Registration No.
                                                       333-135516
                                                       File No. 811-21920

                                UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, DC 20549

                                  FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933                   [X]

      Pre-Effective Amendment No. 2                                        [X]

      Post-Effective Amendment No. __                                    [   ]

                                    and/or

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY
ACT OF 1940                                                                [X]

      Amendment No. 2                                                      [X]

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                       OPPENHEIMER TRANSITION 2010 FUND
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              (Exact Name of Registrant as Specified in Charter)

            6803 South Tucson Way, Centennial, Colorado 80112-3924
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             (Address of Principal Executive Offices) (Zip Code)

                                (303) 768-3200
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             (Registrant's Telephone Number, including Area Code)

                             Robert G. Zack, Esq.
                            OppenheimerFunds, Inc.
Two World Financial Center, 225 Liberty Street, New York, New York 10281-1008
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                   (Name and Address of Agent for Service)

It is proposed that this filing will become effective (check appropriate box):
     [   ] immediately upon filing pursuant to paragraph (b)
     [   ] on _______________ pursuant to paragraph (b)
     [   ] 60 days after filing pursuant to paragraph (a)(1)
     [   ] on _______________ pursuant to paragraph (a)(1)
     [   ] 75 days after filing pursuant to paragraph (a)(2)
     [   ] on _______________ pursuant to paragraph (a)(2) of Rule 485.

If appropriate, check the following box:
     [   ]this post-effective amendment designates a new effective date for a previously
filed post-effective amendment.
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The Registrant hereby amends the Registration  statement on such date or dates
as may be necessary to delay its  effective  date until the  Registrant  shall
file a further  amendment  which  specifically  states that this  Registration
Statement shall  thereafter  become  effective in accordance with section 8(a)
of the  Securities  Act of 1933 or  until  the  Registration  Statement  shall
become  effective on such date as the  Commission,  acting pursuant to Section
8(a), shall determine.



Oppenheimer
LifeCycle Funds

o        Oppenheimer Transition 2010 Fund
o        Oppenheimer Transition 2015 Fund
o        Oppenheimer Transition 2020 Fund
o        Oppenheimer Transition 2030 Fund


Prospectus dated December 8, 2006

     Oppenheimer  LifeCycle  Funds are a group of retirement  funds designed for
different  retirement date goals.  Each Fund seeks total return until the target
retirement date and then seeks income and secondarily capital growth.


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

As with all mutual funds, the Securities and Exchange
Commission has not approved or disapproved the Funds'
securities nor has it determined that this Prospectus is
accurate or complete. It is a criminal offense to
represent otherwise.
                                                [logo] OppenheimerFunds
                                                The Right Way to Invest


CONTENTS


               ABOUT THE FUNDS

           The Funds' Investment Objectives and Principal Investment Strategies
           Main Risks of Investing in the Funds
           Fees and Expenses of the Funds
           About the Funds' Investments
           How the Funds are Managed

                ABOUT YOUR ACCOUNT

            How to Buy Shares
            Class A Shares
            Class B Shares
            Class C Shares
            Class N Shares
            Class Y Shares

            Special Investor Services
            AccountLink
            PhoneLink
            OppenheimerFunds Internet Website
            Retirement Plans

             How to Sell Shares
             By Mail
             By Telephone

             How to Exchange Shares
             Shareholder Account Rules and Policies
             Dividends, Capital Gains and Taxes
             Financial Highlights
             More Information About the Underlying Funds


ABOUT THE FUNDS

The Funds' Investment Objectives and Principal Investment Strategies

     WHAT IS EACH FUND'S  INVESTMENT  OBJECTIVE?  Each Fund seeks  total  return
until the target  retirement date included in its name and then seeks income and
secondarily capital growth.

     WHAT DOES EACH FUND MAINLY INVEST IN? Each Fund is a special type of mutual
fund known as a "fund of funds" because it invests in other mutual funds.  Under
normal market conditions, OppenheimerFunds, Inc. (the "Manager"), the investment
manager of each Fund,  will invest the Fund's assets in a diversified  portfolio
of  Oppenheimer  mutual  funds.  Those funds are referred to as the  "Underlying
Funds." "Normal market  conditions"  exist when securities  markets and economic
conditions  are not unstable or adverse,  in the  judgment of the Manager.  Each
Fund  will  seek to  achieve  its  objective  by  investing  in a  portfolio  of
Underlying  Funds that  represent  various  asset  classes and sectors that will
change over time as investors  approach and enter retirement.  Each of the Funds
will have, and is expected to maintain, some equity exposure.  Equity securities
have generally proven to offer higher rates of return,  over the long term, than
fixed-income  securities  and may play a role both in  preparing  for and during
retirement.

     HOW DOES THE MANAGER  DECIDE WHAT  SECURITIES TO BUY OR SELL?  Each Fund is
managed based on an approximate retirement year (the "transition" date) included
in its name. The following  tables detail the way each Fund expects to initially
allocate  investments among the Underlying Funds,  which represent various asset
classes.  At times,  the  Funds  may  invest  in other  Oppenheimer  equity  and
fixed-income funds and in Oppenheimer money market funds.

     The Funds will present their allocations among the Underlying Fundsin their
shareholder   reports  and  as  described  in  the  section  "About  the  Funds'
Investments-Portfolio  Holdings"  below.  The  Manager  may  change  the  Funds'
allocations at any time without notice to shareholders.

 Transition 2010 Fund
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---- ------------------------------------------------- -----------------------
          Asset Class           Underlying Fund                                     Initial Allocation
          Equity                Oppenheimer Capital Appreciation Fund                      10%
          Equity                Oppenheimer Main Street Fund                               10%
          Equity                Oppenheimer Value Fund                                     18%
          Equity                Oppenheimer MidCap Fund                                     8%
          Equity                Oppenheimer Small- & Mid- Cap Value Fund                    8%
          Equity                Oppenheimer Global Fund                                    14%
          Equity                Oppenheimer Main Street Opportunity Fund                    2%
          Fixed-Income          Oppenheimer Core Bond Fund                                 21%
          Fixed-Income          Oppenheimer Champion Income Fund                            2%
          Fixed-Income          Oppenheimer U.S. Government Trust Fund                      2%
          Other                 Oppenheimer Real Asset Fund                                 5%


          Transition 2015 Fund
          -----------------------------------------------------------------------------------------------
          --------------------- ------------------------------------------------- -----------------------
          Asset Class           Underlying Fund                                     Initial Allocation
          Equity                Oppenheimer Capital Appreciation Fund                      10%
          Equity                Oppenheimer Main Street Fund                               10%
          Equity                Oppenheimer Value Fund                                     20%
          Equity                Oppenheimer MidCap Fund                                    10%
          Equity                Oppenheimer Small- & Mid- Cap Value Fund                   15%
          Equity                Oppenheimer International Growth Fund                      10%
          Equity                Oppenheimer Quest International Value Fund                  5%
          Fixed-Income          Oppenheimer Core Bond Fund                                 15%
          Other                 Oppenheimer Real Asset Fund                                 5%


          Transition 2020 Fund
          -----------------------------------------------------------------------------------------------
          --------------------- ------------------------------------------------- -----------------------
          Asset Class           Underlying Fund                                     Initial Allocation
          Equity                Oppenheimer Capital Appreciation Fund                      10%
          Equity                Oppenheimer Growth Fund                                     5%
          Equity                Oppenheimer Main Street Fund                               10%
          Equity                Oppenheimer Value Fund                                     20%
          Equity                Oppenheimer MidCap Fund                                    10%
          Equity                Oppenheimer Small- & Mid- Cap Value Fund                   15%
          Equity                Oppenheimer International Growth Fund                      10%
          Equity                Oppenheimer Quest International Value Fund                  5%
          Fixed-Income          Oppenheimer Core Bond Fund                                 10%
          Other                 Oppenheimer Real Asset Fund                                 5%


          Transition 2030 Fund
          -----------------------------------------------------------------------------------------------
          --------------------- ------------------------------------------------- -----------------------
          Asset Class           Underlying Fund                                     Initial Allocation
          Equity                Oppenheimer Capital Appreciation Fund                      10%
          Equity                Oppenheimer Growth Fund                                    10%
          Equity                Oppenheimer Main Street Fund                               10%
          Equity                Oppenheimer Value Fund                                     20%
          Equity                Oppenheimer MidCap Fund                                    15%
          Equity                Oppenheimer Small- & Mid- Cap Value Fund                   15%
          Equity                Oppenheimer International Growth Fund                      10%
          Equity                Oppenheimer Quest International Value Fund                  5%
          Other                 Oppenheimer Real Asset Fund                                 5%

     Shares of the Underlying  Funds may be sold for a variety of reasons,  such
as to  effect a change  in asset  allocation,  secure a gain,  limit a loss,  or
redeploy assets into more promising opportunities.

     WHO ARE THE  FUNDS  DESIGNED  FOR?  The Funds are  designed  primarily  for
investors seeking a professionally  managed  investment  program to simplify the
accumulation of assets prior to and during  retirement.  In general,  the Funds'
investment  programs  assume a retirement age of 65 and expect that the investor
will choose a Fund whose  "transition"  date is closest to the date the investor
turns 65. The  "transition"  date of the Fund you select should not  necessarily
represent  the specific  year you intend to retire or start  drawing  retirement
assets; rather it should be an approximate guide.

     To accommodate a wider range of investor  preferences  and retirement  time
horizons than is possible with a single fund, the  Oppenheimer  LifeCycle  Funds
offer four Funds with different combinations of asset allocations to provide the
growth  potential of equities,  the income  potential of bonds, and the relative
stability of short-term bond funds.  Choosing a Fund with an earlier  transition
date  represents  a more  conservative  choice;  choosing  a Fund  with a  later
transition date represents a more aggressive choice.

     Investors  should  realize  that the Funds are not a complete  solution  to
their  retirement  needs.  Investors  must weigh many factors  when  considering
retirement,  including when to retire,  what their retirement needs will be, and
what other sources of income they may have.

     HOW WILL THE FUNDS CHANGE WITH YOUR CHANGING NEEDS? The Funds'  allocations
to various asset classes,  through  investments in the  Underlying  Funds,  will
become  progressively  more conservative over time. This approach is designed to
help  investors  accumulate  the assets  needed to generate  income during their
retirement  years.  An  example  of  this  progression  is  demonstrated  in the
following chart, which reflects an investor's need to reduce investment risks as
his or her retirement  year  approaches  and the need for lower  volatility in a
portfolio that may be an investor's primary source of income after retirement.


[GRAPHIC OMITTED][GRAPHIC OMITTED]

     The  Manager  will  monitor  the Funds'  asset  allocations  daily and will
regularly rebalance each Fund's portfolio so that it remains consistent with its
target   allocations  to  the  indicated  asset  classes.   Each  Fund's  target
allocations to equity and fixed-income  Underlying  Funds, as shown in the chart
above, are not expected to vary from the allocations  shown by more than plus or
minus five  percentage  points.  However,  the  Manager  may favor  fixed-income
securities  if the economy is expected to slow  sufficiently  to hurt  corporate
profit growth. The opposite may be true when strong economic growth is expected.
The Manager will examine  relative values and prospects among  Underlying  Funds
that invest in growth- and value-oriented securities, domestic and international
securities, and the securities of small-, mid- and large-cap issuers, as well as
the capacity of the Underlying Funds to absorb and invest  additional cash flow.
Each Fund's allocations will be rebalanced at least annually.


     WHAT WILL HAPPEN AFTER THE TRANSITION  DATE? After the transition date, the
Funds  will  continue  on a  "glide  path"  to a more  conservative  allocation,
designed  to place  greater  emphasis  on income and reduce  investors'  overall
risks.  Approximately  10 years after a Fund's  stated  "transition"  year,  the
Fund's exposure to equity  Underlying Funds will be at its most conservative and
will remain fixed at approximately 20% of assets.  At that point,  approximately
75% of the Funds'  portfolios will be invested in fixed-income  Underlying Funds
and 5% may be invested in other types of Underlying Funds.

     CAN THE FUND'S INVESTMENT OBJECTIVES AND POLICIES CHANGE? Each Fund's Board
of Trustees can change  non-fundamental  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 a
Fund's  outstanding  voting shares (as defined in the Investment  Company Act of
1940, as amended).  The Funds'  investment  objectives and principal  investment
strategies are not fundamental policies,  however,  shareholders will receive at
least 60 days'  advance  notice of changes in a Funds'  investment  objective or
principal  strategies.  Unless  otherwise  stated  in  this  Prospectus  or  the
Statement of Additional  Information,  investment  policies of the Funds are not
fundamental.

     Certain  investment  objectives or strategies of the  Underlying  Funds are
fundamental  policies and others are non-fundamental  policies,  as indicated in
each Underlying Fund's Prospectus or Statement of Additional  Information.  Each
Underlying  Fund's board of directors  or trustees,  can change  non-fundamental
policies without  shareholder  approval,  including  without the approval of the
Funds.

Main Risks of Investing in the Funds

     All investments have risks to some degree.  The share prices of each Fund's
shares  generally  change  daily  based on the values of the  Underlying  Funds'
investments,  which may be subject to a number of factors  described  below.  By
investing  in  different  types of  Underlying  Funds,  the Funds  have  partial
exposure  to the  risks  of  different  areas  of the  market.  The  more a Fund
allocates to equity  Underlying  Funds, the greater the expected risk. The Funds
are also  subject to the risk that poor  security  selection  by the  Underlying
Funds may cause a Fund to underperform other funds having similar objectives.

     RISKS OF INVESTING IN THE UNDERLYING FUNDS. Each of the Underlying Funds in
which the Funds invest has its own investment  risks, and those risks can affect
the value of the Underlying  Funds' shares and therefore the value of the Funds'
shares.  To the  extent  that  the  Funds  invest  more of their  assets  in one
Underlying  Fund than in another,  the Funds will have  greater  exposure to the
risks  of  that  Underlying   Fund.  The  investment   objective  and  principal
investments of each of the  Underlying  Funds are described in the section "More
Information  About  the  Underlying  Funds."  There  is no  guarantee  that  the
Underlying  Funds will achieve  their  investment  objectives.  The risks of the
Underlying  Fund's  investments  are described in the section  "About the Funds'
Investments-The  Funds' Principal  Investment Policies and Risks." The principal
risks of an investment in the LifeCycle  Funds are different  from the principal
risks of an investment  in any one of the  individual  Underlying  Funds and are
described below.

     The Underlying Funds will pursue their  investment  objectives and policies
without the  approval  of the Funds.  If an  Underlying  Fund were to change its
investment  objective or policies,  the applicable  Fund may be required to sell
its shares of the Underlying Fund at a  disadvantageous  time. The  Prospectuses
and Statements of Additional  Information of the Underlying  Funds are available
without charge upon request by contacting OppenheimerFunds Services toll free at
1.800.CALL OPP  (225.5677),  or they can be downloaded on the  OppenheimerFunds,
Inc. website at www.oppenheimerfunds.com.

     ALLOCATION  RISK.  Each Fund's ability to achieve its investment  objective
depends upon the Manager's skill in selecting the best mix of Underlying  Funds.
There is the risk that the Manager's  evaluations and assumptions  regarding the
Underlying Funds may be incorrect in view of actual market conditions.

     AFFILIATED  PORTFOLIO  RISK.  In managing the Funds,  the Manager will have
authority to select and substitute  Underlying Funds. The Manager may be subject
to potential  conflicts of interest in selecting  Underlying  Funds  because the
fees paid to it by some Underlying  Funds are higher than the fees paid by other
Underlying Funds.  However the Manager's  fund-of-funds  committee  monitors the
investment process, identifies,  addresses and resolves any potential issues and
reports to the Board of the Funds and each Underlying Fund at least quarterly.

     RISKS OF INVESTING IN EQUITY SECURITIES. Stocks and other equity securities
fluctuate  in price in  response to changes in equity  markets in  general,  and
their  short-term  volatility  at times may be great.  The prices of  individual
equity securities do not all move in the same direction uniformly or at the same
time; for example, "growth" stocks may perform well under circumstances in which
"value"  stocks in general  have  fallen.  Different  stock  markets  may behave
differently from each other.  Other factors may affect the price of a particular
company's  securities.  Those  factors  include poor earnings  reports,  loss of
customers,  litigation,  or changes in regulations  affecting the company or its
industry.  To the extent  that an  Underlying  Fund  emphasizes  investments  in
securities of a particular type, for example foreign stocks,  stocks of small or
mid sized  companies,  growth or value  stocks,  or  stocks  of  companies  in a
particular  industry,  its  share  value may  fluctuate  in  response  to events
affecting the market for that type of securities.

     RISKS  OF  INVESTING  IN  FIXED-INCOME   SECURITIES.   Fixed-income  (debt)
securities held by the Underlying Funds may be subject to credit risk,  interest
rate risk, and prepayment risk. Credit risk relates to the ability of the issuer
of a security to make  interest and  principal  payments on the security as they
become  due.  If an issuer  fails to pay  interest  or to repay  principal,  the
Underlying  Fund's  income or share value  might be  reduced.  The value of debt
securities  are also subject to change when  prevailing  interest  rates change.
When  prevailing   interest  rates  fall,  the  values  of  already-issued  debt
securities  generally rise.  When prevailing  interest rates rise, the values of
already-issued  debt securities  generally fall, and they may sell at a discount
from their face  amount or from the  amount the  Underlying  Fund paid for them.
When interest rates fall, the issuers of  mortgage-related  debt  securities may
prepay  principal to the  Underlying  Fund more  quickly  than  expected and the
Underlying  Fund may be required to reinvest  the  proceeds at a lower  interest
rate.

     HOW RISKY ARE THE FUNDS OVERALL?  The risks  described  above  collectively
form the overall risk profile of the Funds.  However, the allocation  strategies
that the Manager  employs for the Funds are designed to allow risks to be offset
by one another. For example the downward movement in one security or asset class
may be offset by the upward movement in another.  So while the Underlying  Funds
have certain risk  characteristics,  the Manager's  strategy of allocating  Fund
assets to  different  Underlying  Funds may allow those  risks to be offset.  As
discussed  above,  each Fund's risk profile will become more  conservative  over
time.  The Transition  2010 Fund  represents  the most  conservative  investment
strategy,  while the  Transition  2030 Fund is the most  aggressive.  The Funds'
risks mean that you can lose money by investing in a Fund.  When you redeem your
shares,  they may be worth more or less than what you paid for them. There is no
assurance that the Funds will achieve their investment objectives.

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 An  investment in the Funds is not a deposit of any bank and is not insured
or  guaranteed  by the  Federal  Deposit  Insurance  Corporation  or  any  other
government agency.
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     The Funds' Past Performance

     Because  the  Funds  have  not  commenced  operations,  there  is no  prior
performance  information.  Please  remember  that the Funds are  intended  to be
long-term  investments,  that performance results are historical,  and that past
performance  (particularly over a short time period) is not predictive of future
results.

Fees and Expenses of the Funds

     The  following  tables are  provided  to help you  understand  the fees and
expenses  you may pay if you buy and hold  shares of the Funds.  The Funds pay a
variety  of  expenses  directly  for  distribution  of their  shares  and  other
services.  Those  expenses are  subtracted  from each Fund's assets to calculate
such  Fund's net asset value per share.  All  shareholders  therefore  pay those
expenses  indirectly.  In addition,  each Fund will indirectly bear its pro-rata
share of the expenses of the Underlying Funds in which it invests.  Shareholders
pay other expenses directly,  such as sales charges, which are the same for each
of the Funds. "Other Expenses," "Underlying Fund Operating Expenses," and "Total
Annual Fund and Underlying Fund Operating  Expenses" are each Fund's anticipated
expenses  during its first  fiscal  year based on  estimated  average  daily net
assets of $25 million.

