psp and sai

497 1 pspsai.htm PROSPECTUS AND SAI psp and sai

Oppenheimer
Principal Protected
Main Street Fund(R)

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

Prospectus dated May 30, 2003

Oppenheimer Principal Protected Main Street Fund(R) is a mutual fund that
seeks capital preservation in order to have a net asset value on the Maturity
Date at least equal to your original investment (reduced by any adjustments to
the Warranty Amount permitted under the Warranty Agreement and less any sales
charges and your share of extraordinary expenses and the proportional reduction
for dividends paid in cash and redemption of Fund shares). The Fund seeks high
total return as a secondary objective. It invests in shares of the Oppenheimer
Main Street Fund(R) (which invests mainly in common stocks) and U.S. government
securities, including zero coupon bonds.

This Prospectus contains important information about the Fund's objective,
its investment policies, strategies and risks. It also contains important
information about how to buy and sell shares of the Fund and other account
features. Please read this Prospectus carefully before you invest and keep it
for future reference about your account.

The fund will offer its shares to the public from May 30, 2003 through July 31,
2003, unless extended. All monies to purchase shares during the offering Period
must be received no later than July 31, 2003. From August 5, 2003, and until
August 5, 2010, shares of the Fund will only be issued upon reinvestment of
dividends and distributions.

As with all mutual funds, the Securities and Exchange Commission has not
approved or disapproved the Fund's securities nor has it determined that this
Prospectus is accurate or complete. It is a criminal offense to represent
otherwise.

An investment in the Fund is not a deposit of any bank and is not insured
or guaranteed by the Federal Deposit Insurance Corporation or any other
government agency or any person.

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

(logo) OppenheimerFunds
The Right Way to Invest

CONTENTS

A B O U T T H E F U N D

3 Overview

4 The Fund's Investment Objective and Strategies

5 Main Risks of Investing in the Fund

12 The Fund's Past Performance

12 Fees and Expenses of the Fund

15 The Warranty Agreement and the Financial Warranty

20 About the Fund's Investments

24 How the Fund is Managed

A B O U T Y O U R A C C O U N T

26 How to Buy Shares

Class A Shares
Class B Shares
Class C Shares
Class N Shares

33 Special Investor Services
AccountLink
PhoneLink
OppenheimerFunds Internet Website
Reinvestment Privilege
Retirement Plans

35 How to Sell Shares

By Wire
By Mail
By Telephone

38 How to Exchange Shares

40 Shareholder Account Rules and Policies

42 Dividends, Capital Gains and Taxes

The Underlying Fund's Past Performance

Financial Highlights of the Underlying Fund

A B O U T T H E F U N D

Overview

The Oppenheimer Principal Protected Main Street Fund is a "fund-of-funds" that
will invest a portion of its assets in shares of Oppenheimer Main Street
Fund(R)1 and a portion of its assets in U.S. Government securities.

The Fund has an Offering Period, a Warranty Period and a Post-Warranty
Period. Shares of the Fund will be offered during an Offering Period but will
not be offered during the Warranty Period, except in connection with
reinvestment of dividends and distributions. The Offering Period will run from
May 30, 2003 through July 31, 2003, unless extended. The Fund may decide, in its
discretion, not to commence operations if it does not receive $90 million in
investments during the Offering Period. During the Offering Period and the two
days subsequent thereto, the Fund will invest in money market instruments and
short-term debt securities to attempt to preserve shareholders' principal
investment.

The Warranty Period will run from the third business day following the end
of the Offering Period (expected to be August 5, 2003) through and including a
date 7 years later (expected to be August 5, 2010) (the "Maturity Date"). During
the Warranty Period, the Fund will seek capital preservation, and secondarily
high total return, by allocating its assets between Class Y shares of
Oppenheimer Main Street Fund and U.S. government securities, including zero
coupon bonds and certain securities guaranteed by certain U.S. government
agencies and instrumentalities. Shareholders may receive taxable gains from
portfolio transactions by the Fund, whether they take payment in cash or
reinvest them to purchase additional Fund shares.

The Fund has entered into a Financial Warranty Agreement (the "Warranty
Agreement") with Merrill Lynch Bank USA (the "Warranty Provider") pursuant to
which the Warranty Provider will issue a financial warranty (the "Financial
Warranty") to the Fund in order to make sure that the value of each
shareholder's account on the Maturity Date will be no less than the value of
that shareholder's account on the second business day after the end of the
Offering Period including net income, if any, earned by the Fund during the
Offering Period, and reduced by any adjustments by the Warranty Provider
permitted under the Warranty Agreement, and less sales charges and your share of
any Extraordinary Expenses not covered by the Warranty Agreement, and
proportionately reduced for dividends and distributions paid in cash and
redemptions of Fund shares (the "Warranty Amount"). In order to avoid having
their Warranty Amount reduced, shareholders must reinvest all dividends and
distributions received from the Fund to purchase additional shares of the Fund
and must not redeem any shares of the Fund during the Warranty Period. If the
value of the Fund's assets on the Maturity Date is insufficient to result in the
value of each shareholder's account being at least equal to the shareholder's
Warranty Amount, the Warranty Provider will pay the Fund an amount sufficient to
make sure that each shareholder's account can be redeemed for an amount equal to
his or her Warranty Amount.

Because the front-end sales charge you pay on the purchase of Class A
shares reduces the Warranty Amount for Class A shareholders, Class A shares will
have a lower Warranty Amount than the Class B, Class C or Class N shares. Normal
operating fees and expenses of the Fund incurred in the ordinary course of
business will not reduce the Warranty Amount. However, extraordinary expenses
incurred by the Fund will reduce the Warranty Amount. In addition, in the event
the Fund is completely and irreversibly invested in U.S. government securities,
any Fund expenses in excess of certain limits as described on page 11 will
reduce the Warranty Amount.

The Warranty Provider, a direct subsidiary of Merrill Lynch &amp;amp;
Co., Inc., is licensed as an industrial loan corporation under Utah law. The
Warranty Provider's principal business is to engage in banking activities.
Neither Merrill Lynch &amp;amp; Co., Inc. nor any other entity will be
guaranteeing the obligations of the Warranty Provider. The Warranty Provider has
not participated in the organization of the Fund and makes no representation
regarding the advisability of an investment in the Fund. Further information
about the Warranty Provider can be found in the Statement of Additional
Information.

Shareholders could lose money by investing in this Fund. A shareholder's
Warranty Amount will be reduced, as more fully described in this prospectus, if
the shareholder takes any dividends or distributions in cash instead of
reinvesting them in additional shares of the Fund, redeems any shares before the
Maturity Date, if there are Extraordinary Expenses incurred by the Fund (as such
expenses are not covered by the Warranty Agreement), if the Fund or the Manager
fails to perform certain obligations under the Warranty Agreement, or if the
Warranty Provider fails to or is unable to meet its obligations under the
Warranty Agreement.

During the Post-Warranty Period, which will commence immediately following
the Warranty Period, the Fund will seek high total return by investing in Class
Y shares of Oppenheimer Main Street Fund, common stocks of U.S. companies of
different capitalization ranges, and/or debt securities, such as bonds and
debentures. The Fund's shares will be offered on a continuous basis during the
Post-Warranty Period.

The Fund's Investment Objective and Strategies

What Is the Fund's Investment Objective During the Warranty Period? During the
Warranty Period, the Fund will seek capital preservation in order to have a net
asset value on the Maturity Date at least equal to the Warranty Amount. The Fund
seeks high total return as a secondary objective.

What Does The Fund Mainly Invest In During the Warranty Period? The Fund is a
special type of mutual fund known as a "fund of funds" because it can invest a
substantial portion of its assets in other mutual funds. During the Warranty
Period, the Fund's investment manager, OppenheimerFunds, Inc. (the "Manager")
will allocate the Fund's assets between a portfolio of equity securities as
described below (the "equity portfolio") and a portfolio of debt securities as
described below (the "debt portfolio"). The equity portfolio will invest in
Class Y shares of Oppenheimer Main Street Fund (referred to as the "Underlying
Fund"). The Underlying Fund's investment objective is to seek high total return
by investing mainly in common stocks of U.S. companies of different
capitalization ranges. The debt portfolio will invest principally in zero coupon
U.S. government securities, but may also include certain securities guaranteed
by certain U.S. Government agencies and instrumentalities. The securities in the
debt portfolio will have a maturity approximately equal to the period remaining
in the Warranty Period.

Who Is The Fund Designed For? The Fund may be an appropriate investment for you
if you: o Have an investment time horizon of at least 7 years o Seek potential
for growth but are concerned about capital preservation o Want a professionally
managed and diversified portfolio o Are not seeking current income through cash
dividends

Main Risks of Investing in the Fund

All investments have risks to some degree. The Fund's investments are subject to
changes in their value from a number of factors described below. There is also
the risk that poor security selection by the Fund's and the Underlying Fund's
investment manager, OppenheimerFunds, Inc., will cause the Fund to underperform
other funds having a similar objective.

The principal risks of investing in the Fund during the Offering Period
are those generally attributable to short-term debt securities and money market
instruments. The principal risks of an investment in the Fund during the
Warranty Period and the Post-Warranty Period are those generally attributable to
investing in stocks and debt securities. Because the Fund invests in both stocks
and debt securities during the Warranty Period, the Fund may underperform stock
funds when stocks are in favor and underperform bond funds when debt securities
are in favor.

In order to enable the Fund to obtain the benefits of the Financial
Warranty, the Fund expects to comply with certain investment limitations
established by the Warranty Agreement. If the Fund or the Manager chooses not to
comply with those investment limitations because it determines that such
non-compliance would be in the shareholder's best interests, the Warranty
Provider may exercise its rights to have more of the Fund's assets invested in
the debt portfolio (including a complete and irreversible allocation to the debt
portfolio) or could terminate the Financial Warranty.

As with any mutual fund, the value of the Fund's investments - and
therefore the value of Fund shares - may go down. Although the Fund will seek to
return a shareholder's Warranty Amount at the end of the Warranty Period, the
value of the Fund's shares will fluctuate during the Warranty Period and may
decline below your original account value. Changes in the value of the Fund's
shares may occur because a particular stock market in which the Underlying Fund
invests is rising or falling, or in response to interest rate changes because of
the effect of the change on the value of the Fund's debt portfolio. You could
lose money by investing in the Fund if you redeem your shares prior to the
Maturity Date or after the Maturity Date or if the value of the Fund's
investments goes down and the Warranty Provider is unable to meet its
obligations under the Financial Warranty. See "The Warranty Agreement and the
Financial Warranty" on page 20 for further information about when the Warranty
Agreement and the Financial Warranty may be terminated.

The Fund will distribute any net gains and income (including accrued but
unpaid income on zero coupon bonds) to shareholders at least annually. Such
distributions are taxable to shareholders even if the distributions are
reinvested in the Fund. Shareholders who reinvest distributions in the Fund will
be required to pay taxes on such distributions from other sources. Shareholders
who do not reinvest distributions, however, will be subject to a reduction in
their Warranty Amount.

RISKS OF INVESTING IN STOCKS. Stocks fluctuate in price, and their short-term
volatility at times may be great. Because the Underlying Fund currently invests
a substantial portion of its assets in common stocks, the value of the
Underlying Fund's portfolio and therefore the Fund's equity portfolio will be
affected by changes in the stock markets. Market risk will affect the Fund's net
asset values per share, which will fluctuate as the values of the Underlying
Fund's portfolio securities change. The corresponding effect on the net asset
value of the Fund will depend on the percentage of the Fund's assets allocated
to shares of the Underlying Fund.

A variety of factors can affect the price of a particular stock and the
prices of individual stocks do not all move in the same direction uniformly or
at the same time. Different stock markets may behave differently from each
other. In particular, because the Underlying Fund currently focuses its stock
investments in U.S. issuers, it will be primarily affected by changes in U.S.
stock markets.

Other factors can affect a particular stock's price, such as poor earnings
reports by the issuer, loss of major customers, major litigation against the
issuer, or changes in government regulations affecting the issuer or its
industry. The Underlying Fund may buy securities of small and medium-size
companies, which may have more volatile prices than stocks of large companies.
Therefore, if the Underlying Fund is focusing on or has substantial investments
in smaller capitalization companies at times of market volatility, the
Underlying Fund's share price may fluctuate more than that of funds focusing on
larger capitalization issuers.

At times, the Underlying Fund's emphasis of its investments in a particular
industry may differ compared to the weighting of that industry in the
S&amp;amp;P 500 Index, which the Underlying Fund uses as a performance
benchmark. To the extent that the Underlying Fund increases its emphasis on
stocks in a particular industry, its share values may fluctuate in response to
events affecting that industry, such as changes in economic conditions,
government regulations, availability of basic resources or supplies, or other
events that affect that industry more than others.

INTEREST RATE RISKS. Debt securities are subject to changes in value when
prevailing interest rates change. When interest rates fall, the values of
already-issued debt securities generally rise. When interest rates rise, the
values of already-issued debt securities generally fall, and those securities
may sell at a discount from their face amount. The magnitude of these price
fluctuations is generally greater for debt securities having longer maturities
and for zero coupon securities.

The Fund buys zero-coupon or "stripped" securities, which are particularly
sensitive to interest rate changes. Their prices may go up or down more than the
prices of other types of debt securities in response to interest rate changes.

CREDIT RISK. Securities directly issued by the U.S. Treasury and certain
U.S. government agencies that are backed by the full faith and credit of
the U.S. government have little credit risk. Securities issued by other
agencies or instrumentalities of the U.S. government generally have low
credit risks. Credit risk is the risk that the issuer of a debt security
might not make interest and principal payments on the security as they
become due.

RISKS ASSOCIATED WITH THE FINANCIAL WARRANTY. The Fund has entered into the
Warranty Agreement with the Warranty Provider to try to make sure that on the
Maturity Date shareholders will be able to redeem their shares of the Fund at
their Warranty Amount. It is possible that the financial position of the
Warranty Provider may deteriorate and it would be unable to satisfy its
obligations under the Financial Warranty. The Financial Warranty is solely the
obligation of the Warranty Provider. The Fund's assets and the obligations of
the Warranty Provider under the Warranty Agreement are not guaranteed by Merrill
Lynch &amp;amp; Co., Inc., the United States government, the Manager, or any
other entity or person.

The Warranty Agreement may be terminated by the Warranty Provider in
certain circumstances, as discussed in "The Warranty Agreement and the Financial
Warranty," below. In such event, shareholders will not receive the Warranty
Amount but instead will receive the Fund's then-current net asset value when
they redeem their shares, which may be lower than the Warranty Amount.
Shareholders may receive less than their initial Warranty Amount in certain
other circumstances as well. For example, the Warranty Agreement requires the
Manager to make payments to the Warranty Provider upon the happening of certain
specified events. If the Manager fails to make a required payment, the Warranty
Provider may reduce its obligations under the Financial Warranty. As a result, a
shareholder's Warranty Amount may be reduced. In addition, the Manager has
contractually agreed to reduce its management fee for the remainder of the
Warranty Period in the event that the Fund becomes completely and irreversibly
invested in the debt portfolio to the extent necessary so that total annual
operating expenses of the Fund are limited to certain agreed amounts (as
described under "Advisory Fees" on page 25) for each share class (excluding
Extraordinary Expenses and certain other expenses). However, if this reduction
in the management fee is not sufficient to reduce total annual operating
expenses to these limits, the Manager is not required to subsidize Fund expenses
to assure that expenses do not exceed those limits. Under such circumstances,
the Warranty Amount will be reduced by the portion of the Fund's annual
operating expenses that exceed these limits.

Furthermore, the Warranty Amount per share will be reduced by the
shareholder's proportionate share of any Extraordinary Expenses incurred by the
Fund, by any shortfall amount resulting from the negligence of the Manager, by
dividends and distributions paid in cash, and redemption of Fund shares during
the Warranty Period. If any of those were to occur, the shareholder will receive
less than the original Warranty Amount on the Maturity Date. The Manager will
not be responsible to the Fund for a reduction in the Warranty Amount due to an
Extraordinary Expense or other shortfall resulting from the Manager's negligent
acts.

Investment Restrictions Under Warranty Agreement. To avoid losing the benefits
of the Financial Warranty, the Fund is subject to conditions of the Warranty
Agreement that require the Manager to make investment allocation decisions based
on a mathematical formula (the "Warranty Formula") that limits the amount of the
Fund's assets that may be allocated to the shares of the Underlying Fund. This
limitation is designed to reduce, but does not eliminate, the risk that the
Fund's assets will be insufficient to allow the Fund to redeem shares at not
less than the Warranty Amount on the Maturity Date. Accordingly, the Warranty
Agreement could limit the Manager's ability to respond to changing market
conditions during the Warranty Period. If the Manager fails to comply with the
agreed-upon investment parameters or otherwise fails to comply with certain
requirements set forth in the Warranty Agreement, the Warranty Provider may
terminate the Financial Warranty or exercise its right to instruct the Manager
to immediately allocate the Fund's assets to the debt portfolio, deliver to the
Fund's Custodian pre-signed instructions from the Manager instructing the
Custodian to immediately allocate all of the Fund's assets to the debt
portfolio, or change one of the variables in the Warranty Formula which would
have the effect of increasing the portion of the Fund's assets allocated to the
debt portfolio. If the Warranty Provider were to exercise the right to have all
of the Fund's assets invested in the debt portfolio, the Fund's ability to
participate in upward equity market movements would be eliminated.

Risk of Default. A shareholder's ability to receive the Warranty Amount depends
on the financial condition of the Warranty Provider. The Warranty Agreement is
an obligation that runs solely to the Fund, not to the Fund's shareholders and
shareholders would have no recourse against the Warranty Provider in the event
it defaults on its obligations under the Warranty Agreement. The Financial
Warranty is solely an obligation of the Warranty Provider. Consequently, an
investment in the Fund involves a risk of loss if the Warranty Provider is
placed in receivership, or is otherwise unable to perform its obligation or
defaults on its obligations, if any, under the Warranty Agreement. In such
event, the Fund's board of trustees (the "Board") could take a variety of
actions including replacing the Financial Warranty. However, the Board is under
no obligation to replace the Financial Warranty or otherwise find a substitute
provider of principal protection. In such circumstances, shareholders could
suffer a loss of principal. No entity or person is obligated to make up any
shortfall in the event the Warranty Provider defaults on its obligations under
the Warranty Agreement and the Fund's assets are insufficient to redeem the
Fund's shares for the Warranty Amount on the Maturity Date. The Warranty
Provider may also assign its obligations under the Warranty Agreement to an
affiliate, provided the Warranty Provider's parent company guarantees the
obligations of the affiliate. The Warranty Provider may only assign its
obligations under the Warranty Agreement to a non-affiliate if the Board and the
Manager have consented to such assignment. There is a risk that the substitute
Warranty Provider may not have the financial resources to fulfill its
obligations under the Warranty Agreement.

The availability of the Financial Warranty on the Maturity Date is
conditioned upon the Manager and the Fund satisfying their respective
obligations under the Warranty Agreement. Should the Manager or the Fund fail to
satisfy their respective obligations under the Warranty Agreement, the Warranty
Provider is permitted to terminate the Financial Warranty and thus terminate its
obligations to make any payment to the Fund if a shortfall exists on the
Maturity Date. In addition, the availability of the Financial Warranty on the
Maturity Date is conditional upon the Manager and the Fund's Custodial Bank
providing certain information to the Warranty Provider. If the Manager or the
Custodial Bank fails to provide such information, the Warranty Provider may
require the Fund to invest exclusively in the debt portfolio, which will
eliminate the Fund's ability to participate in upward equity market movements

Risks Associated with Asset Allocation. At times, the Fund's assets may be
largely invested in the debt portfolio in order to increase the likelihood of
preserving the original principal value of the Fund. If Fund assets are largely
invested in the debt portfolio, the Fund's exposure to equity markets will be
reduced and the Fund will be more highly correlated with bonds. In addition, if
during the Warranty Period the equity markets experience a major decline, the
Fund's assets may become largely or entirely invested in the debt portfolio. In
fact, if the value of the shares of the Underlying Fund were to decline
significantly (whether within a short period of time or over a protracted
period), a complete and irreversible reallocation to the debt portfolio may
occur. In this circumstance, the Fund would not participate in any subsequent
recovery in the equity markets. Investment in debt securities during the
Warranty Period reduces the Fund's ability to participate as fully in upward
equity market movements, and therefore represents some loss of opportunity
compared to a portfolio that invests principally in equity securities. In
addition, the terms of the Warranty Agreement prescribe certain investment
parameters within which the Fund must be managed during the Warranty Period to
preserve the benefit of the Financial Warranty. Accordingly, the Warranty
Agreement could limit the Manager's ability to alter the allocation of Fund
assets during the Warranty Period in response to changing market conditions. The
terms of the Warranty Agreement could require the Fund to liquidate an equity
position when it otherwise would not be in the shareholders' best interests or
at a time when the Manager otherwise would not recommend that the securities be
sold.

The asset allocation process may result in additional transaction costs.
This process can have an adverse effect on the performance of the Fund during
periods of increased equity market volatility. In addition, a high portfolio
turnover rate may increase the Fund's transaction costs, which would adversely
affect performance. Also, you may receive taxable gains from portfolio
transactions by the Fund, whether you take payment in cash or reinvest them to
purchase additional Fund shares.

HOW RISKY IS THE FUND OVERALL? The risks described above collectively form the
overall risk profile of the Fund and can affect the value of the Fund's
investments, its investment performance and the prices of its shares. Particular
investments and investment strategies also have risks. These risks mean that you
can lose money by investing in the Fund, particularly if the financial condition
of the Warranty Provider deteriorates and it is unable to make the required
payment to the Fund, if necessary, under the Financial Warranty. You could lose
money if, among other reasons, the Fund incurs Extraordinary Expenses, the Fund
is liquidated prior to the Maturity Date, or if you redeem your shares prior to
the Maturity Date or after the Maturity Date and the Fund's net asset value is
less than the Warranty Amount on the date of redemption. It is possible that the
Warranty Provider will not be able to satisfy its obligations under the Warranty
Agreement as of the Maturity Date or that the Manager or the Fund will not be
able to satisfy their respective obligations under the Warranty Agreement. As a
result, the Fund would not be able to redeem your shares for the Warranty Amount
on the Maturity Date, and the value of your shares on the Maturity Date may be
more or less than your Warranty Amount. There is no assurance that the Fund will
achieve its investment objective.

-----------------------------------------------------------------------------
The life of the Fund is divided into three phases: an Offering Period, a
Warranty Period and a Post-Warranty Period.
-----------------------------------------------------------------------------

Offering Period. Shares of the Fund are available for purchase only during the
Offering Period. Investors will receive shares of the Fund contemporaneously
with amounts invested. The Offering Period is expected to run from May 30, 2003
through July 31, 2003, unless extended. The Fund reserves the right to extend
the Offering Period. The Fund must receive all orders and applications to
purchase shares by the end of the Offering Period.

If the Fund does not have at least $90 million in net assets at the end of
the Offering Period, the Board may, at its option, continue the Fund or
liquidate the Fund. If the Fund does not have at least $90 million in net assets
at the end of the Offering Period or if the Board were to decide to liquidate
the Fund, the Warranty Provider would have the option of terminating the
Warranty Agreement. If the Board decides to continue the Fund with less than $90
million in net assets at the end of the Offering Period, it will do so only if
the Warranty Provider agrees to continue its obligations under the Warranty
Agreement. The Board may also elect to liquidate the Fund during the Offering
Period should the asset allocation model the Fund employs indicate that the Fund
would be predominantly invested in debt securities during the Warranty Period
due to unusual market conditions (such as a significant decline in prevailing
interest rates). In the event the Fund is liquidated for the reasons stated
above, the shares of the Fund will be exchanged for shares of Oppenheimer Money
Market Fund, Inc. and the Fund's Distributor, OppenheimerFunds Distributor,
Inc., will rebate or waive any sales charge paid by you in connection with your
purchase of Fund shares (other than as a result of an exchange into the Fund
from another Oppenheimer fund), and shareholders will not receive the benefit of
the Financial Warranty. During the Offering Period and for the two business days
thereafter, the Fund will not invest in shares of the Underlying Fund but
instead will invest all of its assets primarily in money market instruments and
short-term debt securities to seek preservation of capital. You will not have
the benefit of the Financial Warranty during the Offering Period and the two
business days subsequent thereto.

Warranty Period. The Warranty Period will run from the third business day after
the end of the Offering Period - expected to be August 5, 2003 through and
including a date seven years later, expected to be August 5, 2010, or if that
day is not a business day, the first business day thereafter (previously defined
as the "Maturity Date"). During the Warranty Period, the Fund will not accept
purchase orders for Fund shares, except for reinvestment of dividends and
distributions.

If you maintain your investment in the Fund through the Maturity Date, do
not redeem any shares, and reinvest all dividends and distributions, you will be
entitled to redeem your shares held as of the Maturity Date for the greater of
the then-current net asset value of your shares or your Warranty Amount. A
transfer or reregistration of existing shares during the Warranty Period that
does not result in an increase in Fund shares that are issued and outstanding
will not interrupt the seven year period calculated to determine the Warranty
Amount. Shareholders must redeem their shares in the Fund on, and only on, the
Maturity Date (August 5, 2010) to receive the greater of the then-current net
asset value of the Fund or their Warranty Amount. Prior to the Maturity Date the
Fund will provide each shareholder a notice reminding them that shares must be
redeemed on the Maturity Date to receive the full benefit of the Financial
Warranty. In the event there is a shortfall on the Maturity Date, each redeeming
shareholder will be entitled to redemption proceeds that include a pro rata
allocation of any payments made to the Fund by the Warranty Provider.
Shareholders who remain invested in the Fund past the Maturity Date will also
receive the benefit of a pro-rata allocation of any shortfall payments made by
the Warranty Provider, if any, on the Maturity Date. However, after the Maturity
Date shares of the Fund will not be protected by the Financial Warranty and will
be subject to market fluctuations and the shares will then be redeemable at the
Fund's then-current net asset value, which may be lower than the Warranty
Amount.

The Fund never restricts your ability to redeem your shares. However,
shareholders who do not reinvest their distributions or dividends will reduce
their Warranty Amount and shareholders who redeem prior to the Maturity Date
will bear the cost of the Warranty Agreement without receiving any corresponding
benefit. As explained in the example on page 22, if you reinvest your dividends
and distributions, the number of shares you own in the Fund will increase at
each date on which a dividend or distribution is effective and the corresponding
Warranty Amount per share decreases so that your overall Warranty Amount does
not change. Therefore, if you fail to reinvest the Fund's dividends or
distributions or you redeem Fund shares, your overall Warranty Amount will
decrease because you will have fewer shares multiplied by the applicable
Warranty Amount per share. See "How is the Warranty Amount Determined?" for
further information. Shareholders (other than certain retirement plans) are
subject to income taxes on distributions from the Fund whether they take payment
of distributions in cash or reinvest them to purchase additional Fund shares.

If the Fund incurs certain Extraordinary Expenses or if the Manager is
required to make payments under the Warranty Agreement in certain instances and
the Manager fails to do so in a timely manner, your Warranty Amount also will be
reduced by the proportionate amount of the Extraordinary Expenses or the amount
of the payment which the Manager failed to make.

"Extraordinary Expenses" means any Fund fees and expenses that are not
incurred or accrued in the ordinary course of the Fund's business (including for
example, all costs of defending or prosecuting any claim, or litigation, to
which the Fund is a party, together with any amounts in judgment, settlement or
indemnification expense incurred by the Fund or any other non-recurring,
non-operating expenses). If the Fund's assets are invested completely and
irreversibly in the debt portfolio, Extraordinary Expenses will also include any
Fund fees and expenses incurred in excess of the Fund's expense limits whether
or not incurred in the ordinary course of the Fund's business. Those expense
limits are 1.30% for Class A shares, 2.05% for Class B shares, 2.05% for Class C
shares and 1.55% for Class N shares. The Fund will invest its assets completely
and irreversibly in the debt portfolio if the Warranty Formula provides for such
allocation or if, under the terms of the Warranty Agreement, the Warranty
Provider exercises its right to instruct the Manager to allocate the Fund's
assets to the debt portfolio, or deliver to the Fund's Custodian pre-signed
instructions from the Manager instructing the Custodian to immediately allocate
all of the assets of the Fund to the debt portfolio.

Post-Warranty Period. On and after the Maturity Date, you can redeem your shares
or exchange your shares for shares of the same class of another Oppenheimer fund
that offers an exchange privilege. The value of your shares on the Maturity Date
will be the greater of (i) the then-current net asset value of the Fund or (ii)
the Warranty Amount. Because the benefits of the Warranty Agreement terminate
after the Maturity Date, the entire amount of your investment in the Fund
following the Maturity Date will be subject to market risk.

