B shares of a Former Connecticut Mutual Fund provided that the Class A or
Class B shares of the Fund to be redeemed or exchanged were (i) acquired prior to March 18, 1996 or (ii) were
acquired by exchange from an Oppenheimer fund that was a Former Connecticut Mutual Fund. Additionally, the shares
of such Former Connecticut Mutual Fund must have been purchased prior to March 18, 1996:
(1)      by the estate of a deceased shareholder;
(2)      upon the disability of a shareholder, as defined in Section 72(m)(7) of the Internal Revenue Code;
(3)      for retirement distributions (or loans) to participants or beneficiaries from retirement plans qualified
                under Sections 401(a) or 403(b)(7)of the Code, or from IRAs, deferred compensation plans created
                under Section 457 of the Code, or other employee benefit plans;
(4)      as tax-free returns of excess contributions to such retirement or employee benefit plans;
(5)      in whole or in part, in connection with shares sold to any state, county, or city, or any
                instrumentality, department, authority, or agency thereof, that is prohibited by applicable
                investment laws from paying a sales charge or concession in connection with the purchase of
                shares of any registered investment management company;
(6)      in connection with the redemption of shares of the Fund due to a combination with another investment
                company by virtue of a merger, acquisition or similar reorganization transaction;
(7)      in connection with the Fund's right to involuntarily redeem or liquidate the Fund;
(8)      in connection with automatic redemptions of Class A shares and Class B shares in certain retirement plan
                accounts pursuant to an Automatic Withdrawal Plan but limited to no more than 12% of the original
                value annually; or
(9)      as involuntary redemptions of shares by operation of law, or under procedures set forth in the Fund's
                Articles of Incorporation, or as adopted by the Board of Directors of the Fund.

VI.                 Special Reduced Sales Charge for Former Shareholders of Advance America Funds, Inc.

Shareholders of Oppenheimer Municipal Bond Fund, Oppenheimer U.S. Government Trust, Oppenheimer Strategic Income
Fund and Oppenheimer Capital Income Fund who acquired (and still hold) shares of those funds as a result of the
reorganization of series of Advance America Funds, Inc. into those Oppenheimer funds on October 18, 1991, and who
held shares of Advance America Funds, Inc. on March 30, 1990, may purchase Class A shares of those four
Oppenheimer funds at a maximum sales charge rate of 4.50%.

          VII. Sales Charge Waivers on Purchases of Class M Shares of Oppenheimer Convertible Securities
                                                       Fund

Oppenheimer Convertible Securities Fund (referred to as the "Fund" in this section) may sell Class M shares at
net asset value without any initial sales charge to the classes of investors listed below who, prior to March 11,
1996, owned shares of the Fund's then-existing Class A and were permitted to purchase those shares at net asset
value without sales charge:
-        the Manager and its affiliates,
-        present or former officers, directors, trustees and employees (and their "immediate families" as defined
         in the Fund's Statement of Additional Information) of the Fund, the Manager and its affiliates, and
         retirement plans established by them or the prior investment advisor of the Fund for their employees,
-        registered management investment companies or separate accounts of insurance companies that had an
         agreement with the Fund's prior investment advisor or distributor for that purpose,
-        dealers or brokers that have a sales agreement with the Distributor, if they purchase shares for their
         own accounts or for retirement plans for their employees,
-        employees and registered representatives (and their spouses) of dealers or brokers described in the
         preceding section or financial institutions that have entered into sales arrangements with those dealers
         or brokers (and whose identity is made known to the Distributor) or with the Distributor, but only if
         the purchaser certifies to the Distributor at the time of purchase that the purchaser meets these
         qualifications,
-        dealers, brokers, or registered investment advisors that had entered into an agreement with the
         Distributor or the prior distributor of the Fund specifically providing for the use of Class M shares of
         the Fund in specific investment products made available to their clients, and
-        dealers, brokers or registered investment advisors that had entered into an agreement with the
         Distributor or prior distributor of the Fund's shares to sell shares to defined contribution employee
         retirement plans for which the dealer, broker, or investment advisor provides administrative services.