Shareholder Fees (charges paid directly from your investment):

                                                      Class A      Class B      Class C       Class N      Class Y
                                                      Shares       Shares        Shares       Shares       Shares
--------------------------------------------------- ------------ ------------ ------------- ------------ ------------
--------------------------------------------------- ------------ ------------ ------------- ------------ ------------
Maximum Sales Charge (Load) on purchases (as % of
offering price)                                        5.75%        None          None         None         None
--------------------------------------------------- ------------ ------------ ------------- ------------ ------------
--------------------------------------------------- ------------ ------------ ------------- ------------ ------------
Maximum Deferred Sales Charge (Load)
(as % of the lower of the original offering price     None(1)       5%(2)        1%(3)         1%(4)        None
or redemption proceeds)

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

Transition 2010 Fund                                   Class A     Class B      Class C       Class N      Class Y
                                                       Shares       Shares       Shares       Shares       Shares
--------------------------------------------------- -------------- ---------- ------------- ------------ ------------
--------------------------------------------------- -------------- ---------- ------------- ------------ ------------
Management Fees                                         None         None         None         None         None
--------------------------------------------------- -------------- ---------- ------------- ------------ ------------
--------------------------------------------------- -------------- ---------- ------------- ------------ ------------
Distribution and/or Service (12b-1) Fees                0.25%        1.00%       1.00%         0.50%        None
--------------------------------------------------- -------------- ---------- ------------- ------------ ------------
--------------------------------------------------- -------------- ---------- ------------- ------------ ------------
Other Expenses(5)                                       0.39%        0.39%       0.39%         0.39%        0.39%
--------------------------------------------------- -------------- ---------- ------------- ------------ ------------
--------------------------------------------------- -------------- ---------- ------------- ------------ ------------
Underlying Fund Operating Expenses(6)                   0.65%        0.65%       0.65%         0.65%        0.65%
--------------------------------------------------- -------------- ---------- ------------- ------------ ------------
--------------------------------------------------- -------------- ---------- ------------- ------------ ------------
Total Annual Fund and Underlying Fund Operating         1.29%        2.04%       2.04%         1.54%        1.04%
Expenses(7)

Transition 2015 Fund                                   Class A     Class B      Class C       Class N      Class Y
                                                       Shares       Shares       Shares       Shares       Shares
--------------------------------------------------- -------------- ---------- ------------- ------------ ------------
--------------------------------------------------- -------------- ---------- ------------- ------------ ------------
Management Fees                                         None         None         None         None         None
--------------------------------------------------- -------------- ---------- ------------- ------------ ------------
--------------------------------------------------- -------------- ---------- ------------- ------------ ------------
Distribution and/or Service (12b-1) Fees                0.25%        1.00%       1.00%         0.50%        None
--------------------------------------------------- -------------- ---------- ------------- ------------ ------------
--------------------------------------------------- -------------- ---------- ------------- ------------ ------------
Other Expenses(5)                                       0.39%        0.39%       0.39%         0.39%        0.39%
--------------------------------------------------- -------------- ---------- ------------- ------------ ------------
--------------------------------------------------- -------------- ---------- ------------- ------------ ------------
Underlying Fund Operating Expenses(6)                   0.69%        0.69%       0.69%         0.69%        0.69%
--------------------------------------------------- -------------- ---------- ------------- ------------ ------------
--------------------------------------------------- -------------- ---------- ------------- ------------ ------------
Total Annual Fund and Underlying Fund Operating         1.33%        2.08%       2.08%         1.58%        1.08%
Expenses(7)

Transition 2020 Fund                                   Class A     Class B      Class C       Class N      Class Y
                                                       Shares       Shares       Shares       Shares       Shares
--------------------------------------------------- -------------- ---------- ------------- ------------ ------------
--------------------------------------------------- -------------- ---------- ------------- ------------ ------------
Management Fees                                         None         None         None         None         None
--------------------------------------------------- -------------- ---------- ------------- ------------ ------------
--------------------------------------------------- -------------- ---------- ------------- ------------ ------------
Distribution and/or Service (12b-1) Fees                0.25%        1.00%       1.00%         0.50%        None
--------------------------------------------------- -------------- ---------- ------------- ------------ ------------
--------------------------------------------------- -------------- ---------- ------------- ------------ ------------
Other Expenses(5)                                       0.39%        0.39%       0.39%         0.39%        0.39%
--------------------------------------------------- -------------- ---------- ------------- ------------ ------------
--------------------------------------------------- -------------- ---------- ------------- ------------ ------------
Underlying Fund Operating Expenses(6)                   0.71%        0.71%       0.71%         0.71%        0.71%
--------------------------------------------------- -------------- ---------- ------------- ------------ ------------
--------------------------------------------------- -------------- ---------- ------------- ------------ ------------
Total Annual Fund and Underlying Fund Operating         1.35%        2.10%       2.10%         1.60%        1.10%
Expenses(7)

Transition 2030 Fund                                   Class A     Class B      Class C       Class N      Class Y
                                                       Shares       Shares       Shares       Shares       Shares
--------------------------------------------------- -------------- ---------- ------------- ------------ ------------
--------------------------------------------------- -------------- ---------- ------------- ------------ ------------
Management Fees                                         None         None         None         None         None
--------------------------------------------------- -------------- ---------- ------------- ------------ ------------
--------------------------------------------------- -------------- ---------- ------------- ------------ ------------
Distribution and/or Service (12b-1) Fees                0.25%        1.00%       1.00%         0.50%        None
--------------------------------------------------- -------------- ---------- ------------- ------------ ------------
--------------------------------------------------- -------------- ---------- ------------- ------------ ------------
Other Expenses(5)                                       0.39%        0.39%       0.39%         0.39%        0.39%
--------------------------------------------------- -------------- ---------- ------------- ------------ ------------
--------------------------------------------------- -------------- ---------- ------------- ------------ ------------
Underlying Fund Operating Expenses(6)                   0.74%        0.74%       0.74%         0.74%        0.74%
--------------------------------------------------- -------------- ---------- ------------- ------------ ------------
--------------------------------------------------- -------------- ---------- ------------- ------------ ------------
Total Annual Fund and Underlying Fund Operating         1.38%        2.13%       2.13%         1.63%        1.13%
Expenses(7)

     EXAMPLES.  The following examples are intended to help you compare the cost
of investing in the Funds with the cost of investing in other mutual funds.  The
examples, which are based on the estimated Total Annual Fund and Underlying Fund
Operating  Expenses,  assume that you invest  $10,000 in the indicated  class of
shares of the applicable  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
share  class's  operating  expenses  remain the same.  Your actual  costs may be
higher or lower  because  expenses  will vary over time.  Based on these expense
assumptions your expenses would be as follows:

If you redeemed your shares:

Transition 2010 Fund             1 Year       3 Years         Transition 2015 Fund          1 Year       3 Years
------------------------------ ------------ ------------      --------------------------- ------------ -------------
------------------------------ ------------ ------------      --------------------------- ------------ -------------
Class A Shares                    $700         $963           Class A Shares                 $703          $975
------------------------------ ------------ ------------      --------------------------- ------------ -------------
------------------------------ ------------ ------------      --------------------------- ------------ -------------
Class B Shares                    $709         $946           Class B Shares                 $713          $958
------------------------------ ------------ ------------      --------------------------- ------------ -------------
------------------------------ ------------ ------------      --------------------------- ------------ -------------
Class C Shares                    $309         $646           Class C Shares                 $313          $658
------------------------------ ------------ ------------      --------------------------- ------------ -------------
------------------------------ ------------ ------------      --------------------------- ------------ -------------
Class N Shares                    $258         $490           Class N Shares                 $262          $503
------------------------------ ------------ ------------      --------------------------- ------------ -------------
------------------------------ ------------ ------------      --------------------------- ------------ -------------
Class Y Shares                    $107         $333           Class Y Shares                 $111          $345


Transition 2020 Fund             1 Year       3 Years         Transition 2030 Fund          1 Year       3 Years
------------------------------ ------------ ------------      --------------------------- ------------ -------------
------------------------------ ------------ ------------      --------------------------- ------------ -------------
Class A Shares                    $705         $981           Class A Shares                 $708          $990
------------------------------ ------------ ------------      --------------------------- ------------ -------------
------------------------------ ------------ ------------      --------------------------- ------------ -------------
Class B Shares                    $715         $965           Class B Shares                 $718          $974
------------------------------ ------------ ------------      --------------------------- ------------ -------------
------------------------------ ------------ ------------      --------------------------- ------------ -------------
Class C Shares                    $315         $665           Class C Shares                 $318          $674
------------------------------ ------------ ------------      --------------------------- ------------ -------------
------------------------------ ------------ ------------      --------------------------- ------------ -------------
Class N Shares                    $264         $509           Class N Shares                 $267          $518
------------------------------ ------------ ------------      --------------------------- ------------ -------------
------------------------------ ------------ ------------      --------------------------- ------------ -------------
Class Y Shares                    $113         $352           Class Y Shares                 $116          $361


If you did not redeem your shares:

Transition 2010 Fund             1 Year       3 Years         Transition 2015 Fund          1 Year       3 Years
------------------------------ ------------ ------------      --------------------------- ------------ -------------
------------------------------ ------------ ------------      --------------------------- ------------ -------------
Class A Shares                    $700         $963           Class A Shares                 $703          $975
------------------------------ ------------ ------------      --------------------------- ------------ -------------
------------------------------ ------------ ------------      --------------------------- ------------ -------------
Class B Shares                    $209         $646           Class B Shares                 $213          $658
------------------------------ ------------ ------------      --------------------------- ------------ -------------
------------------------------ ------------ ------------      --------------------------- ------------ -------------
Class C Shares                    $209         $646           Class C Shares                 $213          $658
------------------------------ ------------ ------------      --------------------------- ------------ -------------
------------------------------ ------------ ------------      --------------------------- ------------ -------------
Class N Shares                    $158         $490           Class N Shares                 $162          $503
------------------------------ ------------ ------------      --------------------------- ------------ -------------
------------------------------ ------------ ------------      --------------------------- ------------ -------------
Class Y Shares                    $107         $333           Class Y Shares                 $111          $345


Transition 2020 Fund             1 Year       3 Years         Transition 2030 Fund          1 Year       3 Years
------------------------------ ------------ ------------      --------------------------- ------------ -------------
------------------------------ ------------ ------------      --------------------------- ------------ -------------
Class A Shares                    $705         $981           Class A Shares                 $708          $990
------------------------------ ------------ ------------      --------------------------- ------------ -------------
------------------------------ ------------ ------------      --------------------------- ------------ -------------
Class B Shares                    $215         $665           Class B Shares                 $218          $674
------------------------------ ------------ ------------      --------------------------- ------------ -------------
------------------------------ ------------ ------------      --------------------------- ------------ -------------
Class C Shares                    $215         $665           Class C Shares                 $218          $674
------------------------------ ------------ ------------      --------------------------- ------------ -------------
------------------------------ ------------ ------------      --------------------------- ------------ -------------
Class N Shares                    $164         $509           Class N Shares                 $167          $518
------------------------------ ------------ ------------      --------------------------- ------------ -------------
------------------------------ ------------ ------------      --------------------------- ------------ -------------
Class Y Shares                    $113         $352           Class Y Shares                 $116          $361

     In the first group of examples,  expenses include the Class A initial sales
charge for Class A and the  applicable  Class B,  Class C or Class N  contingent
deferred  sales  charges.  In the  second  group of  examples,  Class A expenses
include the initial sales  charge,  but Class B, Class C and Class N expenses do
not include contingent deferred sales charges. There is no sales charge on Class
Y shares.

     1.  A  contingent  deferred  sales  charge  may  apply  to  redemptions  of
investments  of $1  million  or  more  ($500,000  for  certain  retirement  plan
accounts) of Class A shares. See "How to Buy Shares" for details.

     2. Applies to redemptions in the first year after purchase.  The contingent
deferred sales charge gradually  declines from 5% to 1% in years one through six
and is eliminated after that.

     3. Applies to shares redeemed within 12 months of purchase.

     4. Applies to shares redeemed within 18 months of a retirement plan's first
purchase of Class N shares of any Oppenheimer fund.

     5. "Other  Expenses"  include transfer agent fees,  custodial  expenses and
accounting  and legal  expenses  that the  Funds pay and are based on  estimated
amounts  for the Funds'  first  fiscal  year.  The  transfer  agent fee is a per
account  fee and will  therefore  vary on a  percentage  basis as the  number of
accounts  change.  The Funds  estimate  that this fee will not exceed  0.25% per
class. The transfer agent has also voluntarily  undertaken to limit the transfer
agent fees paid to 0.35% of average  net assets per fiscal  year for all classes
of each Fund. This undertaking may be amended or withdrawn at any time.

     6. These estimates of the Underlying  Funds' fees and expenses,  which will
be incurred  indirectly by the Funds, are based on estimates of the total annual
expense ratios,  without giving effect to any waivers or reimbursements,  of the
Underlying Funds in which the applicable Fund expects to invest during its first
fiscal year. Any material change to a Fund's asset  allocation to the Underlying
Funds could  increase or decrease  the amounts of the  estimates  and the actual
amounts of those expenses may vary from these estimates.

     7. The Manager has  voluntarily  undertaken to waive fees and/or  reimburse
the Funds for  certain  expenses  so that each  Fund's  "Total  Annual  Fund and
Underlying  Fund  Operating  Expenses,"  as a  percentage  of average  daily net
assets, will not exceed 1.50% for Class A, 2.25 % for Class B and Class C, 1.75%
for Class N and 1.25% for Class Y shares.  The Manager  may modify or  terminate
that  undertaking  at any time  without  notice  to  shareholders,  but will not
recover waived fees in subsequent fiscal periods.  Those expense  limitations do
not  include  extraordinary  expenses  and other  expenses  not  incurred in the
ordinary course of the Fund's business.  Notwithstanding  the foregoing  limits,
the Manager is not required to waive or reimburse Fund expenses in excess of the
indirect management fees earned from investments in the Underlying Funds.

About the Funds' Investments

     THE FUNDS' PRINCIPAL  INVESTMENT  POLICIES AND RISKS. The allocation of the
different types of investments  will vary over time and the Funds may not always
invest  in  Underlying  Funds  that  include  all  of  the  different  types  of
investments   described  in  this   Prospectus.   The  Statement  of  Additional
Information  contains  more  detailed  information  about the Funds'  investment
policies and risks.

     Investments in the Underlying Funds. Under normal circumstances,  the Funds
invest in diversified  portfolios made up of varying  allocations of investments
in the  Underlying  Funds.  The  Underlying  Funds in which the Funds may invest
include Oppenheimer Capital Appreciation Fund, Oppenheimer Champion Income Fund,
Oppenheimer Core Bond Fund, Oppenheimer Dividend Growth Fund, Oppenheimer Global
Fund, Oppenheimer Growth Fund, Oppenheimer  International Bond Fund, Oppenheimer
International   Growth  Fund,   Oppenheimer  Quest   International  Value  Fund,
Oppenheimer  Main  Street  Fund,   Oppenheimer  Main  Street  Opportunity  Fund,
Oppenheimer  Main Street Small Cap Fund,  Oppenheimer  MidCap Fund,  Oppenheimer
Real Asset Fund,  Oppenheimer  Real Estate Fund,  Oppenheimer  Small- & Mid- Cap
Value Fund,  Oppenheimer  U.S.  Government  Trust,  Oppenheimer  Value Fund, and
Oppenheimer  Limited-Term  Government  Fund.  These Underlying Funds were chosen
based on the Manager's determination that they could provide the diversification
needed to  implement  the  allocation  strategies  of the  Funds.  The choice of
Underlying  Funds,  the objectives and policies of the Underlying  Funds and the
Funds'  allocations to the Underlying Funds may change from time to time without
approval by the Funds' shareholders.

     STOCK AND OTHER EQUITY INVESTMENTS. Some of the Underlying Funds may invest
primarily  in common  stocks  or other  types of  equity  securities,  including
preferred stocks,  rights and warrants,  and securities  convertible into common
stock. The issuers may be small, medium or large  capitalization  companies,  as
defined in the particular Underlying Fund's prospectus. Not all Underlying Funds
define small- and mid-cap issuers in the same way. Some of the Underlying  Funds
may  buy  securities   issued  by  foreign  companies  and  some  may  emphasize
investments in "growth" securities or "value" securities.

     o Common Stock. Common stock represents an ownership interest in the issuer
and  fluctuates  in price in  response  to  conditions  affecting  the issuer or
changes in equity  markets in general.  An Underlying  Fund may invest in common
stock to seek capital  appreciation,  dividend  income or both.  Common stock is
generally subordinate to the other securities of an issuer.

     o Preferred  Stock.  Preferred  stocks are a form of equity  security  that
typically  have a fixed dividend that may cause their prices to behave more like
those of debt  securities.  Preferred  stock  dividends may be cumulative  (they
remain a liability  of the company  until they are paid) or  non-cumulative.  If
prevailing  interest rates rise,  the fixed  dividend on preferred  stock may be
less attractive,  causing the price of preferred stocks to decline. The right to
payment of dividends on preferred  stock is generally  subordinate to the rights
of a corporation's debt securities.

     o  Convertible  Securities.  Some of the  Underlying  Funds  may  also  buy
interest bearing  securities that are convertible into common stock.  While many
convertible  securities are debt securities,  the Underlying Funds consider some
of them to be "equity equivalents" because of their features allowing them to be
converted into common stock.  Convertible securities may be subject to the risks
of the common  stock of the issuer as well as to credit risk and  interest  rate
risk. The credit rating of an "equity equivalent" convertible security generally
has less impact on the Underlying Fund's  investment  decisions than in the case
of other debt securities.

     Some of the Underlying  Funds may buy  convertible  securities  rated below
investment grade by Moody's Investors  Service,  Inc.,  Standard & Poor's Rating
Service or other nationally  recognized  rating  organizations  (or, if they are
unrated,  having a comparable rating assigned by the Manager).  Below investment
grade securities (commonly referred to as "junk bonds") are subject to a greater
risk of default by the issuer than investment-grade securities.

     Risks of Investing in Common Stock and other Equity Securities.  The prices
of common  stock and other equity  securities  fluctuate in response to changing
market  conditions,  and at times their  short-term  volatility may be great. An
Underlying  Fund's emphasis on growth stocks or stocks issued by foreign issuers
or  small-  or  mid-sized  companies  can  also  result  in  higher  volatility.
Additionally,  stocks of issuers in a  particular  industry  may be  affected by
changes in economic conditions that affect that industry more than others, or by
changes in government regulations,  availability of basic resources or supplies,
or other events  affecting that industry.  Other factors can affect a particular
company's stocks price, such as poor earnings reports, loss of a major customer,
litigation  against the issuer, or changes in government  regulations  affecting
the issuer or its industry.

     Growth Investing. In selecting equity securities for purchase or sale, some
of the Underlying  Funds use a "growth"  investment  style. A growth  investment
style  seeks  companies  whose  stock price is expected to increase at a greater
rate than the overall  market.  They may be newer  companies or they may be more
established  companies that are entering a growth cycle. Growth companies may be
developing  new  products or services or may be  expanding  into new markets for
their products, or they may be companies in businesses with above-average growth
potential.  A growth phase may be marked by increases in earnings,  sales,  cash
flows or other factors,  which suggest that the price of the company's stock may
increase in value over time.

     The  Underlying  Funds'  portfolio  managers may consider the  following in
seeking to implement a growth strategy:
o        companies that have strong revenue growth
o        companies with above-average earnings growth
o        companies that can sustain strong revenue and earnings growth
o        stocks with attractive valuations relative to their growth potential

     Risks of Growth  Investing.  The  stocks of  growth  companies  may be more
volatile than stocks of other types of companies. If a company's earnings growth
fails to increase as expected,  the stock price of a growth  company may decline
sharply.  Investments  in newer or smaller  growth  companies  may offer greater
opportunities for capital  appreciation,  but they involve substantially greater
risks of loss and price fluctuations. Their stocks may be less liquid than those
of older or larger issuers.  That means some of the Underlying  Funds could have
greater  difficulty  selling  a  security  of a  smaller  or newer  issuer at an
acceptable  price,  especially  in periods of market  volatility.  Newer  growth
companies  tend  to  retain  a  large  part  of  their  earnings  for  research,
development  or  investment  in capital  assets.  Therefore,  they may pay lower
dividends than other companies or may not pay any dividends for some time. Also,
it may take a substantial  period of time before such Underlying Fund realizes a
gain on an investment in a smaller or newer company,  if it realizes any gain at
all.

     Value Investing.  The portfolio  managers of certain other Underlying Funds
use a value investing strategy.  In value investing,  the portfolio managers use
fundamental  company analysis to seek stocks that have low prices in relation to
what the  portfolio  managers  believe to be the stock's real worth based on the
company's prospects.  The portfolio managers may consider a number of factors in
this assessment. Among other considerations,  they may look for stocks that they
believe are not fully  recognized by, or are  temporarily out of favor with, the
market.  These  Underlying  Funds seek to realize  appreciation  in the value of
their  holdings when other  investors  recognize  the  intrinsic  value of those
stocks.

     Risks of Value  Investing.  For Underlying Funds that use a value investing
style,  there is the risk that if the market does not recognize  the  securities
selected as undervalued, the price of the securities might not appreciate in the
way an Underlying Fund anticipates.

     Foreign Equity Securities.  Some of the Underlying Funds may buy securities
of companies in any country,  including  companies in "emerging" or "developing"
market  countries.  The foreign  securities some of the Underlying Funds may buy
include stocks and other equity securities of companies organized under the laws
of a foreign  country or companies  that have a  substantial  portion (more than
50%) of their  operations or assets abroad,  or derive a substantial  portion of
their  revenue or profits  from  businesses,  investments  or sales  outside the
United States. Foreign securities include securities traded primarily on foreign
securities  exchanges  or in  foreign  over-the-counter  markets.  Some  of  the
Underlying Funds invest in securities of foreign issuers that are represented in
the U.S.  securities markets by American Depository Receipts ("ADRs") or similar
depository arrangements.

     Risks of Foreign  Securities.  While foreign  securities  may offer special
investment  opportunities,  there  are also  special  risks  that can  reduce an
Underlying  Fund's  share  price and  return.  The  change in value of a foreign
currency  against the U.S.  dollar  will  result in a change in the U.S.  dollar
value of securities  denominated in the foreign currency.  Currency rate changes
can also  affect the  distributions  an  Underlying  Fund  makes from  income it
receives from foreign  securities as foreign  currency values change against the
U.S. dollar.  Foreign  investing can result in higher  transaction and operating
costs for some of the Underlying  Funds.  Foreign issuers are not subject to the
same accounting and disclosure requirements that U.S. companies are subject to.

     The value of  foreign  investments  may be  affected  by  exchange  control
regulations,  expropriation or  nationalization  of a company's assets,  foreign
taxes,  delays in the  settlement  of  transactions,  changes  in  governmental,
economic or monetary  policy in the United States or abroad,  or other political
or economic  factors.  These  risks could cause the prices of foreign  stocks to
fall and could  therefore  depress  an  Underlying  Fund's  share  prices.  Fund
shareholders  may be unable to deduct or take a credit for foreign taxes paid by
the Underlying Funds on their foreign investments.

     Additionally,  if an Underlying  Fund invests a  significant  amount of its
assets in  foreign  securities,  it might be exposed  to  "time-zone  arbitrage"
attempts by investors  seeking to take advantage of the  differences in value of
foreign securities that might result from events that occur between the close of
the foreign  securities  market on which a foreign security is traded and before
the  close of the New York  Stock  Exchange  (the  "NYSE")  that  day,  when the
Underlying  Fund's net asset value is calculated.  If such  time-zone  arbitrage
were successful,  it might dilute the interests of other shareholders.  However,
the use of "fair value  pricing" to adjust the closing  market prices of foreign
securities  under  certain  circumstances,  to reflect  what the Manager and the
boards of directors or trustees of the Underlying Funds believe to be their fair
value,  and the imposition of redemption fees by certain  Underlying  Funds, may
help deter those activities.

     Foreign  securities  owned by an  Underlying  Fund may trade on weekends or
other days when the Fund does not price its shares. As a result,  the Fund's net
asset  value may change on days when you will not be able to  purchase or redeem
the Fund's shares.

     Special Risks of Emerging and Developing Markets.  Securities of issuers in
emerging and developing markets may offer special investment opportunities,  but
present risks not found in more mature markets.  Emerging  market  countries may
have less developed legal and accounting systems.  The governments of developing
countries may be more unstable and present greater risks of  nationalization  or
restrictions  on foreign  ownership of stocks of local companies and investments
may be  subject to  greater  risks of  government  restrictions  on  withdrawing
dividends  paid or the sale  proceeds of securities  from the country.  Emerging
market  countries may have less developed  securities  markets and exchanges and
their  economies may be more dependent on relatively few industries  that may be
highly vulnerable to local and global changes.

     The securities of issuers in emerging  markets may be less liquid,  or more
difficult to sell at an  acceptable  price,  than  securities of issuers in more
developed  markets.  Settlements  of trades may be subject to greater  delays so
that an  Underlying  Fund might not receive the proceeds of a sale of a security
on a  timely  basis.  Emerging  market  investments  may be  substantially  more
volatile than investments in the United States or other developed  countries and
may be considered speculative.

     Special Risks of Investing in Small- and Mid-Sized  Companies.  Some of the
Underlying Funds may emphasize  investments in small- and/or mid-cap  companies,
as defined in the Underlying Fund's prospectus. These companies can include both
established  and newer  companies.  While smaller,  newer  companies might offer
greater  opportunities for capital  appreciation  than larger,  more established
companies,  they  may  involve  substantially  greater  risk of loss  and  price
fluctuation.  The Underlying Funds may use different  definitions of "small-cap"
and "mid-cap"  companies,  as stated in each Underlying Fund's  prospectus.  The
Underlying Funds'  prospectuses are available without charge as indicated in the
section "Risks of Investing in the Underlying Funds," above.