If after the Maturity Date shares of the Fund remain issued and
outstanding, the Board may elect at the recommendation of the Manager and
without shareholder approval (1) to have the Fund redeem all issued and
outstanding shares and then terminate the Fund, (2) to merge the Fund into the
Underlying Fund, or (3) to continue the existence of the Fund. Shareholders who
continue their investment in the Fund after the Maturity Date will receive prior
notice of the Board's decision. If the Board chooses to have the Fund redeem all
issued and outstanding shares and terminate the Fund, those remaining
shareholders will receive the then-current net asset value which may be more or
less than their Warranty Amount. If the Board chooses to continue the existence
of the Fund during the Post-Warranty Period, then the Fund's investment
objectives will be changed by the Board to the single objective of seeking high
total return and the Fund's name will change to an appropriate name as
determined by the Board. To achieve that objective, the Fund may invest its
assets during the Post-Warranty Period primarily in shares of the Underlying
Fund, common stocks of U.S. companies of different capitalization ranges, and
debt securities, such as bonds and debentures. The Manager will sell a portfolio
security during the Post-Warranty Period if it determines that the security will
not provide the return anticipated. During the Post-Warranty Period, the Fund's
shares will be offered on a continuous basis. Shareholders will not have the
benefit of the Financial Warranty during the Post-Warranty Period.

-----------------------------------------------------------------------------
An investment in the Fund is not a deposit of any bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency or any person.
-----------------------------------------------------------------------------

The Fund's Past Performance

Because the Fund has not commenced operations, there is no prior performance
information. Please remember that the Fund is intended to be a long-term
investment and that performance results are historical, and that past
performance (particularly over a short-term period) is not predictive of future
results. Because the Fund may invest a significant amount of its assets in Class
Y shares of the Underlying Fund, performance data and financial information
about Class Y shares of the Underlying Fund is included at the end of this
Prospectus. That information is not intended to predict the performance of the
Fund. The Fund's performance will differ from the performance of the Underlying
Fund.

Fees and Expenses of the Fund

The Fund pays a variety of expenses directly for management of its assets,
administration, distribution of its shares and other services and for the
Financial Warranty. Those expenses are subtracted from the Fund's assets to
calculate the Fund's net asset value per share. All shareholders therefore pay
those expenses indirectly. The fees for the Fund may be higher than fees paid by
other mutual funds which do not offer principal protection. In addition, the
Fund and therefore its shareholders will indirectly bear its pro-rata share of
the expenses of the Underlying Fund. Shareholders pay other expenses directly,
such as sales charges and account transaction charges. The following tables are
meant to help you understand the fees and expenses you may pay if you buy and
hold shares of the Fund. "Other Expenses" and "Total Annual Operating Expenses"
are based on the Fund's anticipated expenses during its first fiscal year.

Shareholder Fees (charges paid directly from your investment):

----------------------------------------------------------------------------
Class A Class B Class C Class N
Shares Shares Shares Shares
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Maximum Sales Charge (Load) on

purchases (as % of offering price) 5.75% None None None

----------------------------------------------------------------------------
----------------------------------------------------------------------------
Maximum Deferred Sales Charge (Load)
(as % of the lower of the original
offering None1 5%2 1%3 1%4
price or redemption proceeds)
----------------------------------------------------------------------------

Annual Fund Operating Expenses (deducted from Fund assets):
(% of average daily net assets)

----------------------------------------------------------------------------
Class A Class B Class C Class N
Shares Shares5 Shares Shares
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Management Fees6 0.50% 0.50% 0.50% 0.50%

----------------------------------------------------------------------------
----------------------------------------------------------------------------
Distribution and/or Service (12b-1) 0.25% 1.00% 1.00% 0.50%
Fees
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Other Expenses 1.23% 1.23% 1.23% 1.23%

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

Total Annual Operating Expenses 7 1.98% 2.73% 2.73% 2.23%

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

Fee Waiver and/or Expense 0.23% 0.23% 0.23% 0.23%
Reimbursement8

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

Net Fund Expenses (after fee waiver
and/or expense reimbursement)8 1.75% 2.50% 2.50% 2.00%

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

Expenses may vary in future years. "Other Expenses" include transfer agent fees,
custodial fees, the Warranty Agreement fee of 0.60% of average daily net assets
of the Fund, and accounting and legal expenses that the Fund pays. The Transfer
Agent has voluntarily undertaken to the Fund to limit the transfer agent fees to
0.35% of average daily net assets per fiscal year for each class. That voluntary
undertaking may be amended or terminated at any time. "Total Annual Operating
Expenses" include the Fund's portion of the Underlying Fund's fees and expenses
paid by the Fund as a shareholder of the Underlying Fund and assumes the Fund
invests 50% of its assets in shares of the Underlying Fund. The Fund's actual
operating expenses may be higher as a result of changes in the allocation of
assets to the Underlying Fund, the expenses of the Underlying Fund and/or the
Fund's own expenses. 1. A contingent deferred sales charge may apply to
redemptions of investments of $1 million or more of Class A shares. See "How Can
You Buy Class A Shares" for details.

2. Applies to redemptions in first year after purchase. The contingent deferred
sales charge declines to 1% in the sixth year and is eliminated after that.
3. Applies to shares redeemed within 12 months of purchase. 4. A contingent
deferred sales charge applies to shares redeemed within 18 months of retirement
plan's first purchase of Class N shares. 5. Class B shares automatically convert
to Class A shares 88 months after
purchase.

6. "Management Fees" in the table above is the maximum annual management fee
rate under the investment advisory agreement. The investment advisory agreement
requires that the Fund's management fee be reduced by the amount of management
fees paid to the Manager by the Underlying Fund on assets representing
investments by the Fund in shares of the Underlying Fund so that shareholders of
the Fund do not pay direct and indirect management fees in excess of 0.50%.
Therefore, as the percentage of the Fund's assets invested in the Underlying
Fund increase, the Fund's management fees will decline, but not below zero. If
the Fund becomes completely and irreversibly invested in the debt portfolio, the
Management Fees will be 0.25% for the remainder of the Warranty Period. The
Manager has voluntarily agreed to waive its management fee by 0.0083% per month
in any month following a month where the average daily equity allocation was
less than 10%. The Manager may amend or terminate that voluntary undertaking at
any time.
7. The Manager has contractually agreed to reduce its management fee for the
remainder of the Warranty Period in the event that the Fund becomes completely
and irreversibly invested in the debt portfolio to the extent necessary so that
total annual operating expenses of the Fund are limited to 1.30% for Class A
shares, 2.05% for Class B shares, 2.05% for Class C shares and 1.55% for Class N
shares. Those expense limitations do not include Extraordinary Expenses and
other expenses not incurred in the ordinary course of the Fund's business.
However, if this reduction in the management fee is not sufficient to reduce
total annual operating expenses to these limits, the Manager is not required to
subsidize Fund expenses to assure that expenses do not exceed those limits. If
the Fund's annual operating expenses exceed those limits while the Fund's assets
are completely and irreversibly allocated to the debt portfolio, the Warranty
Amount will be reduced by the portion of the Fund's annual operating expenses
that exceed those limits. Additionally, if the Fund becomes completely and
irreversibly invested in the debt portfolio, the Warranty Fee payable by the
Fund to the Warranty Provider under the Warranty Agreement will decrease to
0.35% per annum.
8. The Manager has voluntarily undertaken to reimburse the Fund for expenses
equal to the Underlying Fund expenses paid by the Fund as a shareholder of the
Underlying Fund. The amount of expense reimbursement shown in the fee table
above assumes an allocation of 50% of the Fund's assets to shares of the
Underlying Fund. That expense reimbursement will fluctuate as the allocation
changes. The Manager may amend or terminate that voluntary undertaking at any
time.

EXAMPLES. The following examples are intended to help you compare the cost of
investing in the Fund with the cost of investing in other mutual funds. The
examples are based on the Total Annual Operating Expenses shown in the table
above, and assume that you invest $10,000 in a class of shares of the Fund for
the time periods indicated and reinvest your dividends and distributions.

The first example assumes that you redeem all of your shares at the end of
those periods. The second example assumes that you keep your shares. Both
examples also assume that your investment has a 5% return each year and that the
class's operating expenses remain the same. Your actual costs may be higher or
lower because expenses will vary over time. Based on these assumptions your
expenses would be as follows:

If shares are redeemed: 1 Year 3 Years
-----------------------------------------------------------

Class A Shares $764 $1,161

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

Class B Shares $776 $1,147

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

Class C Shares $376 $847

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

Class N Shares $326 $697

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

-----------------------------------------------------------
If shares are not redeemed: 1 Year 3 Years
-----------------------------------------------------------

Class A Shares $764 $1,161

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

Class B Shares $276 $847

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

Class C Shares $276 $847

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

Class N Shares $226 $697

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

In the first example, expenses include the initial sales charge for Class A and
the applicable Class B, Class C or Class N contingent deferred sales charges. In
the second example, the Class A expenses include the sales charge, but Class B,
Class C and Class N expenses do not include the contingent deferred sales
charges.

About the Fund's Investments

THE FUND'S PRINCIPAL INVESTMENT POLICIES. The allocation of the Fund's assets
among the debt portfolio and the equity portfolio will vary over time based upon
the Warranty Formula, which is a mathematical formula intended to allow the Fund
to have a net asset value on the Maturity Date at least equal to the Warranty
Amount. The Statement of Additional Information contains more detailed
information about the Fund's investment policies and risks.

Investment in Shares of Oppenheimer Main Street Fund. The Fund invests the
equity portfolio in Class Y shares of Oppenheimer Main Street Fund (the
"Underlying Fund"). The Underlying Fund seeks high total return, by investing
mainly in common stocks of U.S. companies of different capitalization ranges,
presently focusing on large capitalization issuers. It also can buy debt
securities, such as bonds and debentures but does not currently emphasize these
investments. The portfolio managers of the Underlying Fund use a variety of
proprietary quantitative models to rank stocks on the basis of valuation,
momentum and investor psychology, fundamental research about particular
industries and individual judgement. While this process and the
inter-relationship of the factors used may change over time and its
implementation may vary in particular cases, in general the selection process
currently involves the use of:

o Multi-factor quantitative models: These include a group of "top-down"
models that analyze data such as relative valuations, relative price
trends, interest rates and the shape of the yield curve. These help direct
portfolio emphasis by market capitalization (small, mid, or large),
industries, and value or growth styles. A group of "bottom up" models
helps to rank stocks in a universe typically including 3000 stocks,
selecting stocks for relative attractiveness by analyzing stock and
company characteristics.
o Fundamental research: The portfolio managers use internal research and
analysis by other market analysts, with emphasis on current company news
and industry-related events.
o Judgment: The Underlying Fund's portfolio is then continuously rebalanced
by the portfolio managers, using the tools described above.

The portfolio managers of the Underlying Fund emphasize wide
diversification. The allocation of the Underlying Fund's portfolio among
different investments will vary over time based upon the Manager's evaluation of
economic and market trends. The Underlying Fund's portfolio might not always
include all of the different types of investments described below.

Stock Investments. The Underlying Fund currently invests mainly in common
stocks. The Underlying Fund currently focuses on securities of issuers
that have large capitalizations. Historically their stock prices have
tended to be less volatile than securities of smaller issuers. However,
the Underlying Fund can buy stocks of issuers in all capitalization
ranges. "Capitalization" refers to the market value of all of the issuer's
outstanding common stock.
Debt Securities. The mix of equities and debt securities in the Underlying
Fund's portfolio will vary over time depending on the Manager's judgment
about market and economic conditions. The Underlying Fund currently does
not emphasize investment in debt securities. The Underlying Fund's
investments in debt securities can include securities issued or guaranteed
by the U.S. government or its agencies and instrumentalities, and foreign
and domestic corporate bonds, notes and debentures. They may be selected
for their income possibilities, for liquidity and to help cushion
fluctuations in the Underlying Fund's net asset values.
The debt securities the Underlying Fund buys may be rated by nationally
recognized rating organizations such as Moody's Investors Service, Inc. or
Standard &amp;amp; Poor's Rating Service or they may be unrated
securities assigned a comparable rating by the Manager.

o Special Credit Risks of Lower-Grade Securities. The Underlying Fund
can invest up to 25% of its total assets in "lower-grade" securities
commonly known as "junk bonds." These are securities rated below
"Baa" by Moody's Investors Service, Inc. or "BBB" by Standard &amp;amp;
Poors Ratings Service or having similar ratings by other ratings
organizations, or if unrated, assigned a comparable rating by the
Manager. However, the Underlying Fund currently does not intend to
invest more than 10% of its assets in lower-grade securities and
cannot invest more than 10% of its total assets in lower-grade
securities that are not convertible.
Debt securities below investment grade, whether rated or unrated, have
greater risks than investment-grade securities. There may be less of a
market for them and therefore they may be harder to sell at an acceptable
price. There is a relatively greater possibility that the issuer's
earnings may be insufficient to make the payments of interest and
principal when due. These risks mean that the Underlying Fund's net asset
value per share could be affected by declines in value of these
securities.
Risks of Foreign Investing. The Underlying Fund can buy securities of companies
or governments in any country, developed or underdeveloped. While there is
no limit on the amount of the Underlying Fund's assets that may be
invested in foreign securities, the Manager does not currently plan to
invest significant amounts of the Underlying Fund's assets in foreign
securities. While foreign securities offer special investment
opportunities, there are also special risks, such as the effects of a
change in value of a foreign currency against the U.S. dollar, which will
result in a change in the U.S. dollar value of securities denominated in
that foreign currency.
Other Equity Securities. Equity securities include common stocks, as well as
"equity equivalents" such as preferred stocks and securities convertible
into common stock. Preferred stock has a set dividend rate and ranks after
bonds and before common stocks in its claim for dividends and on assets if
the issuer is liquidated or becomes bankrupt. The Manager considers some
convertible securities to be "equity equivalents" because of the
conversion feature and in that case their rating has less impact on the
investment decision than in the case of debt securities.
Illiquid and Restricted Securities. Investments may be illiquid because they do
not have an active trading market, making it difficult to value them or
dispose of them promptly at an acceptable price. A restricted security is
one that has a contractual restriction on its resale or which cannot be
sold publicly until it is registered under the Securities Act of 1933. The
Underlying Fund will not invest more than 10% of its net assets in
illiquid or restricted securities (the Board can increase that limit to
15%). Certain restricted securities that are eligible for resale to
qualified institutional purchasers are not subject to that limit. The
Manager monitors holdings of illiquid securities on an ongoing basis to
determine whether to sell any holdings to maintain adequate liquidity.
Derivative Investments. The Underlying Fund can invest in a number of different
kinds of "derivative" investments. In general terms, a derivative
investment is an investment contract whose value depends on (or is derived
from) the value of an underlying asset, interest rate or index. In the
broadest sense, options, futures contracts, and other hedging instruments
the Underlying Fund might use may be considered "derivative" investments.
The Underlying Fund currently does not use derivatives to a significant
degree and is not required to use them in seeking its objective.
Derivatives have risks. If the issuer of the derivative investment does
not pay the amount due, the Underlying Fund can lose money on the
investment. The underlying security or investment on which a derivative is
based, and the derivative itself, may not perform the way the Manager
expected it to. As a result of these risks the Underlying Fund could
realize less principal or income from the investment than expected or its
hedge might be unsuccessful. As a result, the Underlying Fund's share
prices could fall. Certain derivative investments held by the Underlying
Fund might be illiquid.
o Hedging. The Underlying Fund can buy and sell futures contracts, put and
call options, forward contracts and options on futures and securities
indices. These are all referred to as "hedging instruments." Some of these
strategies would hedge the Underlying Fund's portfolio against price
fluctuations. Other hedging strategies, such as buying futures and call
options, would tend to increase the Underlying Fund's exposure to the
securities market. There are also special risks in particular hedging
strategies. Options trading involves the payment of premiums and can
increase portfolio turnover. If the Manager used a hedging instrument at
the wrong time or judged market conditions incorrectly, the strategy could
reduce the Underlying Fund's return.
Temporary Defensive and Interim Investments. In times of unstable adverse market
or economic conditions, the Underlying Fund can invest up to 100% of its
total assets in temporary defensive investments that are inconsistent with
its principal investment strategies. Generally, they would be money market
instruments, U.S. government securities, highly-rated commercial paper, or
repurchase agreements. The Underlying Fund may also hold these types of
securities pending the investment of proceeds from the sale of Underlying
Fund shares or portfolio securities or to meet anticipated redemptions of
Underlying Fund shares. To the extent the Underlying Fund invests
defensively in these securities, it may not achieve its investment
objective. For more information about the types of securities the
Underlying Fund may invest in, you can request a prospectus of Oppenheimer
Main Street Fund by calling the toll-free number listed on the back cover
of this prospectus.

Investment in Debt Securities. As stated above, during the Offering Period the
Fund will invest in short-term debt securities. During the Warranty Period the
Fund will invest a portion of its assets, and in certain circumstances the Fund
may invest all of its assets, in U.S. government securities having a maturity
approximately equal to the period remaining in the Warranty Period.

U.S. Government Securities. U.S. government securities the Fund buys will
consist of non-callable general obligations of the U.S. Treasury backed by
the full faith and credit of the U.S. government or of any of the
following U.S. government agencies: Federal National Mortgage Association,
Federal Home Loan Mortgage Corporation, Federal Home Loan Bank, Resolution
Funding Corporation, Financing Corporation and Tennessee Valley Authority,
provided such securities are rated no less than "AAA" by Standard
&amp;amp; Poor's Rating Services or "Aaa" by Moody's Investors
Service, Inc.

o U.S. Treasury Obligations. These include Treasury bills (having
maturities of one year or less when issued), Treasury notes (having
maturities of more than one year and up to ten years when issued),
and Treasury bonds (having maturities of more than ten years when
issued). Treasury securities are backed by the full faith and credit
of the United States as to timely payments of interest and repayments
of principal. The Fund can buy U. S. Treasury securities that have
been "stripped" of their coupons and zero-coupon securities described
below.
o Obligations Issued or Guaranteed by U.S. Government Agencies or
Instrumentalities. These include direct obligations and
mortgage-related securities that have different levels of credit
support from the U.S. government. Government National Mortgage
Association ("Ginnie Mae") pass-through mortgage certificates, for
example, are supported by the full faith and credit of the U.S.
government.

Zero-Coupon Securities. Some of the debt securities the Fund buys
are zero-coupon bonds that pay no interest. The Fund can invest up to 100%
of its assets in zero-coupon U.S. government securities. They are issued
at a substantial discount from their face value.
Zero-coupon are subject to greater fluctuations in
price from interest rate changes than typical debt securities that pay
interest on a regular basis. The Fund may have to pay out the imputed
income on zero-coupon securities without receiving the cash currently.
The Fund will not purchase zero coupon securities in the form of
collateralized mortgage obligations.
Short-Term Debt Securities. The Fund can buy high-quality, short-term money
market instruments, including obligations of the U.S. Government and its
agencies, and certain short-term demand and time deposits in, certificates
of deposit of and bankers' acceptances issued by certain U.S. depository
institutions or trust companies, and certain commercial paper, which are
short-term, negotiable promissory notes of companies. Because these
instruments tend to offer lower yields than other debt securities, the
Fund ordinarily uses them for liquidity and cash management purposes or
for defensive purposes when market conditions are unstable.
Portfolio Turnover. The Fund can engage in active and frequent trading to try to
achieve its objective, and will likely have a high portfolio turnover
rate. Portfolio turnover increases the Fund's transaction costs. However,
most of the Fund's portfolio transactions are principal trades that do not
entail brokerage fees. If the Fund realizes capital gains when it sells
its portfolio investments, it must generally pay those gains out to
shareholders, increasing their taxable distributions.

Asset allocation. The Manager allocates the Fund's assets between the equity
portfolio (shares of the Underlying Fund) and the debt portfolio (primarily zero
coupon U.S. government securities) based upon the recommendation of the Warranty
Formula. The Manager evaluates the relative allocation between the equity
portfolio and debt portfolio daily and makes any necessary adjustments to the
Fund's portfolio. The Warranty Formula may allocate between 0% to 100% of the
Fund's assets to the equity portfolio. However, at the Fund's commencement of
operations following the Offering Period, it is anticipated that approximately
20% to 50% of the Fund's assets will be allocated to the equity portfolio. The
allocation during the Warranty Period will fluctuate in response to changes in
the securities markets. Factors reflected in the asset allocation methodology
include, but are not limited to:

The market value of the Fund's assets as compared to the Warranty Amount o
The prevailing level of interest rates o Equity market volatility o The length
of time remaining until the Maturity Date

Under the terms of the Warranty Agreement, the Fund may be required in
certain limited circumstances, including a material decline in the value of the
Fund's assets relative to the Warranty Amount or a breach by the Fund or the
Manager of its obligations under the Warranty Agreement, to invest all or a
substantial portion of its assets in U.S. government securities (as well as cash
and cash equivalents to the extent necessary to meet redemption requests and
Fund expenses) or in zero coupon U.S. government securities (and cash or cash
equivalents to the extent necessary to meet redemption requests and Fund
expenses).

Specifically, situations where the Warranty Provider can require the Fund
to invest all of its assets in the debt portfolio include: o if the Fund issues
additional shares during the Warranty Period in
violation of the Warranty Agreement;

o if the Fund invests in securities other than as permitted in this

prospectus;

o if the Fund's investment in the equity portfolio on any given day
exceeds certain limitations as established by, or fails to
allocate assets pursuant to, the Warranty Formula;
o if the Fund fails to comply with the expense limitations imposed on
the Fund if it is required to invest completely and irreversibly
in the debt portfolio;
o if the Fund fails to pay the Warranty Agreement fee when due;
o if the investment advisory agreement with the Manager is terminated

and the successor investment adviser is not acceptable to the
Warranty Provider;

o if the Manager fails to manage the Fund in accordance with its
objectives, policies and strategies;
o if the Manager or the Fund's custodian fail to provide the Warranty
Provider with certain information necessary for it to monitor the
Fund's compliance with the Warranty Agreement;
o if representations or warranties made by the Manager or the Fund in
certain agreements and documents were incorrect or misleading when
made;
o if the Manager, the Fund or the custodian fails to perform any
obligation or breaches any covenant under the Warranty Agreement
or other related agreements and such failure could have an adverse
effect on the Warranty Provider (including a change to the Fund's
investment objective or any material change to the Fund's
investment policies or strategies without the Warranty Provider's
prior written consent, even where such change is in the Fund's and
the shareholders' best interest);
o if the commencement of any proceeding in a federal, state or local
court which if adversely determined, could have an adverse effect on
the Manager or the Fund;
o if an action or proceeding is commenced to place the Fund or the
Manager in receivership or bankruptcy or;
o if any governmental or regulatory action limits, suspends, or
terminates the rights, privileges or operation of the Manager or the
Fund that could adversely affect the Manager or the Fund.

Under the Warranty Agreement, the Fund is also required to satisfy certain
risk management requirements, which will also restrict the manner in which the
Fund may invest its assets. The Fund's holdings of cash and cash equivalents
will generally be limited to an amount necessary to meet anticipated expenses
and redemptions.

The Warranty Formula may require the Fund to have a higher portfolio
turnover rate as compared to other mutual funds.

The Warranty Agreement and the Financial Warranty. The Fund has entered into the
Warranty Agreement to help make sure that on the Maturity Date, each shareholder
will be entitled to redeem his or her shares for an amount not less than the
Warranty Amount, i.e., the initial value of that shareholder's account on the
second business day after the end of the Offering Period (including any net
income earned by the Fund during the Offering Period and the two business days
subsequent thereto, but reduced by any adjustments the Warranty Provider is
permitted to make under the Warranty Agreement and less sales charges and
Extraordinary Expenses and a proportionate reduction for dividends and
distributions paid in cash and shares redeemed). Certain calculations under the
Warranty Agreement (including the calculation of any shortfall) will be
performed by an affiliate of the Warranty Provider as calculation agent.

The Warranty Agreement requires the Manager to comply with certain agreed
upon investment parameters in an attempt to limit the Fund's risk. These
investment parameters are designed to reduce, but do not eliminate, the risk
that the Fund's assets will be insufficient to allow the Fund to redeem shares
at not less than the Warranty Amount on the Maturity Date. If the Fund fails to
comply with the agreed-upon investment parameters or otherwise fails to comply
with certain requirements set forth in the Warranty Agreement, the Warranty
Provider may terminate its Financial Warranty in certain limited circumstances.
If the Fund receives notice of termination from the Warranty Provider, the Fund
will promptly notify shareholders of such termination.

These circumstances include:
o if the Fund liquidates, is merged, reorganizes or sells all or
substantially all of its assets;
o if the Manager ceases to be the adviser of the Fund and any successor
adviser is not acceptable to the Warranty Provider;
o if the conditions precedent to the Warranty Provider's issuance of
the Financial Warranty have not been met under the terms of the
Warranty Agreement;

o if the custodian agreement is amended so that the custodian or successor
custodian is no longer obligated or does not agree to provide the Warranty
Provider with certain information regarding the Fund's portfolio as
required by the Warranty Agreement;

o if the Manager fails to pay to the Warranty Provider a shortfall amount
resulting from the negligence, recklessness, bad faith, willful misconduct
or fraud of the Manager;

o a determination of negligence, recklessness, fraud, bad faith or willful
misconduct on the part of the Manager or the Fund under the Warranty
Agreement and related agreements by a court of competent jurisdiction or a
board of arbitration;

o if under the terms of the Warranty Agreement, the Manager or the custodian
is required to allocate all of the Fund's assets to the debt portfolio and
fails to do so within a reasonable time;
o if the Manager fails to provide the Warranty Provider with
information regarding the Underlying Fund in certain circumstances;

o if the Manager does not manage the assets of the Fund in accordance
with the Fund's objective, policies and strategies;
o if the Trust establishes another series other than this Fund during
the Warranty Period; or
o if the Manager fails to provide certain instructions and information to,
and cooperate with, the custodian in the event that the Warranty Provider
has exercised its right to deliver pre-signed instructions from the
Manager to the custodian instructing the custodian to invest all of the
Fund's assets in the debt portfolio.

The Warranty Provider (or its affiliate) may monitor the Fund's compliance
with the Warranty Agreement solely to protect the interests of the Warranty
Provider and not the Fund's shareholders. In monitoring the Fund's compliance,
the Warranty Provider (or its affiliate) will rely predominantly on information
provided by the Fund, the Manager and the Fund's custodian.

The Warranty Provider may terminate the Warranty Agreement prior to the
Warranty Period if the Fund's net assets at the end of the Offering Period are
less than $90 million. The Fund and the Manager may terminate the Warranty
Agreement if the Warranty Provider becomes insolvent or if the Warranty Provider
ceases to be "well capitalized" within the meaning of the capital maintenance
regulations of the Federal Deposit Insurance Corporation.

The Fund will pay to the Warranty Provider, under the Warranty Agreement,
an annual fee equal to 0.60% of the average daily net assets of the Fund during
the Warranty Period. If the Fund is required to make a complete and irreversible
allocation of its assets to the debt portfolio, the Warranty fee will thereafter
be reduced to 0.35% of the average daily net assets of the Fund. If the value of
the Fund's assets on the Maturity Date is insufficient to result in the value of
each shareholder's account being at least equal to his or her Warranty Amount (a
"Shortfall"), the Warranty Provider will pay to the Fund an amount sufficient to
make sure that each shareholder's account can be redeemed for an amount equal to
his or her Warranty Amount. The amount of any Shortfall required to be paid by
the Warranty Provider will be reduced by (i) the amount of any dividends and
distributions taken in cash rather than reinvested in additional shares of the
Fund; (ii) the value of any shares redeemed; (iii) the shareholder's pro rata
portion of the amount of any Extraordinary Expenses or any expenses incurred by
the Fund in excess of the expense limits described under "Warranty Period" on
page 11; (iv) the shareholder's pro rata portion of the value of any shares
issued by the Fund during the Warranty Period other than in connection with the
reinvestment of dividends and distributions; (v) the amount of any increase in
the Warranty Amount per share as a result of changes in accounting practices for
the Fund, corporate actions or certain other events; and (vi) if the Manager is
required to make payments under the Warranty Agreement in certain instances and
the Manager fails to do so in a timely manner, the amount of the payments the
Manager failed to make (on a pro rata basis).

A shareholder's ability to receive his or her Warranty Amount depends on
the financial condition of the Warranty Provider. If the Warranty Provider
becomes insolvent or its credit deteriorates substantially, payment under the
Financial Warranty may not be made or may become unlikely. In such event, the
Board could take a variety of actions, including replacing the Financial
Warranty or liquidation of the Fund. In such circumstances, shareholders could
suffer a loss of principal. The Board is under no obligation to replace the
Financial Warranty. If it does so, the fee charged by any replacement warranty
provider may be higher or lower than the fee charged by Merrill Lynch Bank USA.
If the Board were to determine that liquidation of the Fund during the Warranty
Period is in the shareholders' best interests, the Warranty Agreement would
automatically terminate upon such liquidation and the Warranty Provider would
have no obligations to make a payment to the Fund. In that event neither the
Manager nor any other person would be liable to make a payment to the Fund to
provide shareholders with their Warranty Amount. Upon liquidation, shareholders
would receive the then-current net asset value of their Fund account, which may
be less than the Warranty Amount they would have received on the Maturity Date.