-------------------------------------------------------------------------------------------------------------------
Oppenheimer Emerging Growth Fund
-------------------------------------------------------------------------------------------------------------------

Internet Website:
         WWW.OPPENHEIMERFUNDS.COM
         ------------------------

Investment Advisor
         OppenheimerFunds, Inc.
         498 Seventh Avenue
         New York, NY 10018

Distributor
         OppenheimerFunds Distributor, Inc.
         498 Seventh Avenue
         New York, NY 10018

Transfer Agent
         OppenheimerFunds Services
         P.O. Box 5270
         Denver, Colorado 80217
         1-800-525-7048

Custodian Bank
         The Bank of New York
         One Wall Street
         New York, New York 10015

Independent Auditors
         KPMG LLP
         707 Seventeenth Street
         Denver, Colorado 80202

Legal Counsel
         Mayer, Brown, Rowe & Maw
         1675 Broadway
         New York, New York 10019-5820


1234


PX0721.0301

--------
1 Mr. Murphy and Mr. Griffiths are not Directors of Oppenheimer Money Market Fund, Inc. and Mr. Murphy is not a
Trustee of Oppenheimer California Municipal Fund.
2 The address of each Trustee is 6803 S. Tucson Way, Englewood, CO 80112-3924.
3 Each Trustee serves for an indefinite term, until his or her resignation, death or removal.
4 Includes shares owned by Mr. Galli in other Oppenheimer Funds for which he serves as director or trustee.
5 The address of Mr. Murphy is 498 Seventh Avenue, New York, NY 10018.
6 Each Trustee serves for an indefinite term, until his or her resignation, death or removal.
7 Includes shares owned by Mr. Murphy in other Oppenheimer Funds for which he serves as director or trustee.
8 The address of each Officer is 498 Seventh Avenue, New York, NY 10018 except for Messrs. Bishop, Farrar and
Wixted and Ms. Ives, whose address is 6803 S. Tucson Way, Englewood, CO 80112-3924 .
9 Each Officer serves for an indefinite term, until his or her resignation, death or removal.
10 Certain waivers also apply to Class M shares of Oppenheimer Convertible Securities Fund.
11 In the case of Oppenheimer Senior Floating Rate Fund, a continuously-offered closed-end fund, references to
contingent deferred sales charges mean the Fund's Early Withdrawal Charges and references to "redemptions" mean
"repurchases" of shares.
12 An "employee benefit plan" means any plan or arrangement, whether or not it is "qualified" under the Internal
Revenue Code, under which Class N shares of an Oppenheimer fund or funds are purchased by a fiduciary or other
administrator for the account of participants who are employees of a single employer or of affiliated employers.
These may include, for example, medical savings accounts, payroll deduction plans or similar plans. The fund
accounts must be registered in the name of the fiduciary or administrator purchasing the shares for the benefit
of participants in the plan.
13 The term "Group Retirement Plan" means any qualified or non-qualified retirement plan for employees of a
corporation or sole proprietorship, members and employees of a partnership or association or other organized
group of persons (the members of which may include other groups), if the group has made special arrangements with
the Distributor and all members of the group participating in (or who are eligible to participate in) the plan
purchase shares of an Oppenheimer fund or funds through a single investment dealer, broker or other financial
institution designated by the group. Such plans include 457 plans, SEP-IRAs, SARSEPs, SIMPLE plans and 403(b)
plans other than plans for public school employees. The term "Group Retirement Plan" also includes qualified
retirement plans and non-qualified deferred compensation plans and IRAs that purchase shares of an Oppenheimer
fund or funds through a single investment dealer, broker or other financial institution that has made special
arrangements with the Distributor.
14 However, that concession will not be paid on purchases of shares in amounts of $1 million or more (including
any right of accumulation) by a Retirement Plan that pays for the purchase with the redemption proceeds of Class
C shares of one or more Oppenheimer funds held by the Plan for more than one year.
15 This provision does not apply to IRAs.
16 This provision does not apply to 403(b)(7) custodial plans if the participant is less than age 55, nor to IRAs.
17 The distribution must be requested prior to Plan termination or the elimination of the Oppenheimer funds as an
investment option under the Plan.
18 This provision does not apply to IRAs.
19 This provision does not apply to loans from 403(b)(7) custodial plans.
20 This provision does not apply to 403(b)(7) custodial plans if the participant is less than age 55, nor to IRAs.