     Small- and mid-sized  companies  may have limited  product lines or markets
for their products, more limited access to financial resources and less depth in
management  skill than larger  companies.  Their  stocks also may be less liquid
than those of larger  issuers.  That means  that an  Underlying  Fund could have
greater  difficulty  selling those  securities,  especially in periods of market
volatility,  which could  increase the  potential  for loss.  It also may take a
substantial  period  of time  for an  Underlying  Fund to  realize  a gain on an
investment  in the stocks of a small- or mid-sized  company,  if it realizes any
gain  at  all.  Because  the  securities  of  smaller  companies  may be  traded
infrequently,  to the extent that an Underlying  Fund invests  significantly  in
those  securities,  investors may seek to trade shares of the  Underlying  Funds
based on their knowledge or understanding of the value of those securities (this
is sometimes referred to as "price arbitrage"). Certain of the Underlying Funds,
including the Oppenheimer  Small- & Mid- Cap Value Fund,  impose a 2% redemption
fee under certain  circumstances  to attempt to deter such price  arbitrage.  If
such price  arbitrage were  otherwise  successful,  it might  interfere with the
efficient  management of an Underlying Fund's portfolio to a greater degree than
would be the case for a fund that invests in more liquid securities, because the
Underlying  Fund may have  difficulty  selling those  securities at advantageous
times or prices to satisfy the  liquidity  requirements  created by large and/or
frequent  trading  activity.  Successful  price arbitrage  activities might also
dilute the value of an Underlying Fund's shares held by other shareholders.

     Risks  of  Technology  Stocks.  Certain  Underlying  Funds  may  invest  in
technology  stocks.  The types of  companies  the  portfolio  managers  of those
Underlying  Funds consider to be technology  companies can be expected to change
over time as developments in technology  occur. To the extent an Underlying Fund
is  invested  in stocks of  technology  companies,  the value of the  Underlying
Fund's shares is particularly vulnerable to risks, including market and economic
events, that affect technology  companies and/or companies having investments in
technology.  The  technology  sector  has  historically  exhibited  great  price
volatility, or fluctuations in stock valuations.  The stock prices of technology
companies  during the past few years have been highly  volatile,  largely due to
the rapid  pace of  product  change  and  development  within  this  sector.  In
addition,  technologies  that  are  dependent  on  consumer  demand  may be more
sensitive  to  changes  in  consumer  spending  patterns.  Technology  companies
focusing on the information and  telecommunications  sectors may also be subject
to international, federal and state regulations and may be adversely affected by
changes in those  regulations.  The portfolio  managers of the Underlying  Funds
take these  factors into  account  when  evaluating  the  long-term  merits of a
technology investment.

     Investing in Special Situations. Periodically, some of the Underlying Funds
might use  aggressive  investment  techniques  to seek to benefit  from what the
portfolio  manager  perceives  to be a  "special  situation,"  such as a merger,
reorganization,  restructuring or other unusual event that is expected to affect
a particular  issuer.  However,  there is a risk that the anticipated  change or
event might not occur,  which  could have a negative  impact on the price of the
issuer's  securities.  In that case, an Underlying  Fund's  investment might not
produce the expected gains or might incur a loss.

     Cyclical Opportunities.  Some of the Underlying Funds may also seek to take
advantage  of changes in the business  cycle by investing in companies  that are
sensitive to those changes. Some of the Underlying Funds might sometimes seek to
take tactical  advantage of short-term  market  movements or in  anticipation of
events that would affect particular issuers or industries.  There is a risk that
if the event  does not occur as  expected,  the value of the  Underlying  Fund's
investments could fall.

     INVESTMENTS IN  FIXED-INCOME  SECURITIES.  Certain of the Underlying  Funds
emphasize  investments  in debt  securities,  such as government  securities and
corporate bonds and debentures.  The Underlying  Funds might also buy short-term
debt securities for liquidity  purposes  pending the purchase of new investments
or to have cash to pay for redemptions of the Underlying  Fund's shares. To seek
higher  income,   some  Underlying  Funds  can  invest  without  limit  in  debt
securities,  commonly  known as "junk  bonds,"  that are rated below  investment
grade.  That  means that they are rated  lower  than "Baa" by Moody's  Investors
Service or "BBB" by Standard & Poor's Rating Service or have comparable  ratings
by other  nationally-recognized  rating  organizations or are unrated securities
that the Manager considers to be of equivalent quality.  The Underlying Funds do
not purchase  debt  securities  that are in default,  but may continue to hold a
debt security after a default event has occured.

     Interest  Rate Risk.  The values of debt  securities  are subject to change
when prevailing  interest rates change.  When interest rates fall, the values of
outstanding debt securities generally rise. When interest rates rise, the values
of outstanding debt securities  generally fall, and those securities may sell at
a discount from their face amount.  An Underlying  Funds' share prices may go up
or down when interest rates change because of the effect of those changes on the
value of the Underlying Fund's investments in debt securities.

     These  fluctuations  will often be greater for longer-term  debt securities
than  for  shorter-term  debt  securities.  When  the  average  maturity  of the
Underlying Fund's portfolio is longer, its shares prices may fluctuate more when
interest rates change. An Underlying Fund may also buy zero-coupon or "stripped"
securities,  which may be  particularly  sensitive  to  interest  rate  changes.
Interest   rate   changes   may  have   different   effects  on  the  values  of
mortgage-related securities because of prepayment and extension risks.

     o Prepayment Risk.  Mortgage-related  securities are subject to the risk of
unanticipated  prepayment.  That is the risk  that  when  interest  rates  fall,
borrowers will prepay the mortgages that underlie these  securities more quickly
than expected,  causing the issuer of the security to repay the principal to the
Underlying Fund prior to the security's  expected maturity.  The Underlying Fund
may need to reinvest the proceeds at a lower interest rate, reducing its income.
Mortgage-related  securities  subject to prepayment  risk  generally  offer less
potential for gains when  prevailing  interest rates fall. If an Underlying Fund
buys mortgage-related securities at a premium,  accelerated prepayments on those
securities  could cause the  Underlying  Fund to lose a portion of its principal
investment   represented  by  the  premium.   Interest-only  and  principal-only
mortgage-backed  securities,   which  certain  Underlying  Funds  may  buy,  are
especially  sensitive to interest rate changes,  which can affect not only their
prices but can also change the income  flows and  prepayment  assumptions  about
those investments.

     o Extension  Risk. If interest rates rise rapidly,  repayments of mortgages
may  occur  at a  slower  rate  than  expected  and  the  expected  maturity  of
mortgage-related  securities  could  lengthen  as  a  result.   Mortgage-related
securities  generally have a greater potential for loss when prevailing interest
rates rise. That could cause the value of an Underlying Fund's shares to fall.

     o Credit Risk. Debt securities are also subject to credit risk. Credit risk
is the risk that the issuer of a security  might not make interest and principal
payments on the security as they become due.  Securities  directly issued by the
U.S.  Treasury and certain agencies that are backed by the full faith and credit
of the U.S.  government have little credit risk, and securities  issued by other
agencies of the U.S.  government  generally  have low credit  risks.  Securities
issued by private  issuers  generally have greater credit risks than  government
issued securities.

     If an issuer fails to pay interest,  an  Underlying  Fund's income might be
reduced, and if an issuer fails to repay principal,  the values of that security
and of the Underlying  Fund's shares might fall.  High-yield,  lower-grade  debt
securities  are  especially  subject  to risks of  default.  A  downgrade  in an
issuer's  credit  rating or other  adverse  news  about an issuer can reduce the
market value of that issuer's  securities.  Securities issued by U.S. government
agencies or  instrumentalities  carry an implied  credit  support  from the U.S.
government.  These  government  agencies  and  instrumentalities  are  currently
subject to a degree of focus by the U.S.  Treasury,  the U.S.  Congress  and the
regulatory    agencies   which   oversee   those    government    agencies   and
instrumentalities.  It is possible that the implied  credit  support of the U.S.
government could be modified or withdrawn.  However, at this time the likelihood
of that event  cannot be  predicted  at this time.  In the event that the credit
support is modified or withdrawn,  those  securities  may be subject to a credit
downgrade and the value of those securities may decline.

     o Special Risks of Lower-Grade  Securities.  The Underlying  Funds that may
invest in below  investment  grade  securities  ("junk  bonds")may  have greater
credit risks than funds that buy only investment-grade  bonds.  Lower-grade debt
securities  may be subject to greater  price  fluctuations  and risks of loss of
income and principal than investment-grade debt securities.  Securities that are
below  investment  grade are exposed to a greater risk that the issuer might not
meet its debt  obligations or might  default.  There may be less of a market for
lower  grade  securities,  making  it  harder  to value  them or sell them at an
acceptable price and possibly  exposing an Underlying Fund to "price  arbitrage"
attempts as described below. Additionally,  these securities may be subject to a
greater risk of default. These risks may reduce an Underlying Fund's share price
and the income it earns.

     Foreign  Debt  Securities.  Some of the  Underlying  Funds may  invest in a
variety of debt securities issued by foreign governments and companies,  as well
as  "supra-national"  entities,  such as the World Bank. They can include bonds,
debentures,  and notes,  including  derivative  investments called  "structured"
notes,  described below.  The Underlying  Fund's foreign debt investments may be
denominated  in U.S.  dollars or in foreign  currencies  and can include  "Brady
Bonds." Those are  U.S.-dollar  denominated  debt securities  collateralized  by
zero-coupon  U.S.  Treasury  securities.  They are typically  issued by emerging
market countries and are considered  speculative securities with higher risks of
default.  The Underlying Funds will buy foreign currency only in connection with
the purchase and sale of foreign securities and not for speculation.

     U.S. Government Securities.  Not all of the U.S. government securities that
certain Underlying Funds buy are backed by the full faith and credit of the U.S.
government as to the payment of interest and  repayment of  principal.  Some are
backed by the right of the entity to borrow from the U.S.  Treasury.  Others are
backed  only by the  credit of the  issuing  governmental  entity.  All of these
different types of securities,  described  below,  are generally  referred to as
"U.S. government securities" in this Prospectus.

     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).  All Treasury
securities  are backed by the full  faith and credit of the United  States as to
the timely  payment of interest and repayment of principal.  Certain  Underlying
Funds  can buy U.S.  Treasury  securities  that have  been  "stripped"  of their
coupons,  zero-coupon U.S. Treasury  securities as described below, and Treasury
Inflation Protection Securities.

     o  Obligations  Issued  or  Guaranteed  by  U.S.   Government  Agencies  or
Instrumentalities.   Certain   Underlying   Funds  can  invest  in  both  direct
obligations and mortgage-related securities that have different levels of credit
support from the U.S. government.  Some of these securities are supported by the
full  faith  and  credit of the U.S.  government,  such as  Government  National
Mortgage Association ("Ginnie Mae") pass-through mortgage certificates. Some are
supported  by the right of the  issuer to borrow  from the U.S.  Treasury  under
certain  circumstances,  such as Federal National Mortgage  Association ("Fannie
Mae"), Federal Home Loan Mortgage  Corporation  ("Freddie Mac") and Federal Home
Loan Bank  obligations.  Others are  supported  only by the credit of the entity
that issued them.

     o Mortgage-Related  U.S.  Government  Securities.  Certain Underlying Funds
invest a significant amount of their assets in mortgage-related  U.S. government
securities.  These  include  interests  in pools of  residential  or  commercial
mortgages,  in the form of collateralized  mortgage-backed  obligations ("CMOs")
and other  "pass-through"  mortgage  securities.  CMOs have collateral to secure
payment of interest and principal.  They may be issued in different  series with
different interests rates and maturities. The collateral of U.S. government CMOs
is either in the form of mortgage pass-through certificates issued or guaranteed
by a  U.S.  agency  or  instrumentality  or  mortgage  loans  insured  by a U.S.
government agency.

     The prices and yields of CMOs are determined, in part, by assumptions about
the cash  flows  from the  payments  on the  underlying  mortgages.  Changes  in
interest rates may cause the rate of expected  prepayments of those mortgages to
change. Prepayment risk and extension risk, described above, can make the prices
of CMOs and other mortgage-related  securities very volatile when interest rates
change. That volatility may affect an Underlying Fund's share price.

     o Forward  Rolls.  Certain  Underlying  Funds can enter into "forward roll"
transactions  with  respect  to  mortgage-related  securities.  In this  type of
transaction,  the Underlying Fund sells a  mortgage-related  security to a buyer
for a specific settlement date and simultaneously agrees to repurchase a similar
security on a future settlement date at a set price.

     During the  period  between  the sale  settlement  date and the  repurchase
settlement  date the Underlying  Funds will not be entitled to receive  interest
and  principal  payments on the  securities  that have been sold. It is possible
that the market value of the  securities  that an Underlying  Fund has agreed to
repurchase may decline below the price that the Underlying  Fund is obligated to
pay  for  the  securities,  or  that  the  counterparty  might  default  in  its
obligation.  At any given  time,  a  substantial  portion of certain  Underlying
Fund's assets may be subject to these risks.

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

     Participation  Interest in Loans.  These securities  represent an undivided
fractional  interest  in a loan  obligation  of a borrower.  They are  typically
purchased  from banks or dealers  that have made the loan or are  members of the
loan syndicate. The loans may be to foreign or U.S. companies.  They are subject
to the risk of default by the borrower. If the borrower fails to pay interest or
repay  principal,  an  Underlying  Fund may lose  money  on its  investment.  No
Underlying  Fund will  invest  more than 5% of its net  assets in  participation
interests of any one borrower.

     Asset-Backed  Securities.  Certain  Underlying  Funds can buy  asset-backed
securities,   which  are  fractional   interests  in  pools  of  loans  and  are
collateralized  by the loans,  other assets or  receivables.  They are typically
issued by trusts and special purpose  corporations that pass the income from the
underlying pool to the purchasers.  These  securities are subject to the risk of
default by the issuer as well as by the borrowers of the underlying loans in the
pool, and to interest rate and prepayment risks.

     "Structured"  Notes.  Some of the  Underlying  Funds  may buy  "structured"
notes, which are  specially-designed to replicate the value of an index (such as
a currency or securities index) or a commodity.  The terms of the instrument may
be  negotiated,  or"structured,"  by the purchaser and the borrower  issuing the
note.

     The values of these  notes will fall or rise in  response to the changes in
the value of the underlying  security or index.  The value of these notes may be
affected  by events  pertaining  to the credit of the  borrower,  referred to as
"counter-party"  risks.  The values of these notes are also  subject to interest
rate risks and therefore some of the Underlying Funds could receive more or less
than they  originally  invested when a note matures,  or they might receive less
interest than the stated coupon  payment if the  underlying  investment or index
does not perform as anticipated.  The prices of these notes may be very volatile
and  they  may  have a  limited  trading  market,  making  it  difficult  for an
Underlying Fund to value them or sell them at an acceptable price.

     Zero-Coupon  and "Stripped"  Securities.  Some of the debt  securities that
certain  of the  Underlying  Funds  may buy are  zero-coupon  bonds  that pay no
interest and are issued at a substantial  discount  from their face value.  They
may be issued by the U.S. government or private issuers.  "Stripped"  securities
are the  separate  income  or  principal  components  of a debt  security.  Some
mortgage  related  securities  may be  stripped,  with each  component  having a
different proportion of principal or interest payments.  One class might receive
all the interest and the other all the principal  payments.  The securities that
are  entitled  to only  the  principal  payments  may be  sold at a  substantial
discount from the market value of the initial mortgage related security.

     Zero-coupon and stripped  securities are particularly  sensitive to changes
in interest rates and may be subject to greater price  fluctuations  as a result
of  interest  rate  changes  than  interest-bearing   securities.  Some  of  the
Underlying  Funds  may  have  to pay  out  the  imputed  income  on  zero-coupon
securities   without   receiving  the  actual  cash  currently.   The  value  of
interest-only and principal-only securities mortgage related securities are also
very sensitive to changes in prepayments of the underlying mortgages. The market
for zero-coupon and stripped securities may be limited,  making it difficult for
the Fund to sell its holdings at an acceptable price.

     Money  Market   Instruments.   To  seek  current  income  while  preserving
liquidity,  the Funds and some of the Underlying Funds can also invest in "money
market  instruments,"  which are  short-term,  high-quality,  dollar-denominated
money market  instruments  issued by the U.S.  Government,  domestic and foreign
corporations and financial institutions,  and other entities. These include U.S.
Government securities, high-quality corporate debt securities having a remaining
maturity  of  one  year  or  less,  bankers'   acceptances,   commercial  paper,
certificates of deposit,  repurchase agreements,  and other short-term corporate
debt obligations. While money market instruments generally have lower risks than
other fixed income securities, they may also offer lower returns.

     Investments  in  Institutional   Money  Market  Fund.  The  Funds  and  the
Underlying  Funds also can invest their free cash balances in the Class E shares
of Oppenheimer  Institutional  Money Market Fund. The Oppenheimer  Institutional
Money  Market  Fund is a  registered  open-end  management  investment  company,
regulated as a money market fund under the  Investment  Company Act of 1940,  as
amended, that invests in a variety of money market instruments. As shareholders,
the Funds and the Underlying Funds will be subject to their  proportional  share
of the Oppenheimer Institutional Money Market Fund's Class E expenses, including
its advisory  fee.  However,  the Manager will waive a portion of the Funds' and
the  Underlying  Funds'  advisory  fee to the  extent of the their  share of the
Oppenheimer Institutional Money Market Fund's advisory fee.

     DERIVATIVE INVESTMENTS. Each of the Underlying Funds may use derivatives to
seek  increased  returns or to try to hedge  investment and interest rate risks.
Oppenheimer  International Growth Fund can invest up to 25% of its net assets in
derivatives.  The other  Underlying  Funds  have no stated  limit on  derivative
investments, but will comply with all applicable laws and regulations.  There is
no target range of for indirect investment in derivatives at the Fund level.

     In general terms, a derivative investment is one whose value depends on (or
is  derived  from) the  value of an  underlying  asset,  interest  rate,  index,
commodity or currency.  Options, futures, interest rate swaps, structured notes,
mortgage-related  securities  and forward  contracts are examples of derivatives
that some of the Underlying Funds could use.

     If the issuer of the derivative  does not pay the amount due, an Underlying
Fund  may  lose  money on the  investment.  Also,  the  underlying  security  or
investment on which the derivative is based,  and the derivative  itself,  might
not perform the way the Manager  expected  it to perform.  If that  happens,  an
Underlying  Fund's  share price  could fall and it may realize  less income than
expected. Some derivatives may be illiquid, making it difficult to value them or
sell them at an acceptable price.  Using derivatives can increase the volatility
of an Underlying Fund's share price.

     Futures and Options. Certain Underlying Funds use futures contracts and put
and call  options  to  attempt  to  increase  investment  return,  and to manage
exposure to changing interest rates,  commodity prices,  securities  prices, and
other  economic  variables.  Futures and options  may be  considered  derivative
investments.

     Certain Underlying Funds can purchase and sell commodity futures contracts,
forward  contracts,  options on futures  contracts  and  options  and futures on
commodity indices. Certain Underlying Funds can also buy and sell other types of
futures contracts and options relating to them.

     Buying and Selling Put and Call Options.  A call option gives the buyer the
right,  but not the obligation,  to purchase an underlying  asset at a specified
price. A put option gives the buyer the right,  but not the obligation,  to sell
an  underlying  asset  at a  specified  price.  Selling  a put or a call  option
obligates  the  seller  to  respectively  buy or sell an  underlying  asset at a
specified price if the option is exercised. Certain Underlying Funds may buy and
sell exchange-traded and over-the-counter options.

     Certain  Underlying  Funds may sell ("write")  calls if they are "covered."
That means the Underlying  Fund already owns the securities  that are subject to
the call. For other calls,  an Underlying  Fund must segregate  liquid assets to
cover its potential  obligation  under the call. For certain  Underlying  Funds,
there is no limit on the  amount  of its total  assets  that may be  subject  to
"covered"  calls.  Certain  Underlying Funds may also sell puts. In doing so, an
Underlying Fund must segregate liquid assets to cover its obligations  under the
put. No more than 50% of any  Underlying  Fund's  total assets may be subject to
puts that it sells.

     Futures  Contracts.  A commodity  futures contract  obligates the seller to
deliver at a specified  date a specified  quantity of a commodity at a specified
price. In practice, only a very small percentage of all futures contracts result
in actual  delivery of the  underlying  commodity.  At the maturity of a futures
contract,  an  Underlying  Fund may either  accept or make delivery of the asset
specified  in the  contract,  or at or prior to  maturity  enter  into a closing
transaction  involving the purchase or sale of an offsetting  contract.  Closing
transactions  with respect to futures  contracts  are effected on a  commodities
exchange;   a  clearing   corporation   associated  with  the  exchange  assumes
responsibility for closing out such contracts.

     Forward Contracts. Certain Underlying Funds may invest in forward contracts
to buy or sell  foreign  currency  for  future  delivery  at a fixed  price.  An
Underlying  Fund  may use them to try to "lock  in" the U.S.  dollar  price of a
security  denominated  in a  foreign  currency  that  the  Underlying  Fund  has
purchased or sold,  or to protect  against  possible  losses from changes in the
relative value of the U.S.  dollar and a foreign  currency.  Certain  Underlying
Funds may also use "cross  hedging,"  a  technique  that seeks to hedge  against
changes  in  currencies   other  than  the  currency  in  which  a  security  is
denominated.  The use of forward  contracts may reduce the gain on an investment
that would otherwise result from a change in the  relationship  between the U.S.
dollar and the foreign  currency in which the  investment is  denominated or may
not fully offset a loss resulting from the change in the relative value.

     Swap Transactions.  Swap transactions are privately  negotiated  agreements
between an Underlying  Fund and a  counterparty  to exchange or swap  investment
cash flows or assets at specified  intervals in the future.  The obligations may
extend beyond one year.

     There is no central exchange or market for swap  transactions and therefore
they  are  less  liquid  investments  than  exchange-traded  instruments.  If an
Underlying  Fund were to sell a swap it owned to a third party,  the  Underlying
Fund would still remain primarily liable on the obligations  underlying the swap
contract.  Additionally,  the  Underlying  Fund  would  bear the  risk  that the
counterparty might default under a swap agreement.

     Certain  Underlying  Funds may enter into credit  default  swaps,  both (i)
directly and (ii)  indirectly in the form of a swap embedded within a structured
security  to protect  against the risk that a debt  security  will  default.  An
Underlying  Fund pays a fee to enter into the trade and receives a fixed payment
during  the life of the  swap.  If there is a credit  event  (for  example,  the
security fails to timely pay interest or principal),  the Underlying Fund either
delivers the defaulted bond (if the Underlying Fund has taken the short position
in the credit default swap,  also known as "buying credit  protection")  or pays
the par amount of the defaulted bond (if the Underlying  Fund had taken the long
position in the credit default swap, also know as "selling credit  protection").
Risks of credit  default swaps include the cost of paying for credit  protection
if there are no credit  events,  and adverse  pricing when  purchasing  bonds to
satisfy its delivery  obligation where the Underlying Fund took a short position
in the swap and there has been a credit event.