The Warranty Agreement may be amended with the prior consent of the
Warranty Provider, the Fund and the Manager. Therefore, material changes to the
Warranty Agreement may be made without shareholder approval, even to the extent
such change could have a direct or indirect impact on a shareholder's investment
in the Fund. Any material amendments to the Warranty Agreement will be disclosed
in amendments to this prospectus.

The Fund will provide you with a copy of the most recent audited annual or
unaudited quarterly financial statements of the Warranty Provider, free of
charge, upon your request. To receive a copy of these financial statements
please contact the Fund at the telephone number or write to the Fund at the
address shown on the outside back cover of this Prospectus.

CAN THE FUND'S INVESTMENT OBJECTIVE AND POLICIES CHANGE? The Fund's Board of
Trustees can change non-fundamental investment policies without shareholder
approval, although significant changes will be described in amendments to this
Prospectus. Fundamental policies cannot be changed without the approval of a
majority of the Fund's outstanding voting shares. The Fund's investment
objective is a non-fundamental policy. Investment restrictions that are
fundamental policies are listed in the Statement of Additional Information. An
investment policy is not fundamental unless this Prospectus or the Statement of
Additional Information says that it is.

How is the Warranty Amount Determined?

Example.* Assume you have $20,000 to invest in Fund shares. Assume that you
decided to purchase Class A shares and the public offering price is $10.61 per
share (initial net asset value of $10.00 per share plus a sales load of 5.75%).
After deducting your sales load of 5.75%, $18,850.14 will be invested in Fund
shares and you will have 1,885.01 shares in your account. Your initial Warranty
Amount will be $18,850.14.

* Figures used in the example have been rounded to the nearest hundredth.

The full amount of your investment will not receive the benefit of the Financial
Warranty. Rather, the Financial Warranty protects only the amount invested, as
reduced by any adjustments to the Warranty Amount by the Warranty Provider
permitted under the Warranty Agreement and less any sales charges and your
proportionate share of certain Extraordinary Expenses, and reduced
proportionately for any dividends paid in cash or redemption of shares.

Redemption of shares during the Warranty Period will decrease the Warranty
Amount to which a shareholder is entitled. If a shareholder redeems shares in
the Fund, he or she will then hold fewer shares at the then-current Warranty
Amount per share, thereby reducing the overall Warranty Amount for the
shareholder. A redemption made from the Fund prior to the Maturity Date will be
made at the Fund's then-current net asset value per share, less any applicable
deferred sales charge, which may be higher or lower than the Warranty Amount per
share.

The Warranty Amount per share will decline as dividends and distributions are
made to shareholders. If a shareholder automatically reinvests dividends and
distributions in additional shares of the Fund, the shareholder's total Warranty
Amount will remain the same because he or she will hold a greater number of
shares at a reduced Warranty Amount per share following payment of a dividend or
distribution. The result is to preserve the total Warranty Amount to which he or
she was entitled before the dividend or distribution was made. If a shareholder
elects to receive any dividends or distributions in cash, however, he or she
will hold the original number of shares at the reduced Warranty Amount per share
following payment of a dividend or distribution. This will reduce the Warranty
Amount to which such shareholder was entitled before the dividend or
distribution was made.

Example 1. Assume you reinvest your dividends and distributions. The number of
shares you own in the Fund will increase at each date on which a dividend or
distribution is effective. Although the number of shares in your account
increases, and the Warranty Amount per share decreases, your overall Warranty
Amount does not change. Using our example, assume it is now December 31, 2003
and the Fund makes effective a dividend of $0.15 per share. Also, assume that
the net asset value is $11.25 per share at the end of the day on December 31,
2003.

To recalculate your Warranty Amount per share:
1. Determine the value of your dividend. Your total dividend will equal
the per share dividend multiplied by the number of shares you own the
day before the dividend is declared. In our example, we will multiply
1,885.01 shares by $0.15 per share to arrive at $282.75.
2. Determine the number of shares that will get added to your account when
your dividend is reinvested. Your additional shares equal the value of
your dividend divided by the ending net asset value per share on the
day the dividend was declared. In our case, $282.75 divided by $11.25
equals 25.13 additional shares.
3. Adjust your account for your additional shares. Add 1,885.01 and 25.13
to arrive at your new share balance of 1,910.14.
4. Determine your new Warranty Amount per share. Take your original
Warranty Amount and divide by your new share balance. Using our
example, divide $18,850.14 by 1,910.14 shares to arrive at the new
Warranty Amount per share of $9.87.
5. Your Warranty Amount still equals $18,850.14.

If you do not reinvest your dividends and distributions in additional
shares of the Fund, your Warranty Amount will be reduced with the same effect as
if you had reinvested such dividends and distributions and then immediately
redeemed them.

Example 2. Assume you elect to receive Fund dividends and distributions in cash.
On each date on which a dividend or distribution is effective, the number of
shares you own in the Fund will remain the same and the Warranty Amount per
share will decrease resulting in your overall Warranty Amount declining. Using
our example, assume it is now December 31, 2003 and the Fund makes effective a
dividend of $0.15 per share. Also assume that the net asset value is $11.25 per
share at the end of the day on December 31, 2003.

2. Determine your new Warranty Amount per share. Take your original
Warranty Amount and divide by the number of shares you would have had
if you reinvested the distribution. Using our example, divide
$18,850.14 by 1,910.14 shares to arrive at $9.87 per share.

3. Multiply $9.87 by the number of shares you actually own (1,885.01) to
arrive at your new Warranty Amount of $18,605.05.

Although shareholders can perform this calculation themselves, the Fund
will recalculate the Warranty Amount per share whenever the Fund declares a
dividend or makes a distribution. It is possible that the Fund's calculations
may differ from a shareholder's calculation, for example, because of rounding or
the number of decimal places used. In each case, the Fund's calculations will
control.

See "Dividends, Capital Gains and Taxes" for additional details
regarding the Financial Warranty.

How the Fund is Managed

THE MANAGER. The Manager chooses the Fund's investments and handles its
day-to-day business. The Manager carries out its duties, subject to the policies
established by the Fund's Board of Trustees, under an investment advisory
agreement that states the Manager's responsibilities. The agreement sets the
fees the Fund pays to the Manager and describes the expenses that the Fund is
responsible to pay to conduct its business.

The Manager has been an investment advisor since January 1960. The Manager
and its subsidiaries and controlled affiliates managed more than $125 billion in
assets as of March 31, 2003, including other Oppenheimer funds, with more than 7
million shareholder accounts. The Manager is located at 498 Seventh Avenue, New
York, New York 10018.

Portfolio Managers. Angelo Manioudakis and other investment professionals
selected from the Manager's high-grade team in its fixed-income
department are primarily responsible for the day-to-day management of
the Fund's fixed-income portfolio. Kenneth Winston and other members
of the Manager's risk management department shall be primarily
responsible for the allocation of the Fund's assets between shares of
Oppenheimer Main Street Fund and debt securities. Messrs. Manioudakis
and Winston are Vice Presidents of the Fund and Senior Vice
Presidents of the Manager. Prior to joining the Manager in April
2002, Mr. Manioudakis was a portfolio Manager at Morgan Stanley
Investment Management (since August 1993). Prior to joining the
Manager in May 2001, Mr. Winston was a Managing Partner at Richards &amp;amp;
Tierney, Inc. (since 1994).

Advisory Fees. Under the investment advisory agreement, the Fund pays the
Manager a management fee at an annual rate of 0.50% of the average annual
net assets of the Fund. That fee will apply during the Warranty Period and
the Post-Warranty Period. If during the Warranty Period 100% of the Fund's
assets are completely and irreversibly invested in the debt portfolio, the
management fee will be at an annual rate of 0.25% of the average annual
net assets of the Fund, and if that occurs the Manager will further reduce
its management fee to the extent necessary so that total annual operating
expenses of the Fund (other than Extraordinary Expenses such as litigation
costs) do not exceed 1.30% for Class A shares, 2.05% for Class B shares,
2.05% for Class C shares and 1.55% for Class N shares. However, if this
reduction in the management fee is not sufficient to reduce total annual
operating expenses to these limits, the Manager is not required to
subsidize Fund expenses to assure that expenses do not exceed those
limits. Furthermore, if expenses exceed these expense limits, the Warranty
Amount will be reduced by any expenses that exceed those limits. The
Manager has voluntarily agreed to waive its management fee during the
Offering Period. In addition, during the Warranty Period the Manager has
voluntarily agreed to reduce the management fee payable by the Fund by
0.00833% per month in any month following a month where the Fund's average
daily equity allocation was less than 10%. Those voluntary undertakings
may be amended or eliminated at any time.

ABOUT your account

How to Buy Shares

HOW DO YOU BUY SHARES DURING THE OFFERING PERIOD? Shares of the Fund may only be
purchased during the Offering Period which is expected to run from May 30, 2003
through July 31, 2003, unless extended. The Fund reserves the right to extend
the Offering Period. You can buy shares several ways, as described below. The
Fund's Distributor, OppenheimerFunds Distributor, Inc., may appoint servicing
agents to accept purchase (and redemption) orders. The Distributor, in its sole
discretion, may reject any purchase order for the Fund's shares.

BuyingShares Through Your Dealer. You can buy shares through any dealer, broker
or financial institution that has a sales agreement with the Distributor.
Your dealer will place your order with the Distributor on your behalf.
BuyingShares Through the Distributor. Complete an OppenheimerFunds New Account
Application and return it with a check payable to "OppenheimerFunds
Distributor, Inc." Mail it to P.O. Box 5270, Denver, Colorado 80217. If
you don't list a dealer on the application, the Distributor will act as
your agent in buying the shares. However, we recommend that you discuss
your investment with a financial advisor before you make a purchase to be
sure that the Fund is appropriate for you.
o Paying by Federal Funds Wire. Shares purchased through the Distributor may
be paid for by Federal Funds wire. The minimum investment is $5,000,
$2,500 for retirement plans. Before sending a wire, call the Distributor's
Wire Department at 1.800.225.5677 to notify the Distributor of the wire
and to receive further instructions.
o Buying Shares Through OppenheimerFunds AccountLink. With AccountLink, you
pay for shares by electronic funds transfers from your bank account.
Shares are purchased for your account by a transfer of money from your
bank account through the Automated Clearing House (ACH) system. You can
provide those instructions by telephone using OppenheimerFunds PhoneLink,
described below. Please refer to "PhoneLink," below for more details.
o You may not purchase additional shares during the Warranty Period other
than in connection with the reinvestment of dividends and distributions.

HOW MUCH MUST YOU INVEST? You can buy Fund shares with a minimum investment of
$5,000. Under retirement plans, such as IRAs, pension and profit-sharing plans,
the minimum investment is $2,500. The minimum investment requirement does not
apply to reinvesting dividends in the Fund.

AT WHAT PRICE ARE SHARES SOLD? Orders to purchase shares must be received no
later than July 31, 2003 unless the offering period is extended. The Fund may
reject any order to buy shares. Shares will not be offered during the Warranty
Period, except in connection with the reinvestment of dividends and
distributions. Selected securities dealers or other financial intermediaries,
may directly charge you a processing fee to confirm a purchase. Such processing
fee is not included in the Warranty Amount. Shares are sold at their offering
price which is the net asset value per share plus any initial sales charge that
applies. The offering price that applies to a purchase order is based on the
next calculation of the net asset value per share that is made after the
Distributor receives the purchase order at its offices in Colorado, or after any
agent appointed by the Distributor receives the order and sends it to the
Distributor.

Net Asset Value. The Fund calculates the net asset value of each class of
shares as of the close of The New York Stock Exchange, on each day the
Exchange is open for trading (referred to in this Prospectus as a "regular
business day"). The Exchange normally closes at 4:00 P.M., Eastern time,
but may close earlier on some days. All references to time in this
Prospectus mean "Eastern time."

The net asset value per share is determined 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. To determine net asset value, the Fund's Board
of Trustees has established procedures to value the Fund's securities.

If, after the close of the principal market on which a security held by
the Fund is traded, and before the time the Fund's securities are priced
that day, an event occurs that the Manager deems likely to cause a
material change in the value of such security, the Fund's Board of
Trustees has authorized the Manager, subject to the Board's review, to
ascertain a fair value for such security. A security's valuation may
differ depending on the method used for determining value.

The Offering Price. To receive the offering price for a particular day, in
most cases the Distributor or its designated agent must receive your order
by the time of day The New York Stock Exchange closes that day. If your
order is received on a day when the Exchange is closed or after it has
closed, the order will receive the next offering price that is determined
after your order is received.

Buying Through a Dealer. If you buy shares through a dealer, your dealer must
receive the order by the close of The New York Stock Exchange and transmit
it to the Distributor so that it is received no later than the
Distributor's close of business on July 31, 2003, unless your dealer has
made alternative arrangements with the Distributor.

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

WHAT CLASSES OF SHARES DOES THE FUND OFFER? The Fund offers investors four
different classes of shares. The different classes of shares represent
investments in the same portfolio of securities, but the classes are subject to
different expenses and will likely have different share prices. When you buy
shares, be sure to specify the class of shares. If you do not choose a class,
your investment will be made in Class A shares.

-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
Class A Shares. If you buy Class A shares, you pay an initial sales charge (on
investments up to $1 million). The amount of that sales charge will vary
depending on the amount you invest. The sales charge rates are listed in
"How Can You Buy Class A Shares?" below.
-----------------------------------------------------------------------------
Class B Shares. If you buy Class B shares, you pay no sales charge at the time
of purchase, but you will pay an annual asset-based sales charge. If you
sell your shares within six years of buying them, you will normally pay a
contingent deferred sales charge. That contingent deferred sales charge
varies depending on how long you own your shares, as described in "How Can
You Buy Class B Shares?" below. Class B shares automatically convert to
Class A shares 88 months after purchase.
-----------------------------------------------------------------------------
Class C Shares. If you buy Class C shares, you pay no sales charge at the time
of purchase, but you will pay an annual asset-based sales charge. If you
sell your shares within 12 months of buying them, you will normally pay a
contingent deferred sales charge of 1.0%, as described in "How Can You Buy
Class C Shares?" below.
-----------------------------------------------------------------------------
Class N Shares. If you buy Class N shares (available only through certain
retirement plans), you pay no sales charge at the time of purchase, but
you will pay an annual asset-based sales charge. If you sell your shares
within 18 months of the retirement plan's first purchase of Class N
shares, you may pay a contingent deferred sales charge of 1.0%, as
described in "How Can You Buy Class N Shares?" below.

WHICH CLASS OF SHARES SHOULD YOU CHOOSE? Once you decide that the Fund is an
appropriate investment for you, the decision as to which class of shares is best
suited to your needs depends on a number of factors that you should discuss with
your financial advisor. Some factors to consider are how much you plan to invest
and how long you plan to hold your investment. Because the front-end sales
charge you pay on the purchase of Class A shares reduces the Warranty Amount for
Class A shareholders, Class A shares will have a lower Warranty Amount than the
Class B, Class C or Class N shares. If your goals and objectives change over
time, you should re-evaluate those factors to see if you should consider another
class of shares. The Fund's operating costs that apply to a class of shares and
the effect of the different types of sales charges on your investment will vary
your investment results over time.

The discussion below is not intended to be investment advice or a
recommendation, because each investor's financial considerations are different.
The discussion below assumes that you will purchase only one class of shares and
not a combination of shares of different classes. Of course, these examples are
based on approximations of the effects of current sales charges and expenses
projected over time, and do not detail all of the considerations in selecting a
class of shares. You should analyze your options carefully with your financial
advisor before making that choice.

How Long Do You Expect to Hold Your Investment? While future financial needs
cannot be predicted with certainty, knowing how long you expect to hold
your investment will assist you in selecting the appropriate class of
shares. The Fund is designed for those investors who do not anticipate
needing to take dividends and distributions in cash or needing to redeem
their shares prior to the Maturity Date. Because of the effect of
class-based expenses, your choice will also depend on how much you plan to
invest. For retirement plans that qualify to purchase Class N shares,
Class N shares will generally be more advantageous than Class B and Class
C shares.

For non-retirement plan investors who invest $1 million or more, in most
cases Class A shares will be the most advantageous choice, no matter how
long you intend to hold your shares. For that reason, the Distributor
normally will not accept purchase orders of $500,000 or more of Class B
shares or $1 million or more of Class C shares from a single investor. If
you are investing less than $100,000 and intend on redeeming your shares
on the Maturity Date and do not expect to need access to your money for
the seven year Warranty Period, Class B or Class C shares may be more
appropriate.

Are There Differences in Account Features That Matter to You? Some account
features may not be available to Class B, Class C and Class N
shareholders. Other features may not be advisable (because of the effect
of the contingent deferred sales charge) for Class B, Class C and Class N
shareholders. Therefore, you should carefully review how you plan to use
your investment account before deciding which class of shares to buy.

Additionally, the dividends payable to Class B, Class C and Class N
shareholders will be reduced by the additional expenses borne by those
classes that are not borne by Class A shares, such as the Class B, Class C
and Class N asset-based sales charge described below and in the Statement
of Additional Information. Share certificates will not be issued for any
class of shares of the Fund except for Class A share accounts with a value
of $1 million or more. If you are considering using your shares as
collateral for a loan, that may be a factor to consider.

How Do Share Classes Affect Payments to Your Broker? A financial advisor may
receive different compensation for selling one class of shares than for
selling another class. It is important to remember that Class B, Class C
and Class N contingent deferred sales charges and asset-based sales
charges have the same purpose as the front-end sales charge on sales of
Class A shares: to compensate the Distributor for concessions and expenses
it pays to dealers and financial institutions for selling shares. The
Distributor may pay additional compensation from its own resources to
securities dealers or financial institutions based upon the value of
shares of the Fund owned by the dealer or financial institution for its
own account or for its customers.

SPECIAL SALES CHARGE ARRANGEMENTS AND WAIVERS. Appendix B to the Statement of
Additional Information details the conditions for the waiver of sales charges
that apply in certain cases, and the special sales charge rates that apply to
purchases of shares of the Fund by certain groups, or under specified retirement
plan arrangements or in other special types of transactions. To receive a waiver
or special sales charge rate, you must advise the Distributor when purchasing
shares or the Transfer Agent when redeeming shares that a special condition
applies.

HOW CAN YOU BUY CLASS A SHARES? Class A shares are sold at their offering price,
which is normally net asset value plus an initial sales charge. However, in some
cases, described below, purchases are not subject to an initial sales charge,
and the offering price will be the net asset value. In other cases, reduced
sales charges may be available, as described below or in the Statement of
Additional Information. Out of the amount you invest, the Fund receives the net
asset value to invest for your account.

The sales charge varies depending on the amount of your purchase. A
portion of the sales charge may be retained by the Distributor or allocated to
your dealer as a concession. The Distributor reserves the right to reallow the
entire concession to dealers. The current sales charge rates and concessions
paid to dealers and brokers are as follows:

------------------------------------------------------------------------------
Amount of Purchase Front-End Sales Front-End Sales
Charge As a Charge As a Concession As
Percentage of Percentage of Net Percentage of
Offering Price Amount Invested Offering Price
------------------------------------------------------------------------------
------------------------------------------------------------------------------
Less than $25,000 5.75% 6.10% 4.75%
------------------------------------------------------------------------------
------------------------------------------------------------------------------
$25,000 or more but less 5.50% 5.82% 4.75%
than $50,000
------------------------------------------------------------------------------
------------------------------------------------------------------------------
$50,000 or more but less 4.75% 4.99% 4.00%
than $100,000
------------------------------------------------------------------------------
------------------------------------------------------------------------------
$100,000 or more but less 3.75% 3.90% 3.00%
than $250,000
------------------------------------------------------------------------------
------------------------------------------------------------------------------
$250,000 or more but less 2.50% 2.56% 2.00%
than $500,000
------------------------------------------------------------------------------
------------------------------------------------------------------------------
$500,000 or more but less 2.00% 2.04% 1.60%
than $1 million
------------------------------------------------------------------------------

Can You Reduce Class A Sales Charges? You may be eligible to buy Class A
shares at reduced sales charge rates under the Fund's "Right of
Accumulation," as described in "Reduced Sales Charges" in the Statement of
Additional Information.

Class A Contingent Deferred Sales Charge. There is no initial sales charge on
purchases of Class A shares of any one or more of the Oppenheimer funds
aggregating $1 million or more. Retirement plans are not permitted to make
initial purchases of Class A shares subject to a contingent deferred sales
charge. The Distributor pays dealers of record concessions in an amount
equal to 1.0% of purchases of $1 million or more. The concession will not
be paid on purchases of shares by exchange or that were previously subject
to a front-end sales charge and dealer concession.

If you redeem any of those shares within an 18-month "holding period"
measured from the beginning of the calendar month of their purchase, a
contingent deferred sales charge (called the "Class A contingent deferred
sales charge") may be deducted from the redemption proceeds. That sales
charge will be equal to 1.0% of the lesser of:
o the aggregate net asset value of the redeemed shares at the time of
redemption (excluding shares purchased by reinvestment of dividends
or capital gain distributions) or
o the original net asset value of the redeemed shares.

The Class A contingent deferred sales charge will not exceed the aggregate
amount of the concessions the Distributor paid to your dealer on all
purchases of Class A shares of all Oppenheimer funds you made that were
subject to the Class A contingent deferred sales charge.

Purchases by Certain Retirement Plans. There is no initial sales charge on
purchases of Class A shares of any one or more Oppenheimer funds by
retirement plans that have $10 million or more in plan assets and that
have entered into a special agreement with the Distributor and by
retirement plans which are part of a retirement plan product or platform
offered by certain banks, broker-dealers, financial advisors, insurance
companies or recordkeepers which have entered into a special agreement
with the Distributor. The Distributor currently pays dealers of record
concessions in an amount equal to 0.25% of the purchase price of Class A
shares by those retirement plans from its own resources at the time of
sale, subject to certain exceptions as described in the Statement of
Additional Information. There is no contingent deferred sales charge upon
the redemption of such shares.

HOW CAN YOU BUY CLASS B SHARES? Class B shares are sold at net asset value per
share without an initial sales charge. Class B shares cannot be purchased by
exchange of Class B shares from another Oppenheimer fund. If Class B shares are
redeemed within six years from the beginning of the calendar month of their
purchase, a contingent deferred sales charge will be deducted from the
redemption proceeds. The Class B contingent deferred sales charge is paid to
compensate the Distributor for its expenses of providing distribution-related
services to the Fund in connection with the sale of Class B shares.

The amount of the contingent deferred sales charge will depend on the
number of years since you invested and the dollar amount being redeemed,
according to the following schedule for the Class B contingent deferred sales
charge holding period:

-------------------------------------------------------------------------------
Years Since Beginning of Month in Contingent Deferred Sales Charge on
Which Purchase Order was Accepted Redemptions in That Year
(As % of Amount Subject to Charge)
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
0 - 1 5.0%
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
1 - 2 4.0%
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
2 - 3 3.0%
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
3 - 4 3.0%
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
4 - 5 2.0%
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
5 - 6 1.0%
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
More than 6 None
-------------------------------------------------------------------------------

In the table, a "year" is a 12-month period. In applying the contingent deferred
sales charge, all purchases are considered to have been made on the first
regular business day of the month in which the purchase was made.

Automatic Conversion of Class B Shares. Class B shares automatically convert to
Class A shares 88 months after you purchase them. This conversion feature
relieves Class B shareholders of the asset-based sales charge that applies
to Class B shares under the Class B Distribution and Service Plan,
described below. The conversion is based on the relative net asset value
of the two classes, and no sales load or other charge is imposed. When any
Class B shares that you hold convert, any other Class B shares that were
acquired by reinvesting dividends and distributions on the converted
shares will also convert to Class A shares. For further information on the
conversion feature and its tax implications, see "Class B Conversion" in
the Statement of Additional Information.

How Can you Buy Class C Shares? Class C shares are sold at net asset value per
share without an initial sales charge. However, if Class C shares are redeemed
within a holding period of 12 months from the beginning of the calendar month of
their purchase, a contingent deferred sales charge of 1.0% will be deducted from
the redemption proceeds. The Class C contingent deferred sales charge is paid to
compensate the Distributor for its expenses of providing distribution-related
services to the Fund in connection with the sale of Class C shares.

HOW CAN YOU BUY CLASS N SHARES? Class N shares are offered for sale to
retirement plans (including IRAs and 403(b) plans) that purchase $500,000 or
more of Class N shares of one or more Oppenheimer funds or to group retirement
plans (which do not include IRAs and 403(b) plans) that have assets of $500,000
or more or 100 or more eligible participants. See "Availability of Class N
shares" in the Statement of Additional Information for other circumstances where
Class N shares are available for purchase.

A contingent deferred sales charge of 1.0% will be imposed upon the
redemption of Class N shares, if: o The group retirement plan is terminated or
Class N shares of all
Oppenheimer funds are terminated as an investment option of the plan and
Class N shares are redeemed within 18 months after the plan's first
purchase of Class N shares of any Oppenheimer fund, or
o With respect to an IRA or 403(b) plan, Class N shares are redeemed within
18 months of the plan's first purchase of Class N shares of any
Oppenheimer fund.

Retirement plans that offer Class N shares may impose charges on plan
participant accounts. The procedures for buying, selling, exchanging and
transferring the Fund's other classes of shares (other than the time those
orders must be received by the Distributor or Transfer Agent in Colorado) and
the special account features applicable to purchasers of those other classes of
shares described elsewhere in this prospectus do not apply to Class N shares
offered through a group retirement plan. Instructions for buying, selling,
exchanging or transferring Class N shares offered through a group retirement
plan must be submitted by the plan, not by plan participants for whose benefit
the shares are held.

DISTRIBUTION AND SERVICE (12b-1) PLANS.

Service Plan for Class A Shares. The Fund has adopted a Service Plan for Class A
shares. It reimburses the Distributor for a portion of its costs incurred
for services provided to accounts that hold Class A shares. Reimbursement
is made quarterly at an annual rate of up to 0.25% of the average annual
net assets of Class A shares of the Fund. The Distributor currently uses
all of those fees to pay dealers, brokers, banks and other financial
institutions quarterly for providing personal service and maintenance of
accounts of their customers that hold Class A shares.

Distribution and Service Plans for Class B, Class C and Class N Shares. The Fund
has adopted Distribution and Service Plans for Class B, Class C and Class
N shares to pay the Distributor for its services and costs in distributing
Class B, Class C and Class N shares and servicing accounts. Under the
plans, the Fund pays the Distributor an annual asset-based sales charge of
0.75% on Class B and Class C shares and 0.25% on Class N shares. The
Distributor also receives a service fee of 0.25% per year under the Class
B, Class C and Class N plans.

The asset-based sales charge and service fees increase Class B and Class C
expenses by 1.0% and increase Class N expenses by 0.50% of the net assets
per year of the respective class. Because these fees are paid out of the
Fund's assets on an on-going basis, over time these fees will increase the
cost of your investment and may cost you more than other types of sales
charges.

The Distributor uses the service fees to compensate dealers for providing
personal services for accounts that hold Class B, Class C or Class N
shares. The Distributor pays the 0.25% service fees to dealers in advance
for the first year after the shares are sold by the dealer. After the
shares have been held for a year, the Distributor pays the service fees to
dealers on a quarterly basis. The Distributor retains the service fees for
accounts for which it renders the required personal services.

The Distributor currently pays a sales concession of 3.75% of the purchase
price of Class B shares to dealers from its own resources at the time of
sale. Including the advance of the service fee, the total amount paid by
the Distributor to the dealer at the time of sale of Class B shares is
therefore 4.00% of the purchase price. The Distributor retains the Class B
asset-based sales charge. See the Statement of Additional Information for
exceptions.

The Distributor currently pays a sales concession of 0.75% of the purchase
price of Class C shares to dealers from its own resources at the time of
sale. Including the advance of the service fee, the total amount paid by
the Distributor to the dealer at the time of sale of Class C shares is
therefore 1.0% of the purchase price. The Distributor pays the asset-based
sales charge as an ongoing concession to the dealer on Class C shares that
have been outstanding for a year or more. See the Statement of Additional
Information for exceptions.

The Distributor currently pays a sales concession of 0.75% of the purchase
price of Class N shares to dealers from its own resources at the time of
sale. Including the advance of the service fee, the total amount paid by
the Distributor to the dealer at the time of sale of Class N shares is
therefore 1.0% of the purchase price. The Distributor retains the
asset-based sales charge on Class N shares. See the Statement of
Additional Information for exceptions.