     Certain  Underlying  Funds can engage in total return swaps. A total return
swap gives an Underlying Fund the right to receive the  appreciation in value of
an asset in return  for  paying a fee to the  counterparty.  The fee paid by the
Underlying  Fund will typically be determined by  multiplying  the face value of
the swap  agreement by an  agreed-upon  interest  rate. If the asset declines in
value over the term of the swap, the  Underlying  Fund would also be required to
pay the dollar value of the that decline to the counterparty.

     The applicable  Underlying Funds intend to invest in swap transactions only
if they are excluded from regulation by the Commodity Futures Trading Commission
under the Commodity Exchange Act and the rules thereunder.

     Commodity-Linked  "Structured"  Hybrid  Securities.  One of the  Underlying
Funds,  Oppenheimer Real Asset Fund,  invests in  commodity-linked  "structured"
securities to gain exposure to commodities  markets.  Structured  securities are
hybrid  instruments  typically  issued  by  banks,  brokerage  firms,  insurance
companies  and other  corporations.  They are  considered  "hybrid"  instruments
because they have both  commodity-like  and  security-like  characteristics.  In
general,  hybrid instruments have  characteristics of debt securities and either
commodity futures contracts or commodity options contracts,  or a combination of
both.  Structured  hybrid  instruments are derivatives  because at least part of
their value is derived  from the value of the  underlying  commodity,  commodity
index or other economic variable.  The value of a hybrid instrument typically is
based on the price  movements  of a physical  commodity  (such as  heating  oil,
livestock,  or agricultural products), a commodity futures contract, a commodity
index, or some other readily  measurable  variable that reflects  changes in the
value of particular  commodities or the commodities  markets. The securities are
referred to as "structured"  securities because the purchaser can negotiate with
the  issuer to obtain  specific  terms and  features  that are  tailored  to the
purchaser's investment needs.

     Because the performance of structured  hybrid  instruments is linked to the
performance  of an  underlying  commodity,  commodity  index or  other  economic
variable,  those  investments  are subject to "market risks" with respect to the
movements  of the  commodity  markets and may be subject to certain  other risks
that do not affect  traditional  equity  and debt  securities.  If the  interest
payment on a hybrid instrument is linked to the value of a particular commodity,
commodity index or other economic  variable and the underlying  investment loses
value,  the  purchaser  might  not  receive  the  anticipated  interest  on  its
investment.  If the  amount of  principal  to be repaid on a  structured  hybrid
instrument is linked to the value of a particular commodity,  commodity index or
other economic variable, the purchaser might not receive all of the principal at
maturity of the investment.

     The value of the structured  hybrid  instruments the Oppenheimer Real Asset
Fund buys may  fluctuate  significantly  because  the  values of the  underlying
investments to which they are linked are themselves extremely volatile. The risk
of loss associated with a particular instrument may be significantly higher than
50% of the value of the  investment at any time.  Additionally,  the  particular
terms  of a  structured  hybrid  instrument  may  create  economic  leverage  by
requiring  payments that are a multiple of the price increase or decrease of the
underlying  commodity,  commodity  index, or other economic  variable.  Economic
leverage  may increase  the  volatility  of the  structured  hybrid  instruments
because  they  would  increase  or  decrease  in  value  more  quickly  than the
underlying  commodity,  commodity  index or other  economic  variable.  A liquid
secondary  market  may not  exist  for the  structured  hybrid  instruments  the
Oppenheimer  Real Asset Fund buys,  which may make it difficult  for the fund to
sell them at an acceptable price or to accurately value them.

     RISKS OF LEVERAGE.  Certain  derivatives that some Underlying Funds may buy
involve a degree of leverage.  Economic leverage occurs when an investor has the
right to a return on an  investment  that  exceeds the return that the  investor
would be expected to receive based on the amount  contributed to the investment.
Economically  leveraged investments can increase the gain or the loss associated
with changes in the value of an underlying  economic variable.  Underlying Funds
have limits on the leverage ratio of each  investment they can buy as well as on
their overall portfolio.

     Repurchase  Agreements.  Certain Underlying Funds can enter into repurchase
agreements for investment  purposes.  They also may be used for cash  management
purposes or in swap transactions for liquidity. In a repurchase transaction,  an
Underlying  Fund buys a security and  simultaneously  sells it to the seller for
delivery at a future date.  Repurchase  agreements must be fully collateralized.
However,  if the seller 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. If the default
on the  part of the  seller  is due to its  bankruptcy,  the  Underlying  Fund's
ability to liquidate the collateral may be delayed or limited.

     Investments By "Funds of Funds." Class Y shares of certain Underlying Funds
may also be  offered as an  investment  to other  Oppenheimer  funds that act as
"funds of funds." The boards of directors or trustees of those  Underlying Funds
have approved making each Underlying Fund's shares available as an investment to
the  Funds  and to such  other  funds of funds,  which  may  invest  significant
portions of their  assets in shares of the  Underlying  Funds,  as  described in
their respective prospectuses.  The Funds and other funds of funds, individually
and/or  collectively,  may own significant  amounts of those  Underlying  Fund's
shares  from  time to time.  Funds  of  funds  typically  use  asset  allocation
strategies  under  which  they  may  increase  or  reduce  the  amount  of their
investment in the Underlying Fund  frequently,  which may occur on a daily basis
under volatile market conditions.  Depending on a number of factors, such as the
flows of cash into and from an  Underlying  Fund as a result of the  activity of
other  investors  and  the  Underlying  Fund's  then-current  liquidity,   those
purchases and  redemptions  of an  Underlying  Fund's shares by the Funds and/or
such other funds of funds could require the Underlying  Fund to purchase or sell
portfolio  securities,  increasing its transaction costs and possibly reduce its
performance,  if the size of those  purchases and redemptions  were  significant
relative to the size of the Underlying Fund.

     Industry  And Sector  Focus.  At times,  some of the  Underlying  Funds may
increase the relative  emphasis of their  investments in a particular  industry,
group of  industries  or sector.  Stocks of issuers in a particular  industry or
sector  might be  affected by changes in  economic  conditions  or by changes in
government  regulations,  availability of basic resources or supplies,  or other
events that affect that  industry or sector more than others.  If an  Underlying
Fund has a greater  emphasis on investments in a particular  industry or sector,
its share value may fluctuate in response to events  affecting  that industry or
sector  to a greater  extent  than the  shares  value of funds  without  such an
emphasis.

     OTHER INVESTMENT STRATEGIES. To seek their objectives, the Underlying Funds
may also use  certain of the  investment  techniques  and  strategies  described
below.  The  Manager  of an  Underlying  Fund  might not  always  use all of the
strategies  described  below.  These  investments  and techniques have their own
risks,  although some are designed to help reduce  overall  investment or market
risks.

     Illiquid and Restricted  Securities.  Investments of an Underlying Fund may
be  illiquid  because  they do not have an  active  trading  market,  making  it
difficult to value them or sell them promptly at an acceptable price. Restricted
securities  may have terms that limit  their  resale to other  investors  or may
require  registration  under applicable  securities laws before they may be sold
publicly.  Of the  Underlying  Funds that can invest in illiquid  or  restricted
securities,  none of them  will  invest  more  than  15% of net  assets  in such
securities.  Certain  restricted  securities  that are  eligible  for  resale to
qualified institutional purchasers may not be subject to that limit. The Manager
monitors  Underlying Funds' holdings of illiquid  securities on an ongoing basis
to determine whether to sell any holdings to maintain adequate liquidity.

     Loans of Portfolio  Securities.  Some of the Underlying  Funds have entered
into a Securities  Lending Agreement with JPMorgan Chase.  Under that agreement,
securities  in the  portfolio  of an  Underlying  Fund may be loaned to brokers,
dealers and other  financial  institutions.  The  Securities  Lending  Agreement
provides  that loans must be adequately  collateralized  and may be made only in
conformity with the Underlying Fund's Securities Lending Guidelines,  adopted by
its board of directors or trustees.  The value of the securities  loaned may not
exceed 25% of the value of the Underlying Fund's net assets.

     Purchases  &  Sales  by  Other  Funds.  An  Underlying  Fund  may  have
investment  policies  similar to those of another  Underlying  Fund and/or other
funds advised by the Manager.  If one of those other funds  purchases or sells a
particular  security at the same time that the Underlying  Fund is purchasing or
selling it,  such  purchases  or sales  could  affect the supply or price of the
security. The simultaneous purchase of a security by one Underlying Fund and its
sale by another  Underlying  Fund could also  increase  the trading  costs borne
indirectly by the Funds.

     Additional  information  about each  Underlying  Fund is  contained  in its
Prospectus  and Statement of Additional  Information.  To obtain a Prospectus or
Statement of Additional  Information of any of the Underlying Funds, simply call
the toll-free number on the back cover of this  Prospectus.  Those documents and
other information about the Underlying Funds may also be viewed or downloaded on
the Manager's website at www.oppenheimerfunds.com.

     Measurement of Investment Restrictions.  Investment restrictions, such as a
required  minimum or maximum  investment in a particular  type of security,  are
measured at the time each Fund purchases a security.  The status,  market value,
maturity, credit quality, or other characteristics of each Fund's securities may
change  after they are  purchased,  and this may cause the amount of each Fund's
assets invested in such  securities to exceed the stated maximum  restriction or
fall below the  stated  minimum  restriction.  If this  occurs,  it would not be
considered a violation of the investment restriction.

     Temporary  Defensive and Interim  Investments.  For temporary periods,  the
Funds and each of the  Underlying  Funds may hold a portion  of their  assets in
cash, money market  securities or other similar,  liquid  investments  including
shares of Oppenheimer Institutional Money Market Fund. This will generally occur
when the Manager is unable to immediately invest cash received from purchases of
Fund or Underlying Fund shares or from  redemptions of a Fund's or an Underlying
Fund's  other  investments  or  to  meet  anticipated  redemptions  of  Fund  or
Underlying  Fund  shares.  In times of adverse or unstable  market,  economic or
political  conditions,  the Funds and certain of the Underlying Funds may invest
up to 100% of their assets in temporary  investments that are inconsistent  with
their principal investment  strategies.  Generally those assets would be held in
cash or cash equivalents,  such as U.S. Treasury Bills and other short-term U.S.
Government  obligations,  high-grade  commercial  paper securities or repurchase
agreements or shares of Oppenheimer  Institutional  Money Market Fund.  They may
also include other  investment-grade debt securities.  To the extent that a Fund
or an  Underlying  Fund invests  defensively  in these  securities  it might not
achieve its investment objective.


     Portfolio  Turnover.  A change in the securities held by a Fund is known as
"portfolio  turnover." It is not  anticipated  that any of the Funds will have a
portfolio  turnover rate of over 100%.  An Underlying  Fund may engage in active
and frequent trading to try to achieve its objectives,  however,  and may have a
portfolio  turnover rate of over 100%. If a Fund or an Underlying  Fund realizes
capital gains when it sells  investments,  it must generally pay those gains out
to shareholders,  increasing their taxable distributions.  Generally,  increased
portfolio  turnover creates higher brokerage and transaction  costs for the fund
conducting the trading (and may reduce its  performance).  However,  most of the
Funds'  portfolio  transactions  will be trades in the shares of the  Underlying
Funds,  which do not involve brokerage  commissions.  The portfolio  turnover of
each Underlying Fund for its most recently  completed fiscal year is included in
its prospectus, which is available without charge as indicated on the back cover
of this prospectus.


     PORTFOLIO  HOLDINGS.   Each  Fund's  portfolio  holdings  are  included  in
semi-annual and annual reports that are distributed to shareholders of the Funds
within 60 days  after the close of the  period  for which  such  report is being
made.  Each Fund also  discloses  its  portfolio  holdings in its  Statements of
Investments  on Form N-Q,  which  are filed  with the  Securities  and  Exchange
Commission  no later than 60 days after the close of its first and third  fiscal
quarters.  These required  filings are publicly  available at the Securities and
Exchange  Commission  and on its  EDGAR  filing  website.  Therefore,  portfolio
holdings of the Funds are made  publicly  available  no later than 60 days after
the close of each of the Funds' fiscal quarters.  The same policies apply to the
holdings of each of the Underlying Funds.

     A description  of the Funds'  policies and  procedures  with respect to the
disclosure  of the  Funds'  portfolio  securities  is  available  in the  Funds'
Statement of Additional Information.

How the Funds are Managed

     THE MANAGER.  The Manager  chooses each Fund's  investments and handles its
day-to-day business. The Manager carries out its duties, subject to the policies
established  by each Fund's  Board of  Trustees,  under an  investment  advisory
agreement that states the Manager's  responsibilities with respect to that Fund.
The advisory agreements also describe the expenses that each Fund is responsible
for paying to conduct its business.

     The Manager has been an investment  adviser since January 1960. The Manager
and its subsidiaries and controlled affiliates managed more than $220 billion in
assets as of September 30, 2006,  including  other  Oppenheimer  funds with more
than 6  million  shareholder  accounts.  The  Manager  is  located  at Two World
Financial Center, 225 Liberty Street, 11th Floor, New York, New York 10281-1008.

     Advisory Fees. Under the Investment  Advisory  Agreement,  the Manager will
not charge a  management  fee to the Funds,  however  the Manager  will  collect
indirect  management fees through the investments in the Underlying  Funds.  The
estimated  indirect  management fees of the Funds, as a percent of their average
daily net assets is as follows:

                                          Class A      Class B     Class C      Class N      Class Y
-------------------------------------- ------------ ----------- ------------ ------------ ------------
-------------------------------------- ------------ ----------- ------------ ------------ ------------
Transition 2010 Fund                       0.65%        0.65%       0.65%        0.65%        0.65%
-------------------------------------- ------------ ----------- ------------ ------------ ------------
-------------------------------------- ------------ ----------- ------------ ------------ ------------
Transition 2015 Fund                       0.69%        0.69%       0.69%        0.69%        0.69%
-------------------------------------- ------------ ----------- ------------ ------------ ------------
-------------------------------------- ------------ ----------- ------------ ------------ ------------
Transition 2020 Fund                       0.71%        0.71%       0.71%        0.71%        0.71%
-------------------------------------- ------------ ----------- ------------ ------------ ------------
-------------------------------------- ------------ ----------- ------------ ------------ ------------
Transition 2030 Fund                       0.74%        0.74%       0.74%        0.74%        0.74%

     The Manager has  voluntarily  agreed to a total  expense  limitation on the
aggregate amount of combined direct (Funds level) and indirect (Underlying Funds
level) expenses, as follows:

                                          Class A      Class B     Class C      Class N      Class Y
-------------------------------------- ------------ ----------- ------------ ------------ ------------
-------------------------------------- ------------ ----------- ------------ ------------ ------------
Transition 2010 Fund                       1.50%        2.25%       2.25%        1.75%        1.25%
-------------------------------------- ------------ ----------- ------------ ------------ ------------
-------------------------------------- ------------ ----------- ------------ ------------ ------------
Transition 2015 Fund                       1.50%        2.25%       2.25%        1.75%        1.25%
-------------------------------------- ------------ ----------- ------------ ------------ ------------
-------------------------------------- ------------ ----------- ------------ ------------ ------------
Transition 2020 Fund                       1.50%        2.25%       2.25%        1.75%        1.25%
-------------------------------------- ------------ ----------- ------------ ------------ ------------
-------------------------------------- ------------ ----------- ------------ ------------ ------------
Transition 2030 Fund                       1.50%        2.25%       2.25%        1.75%        1.25%

     The limitations  will be applied after giving effect to  reimbursements  by
the  Distributor  of 12b-1 fees paid by a Fund with respect to Class A shares of
any Underlying Fund that does not offer Class Y shares.

     A discussion regarding the basis for the Board of Trustees' approval of the
Fund's  investment  advisory  contract  will be available  in the Fund's  Annual
Report to the shareholders for the period ended February 28, 2006.

     Portfolio  Managers.  The  Funds  are  managed  by  a  team  of  investment
professionals  including Rudi W. Schadt,  Jerry A. Webman,  and Kurt Wolfgruber,
who have  been  Vice  Presidents  of the  Funds  and  members  of the  portfolio
management team since the Funds' inception.

     Mr.  Schadt has been a Vice  President  and Director of Research in Product
Design and Risk  Management of the Manager  since August 2004.  Prior to joining
the Manager in February 2002, he was a Director and Senior Quantitative  Analyst
at UBS Asset  Management  from 2000 through  2001 and an  Associate  Director of
Research,  Senior  Researcher  and  Portfolio  Manager  at State  Street  Global
Advisors from June 1997. Mr. Schadt is a portfolio  manager and officer of other
portfolios in the OppenheimerFunds complex.

     Dr. Webman has been Chief  Economist of the Manager since May 2006;  Senior
Investment  Officer and Director of the Manager's Fixed Income Investments since
1999, a Senior Vice  President of the Manager since  February 1996, and a Senior
Vice President of HarbourView  Asset Management  Corporation since May 1999. Dr.
Webman  is  a  portfolio   manager  and  officer  of  other  portfolios  in  the
OppenheimerFunds complex.

     Mr.  Wolfgruber  has been an Executive  Vice President of the Manager since
March 2003 and Chief  Investment  Officer and Director of the Manager since July
2003. He has been a Managing  Director of Oppenheimer  Acquisition  Corp.  since
December 2005. Mr.  Wolfgruber has been Director of HarbourView Asset Management
Corporation and of OFI Institutional Asset Management,  Inc. since June 2003 and
of Tremont Capital  Management,  Inc. since October 2001. He is also a portfolio
manager and officer of other portfolios in the OppenheimerFunds complex.

     The Statement of Additional  Information  provides  additional  information
about the portfolio management team's  compensation,  other accounts they manage
and their  ownership  of each Fund's  shares.  Information  about the  portfolio
managers of the Underlying Funds is available in the prospectus and Statement of
Additional Information of each Underlying Fund.

     Pending  Litigation.  A  consolidated  amended  complaint  was  filed  as a
putative  class  action  against the Manager and the  Transfer  Agent (and other
defendants) in the U.S.  District Court for the Southern District of New York on
January 10, 2005 and was amended on March 4, 2005. The complaint alleged,  among
other things, that the Manager charged excessive fees for distribution and other
costs,  and  that by  permitting  and/or  participating  in those  actions,  the
Directors/Trustees and the Officers of the funds breached their fiduciary duties
to fund shareholders under the Investment Company Act of 1940 and at common law.
The plaintiffs sought unspecified  damages,  an accounting of all fees paid, and
an award of attorneys' fees and litigation expenses.

     In response to the  defendants'  motions to dismiss the suit,  seven of the
eight  counts in the  complaint,  including  the claims  against  certain of the
Oppenheimer funds, as nominal defendants, and against certain present and former
Directors,  Trustees  and  officers  of  the  funds,  and  the  Distributor,  as
defendants,  were dismissed with prejudice, by court order dated March 10, 2006,
and the remaining count against the Manager and the Transfer Agent was dismissed
with  prejudice  by court  order dated April 5, 2006.  The  plaintiffs  filed an
appeal of those dismissals on May 11, 2006.

     The Manager  believes  that it is premature to render any opinion as to the
likelihood of an outcome unfavorable to it, the funds, the Directors/Trustees or
the Officers on the appeal of the decisions of the district  court,  and that no
estimate  can yet be made with any degree of certainty as to the amount or range
of any  potential  loss.  However,  the Manager  believes  that the  allegations
contained  in the  complaint  are without  merit and that there are  substantial
grounds to sustain the district court's rulings.

ABOUT YOUR ACCOUNT

How to Buy Shares

     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 a Fund's shares.

     Buying Shares  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.  A broker
or dealer may charge a processing fee for that service.

     Buying  Shares  Through  the   Distributor.   To  buy  shares  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 do not list a dealer on the  application,
Class A shares are your only purchase  option.  The Distributor will act as your
agent in buying  Class A 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. Class B, Class C, Class N or Class Y shares may
not be purchased  directly from the  Distributor  by a new investor  without the
investor designating another registered broker-dealer.  If a current investor no
longer has another  broker-dealer  of record for an existing Class B, Class C or
Class  N  account,   the   Distributor  is   automatically   designated  as  the
broker-dealer of record,  but solely for the purpose of acting as the investor's
agent to purchase the shares.

     o Paying by Federal Funds Wire.  Shares  purchased  through the Distributor
may be paid for by Federal  Funds wire.  The minimum  federal  wire  purchase is
$2,500.  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 can 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
share  purchase  instructions  automatically,   under  an  Asset  Builder  Plan,
described below, or by telephone instructions using OppenheimerFunds  PhoneLink,
also described below.  Please refer to "AccountLink,"  below for more details. o
Buying  Shares  Through an Asset Builder  Plan.  You may purchase  shares of the
Funds  automatically from your account at a bank or other financial  institution
under an Asset  Builder  Plan with  AccountLink.  For  details  see the  Account
Application for Nonretirement  Accounts,  the Asset Builder  Enrollment Form and
the Statement of Additional Information.

     WHAT IS THE MINIMUM  AMOUNT YOU MUST  INVEST?  In most  cases,  you can buy
shares  of the Funds  with a  minimum  initial  investment  of  $1,000  and make
additional investments at any time with as little as $50. The minimum investment
requirements  do not apply to reinvested  dividends from the Funds or from other
Oppenheimer funds or reinvested  distributions  from unit investment trusts that
have made arrangements with the Distributor.  There are reduced initial minimums
available  in  certain  circumstances,  including  under the  following  special
investment plans:

     o For the many types of  retirement  plan  accounts  that  OppenheimerFunds
offers  (more fully  described  below under  "Special  Investor  Services")  the
minimum initial investment is $500.

     o For an Asset Builder Plan or Automatic  Exchange Plan (details are in the
Statement of  Additional  Information),  or a  government  allotment  plan,  the
minimum investment is $500.

     o  For  certain  fee  based  programs  that  have  an  agreement  with  the
Distributor a minimum initial investment of $250 applies.

     If your account  balance is less than $500 at the time the Minimum  Balance
Fee is  assessed  (in  September  of each  year)  it may be  subject  to the fee
described in the section  "Shareholder Account Rules and Policies - A $12 annual
'Minimum Balance Fee'" in this  Prospectus.  Accounts with balances of less than
$500 may be subject to involuntary redemption under certain circumstances.

     AT WHAT PRICE ARE SHARES  SOLD?  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.  Your financial  adviser
can provide you with more  information  regarding  the time you must submit your
purchase order and whether the adviser is an authorized agent for the receipt of
purchase orders.

     Net Asset Value. Each Fund calculates the net asset value of each class its
of shares  based upon the net asset value per share of the  applicable  class of
the  Underlying  Funds  as of the  close  of the New York  Stock  Exchange  (the
"NYSE"),  on  each  day  the  NYSE  is open  for  trading  (referred  to in this
Prospectus as a "regular  business day"). The NYSE normally closes at 4:00 p.m.,
Eastern time, but may close earlier on some days. All references to time in this
Prospectus are to "Eastern time."

     For each Fund and each Underlying Fund, the net asset value per share for a
class of shares on a regular business day is determined by dividing the value of
that  fund's  net assets  attributable  to that class by the number of shares of
that class outstanding on that day. The Underlying Funds determine the values of
their assets  primarily  on the basis of current  market  quotations.  If market
quotations  are not readily  available  or, in the  Manager's  judgment,  do not
accurately  reflect the fair value for a security,  or if a security's value has
been  materially  affected by events  occurring after the close of the market on
which the security is principally traded, that security may be valued by another
method that the  Underlying  Fund's  board of  directors  or  trustees  believes
accurately  reflects the security's fair value.  Because some foreign securities
trade in markets and on exchanges  that  operate on weekends and U.S.  holidays,
the values of some of the Underlying Fund's foreign  investments,  and therefore
the value of the shares of a Fund, may change on days when investors  cannot buy
or redeem the Fund's shares.

     The board of  directors  or  trustees of each  Underlying  Fund has adopted
valuation  procedures for that  Underlying Fund and has delegated the day-to-day
responsibility  for  fair  value   determinations  to  the  Manager's  Valuation
Committee.  A fair  value  determination  by the  Manager  is subject to review,
approval and ratification by the applicable board at its next scheduled  meeting
after the fair valuation is determined.  In determining  whether  current market
prices are readily available and reliable,  the Manager monitors the information
it receives in the ordinary course of its investment management responsibilities
for events that it believes, in good faith, will affect the market prices of the
securities of issuers held by the  Underlying  Fund.  If, after the close of the
principal  market on which a security held by an  Underlying  Fund is traded and
before  the  time as of  which  the  Underlying  Fund's  net  asset  values  are
calculated  that day, an event occurs that the Manager learns of and believes in
the exercise of its judgment  will cause a material  change in the value of that
security from the closing price of the security on the principal market on which
it is traded,  the Manager will use its best  judgment to determine a fair value
for that security.  Those may include  events  affecting  specific  issuers (for
example,  a halt in trading of the securities of an issuer on an exchange during
the trading  day) or events  affecting a  securities  markets  (for  example,  a
foreign  securities  market  closes early  because of a natural  disaster).  The
Manager  believes that foreign  securities  values may be affected by volatility
that  occurs  in U.S.  markets  on a trading  day  after  the  close of  foreign
securities markets.  The Manager's fair valuation procedures therefore include a
procedure  whereby foreign  securities prices may be "fair valued" to take those
factors into account.

     The Underlying Funds use fair value pricing  procedures to reflect what the
Manager and the Underlying  Funds' boards of directors or trustees believe to be
more accurate values for the Underlying  Fund's portfolio  securities,  although
they may not always be able to accurately determine such values. There can be no
assurance  that an  Underlying  Fund could  obtain the fair value  assigned to a
security if it were to sell the security at approximately the same time at which
the Underlying Fund determines its net asset value per share.  The discussion of
"time-zone  arbitrage" above describes certain other effects that the Underlying
Funds' fair value pricing policies are intended to counteract.

     The Offering Price. To receive the offering price for a particular day, the
Distributor or its designated  agent must receive your order,  in proper form as
described  in this  Prospectus,  by the time the NYSE  closes  that day. If your
order is received  on a day when the NYSE 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 NYSE  (normally  4:00  p.m.).  Your
dealer must  transmit it to the  Distributor  so that it is received  before the
Distributor's  close of business on a regular business day (normally 5:00 p.m.),
unless  your  dealer has made  alternative  arrangements  with the  Distributor.
Otherwise, the order will receive the next offering price that is determined.

     WHAT CLASSES OF SHARES DO THE FUNDS OFFER?  The Funds offer  investors five
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  for regular  accounts or lesser  amounts for
certain  retirement  plans). 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 6 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 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.

     Class Y Shares.  Class Y shares are offered  only to certain  institutional
investors that have a special agreement with the Distributor.


     WHICH CLASS OF SHARES SHOULD YOU CHOOSE?  Once you decide that a particular
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  adviser.  Some factors to consider are how
much you plan to invest and how long you plan to hold your  investment.  If your
goals  and  objectives  change  over  time and you plan to  purchase  additional
shares,  you should  re-evaluate  those  factors  to see if you should  consider
another class of shares.  Each 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
adviser 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.
Because of the effect of class-based  expenses,  your choice will also depend on
how much you plan to invest.  For example,  the reduced sales charges  available
for larger  purchases  of Class A shares  may,  over time,  offset the effect of
paying an initial sales charge on your  investment,  compared to the effect over
time of higher  class-based  expenses  on shares of Class B, Class C or Class N.
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

     o  Investing  for the  Shorter  Term.  While  each  Fund is  meant  to be a
long-term  investment,  if you have a relatively  short-term  investment horizon
(that is, you plan to hold your shares for not more than six years),  you should
most likely invest in Class A or Class C shares rather than Class B shares. That
is because of the effect of the Class B contingent  deferred sales charge if you
redeem within six years, as well as the effect of the Class B asset-based  sales
charge on the investment return for that class in the short-term. Class C shares
might  be the  appropriate  choice  (especially  for  investments  of less  than
$100,000),  because there is no initial sales charge on Class C shares,  and the
contingent  deferred  sales  charge  does not apply to  amounts  you sell  after
holding them one year.

     However,  if you plan to invest more than  $100,000  for the shorter  term,
then as your investment horizon increases toward six years, Class C shares might
not be as advantageous as Class A shares. That is because the annual asset-based
sales  charge on Class C shares will have a greater  impact on your account over
the longer term than the reduced  front-end  sales charge  available  for larger
purchases of Class A shares.

     If you 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 more
than  $100,000  of Class B shares or $1 million or more of Class C shares from a
single investor. Dealers or other financial intermediaries purchasing shares for
their  customers in omnibus  accounts are  responsible for compliance with those
limits.

     o Investing for the Longer Term.  If you are  investing  less than $100,000
for the  longer-term,  for  example  for  retirement,  and do not expect to need
access to your money for seven years or more, Class B shares may be 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 or Class Y shares,  such as the Class B,  Class C
and Class N  asset-based  sales charge  described  below and in the Statement of
Additional Information.

     How Do Share Classes Affect  Payments to Your Broker?  A financial  adviser
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 each Fund held by the dealer or
financial institution for its own account or for its customers.

     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, a 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:

  ------------------------------------ ------------------------ ------------------------- -------------------------
                                           Front-End Sales          Front-End Sales
                                             Charge as a              Charge as a             Concession as a
                                            Percentage of          Percentage of Net           Percentage of
  Amount of Purchase                       Offering Price           Amount Invested            Offering Price
  ------------------------------------ ------------------------ ------------------------- -------------------------
  ------------------------------------ ------------------------ ------------------------- -------------------------
  Less than $25,000                             5.75%                    6.10%                     4.75%
  ------------------------------------ ------------------------ ------------------------- -------------------------
  ------------------------------------ ------------------------ ------------------------- -------------------------
  $25,000 or more but less than                 5.50%                    5.82%                     4.75%
  $50,000
  ------------------------------------ ------------------------ ------------------------- -------------------------
  ------------------------------------ ------------------------ ------------------------- -------------------------
  $50,000 or more but less than                 4.75%                    4.99%                     4.00%
  $100,000
  ------------------------------------ ------------------------ ------------------------- -------------------------
  ------------------------------------ ------------------------ ------------------------- -------------------------
  $100,000 or more but less than                3.75%                    3.90%                     3.00%
  $250,000
  ------------------------------------ ------------------------ ------------------------- -------------------------
  ------------------------------------ ------------------------ ------------------------- -------------------------
  $250,000 or more but less than                2.50%                    2.56%                     2.00%
  $500,000
  ------------------------------------ ------------------------ ------------------------- -------------------------
  ------------------------------------ ------------------------ ------------------------- -------------------------
  $500,000 or more but less than $1             2.00%                    2.04%                     1.60%
  million
  ------------------------------------ ------------------------ ------------------------- -------------------------
Due to rounding,  the actual sales charge for a particular  transaction may
be higher or lower than the rates listed above.

     SPECIAL SALES CHARGE ARRANGEMENTS AND WAIVERS.  Appendix C 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  Funds  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.

     Can You Reduce Class A Sales  Charges?  You and your spouse may be eligible
to buy Class A shares of the Funds at reduced  sales  charge  rates set forth in
the  table  above  under the  Funds'  "Right of  Accumulation"  or a "Letter  of
Intent."  The Funds  reserve  the right to  modify  or to cease  offering  these
programs at any time.

     o Right of  Accumulation.  To qualify for the reduced  Class A sales charge
that would apply to a larger purchase than you are currently making (as shown in
the  table  above),  you can add the  value of any  Class A,  Class B or Class C
shares of the Funds or other Oppenheimer funds that you or your spouse currently
own, or are currently  purchasing,  to the value of your Class A share purchase.
Your Class A shares of Oppenheimer  Money Market Fund, Inc. or Oppenheimer  Cash
Reserves on which you have not paid a sales  charge will not be counted for this
purpose. In totaling your holdings, you may count shares held in your individual
accounts  (including  IRAs and  403(b)  plans),  your joint  accounts  with your
spouse,  or accounts you or your spouse hold as trustees or custodians on behalf
of your children who are minors.  A fiduciary can count all shares purchased for
a trust, estate or other fiduciary account that has multiple accounts (including
employee benefit plans for the same employer). If you are buying shares directly
from the Funds,  you must inform the Funds'  Distributor of your eligibility and
holdings  at the time of your  purchase  in order to  qualify  for this Right of
Accumulation. If you are buying shares through your financial intermediary,  you
must notify your intermediary of your eligibility for this Right of Accumulation
at the time of your purchase.

     To count  shares of  eligible  Oppenheimer  funds held in accounts at other
intermediaries under this Right of Accumulation, you may be requested to provide
the  Distributor  or your  current  intermediary  with a copy  of  each  account
statement  showing  your  current  holdings  of  the  Funds  or  other  eligible
Oppenheimer funds, including statements for accounts held by you and your spouse
or in  retirement  plans or trust or custodial  accounts  for minor  children as
described  above.  The Distributor or intermediary  through which you are buying
shares will combine the value of all your  eligible  Oppenheimer  fund  accounts
based on the current  offering  price per share to determine  what Class A sales
charge breakpoints you may qualify for on your current purchase.

     o Letters of Intent. You may also qualify for reduced Class A sales charges
by  submitting  a Letter of Intent to the  Distributor.  A Letter of Intent is a
written  statement of your  intention to purchase a specified  value of Class A,
Class B or  Class C  shares  of the  Funds or  other  Oppenheimer  funds  over a
13-month period. The total amount of your intended purchases of Class A, Class B
and Class C shares will  determine the reduced sales charge rate that will apply
to your Class A share purchases of the Funds during that period.  You can choose
to include purchases made up to 90 days before the date that you submit a Letter
of  Intent.  Your Class A shares of  Oppenheimer  Money  Market  Fund,  Inc.  or
Oppenheimer  Cash Reserves on which you have not paid a sales charge will not be
counted for this purpose. Submitting a Letter of Intent does not obligate you to
purchase the specified amount of shares. You may also be able to apply the Right
of Accumulation to these purchases.

     If you do not complete the Letter of Intent, the front-end sales charge you
paid on your  purchases  will be  recalculated  to reflect  the actual  value of
shares you purchased. A certain portion of your shares will be held in escrow by
the Funds' Transfer Agent for this purpose. Please refer to "How to Buy Shares -
Letters of Intent" in the Fund's  Statement of Additional  Information  for more
complete information.

     Other  Special  Sales Charge  Arrangements  and Waivers.  The Funds and the
Distributor  offer other  opportunities to purchase shares without  front-end or
contingent  deferred sales charges under the programs described below. The Funds
reserve the right to amend or  discontinue  these  programs at any time  without
prior notice.

     o Dividend  Reinvestment.  Dividends  and/or  capital  gains  distributions
received by a shareholder  from a Fund may be reinvested in shares of that Fund,
or any of the  other  Oppenheimer  funds  into  which  shares of the Fund may be
exchanged, without a sales charge, at the net asset value per share in effect on
the payable  date.  You must notify the Transfer  Agent in writing to elect this
option and must have an existing account in the fund selected for reinvestment.

     o Exchanges of Shares.  Shares of the Funds may be exchanged  for shares of
certain  other  Oppenheimer  funds at net  asset  value per share at the time of
exchange,  without  sales  charge,  and shares of the Funds can be  purchased by
exchanging shares of certain other Oppenheimer funds for shares of a Fund on the
same basis.  Please refer to "How to Exchange  Shares" in this Prospectus and in
the Statement of Additional Information for more details, including a discussion
of certain circumstances in which sales charges may apply to an exchange.

     o  Reinvestment  Privilege.  Within six months of a  redemption  of certain
Class A and Class B shares,  the proceeds may be reinvested in Class A shares of
a Fund, or any of the other Oppenheimer funds into which shares of that Fund may
be exchanged,  without a sales charge.  This privilege applies to redemptions of
Class A shares that were subject to an initial  sales charge or Class A or Class
B shares that were subject to a contingent  deferred sales charge when redeemed.
An investor must ask the Transfer Agent or his or her financial intermediary for
that  privilege at the time of  reinvestment  and must identify the account from
which the redemption was made.

     o Other Special Reductions and Waivers. The Funds and the Distributor offer
additional  arrangements  to reduce or eliminate  front-end  sales charges or to
waive  contingent  deferred sales charges for certain types of transactions  and
for certain  categories of investors  (primarily  retirement plans that purchase
shares in special  programs  through the  Distributor).  These are  described in
greater detail in Appendix C to the Statement of Additional  Information,  which
may be  ordered  by  calling  1.800.225.5677  or  through  the  OppenheimerFunds
website, at  www.oppenheimerfunds.com  (follow the hyperlinks:  "Access Accounts
and  Services" - "Forms & Literature"  - "Order  Literature"  -  "Statements  of
Additional  Information").  A  description  of these  waivers and special  sales
charge  arrangements  is also  available  for  viewing  on the  OppenheimerFunds
website (follow the hyperlinks:  "Research  Funds" - "Fund  Documents" - "View a
description  . . .").  To receive a waiver or special  sales  charge  rate under
these  programs,  the purchaser must notify the  Distributor (or other financial
intermediary  through which shares are being purchased) at the time of purchase,
or notify the Transfer  Agent at the time of  redeeming  shares for waivers that
apply to contingent deferred sales charges.

     o Purchases by Certain  Retirement Plans.  There is no initial sales charge
on  purchases  of Class A shares of the Funds by  retirement  plans that have $5
million or more in plan assets.  In that case the  Distributor  may pay from its
own resources,  at the time of sale,  concessions in an amount equal to 0.25% of
the purchase  price of Class A shares  purchased  within the first six months of
account establishment by those retirement plans to dealers of record, subject to
certain  exceptions   described  in  "Retirement  Plans"  in  the  Statement  of
Additional Information.

     There is also no initial sales charge on purchases of Class A shares of the
Fund by certain  retirement plans that are part of a retirement plan or platform
offered by banks,  broker-dealers,  financial  advisors,  insurance companies or
recordkeepers.   No  contingent  deferred  sales  charge  is  charged  upon  the
redemption of such shares.

     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,  or on  purchases  of Class A shares by certain
retirement  plans that  satisfied  certain  requirements  prior to March 1, 2001
("grandfathered  retirement  accounts").  However,  those  Class A shares may be
subject to a Class A contingent  deferred  sales  charge,  as  described  below.
Retirement  plans holding shares of Oppenheimer  funds in an omnibus  account(s)
for the benefit of plan  participants  in the name of a fiduciary  or  financial
intermediary  (other than  OppenheimerFunds-sponsored  Single DB Plus 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
1.00% of purchases of $1 million or more other than  purchases by  grandfathered
retirement accounts.  For grandfathered  retirement accounts,  the concession is
0.75% of the first $2.5 million of  purchases  plus 0.25% of purchases in excess
of $2.5 million. In either case, 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 1.00% 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.

     HOW CAN YOU BUY CLASS B SHARES?  Class B shares are sold at net asset value
per share  without  an  initial  sales  charge.  However,  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 Funds 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 Which Purchase Order      Contingent Deferred Sales Charge on Redemptions in
                                                                                   That Year
                       was Accepted                                   (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 72 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 1.00% 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 Funds 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.

     Class N shares are sold at net asset value without an initial sales charge.
A contingent  deferred sales charge of 1.00% 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  a 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.

     WHO CAN BUY CLASS Y SHARES?  Class Y shares are sold at net asset value per
share  without a sales  charge  directly to  institutional  investors  that have
special  agreements  with the  Distributor  for this  purpose.  They may include
insurance companies, registered investment companies, employee benefit plans and
Section 529 plans, among others.  Individual investors cannot buy Class Y shares
directly.

     Institutional  investors  that buy  Class Y  shares  for  their  customers'
accounts  may impose  charges on those  accounts.  The  procedures  for  buying,
selling,  exchanging and  transferring the Funds' other classes of shares (other
than the time those orders must be received by the Distributor or Transfer Agent
at  their  Colorado  office)  and the  special  account  features  available  to
investors  buying those other  classes of shares do not apply to Class Y shares.
Instructions for buying, selling, exchanging or transferring Class Y shares must
be submitted  by the  institutional  investor,  not by its  customers  for whose
benefit the shares are held.

DISTRIBUTION AND SERVICE (12b-1) PLANS.

     Service Plan for Class A Shares.  The Funds have adopted  Service Plans for
Class A shares.  These Service Plans  reimburse 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 each Fund. The Distributor currently uses
all  of  those  fees  to  pay  dealers,   brokers,  banks  and  other  financial
institutions  periodically  for providing  personal  service and  maintenance of
accounts of their  customers  that hold Class A shares.  With respect to Class A
shares  subject to a Class A  contingent  deferred  sales  charge  purchased  by
grandfathered retirement accounts, the Distributor pays the 0.25% service fee to
dealers in advance  for the first year after the shares are sold by the  dealer.
The  Distributor  retains the first year's service fee paid by each Fund.  After
the shares have been held by grandfathered  retirement  accounts for a year, the
Distributor pays the service fee to dealers periodically.

     Distribution and Service Plans for Class B, Class C and Class N Shares. The
Funds have 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 in servicing  accounts.  Under the plans, each
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 1.00% 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 each 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  normally  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 periodically.

     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  normally  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
1.00% 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. The Distributor normally retains the asset-based
sales charge on Class C shares during the first year after the purchase of Class
C shares. 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
1.00% of the purchase price.  The Distributor  normally  retains the asset-based
sales charge on Class N shares. See the Statement of Additional  Information for
exceptions.

     For  certain  group  retirement  plans  held  in  omnibus   accounts,   the
Distributor  will pay the full Class C or Class N  asset-based  sales charge and
the service fee to the dealer  beginning in the first year after the purchase of
such shares in lieu of paying the dealer the sales concession and the advance of
the first year's  service fee at the time of purchase.  New group  omnibus plans
may not purchase Class B shares.

     For Class C shares purchased through the OppenheimerFunds  Recordkeeper Pro
program,  the Distributor  will pay the Class C asset-based  sales charge to the
dealer of record in the first year after the  purchase of such shares in lieu of
paying the dealer a sales  concession at the time of purchase.  The  Distributor
will use the service fee it receives from the Funds on those shares to reimburse
FASCorp for providing  personal  services to the Class C accounts  holding those
shares.

     OTHER  PAYMENTS TO  FINANCIAL  INTERMEDIARIES  AND SERVICE  PROVIDERS.  The
Manager and the Distributor,  in their discretion, also may pay dealers or other
financial   intermediaries   and  service  providers  for  distribution   and/or
shareholder servicing  activities.  These payments are made out of the Manager's
and/or the Distributor's own resources,  including from the profits derived from
the advisory fees the Manager  receives from the  Underlying  Funds.  These cash
payments,  which may be  substantial,  are paid to many  firms  having  business
relationships  with the Manager and Distributor.  These payments are in addition
to any distribution fees,  servicing fees, or transfer agency fees paid directly
or indirectly by the Funds or directly or indirectly by the Underlying  Funds to
these financial intermediaries and any commissions the Distributor pays to these
firms out of the sales charges paid by investors.  These payments by the Manager
or  Distributor  from their own resources are not reflected in the tables in the
section called "Fees and Expenses of the Fund" in this  Prospectus  because they
are not paid by the Funds.

     "Financial  intermediaries"  are firms that  offer and sell Fund  shares to
their  clients,  or provide  shareholder  services  to the Funds,  or both,  and
receive  compensation for doing so. Your securities dealer or financial adviser,
for example, is a financial intermediary, and there are other types of financial
intermediaries  that receive  payments  relating to the sale or servicing of the
Funds' shares.  In addition to dealers,  the financial  intermediaries  that may
receive payments include sponsors of fund "supermarkets,"  sponsors of fee-based
advisory  or wrap fee  programs,  sponsors  of college  and  retirement  savings
programs, banks and trust companies offering products that hold Fund shares, and
insurance  companies  that offer  variable  annuity or variable  life  insurance
products.

     In general,  these payments to financial  intermediaries can be categorized
as    "distribution-related"    or    "servicing"    payments.    Payments   for
distribution-related  expenses,  such as marketing or promotional expenses,  are
often referred to as "revenue  sharing." Revenue sharing payments may be made on
the basis of the sales of shares  attributable  to that dealer,  the average net
assets of the Funds and other Oppenheimer funds  attributable to the accounts of
that dealer and its  clients,  negotiated  lump sum  payments  for  distribution
services provided, or sales support fees. In some circumstances, revenue sharing
payments may create an incentive for a dealer or financial  intermediary  or its
representatives  to recommend or offer shares of the Funds or other  Oppenheimer
funds  to its  customers.  These  payments  also  may  give an  intermediary  an
incentive to  cooperate  with the  Distributor's  marketing  efforts.  A revenue
sharing  payment may, for example,  qualify the Funds for preferred  status with
the  intermediary  receiving  the  payment  or  provide  representatives  of the
Distributor with access to representatives of the intermediary's sales force, in
some cases on a preferential basis over funds of competitors.  Additionally,  as
firm  support,  the Manager or  Distributor  may reimburse  expenses  related to
educational  seminars and "due  diligence"  or training  meetings (to the extent
permitted  by  applicable  laws or the rules of the NASD)  designed  to increase
sales  representatives'  awareness about Oppenheimer funds, including travel and
lodging  expenditures.  However,  the  Manager  does not  consider  a  financial
intermediary's  sale of  shares  of the Funds or other  Oppenheimer  funds  when
selecting brokers or dealers to effect portfolio transactions for the Funds.