Special Investor Services

ACCOUNTLINK. You can use our AccountLink feature to link your Fund account with
an account at a U.S. bank or other financial institution. It must be an
Automated Clearing House (ACH) member. AccountLink lets you:
o transmit funds electronically to purchase shares during the Offering
Period by telephone (through a service representative or by PhoneLink), or
o have the Transfer Agent send redemption proceeds or transmit dividends and
distributions directly to your bank account. Please call the Transfer
Agent for more information.

You may purchase shares by telephone during the Offering Period only after
your account has been established. To purchase shares in amounts up to $250,000
through a telephone representative, call the Distributor at 1.800.225.5677. The
purchase payment will be debited from your bank account.

AccountLink privileges should be requested on your Application or your
dealer's settlement instructions if you buy your shares through a dealer. After
your account is established, you can request AccountLink privileges by sending
signature-guaranteed instructions and proper documentation to the Transfer
Agent. AccountLink privileges will apply to each shareholder listed in the
registration on your account as well as to your dealer representative of record
unless and until the Transfer Agent receives written instructions terminating or
changing those privileges. After you establish AccountLink for your account, any
change of bank account information must be made by signature-guaranteed
instructions to the Transfer Agent signed by all shareholders who own the
account.

PHONELINK. PhoneLink is the OppenheimerFunds automated telephone system that
enables shareholders to perform a number of account transactions automatically
using a touch-tone phone. PhoneLink may be used on already-established Fund
accounts after you obtain a Personal Identification Number (PIN), by calling the
PhoneLink number, 1.800.225.5677.

Purchasing Shares. You may purchase shares during the Offering Period in amounts
up to $100,000 by phone, by calling 1.800.225.5677. You must have
established AccountLink privileges to link your bank account with the Fund
to pay for these purchases.
Exchanging Shares. With the OppenheimerFunds Exchange Privilege, described
below, you can exchange shares automatically by phone from your Fund
account to another OppenheimerFunds account you have already established
by calling the special PhoneLink number.
Selling Shares. You can redeem shares by telephone automatically by calling the
PhoneLink number and the Fund will send the proceeds directly to your
AccountLink bank account. Please refer to "How to Sell Shares," below for
details.

CAN YOU SUBMIT TRANSACTION REQUESTS BY FAX? You may send requests for certain
types of account transactions to the Transfer Agent by fax (telecopier). Please
call 1.800.225.5677 for information about which transactions may be handled this
way. Transaction requests submitted by fax are subject to the same rules and
restrictions as written and telephone requests described in this Prospectus.

OPPENHEIMERFUNDS INTERNET WEBSITE. You can obtain information about the Fund, as
well as your account balance, on the OppenheimerFunds Internet website, at
WWW.OPPENHEIMERFUNDS.COM. Additionally, shareholders listed in the account
registration (and the dealer of record) may request certain account transactions
through a special section of that website. To perform account transactions or
obtain account information online, you must first obtain a user I.D. and
password on that website. If you do not want to have Internet account
transaction capability for your account, please call the Transfer Agent at
1.800.225.5677. At times, the website may be inaccessible or its transaction
features may be unavailable.

REINVESTMENT PRIVILEGE. If you redeem some or all of your Class A or Class B
shares of the Fund during the Offering Period, you have until the end of the
Offering Period to reinvest all or part of the redemption proceeds in Class A
shares of the Fund without paying another sales charge. If you redeem some or
all of your Class A or Class B shares of the Fund at any time, you have up to
six months to reinvest all or a part of the redemption proceeds in Class A
shares of other Oppenheimer funds without paying a sales charge. If you redeem
some or all of your Class A or Class B shares of the Fund during the
Post-Warranty Period, you have up to six months to reinvest all or a part of the
redemption proceeds in Class A shares of this Fund or other Oppenheimer funds
without paying a sales charge. This privilege applies only to Class A shares
that you purchased subject to an initial sales charge and to Class A or Class B
shares on which you paid a contingent deferred sales charge when you redeemed
them. This privilege does not apply to Class C or Class N shares. You must be
sure to ask the Distributor for this privilege when you send your payment.

RETIREMENT PLANS. You may buy shares of the Fund during the Offering Period for
your retirement plan account. If you will be required by law to take a
distribution from your retirement plan in the next seven years which in turn
would require you to redeem shares of the Fund, this Fund may not be an
appropriate investment under your retirement plan because the Warranty Amount is
reduced by such redemptions. If you participate in a plan sponsored by your
employer, the plan trustee or administrator must buy the shares for your plan
account. The Distributor also offers a number of different retirement plans that
individuals and employers can use: Individual Retirement Accounts (IRAs). These
include regular IRAs, Roth

IRAs, SIMPLE IRAs and rollover IRAs.
SEP-IRAs. These are Simplified Employee Pension Plan IRAs for small business
owners or self-employed individuals.
403(b)(7) Custodial Plans. These are tax-deferred plans for employees of
eligible tax-exempt organizations, such as schools, hospitals and
charitable organizations.
Pension and Profit-Sharing Plans. These plans are designed for businesses and
self-employed individuals. Please call the Distributor for
OppenheimerFunds retirement plan
documents, which include applications and important plan information.

How to Sell Shares

You can sell (redeem) some or all of your shares on any regular business day.
Prior to the Maturity Date and during the Post-Warranty Period, shares are
redeemed at their net asset value (which may be less than your Warranty Amount)
minus any applicable contingent deferred sales charge. For redemptions prior to
the Maturity Date and during the Post-Warranty Period, the net asset value used
in determining your share price is the next one calculated after your redemption
order is received in proper form (which means that it must comply with the
procedures described below) and is accepted by the Transfer Agent. Redemption of
Fund shares prior to the Maturity Date will reduce your Warranty Amount. The
Fund lets you sell your shares by writing a letter, or by telephone. If you have
questions about any of these procedures, and especially if you are redeeming
shares in a special situation, such as due to the death of the owner or from a
retirement plan account, please call the Transfer Agent first, at
1.800.225.5677, for assistance. Redemption requests received after 4:00p.m. (or
such earlier time as may be required by your financial intermediary) will be
priced at the net asset value at the close of business on the next business day.

For redemptions made on the Maturity Date (August 5, 2010), the value used
in determining your share price will be the greater of (i) the then-current net
asset value or (ii) your Warranty Amount per share. See the example starting on
page 22 for help in understanding how this amount is calculated. Redemptions
made prior to the Maturity Date or during the Post-Warranty Period will not be
protected by the Financial Warranty and the value of your shares will be the
then-current net asset value of the Fund, which may be less than your Warranty
Amount.

Certain Requests Require a Signature Guarantee. To protect you and the Fund from
fraud, the following redemption requests must be in writing and must
include a signature guarantee (although there may be other situations that
also require a signature guarantee):
o You wish to redeem more than $100,000 and receive a check o The redemption
check is not payable to all shareholders listed on the
account statement
o The redemption check is not sent to the address of record on your
account statement
o Shares are being transferred to a Fund account with a different owner
or name
o Shares are being redeemed by someone (such as an Executor) other than
the owners

Where Can You Have Your Signature Guaranteed? The Transfer Agent will accept a
guarantee of your signature by a number of financial institutions,
including:
o a U.S. bank, trust company, credit union or savings association,
o a foreign bank that has a U.S. correspondent bank,
o a U.S. registered dealer or broker in securities, municipal
securities or government securities, or
o a U.S. national securities exchange, a registered securities
association or a clearing agency.
If you are signing on behalf of a corporation, partnership or other
business or as a fiduciary, you must also include your title in the
signature.

Retirement Plan Accounts. There are special procedures to sell shares in an
OppenheimerFunds retirement plan account. Call the Transfer Agent for a
distribution request form. Special income tax withholding requirements
apply to distributions from retirement plans. You must submit a
withholding form with your redemption request to avoid delay in getting
your money and if you do not want tax withheld. If your employer holds
your retirement plan account for you in the name of the plan, you must ask
the plan trustee or administrator to request the sale of the Fund shares
in your plan account.

Sending Redemption Proceeds by Wire. While the Fund normally sends your money by
check, you can arrange to have the proceeds of shares you sell sent by
Federal Funds wire to a bank account you designate. It must be a
commercial bank that is a member of the Federal Reserve wire system. The
minimum redemption you can have sent by wire is $2,500. There is a $10 fee
for each request. To find out how to set up this feature on your account
or to arrange a wire, call the Transfer Agent at 1.800.225.5677.

HOW DO YOU SELL SHARES BY MAIL? Write a letter of instruction that includes:
o Your name o The Fund's name o Your Fund account number (from your account
statement) o The dollar amount or number of shares to be redeemed o Any
special payment instructions o Any share certificates for the shares you are
selling o The signatures of all registered owners exactly as the account is
registered, and
o Any special documents requested by the Transfer Agent to assure proper
authorization of the person asking to sell the shares.

Use the following address for Send courier or express mail
Requests by mail: requests to:
OppenheimerFunds Services OppenheimerFunds Services
P.O. Box 5270 10200 E. Girard Avenue, Building D
Denver, Colorado 80217 Denver, Colorado 80231

HOW DO you SELL SHARES BY TELEPHONE? You and your dealer representative of
record may also sell your shares by telephone. To receive the redemption price
calculated on a particular regular business day, your call must be received by
the Transfer Agent by the close of The New York Stock Exchange that day, which
is normally 4:00 P.M., but may be earlier on some days. You may not redeem
shares held in an OppenheimerFunds retirement plan account by telephone.
o To redeem shares through a service representative or automatically on
PhoneLink, call 1.800.225.5677. Whichever method you use, you may have a
check sent to the address on
the account statement, or, if you have linked your Fund account to your bank
account on AccountLink, you may have the proceeds sent to that bank account.

Are There Limits on Amounts Redeemed by Telephone?
Telephone Redemptions Paid by Check. Up to $100,000 may be redeemed by
telephone in any seven-day period. The check must be payable to all owners
of record of the shares and must be sent to the address on the account
statement. This service is not available within 30 days of changing the
address on an account.

Telephone Redemptions Through AccountLink or by Wire. There are no dollar limits
on telephone redemption proceeds sent to a bank account designated when
you establish AccountLink. Normally the ACH transfer to your bank is
initiated on the business day after the redemption. You do not receive
dividends on the proceeds of the shares you redeemed while they are
waiting to be transferred.

If you have requested Federal Funds wire privileges for your account, the
wire of the redemption proceeds will normally be transmitted on the next
bank business day after the shares are redeemed. There is a possibility
that the wire may be delayed up to seven days to enable the Fund to sell
securities to pay the redemption proceeds. No dividends are accrued or
paid on the proceeds of shares that have been redeemed and are awaiting
transmittal by wire.

CAN YOU SELL SHARES THROUGH your DEALER? The Distributor has made arrangements
to repurchase Fund shares from dealers and brokers on behalf of their customers.
Brokers or dealers may charge for that service. If your shares are held in the
name of your dealer, you must redeem them through your dealer.

HOW CONTINGENT DEFERRED SALES CHARGES AFFECT REDEMPTIONS. If you purchase shares
subject to a Class A, Class B, Class C or Class N contingent deferred sales
charge and redeem any of those shares during the applicable holding period for
the class of shares, the contingent deferred sales charge will be deducted from
the redemption proceeds (unless you are eligible for a waiver of that sales
charge based on the categories listed in Appendix B to the Statement of
Additional Information and you advise the Transfer Agent of your eligibility for
the waiver when you place your redemption request.)

A contingent deferred sales charge will be based on the lesser of the net
asset value of the redeemed shares at the time of redemption or the original net
asset value. A contingent deferred sales charge is not imposed on:
o the amount of your account value represented by an increase in net
asset value over the initial purchase price,
o shares purchased by the reinvestment of dividends or capital gains
distributions, or
o shares redeemed in the special circumstances described in Appendix B
to the Statement of Additional Information.

To determine whether a contingent deferred sales charge applies to a
redemption, the Fund redeems shares in the following order:
1. shares acquired by reinvestment of dividends and capital gains
distributions,
2. shares held for the holding period that applies to the class, and 3.
shares held the longest during the holding period.

Contingent deferred sales charges are not charged when you exchange shares
of the Fund for shares of other Oppenheimer funds. However, if you exchange them
within the applicable contingent deferred sales charge holding period, the
holding period will carry over to the fund whose shares you acquire. Similarly,
if during the Offering Period you acquire Class A, Class C or Class N shares of
this Fund by exchanging shares of another Oppenheimer fund that are still
subject to a contingent deferred sales charge holding period, that holding
period will carry over to this Fund. During the Post-Warranty Period, if you
acquire Class A, Class B, Class C or Class N shares of this Fund by exchanging
the same class of shares of another Oppenheimer fund that are subject to a
contingent deferred sales charge holding period, that holding period will carry
over to this Fund.

How to Exchange Shares

The Fund does not offer the ability to exchange into the Fund during the
Warranty Period. Because the Fund is not continuously offering its shares during
the Warranty Period, if you exchange your shares of the Fund for shares of
another fund you will not be able to effect an exchange back into the Fund
during the Warranty Period. In addition, your exchange will be considered a
redemption and will reduce your Warranty Amount.

If you make an exchange prior to the Maturity Date, you may receive an
amount less than your original investment in the Fund.

Shares of the Fund may be exchanged for shares of certain Oppenheimer
funds at net asset value per share at the time of exchange, without sales
charge. Class A, C and N shares of the Fund can be purchased during the Offering
Period by exchange of the same class of shares of other Oppenheimer funds on the
same basis. You cannot purchase Class B shares of the Fund during the Offering
Period by exchange of shares of other Oppenheimer funds. To exchange shares, you
must meet several conditions:
o Shares of the fund selected for exchange must be available for sale in
your state of residence.
o The prospectuses of both funds must offer the exchange privilege. o You
must hold the shares you buy when you establish your account for
at least seven days before you can exchange them. After the account is
open seven days, you can exchange shares every regular business day.
o You must meet the minimum purchase requirements for the fund whose shares
you purchase by exchange.
o Before exchanging into a fund, you must obtain and read its
prospectus.

Shares of a particular class of the Fund may be exchanged only for
shares of the same class in the other Oppenheimer funds. For example, you can
exchange Class A shares of this Fund only for Class A shares of another fund. In
some cases, sales charges may be imposed on exchange transactions. For tax
purposes, exchanges of shares involve a sale of the shares of the fund you own
and a purchase of the shares of the other fund, which may result in a capital
gain or loss. Please refer to "How to Exchange Shares" in the Statement of
Additional Information for more details.

You can find a list of Oppenheimer funds currently available for exchanges
in the Statement of Additional Information or obtain one by calling a service
representative at 1.800.225.5677. That list can change from time to time.

HOW DO you SUBMIT EXCHANGE REQUESTS? Exchanges may be requested in writing
or by telephone:

Written Exchange Requests. Submit an OppenheimerFunds Exchange Request form,
signed by all owners of the account. Send it to the Transfer Agent at the
address on the back cover. Exchanges of shares held under certificates
cannot be processed unless the Transfer Agent receives the certificates
with the request.
Telephone Exchange Requests. Telephone exchange requests may be made either by
calling a service representative or by using PhoneLink for automated
exchanges by calling 1.800.225.5677. Telephone exchanges may be made only
between accounts that are registered with the same name(s) and address.
Shares held under certificates may not be exchanged by telephone.

ARE THERE LIMITATIONS ON EXCHANGES? There are certain exchange policies you
should be aware of:
o Shares are redeemed from one fund and purchased from the other fund
in the exchange transaction on the same regular business day on which the
Transfer Agent receives an exchange request that conforms to the policies
described above. It must be received by the close of The New York Stock
Exchange that day, which is normally 4:00 P.M. but may be earlier on some
days.
o The Fund may amend, suspend or terminate the exchange privilege at any
time. The Fund will provide you notice whenever it is required to do so by
applicable law, but it may impose changes at any time for emergency
purposes.
o If the Transfer Agent cannot exchange all the shares you request because
of a restriction cited above, only the shares eligible for exchange will
be exchanged.

Shareholder Account Rules and Policies

More information about the Fund's policies and procedures for buying, selling
and exchanging shares is contained in the Statement of Additional Information.

A $12 annual fee is assessed on any account valued at less than $500. The
fee is automatically deducted from the accounts annually on or about the
second to last business day of September. See the Statement of Additional
Information or visit the OppenheimerFunds website, to learn how you can
avoid this fee and for circumstances when this fee will not be assessed.

Telephone transaction privileges for purchases, redemptions or exchanges may be
modified, suspended or terminated by the Fund at any time. The Fund will
provide you notice whenever it is required to do so by applicable law. If
an account has more than one owner, the Fund and the Transfer Agent may
rely on the instructions of any one owner. Telephone privileges apply to
each owner of the account and the dealer representative of record for the
account unless the Transfer Agent receives cancellation instructions from
an owner of the account.
The Transfer Agent will record any telephone calls to verify data concerning
transactions and has adopted other procedures to confirm that telephone
instructions are genuine, by requiring callers to provide tax
identification numbers and other account data or by using PINs, and by
confirming such transactions in writing. The Transfer Agent and the Fund
will not be liable for losses or expenses arising out of telephone
instructions reasonably believed to be genuine.
Redemption or transfer requests will not be honored until the Transfer Agent
receives all required documents in proper form. From time to time, the
Transfer Agent in its discretion may waive certain of the requirements for
redemptions stated in this Prospectus.
Dealers that perform account transactions for their clients by participating in
NETWORKING through the National Securities Clearing Corporation are
responsible for obtaining their clients' permission to perform those
transactions, and are responsible to their clients who are shareholders of
the Fund if the dealer performs any transaction erroneously or improperly.

The redemption price for shares will vary from day to day because the value of
the securities in the Fund's portfolio fluctuates. The redemption price,
which is the net asset value per share, will normally differ for each
class of shares. If you redeem your shares before or after the Maturity
Date, the redemption value of your shares may be more or less than their
original cost. The value of your shares on the Maturity Date will equal
the greater of the Warranty Amount or the Fund's then-current net asset
value.

Payment for redeemed shares ordinarily is made in cash. It is forwarded by
check, or through AccountLink or by Federal Funds wire (as elected by the
shareholder) within seven days after the Transfer Agent receives
redemption instructions in proper form. However, under unusual
circumstances determined by the Securities and Exchange Commission,
payment may be delayed or suspended. For accounts registered in the name
of a broker-dealer, payment will normally be forwarded within three
business days after redemption.
The Transfer Agent may delay processing any type of redemption payment as
described under "How to Sell Shares" for recently purchased shares, but
only until the purchase payment has cleared. That delay may be as much as
10 days from the date the shares were purchased. That delay may be avoided
if you purchase shares by Federal Funds wire or certified check, or
arrange with your bank to provide telephone or written assurance to the
Transfer Agent that your purchase payment has cleared.
Involuntary redemptions of small accounts may be made by the Fund if the account
value has fallen below $500 for reasons other than the fact that the
market value of shares has dropped. In some cases, involuntary redemptions
may be made to repay the Distributor for losses from the cancellation of
share purchase orders.

Sharesmay be "redeemed in kind" under unusual circumstances (such as a lack of
liquidity in the Fund's portfolio to meet redemptions). This means that
the redemption proceeds will be paid with liquid securities from the
Fund's portfolio. If the Fund redeems your shares in-kind, you may bear
transaction costs and will bear market risks until such time as such
securities are converted into cash.

"Backup withholding" of federal income tax may be applied against taxable
dividends, distributions and redemption proceeds (including exchanges) if
you fail to furnish the Fund your correct, certified Social Security or
Employer Identification Number when you sign your application, or if you
under-report your income to the Internal Revenue Service.
To avoid sending duplicate copies of materials to households, the Fund will
mail only one copy of each prospectus, annual and semi-annual report and
annual notice of the Fund's privacy policy to shareholders having the same
last name and address on the Fund's records. The consolidation of these
mailings, called householding, benefits the Fund through reduced mailing
expense.

If you want to receive multiple copies of these materials, you may call
the Transfer Agent at 1.800.225.5677. You may also notify the Transfer
Agent in writing. Individual copies of prospectuses, reports and privacy
notices will be sent to you commencing within 30 days after the Transfer
Agent receives your request to stop householding.

Dividends, Capital Gains and Taxes

Dividends. The Fund intends to declare dividends separately for each class of
shares from net investment income on an annual basis and to pay them to
shareholders in December on a date selected by the Board of Trustees. Dividends
and distributions paid to Class A shares will generally be higher than dividends
for Class B, Class C and Class N shares, which normally have higher expenses
than Class A. The Fund has no fixed dividend rate and cannot guarantee that it
will pay any dividends or distributions.

Capital Gains. The Fund may realize capital gains on the sale of portfolio
securities. If it does, it may make distributions out of any net short-term or
long-term capital gains in December of each year. The Fund may make supplemental
distributions of dividends and capital gains following the end of its fiscal
year. There can be no assurance that the Fund will pay any capital gains
distributions in a particular year.

WHAT CHOICES TO YOU HAVE FOR RECEIVING DISTRIBUTIONS?

Reinvest All Distributions in the Fund. You can elect to reinvest all
dividends and capital gains distributions in additional shares of the
Fund.
Reinvest Dividends or Capital Gains. You can elect to reinvest some
distributions (dividends, short-term capital gains or long-term capital
gains distributions) in the Fund while receiving the other types of
distributions by check or having them sent to your bank account through
AccountLink.
Receive All Distributions in Cash. You can elect to receive a check for all
dividends and capital gains distributions or have them sent to your bank
through Account Link.
Reinvest Your Distributions in Another OppenheimerFunds Account. You can
reinvest all distributions in the same class of shares of another
OppenheimerFunds account you have established.

Unless otherwise specified, all dividends and distributions will be
automatically reinvested in additional full and fractional shares of the
Fund. If you do not reinvest all of your dividends and capital gains
distributions in the Fund during the Warranty Period, your Warranty Amount
will be reduced.

TAXES. If your shares are not held in a tax-deferred retirement account, you
should be aware of the following tax implications of investing in the Fund.
Distributions are subject to federal income tax and may be subject to state or
local taxes. Dividends paid from short-term capital gains and net investment
income are taxable as ordinary income. Long-term capital gains are taxable as
long-term capital gains when distributed to shareholders. It does not matter how
long you have held your shares. Whether you reinvest your distributions in
additional shares or take them in cash, the tax treatment is the same. When you
sell or exchange Fund shares you will generally recognize a capital gain or
capital loss in an amount equal to the difference between the net amount of sale
proceeds (or, in the case of an exchange, the fair market value of the shares)
that you receive and your tax basis for the shares that you sell or exchange. In
January of each year the Fund will mail to you information about your dividends,
distributions and any shares you sold in the previous calendar year.

The asset allocation process may increase turnover of the Fund's assets,
which may result in the realization of additional gains by the Fund. It may also
result in a larger portion of any net gains being treated as short-term capital
gains, which would be taxed as ordinary income when distributed to shareholders.
As noted above, distributions of any gains and income will be taxable to
shareholders even if those distributions are reinvested in Fund shares.
Shareholders may receive taxable distributions of income from investments
included in the debt portfolio even in situations where the Fund has capital
losses from investments in the equity portfolio.

The determination of the tax character of any payment of the Warranty
Amount under the Warranty Agreement to the Fund as capital gain or ordinary
income is not free from doubt under federal tax law. The Fund intends to take
the position that its right to receive the payment under the Warranty Agreement
is itself a capital asset, and that the payment in termination of such right
gives rise to capital gain. Were the Internal Revenue Service to challenge such
position, at least the portion of such payment attributable to capital losses
previously realized by the Fund, and perhaps attributable to the Fund's
unrealized capital losses, should be treated as capital gain. Any such gain
would be offset by otherwise allowable capital losses, if any. To the extent
that the Fund distributes such payment to its shareholders, a portion of such
payment may constitute ordinary income to the shareholders, provided however,
that if the trustees of the Fund should elect to terminate the Fund at the end
of the Warranty Period, it is anticipated that the shareholders receiving such
payment in exchange for their shares would be treated as receiving a return of
capital to the extent of their basis in the shares of the Fund, and to the
extent such payment exceeds basis, as having capital gain.

Every year the Fund will send you and the IRS a statement showing the
amount of any taxable distribution you received in the previous year. Any
long-term capital gains will be separately identified in the tax information the
Fund sends you after the end of the calendar year.

Remember, There May be Taxes on Transactions. Because the Fund's share prices
fluctuate, you may have a capital gain or loss when you sell or exchange
your shares. A capital gain or loss is the difference between the price
you paid for the shares and the price you received when you sold them. Any
capital gain is subject to capital gains tax.
Returns of Capital Can Occur. In certain cases, distributions made by the Fund
may be considered a non-taxable return of capital to shareholders. If that
occurs, it will be identified in notices to shareholders.

The Fund will invest in zero coupon U.S. Treasury bonds and other debt
securities that are issued at a discount or provide for deferred interest. Even
though the Fund receives no actual interest payments on these securities, the
Fund will be deemed to receive income equal, generally, to a portion of the
excess of the face value of the securities over their issue price ("original
issue discount") each year that the securities are held. Since the original
issue discount income earned by the Fund in a taxable year may not be
represented by cash income, the Fund may have to dispose of securities, which it
might otherwise have continued to hold, to generate cash in order to satisfy its
distribution requirements if shareholders request cash distributions.

This information is only a summary of certain federal income tax
information about your investment. You should consult with your tax advisor
about the effect of an investment in the Fund on your particular tax situation.

The Underlying Fund's Past Performance

The following information about the Underlying Fund is provided because the Fund
may invest a substantial amount of its assets in Class Y shares of the
Underlying Fund. The following information is for the Underlying Fund only and
is not intended to predict the performance of the Fund. The performance of the
Fund will differ from the performance of the Underlying Fund. The magnitude of
that difference will depend on the amount of the Fund's assets that are invested
in the Underlying Fund.

The bar chart and table below show one measure of the risks of investing
in the Underlying Fund, by showing the Underlying Fund's performance (for its
Class Y shares) since inception and by showing how the average annual total
returns of the Underlying Fund's Class Y shares, both before and after taxes,
compare to those of a broad-based market index. The after-tax returns are
calculated using the historical highest individual federal marginal income tax
rates in effect during the periods shown, and do not reflect the impact of state
or local taxes. In certain cases, the figure representing "Return After Taxes on
Distributions and Sale of Underlying Fund Shares" may be higher than the other
return figures for the same period. A higher after-tax return results when a
capital loss occurs upon redemption and translates into an assumed tax deduction
that benefits the shareholder. The after-tax returns are calculated based on
certain assumptions mandated by regulation. The Underlying Fund's past
investment performance both before and after taxes, is not necessarily an
indication of how the Underlying Fund or the Fund will perform in the future.

Annual Total Returns (Class Y) (as of 12/31 each year)

[See appendix to prospectus for data in bar chart showing annual total
returns]

Sales charges and taxes are not included in the calculations of return in this
bar chart, and if those charges and taxes were included, the returns may be less
than those shown. For the period from 1/1/03 through 3/31/03, the cumulative
return (not annualized) before taxes for Class Y shares was -3.30%. During the
period shown in the bar chart, the highest return (not annualized) before taxes
for a calendar quarter was 22.05% (4thQTR `98) and the lowest return (not
annualized) before taxes for a calendar quarter was -16.49% (3rdQTR `02).

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

Average Annual Total 10 Years
Returns for the periods 1 Year 5 Years (or Life of
Ended December 31, 2002 Class,
if Less)

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

Class Y Shares (inception 11/1/96)
Return before taxes -19.29% -0.34% 4.36%
Return after taxes on distributions -19.56% -1.39% 2.68%
Return after taxes on distributions
and sale of Underlying Fund shares -11.74% -0.20% 3.30%

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

S&amp;amp;P 500 Index (reflects no
deductions for fees, expenses or -22.09% -0.58% 5.18%1
taxes)

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

1 From 10/31/96.
There is no sales charge on Class Y shares. The Underlying
Fund's returns measure the performance of a hypothetical account and assume that
all dividends and capital gains distributions have been reinvested in additional
shares. The performance of the Underlying Fund's Class Y shares is compared to
the S&amp;amp;P 500 Index, an unmanaged index of equity securities. Index
performance reflects the reinvestment of income but does not consider the
effects of transaction costs, fees, expenses or taxes. The Underlying Fund may
have investments that vary from those in the index.

Financial Highlights of the Underlying Fund

Because the Oppenheimer Principal Protected Main Street Fund may invest a
significant amount of its assets in the Underlying Fund the following Financial
Highlights Table is presented to help you understand the Underlying Fund's Class
Y share financial performance for the past five fiscal years. The total returns
in the table represent the rate that an investor would have earned (or lost) on
an investment in the Underlying Fund (assuming reinvestment of all dividends and
distributions). This information has been audited by Deloitte &amp;amp;
Touche LLP, the Fund's and the Underlying Fund's independent auditors, whose
report, along with the Underlying Fund's financial statements is incorporated by
reference in the Fund's Statement of Additional Information, which is available
on request.