     Various  factors  are used to  determine  whether to make  revenue  sharing
payments.  Possible  considerations  include,  without limitation,  the types of
services  provided by the  intermediary,  sales of Fund shares,  the  redemption
rates on  accounts of clients of the  intermediary  or overall  asset  levels of
Oppenheimer funds held for or by clients of the intermediary, the willingness of
the  intermediary to allow the  Distributor to provide  educational and training
support for the  intermediary's  sales  personnel  relating  to the  Oppenheimer
funds, the  availability of the Oppenheimer  funds on the  intermediary's  sales
system,  as  well  as the  overall  quality  of  the  services  provided  by the
intermediary   and  the   Manager  or   Distributor's   relationship   with  the
intermediary.  The Manager and Distributor have adopted guidelines for assessing
and implementing  each prospective  revenue sharing  arrangement.  To the extent
that financial intermediaries receiving  distribution-related  payments from the
Manager or Distributor sell more shares of the Oppenheimer  funds or retain more
shares  of the funds in their  client  accounts,  the  Manager  and  Distributor
benefit from the incremental management and other fees they receive with respect
to those assets.

     Payments may also be made by the Manager,  the  Distributor or the Transfer
Agent  to  financial   intermediaries   to  compensate  or  reimburse  them  for
administrative  or other client services  provided such as  sub-transfer  agency
services for shareholders or retirement plan participants, omnibus accounting or
sub-accounting,   participation  in  networking  arrangements,  account  set-up,
recordkeeping  and other  shareholder  services.  Payments  may also be made for
administrative  services  related to the distribution of Fund shares through the
intermediary.  Firms that may receive  servicing  fees include  retirement  plan
administrators,  qualified tuition program sponsors,  banks and trust companies,
and others.  These fees may be used by the service  provider to offset or reduce
fees that would otherwise be paid directly to them by certain  account  holders,
such as retirement plans.

     The Statement of Additional  Information  contains more  information  about
revenue  sharing and service  payments  made by the Manager or the  Distributor.
Your dealer may charge you fees or commissions in addition to those disclosed in
this  Prospectus.  You  should ask your  dealer or  financial  intermediary  for
details about any such payments it receives from the Manager or the  Distributor
and their affiliates, or any other fees or expenses it charges.

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 by telephone (through a
service  representative  or by PhoneLink) or  automatically  under Asset Builder
Plans, 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  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   you   make  to  the   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 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 a 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 proceeds will be sent 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
Funds,  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.

     AUTOMATIC  WITHDRAWAL AND EXCHANGE PLANS. The Funds have several plans that
enable  you  to  sell  shares   automatically   or  exchange   them  to  another
OppenheimerFunds  account on a regular basis.  Please call the Transfer Agent or
consult the Statement of Additional Information for details.

     RETIREMENT  PLANS. You may buy shares of the Funds for your retirement plan
account.  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.

401(k) Plans. These are special retirement plans for businesses.

     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. Your shares will be sold at the next net asset value  calculated after your
order is received by the Distributor or your authorized financial  intermediary,
in proper form (which  means that it must comply with the  procedures  described
below) and is accepted by the Transfer Agent. The Funds let you sell your shares
by writing a letter,  by wire,  or by  telephone.  You can also set up Automatic
Withdrawal  Plans to redeem  shares on a regular  basis.  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.

     Certain  Requests  Require a  Signature  Guarantee.  To protect you and the
Funds from fraud,  certain requests must be in writing and must have a signature
guarantee, including the following redemption requests:

     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 an account  with a  different  owner or
name; or

     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 Fund shares in your plan account.

     Receiving  Redemption  Proceeds by Wire. While the Funds normally send 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 NYSE that day,  which is normally  4:00
p.m.  Eastern time,  but may be earlier on some days.  You may not redeem shares
held in an OppenheimerFunds-sponsored qualified retirement plan account or under
a share certificate 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 Funds 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 a  processing  fee 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  C 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 C to
the Statement of Additional Information.

     To  determine  whether a  contingent  deferred  sales  charge  applies to a
redemption, the Funds redeem 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 Funds 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 you acquire shares of the Funds 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 that Fund.

How to Exchange Shares

     If you want to change all or part of your  investment  from one Oppenheimer
fund to another,  you can  exchange  your shares for shares of the same class of
another  Oppenheimer  fund that  offers the  exchange  privilege  on any regular
business day. For example, you can exchange Class A shares of the Funds only for
Class A shares of  another  fund.  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 selected fund must offer the exchange privilege.

     o When you  establish  an account,  you must hold the shares you buy for at
least seven days before you can exchange them.

     o  Normally,  you  must  meet the  minimum  purchase  requirements  for the
selected fund.

     o  Generally,  exchanges  may be made only between  identically  registered
accounts,  unless all account owners send written exchange  instructions  with a
signature guarantee.

     o Before  exchanging  into aother fund,  you must obtain its prospectus and
should read it carefully.

     For tax  purposes,  an exchange of shares of a Fund is considered a sale of
those  shares  and a  purchase  of the  shares  of the fund  into  which you are
exchanging. An exchange may result in a capital gain or loss.

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

     A contingent  deferred sales charge (CDSC) is not charged when you exchange
shares  of a Fund for  shares  of  another  Oppenheimer  fund.  However,  if you
exchange  your shares during the  applicable  CDSC holding  period,  the holding
period will carry over to the fund shares that you  acquire.  Similarly,  if you
acquire shares of a Fund in exchange for shares of another Oppenheimer fund that
are subject to a CDSC holding period, that holding period will carry over to the
acquired  shares of the  Fund.  In  either  of these  situations,  a CDSC may be
imposed if the acquired  shares are redeemed  before the end of the CDSC holding
period that applied to the exchanged shares.

     There are a number of other special  conditions and limitations  that apply
to certain types of exchanges.  These conditions and circumstances are described
in detail in the "How to Exchange Shares" section in the Statement of Additional
Information.

     HOW DO YOU SUBMIT EXCHANGE REQUESTS? Exchanges may be requested in writing,
by telephone or internet, or by establishing an Automatic Exchange Plan.

     Written Exchange Requests.  Send a request letter,  signed by all owners of
the account,  to the Transfer Agent at the address on the back cover.  Exchanges
of shares for which  share  certificates  have been issued  cannot be  processed
unless the Transfer Agent receives the certificates with the request letter.

     Telephone and Internet Exchange  Requests.  Telephone exchange requests may
be made  either by calling a service  representative  or by using  PhoneLink  by
calling  1.800.225.5677.  You  may  submit  internet  exchange  requests  on the
OppenheimerFunds  internet website, at  www.oppenheimerfunds.com.  You must have
obtained  a user  I.D.  and  password  to make  transactions  on  that  website.
Telephone  and/or internet  exchanges may be made only between accounts that are
registered   with  the  same  name(s)  and  address.   Shares  for  which  share
certificates have been issued may not be exchanged by telephone or the internet.

     Automatic  Exchange Plan.  Shareholders can authorize the Transfer Agent to
exchange  a  pre-determined   amount  of  shares  automatically  on  a  monthly,
quarterly, semi-annual or annual basis.

     Please refer to "How to Exchange  Shares" in the  Statement  of  Additional
Information for more details.

ARE THERE LIMITATIONS ON FREQUENT PURCHASES, REDEMPTIONS AND EXCHANGES?

     Risks from Excessive Purchase, Redemption and Short-Term Exchange Activity.
The OppenheimerFunds  exchange privilege affords investors the ability to switch
their  investments  among  Oppenheimer  funds if their  investment needs change.
However, there are limits on that privilege. Frequent purchases, redemptions and
exchanges of fund shares may interfere  with the  Manager's  ability to manage a
fund's   investments   efficiently,   increase   the  fund's   transaction   and
administrative costs and/or affect the fund's performance,  depending on various
factors, such as the size of the fund, the nature of its investments, the amount
of fund assets the portfolio manager maintains in cash or cash equivalents,  the
aggregate dollar amount and the number and frequency of trades.  If large dollar
amounts are involved in exchange and/or redemption transactions, a Fund might be
required to sell portfolio securities at unfavorable times to meet redemption or
exchange requests, and the Fund's brokerage or administrative  expenses might be
increased.

     Therefore,  the Manager and the Funds'  Boards of Trustees have adopted the
following  policies  and  procedures  to  detect  and  prevent  frequent  and/or
excessive exchanges,  and/or purchase and redemption  activity,  while balancing
the needs of investors who seek liquidity from their  investment and the ability
to exchange  shares as investment  needs change.  There is no guarantee that the
policies and procedures described below will be sufficient to identify and deter
excessive short-term trading.

     o Timing of Exchanges. Exchanged shares are normally redeemed from one fund
and the proceeds are  reinvested  in the fund  selected for exchange on the same
regular  business  day on  which  the  Transfer  Agent or its  agent  (such as a
financial  intermediary holding the investor's shares in an "omnibus" or "street
name" account) receives an exchange request that conforms to these policies. The
request  must be received  by the close of the NYSE that day,  which is normally
4:00 p.m.  Eastern  time,  but may be earlier on some days,  in order to receive
that day's net asset value on the exchanged  shares.  Exchange requests received
after the close of the NYSE will  receive  the next net asset  value  calculated
after  the  request  is  received.   However,   the  Transfer  Agent  may  delay
transmitting  the proceeds  from an exchange for up to five  business days if it
determines,  in its  discretion,  that an earlier  transmittal of the redemption
proceeds  to the  receiving  fund would be  detrimental  to either the fund from
which the  exchange  is being made or the fund into which the  exchange is being
made. The proceeds will be invested in the fund into which the exchange is being
made at the next net asset value calculated after the proceeds are received.  In
the event that such a delay in the reinvestment of proceeds occurs, the Transfer
Agent will notify you or your financial representative.

     o Limits on Disruptive Activity. The Transfer Agent may, in its discretion,
limit or  terminate  trading  activity by any person,  group or account  that it
believes would be  disruptive,  even if the activity has not exceeded the policy
outlined in this  Prospectus.  The  Transfer  Agent may review and  consider the
history of frequent  trading  activity in all accounts in the Oppenheimer  funds
known to be under common  ownership  or control as part of the Transfer  Agent's
procedures to detect and deter excessive trading activity.

     o Exchanges  of Client  Accounts by Financial  Advisers.  The Funds and the
Transfer Agent permit dealers and financial  intermediaries  to submit  exchange
requests on behalf of their  customers  (unless the  customer  has revoked  that
authority).  The  Distributor  and/or the Transfer Agent have  agreements with a
number of financial intermediaries that permit them to submit exchange orders in
bulk on behalf of their clients. Those intermediaries are required to follow the
exchange policies stated in this Prospectus and to comply with additional,  more
stringent restrictions. Those additional restrictions include limitations on the
funds  available  for  exchanges,  the  requirement  to give  advance  notice of
exchanges to the Transfer Agent,  and limits on the amount of client assets that
may be invested in a particular  fund. A fund or the Transfer Agent may limit or
refuse bulk exchange requests submitted by such financial  intermediaries if, in
the Transfer Agent's judgment,  exercised in its discretion, the exchanges would
be disruptive to any of the funds involved in the transaction.

     o  Redemptions  of Shares.  These  exchange  policy  limits do not apply to
redemptions of shares.  Shareholders are permitted to redeem their shares on any
regular business day,  subject to the terms of this Prospectus.  Further details
are provided under "How to Sell Shares."

     o Right to Refuse Exchange and Purchase Orders.  The Distributor and/or the
Transfer Agent may refuse any purchase or exchange order in their discretion and
are not  obligated to provide  notice before  rejecting an order.  The Funds may
amend, suspend or terminate the exchange privilege at any time. You will receive
60  days'  notice  of any  material  change  in the  exchange  privilege  unless
applicable law allows otherwise.

     o Right to Terminate or Suspend Account Privileges.  The Transfer Agent may
send a written warning to direct  shareholders  that the Transfer Agent believes
may be engaging in excessive purchases, redemptions and/or exchange activity and
reserves the right to suspend or terminate the ability to purchase shares and/or
exchange  privileges  for any account that the  Transfer  Agent  determines,  in
carrying out these policies and in the exercise of its  discretion,  has engaged
in disruptive or excessive trading activity, with or without such warning.

     o Omnibus  Accounts.  If you hold your shares of a Fund through a financial
intermediary  such as a  broker-dealer,  a bank, an insurance  company  separate
account, an investment adviser, an administrator or trustee of a retirement plan
or Section 529 plan,  that holds your shares in an account under its name (these
are  sometimes  referred  to as  "omnibus"  or  "street  name"  accounts),  that
financial  intermediary  may  impose  its own  restrictions  or  limitations  to
discourage  short-term or excessive  trading.  You should consult your financial
intermediary  to find out what trading  restrictions,  including  limitations on
exchanges, may apply.

     While the Funds,  the  Distributor,  the  Manager  and the  Transfer  Agent
encourage  financial  intermediaries  to apply  each  Fund's  policies  to their
customers who invest indirectly in a Fund, the Transfer Agent may not be able to
detect  excessive  short term trading  activity  facilitated  by, or in accounts
maintained   in,  the  "omnibus"  or  "street  name"  accounts  of  a  financial
intermediary.  Therefore  the  Transfer  Agent  might not be able to apply  this
policy to accounts  such as (a)  accounts  held in omnibus form in the name of a
broker-dealer  or other financial  institution,  or (b) omnibus accounts held in
the name of a  retirement  plan or 529 plan  trustee  or  administrator,  or (c)
accounts held in the name of an insurance  company for its separate  account(s),
or (d) other  accounts  having  multiple  underlying  owners but registered in a
manner such that the  underlying  beneficial  owners are not  identified  to the
Transfer Agent.

     However,  the Transfer Agent will attempt to monitor  overall  purchase and
redemption  activity in those  accounts to seek to  identify  patterns  that may
suggest  excessive  trading by the  underlying  owners.  If evidence of possible
excessive  trading  activity is observed by the Transfer  Agent,  the  financial
intermediary  that is the  registered  owner  will be  asked to  review  account
activity,  and to confirm to the  Transfer  Agent and the  applicable  Fund that
appropriate  action has been taken to curtail any  excessive  trading  activity.
However,  the Transfer Agent's ability to monitor and deter excessive short-term
trading in omnibus or street name accounts  ultimately depends on the capability
and cooperation of the financial intermediaries controlling those accounts.

     Additional  Policies  and  Procedures.  The Funds'  Boards have adopted the
following  additional  policies and  procedures  to detect and prevent  frequent
and/or excessive exchanges and purchase and redemption activity.

     o 30-Day Limit. A direct shareholder may exchange some or all of the shares
of a Fund held in his or her account to another  eligible  Oppenheimer fund once
in a 30  calendar-day  period.  When shares are exchanged into the fund account,
that account will be "blocked"  from further  exchanges  into another fund for a
period of 30 calendar days from the date of the  exchange.  The block will apply
to the full  account  balance  and not  just to the  amount  exchanged  into the
account.  For  example,  if a  shareholder  exchanged  $1,000 from one fund into
another fund in which the shareholder already owned shares worth $10,000,  then,
following the exchange, the full account balance ($11,000 in this example) would
be blocked from further  exchanges into another fund for a period of 30 calendar
days. A "direct  shareholder"  is one whose  account is registered on the Fund's
books showing the name, address and tax ID number of the beneficial owner.

     o Exchanges Into Money Market Funds. A direct shareholder will be permitted
to  exchange  shares of a stock or bond fund for shares of a money  market  fund
that offers an  exchange  privilege  at any time,  even if the  shareholder  has
exchanged shares into the stock or bond fund during the prior 30 days.  However,
all of the shares  held in that  money  market  fund would then be blocked  from
further exchanges into another fund for 30 calendar days.

     o Dividend Reinvestments/B Share Conversions.  Reinvestment of dividends or
distributions  from  one  fund  to  purchase  shares  of  another  fund  and the
conversion  of  Class B  shares  into  Class A  shares  will  not be  considered
exchanges for purposes of imposing the 30-day limit.

     o Asset Allocation.  Third-party asset allocation and rebalancing  programs
will be subject to the 30-day limit described above. Asset allocation firms that
want to  exchange  shares held in  accounts  on behalf of their  customers  must
identify  themselves to the Transfer  Agent and execute an  acknowledgement  and
agreement to abide by these policies with respect to their customers'  accounts.
"On-demand"  exchanges outside the parameters of portfolio  rebalancing programs
will be subject to the  30-day  limit.  However,  investment  programs  by other
Oppenheimer   "funds-of-funds"   that  entail   rebalancing  of  investments  in
underlying Oppenheimer funds will not be subject to these limits.

     o Automatic Exchange Plans. Accounts that receive exchange proceeds through
automatic or systematic exchange plans that are established through the Transfer
Agent will not be subject to the 30-day block as a result of those  automatic or
systematic exchanges (but may be blocked from exchanges, under the 30-day limit,
if they receive proceeds from other exchanges).

Shareholder Account Rules and Policies

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

     A $12 annual  "Minimum  Balance  Fee" is assessed on Fund  accounts  with a
value of less than $500. The fee is automatically  deducted from each applicable
Fund account annually in September.  See the Statement of Additional Information
for  information  about  the  circumstances  under  which  this  fee will not be
assessed.

     The  offering  of shares  may be  suspended  during any period in which the
determination of net asset value is suspended, and the offering may be suspended
by the Board of Trustees  of a Fund at any time the Board  believes it is in the
Fund's best interest to do so.

     Telephone  transaction  privileges for purchases,  redemptions or exchanges
may be modified,  suspended or  terminated  by the Funds at any time.  The Funds
will provide you notice  whenever it is required to do so by applicable  law. If
an account has more than one owner, the Funds 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 Funds 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
Funds 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  Funds'  share  holdings  in the  Underlying  Funds will  fluctuate.  The
redemption  price,  which is the net asset value per share, will normally differ
for each class of shares.  The  redemption  value of your  shares may be more or
less than their original cost.

     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.

     Involuntary  redemptions  of small accounts may be made by the Funds if the
account  value has  fallen  below $500 for  reasons  other than a decline in the
market value of the shares. In some circumstances,  involuntary  redemptions may
be made to repay the  Distributor  for  losses  from the  cancellation  of share
purchase  orders.  See the section "How to Buy Shares - Cancellation of Purchase
Orders" in the Statement of Additional Information for more information.

     Shares may be "redeemed in kind" under  unusual  circumstances.  This means
that the redemption  proceeds will be paid with liquid  securities from a Fund's
portfolio,  normally  shares of one or more of the Underlying  Funds.  If a 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.

     Federal regulations may require the Funds to obtain your name, your date of
birth (for a natural person), your residential street address or principal place
of business and your Social Security Number,  Employer  Identification Number or
other  government  issued  identification  when you open an account.  Additional
information  may be  required  in  certain  circumstances  or to open  corporate
accounts. The Funds or the Transfer Agent may use this information to attempt to
verify your  identity.  The Funds may not be able to establish an account if the
necessary  information is not received.  The Funds may also place limits on Fund
transactions  while it is in the process of attempting to verify your  identity.
Additionally,  if a Fund is unable to verify your identity after your account is
established,  the Fund may be required to redeem your Fund shares and close your
account.

     "Backup  withholding"  of federal income tax may be applied against taxable
dividends,  distributions and redemption proceeds  (including  exchanges) if you
fail to furnish a 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 Funds
will mail only one copy of each  prospectus,  annual and semi-annual  report and
annual notice of the Funds' privacy policy to shareholders  having the same last
name and address on the Funds'  records.  The  consolidation  of these mailings,
called householding, benefits the Funds 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 Funds intend to declare dividends separately for each class
of  shares  from  net  investment  income  on an  annual  basis  and to pay them
annually.  Dividends and  distributions  paid to Class A and Class Y shares will
generally  be higher  than  dividends  for Class B,  Class C and Class N shares,
which normally have higher  expenses than Class A and Class Y shares.  The Funds
have no fixed  dividend  rates  and  cannot  guarantee  that  they  will pay any
dividends or distributions.

     CAPITAL GAINS. The Funds may realize capital gains on the sale of portfolio
securities.  If so, they may make  distributions  out of any net  short-term  or
long-term capital gains annually. A Fund may make supplemental  distributions of
dividends and capital gains  following the end of its fiscal year.  There can be
no  assurance  that a  Fund  will  pay  any  capital  gains  distributions  in a
particular year.

     WHAT CHOICES DO YOU HAVE FOR  RECEIVING  DISTRIBUTIONS?  When you open your
account,  specify on your application how you want to receive your dividends and
distributions. You have four options:

     Reinvest  All  Distributions  in a Fund.  You can  elect  to  reinvest  all
dividends and capital gains distributions in additional shares of a 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 a 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
AccountLink.

     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.

     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 a 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  generally are taxable as ordinary  income.  Long-term  capital gains are
taxable as long-term capital gains when distributed to shareholders,  regardless
of how long you have held your shares.  Certain  dividend  income and  long-term
capital gains  received by the Funds are eligible for taxation at a reduced rate
that  applies  to   non-corporate   shareholders.   Whether  you  reinvest  your
distributions  in additional  shares or take them in cash,  the tax treatment is
the same.

     Dividends and distributions to Fund shareholders may be from amounts a Fund
receives as dividends or  distributions  from the Underlying Funds or from gains
on the sale of shares in the  Underlying  Funds.  Changes in a Fund's  portfolio
holdings may  increase  turnover of the Fund's  assets,  which may result in the
realization  of  additional  taxable  gains or losses  by the Fund.  It may also
result in a larger portion of any net gains being treated as short-term  capital
gains,  which generally  would be taxed as ordinary  income when  distributed to
shareholders.  Generally,  the  character of the income or capital  gains that a
Fund receives from the Underlying Funds will "pass through" to the Fund, subject
to certain  exceptions,  as long as the Underlying  Funds continue to qualify as
regulated investment companies.  As noted above,  distributions of any gains and
income  will  be  taxable  to  shareholders  even  if  those  distributions  are
reinvested in Fund shares.

     Every year the Funds will send shareholders 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
Funds send after the end of the calendar year.

     The Funds intend each year to qualify as "regulated  investment  companies"
under the Internal  Revenue  Code,  but reserve the right not to so qualify.  As
regulated investment companies,  the Funds will not be subject to Federal income
taxes on any of  their  income,  provided  that  they  satisfy  certain  income,
diversification and distribution requirements.

     If a shareholder  is neither a lawful  permanent  resident nor a citizen of
the United States or if a shareholder is a foreign  entity,  the Fund's ordinary
income dividends (which include  distributions of net-short-term  capital gains)
generally will be subject to a 30% U.S.  withholding  tax, unless a lower treaty
rate applies.  However,  for taxable  years  beginning  before  January 1, 2008,
certain  distributions  designated  by  the  Fund  as  either  interest  related
dividends or short term gain dividends and paid to a foreign  shareholder  would
be eligible for an exemption from U.S.  withholding tax. It is not expected that
the Funds would be designating any interest related dividends.

     By law,  your  dividends  and  redemption  proceeds  will be  subject  to a
withholding  tax if you have not  provided a taxpayer  identification  number or
social security number or if the number you have provided is incorrect.

     The Funds intend to invest in an  Underlying  Fund only if it qualifies for
treatment as a regulated  investment  company ("RIC") under the Internal Revenue
Code.  If an  Underlying  Fund fails to  qualify as a RIC,  it may be subject to
federal  income tax.  Although  there is no  assurance an  Underlying  Fund will
qualify as a RIC, a Fund will  promptly  dispose of any shares in its  portfolio
which have been  issued by an  Underlying  Fund which has failed to qualify as a
RIC.

     Avoid  "Buying a  Distribution."  If you buy  shares on or just  before the
ex-dividend  date, or just before a Fund declares a capital gains  distribution,
you will pay the full  price for the  shares  and then  receive a portion of the
price back as a taxable dividend or capital gain.

     Remember,  There May be Taxes on  Transactions.  Because  the Funds'  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 a
Fund may be considered a non-taxable return of capital to shareholders.  If that
occurs, it will be identified in notices to shareholders.

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

Financial Highlights

     Financial information for the Funds is not provided because, as of the date
of this Prospectus, the Funds had not commenced operations.


More Information About The Underlying Funds

     Oppenheimer Capital  Appreciation Fund - This Underlying Fund seeks capital
appreciation.  This Underlying Fund currently invests mainly in common stocks of
"growth companies." These may be newer companies or established companies of any
capitalization range that the portfolio manager of this Underlying Fund believes
may appreciate in value over the long term.

     This Underlying  Fund's portfolio  manager focuses on factors that may vary
in particular cases and over time in seeking broad diversification of the Fund's
portfolio among  industries and market sectors.  The portfolio  manager may look
for:

     o companies in businesses with above-average growth potential,

     o  companies  with growth  rates that the  portfolio  managers  believe are
sustainable over time,

     o stocks with reasonable valuations relative to their growth potential.

     Oppenheimer Champion Income Fund - This Underlying Fund's primary objective
is to  seek a high  level  of  current  income  by  investing  in a  diversified
portfolio of high-yield,  lower-rated  fixed-income  securities that the Manager
believes do not involve undue risk. This Underlying  Fund's secondary  objective
is to seek capital growth when consistent with its primary objective.

     This  Underlying  Fund currently  invests mainly in a variety of high-yield
fixed-income  debt  securities of domestic and foreign  issuers for high current
income. These securities primarily include:

o        Lower-grade bonds and notes of corporate issuers.
o        Foreign corporate and government bonds.
o        "Structured" notes.

     Under normal market conditions,  the Fund invests at least 60% of its total
assets in high-yield,  lower-grade,  fixed-income  securities,  commonly  called
"junk bonds." Lower-grade debt securities are those rated below "Baa" by Moody's
Investors  Service  ("Moody's")  or lower than "BBB" by  Standard  &  Poor's
Rating Services ("S&P") or comparable ratings by other nationally-recognized
rating  organizations (or, in the case of unrated securities,  determined by the
Manager to be  comparable  to  securities  rated below  investment  grade).  See
Appendix A to the Statement of Additional  Information  for a description of the
bond ratings.

     The  remainder of the Fund's  assets may be held in other debt  securities,
cash or cash  equivalents,  in rights or warrants,  or invested in common stocks
and other equity  securities when the Manager believes those are consistent with
the  Fund's  objectives.   Investments  in  high-yield   securities  and  equity
securities  may provide  opportunities  for capital  growth while also providing
income to the Fund.  The  Fund's  foreign  investments  currently  focus on debt
securities  of  issuers  in  developed  markets.  The  Fund  also  uses  certain
derivative  investments,  primarily "structured notes," to try to enhance income
or to try to manage investment risks.

     Oppenheimer  Core Bond Fund - This  Underlying  Fund seeks total  return by
investing mainly in debt instruments.  As a  non-fundamental  policy (which will
not  be  changed   without   providing  60  days  notice  to   Underlying   Fund
shareholders),  under normal market conditions,  this Underlying Fund invests at
least  80% of its net  assets  (plus  borrowings  for  investment  purposes)  in
investment-grade bonds. Those investment-grade debt securities can include:

     o domestic and foreign corporate debt obligations,

     o  domestic  and  foreign  government  bonds,   including  U.S.  government
securities, and

     o mortgage-related securities (including CMOs) issued by private issuers.

     This Underlying Fund's  investments in U.S.  government  securities include
securities  issued or  guaranteed  by the U.S.  government  or its  agencies  or
federally-chartered corporate entities referred to as "instrumentalities." These
include  mortgage-related  U.S. government  securities and CMOs. This Underlying
Fund can also invest in money market instruments and other debt obligations.

     There is no set  allocation  of this  Underlying  Fund's  assets  among the
classes of securities  that this  Underlying Fund buys, but this Underlying Fund
focuses  mainly  on  U.S.  government   securities  and  investment-grade   debt
securities.  However,  if  market  conditions  change,  this  Underlying  Fund's
portfolio  managers  might change the relative  allocation  of its assets.  This
Underlying  Fund can  invest up to 20% of its total  assets in  high-yield  debt
securities that are below investment-grade.

     This  Underlying  Fund seeks to  maintain  an average  effective  portfolio
duration of three to six years (measured on a  dollar-weighted  basis) to try to
reduce the volatility of the value of its securities portfolio.  This Underlying
Fund has no  limitations  on the range of maturities  of the debt  securities in
which it can  invest  and  therefore  may hold  bonds  with  short-,  medium- or
long-term  maturities.  Because of market events and interest rate changes,  the
duration of the portfolio  might not meet that target at all times.  The Manager
will  attempt to maintain the overall  weighted  average  credit  quality of the
portfolio  at a rating of "A-" (or  equivalent)  or higher  from any  nationally
recognized credit rating organization.  This Underlying Fund can use derivatives
to seek increased returns or try to hedge investment risks.

     Oppenheimer Dividend Growth Fund - This Underlying Fund's primary objective
is to seek to maximize  total  return  through  both  capital  appreciation  and
income.

     This  Underlying  Fund invests  mainly in common  stocks of companies  that
currently pay dividends or are expected to begin paying dividends in the future.
This  Underlying Fund invests with an emphasis on companies that are expected to
grow their dividends over time. As a non-fundamental policy, under normal market
conditions,  this  Underlying Fund will invest at least 80% of its net assets in
securities  of  companies  that the  portfolio  managers  expect  to  experience
dividend  growth,  including  companies  that  currently  pay  dividends and are
expected to increase them, and companies that do not currently pay dividends but
are expected to begin paying them in the near future.

     Oppenheimer Growth Fund - This Underlying Fund seeks capital  appreciation.
This Underlying Fund invests mainly in common stocks of "growth companies." This
Underlying  Fund  currently  focuses  on stocks of  companies  having a large or
mid-size  market  capitalization,  but this focus could  change over time.  This
Underlying Fund can invest in domestic companies and foreign companies, although
most of its investments are in stocks of U.S. companies.

     The portfolio manager of this Underlying Fund looks for stocks of companies
with growth potential,  and normally invests in between 60 and 80 companies,  to
focus the portfolio.  Currently,  the portfolio  manager seeks to implement that
investment approach by looking for:

o        Companies that have strong revenue growth
o        Companies with above-average earnings growth
o        Companies that we believe can sustain strong revenue and earnings growth
o        Companies that are well established as leaders in growth markets
o        Stocks with attractive valuations relative to their growth potential

     Oppenheimer Global Fund - This Underlying Fund seeks capital  appreciation.
This  Underlying  Fund  invests  mainly in common  stocks  of U.S.  and  foreign
companies.  This Underlying Fund can invest without limit in foreign  securities
and can invest in any country,  including  countries  with developed or emerging
markets.  However,  this Underlying Fund currently emphasizes its investments in
developed  markets such as the United  States,  Western  European  countries and
Japan.  This  Underlying  Fund does not limit its  investments to companies in a
particular  capitalization  range,  but currently  invests in mid- and large-cap
companies.

     This Underlying Fund is not required to allocate its investments in any set
percentages  in  any  particular  countries.   As  a  fundamental  policy,  this
Underlying  Fund normally will invest in at least three  countries (one of which
may be the United States).  Typically,  this Underlying Fund invests in a number
of different countries.

     Oppenheimer  International  Bond  Fund -  This  Underlying  Fund's  primary
objective is to seek total return.  As a secondary  objective,  this  Underlying
Fund seeks  income when  consistent  with total  return.  This  Underlying  Fund
invests mainly in debt securities of foreign  government and corporate  issuers.
Those debt securities  generally,  referred to as "bonds," include long-term and
short-term government bonds,  participation  interests in loans,  corporate debt
obligations,  "structured"  notes and other debt  obligations.  They may include
"zero coupon" or "stripped" securities.

     Under normal  circumstances,  this  Underlying Fund invests at least 80% of
its net assets (plus borrowings for investment  purposes) in "bonds" and invests
in at least three countries other than the United States. This Underlying Fund's
non-fundamental  policy of  investing  at least 80% of its net assets in "bonds"
will  not  be  changed  by  its  board  of  trustees   without  first  providing
shareholders 60 days written notice of the change. This Underlying Fund does not
limit  its  investments  to  securities  of  issuers  in  a  particular   market
capitalization  or  maturity  range or rating  category,  and can hold rated and
unrated securities.  This Underlying Fund can invest without limit in securities
below  investment  grade (commonly called "junk bonds") to seek total return and
higher income.  Therefore,  this Underlying Fund's credit risks are greater than
those  of funds  that buy only  investment-grade  bonds.  This  Underlying  Fund
invests in debt  securities of issuers in both  developed  and emerging  markets
throughout the world.

     Oppenheimer   International  Growth  Fund  -  This  Underlying  Fund  seeks
long-term  capital  appreciation  by  investing  in  common  stocks  of  foreign
companies.

     This  Underlying  Fund currently  invests mainly in common stocks of growth
companies  that are  domiciled  outside the United  States or have their primary
operations  outside the United States.  "Growth  companies" are issuers that the
Underlying  Fund's portfolio  manager  believes have favorable  long-term growth
prospects.

     This  Underlying  Fund does not limit its  investments  to issuers within a
specific market  capitalization range. At times, this Underlying Fund may invest
a substantial  portion of its assets in a particular  capitalization  range. For
example,  this  Underlying Fund currently  invests a substantial  portion of its
assets in stocks  issued by small- to  mid-sized  companies  whose prices may be
more volatile than stocks issued by larger companies.

Oppenheimer  Quest  International  Value Fund - This  Underlying Fund seeks
long-term capital appreciation.

     This Underlying Fund currently invests mainly in common stocks of companies
the Manager  believes to be undervalued,  that are domiciled  outside the United
States or have their primary operations outside the United States.

     This  Underlying  Fund does not limit its  investments  to issuers within a
specific  market  capitalization  range.  At times,  it may invest a substantial
portion of its assets in a particular  capitalization range. For example, it may
invest a  substantial  portion  of its  assets  in  stocks  issued  by small and
mid-sized companies.

     This  Underlying  Fund can invest in emerging  markets as well as developed
markets  throughout  the  world,  although  it may  place  greater  emphasis  on
investing in one or more particular regions from time to time, such as Europe or
Asia. It can invest up to 100% of its assets in foreign securities. Under normal
market  conditions,  it  will  invest  at  least  80% of its  net  assets  (plus
borrowings  for investment  purposes) in foreign  common and preferred  stock of
issuers in at least five different countries outside the United States.

     Oppenheimer  Limited-Term Government Fund - This Underlying Fund seeks high
current return and safety of principal.  This  Underlying  Fund invests at least
80% of its net assets (plus  borrowings  used for  investment  purposes) in debt
securities issued by the U.S.  government,  its agencies and  instrumentalities,
repurchase  agreements on those securities and hedging  instruments  approved by
its board of trustees.  U.S. government  securities include debt securities that
are issued or guaranteed by the U.S. Treasury,  such as Treasury bills, notes or
bonds,  and  securities  issued or  guaranteed  by U.S.  government  agencies or
federally-chartered  entities that are referred to as "instrumentalities" of the
U.S. government.

     This  Underlying  Fund  invests   significant  amounts  of  its  assets  in
mortgage-related   derivative  securities,   such  as  collateralized   mortgage
obligations  and mortgage  participation  certificates,  issued or guaranteed by
instrumentalities  of the  U.S.  government,  such  as the  Government  National
Mortgage Association.  This Underlying Fund may also invest up to 20% of its net
assets in  mortgage-backed  securities  that are not issued or guaranteed by the
U.S. government,  its agencies or  instrumentalities,  asset-backed  securities,
investment  grade corporate debt obligations and certain other high quality debt
obligations.

     This  Underlying  Fund seeks to  maintain  an average  effective  portfolio
duration of not more than three years (measured on a  dollar-weighted  basis) to
try to reduce the volatility of the value of its securities portfolio.  However,
the Fund can  invest  in  securities  that have  short-,  medium-  or  long-term
maturities  and may use derivative  investments  to try to reduce  interest rate
risks.

     Oppenheimer  Main Street  Fund(R)- This  Underlying Fund seeks a high total
return.  This Underlying Fund currently  invests 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.

     In selecting  securities for purchase or sale by this Underlying  Fund, the
portfolio managers use an investment process that combines  quantitative models,
fundamental research about particular securities and individual judgment.  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:  The Fund uses  both "top  down" and
"bottom  up"  models.  The "top  down"  models  are  primarily  used to help the
portfolio managers determine their market  capitalization  exposure (large, mid,
small) and rely on indicators such as relative valuations, relative price trends
and  interest  rate  relationships.  The "bottom  up" models help the  portfolio
managers identify the most attractive  stocks within each market  capitalization
category.  These stock selection models are based upon many factors that measure
the  attractiveness  of  individual  securities  relative  to  each  other.  The
portfolio  managers  typically  follow and analyze  more than 3,000  stocks on a
daily basis and select those that are deemed attractive.

     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 portfolio is then continuously  rebalanced by the portfolio
managers, using the tools described above.


     Oppenheimer  Main Street  Opportunity  Fund(R)- This  Underlying Fund seeks
long-term capital appreciation. This Underlying Fund invests primarily in common
stocks of U.S. companies of small, medium and large capitalization ranges.

     This Underlying  Fund's portfolio  managers use an investment  process that
combines  quantitative models,  fundamental research about particular securities
and individual  judgment in order to decide which securities to buy or sell. The
selection process currently involves the use of:

     o Multi-factor  quantitative models: "Top-down" models 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.  "Bottom up"
models  help to rank  stocks in a universe  typically  including  3,000  stocks,
selecting  stocks for relative  attractiveness  by  analyzing  stock and company
characteristics.

     o  Fundamental  research:  Internal  research  and analysis by other market
analysts, with emphasis on current company news and industry-related events.

     o  Judgment:  After  analyzing  the models and  fundamental  research,  the
portfolio  managers  apply their  judgment to decide which  securities to buy or
sell.

     Oppenheimer  Main Street  Small Cap  Fund(R)-  This  Underlying  Fund seeks
capital  appreciation.  This  Underlying Fund invests mainly in common stocks of
small-capitalization  ("small-cap") U.S. companies that the the Manager believes
have favorable  business  trends or prospects.  Under normal market  conditions,
this Underlying  Fund will invest at least 80% of its net assets  (including any
borrowings  for investment  purposes) in securities of companies  having a small
market  capitalization.  These may include "growth" and/or "value" common stocks
and  other  equity  securities.  A "value"  investment  style  attempts  to find
companies whose securities are believed to be undervalued in the marketplace.  A
"growth"  investment style encompasses a search for companies whose earnings are
expected to increase at a greater rate than the overall market.  This Underlying
Fund  incorporates a blended style of investing  combining both growth and value
styles.

     This  Underlying  Fund  currently  considers  an  issuer  having  a  market
capitalization  of up to $3 billion to be a small-cap  issuer.  This  Underlying
Fund measures  capitalization at the time the Fund buys a security and it is not
required to sell the security if the issuer's capitalization  subsequently grows
above  $3  billion.   Over  time,  the  Fund  may  change  the  range  of  asset
capitalizations  it uses to  define  small-cap  issuers,  as  market  conditions
change.

     Oppenheimer MidCap Fund - This Underlying Fund seeks capital  appreciation.
This Underlying Fund invests mainly in equity securities,  stocks and securities
convertible into common stock. It invests primarily in equity companies, but can
also buy foreign stocks.  Under normal market  conditions,  as a non-fundamental
policy,  this  Underlying  Fund  invests  at least 80% of its net  assets  (plus
borrowings   for   investment   purposes  in   companies   that  have  a  market
capitalization of between $2 billion and $11.5 billion stocks).  This Underlying
Fund's  non-fundamental  policy of investing at least 80% of its net assets will
not be changed by the board of trustees of this  Underlying  Fund without  first
providing shareholders 60 days' written notice.

     Oppenheimer  Real Asset Fund - This  Underlying  Fund seeks  total  return.
Total return  refers to the change in value of an  investment  in shares of this
Underlying Fund over time resulting from changes in the value of its investments
and income on those investments.

     This  Underlying  Fund's  strategy  provides  investment  exposure  to  the
commodities markets. It normally invests at least 65% of its assets in:

     o "Hybrid instruments" that are commodity-linked  derivatives, the value of
which is based on the price  movements of a physical  commodity (such as heating
oil,  livestock,  or agricultural  products),  a commodity futures  contract,  a
commodity  index (such as the GSCI), or some other readily  measurable  variable
that reflects changes in the value of particular  commodities or the commodities
markets;  and o Investment-grade  and  non-investment-grade  corporate bonds and
notes;  securities  issued or guaranteed by the U.S.  government or its agencies
and  instrumentalities;   repurchase  agreements;  futures  contracts;  options;
interest rate swaps; forward contracts; and asset-backed securities.

     Commodity-linked   derivatives  provide  investors  with  exposure  to  the
investment  returns  of "real  assets"  that  trade in the  commodities  markets
without investing directly in physical commodities. "Real assets," as opposed to
stocks  or  bonds,  are  assets  that  have  tangible  properties,  such as oil,
livestock, and agricultural or metal products.

     This  Underlying  Fund  may  invest  up to  25% of its  total  assets  in a
wholly-owned  and controlled  subsidiary.  The subsidiary  invests  primarily in
commodity  and  financial  futures and options  contracts,  and in fixed  income
securities and other  investments  intended to serve as margin or collateral for
the subsidiary's  derivatives  positions.  The subsidiary is subject to the same
investment  restrictions  and  limitations,  and  follows  the  same  compliance
policies and procedures, as this Underlying Fund.

     Oppenheimer  Real Estate  Fund - This  Underlying  Fund seeks total  return
through investment in real estate related  securities.  This Underlying Fund has
adopted a policy to  invest,  under  normal  circumstances,  at least 80% of the
value of its net  assets  (plus the  amount  of any  borrowings  for  investment
purposes  in common  stocks) and other equity  securities  issued by real estate
companies,  such as "real estate  investment  trusts" ("REITs") and "real estate
operating  companies"  ("REOCs").  This is a  non-fundamental  policy which this
Underlying  Fund's  board  of  trustees  may  change  upon 60  days'  notice  to
shareholders.

     Oppenheimer  Small-  &  Mid- Cap Value  Fund - This  Underlying  Fund's
objective is to seek capital  appreciation.  This Underlying Fund invests mainly
in stocks of U.S. issuers having a market capitalization up to $13 billion. That
includes  both  small  cap  stocks   (stocks  of  issuers  that  have  a  market
capitalization  under $3 billion) and mid cap stocks (stocks of issuers having a
capitalization between $3 billion and $13 billion).  This Underlying Fund has no
fixed  ratio for small cap and mid cap  stocks in its  portfolio,  and while its
focus is on stocks of U.S.  companies,  it may invest in stocks of small and mid
cap foreign issuers as well. Under normal market conditions this Underlying Fund
will  invest at least 80% of its net assets  (plus the amount of any  borrowings
for investment purposes) in equity securities and small cap and mid cap domestic
and foreign  issuers.  This  Underlying  Fund  emphasizes  investment  in equity
securities of companies that its portfolio  managers  believe are undervalued in
the marketplace.

     Oppenheimer U.S. Government Trust - This Underlying Fund seeks high current
income consistent with preservation of capital.  Under normal market conditions,
this  Underlying  Fund invests at least 80% of its net assets  (plus  borrowings
used for investment purposes) in U.S. government securities.  These include debt
securities  issued or guaranteed by the U.S.  Treasury,  such as Treasury bills,
notes or bonds, and securities issued or guaranteed by agencies or entities that
are referred to as "instrumentalities" of the U.S. government.

     This Underlying Fund typically invests a substantial  portion of its assets
in  mortgage-related  derivative  securities,  such as  collateralized  mortgage
obligations   and   mortgage    participation    certificates.    They   include
mortgage-related  U.S.  government  securities as well as  securities  issued by
private institutions, such as banks and mortgage companies.

     The  securities  this  Underlying  Fund buys may pay  interest  at fixed or
floating  rates, or may be "stripped"  securities.  This Underlying Fund can buy
securities that have short-,  medium- or long-term  maturities,  and the average
maturity  of this  Underlying  Fund's  portfolio  can be expected to change over
time. This Underlying Fund uses derivative  investments,  such as  interest-only
and principal-only securities, to try to enhance income and to manage investment
risks.

     Oppenheimer  Value Fund - This Underlying  Fund seeks  long-term  growth of
capital by investing  primarily in common stocks with low price-earnings  ratios
and  better-than-anticipated  earnings.  Realization  of  current  income  is  a
secondary consideration. This Underlying Fund may invest mainly in common stocks
of  different  capitalization  ranges,  but  also  can  buy  other  investments,
including:

     o preferred  stocks,  rights and warrants and convertible  debt securities,
and

     o securities of U.S. and foreign  companies,  although  there are limits on
this Underlying Fund's investments in foreign securities.



INFORMATION AND SERVICES

For More Information on Oppenheimer LifeCycle Funds
o        Oppenheimer Transition 2010 Fund
o        Oppenheimer Transition 2015 Fund
o        Oppenheimer Transition 2020 Fund
o        Oppenheimer Transition 2030 Fund

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

     STATEMENT OF  ADDITIONAL  INFORMATION.  This document  includes  additional
information about each 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 each Fund's
investments  and  performance  will  be  available  in  the  Fund's  Annual  and
Semi-Annual Reports to shareholders.  The Annual Report includes a discussion of
market  conditions and investment  strategies that  significantly  affected each
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,  the notice  explaining each
Fund's  privacy  policy and other  information  about the Fund s and each of the
Underlying Funds, or about 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 request these documents by e-mail or
                                  through the OppenheimerFunds website. You may
                                  also read or download certain documents on the
                           OppenheimerFunds website at: www.oppenheimerfunds.com


     Information  about the  Funds and the  Underlying  Funds,  including  their
Statements  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 Funds and the  Underlying  Funds,  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 Funds or to
make any  representations  about the Funds other than what is  contained in this
Prospectus.  This  Prospectus is not an offer to sell shares of any Fund,  nor a
solicitation  of an offer to buy shares of any Fund,  to any person in any state
or other jurisdiction where it is unlawful to make such an offer.