Oppenheimer Main Street Fund
Class Y
---------------------------------------------
Year Ended August 31,
2002 2001 2000 1999 1998
------------------------------------------------------------------------------------
Per Share Operating Data
Net asset value, beginning of period $32.28 $45.64 $43.00 $32.38 $33.94
------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .19 .17 .24 .24 .38
Net realized and unrealized gain (.42) (.11) .68 .12 .97
(loss)
Total from investment operations (.40) (.11) .71 .12 .13
------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.12) (.21) (.19) (.41)
--
Distributions from net realized gain (.05) (.21) (.44) (.15) (.25)
Total dividends and/or distributions (.17) (.23) (.44) (.16) (.29)
to shareholders
---------------------------------------------
------------------------------------------------------------------------------------
Net asset value, end of period $.28 $.32 $.45 $.43 $.32
=============================================

------------------------------------------------------------------------------------
Total Return, at Net Asset Value1 (12.74)% (24.76)% 18.00% 38.84% 3.88%
------------------------------------------------------------------------------------
Ratios/Supplemental Data
Net assets, end of period (in $225,298 $225,475 $260,289 $148,397 $53,063
thousands)
------------------------------------------------------------------------------------
Average net assets (in thousands) $227,835 $239,222 $205,586 $99,155 $36,554
------------------------------------------------------------------------------------
Ratios to average net assets:2
Net investment income 0.74% 0.60% 0.77% 0.63% 1.02%
Expenses 0.92% 0.79% 0.66% 0.77% 0.67%
Expenses, net of reduction to 0.78% 0.73% 0.66% 0.77% 0.67%
custodian expenses and/or voluntary
waiver of transfer agent fees
------------------------------------------------------------------------------------
Portfolio turnover rate 78% 76% 73% 72% 81%

1. Assumes an investment on the business day before the first day of the fiscal
period, 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.
2. Annualized for periods of less than one full year.
3. Added since August 31, 2001 to reflect expenses before reduction to custodian
expenses and voluntary waiver of transfer agent fees. 4. Expense ratio has been
calculated without adjustment for the reduction to custodian expenses.

INFORMATION AND SERVICES

For More Information on

Oppenheimer Principal Protected Main Street Fund(R)

The following additional information about the Fund is available without charge
upon request:

STATEMENT OF ADDITIONAL INFORMATION. This document includes additional
information about the Fund's investment policies, risks, and operations. It is
incorporated by reference into this Prospectus (which means it is legally part
of this Prospectus).

ANNUAL AND SEMI-ANNUAL REPORTS. Additional information about the Fund's
investments and performance will be available in the Fund's Annual and
Semi-Annual Reports to shareholders. The Annual Report will include a discussion
of market conditions and investment strategies that significantly affected the
Fund's performance during its last fiscal year.

How to Get More Information
You can request the Statement of Additional Information, the Annual and
Semi-Annual Reports (when available), the notice explaining the Fund's privacy
policy and other information about the Fund or your account:

------------------------------------------------------------------------------
By Telephone: Call OppenheimerFunds Services toll-free:
1.800.CALL.OPP (225.5677)
------------------------------------------------------------------------------
------------------------------------------------------------------------------
By Mail: Write to:
OppenheimerFunds Services
P.O. Box 5270
Denver, Colorado 80217-5270
------------------------------------------------------------------------------
------------------------------------------------------------------------------
On the Internet: You can send us a request by e-mail or read or
down-load documents on the OppenheimerFunds
website: WWW.OPPENHEIMERFUNDS.COM
------------------------
------------------------------------------------------------------------------

Information about the Fund including the Statement of Additional Information can
be reviewed and copied at the SEC's Public Reference Room in Washington, D.C.
Information on the operation of the Public Reference Room may be obtained by
calling the SEC at 1.202.942.8090. Reports and other information about the Fund
are available on the EDGAR database on the SEC's Internet website at
WWW.SEC.GOV. Copies may be obtained after payment of a duplicating fee by
electronic request at the SEC's e-mail address: publicinfo@sec.gov or by writing
to the SEC's Public Reference Section, Washington, D.C. 20549-0102.

No one has been authorized to provide any information about the Fund or to make
any representations about the Fund other than what is contained in this
Prospectus. This Prospectus is not an offer to sell shares of the Fund, nor a
solicitation of an offer to buy shares of the Fund, to any person in any state
or other jurisdiction where it is unlawful to make such an offer.

The Fund's SEC File No. 811-21281 The Fund's shares are distributed
by:
PR0676.001.0503 [logo] OppenheimerFunds
Distributor, Inc.

Printed on recycled paper

--------
1 Prior to April 30, 2003, the fund's name was Oppenheimer Main Street Growth &amp;amp;
Income Fund.

APPENDIX TO THE PROSPECTUS OF
OPPENHEIMER PRINCIPAL PROTECTED MAIN STREET FUND(R)

Graphic material included in the Prospectus of Oppenheimer Principal Protected
Main Street Fund ("the Fund") includes "Annual Total Returns (Class Y)(% as of
12/31 each year)" for Oppenheimer Main Street Fund (the "Underlying Fund"):

A bar chart will be included in the Prospectus depicting the Underlying
Fund's annual total returns of a hypothetical investment in Class Y shares of
the Underlying Fund since inception, without deducting sales charges. Set forth
below are the relevant data points that will appear in the bar chart:

Calendar Year Ended: Annual Total Returns
12/31/97 26.99%
12/31/98 25.40%
12/31/99 17.37%
12/31/00 -7.77%
12/31/01 -10.28%
12/32/02 -19.29%

Oppenheimer Principal Protected Main Street Fund(R)

6803 South Tucson Way, Centennial, Colorado 80112-3924
1.800.CALL.OPP (225.5677)

Statement of Additional Information dated May 30, 2003

This Statement of Additional Information is not a prospectus. This document
contains additional information about the Fund and supplements information in
the Prospectus dated May 30, 2003. It should be read together with the
Prospectus, which may be obtained 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.

Contents
Page
About the Fund
Additional Information About the Fund's Investment Policies and Risks.......2
The Fund's Investment Policies..........................................2
The Asset Allocation Process............................................3
Investment Restrictions.................................................9
How the Fund is Managed ....................................................11
Organization and History....................................................11
Trustees and Officers of the Fund.......................................13
The Manager.............................................................20
Brokerage Policies of the Fund..............................................22
Distribution and Service Plans..............................................23
Performance of the Fund.....................................................26

About Your Account
How To Buy Shares...........................................................31
How To Sell Shares..........................................................37
How To Exchange Shares......................................................39
Dividends, Capital Gains and Taxes..........................................44
Additional Information About the Fund and the Warranty Provider.............48

Financial Information About the Fund
Independent Auditors' Report................................................50
Financial Statements........................................................51

Appendix A: Industry Classifications.......................................A-1
Appendix B: Special Sales Charge Arrangements and Waivers..................B-1
Appendix C: Information About the Underlying Fund..........................C-1

A B O U T T H E F U N D

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 as
well as information about any non-principal investment policies and the
attendant risks not described in the prospectus 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 can
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 can use in selecting portfolio
securities will vary over time. During the Offering Period (expected to run from
May 30, 2003 through July 31, 2003, unless extended), the Fund will invest its
assets primarily in money market instruments and short-term debt securities. The
Fund's investment objective during the Offering Period is preservation of
capital. Following the Offering Period, the Fund will enter its "Warranty
Period." The "Warranty Period" will run from the third business day following
the end of the Offering Period (expected to be August 5, 2003) through and
including a date seven years later (expected to be August 5, 2010 or the next
following business day (the "Maturity Date")).

The investment objective of the Fund during the Warranty Period is to seek
capital preservation in order to attempt to make sure that the value of each
shareholder's account on the Maturity Date will be no less than the value of
that shareholder's account on the last day of the Offering Period, less sales
charges, extraordinary expenses and other amounts not covered by the "Warranty
Agreement" (the "Warranty Amount"). The Fund seeks high total return as a
secondary objective. There can be no assurance that the Fund will achieve its
objective. The Fund's investment objective during the "Post-Warranty Period,"
the period immediately following the Maturity Date, is high total return. This
section supplements the disclosure in the Fund's Prospectus and provides
additional information on the Fund's investment policies or restrictions to the
extent permitted under the Financial Warranty Agreement, dated May 29, 2003 (the
"Warranty Agreement"), among the Fund, the Manager and Merrill Lynch Bank USA.
Restrictions or policies stated as a maximum percentage of the Fund's assets are
only applied immediately after a portfolio investment to which the policy or
restriction is applicable (other than the limitations on borrowing and illiquid
securities). Accordingly, any later increase or decrease resulting from a change
in values, net assets or other circumstances will not be considered in
determining whether the investment complies with the Fund's restrictions and
policies.

Under normal market conditions, during the Warranty Period the Fund's
assets are allocated between an equity component, consisting exclusively of
Class Y shares of the Oppenheimer Main Street Fund (the "Underlying Fund"), and
a fixed income component, normally consisting primarily of zero-coupon U.S.
government securities. However, as explained more fully in the prospectus, under
certain circumstances, the Fund's assets may be invested primarily or even
exclusively in U.S. government securities.

Merrill Lynch Bank USA ("MLBUSA" or the "Warranty Provider") is a
wholly-owned subsidiary of Merrill Lynch &amp;amp; Co., Inc. MLBUSA is
licensed as an industrial loan corporation pursuant to the laws of the State of
Utah. MLBUSA is regulated by certain Federal and state agencies and is examined
by those agencies. MLBUSA may hedge its risks under the Warranty Agreement with
one or more counterparties, including with an affiliate of MLBUSA (which may
include the calculation agent under the Warranty Agreement). MLBUSA is not
required to hedge its risk under the Warranty Agreement and may choose not to do
so. Whether MLBUSA attempts to hedge its risk under the Warranty Agreement or
not, it is the sole entity responsible for making payments to the Fund, if any,
under the Warranty Agreement.

The Asset Allocation Process. In pursuing the Fund's investment objective during
the Warranty Period, the Manager allocates the Fund's assets between the equity
and fixed income components of the portfolio. The Fund will not employ an asset
allocation model during either the Offering Period or the Post-Warranty Period.

The prevailing level of interest rates and the volatility of the equity
markets will significantly influence the initial allocation of Fund assets
between equity and fixed income securities. At the date of this Statement of
Additional Information, interest rates remain at historically low levels and the
equity markets continue to experience above normal volatility, both of which are
factors that may result in the mathematical formula allocating a high portion of
the Fund's assets to fixed income securities. The Manager will monitor the
allocation of the Fund's assets on a daily basis.

The asset allocation process will also be affected by the Manager's
ability to manage the Underlying Fund. If the market value of the Underlying
Fund increases, a smaller portion of the Fund's assets would be allocated to the
debt portfolio. On the other hand, if the market value of the Underlying Fund
decreases, a higher portion of the Fund's assets would have to be allocated to
the debt portfolio, and the ability of the Fund to participate in any subsequent
upward movement in the equity market would be reduced.

The Warranty Agreement contains a mathematical formula which provides the
maximum amount of the Fund's assets that may be invested in the equity portfolio
on any given day during the Warranty Period. That percentage allocation to the
equity portfolio can be as high as 100% and as low as zero. Accordingly, the
Warranty Agreement could limit the way that the Manager manages the Fund during
the Warranty Period in response to changing market conditions.

In allocating the Fund's assets between equity and fixed income
securities, the Manager will base its decision on the formula set forth in the
Warranty Agreement. The formula will help establish both the initial allocation
of the Fund's assets and on a daily basis will reevaluate the Fund's then
maximum permitted allocation in the equity component. The objective of the
formula is to preserve the principal of the Fund, primarily through allocations
to the fixed income securities. The formula takes into account a number of
factors, including, but not limited to: o The market value of the Fund's assets
as compared to the Warranty Amount;

o The prevailing level of interest rates;
o Equity market volatility; and
o The length of time remaining until the Maturity Date.

The model may allocate between 0% to 100% of the Fund's assets to equity
securities. However, initially a significant portion of the Fund's assets will
be allocated to fixed income securities. It is also possible that 100% of the
Fund's assets will be allocated to the debt portfolio during the Warranty
Period.

The basic terms of the asset allocation model were determined prior to the
Fund entering into the Warranty Agreement with MLBUSA. MLBUSA reviewed the asset
allocation model in determining whether it was prepared to offer the Financial
Warranty to the Fund and negotiated some modifications to manage its financial
risk. MLBUSA has no right to require any modification to the structure of the
asset allocation formula during the Offering Period or the Warranty Period, but
has discretion in certain limited circumstances to adjust certain variables in
the formula. Because the model impacts MLBUSA's financial exposure, MLBUSA has a
right to approve any changes that the Fund wishes to make to the model during
the Offering Period or the Warranty Period. MLBUSA has informational rights
regarding the model's allocation and the Fund's portfolio during the Warranty
Period, but these rights are intended to enable MLBUSA to monitor its financial
exposure. Under the terms of the Warranty Agreement, the Fund is subject to
certain investment parameters during the Warranty Period. The Fund has also
agreed to be bound by various covenants. If the Fund's assets are not managed in
accordance with the parameters set forth in the Warranty Agreement or if the
Fund breaches these covenants, the Fund's assets could be allocated entirely to
the fixed income portfolio for the remainder of the Warranty Period, or MLBUSA
may terminate the Warranty Agreement.

The Financial Warranty. The prospectus contains a detailed description of the
Warranty Agreement. The "Financial Warranty" that the Warranty Provider issues
is a contractual obligation to make a payment to the Fund in the event there is
a Shortfall between the Warranty Amount and the then-current net asset value of
the Fund on the Maturity Date ("Shortfall"). The Financial Warranty is not a
guarantee and therefore the availability of the Financial Warranty on the
Maturity Date will be conditioned upon the Manager and the Fund satisfying their
respective obligations under the Warranty Agreement. Should the Fund and/or the
Manager fail to satisfy their respective obligations under the Warranty
Agreement, the Warranty Provider is permitted to terminate the Financial
Warranty and thus terminate its obligation, if any, to make any payment to the
Fund on the Maturity Date. Shareholders also bear the risk that the Warranty
Provider will become insolvent or otherwise fail to or become unable to satisfy
its payment obligation to the Fund, if any, under the Financial Warranty. If
either event were to occur, shareholders' investment in the Fund would no longer
be protected by the Financial Warranty which means their shares may be worth
less than their anticipated Warranty Amount. The Fund's Board of Trustees will
periodically review the financial statements of the Warranty Provider. In the
event that the financial condition of the Bank has deteriorated beyond certain
thresholds, the Trustees will determine whether there is a substantial
likelihood that the Warranty Provider will be unable to satisfy its obligations
under the Warranty Agreement. Under such circumstances the Board may, but is not
obligated to, replace the Warranty Provider.

In the event the Manager acts with negligence, recklessness, bad faith,
willful misconduct or fraud and the Fund's net asset value is below a set limit,
the Manager will be required to make a payment under the Warranty Agreement in
an amount equal to the amount of any reduction in the Fund's net asset value
below a set limit that is directly or indirectly attributable to the Manager's
conduct. Additionally, in the event the Manager is required to allocate the
Fund's assets to the debt portfolio and fails to do so and such failure results
in the Fund's net asset value falling below a set limit, the Manager will be
required to pay to the Warranty Provider an amount equal to the shortfall due to
the Fund's assets not being so invested. In the event the Manager fails to make
any such payment, deliver a notice of objection, or pay such amount into an
escrow account to the Warranty Provider within five business days, then the
Warranty Provider may terminate the Financial Warranty. The Warranty Provider
may also terminate the Financial Warranty for other reasons, as discussed in the
Prospectus and this Statement of Additional Information.

The Warranty Agreement imposes certain conditions and requirements on the
Fund and the Manager. Failure to satisfy those conditions and requirements,
which are described in detail in the Prospectus, gives the Warranty Provider the
ability to (i) reduce the amount of the Fund's assets invested in shares of the
Underlying Fund, (ii) require 100% of the Fund's assets to be invested in U.S.
government securities, or (iii) terminate the Warranty Agreement, depending on
the condition or requirement. The Manager will monitor the various conditions
and requirements of the Warranty Agreement on a daily basis to ensure that the
Fund and the Manager satisfy those conditions and requirements. In certain
circumstances, the Warranty Agreement provides that in the case of certain
deficiencies, the Fund may have a specified period of time to cure the
deficiency. In the case of other deficiencies, the Warranty Provider has the
right, in its sole discretion, to either direct the Manager to allocate all of
the Fund's assets to the debt portfolio, deliver to the Fund's Custodian
pre-signed instructions from the Manager instructing the Custodian to
immediately allocate all of the Fund's assets to the debt portfolio or change
one of the variables in the formula which would have the effect of increasing
the portion of the Fund's assets allocated to the debt portfolio or in certain
circumstances terminate the Warranty Agreement. The Warranty Provider will rely
on the Manager as well as on the Fund's Custodian bank for the information
necessary to monitor the Fund's and/or the Manager's compliance with the terms
of the Warranty Agreement. The attendant risks to the Fund and shareholders are
if the Manager or the Custodian bank fail to provide the information required by
the Warranty Agreement, in which case the Warranty Provider may require the Fund
to invest exclusively in U.S. government securities.

On the Maturity Date, if there is a shortfall between the Warranted Amount
and the Fund's then-current net asset value, the Warranty Provider will be
required to make a payment to the Fund in the amount of the shortfall. The
Shortfall amount will be determined per class of shares and then the specific
shortfall amount per class of shares will be allocated to the respective class.
Once the dollar amount of shortfall is allocated per class, that amount will
then be divided evenly among the outstanding shares of the class to apply on a
shareholder basis. The Fund will then provide those shareholders who redeem
their Fund shares on the Maturity Date with their respective Warranty Amount.

During the Warranty Period, the Fund may purchase securities or engage in
investment techniques set forth in the following sections.

|X| Investments in Equity Securities. The Fund's investments in equity
securities will consist exclusively of Class Y shares of the Oppenheimer Main
Street Fund (the "Underlying Fund"). The Underlying Fund does not limit its
investments in equity securities to issuers having a market capitalization of a
specified size or range, and therefore can invest in securities of small-, mid-
and large-capitalization issuers. At times, the Underlying Fund can focus its
equity investments in securities of one or more capitalization ranges, based
upon the Manager's judgment of where the best market opportunities are to seek
the Underlying Fund's objective. At times, the market may favor or disfavor
securities of issuers of a particular capitalization range. Securities of small
capitalization issuers may be subject to greater price volatility in general
than securities of larger companies. Therefore, if the Underlying Fund is
focusing on or has substantial investments in smaller capitalization companies
at times of market volatility, the Underlying Fund's share prices may fluctuate
more than that of funds focusing on larger capitalization issuers. Further
information about the Underlying Fund is included under "Information About the
Underlying Fund" in Appendix C to this Statement of Additional Information. The
Underlying Fund's Prospectus and Statement of Additional Information describe in
detail the Underlying Fund's investment policies, risks, management, investment
restrictions, strategies and types of securities in which it may invest, and
contains other information about the Underlying Fund. The Prospectus, Statement
of Additional Information and annual and semi-annual reports of the Underlying
Fund are available without charge upon request by calling 1.800.525.7048.

|X| Investments in Bonds and Other Debt Securities. The Fund will invest
in U.S. government securities to seek its investment objective. In general, debt
securities are also subject to two types of risk: credit risk and interest rate
risk.

o Credit Risk. Credit risk relates to the ability of the issuer to meet
interest or principal payments or both as they become due. The fixed income
component of the Fund's portfolio consist of U.S. government securities. U.S.
government securities, although unrated, are generally considered to be
equivalent to securities in the highest rating categories. Investment-grade
bonds are bonds rated at least "Baa" by Moody's Investors Service, Inc., or at
least "BBB" by Standard &amp;amp; Poor's Rating Service or Fitch, Inc., or that have
comparable ratings by another nationally-recognized rating organization.

o Interest Rate Risk. Interest rate risk refers to the fluctuations in
value of debt securities resulting from the inverse relationship between price
and yield. For example, an increase in general interest rates will tend to
reduce the market value of already-issued debt securities, and a decline in
general interest rates will tend to increase their value. In addition, debt
securities having longer maturities tend to offer higher yields, but are subject
to potentially greater fluctuations in value from changes in interest rates than
obligations having shorter maturities.

Fluctuations in the market value of debt securities after the Fund buys
them will not affect the interest income payable on those securities (unless the
security pays interest at a variable rate pegged to interest rate changes).
However, those price fluctuations will be reflected in the valuations of the
securities, and therefore the Fund's net asset values will be affected by those
fluctuations.

|X| U.S. Government Securities. U.S. government securities the Fund buys
will include non-callable general obligations of the U.S. Treasury backed by the
full faith and credit of the U.S. government or of any of the following U.S.
government agencies: Federal National Mortgage Association, Federal Home Loan
Mortgage Corporation, Federal Home Loan Bank, Resolution Funding Corporation,
Financing Corporation and Tennessee Valley Authority, provided such securities
are rated no less than "AAA" by Standard &amp;amp; Poor's Rating Services
or "Aaa" by Moody's Investors Service, Inc.

o U.S. Treasury Obligations. These include Treasury bills (which have
maturities of one year or less when issued), Treasury notes (which have
maturities of more than one year and up to ten years when issued), and Treasury
bonds (which have maturities of more than ten years when issued). Treasury
securities are backed by the full faith and credit of the United States as to
timely payments of interest and repayments of principal. Other U.S. Treasury
obligations the Fund can buy include U. S. Treasury securities that have been
"stripped" by a Federal Reserve Bank, zero-coupon U.S. Treasury securities
described below.

o Obligations Issued or Guaranteed by U.S. Government Agencies or
Instrumentalities. These include direct obligations and mortgage-related
securities that have different levels of credit support from the government. The
Fund may invest in, Government National Mortgage Association pass-through
mortgage certificates (called "Ginnie Maes"), which are supported by the full
faith and credit of the U.S. government .

|X| Zero-Coupon Securities. The Fund can buy zero-coupon and
delayed-interest securities. The Fund can buy U.S. Treasury notes or bonds that
have been stripped of their interest coupons, and U.S. Treasury bills issued
without interest coupons.

Zero-coupon securities do not make periodic interest payments and are sold
at a deep discount from their face value. The buyer recognizes a rate of return
determined by the gradual appreciation of the security, which is redeemed at
face value on a specified maturity date. This discount depends on the time
remaining until maturity, as well as prevailing interest rates, the liquidity of
the security and the credit quality of the issuer. The discount typically
decreases as the maturity date approaches. Some zero-coupon securities are
convertible, in that they are zero-coupon securities until a predetermined date,
at which time they convert to a security with a specified coupon rate.

Because zero-coupon securities pay no interest and compound semi-annually
at the rate fixed at the time of their issuance, their value is generally more
volatile than the value of other debt securities. Their value may fall more
dramatically than the value of interest-bearing securities when interest rates
rise. When prevailing interest rates fall, zero-coupon securities tend to rise
more rapidly in value because they have a fixed rate of return.

The Fund's investment in zero-coupon securities may cause the Fund to
recognize income and make distributions to shareholders before it receives any
cash payments on the zero-coupon investment. To generate cash to satisfy those
distribution requirements, the Fund may have to sell portfolio securities that
it otherwise might have continued to hold or to use cash flows from other
sources such as the sale of Fund shares.

|X| Money Market Instruments. The following is a brief description of the
types of the U.S. dollar denominated money market securities the Fund can invest
in. Money market securities are high-quality, short-term debt instruments that
may be issued by the U.S. government, corporations, banks or other entities.
They may have fixed, variable or floating interest rates. During the Offering
Period the Fund will invest its assets in:

o U.S. Government Securities. These include obligations issued or
guaranteed by the U.S. government or any of its agencies or
instrumentalities, described above.

o Bank Obligations. The Fund can buy time deposits, certificates of
deposit and bankers' acceptances. They must be:
o obligations issued or guaranteed by a domestic bank (including
a foreign branch of a domestic bank) having total assets of at
least U.S. $1 billion, or
o obligations of a foreign bank with total assets of at least U.S. $1
billion.

"Banks" include commercial banks, savings banks and savings and loan
associations, which may or may not be members of the Federal Deposit Insurance
Corporation.

o Commercial Paper. The Fund can invest in commercial paper if it is
rated within the top three rating categories of Standard &amp;amp; Poor's
and Moody's or other rating organizations.

If the paper is not rated, it may be purchased if the Manager determines
that it is comparable to rated commercial paper in the top three rating
categories of national rating organizations.

The Fund can buy commercial paper, including U.S. dollar-denominated
securities of foreign branches of U.S. banks, issued by other entities if the
commercial paper is guaranteed as to principal and interest by a bank,
government or corporation whose certificates of deposit or commercial paper may
otherwise be purchased by the Fund.

During the Warranty Period, the Fund may invest in bank deposits,
commercial paper and U.S. government securities (excluding U.S. government zero
coupon securities), having a remaining maturity of 90 days or less. The bank
deposits will include demand and time deposits in, certificates of deposit of,
and bankers' acceptances issued by, any U.S. depository institution or trust
company. The bank deposits and commercial paper must have a credit rating of at
least "P-1" by Moody's Investors Service, Inc. and at least "A-1" by Standard &amp;amp;
Poor's Rating Services, and the issuer thereof must have at the time of such
investment a long-term credit rating of at least "Aa3" by Moody's or at least
"AA" by S&amp;amp;P.

|X| Borrowing. The Fund may borrow for temporary or emergency purposes
only to the extent necessary in emergency situations to meet redemption requests
after using all cash held by the Fund to meet such redemption requests, other
than cash necessary to pay Fund fees and expenses. Currently, under the 1940
Act, a mutual fund may borrow only from banks and the maximum amount it may
borrow is up to one-third of its total assets (including the amount borrowed
less its liabilities, other than borrowings), except that a fund may borrow up
to 5% of its total assets for temporary purposes from any person. Under the 1940
Act, there is a rebuttable presumption that a loan is temporary if it is repaid
within 60 days and not extended or renewed. As a matter of fundamental policy,
the Fund is authorized to borrow up to the limits set forth in the 1940 Act.
During periods of substantial borrowings, the value of the Fund's assets would
be reduced due to the added expense of interest on borrowed monies. The Fund is
authorized to borrow, and to pledge assets to secure such borrowings, up to the
maximum extent permissible under the 1940 Act (i.e., presently 50% of net
assets). Any such borrowing will be made only pursuant to the requirements of
the 1940 Act and will be made only to the extent that the value of each 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 a Fund's
assets, so computed, should fail to meet the 300% asset coverage requirement,
the Fund is required, within three days to reduce its bank debt to the extent
necessary to meet such requirement and may have to sell a portion of its
investments at a time when independent investment judgment would not dictate
such sale. Interest on money borrowed is an expense the Fund would not otherwise
incur, so that it may have little or no net investment income during periods of
substantial borrowings. Since substantially all of a Fund's assets fluctuate in
value, but borrowing obligations are fixed when the Fund has outstanding
borrowings, the net asset value per share of a Fund correspondingly will tend to
increase and decrease more when the Fund's assets increase or decrease in value
than would otherwise be the case.

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| Portfolio Turnover. "Portfolio turnover" describes the rate at which
the Fund traded its portfolio securities during its previous fiscal year. For
example, if a fund sold all of its securities during the year, its portfolio
turnover rate would have been 100%. The Fund's portfolio turnover rate will
fluctuate from year to year, and the Fund can have a portfolio turnover rate of
100% or more. 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. As a result of the
Fund's dynamic asset allocation model, the Fund may have a higher portfolio
turnover rate than other mutual funds.

Investment in Other Investment Companies. As stated above, the Fund can invest
in the Class Y shares of Oppenheimer Main Street Fund, subject to the limits set
forth in the Investment Company Act of 1940 (the "Investment Company Act") or
any exemption therefrom that apply to those types of investments and any
percentage limit established, from time to time, by the asset allocation formula
described in the Warranty Agreement. Investing in another investment company may
involve the payment of substantial premiums above the value of such investment
company's portfolio securities and is subject to limitations under the
Investment Company Act. As a shareholder of an investment company, the Fund will
be subject to its ratable share of that investment company's expenses, including
its advisory and administration expenses.

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:
o 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
o 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| Does the Fund Have Additional Fundamental Policies? The following
investment restrictions are fundamental policies of the Fund.

o The Fund cannot concentrate investments. That means it cannot invest 25%
or more of its total assets in any industry. However, there is no limitation on
investments in affiliated funds and obligations issued or guaranteed by the U.S.
government, its agencies or instrumentalities.

o The Fund cannot invest in commodities. However, the Fund can buy and sell any
of the hedging instruments permitted by any of its other policies. It does not
matter if the hedging instrument is considered to be a commodity or commodity
contract.

o The Fund cannot invest in real estate or in interests in real estate.
However, the Fund can purchase securities of issuers holding real estate or
interests in real estate (including securities of real estate investment
trusts).

o 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.

o 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.

o The Fund cannot borrow money, except to the extent permitted under the
Investment Company Act, the rules or regulations thereunder or any exemption
therefrom that is applicable to the Fund, as such statutes, rules or regulations
may be amended or interpreted from time to time.

o The Fund cannot make loans except (a) through lending of securities, (b)
through the purchase of debt instruments or similar evidences of indebtedness,
(c) through an interfund lending program with other affiliated funds, and (d)
through repurchase agreements.

o 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 it
would then own more than 10% of that issuer's voting securities. This limit
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 affiliated investment companies.

Unless the Prospectus or this Statement of Additional Information states
that a percentage restriction applies on an ongoing basis, it applies only at
the time the Fund makes an investment. 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 as a non-fundamental policy the industry
classifications set forth in Appendix B to this Statement of Additional
Information. The Fund does not intend to concentrate its investments in a group
of industries.

How the Fund is Managed

Organization and History. The Fund is a "series" of Oppenheimer Principal
Protected Trust. That Trust is an open-end, management investment company
organized as a Massachusetts business trust on January 17, 2003. The Fund is a
diversified mutual fund and commenced operations on May 30, 2003.

Classes of Shares. The Trustees are authorized, without shareholder approval, 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.

The Fund currently has four classes of shares: Class A, Class B, Class C
and Class N. All classes invest in the same investment portfolio. Only
retirement plans may purchase Class N 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.

Meetings of Shareholders. Although the Fund is not required by Massachusetts law
to hold annual meetings, it may hold shareholder meetings from time to time on
important matters. The shareholders of the Fund's parent trust have the right to
call a meeting to remove a Trustee or to take certain other action described in
the Declaration of Trust or under Massachusetts law.

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 ten 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. The Trustees may also take other action as permitted by the
Investment Company Act.

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

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

Board of Trustees and Oversight Committees. 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 Trust will not normally hold annual meetings of its
shareholders, it may hold shareholder meetings from time to time on important
matters, and shareholders have certain rights to call a meeting to remove a
Trustee or to take other action as described in the Trust's Declaration of
Trust.

The Board of Trustees has an Audit Committee and a Review Committee. The
Audit Committee is comprised solely of Independent Trustees. The members of the
Audit Committee are Edward L. Cameron (Chairman), William L. Armstrong, George
C. Bowen and Robert J. Malone. The Audit Committee furnishes the Board with
recommendations regarding the selection of the Trust's independent auditors.
Other main functions of the Audit Committee include, but are not limited to: (i)
reviewing the scope and results of audits and the audit fees charged; (ii)
reviewing reports from the Trust's independent auditors regarding the Fund's
internal accounting procedures and controls; and (iii) establishing a separate
line of communication between the Trust's independent auditors and its
independent Trustees.

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

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

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

Trustees and Officers of the Fund. Except for Mr. Murphy, each of the Trustees
is an independent trustee of the Fund ("Independent Trustee"). 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 he ceases to be the chief executive officer of
the Manager, he will resign as a trustee of the Fund and the other Board II
Funds (defined below) for which he is a trustee or director. As of the date of
this Statement of Additional Information, 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 Trust's Trustees and officers and their positions held with the Trust
and length of service in such position(s) and their principal occupations and
business affiliations during the past five years are listed in the chart below.
The information for the Trustees also includes the dollar range of shares of the
Fund as well as the aggregate dollar range of shares beneficially owned in any
of the Oppenheimer funds overseen by the Trustees. All of the Trustees are also
trustees or directors of the following Oppenheimer funds (except for Ms.
Hamilton and Mr. Malone, who are not Trustees of Oppenheimer Senior Floating
Rate Fund and Mr. Murphy is not a Trustee or Managing General Partner of any of
the Centennial funds) (referred to as "Board II Funds"):

Oppenheimer Cash Reserves Oppenheimer Select Managers
Oppenheimer Champion Income Fund Oppenheimer Senior Floating
Rate Fund
Oppenheimer Capital Income Fund Oppenheimer Strategic Income
Fund
Oppenheimer High Yield Fund Oppenheimer Total Return
Fund, Inc.
Oppenheimer International Bond Fund Oppenheimer Variable Account
Funds
Oppenheimer Integrity Funds Panorama Series Fund, Inc.
Oppenheimer Limited-Term Government Fund Centennial America Fund, L.P.
Oppenheimer Main Street Funds, Inc. Centennial California Tax
Exempt Trust
Oppenheimer Main Street Opportunity Fund Centennial Government Trust
Oppenheimer Main Street Small Cap Fund Centennial Money Market Trust
Oppenheimer Municipal Fund Centennial New York Tax
Exempt Trust
Oppenheimer Real Asset Fund Centennial Tax Exempt Trust

Present or former officers, directors, trustees and employees (and their
immediate family members) of the Trust, the Manager and its affiliates, and
retirement plans established by them for their employees are permitted to
purchase Class A shares of the Funds and the other Oppenheimer funds at net
asset value without sales charge. The sales charges on Class A shares is waived
for that group because of the economies of sales efforts realized by the
Distributor.

Messrs. Murphy, Manioudakis, Masterson, Molleur, Vottiero, Winston, Wixted
and Zack, and Mses. Bechtolt, Feld and Ives who are officers of the Trust,
respectively hold the same offices with one or more of the other Board II Funds
as with the Trust. Each Independent Trustee, and his family members, do not own
securities of either the Manager or Distributor of the Board II Funds or any
person directly or indirectly controlling, controlled by or under common control
with the Manager or Distributor.

|X| Affiliated Transactions and Material Business Relationships. In 2001,
Mr. Swain surrendered for cancellation 60,000 options of Oppenheimer Acquisition
Company ("OAC") (the Manager's parent holding company) to MassMutual for a cash
payment of $2,700,600.

Mr. Swain has reported that he sold a residential property to Mr. Freedman
on October 23, 2001 for $1.2 million. An independent appraisal of the property
supported the sale price.

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

-------------------------------------------------------------------------------------
Independent Trustees
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
Name, Principal Occupation(s) During Past 5 Dollar Aggregate
Dollar
Range Of
Shares
Beneficially
Owned in
Years; Range of Any of the
Position(s) Held Other Trusteeships/Directorships Held by Shares Oppenheimer
with Fund, Trustee; BeneficiallFunds
Length of Service, Number of Portfolios in Fund Complex Owned in Overseen
Age Currently Overseen by Trustee the Fund by Trustee
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
As of December 31,
2002
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------

James C. Swain, Formerly, Chief Executive Officer (until $0 Over
Chairman and August 27, 2002) of the Board II Funds, $100,000
Trustee since 2003 Vice Chairman (until January 2, 2002) of
Age: 69 the Manager and President and a director
(until 1997) of Centennial Asset Management Corporation (a
wholly-owned investment advisory subsidiary of the Manager).
Oversees 42 portfolios in the OppenheimerFunds complex.

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

William L. Chairman of the following private $0 $50,001-
Armstrong, mortgage banking companies: Cherry Creek $100,000
Trustee since2003 Mortgage Company (since 1991),
Age: 66 Centennial State Mortgage Company (since
1994), The El Paso Mortgage Company
(since 1993), Transland Financial
Services, Inc. (since 1997); Chairman of
the following private companies: Great
Frontier Insurance (insurance agency)
(since 1995), Ambassador Media
Corporation and Broadway Ventures (since
1984); a director of the following
public companies: Helmerich &amp;amp; Payne,
Inc. (oil and gas drilling/production
company) (since 1992) and UNUMProvident
(insurance company) (since 1991). Mr.
Armstrong is also a Director/Trustee of
Campus Crusade for Christ and the
Bradley Foundation. Formerly a director
of the following: Storage Technology
Corporation (a publicly-held computer
equipment company) (1991-February 2003),
International Family Entertainment
(television channel) (1992-1997) and
Natec Resources, Inc. (air pollution
control equipment and services company)
(1991-1995), Frontier Real Estate, Inc.
(residential real estate brokerage)
(1994-1999), and Frontier Title (title
insurance agency) (1995-June 1999); a
U.S. Senator (January 1979-January
1991). Oversees 42 portfolios in the
OppenheimerFunds complex.

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

Robert G. Avis, Formerly, Director and President of A.G. $0 $1-$10,000
Trustee since 2003 Edwards Capital, Inc. (General Partner
Age: 71 of private equity funds) (until February
2001); Chairman, President and Chief
Executive Officer of A.G. Edwards
Capital, Inc. (until March 2000); Vice
Chairman and Director of A.G. Edwards,
Inc. and Vice Chairman of A.G. Edwards &amp;amp;
Sons, Inc. (its brokerage company
subsidiary) (until March 1999); Chairman
of A.G. Edwards Trust Company and A.G.E.
Asset Management (investment advisor)
(until March 1999); and a Director
(until March 2000) of A.G. Edwards &amp;amp;
Sons and A.G. Edwards Trust Company.
Oversees 42 portfolios in the
OppenheimerFunds complex.

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

George C. Bowen, Formerly (until April 1999): Senior Vice $0 Over
Trustee since2003 President (from September 1987) and $100,000
Age: 66 Treasurer (from March 1985) of the
Manager; Vice President (from June 1983) and Treasurer
(since March 1985) of OppenheimerFunds Distributor, Inc. (a
subsidiary of the Manager); Senior Vice President (since
February 1992), Treasurer (since July 1991) Assistant
Secretary and a director (since December 1991) of Centennial
Asset Management Corporation; Vice President (since October
1989) and Treasurer (since April 1986) of HarbourView Asset
Management Corporation (an investment advisory subsidiary of
the Manager); President, Treasurer and a director (June
1989-January 1990) of Centennial Capital Corporation (an
investment advisory subsidiary of the Manager); Vice
President and Treasurer (since August 1978) and Secretary
(since April 1981) of Shareholder Services, Inc. (a transfer
agent subsidiary of the Manager); Vice President, Treasurer
and Secretary (since November 1989) of Shareholder Financial
Services, Inc. (a transfer agent subsidiary of the Manager);
Assistant Treasurer (since March 1998) of Oppenheimer
Acquisition Corp. (the Manager's parent corporation);
Treasurer (since November 1989) of Oppenheimer Partnership
Holdings, Inc. (a holding company subsidiary of the
Manager); Vice President and Treasurer (since July 1996) of
Oppenheimer Real Asset Management, Inc. (an investment
advisory subsidiary of the Manager); Chief Executive Officer
and director (since March 1996) of MultiSource Services,
Inc. (a broker-dealer subsidiary of the Manager); Treasurer
(since October 1997) of OppenheimerFunds International Ltd.
and Oppenheimer Millennium Funds plc (offshore fund
management subsidiaries of the Manager). Oversees 42
portfolios in the OppenheimerFunds complex.

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

Edward L. Cameron, A member of The Life Guard of Mount $0 $50,001-
Trustee since 2003 Vernon, George Washington's home (since $100,000
Age: 64 June 2000). Formerly (March 2001 - May
2002) Director of Genetic ID, Inc. and its subsidiaries (a
privately held biotech company); a partner with
PricewaterhouseCoopers LLP (from 1974-1999) (an accounting
firm) and Chairman (from 1994-1998), Price Waterhouse LLP
Global Investment Management Industry Services Group.
Oversees 42 portfolios in the OppenheimerFunds complex.

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

Jon S. Fossel, Chairman and Director (since 1998) of $0 Over
Trustee since 2003 Rocky Mountain Elk Foundation (a $100,000
Age: 61 not-for-profit foundation); and a
director (since October 1999) of P.R.
Pharmaceuticals (a privately held
company) and UNUMProvident (an insurance
company) (since June 1, 2002). Formerly
Chairman and a director (until October
1996) and President and Chief Executive
Officer (until October 1995) of the
Manager; President, Chief Executive
Officer and a director of Oppenheimer
Acquisition Corp., Shareholders Services
Inc. and Shareholder Financials
Services, Inc. (until October 1995).
Oversees 42 portfolios in the
OppenheimerFunds complex.

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

Sam Freedman, Director of Colorado Uplift (a $0 Over
Trustee since 2003 non-profit charity) (since September $100,000
Age: 62 1984). Formerly (until October 1994) Mr.
Freedman held several positions in subsidiary or affiliated
companies of the Manager. Oversees 42 portfolios in the
OppenheimerFunds complex.

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

Beverly L. Trustee (since 1996) of MassMutual $0 $10,001-
Hamilton, Institutional Funds and of MML Series $50,000
Trustee since 2003 Investment Fund (open-end investment
Age: 56 companies); Director of MML Services
(since April 1987) and America Funds Emerging Markets Growth
Fund (since October 1991) (both are investment companies),
The California Endowment (a philanthropy organization)
(since April 2002), and Community Hospital of Monterey
Peninsula, (since February 2002); a trustee (since February
2000) of Monterey International Studies (an educational
organization), and an advisor to Unilever (Holland)'s
pension fund and to Credit Suisse First Boston's Sprout
venture capital unit. Mrs. Hamilton also is a member of the
investment committees of the Rockefeller Foundation, the
University of Michigan and Hartford Hospital. Formerly,
President (February 1991-April 2000) ARCO Investment
Management Company. Oversees 41 portfolios in the
OppenheimerFunds complex.

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

Robert J. Malone, Director (since 2001) of Jones $0 Over
Trustee since 2003 Knowledge, Inc. (a privately held $100,000
Age: 58 company), U.S. Exploration, Inc., (since
1997), Colorado UpLIFT (a non-profit
organization) (since 1986) and a trustee
of the Gallagher Family Foundation
(non-profit organization) (since 2000).
Formerly, Chairman of U.S. Bank (a
subsidiary of U.S. Bancorp and formerly
Colorado National Bank,) (July
1996-April 1, 1999) and a director of
Commercial Assets, Inc. (a REIT)
(1993-2000). Oversees 41 portfolios in
the OppenheimerFunds complex.

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

F. William Trustee (since 1996) of MassMutual $0 Over Marshall, Jr.,
Institutional Funds and of MML Series $100,000 Trustee since 2003 Investment
Fund (open-end investment Age: 60 companies); Trustee (since 1987),
Chairman of the Board (since 2003) and Chairman of the
investment committee (since 1994) for the Worcester Polytech
Institute; President and Treasurer (since January 1999) of
the SIS Fund (a private not for profit charitable fund);
Trustee (since 1995) of the Springfield Library and Museum
Association; Trustee (since 1996) of the Community Music
School of Springfield. Formerly, member of the investment
committee of the Community Foundation of Western
Massachusetts (1998 - 2003); Chairman (January 1999-July
1999) of SIS &amp;amp; Family Bank, F.S.B. (formerly SIS Bank);
President, Chief Executive Officer and Director (May
1993-December 1998) of SIS Bankcorp, Inc. and SIS Bank
(formerly Springfield Institution for Savings) and Executive
Vice President (January 1999-July 1999) of Peoples Heritage
Financial Group, Inc. Oversees 42 portfolios in the
OppenheimerFunds complex.

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

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

-------------------------------------------------------------------------------------
Interested Trustee and Officer
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
Name, Principal Occupation(s) During Past 5 Years
Position(s) Held with
Fund,
Length of Service,
Age
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
John V. Murphy, Chairman, Chief Executive Officer and director (since June
President and Trustee 2001) and President (since September 2000) of the Manager;
since 2003 President and a director or trustee of other Oppenheimer Age: 53
funds; President and a director (since July 2001) of
Oppenheimer Acquisition Corp. and of Oppenheimer
Partnership Holdings, Inc.; a director (since November
2001) of OppenheimerFunds Distributor, Inc.; Chairman
and a director (since July 2001) of Shareholder
Services, Inc. and of Shareholder Financial Services,
Inc.; President and a director (since July 2001) of
OppenheimerFunds Legacy Program (a charitable trust
program established by the Manager); a director of the
following investment advisory subsidiaries of
OppenheimerFunds, Inc.: OFI Institutional Asset
Management, Inc. and Centennial Asset Management
Corporation (since November 2001), HarbourView Asset
Management Corporation and OFI Private Investments, Inc.
(since July 2001); President (since November 1, 2001)
and a director (since July 2001) of Oppenheimer Real
Asset Management, Inc.; a director (since November 2001)
of Trinity Investment Management Corp. and Tremont
Advisers, Inc. (investment advisory affiliates of the
Manager); Executive Vice President (since February 1997)
of Massachusetts Mutual Life Insurance Company (the
Manager's parent company); a director (since June 1995)
of DLB Acquisition Corporation (a holding company that
owns shares of David L. Babson &amp;amp; Company, Inc.);
formerly, Chief Operating Officer (September 2000-June
2001) of the Manager; President and trustee (November
1999-November 2001) of MML Series Investment Fund and
MassMutual Institutional Funds (open-end investment
companies); a director (September 1999-August 2000) of
C.M. Life Insurance Company; President, Chief Executive
Officer and director (September 1999-August 2000) of MML
Bay State Life Insurance Company; a director (June
1989-June 1998) of Emerald Isle Bancorp and Hibernia
Savings Bank (a wholly-owned subsidiary of Emerald Isle
Bancorp). Oversees 74 portfolios in the OppenheimerFunds
complex.
-------------------------------------------------------------------------------------

The address of the Officers in the chart below is as follows: for
Messrs. Manioudakis, Winston, Molleur and Zack and Ms. Feld, 498 Seventh
Avenue, New York, NY 10018, for Messrs. Masterson, Vottiero and Wixted and
Mses. Bechtolt and Ives, 6803 S. Tucson Way, Centennial, CO 80112-3924. Each
Officer serves for an annual term or until his or her earlier resignation,
death or removal.

-------------------------------------------------------------------------------------
Officers of the Fund
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
Name, Principal Occupation(s) During Past 5 Years
Position(s) Held with
Fund,
Length of Service,
Age
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
Angelo Manioudakis, Senior Vice President of the Manager (since April 2002); an
Vice President and officer of 12 portfolios in the OppenheimerFunds complex;
Portfolio Manager formerly Executive Director and portfolio manager for since
2003 Miller, Anderson &amp;amp; Sherrerd, a division of Morgan Stanley Age: 36
Investment Management (August 1993-April 2002).
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
Kenneth Winston, Vice Senior Vice President and Director of Risk Management,
President and Quantitative Research and Product Design of the Manager Portfolio
Manager (since May 2001); an officer of 1 portfolio in the since 2003
OppenheimerFunds complex; formerly a Managing Partner at Age: 50 Richards &amp;amp;
Tierney, Inc. (March 1994 - May 2001).
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
Brian W. Wixted, Senior Vice President and Treasurer (since March 1999) of
Treasurer since 2003 the Manager; Treasurer (since March 1999) of HarbourView
Age: 43 Asset Management Corporation, Shareholder Services, Inc.,
Oppenheimer Real Asset Management Corporation, Shareholder
Financial Services, Inc., Oppenheimer Partnership Holdings,
Inc., OFI Private Investments, Inc. (since March 2000),
OppenheimerFunds International Ltd. and Oppenheimer
Millennium Funds plc (since May 2000) and OFI Institutional
Asset Management, Inc. (since November 2000); Treasurer and
Chief Financial Officer (since May 2000) of Oppenheimer
Trust Company (a trust company subsidiary of the Manager);
Assistant Treasurer (since March 1999) of Oppenheimer
Acquisition Corp. and OppenheimerFunds Legacy Program
(since April 2000); formerly Principal and Chief Operating
Officer (March 1995-March 1999), Bankers Trust
Company-Mutual Fund Services Division. An officer of 90
portfolios in the OppenheimerFunds complex.
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
Connie Bechtolt, Assistant Vice President of the Manager (since September
Assistant Treasurer 1998); formerly Manager/Fund Accounting (September
since 2003 1994-September 1998) of the Manager. An officer of 90
Age: 39 portfolios in the OppenheimerFunds complex.
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
Philip Vottiero, Vice President/Fund Accounting of the Manager (since March
Assistant Treasurer 2002; formerly Vice President/Corporate Accounting of the
since 2003 Manager (July 1999-March 2002) prior to which he was Chief
Age: 39 Financial Officer at Sovlink Corporation (April 1996-June
1999). An officer of 90 portfolios in the
OppenheimerFunds complex.
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
Robert G. Zack, Senior Vice President (since May 1985) and General Counsel
Vice President &amp;amp; (since February 2002) of the Manager; General Counsel and a
Secretary since 2003 director (since November 2001) of OppenheimerFunds
Age: 54 Distributor, Inc.; Senior Vice President and General
Counsel (since November 2001) of HarbourView Asset
Management Corporation; Vice President and a director
(since November 2000) of Oppenheimer Partnership
Holdings, Inc.; Senior Vice President, General Counsel
and a director (since November 2001) of Shareholder
Services, Inc., Shareholder Financial Services, Inc.,
OFI Private Investments, Inc., Oppenheimer Trust Company
and OFI Institutional Asset Management, Inc.; General
Counsel (since November 2001) of Centennial Asset
Management Corporation; a director (since November 2001)
of Oppenheimer Real Asset Management, Inc.; Assistant
Secretary and a director (since November 2001) of
OppenheimerFunds International Ltd.; Vice President
(since November 2001) of OppenheimerFunds Legacy
Program; Secretary (since November 2001) of Oppenheimer
Acquisition Corp.; formerly Acting General Counsel
(November 2001-February 2002) and Associate General
Counsel (May 1981-October 2001) of the Manager;
Assistant Secretary of Shareholder Services, Inc. (May
1985-November 2001), Shareholder Financial Services,
Inc. (November 1989-November 2001); OppenheimerFunds
International Ltd. And Oppenheimer Millennium Funds plc
(October 1997-November 2001). An officer of 90
portfolios in the OppenheimerFunds complex.
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
Katherine P. Feld, Vice President and Senior Counsel (since July 1999) of the
Assistant Secretary Manager; Vice President (since June 1990) of
since 2003 OppenheimerFunds Distributor, Inc.; Director, Vice
Age: 44 President and Assistant Secretary (since June 1999) of
Centennial Asset Management Corporation; Vice President
(since 1997) of Oppenheimer Real Asset Management, Inc.;
formerly Vice President and Associate Counsel of the
Manager (June 1990-July 1999). An officer of 90
portfolios in the OppenheimerFunds complex.
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
Kathleen T. Ives, Vice President and Assistant Counsel (since June 1998) of
Assistant Secretary the Manager; Vice President (since 1999) of
since 2003 OppenheimerFunds Distributor, Inc.; Vice President and
Age: 36 Assistant Secretary (since 1999) of Shareholder Services,
Inc.; Assistant Secretary (since December 2001) of
OppenheimerFunds Legacy Program and Shareholder Financial
Services, Inc.; formerly Assistant Vice President and
Assistant Counsel of the Manager (August 1997-June 1998);
Assistant Counsel of the Manager (August 1994-August 1997).
An officer of 90 portfolios in the OppenheimerFunds complex.
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
Philip T. Masterson, Vice President and Assistant Counsel of the Manager (since
Assistant Secretary July 1998); formerly, an associate with Davis, Graham, &amp;amp;
since 2003 Stubbs LLP (January 1997-June 1998). An officer of 90 Age: 38
portfolios in the OppenheimerFunds complex.
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
Denis R. Molleur, Vice President and Senior Counsel of the Manager (since
Assistant Secretary July 1999); formerly a Vice President and Associate Counsel
since 2003 of the Manager (September 1995-July 1999). An officer of 83
Age: 45 portfolios in the OppenheimerFunds complex.
-------------------------------------------------------------------------------------

|X| Remuneration of Trustees. The officers of the Fund and one of the
Trustees of the Fund are affiliated with the Manager and therefore receive no
salary or fee from the Fund. The Trustees of the Fund who are not affiliated
with the Manager will receive a salary or fee from the Fund. As of the date of
the Statement of Additional Information, the Fund has not paid any compensation
to the Trustees because it is a new fund.

|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 Funds. Under the plan, the compensation deferred by
a Trustee is periodically adjusted as though an equivalent amount had been
invested in shares of one or more Oppenheimer funds selected by the Trustee. The
amount paid to the Trustee under the plan will be determined based upon the
performance of the selected funds.

Deferral of Trustee's fees under the plan will not materially affect the
Funds' assets, liabilities and net income per share. The plan will not obligate
the fund to retain the services of any Trustee or to pay any particular level of
compensation to any Trustee. Pursuant to an Order issued by the Securities and
Exchange Commission, the Funds 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 the date of this Statement of Additional
Information, OppenheimerFunds, Inc. was the only shareholder of record of any
class of shares of the Fund.

The Manager. The Manager is wholly-owned by Oppenheimer Acquisition Corp., a
holding company controlled by Massachusetts Mutual Life Insurance Company.
The Manager is organized under the laws of the State of Colorado.

|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 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 managers
of the Fund are employed by the Manager and are the persons who are principally
responsible for the day-to-day management of the Fund's portfolio.

The investment advisory 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 or paid by the general distributors of shares of the Fund.
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 bank 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.

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 names "Oppenheimer" and "Main
Street" 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's
parent corporation to use the names "Oppenheimer" and "Main Street" as part of
its name and the name of the Fund.

|X| Approval of Investment Advisory Agreement. The Board of Trustees,
including a majority of the Independent Trustees, is required to approve 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 discussed the services the Manager performs for the Underlying
Fund and the services the Manager will perform for the Fund and concluded that
the advisory fee charged is based on services provided that are in addition to,
rather than duplicative of, services provided under the investment advisory
agreement with the Underlying Fund. The Board considered that the investment
advisory agreement requires that the Manager reduce its advisory fee in the
event the Fund's assets become completely and irreversibly invested in debt
securities.

The Board reviewed the foregoing information in arriving at its decision
to approve the investment advisory agreement. Among other factors, the Board
considered:
o The nature, cost, and quality of the services to be provided to the
Fund and its shareholders;
o The potential profitability of the Fund to the Manager;
o The investment performance of other mutual funds advised by the Manager
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 principal protected mutual funds for similar
services;
o The value and quality of any other benefits or services expected to be
received by the Fund from its relationship with the Manager, and
o The direct and indirect benefits the Manager will receive from its
relationship with the Fund. These included services provided by the
Distributor and the Transfer Agent, and brokerage and soft dollar
arrangements permissible under Section 28(c) of the Securities Exchange
Act.

The Board also considered that the Manager must be able to pay and retain
high quality personnel at competitive rates to provide services to the Fund, and
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 considered by the Trustees, all of whom, except Mr.
Murphy, are "Independent Trustees" within the meaning of the 1940 Act, meeting
with experienced Counsel to the Independent Trustess who assisted the Board in
its deliberations. The Independent Trustees' 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 to approve the investment advisory agreement,
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
commissions 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. 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. 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 commissions 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.

Distribution and Service Plans

The Distributor. Under its General Distributor's Agreement with the Fund's
parent corporation, the Distributor acts as the Fund's principal underwriter in
the continuous public offering of the different classes of shares of the Fund.
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.

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 reimburses 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.

Each plan has been approved by a vote of the Board of Trustees. 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.

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 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 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 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 88 months
after purchase, 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.

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
Trustees. The Board of Trustees has set no minimum amount of assets to qualify
for payments under the plans.

|_| Class A Service Plan. 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. The Class A
service plan permits reimbursements to the Distributor at a rate of up to 0.25%
of average annual net assets of Class A shares. The Board has set the rate at
that level. 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.

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 under the Class A Plan to pay any of
its interest expenses, carrying charges, or other financial costs, or allocation
of overhead.

|_| Class B, Class C and Class N Service and Distribution Plan. 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 allow the Distributor to be compensated at a flat rate for its services
and costs in distributing Class B, Class C and Class N shares and servicing
accounts, 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 types of services that recipients provide are similar to the
services provided under the Class A service plan, described above.

Each plan permits 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 and
Class N shares. The Distributor retains the asset-based sales charge on Class C
shares during the first year the shares are outstanding. It pays the asset-based
sales charge as an ongoing concession to the recipient on Class C shares
outstanding for a year 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 concessions 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 concessions to authorized brokers and dealers at the time of
sale and pays service fees as described above,
o may finance payment of sales concessions 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,
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.

All payments under the Class B, Class C and 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
1.800.225.5677 or by visiting the Oppenheimer Funds 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:

o 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.
o An investment in the Fund is not insured by the FDIC or any other
government agency.
o The Fund's performance returns may not reflect the effect of taxes on
dividends and capital gains distributions.
o The principal value of the Fund's shares and total returns are not
guaranteed and normally will fluctuate on a daily basis.
o When an investor's shares are redeemed, they may be worth more or less
than their original cost.
o 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% contingent deferred sales charge is
deducted for returns for the 1-year and life-of-class periods, as applicable.
For Class N shares, the 1% contingent deferred sales charge is deducted for
returns for the one-year and life-of-class periods as applicable.

|_| 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:

1/n
ERV
--- - 1 = Average Annual 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:

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

|_| Average Annual Total Return (After Taxes on Distributions). The
"average annual total return (after taxes on distributions)" of Class A shares
is an average annual compounded rate of return for each year in a specified
number of years, adjusted to show the effect of federal taxes (calculated using
the highest individual marginal federal income tax rates in effect on any
reinvestment date) on any distributions made by the Fund during the specified
period. 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 value ("ATVD" in the formula) of
that investment, after taking into account the effect of taxes on Fund
distributions, but not on the redemption of Fund shares, according to the
following formula:

ATVD - 1 = Average Annual Total Return (After Taxes on
/n Distributions)
P

|_| Average Annual Total Return (After Taxes on Distributions and
Redemptions). The "average annual total return (after taxes on distributions and
redemptions)" of Class A shares is an average annual compounded rate of return
for each year in a specified number of years, adjusted to show the effect of
federal taxes (calculated using the highest individual marginal federal income
tax rates in effect on any reinvestment date) on any distributions made by the
Fund during the specified period and the effect of capital gains taxes or
capital loss tax benefits (each calculated using the highest federal individual
capital gains tax rate in effect on the redemption date) resulting from the
redemption of the shares at the end of the period. 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 value ("ATVDR" in the formula) of that investment, after taking into
account the effect of taxes on fund distributions and on the redemption of Fund
shares, according to the following formula:

ATVDR - 1= Average Annual Total Return (After Taxes on
1/n Distributions and Redemptions)
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.

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.

|_| Lipper Rankings. From time to time the Fund may publish the ranking of
the performance of its classes of shares by Lipper, Inc. ("Lipper"). Lipper
monitors the performance of regulated investment companies, including the Fund,
and ranks their performance for various periods based on categories relating to
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.

|_| Morningstar Ratings. From time to time a Fund may publish the star
rating of the performance of its classes of shares by Morningstar, Inc., an
independent mutual fund monitoring service. Morningstar rates mutual funds in
their specialized market sector. The Fund is rated among domestic hybrid funds.

Morningstar proprietary star ratings reflect historical risk-adjusted
total investment return. For each fund with at least a three-year history,
Morningstar calculates a Morningstar Rating(TM) based on a Morningstar
Risk-Adjusted Return measure that accounts for variation in a fund's monthly
performance (including the effects of sales charges, loads, and redemption
fees), placing more emphasis on downward variations and rewarding consistent
performance. The top 10% of funds in each category 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. (Each share class is counted as a
fraction of one fund within this scale and rated separately, which may cause
slight variations in the distribution percentages.) 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 Rating
metrics.

|_| 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 prices 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 publish rankings or ratings of the Manager
or Transfer Agent, and of the investor services provided by them to shareholders
of the Oppenheimer funds, other than performance rankings of the Oppenheimer
funds themselves. Those ratings or rankings of shareholder and investor services
by third parties may include comparisons of their services to those provided by
other mutual fund families selected by the rating or ranking services. They may
be based upon the opinions of the rating or ranking service itself, using its
research or judgment, or based upon surveys of investors, brokers, shareholders
or others.

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 during the Offering Period, which ends July 31, 2003,
unless extended. 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 $50 and shareholders must invest at least $500 before an Asset
Builder Plan (described below) can be established on a new account. Shares will
be purchased on the regular business day the Distributor is instructed to
initiate the Automated Clearing House ("ACH") transfer to buy the shares.
Dividends will begin to accrue on shares purchased with the proceeds of ACH
transfers on the business day the Fund receives Federal Funds for the purchase
through the ACH system before the close of The New York Stock Exchange ("the
Exchange"). The Exchange normally closes at 4:00 P.M., but may close earlier on
certain days. If Federal Funds are received on a business day after the close of
the Exchange, the shares will be purchased and dividends will begin to accrue on
the next regular business day. The proceeds of ACH transfers are normally
received by the Fund three 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 purchased during the Offering Period
under a Right of Accumulation 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.

|_| 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 and Class B 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 and Class B 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 and Class B 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.

The Oppenheimer Funds. The Oppenheimer funds are those mutual funds for which
the Distributor acts as the distributor and currently include the following:

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

And the following money market funds:

Oppenheimer Cash Reserves Centennial Government Trust
Oppenheimer Money Market Fund, Inc. Centennial Money Market Trust
Centennial America Fund, L. P. Centennial New York Tax Exempt Trust
Centennial California Tax Exempt Trust Centennial Tax Exempt Trust

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 described above except the money market funds and
Oppenheimer Senior Floating Rate Fund. 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.

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 &amp;amp; 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.
OppenheimerFunds has entered into arrangements with certain record keepers
whereby the Transfer Agent compensates the record keeper for its record keeping
and account servicing functions that it performs on behalf of the participant
level accounts of a retirement plan. While such compensation may act to reduce
the record keeping fees charged by the retirement plan's record keeper, that
compensation arrangement may be terminated at any time, potentially affecting
the record keeping fees charged by the retirement plan's record keeper.

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 values 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 shares 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 and Class N shares 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 at net asset value whether or not 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 Class A
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 88 months from the date of purchase 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 88
months.

|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 (including SEP IRAs and SIMPLE IRAs), o to all rollover contributions made
to Individual 401(k) plans,
Profit-Sharing Plans and Money Purchase Pension Plans, 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 B 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, and
o to certain customers of broker-dealers and financial advisors that
are identified in a special agreement between the broker-dealer or
financial advisor and the Distributor for that purpose.

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.

No sales concessions will be paid to the broker-dealer of record, as
described in the Prospectus, on sales of Class N 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.

|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 values 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).

Account Fees. As stated in the Prospectus, a $12 annual fee is assessed on
any account valued at less than $500. This fee will not be assessed on the
following accounts:
o Accounts that have balances below $500 due to the automatic conversion
of shares from Class B to Class A shares;
o Certain accounts held by broker-dealers through the National Securities
Clearing Corporation; and
o Accounts that fall below the $500 threshold due solely to market
fluctuations within the 12-month period preceding the date the fee is
deducted.

The fee is automatically deducted from qualifying accounts annually on or
about the second to last business day of September. This annual fee is waived
for any shareholders who elect to access their account documents through
electronic document delivery rather than in paper copy and who elect to utilize
the Internet or PhoneLink as their primary source for their general servicing
needs. To sign up to access account documents electronically via eDocs Direct,
please visit the Service Center on our website at WWW.OPPENHEIMERFUNDS.COM or
call 1.888.470.0862 for instructions.

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 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., Eastern time, but may close earlier on some other days (for
example, in case of weather emergencies or on days falling before a U.S.
holiday). All references to time in this Statement of Additional Information
mean "Eastern time." The Exchange's most recent annual announcement (which is
subject to change) states that it will close on New Year's Day, Martin Luther
King, Jr. Day, Presidents' 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
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 affected on such days when shareholders may not
purchase or redeem shares.

|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:
o 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.
o 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.
o 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.
o 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).

How to Sell Shares

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

Sending Redemption Proceeds by Federal Funds Wire. The Federal Funds wire of
redemption proceeds may be delayed if the Fund's custodian bank is not open for
business on a day when the Fund would normally authorize the wire to be made,
which is usually the Fund's next regular business day following the redemption.
In those circumstances, the wire will not be transmitted until the next bank
business day on which the Fund is open for business. No dividends will be paid
on the proceeds of redeemed shares awaiting transfer by Federal Funds wire.

Reinvestment Privilege. Within six months of a redemption, a shareholder
may reinvest all or part of the redemption proceeds of: o Class A shares
purchased subject to an initial sales charge or Class A shares on which a
contingent deferred sales charge was paid, or o 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 if the reinvestment occurs during the Offering Period or during the
Post-Warranty Period or if the reinvestment occurs during the Warranty Period,
in 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
and Class N 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. 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.

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, Class C
and Class N 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, SEP-IRAs, SIMPLE 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 plan sponsors) 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 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.

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
of shares by calling the Distributor.

o All of the Oppenheimer funds currently offer Class A, B, C, N and Y shares
with the following exceptions:

The following funds only offer Class A shares:
Centennial America Fund, L.P. Centennial New York Tax Exempt
Trust
Centennial California Tax Exempt Centennial Tax Exempt Trust
Trust
Centennial Government Trust Oppenheimer Money Market Fund, Inc.
Centennial Money Market Trust

The following funds do not offer Class N shares:
Oppenheimer AMT-Free New York Oppenheimer Pennsylvania Municipal
Municipals Fund
Oppenheimer California Municipal Fund Oppenheimer Rochester National
Municipals
Oppenheimer Limited Term Municipal Oppenheimer Senior Floating Rate
Fund Fund
Oppenheimer Municipal Bond Fund Limited Term New York Municipal Fund
Oppenheimer New Jersey Municipal Fund Rochester Fund Municipals

The following funds do not offer Class Y shares:
Oppenheimer AMT-Free New York Oppenheimer Limited Term Municipal
Municipals Fund
Oppenheimer California Municipal Fund Oppenheimer Multiple Strategies Fund
Oppenheimer Capital Income Fund Oppenheimer New Jersey Municipal Fund
Oppenheimer Cash Reserves Oppenheimer Pennsylvania Municipal
Fund
Oppenheimer Champion Income Fund Oppenheimer Quest Capital Value
Fund, Inc.
Oppenheimer Convertible Securities Fund Oppenheimer Quest Global Value Fund,
Inc.
Oppenheimer Disciplined Allocation Fund Oppenheimer Rochester National
Municipals
Oppenheimer Developing Markets Fund Oppenheimer Senior Floating Rate Fund
Oppenheimer Gold &amp;amp; Special Minerals Oppenheimer Small Cap Value Fund Fund
Oppenheimer International Bond Fund Oppenheimer Total Return Bond Fund
Oppenheimer International Growth Fund Limited Term New York Municipal Fund
Oppenheimer International Small Company Fund

o Class B shares of the Fund cannot be purchased during the Offering Period
by exchange of Class B shares of another Oppenheimer fund.
o Class Y shares of Oppenheimer Real Asset Fund may not be exchanged for
shares of any other fund.
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 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 may 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.
o Shares of Oppenheimer Select Managers Mercury Advisors S&amp;amp;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.
o 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.
o 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.
o Shares of the Fund acquired during the Offering Period 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, with the following exceptions:

o When Class A shares of any Oppenheimer fund (other than Rochester National
Municipals and Rochester Fund Municipals) acquired by exchange of Class A shares
of any Oppenheimer fund purchased subject to a Class A contingent deferred sales
charge are redeemed within 18 months measured from the beginning 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.

o When Class A shares of Rochester National Municipals and Rochester Fund
Municipals acquired by exchange of Class A shares of any Oppenheimer fund
purchased subject to a Class A contingent deferred sales charge are redeemed
within 24 months of the beginning 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.

o 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 When Class A shares of Oppenheimer Cash Reserves and Oppenheimer Money Market
Fund, Inc. acquired by exchange of Class A shares of any Oppenheimer fund
purchased subject to a Class A contingent deferred sales charge are redeemed
within the Class A holding period of the fund from which the shares were
exchanged, the Class A contingent deferred sales charge of the fund from which
the shares were exchanged is imposed on the redeemed shares.

o With respect to Class B shares, the Class B contingent deferred sales charge
is imposed on Class B shares acquired by exchange if they are redeemed within
six years of the initial purchase of the exchanged Class B shares.

o With respect to Class C 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.

o With respect to Class N shares, a 1% contingent deferred sales charge will be
imposed if the retirement plan (not including IRAs and 403(b) plans) is
terminated or Class N shares of all Oppenheimer funds are terminated as an
investment option of the plan and Class N shares are redeemed within 18 months
after the plan's first purchase of Class N shares of any Oppenheimer fund or
with respect to an individual retirement plan or 403(b) plan, Class N shares are
redeemed within 18 months of the plan's first purchase of Class N shares of any
Oppenheimer fund.

o 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 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.

|X| 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"). Normally, shares of the fund to be acquired
are purchased on the Redemption Date, but such purchases may be delayed by
either fund up to five business days if it determines that it would be
disadvantaged by an immediate transfer of the redemption proceeds. 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.

Under certain tax rules, the Fund may be required to include an amount in
income with respect to a security even though the Fund does not receive payments
in cash attributable to such income in respect of the security during the year.
For example, the Fund may be required to accrue a portion of any discount at
which it purchases a debt security as income in each year. The Fund will not
invest in equity securities during the Warranty Period other than Class Y shares
of the Underlying Fund. To the extent that the Fund invests in any securities
producing such "phantom income," the Fund will nonetheless be required to make
income distributions of such phantom income in order to avoid taxation of such
income at the Fund level. Such distributions will be required to be made from
available cash of the Fund or by liquidation of Fund securities if necessary. If
a distribution of cash necessitates the liquidation of Fund securities, the Fund
may realize a gain or loss from such sales. Any net capital gains realized from
such transactions may result in larger capital gain distributions (if any) to
shareholders than they would have received in the absence of such transactions.

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 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 advisers 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 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 12 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 (including receivables), 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.

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 a long-term
capital gain and will be properly identified in reports sent to shareholders in
January of each year. Such treatment will apply no 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, the Fund will provide to shareholders of record on the
last day of its taxable year information regarding their pro rata share of the
gain and tax paid. 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 30% (29% for
payments after December 31, 2003) of ordinary income dividends, capital gains
distributions and the proceeds of the redemption of shares, paid to any
shareholder (1) who has failed to provide a correct taxpayer identification
number or to properly certify that number when required, (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). All income and any tax withheld by the Fund is remitted
by the Fund to the U.S. Treasury and is identified in reports mailed to
shareholders in January of each year.

|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. Under U.S. tax law, taxation of a shareholder
who is a foreign person (to include, but not limited to, a nonresident alien
individual, a foreign trust, a foreign estate, a foreign corporation, or a
foreign partnership) primarily depends on whether the foreign person's income
from the Fund is effectively connected with the conduct of a U.S. trade or
business. Typically, ordinary income dividends paid from a mutual fund are not
considered "effectively connected" income.

Ordinary income dividends that are paid by the Fund (and are deemed not
"effectively connected income") to foreign persons will be subject to a U.S. tax
withheld by the Fund at a rate of 30%, provided the Fund obtains a properly
completed and signed Certificate of Foreign Status. The tax rate may be reduced
if the foreign person's country of residence has a tax treaty with the U.S.
allowing for a reduced tax rate on ordinary income dividends paid by the Fund.
All income and any tax withheld by the Fund is remitted by the Fund to the U.S.
Treasury and is identified in reports mailed to shareholders in March of each
year.

If the ordinary income dividends from the Fund are effectively connected
with the conduct of a U.S. trade or business, then the foreign person may claim
an exemption from the U.S. tax described above provided the Fund obtains a
properly completed and signed Certificate of Foreign Status.

If the foreign person fails to provide a certification of his/her foreign
status, the Fund will be required to withhold U.S. tax at a rate of 30% (29% for
payments after December 31, 2003) on ordinary income dividends, capital gains
distributions and the proceeds of the redemption of shares, paid to any foreign
person. All income and any tax withheld (in this situation) by the Fund is
remitted by the Fund to the U.S. Treasury and is identified in reports mailed to
shareholders in January of each year.

The tax consequences to foreign persons 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 or the U.S. Internal
Revenue Service with respect to the particular tax consequences to them of an
investment in the Fund, including the applicability of the U.S. withholding
taxes described above.

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. However,
such reinvestment will not be protected by the Financial Warranty and will
result in a reduction of the shareholder's Warranty Amount. 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 Warranty Provider. Merrill Lynch Bank USA, located at 15 West South
Temple Square, Suite 300 Salt Lake City, Utah 84101, has entered into the
Warranty Agreement with the Fund. Merrill Lynch Bank USA is a direct subsidiary
of Merrill Lynch &amp;amp; Co., Inc. and its principal business is to engage
in banking activities. The 2002 audited financial statements of Merrill Lynch
Bank USA and its March 31, 2003 quarterly unaudited financial statements are
incorporated herein by reference. You may request a copy of the Merrill Lynch
Bank USA financial statements, free of charge, by calling the Transfer Agent at
the toll-free number listed on the back cover of this Statement of Additional
Information.

The Custodian. JPMorgan Chase Bank 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 is 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. Deloitte &amp;amp; Touche 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 the Manager and for
certain other funds advised by the Manager and its affiliates. Deloitte
&amp;amp; Touche LLP are the independent auditors of MLBUSA.

Financial Statements. The initial Statement of Assets and Liabilities for the
Fund and the Opinion of Independent Auditors follows. The audited financial
statements for the Oppenheimer Main Street Fund (the "Underlying Fund") are
incorporated in this Statement of Additional Information by reference to the
2002 annual report to shareholders of the Underlying Fund and the unaudited
financial statements for the Underlying Fund are incorporated in this Statement
of Additional Information by reference to the February 28, 2003 semi-annual
report to shareholders of the Underlying Fund. You may request a copy of that
annual report at no charge by calling the toll-free number listed on the back
cover of this Statement of Additional Information during normal business hours
on any business day.

INDEPENDENT AUDITORS' REPORT

To the Board of Trustees and Shareholders of
Oppenheimer Principal Protected Main Street Fund

We have audited the accompanying statement of assets and liabilities of
Oppenheimer Principal Protected Main Street Fund as of March 17, 2003. This
financial statement is the responsibility of the Fund's management. Our
responsibility is to express an opinion on this financial statement 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
statement of assets and liabilities is free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the statement of assets and liabilities. An audit also
includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall statement of assets and
liabilities presentation. We believe that our audit of the statement of
assets and liabilities provides a reasonable basis for our opinion.

In our opinion, such statement of assets and liabilities presents fairly, in
all material respects, the financial position of Oppenheimer Principal
Protected Main Street Fund at March 17, 2003, in conformity with accounting
principles generally accepted in the United States of America.

/s/ Deloitte &amp; Touche

Deloitte &amp; Touche LLP

Denver, Colorado
May 27, 2003

Oppenheimer Principal Protected Main Street Fund

Statement of Assets and Liabilities
March 17, 2003

ASSETS: Composite
Cash $103,000
Offering costs $150,000

$253,000
LIABILITIES:

Accounts Payable $150,000
-----------
Net Assets $103,000
-----------

Class A Class B Class C Class N

NET ASSETS - Applicable to 10,000 Class A
shares, 100 Class B shares, 100 Class
C Shares and 100 Class N Shares of
beneficial interest outstanding,
$.001 par value, unlimited shares
authorized $103,000 $100,000 $1,000 $1,000 $1,000

NET ASSET VALUE PER SHARE (net
assets divided by 10,000, 100, 100
and 100 shares of beneficial interest
for Class A, B, C and N
respectively.)" $10.00 $10.00 $10.00 $10.00

MAXIMUM OFFERING PRICE PER SHARE
(net asset value plus sales charge of 5.75%
of offering price for Class A shares) $10.61 $10.00 $10.00 $10.00

Notes to Statement of Assets and Liabilities:

Note 1. Organization

Oppenheimer Principal Protected Main Street Fund (the ""Fund"") is a series
of Oppenheimer Principal Protected Trust. That Trust was organized as a
business trust in the Commonwealth of Massachusetts on January 16, 2003 as
a diversified open-end management investment company registered under the
Investment Company Act of 1940, as amended. The Fund has had no operations
through March 17, 2003 other than those relating to organizational matters
and the sale and issuance of 10,000 Class A shares, 100 Class B shares, 100
Class C shares, and 100 Class N shares of beneficial interest to
OppenheimerFunds, Inc.(""OFI"" or the ""Adviser"").

On March 14th, 2003, the Fund's Board of Trustees approved an Investment
Advisory Agreement with OFI and a Distributor's Agreement with
OppenheimerFunds Distributor, Inc. (""OFDI""), a wholly-owned subsidiary of
OFI. On April 28, 2003 the fund's Board of Trustees approved a revised
Investment Advisory Agreement with OFI.

The Fund has entered into an agreement with a third party to provide a
warranty to the Fund. The Warranty Agreement is a contractual obligation
for the Warranty Provider to make a payment to the Fund within 12 days of
the end of the Warranty Period in the event the Fund's assets are
insufficient to redeem out Fund shares at the Warranty Amount (which is the
investor's account value at the end of the Offering Period less any sales
charges paid and extraordinary expenses incurred by the Fund). The Warranty
Agreement may be terminated by the Fund at any time upon the occurrence of
an Act of Insolvency with respect to the Warranty Provider, or if the
Warranty Provider ceases to be ""well capitalized"" under FDIC regulations
and may be terminated by the Warranty Provider only in certain specified
circumstances as described in the Warranty Agreement.

The Fund's investment objective is to seek capital preservation in order to
have a net asset value on the Maturity Date at least equal to the Warranty
Amount. The Fund seeks high total return as a secondary objective.

The Fund offers Class A, Class B, Class C and Class N 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).

Note 2. Significant Accounting Policies

OFI has assumed organization cost estimated to be $150,000 and a portion of
the initial offering costs estimated at $233,000.

The Fund's financial statements are prepared in conformity with accounting
principles generally accepted in the United States which may require the
use of management estimates and assumptions. Actual results could differ
from those estimates.

The Fund intends to comply in its initial fiscal year and thereafter with
provisions of the Internal Revenue Code applicable to regulated investment
companies and as such, will not be subject to federal income taxes on
otherwise taxable income (including net realized capital gains) distributed
to shareholders.

Offering costs will be charged to paid-in capital in proportion to the
number of shares sold during the offering period.

Note 3. Fees and Other Transactions with Affiliated Parties The Fund will pay
the Adviser a monthly fee (the ""Management Fee"") at the annual rate of
0.50% of average annual net assets reduced by the amount of management fees
paid to OFI by Oppenheimer Main Street Fund relating to the Fund's assets
invested in Oppenheimer Main Street Fund during the payment period.
However, Management fees shall not be reduced below zero. In the event the
Fund's assets become completely and irrevocably invested in debt
securities, the management fee will be 0.25%.
The Adviser has voluntarily agreed to waive its advisory fee during the
offering period. That voluntary undertaking may be amended or eliminated at
any time.

OppenheimerFunds Services (""OFS""), a division of the Adviser, acts as the
transfer and shareholder servicing agent for the Fund. The Fund will pay
OFS an agreed upon per account fee.
OFDI acts as the Fund's principal underwriter in the public offering of
shares of the Fund.

Appendix A

Industry Classifications

Aerospace &amp;amp; Defense Household Products
Air Freight &amp;amp; Couriers Industrial Conglomerates
Airlines Insurance
Auto Components Internet &amp;amp; Catalog Retail
Automobiles Internet Software &amp;amp; Services
Banks Information Technology Consulting &amp;amp;

Services

Beverages Leisure Equipment &amp;amp; Products Biotechnology Machinery
Building Products Marine Chemicals Media Commercial Services &amp;amp;
Supplies Metals &amp;amp; Mining Communications Equipment Multiline Retail
Computers &amp;amp; Peripherals Multi-Utilities Construction &amp;amp;
Engineering Office Electronics Construction Materials Oil &amp;amp; Gas
Containers &amp;amp; Packaging Paper &amp;amp; Forest Products
Distributors Personal Products Diversified Financials Pharmaceuticals
Diversified Telecommunication Services Real Estate Electric Utilities Road
&amp;amp; Rail Electrical Equipment Semiconductor Equipment &amp;amp;
Products Electronic Equipment &amp;amp; Instruments Software Energy
Equipment &amp;amp; Services Specialty Retail Food &amp;amp; Drug
Retailing Textiles &amp;amp; Apparel Food Products Tobacco Gas Utilities
Trading Companies &amp;amp; Distributors Health Care Equipment &amp;amp;
Supplies Transportation Infrastructure Health Care Providers &amp;amp;
Services Water Utilities Hotels Restaurants &amp;amp; Leisure Wireless
Telecommunication Services Household Durables

Appendix B

OppenheimerFunds Special Sales Charge Arrangements and Waivers

In certain cases, the initial sales charge that applies to purchases of Class A
shares1 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.2 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
plans3
4) Group Retirement Plans4 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 (24 months in the case of Oppenheimer Rochester National Municipals and
Rochester Fund Municipals) of the beginning 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."5 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. That included plans
(other than IRA or 403(b)(7) Custodial Plans) that: 1) bought shares
costing $500,000 or more, 2) had at the time of purchase 100 or more
eligible employees or total plan assets of $500,000 or more, or 3)
certified to the Distributor that it projects to have annual plan
purchases of $200,000 or more.
|_| Purchases by an OppenheimerFunds-sponsored Rollover IRA, if the
purchases are made:
1) through a broker, dealer, bank or registered investment adviser
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 &amp;amp;
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).

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 advisers 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 adviser 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.6 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.7
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.
|_| For distributions from retirement plans that have $10 million or more
in plan assets and that have entered into a special agreement with the
Distributor.
|_| For distributions from retirement plans which are part of a retirement
plan product or platform offered by certain banks, broker-dealers,
financial advisors, insurance companies or record keepers which have
entered into a special agreement with the Distributor.

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. 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.
|_| The contingent deferred sales charges are generally not waived
following the death or disability of a grantor or trustee for a
trust account. The contingent deferred sales charges will only be
waived in the limited case of the death of the 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.
|_| Distributions8 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.9 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.10 9) On account of the
participant's separation from service.11 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.

|X| 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.

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

|X| 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.

|X| 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.

|X| 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.

|X| 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 adviser 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.

|X| 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.

|X| 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.

Appendix C

Information About the Underlying Fund

Additional Information About the Underlying Fund's Investment Policies and
Risks

The investment objective, the principal investment policies and the main risks
of the Oppenheimer Main Street Fund(R) (the "Underlying Fund") are described in
the Underlying Fund's Prospectus as well as the Prospectus for Oppenheimer
Principal Protected Main Street Fund. This Appendix C contains supplemental
information about those policies and risks and the types of securities that the
Underlying Fund's investment Manager, OppenheimerFunds, Inc., can select for the
Underlying Fund. Additional information is also provided about the strategies
that the Underlying Fund can use to try to achieve its objective.

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

|X| Investments in Equity Securities. The Underlying Fund does not limit
its investments in equity securities to issuers having a market capitalization
of a specified size or range, and therefore can invest in securities of small-,
mid- and large-capitalization issuers. At times, the Underlying Fund can focus
its equity investments in securities of one or more capitalization ranges, based
upon the Manager's judgment of where the best market opportunities are to seek
the Underlying Fund's objective. At times, the market may favor or disfavor
securities of issuers of a particular capitalization range. Securities of small
capitalization issuers may be subject to greater price volatility in general
than securities of larger companies. Therefore, if the Underlying Fund is
focusing on or has substantial investments in smaller capitalization companies
at times of market volatility, the Underlying Fund's share prices may fluctuate
more than that of Funds focusing on larger capitalization issuers.

|_| Rights and Warrants. The Underlying Fund can invest up to 10% of
its total assets in warrants or rights, although the Underlying Fund does not
currently intend to invest more than 5% of its total assets 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.

|_| Convertible Securities. Convertible securities are debt securities
that are convertible into an 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. In that case, 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.

While some convertible securities are a form of debt security, in many
cases their conversion feature (allowing conversion into equity securities)
caused 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 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:

o 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,
o 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
o 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.

|X| Investments in Bonds and Other Debt Securities. The Underlying Fund
can invest in bonds, debentures and other debt securities to seek its investment
objective. Because the Underlying Fund currently emphasizes investments in
equity securities, such as stocks, it is not anticipated that significant
amounts of the Underlying Fund's assets will be invested in debt securities.
However, if market conditions suggest that debt securities may offer better
total return opportunities than stocks, or if the Manager determines to seek a
higher amount of current income to distribute to shareholders, the Manager can
shift more of the Underlying Fund's investments into debt securities.

The Underlying Fund's debt investments can include investment-grade and
non-investment-grade bonds (commonly referred to as "junk bonds").
Investment-grade bonds are bonds rated at least "Baa" by Moody's Investors
Service, Inc., or at least "BBB" by Standard &amp;amp; Poor's Corporation or Fitch,
Inc., or that have comparable ratings by another nationally-recognized rating
organization. In making investments in debt securities, the Manager can rely to
some extent on the ratings of ratings organizations or it can use its own
research to evaluate a security's credit-worthiness. If the securities that the
Underlying Fund buys are unrated, to be considered part of the Underlying Fund's
holdings of investment-grade securities, they must be judged by the Manager to
be of comparable quality to bonds rated as investment grade by a rating
organization.

|_| U.S. Government Securities. The Underlying Fund can buy securities
issued or guaranteed by the U.S. government or its agencies and
instrumentalities. Securities issued by the U.S. Treasury are backed by the full
faith and credit of the U.S. government and are subject to very little credit
risk. Obligations of U.S. government agencies or instrumentalities (including
mortgage-backed securities) may or may not be guaranteed or supported by the
"full faith and credit" of the United States. Some are backed by the right of
the issuer to borrow from the U.S. Treasury; others, by discretionary authority
of the U.S. government to purchase the agencies' obligations; while others are
supported only by the credit of the instrumentality. If a security is not backed
by the full faith and credit of the United States, the owner of the security
must look principally to the agency issuing the obligation for repayment and may
not be able to assert a claim against the United States in the event that the
agency or instrumentality does not meet its commitment. The Underlying Fund will
invest in securities of U.S. government agencies and instrumentalities only when
the Manager is satisfied that the credit risk with respect to the agency or
instrumentality is minimal.

|_| Special Risks of Lower-Grade Securities. While it is not
anticipated that the Underlying Fund will invest a substantial portion of its
assets in debt securities, the Underlying Fund can do so to seek current income.
Because lower-rated securities tend to offer higher yields than investment grade
securities, the Underlying Fund can invest in lower grade securities if the
Manager is trying to achieve greater income (and, in some cases, the
appreciation possibilities of lower-grade securities may be a reason they are
selected for the Underlying Fund's portfolio).

The Underlying Fund can invest up to 25% of its total assets in "lower
grade" debt securities. However, the Underlying Fund does not currently intend
to invest more that 10% of its total assets in lower grade debt securities.
"Lower-grade" debt securities are those rated below "investment grade" which
means they have a rating lower than "Baa" by Moody's or lower than "BBB" by
Standard &amp;amp; Poor's or Fitch, Inc., or similar ratings by other rating
organizations. If they are unrated, and are determined by the Manager to be of
comparable quality to debt securities rated below investment grade, they are
included in the limitation on the percentage of the Underlying Fund's assets
that can be invested in lower-grade securities. The Underlying Fund can invest
in securities rated as low as "C" or "D" or which may be in default at the time
the Underlying Fund buys them.

Some of the special credit risks of lower-grade securities are discussed
in the Prospectus. There is a greater risk that the issuer may default on its
obligation to pay interest or to repay principal than in the case of investment
grade securities. The issuer's low creditworthiness may increase the potential
for its insolvency. An overall decline in values in the high yield bond market
is also more likely during a period of a general economic downturn. An economic
downturn or an increase in interest rates could severely disrupt the market for
high yield bonds, adversely affecting the values of outstanding bonds as well as
the ability of issuers to pay interest or repay principal. In the case of
foreign high yield bonds, these risks are in addition to the special risk of
foreign investing discussed in the Prospectus and in this Statement of
Additional Information.

However, the Underlying Fund's limitations on buying these investments can
reduce the effect of those risks to the Underlying Fund, as will the Underlying
Fund's policy of diversifying its investments. Additionally, to the extent they
can be converted into stock, convertible securities may be less subject to some
of these risks than non-convertible high yield bonds, since stock may be more
liquid and less affected by some of these risk factors. The Underlying Fund may
not invest more than 10% of its total assets in lower-grade debt securities that
are not convertible.

While securities rated "Baa" by Moody's or "BBB" by Standard &amp;amp;
Poor's or Fitch, Inc. are investment grade and are not regarded as junk bonds,
those securities may be subject to special risks, and have some speculative
characteristics. Definitions of the debt security ratings categories of Moody's,
S&amp;amp;P, and Fitch, Inc. are included in Appendix A to this Statement of
Additional Information.

|X| Foreign Securities. The Underlying Fund can purchase equity and debt
securities issued or guaranteed by foreign companies or foreign governments or
their agencies. "Foreign securities" include equity and debt securities of
companies organized under the laws of countries other than the United States and
debt securities of foreign governments. 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 or that are listed on a U.S. securities exchange or traded in the U.S.
over-the-counter markets are not considered "foreign securities" for the purpose
of the Underlying 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 Underlying Fund will hold foreign currency only in connection with
the purchase or sale of 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.

|X| Portfolio Turnover. "Portfolio turnover" describes the rate at which
the Underlying Fund traded its portfolio securities during its previous fiscal
year. For example, if a Fund sold all of its securities during the year, its
portfolio turnover rate would have been 100%. The Underlying Fund's portfolio
turnover rate will fluctuate from year to year, and the Underlying Fund can have
a portfolio turnover rate of 100% or more. Increased portfolio turnover creates
higher brokerage and transaction costs for the Underlying 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 Underlying Fund will normally
distribute all of its capital gains realized each year, to avoid excise taxes
under the Internal Revenue Code. The Financial Highlights table at the end of
the Prospectus shows the Underlying Fund's portfolio turnover rates during prior
fiscal years.

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

|X| Investing in Small, Unseasoned Companies. The Underlying 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 may have a limited trading market, which may adversely affect
the Underlying Fund's ability to dispose of them and can reduce the price the
Underlying 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 Underlying Fund is attempting to
dispose of its holdings of that security. In that case the Underlying Fund might
receive a lower price for its holdings than might otherwise be obtained. The
Underlying Fund currently intends to invest no more than 5% of its net assets in
securities of small, unseasoned issuers.

|X| When-Issued and Delayed-Delivery Transactions. The Underlying Fund can
invest in securities on a "when-issued" basis and can purchase or sell
securities on a "delayed-delivery" basis. When-issued and delayed-delivery are
terms that refer to securities whose terms and indenture are available and for
which a market exists, but which are not available for immediate delivery.

When such transactions are negotiated, the price (which is generally
expressed in yield terms) is fixed at the time the commitment is made. Delivery
and payment for the securities take place at a later date. The securities are
subject to change in value from market fluctuations during the period until
settlement. The value at delivery may be less than the purchase price. For
example, changes in interest rates in a direction other than that expected by
the Manager before settlement will affect the value of such securities and may
cause a loss to the Underlying Fund. During the period between purchase and
settlement, no payment is made by the Underlying Fund to the issuer and no
interest accrues to the Underlying Fund from the investment.

The Underlying Fund will engage in when-issued transactions to secure what
the Manager considers to be an advantageous price and yield at the time of
entering into the obligation. When the Underlying Fund enters into a when-issued
or delayed-delivery transaction, it relies on the other party to complete the
transaction. Its failure to do so may cause the Underlying Fund to lose the
opportunity to obtain the security at a price and yield the Manager considers to
be advantageous.

When the Underlying Fund engages in when-issued and delayed-delivery
transactions, it does so for the purpose of acquiring or selling securities
consistent with its investment objective and policies or for delivery pursuant
to options contracts it has entered into, and not for the purpose of investment
leverage. Although the Underlying Fund will enter into delayed-delivery or
when-issued purchase transactions to acquire securities, it can dispose of a
commitment prior to settlement. If the Underlying Fund chooses to dispose of the
right to acquire a when-issued security prior to its acquisition or to dispose
of its right to delivery or receive against a forward commitment, it may incur a
gain or loss.

At the time the Underlying Fund makes the commitment to purchase or sell a
security on a when-issued or delayed-delivery basis, it records the transaction
on its books and reflects the value of the security purchased in determining the
Underlying Fund's net asset value. In a sale transaction, it records the
proceeds to be received. The Underlying Fund will identify on its books liquid
securities of any type at least equal in value to the value of the Underlying
Fund's purchase commitments until the Underlying Fund pays for the investment.

When issued and delayed-delivery transactions can be used by the
Underlying Fund as a defensive technique to hedge against anticipated changes in
interest rates and prices. For instance, in periods of rising interest rates and
falling prices, the Underlying Fund might sell securities in its portfolio on a
forward commitment basis to attempt to limit its exposure to anticipated falling
prices. In periods of falling interest rates and rising prices, the Underlying
Fund might sell portfolio securities and purchase the same or similar securities
on a when-issued or delayed-delivery basis to obtain the benefit of currently
higher cash yields.

Investment in Other Investment Companies. The Underlying Fund can also invest in
the securities of other investment companies, which can include open-end funds,
closed-end funds and unit investment trusts, subject to the limits set forth in
the Investment Company Act of 1940 (the "Investment Company Act") that apply to
those types of investments. For example, the Underlying Fund can invest in
Exchange-Traded Funds, which are typically open-end funds or unit investment
trusts, listed on a stock exchange. The Underlying Fund might do so as a way of
gaining exposure to the segments of the equity or fixed-income markets
represented by the Exchange-Traded Funds' portfolio, at times when the
Underlying Fund may not be able to buy those portfolio securities directly. As a
non-fundamental policy, the Underlying Fund cannot invest in the securities of
other registered open-end investment companies or registered unit investment
trusts in reliance on sub-paragraph (F) or (G) of section 12(d)(1) of the
Investment Company Act of 1940.

Investing in another investment company may involve the payment of
substantial premiums above the value of such investment company's portfolio
securities and is subject to limitations under the Investment Company Act. The
Underlying Fund does not intend to invest in other investment companies unless
the Manager believes that the potential benefits of the investment justify the
payment of any premiums or sales charges. As a shareholder of an investment
company, the Underlying Fund would be subject to its ratable share of that
investment company's expenses, including its advisory and administration
expenses. The Underlying Fund does not anticipate investing a substantial amount
of its net assets in shares of other investment companies.

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

In a repurchase transaction, the Underlying 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
Underlying Fund's limits on holding illiquid investments. The Underlying 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 Underlying 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 Underlying 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 Underlying 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.

Pursuant to an Exemptive Order issued by the Securities and Exchange
Commission, the Underlying Fund, along with other affiliated entities managed by
the Manager, may transfer uninvested cash balances into one or more joint
repurchase accounts. These balances are invested in one or more repurchase
agreements, secured by U.S. government securities. Securities that are pledged
as collateral for repurchase agreements are held by a custodian bank until the
agreements mature. Each joint repurchase arrangement requires that the market
value of the collateral be sufficient to cover payments of interest and
principal; however, in the event of default by the other party to the agreement,
retention or sale of the collateral may be subject to legal proceedings.

|X| Illiquid and Restricted Securities. To enable the Underlying Fund to
sell its holdings of a restricted security not registered under the Securities
Act of 1933, the Underlying Fund may have to cause those securities to be
registered. The expenses of registering restricted securities may be negotiated
by the Underlying Fund with the issuer at the time the Underlying Fund buys the
securities. When the Underlying Fund must arrange registration because the
Underlying 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 Underlying Fund could sell it. The Underlying
Fund would bear the risks of any downward price fluctuation during that period.

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

The Underlying 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 Underlying 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. The Underlying Fund can lend its
portfolio securities to certain types of eligible borrowers approved by its
Board of Directors. It may do so to try to provide income or to raise cash for
liquidity purposes. These loans are limited to not more than 25% of the value of
the Underlying Fund's total assets. There are some risks in connection with
securities lending. The Underlying Fund might experience a delay in receiving
additional collateral to secure a loan, or a delay in recovery of the loaned
securities. The Underlying Fund presently does not intend to engage in loans of
securities in the coming year.

The Underlying 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 Underlying Fund is permitted to invest. To be
acceptable as collateral, letters of credit must obligate a bank to pay amounts
demanded by the Underlying 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 Underlying Fund.

When it lends securities, the Underlying 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 Underlying Fund can
also pay reasonable finder's, custodian bank and administrative fees in
connection with these loans. The terms of the Underlying Fund's loans must meet
applicable tests under the Internal Revenue Code and must permit the Underlying
Fund to reacquire loaned securities on five days' notice or in time to vote on
any important matter.

|X| Derivatives. The Underlying Fund can invest in a variety of derivative
investments to seek income or for hedging purposes. Some derivative investments
the Underlying Fund can use are the hedging instruments described below in this
Appendix C.

Other derivative investments the Underlying Fund can invest in include
"index-linked" notes. Principal and/or interest payments on these notes depend
on the performance of an underlying index. Currency-indexed securities are
another derivative the Underlying Fund can use. Typically these are short-term
or intermediate-term debt securities. Their value at maturity or the rates at
which they pay income are determined by the change in value of the U.S. dollar
against one or more foreign currencies or an index. In some cases, these
securities may pay an amount at maturity based on a multiple of the amount of
the relative currency movements. This type of index security offers the
potential for increased income or principal payments but at a greater risk of
loss than a typical debt security of the same maturity and credit quality.

Other derivative investments the Underlying 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. The Underlying Fund can use hedging to attempt to protect
against declines in the market value of the Underlying Fund's portfolio, to
permit the Underlying Fund to retain unrealized gains in the value of portfolio
securities which have appreciated, or to facilitate selling securities for
investment reasons. To do so, the Underlying Fund could:

o sell futures contracts,
o buy puts on such futures or on securities, or
o write covered calls on securities or futures. Covered calls can also be
used to increase the Underlying Fund's income, but the Manager does not
expect to engage extensively in that practice.

The Underlying Fund can use hedging to establish a position in the
securities market as a temporary substitute for purchasing particular
securities. In that case, the Underlying Fund would normally seek to purchase
the securities and then terminate that hedging position. The Underlying 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 Underlying Fund could:
o buy futures, or
o buy calls on such futures or on securities.

The Underlying Fund is not obligated to use hedging instruments, even
though it is permitted to use them in the Manager's discretion, as described
below. The Underlying Fund's strategy of hedging with futures and options on
futures will be incidental to the Underlying Fund's activities in the underlying
cash market. The particular hedging instruments the Underlying Fund can use are
described below. The Underlying Fund can employ new hedging instruments and
strategies when they are developed, if those investment methods are consistent
with the Underlying Fund's investment objective and are permissible under
applicable regulations governing the Underlying Fund.

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

A broadly-based stock index is used as the basis for trading stock index
futures. They may in some cases 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.

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.

The Underlying 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
Underlying Fund can 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.

No money is paid or received by the Underlying Fund on the purchase or
sale of a future. Upon entering into a futures transaction, the Underlying 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 Underlying 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 Underlying 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 Underlying Fund can
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 Underlying Fund. Any loss or gain on the future is
then realized by the Underlying 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 Underlying Fund can buy and sell certain
kinds of put options ("puts") and call options ("calls"). The Underlying Fund
can buy 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.

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

When the Underlying Fund writes a call on a security, it receives cash (a
premium). The Underlying 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 Underlying 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 Underlying 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 Underlying Fund would keep the cash premium and the investment.

When the Underlying Fund writes a call on an index, it receives cash (a
premium). If the buyer of the call exercises it, the Underlying 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 Underlying Fund would keep the
cash premium.

The Underlying Fund's custodian bank, or a securities depository acting
for the custodian bank, will act as the Underlying Fund's escrow agent, through
the facilities of the Options Clearing Corporation ("OCC"), as to the
investments on which the Underlying 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 Underlying Fund enters into a closing
transaction.

When the Underlying 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 Underlying 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 Underlying 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 Underlying
Fund can purchase a corresponding call in a "closing purchase transaction." The
Underlying 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 Underlying Fund wrote is more or less than the price of the call
the Underlying Fund purchases to close out the transaction. The Underlying Fund
may realize a profit if the call expires unexercised, because the Underlying
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 Underlying Fund they are taxable as ordinary income. If the
Underlying 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 Underlying 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 Underlying Fund must cover the call by
identifying an equivalent dollar amount of liquid assets on the Underlying
Fund's books. The Underlying Fund will identify additional liquid assets on its
books 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 Underlying Fund's receipt of an exercise notice as to
that future require the Underlying Fund to deliver a futures contract. It would
simply put the Underlying Fund in a short futures position, which is permitted
by the Underlying Fund's hedging policies.

o Writing Put Options. The Underlying Fund can 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 Underlying Fund will not write puts if, as a result, more
than 25% of the Underlying Fund's total assets would be required to be
segregated to cover such put options.

If the Underlying Fund writes a put, the put must be covered by liquid
assets identified on the Underlying Fund's books. The premium the Underlying
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 Underlying 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 Underlying Fund has written expires unexercised, the
Underlying Fund realizes a gain in the amount of the premium less the
transaction costs incurred. If the put is exercised, the Underlying 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 Underlying 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 Underlying Fund incurred.

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

As long as the Underlying 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 Underlying Fund to take delivery of the
underlying security and pay the exercise price. The Underlying 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 Underlying Fund effects a closing purchase transaction by purchasing
a put of the same series as it sold. Once the Underlying Fund has been assigned
an exercise notice, it cannot effect a closing purchase transaction.

The Underlying Fund can 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 Underlying 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 Underlying 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 Underlying Fund, are taxable as ordinary income.

o Purchasing Calls and Puts. The Underlying Fund can purchase calls
to protect against the possibility that the Underlying Fund's portfolio will not
participate in an anticipated rise in the securities market. When the Underlying
Fund buys a call (other than in a closing purchase transaction), it pays a
premium. The Underlying 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 Underlying 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 Underlying Fund exercises the
call. If the Underlying 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 Underlying Fund will have paid the premium but lost the right to
purchase the underlying investment.

The Underlying Fund can buy puts whether or not it holds the underlying
investment in its portfolio. When the Underlying 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
Underlying Fund owns enables the Underlying 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 Underlying Fund will have paid the premium but
lost the right to sell the underlying investment. However, the Underlying Fund
can sell the put prior to its expiration. That sale may or may not be at a
profit.

Buying a put on an investment the Underlying Fund does not own (such as an
index or future) permits the Underlying Fund 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 Underlying 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 Underlying 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 Underlying Fund can buy a call or put only if, after the purchase, the
value of all call and put options held by the Underlying Fund will not exceed 5%
of the Underlying Fund's total assets.

|_| Buying and Selling Options on Foreign Currencies. The Underlying 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 Underlying 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 Underlying 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 Underlying Fund's position. The
Underlying Fund will then have incurred option premium payments and transaction
costs without a corresponding benefit.

A call the Underlying Fund writes on a foreign currency is "covered" if
the Underlying 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 Underlying 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
Underlying 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 Underlying 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 Underlying 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 Underlying Fund's return. The
Underlying Fund could also experience losses if the prices of its futures and
options positions were not correlated with its other investments.

The Underlying Fund's option activities could affect its portfolio
turnover rate and brokerage commissions. The exercise of calls written by the
Underlying Fund might cause the Underlying Fund to sell related portfolio
securities, thus increasing its turnover rate. The exercise by the Underlying
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 Underlying Fund's control, holding a put might cause the
Underlying Fund to sell the related investments for reasons that would not exist
in the absence of the put.

The Underlying 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 Underlying Fund's net asset value being more sensitive to
changes in the value of the underlying investment.

If a covered call written by the Underlying Fund is exercised on an
investment that has increased in value, the Underlying 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 Underlying
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 Underlying 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 Underlying Fund's securities. For
example, it is possible that while the Underlying Fund has used hedging
instruments in a short hedge, the market might advance and the value of the
securities held in the Underlying Fund's portfolio might decline. If that
occurred, the Underlying 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
Underlying 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 Underlying 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 Underlying 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 Underlying
Fund does so the market might decline. If the Underlying Fund then concludes not
to invest in securities because of concerns that the market might decline
further or for other reasons, the Underlying 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 Underlying Fund uses them to "lock in" the U.S. dollar price
of a security denominated in a foreign currency that the Underlying 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 Underlying 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 Underlying Fund can also use "cross-hedging"
where the Underlying 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 Underlying 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 Underlying 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 Underlying 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 Underlying 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 Underlying Fund might 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 Underlying 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 Underlying 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
Underlying 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
Underlying Fund's portfolio securities denominated in that foreign currency.
When the Underlying Fund believes that the U.S. dollar may 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
Underlying Fund could enter into a forward contract to sell a different foreign
currency for a fixed U.S. dollar amount if the Underlying 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 Underlying Fund are denominated.
That is referred to as a "cross hedge."

The Underlying 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 Underlying Fund's commitment under forward contracts. The
Underlying Fund will not enter into forward contracts or maintain a net exposure
to such contracts if the consummation of the contracts would obligate the
Underlying Fund to deliver an amount of foreign currency in excess of the value
of the Underlying 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 Underlying Fund can
maintain a net exposure to forward contracts in excess of the value of the
Underlying 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 Underlying Fund can purchase a call option
permitting the Underlying 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 Underlying Fund can purchase a put option
permitting the Underlying 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 Underlying Fund is obligated to deliver, the Underlying
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 Underlying Fund is obligated
to deliver to settle the trade, the Underlying 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 Underlying Fund to
sustain losses on these contracts and to pay additional transactions costs. The
use of forward contracts in this manner might reduce the Underlying Fund's
performance if there are unanticipated changes in currency prices to a greater
degree than if the Underlying Fund had not entered into such contracts.

At or before the maturity of a forward contract requiring the Underlying
Fund to sell a currency, the Underlying Fund might sell a portfolio security and
use the sale proceeds to make delivery of the currency. In the alternative the
Underlying Fund might retain the security and offset its contractual obligation
to deliver the currency by purchasing a second contract. Under that contract the
Underlying Fund will obtain, on the same maturity date, the same amount of the
currency that it is obligated to deliver. Similarly, the Underlying 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 Underlying 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 Underlying 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 Underlying
Fund must evaluate the credit and performance risk of the counterparty under
each forward contract.

Although the Underlying 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 Underlying Fund can 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 Underlying Fund at
one rate, while offering a lesser rate of exchange if the Underlying Fund
desires to resell that currency to the dealer.

|_| Interest Rate Swap Transactions. The Underlying Fund can enter into
interest rate swap agreements. In an interest rate swap, the Underlying Fund and
another party exchange their right to receive or their obligation to pay
interest on a security. For example, they might swap the right to receive
floating rate payments for fixed rate payments. The Underlying Fund can enter
into swaps only on securities that it owns. The Underlying Fund will not enter
into swaps with respect to more than 25% of its total assets. Also, the
Underlying Fund will identify liquid assets on its books (such as cash or U.S.
government securities) to cover any amounts it could owe under swaps that exceed
the amounts it is entitled to receive, and it will adjust that amount daily, as
needed.

Swap agreements entail both interest rate risk and credit risk. There is a
risk that, based on movements of interest rates in the future, the payments made
by the Underlying Fund under a swap agreement will be greater than the payments
it received. Credit risk arises from the possibility that the counterparty will
default. If the counterparty defaults, the Underlying Fund's loss will consist
of the net amount of contractual interest payments that the Underlying Fund has
not yet received. The Manager will monitor the creditworthiness of
counterparties to the Underlying Fund's interest rate swap transactions on an
ongoing basis.

The Underlying Fund can enter into swap transactions with certain
counterparties pursuant to master netting agreements. A master netting agreement
provides that all swaps done between the Underlying Fund and that counterparty
shall be regarded as parts of an integral agreement. If amounts are payable on a
particular date in the same currency in respect of one or more swap
transactions, the amount payable on that date in that currency shall be the net
amount. In addition, the master netting agreement may provide that if one party
defaults generally or on one swap, the counterparty can terminate all of the
swaps with that party. Under these agreements, if a default results in a loss to
one party, the measure of that party's damages is calculated by reference to the
average cost of a replacement swap for each swap. It is measured by the
mark-to-market value at the time of the termination of each swap. The gains and
losses on all swaps are then netted, and the result is the counterparty's gain
or loss on termination. The termination of all swaps and the netting of gains
and losses on termination is generally referred to as "aggregation."

|_| Regulatory Aspects of Hedging Instruments. When using futures and
options on futures, the Underlying 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
Underlying Fund is exempted from registration with the CFTC as a "commodity pool
operator" if the Underlying Fund complies with the requirements of Rule 4.5
adopted by the CFTC. The Rule does not limit the percentage of the Underlying
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 Underlying Fund
must limit its aggregate initial futures margin and related options premiums to
not more than 5% of the Underlying Fund's net assets for hedging strategies that
are not considered bona fide hedging strategies under the Rule. Under the Rule,
the Underlying 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 Underlying 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 Underlying Fund can write or hold
may be affected by options written or held by other entities, including other
investment companies having the same advisor as the Underlying Fund (or an
advisor that is an affiliate of the Underlying 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 Underlying Fund purchases a
future, it must maintain cash or readily marketable short-term debt instruments
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 Underlying Fund can 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 Underlying 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 Underlying Fund to exempt those transactions from
this marked-to-market treatment.

Certain forward contracts the Underlying 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 Underlying 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 Underlying Fund accrues interest or other
receivables or accrues expenses or other liabilities denominated in a
foreign currency and the time the Underlying 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 Underlying Fund's investment income available for distribution to its
shareholders.

|X| Temporary Defensive and Interim Investments. The Underlying Fund's
temporary defensive investments can include (i) obligations issued or guaranteed
by the U.S. government, its agencies or instrumentalities; (ii) commercial paper
rated in the highest category by an established rating organization; (iii)
certificates of deposit or bankers' acceptances of domestic banks with assets of
$1 billion or more; (iv) any of the foregoing securities that mature in one year
or less (generally known as "cash equivalents"); (v) other short-term corporate
debt obligations; and (vi) repurchase agreements.

Investment Restrictions

|X| What Are "Fundamental Policies?" Fundamental policies are those
policies that the Underlying Fund has adopted to govern its investments that can
be changed only by the vote of a "majority" of the Underlying 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:

o 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
o more than 50% of the outstanding shares.

The Underlying Fund's investment objective is a Fundamental policy. Other
policies described in the Underlying Fund's Prospectus or its Statement of
Additional Information and in this Appendix C are "Fundamental" only if they are
identified as such. The Underlying Fund's Board of Directors can change
non-Fundamental policies without shareholder approval. However, significant
changes to investment policies will be described in supplements or updates to
the Underlying Fund's Prospectus or Statement of Additional Information, as
appropriate. The Underlying Fund's most significant investment policies are
described in its Prospectus as well as in the Oppenheimer Principal Protected
Main Street Fund prospectus.

|X| Does the Underlying Fund Have Additional Fundamental Policies? The
following investment restrictions are Fundamental policies of the Underlying
Fund.

o The Underlying Fund cannot concentrate investments. That means it cannot
invest 25% or more of its total assets in any industry. However, there is no
limitation on investments in U.S. government securities.

o The Underlying Fund cannot invest in commodities. However, the Underlying Fund
can buy and sell any of the hedging instruments permitted by any of its other
policies. It does not matter if the hedging instrument is considered to be a
commodity or commodity contract.

o The Underlying Fund cannot invest in real estate or in interests in real
estate. However, the Underlying Fund can purchase securities of issuers holding
real estate or interests in real estate (including securities of real estate
investment trusts).

o The Underlying 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.

o The Underlying Fund cannot issue "senior securities," but this does not
prohibit certain investment activities for which assets of the Underlying 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.

o The Underlying Fund cannot borrow money in excess of 33 1/3% of the value of
its total assets (including the amount borrowed). The Underlying Fund may borrow
only from banks and/or affiliated investment companies. With respect to this
Fundamental policy, the Underlying Fund can borrow only if it maintains a 300%
ratio of assets to borrowings at all times in the manner set forth in the
Investment Company Act of 1940.

o The Underlying Fund cannot make loans except (a) through lending of
securities, (b) through the purchase of debt instruments or similar evidences of
indebtedness, (c) through an interUnderlying Fund lending program with other
affiliated Funds, and (d) through repurchase agreements.

o The Underlying 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 it would then own more than 10% of that issuer's voting
securities. This limit applies to 75% of the Underlying 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.

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

For purposes of the Underlying Fund's policy not to concentrate its
investments as described above, the Underlying Fund has adopted the industry
classifications set forth in Appendix B to its Statement of Additional
Information. That is not a Fundamental policy.

Oppenheimer Principal Protected Main Street Fund(R)

Investment Adviser
OppenheimerFunds, Inc.
498 Seventh Avenue
New York, New York 10018

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

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

Custodian Bank
J.P. Morgan Chase Bank
4 Chase MetroTech Center
Brooklyn, New York 11245

Independent Auditors
Deloitte &amp;amp; Touche LLP
555 Seventeenth Street
Suite 3600
Denver, CO 80202

Counsel to the Fund
Myer, Swanson, Adams &amp;amp; Wolf, P.C.
1600 Broadway
Suite 1480
Denver, CO 80202

Counsel to the Independent Trustees
Mayer, Brown, Rowe &amp;amp; Maw
1675 Broadway
New York, New York 10019-5820

PX0676.001.0503

--------
1 Certain waivers also apply to Class M shares of Oppenheimer Convertible
Securities Fund.
2 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.
3 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.
4 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.
5 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.
6 This provision does not apply to IRAs.
7 This provision does not apply to 403(b)(7) custodial plans if the participant
is less than age 55, nor to IRAs.
8 The distribution must be requested prior to
Plan termination or the elimination of the Oppenheimer funds as an investment
option under the Plan.
9 This provision does not apply to IRAs.
10 This provision does not apply to loans from 403(b)(7) custodial plans and
loans from the OppenheimerFunds-sponsored Single K retirement plan.
11 This provision does not apply to 403(b)(7) custodial plans if the participant
is less than age 55, nor to IRAs.