The Funds' shares are distributed by: [logo] OppenheimerFunds Distributor, Inc.
The Funds' SEC File Nos.:  811-21920,  811-21921; 811-21922; 811-21923

PR0000.007.1206
Printed on recycled paper


SAI


Oppenheimer LifeCycle Funds

o        Oppenheimer Transition 2010 Fund
o        Oppenheimer Transition 2015 Fund
o        Oppenheimer Transition 2020 Fund
o        Oppenheimer Transition 2030 Fund

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


Statement of Additional Information dated December 8, 2006

     This Statement of Additional Information ("SAI") is not a Prospectus.  This
document  contains  additional  information  about each of the four  Oppenheimer
LifeCycle  Funds  listed  above (each a "Fund" and  together  the  "Funds")  and
supplements  information in the Prospectus  dated December 8, 2006. It should be
read together with the  Prospectus.  You can obtain the Prospectus by writing to
the Funds' Transfer Agent,  OppenheimerFunds Services (the "Transfer Agent"), 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 Funds
Additional Information About the Funds' Investment Policies and Risks.......
     The Funds' Investment Policies.........................................
     The Underlying Funds' Investment Policies..............................
         Equity Securities..................................................
         Debt Securities....................................................
         Derivative Securities..............................................
         Other Investments and Investment and Strategies....................
     Investment Restrictions................................................
Disclosure of Portfolio Holdings............................................
How the Funds are Managed...................................................
     Organization and History...............................................
     Board of Trustees and Oversight Committees.............................
     Trustees and Officers of the Funds.....................................
     The Manager............................................................
Brokerage Policies of the Funds.............................................
Distribution and Service Plans..............................................
Payments to Fund Intermediaries.............................................
Performance of the Funds....................................................

     About Your Account
How To Buy Shares...........................................................
How To Sell Shares..........................................................
How to Exchange Shares......................................................
Dividends, Capital Gains and Taxes..........................................
Additional Information About the Funds......................................

     Financial Information About the Funds
Report of Independent Registered Public Accounting Firm.....................
Financial Statements........................................................

Appendix A: Ratings Definitions........................................    A-1
Appendix B: Industry Classifications...................................    B-1
Appendix C: OppenheimerFunds Special Sales Charge Arrangements and Waivers C-1
Appendix D: Qualifying Hybrid Instruments................................. D-1
Appendix E: Qualifying Swap Transactions.................................. E-1


     The investment objective,  the principal investment policies,  and the main
risks of the Funds are described in the Prospectus.  Each Fund is a special type
of fund  known as a "fund of funds"  that  invests  primarily  in a  diversified
portfolio  of  Oppenheimer  mutual  funds.  Those  funds are  referred to as the
"Underlying   Funds."  This   Statement  of  Additional   Information   contains
supplemental  information  about  those  policies  and  risks  and the  types of
securities   the   Funds'   and   Underlying    Funds'    investment    manager,
OppenheimerFunds,  Inc.  (the  "Manager"),  can  select  for  the  Funds  or the
Underlying Funds.  Additional  information is also provided about the strategies
that each Fund may use to try to achieve its objective.

     The Funds' Investment  Policies.  Each Fund normally invests in a portfolio
of Class Y shares of the Oppenheimer  Underlying  Funds. The Funds may invest in
Class A shares of an Underlying  Fund if Class Y shares are not  available.  The
composition of those  investments,  and the factors considered in allocating the
Funds' assets among the Underlying Funds, may vary over time. From time to time,
the Funds may also invest in the securities of individual  issuers directly,  as
described  below.  The risks of such direct  investments in those securities are
the same risks that the  securities  have in the  portfolios  of the  Underlying
Funds.  However  a Fund  may  have  greater  exposure  to such  securities,  and
therefore to such risks, when it makes a direct investment.  As indicated in the
Prospectus,  the Funds intend to initially  invest in the  following  Underlying
Funds:


         Transition 2010 Fund

         Oppenheimer Capital Appreciation Fund

         Oppenheimer Core Bond Fund

         Oppenheimer Global Fund

         Oppenheimer Main Street Fund

         Oppenheimer MidCap Fund

         Oppenheimer Real Asset Fund

         Oppenheimer Small- & Mid- Cap Value Fund

         Oppenheimer Value Fund

         Oppenheimer Champion Income Fund

         Oppenheimer Main Street Opportunity Fund

         Oppenheimer U.S. Government Trust


         Transition 2015 Fund

         Oppenheimer Capital Appreciation Fund

         Oppenheimer Core Bond Fund

         Oppenheimer International Growth Fund

         Oppenheimer International Value Fund

         Oppenheimer Main Street Fund

         Oppenheimer MidCap Fund

         Oppenheimer Real Asset Fund

         Oppenheimer Small- & Mid- Cap Value Fund

         Oppenheimer Value Fund


         Transition 2020 Fund

         Oppenheimer Capital Appreciation Fund

         Oppenheimer Core Bond Fund

         Oppenheimer Growth Fund

         Oppenheimer International Growth Fund

         Oppenheimer International Value Fund

         Oppenheimer Main Street Fund

         Oppenheimer MidCap Fund

         Oppenheimer Real Asset Fund

         Oppenheimer Small- & Mid- Cap Value Fund

         Oppenheimer Value Fund



                     Transition 2030 Fund

                    Oppenheimer Capital Appreciation Fund

                    Oppenheimer Growth Fund

                    Oppenheimer International Growth Fund

                    Oppenheimer International Value Fund

                    Oppenheimer Main Street Fund

                    Oppenheimer MidCap Fund

                     Oppenheimer Real Asset Fund

                     Oppenheimer Small- & Mid- Cap Value Fund

                      Oppenheimer Value Fund


     The Underlying Funds' Investment  Policies.  The Funds' Prospectus includes
the  investment  objective  and a brief  description  of each of the  Underlying
Funds. The Underlying Funds are currently: Oppenheimer Capital Appreciation Fund
("Capital Appreciation"),  Oppenheimer Champion Income Fund ("Champion Income"),
Oppenheimer  Core Bond Fund ("Core  Bond") ,  Oppenheimer  Dividend  Growth Fund
("Dividend Growth"), Oppenheimer Global Fund ("Global Fund"), Oppenheimer Growth
Fund ("Growth  Fund"),  Oppenheimer  International  Growth Fund  ("International
Growth")"",  Oppenheimer  Main  Street Fund ("Main  Street"),  Oppenheimer  Main
Street  Opportunity  Fund ("Main Street  Opportunity"),  Oppenheimer Main Street
Small Cap Fund ("Main  Street  Small  Cap"),  Oppenheimer  MidCap Fund  ("MidCap
Fund"),  Oppenheimer  Limited-Term Government Fund ("Limited-Term  Government"),
Oppenheimer Quest International Value Fund ("International Value"),  Oppenheimer
Real Asset Fund ("Real Asset"),  Oppenheimer  Real Estate Fund ("Real  Estate"),
Oppenheimer  Small-  &  Mid-  Cap  Value  Fund  ("Small-  &  Mid-  Cap  Value"),
Oppenheimer U.S.  Government Trust ("U.S.  Government"),  and Oppenheimer  Value
Fund ("Value Fund"). Set forth below is supplemental information about the types
of securities  the  Underlying  Funds may invest in, as well as  strategies  the
Underlying  Funds may use to try to achieve their  objectives.  The charts below
indicates  some of the  types of  securities  and  strategies  that  each of the
Underlying  Funds may use. The choice of Underlying  Funds,  the  objectives and
investment  policies of the Underlying  Funds and the Funds'  allocations to the
Underlying  Funds  may  change  without  notice  to or  approval  of the  Funds'
shareholders.

---------------------------------- --------------- --------------- ------------- ------------- ------------- -------------
                                      Capital         Champion      Core Bond      Dividend    Global Fund   Growth Fund
                                    Appreciation       Income                    Growth Fund
---------------------------------- --------------- --------------- ------------- ------------- ------------- -------------
---------------------------------- --------------- --------------- ------------- ------------- ------------- -------------
Equity Securities
---------------------------------- --------------- --------------- ------------- ------------- ------------- -------------
---------------------------------- --------------- --------------- ------------- ------------- ------------- -------------
  Common Stock                           X               X              X             X             X             X
---------------------------------- --------------- --------------- ------------- ------------- ------------- -------------
---------------------------------- --------------- --------------- ------------- ------------- ------------- -------------
  Preferred Stock                        X               X              X             X             X             X
---------------------------------- --------------- --------------- ------------- ------------- ------------- -------------
---------------------------------- --------------- --------------- ------------- ------------- ------------- -------------
  Convertible Securities                 X               X              X             X             X             X
---------------------------------- --------------- --------------- ------------- ------------- ------------- -------------
---------------------------------- --------------- --------------- ------------- ------------- ------------- -------------
  Rights                                 X               X              X             X             X             -
---------------------------------- --------------- --------------- ------------- ------------- ------------- -------------
---------------------------------- --------------- --------------- ------------- ------------- ------------- -------------
  Warrants                               X                X             X             X             X             -
---------------------------------- --------------- --------------- ------------- ------------- ------------- -------------
---------------------------------- --------------- --------------- ------------- ------------- ------------- -------------
  Growth Companies                       X               -              -             X             X             X
---------------------------------- --------------- --------------- ------------- ------------- ------------- -------------
---------------------------------- --------------- --------------- ------------- ------------- ------------- -------------
  Value Companies                        -               -              -             X             -             -
---------------------------------- --------------- --------------- ------------- ------------- ------------- -------------
---------------------------------- --------------- --------------- ------------- ------------- ------------- -------------
  Mid-Cap Companies                      X               -              -             X             X             X
---------------------------------- --------------- --------------- ------------- ------------- ------------- -------------
---------------------------------- --------------- --------------- ------------- ------------- ------------- -------------
  Small-Cap Companies                    X               -              -             X             X             X
---------------------------------- --------------- --------------- ------------- ------------- ------------- -------------
---------------------------------- --------------- --------------- ------------- ------------- ------------- -------------
  Unseasoned Issuers                     X               -              -             X             X             X
---------------------------------- --------------- --------------- ------------- ------------- ------------- -------------
---------------------------------- --------------- --------------- ------------- ------------- ------------- -------------
  Cyclical Opportunities                 X               -              -             -             X             X
---------------------------------- --------------- --------------- ------------- ------------- ------------- -------------
---------------------------------- --------------- --------------- ------------- ------------- ------------- -------------
  Real Estate Investment Trusts          -               -              -             -             X             -
  (REITs)
---------------------------------- --------------- --------------- ------------- ------------- ------------- -------------
---------------------------------- --------------- --------------- ------------- ------------- ------------- -------------
  Foreign Equity Securities              X               X              X             X             X             X
---------------------------------- --------------- --------------- ------------- ------------- ------------- -------------
---------------------------------- --------------- --------------- ------------- ------------- ------------- -------------
    Developing Markets                   -               X              X             -             X             -
---------------------------------- --------------- --------------- ------------- ------------- ------------- -------------
---------------------------------- --------------- --------------- ------------- ------------- ------------- -------------
    Privatization Programs               -               -              -             -             -             -
---------------------------------- --------------- --------------- ------------- ------------- ------------- -------------
---------------------------------- --------------- --------------- ------------- ------------- ------------- -------------
  Investment Company Securities          X               X              X             X             -             X
---------------------------------- --------------- --------------- ------------- ------------- ------------- -------------
---------------------------------- --------------- --------------- ------------- ------------- ------------- -------------
Fixed Income Securities
---------------------------------- --------------- --------------- ------------- ------------- ------------- -------------
---------------------------------- --------------- --------------- ------------- ------------- ------------- -------------
  Floating Rate Securities               -               X              X             X             -             -
---------------------------------- --------------- --------------- ------------- ------------- ------------- -------------
---------------------------------- --------------- --------------- ------------- ------------- ------------- -------------
  Variable Rate Securities               -               X              X             X             -             -
---------------------------------- --------------- --------------- ------------- ------------- ------------- -------------
---------------------------------- --------------- --------------- ------------- ------------- ------------- -------------
  Zero Coupon Securities                 -               X              X             X             X             -
---------------------------------- --------------- --------------- ------------- ------------- ------------- -------------
---------------------------------- --------------- --------------- ------------- ------------- ------------- -------------
  Lower Grade Debt Securities            -               X              X             X             X             -
---------------------------------- --------------- --------------- ------------- ------------- ------------- -------------
---------------------------------- --------------- --------------- ------------- ------------- ------------- -------------
  Bank Obligations and Related           -               -              X             X             X             X
  Securities
---------------------------------- --------------- --------------- ------------- ------------- ------------- -------------
---------------------------------- --------------- --------------- ------------- ------------- ------------- -------------
  Loan Participation Interests           -               X              X             -             -             -
---------------------------------- --------------- --------------- ------------- ------------- ------------- -------------
---------------------------------- --------------- --------------- ------------- ------------- ------------- -------------
  Master Demand Notes                    -               -              X             -              -             -
---------------------------------- --------------- --------------- ------------- ------------- ------------- -------------
---------------------------------- --------------- --------------- ------------- ------------- ------------- -------------
  Foreign Debt Obligations               X               X              X             -              -             -
---------------------------------- --------------- --------------- ------------- ------------- ------------- -------------
---------------------------------- --------------- --------------- ------------- ------------- ------------- -------------
  U.S. Government Securities             X               X              X             X             X             X
---------------------------------- --------------- --------------- ------------- ------------- ------------- -------------
---------------------------------- --------------- --------------- ------------- ------------- ------------- -------------
    U.S. Treasury Obligations            X               X              X             X             X             X
---------------------------------- --------------- --------------- ------------- ------------- ------------- -------------
---------------------------------- --------------- --------------- ------------- ------------- ------------- -------------
    Government Agency Obligations        X               X              X             X             X             X
---------------------------------- --------------- --------------- ------------- ------------- ------------- -------------
---------------------------------- --------------- --------------- ------------- ------------- ------------- -------------
  Mortgage Related Securities            -               X              X             X             -             -
---------------------------------- --------------- --------------- ------------- ------------- ------------- -------------
---------------------------------- --------------- --------------- ------------- ------------- ------------- -------------
    Collateralized Mortgage              -               X              X             X             -             -
    Obligations (CMOs)
---------------------------------- --------------- --------------- ------------- ------------- ------------- -------------
---------------------------------- --------------- --------------- ------------- ------------- ------------- -------------
    Forward Rolls                        -               X              X             -             X             -
---------------------------------- --------------- --------------- ------------- ------------- ------------- -------------
---------------------------------- --------------- --------------- ------------- ------------- ------------- -------------
    Stripped Mortgage Related            -               X              X             X             -             -
    Securities
---------------------------------- --------------- --------------- ------------- ------------- ------------- -------------
---------------------------------- --------------- --------------- ------------- ------------- ------------- -------------
    Mortgage Related Government          -               X              X             X             -             -
    Obligations
---------------------------------- --------------- --------------- ------------- ------------- ------------- -------------
---------------------------------- --------------- --------------- ------------- ------------- ------------- -------------
    Commercial Mortgage Related          -               X              X             X             -              -
    Obligations
---------------------------------- --------------- --------------- ------------- ------------- ------------- -------------
---------------------------------- --------------- --------------- ------------- ------------- ------------- -------------
  Asset Backed Securities                -               X              X             -             -             -
---------------------------------- --------------- --------------- ------------- ------------- ------------- -------------
---------------------------------- --------------- --------------- ------------- ------------- ------------- -------------
  Money Market Instruments               X               X               X             X            X             X
---------------------------------- --------------- --------------- ------------- ------------- ------------- -------------
---------------------------------- --------------- --------------- ------------- ------------- ------------- -------------
  Commercial Paper                       -               -              X             X             X             -
---------------------------------- --------------- --------------- ------------- ------------- ------------- -------------
---------------------------------- --------------- --------------- ------------- ------------- ------------- -------------
Derivatives
---------------------------------- --------------- --------------- ------------- ------------- ------------- -------------
---------------------------------- --------------- --------------- ------------- ------------- ------------- -------------
  Futures                                X               X              X             X             X             X
---------------------------------- --------------- --------------- ------------- ------------- ------------- -------------
---------------------------------- --------------- --------------- ------------- ------------- ------------- -------------
  Options                                X               X              X             X             X             X
---------------------------------- --------------- --------------- ------------- ------------- ------------- -------------
---------------------------------- --------------- --------------- ------------- ------------- ------------- -------------
    Write Covered Calls                  X               X              X             X             X             X
---------------------------------- --------------- --------------- ------------- ------------- ------------- -------------
---------------------------------- --------------- --------------- ------------- ------------- ------------- -------------
    Write Put Options                    X               X              X             X             X             X
---------------------------------- --------------- --------------- ------------- ------------- ------------- -------------
---------------------------------- --------------- --------------- ------------- ------------- ------------- -------------
    Purchase Puts and Calls              X               X              X             X             X             X
---------------------------------- --------------- --------------- ------------- ------------- ------------- -------------
---------------------------------- --------------- --------------- ------------- ------------- ------------- -------------
    Foreign Currency Options             X               X              X             X             X             X
---------------------------------- --------------- --------------- ------------- ------------- ------------- -------------
---------------------------------- --------------- --------------- ------------- ------------- ------------- -------------
  Forward Contracts                      X               X              X             X             X             X
---------------------------------- --------------- --------------- ------------- ------------- ------------- -------------
---------------------------------- --------------- --------------- ------------- ------------- ------------- -------------
  Interest Rate Swaps                    -               X              X             -              X             -
---------------------------------- --------------- --------------- ------------- ------------- ------------- -------------
---------------------------------- --------------- --------------- ------------- ------------- ------------- -------------
  Total Return Swaps                     -                -              -             -             -             -
---------------------------------- --------------- --------------- ------------- ------------- ------------- -------------
---------------------------------- --------------- --------------- ------------- ------------- ------------- -------------
  Swaptions                              -               X              X             -             X             -
---------------------------------- --------------- --------------- ------------- ------------- ------------- -------------
---------------------------------- --------------- --------------- ------------- ------------- ------------- -------------
  Credit Derivatives                     -               X              X             -             -             -
---------------------------------- --------------- --------------- ------------- ------------- ------------- -------------
---------------------------------- --------------- --------------- ------------- ------------- ------------- -------------
  Structured Notes                       -               X               X            -              -             -
---------------------------------- --------------- --------------- ------------- ------------- ------------- -------------
---------------------------------- --------------- --------------- ------------- ------------- ------------- -------------
Other Investments and Strategies
---------------------------------- --------------- --------------- ------------- ------------- ------------- -------------
---------------------------------- --------------- --------------- ------------- ------------- ------------- -------------
  Repurchase Agreements                  X               X              X             X             X             X
---------------------------------- --------------- --------------- ------------- ------------- ------------- -------------
---------------------------------- --------------- --------------- ------------- ------------- ------------- -------------
  Reverse Repurchase Agreements          -               -              -             X             X             -
---------------------------------- --------------- --------------- ------------- ------------- ------------- -------------
---------------------------------- --------------- --------------- ------------- ------------- ------------- -------------
  When Issued Securities                 -               X              X             X             -             -
---------------------------------- --------------- --------------- ------------- ------------- ------------- -------------
---------------------------------- --------------- --------------- ------------- ------------- ------------- -------------
  Delayed Delivery Securities            -               X              X             X             -             -
---------------------------------- --------------- --------------- ------------- ------------- ------------- -------------
---------------------------------- --------------- --------------- ------------- ------------- ------------- -------------
  Securities Lending                     X               X              X             X             X             X
---------------------------------- --------------- --------------- ------------- ------------- ------------- -------------
---------------------------------- --------------- --------------- ------------- ------------- ------------- -------------
  Borrowing for Leverage
---------------------------------- --------------- --------------- ------------- ------------- ------------- -------------
---------------------------------- --------------- --------------- ------------- ------------- ------------- -------------
  Illiquid and Restricted                X               X              X             X             X             X
  Securities
---------------------------------- --------------- --------------- ------------- ------------- ------------- -------------

---------------------------------- --------------- ---------------- ------------ ------------ --------------- ------------
                                   International    International     Limited    Main Street    Main Street    Main Street
                                                                                                                Small Cap
                                       Growth           Value          Term                     Opportunity       Fund
---------------------------------- --------------- ---------------- ------------ ------------ --------------- ------------
---------------------------------- --------------- ---------------- ------------ ------------ --------------- ------------
Equity Securities
---------------------------------- --------------- ---------------- ------------ ------------ --------------- ------------
---------------------------------- --------------- ---------------- ------------ ------------ --------------- ------------
  Common Stock                           X                X             -              X             X              X
---------------------------------- --------------- ---------------- ------------ ------------ --------------- ------------
---------------------------------- --------------- ---------------- ------------ ------------ --------------- ------------
  Preferred Stock                        X                X             -              X             X              X
---------------------------------- --------------- ---------------- ------------ ------------ --------------- ------------
---------------------------------- --------------- ---------------- ------------ ------------ --------------- ------------
  Convertible Securities                 X                X              -             X             X              X
---------------------------------- --------------- ---------------- ------------ ------------ --------------- ------------
---------------------------------- --------------- ---------------- ------------ ------------ --------------- ------------
  Rights                                 X                X              -             X             X              X
---------------------------------- --------------- ---------------- ------------ ------------ --------------- ------------
---------------------------------- --------------- ---------------- ------------ ------------ --------------- ------------
  Warrants                               X                X              -             X             X              X
---------------------------------- --------------- ---------------- ------------ ------------ --------------- ------------
---------------------------------- --------------- ---------------- ------------ ------------ --------------- ------------
  Growth Companies                       X                -              -             X             X              X
---------------------------------- --------------- ---------------- ------------ ------------ --------------- ------------
---------------------------------- --------------- ---------------- ------------ ------------ --------------- ------------
  Value Companies                        -                X              -            X             X              X
---------------------------------- --------------- ---------------- ------------ ------------ --------------- ------------
---------------------------------- --------------- ---------------- ------------ ------------ --------------- ------------
  Mid-Cap Companies                      X                X              -             X             X              X
---------------------------------- --------------- ---------------- ------------ ------------ --------------- ------------
---------------------------------- --------------- ---------------- ------------ ------------ --------------- ------------
  Small-Cap Companies                    X                X              -             X             X              X
---------------------------------- --------------- ---------------- ------------ ------------ --------------- ------------
---------------------------------- --------------- ---------------- ------------ ------------ --------------- ------------
  Unseasoned Issuers                     X                X              -             X             X              X
---------------------------------- --------------- ---------------- ------------ ------------ --------------- ------------
---------------------------------- --------------- ---------------- ------------ ------------ --------------- ------------
  Cyclical Opportunities                 X                X              -             -             -              -
---------------------------------- --------------- ---------------- ------------ ------------ --------------- ------------
---------------------------------- --------------- ---------------- ------------ ------------ --------------- ------------
  Real Estate Investment Trusts          -                -              -            -             -              -
  (REITs)
---------------------------------- --------------- ---------------- ------------ ------------ --------------- ------------
---------------------------------- --------------- ---------------- ------------ ------------ --------------- ------------
  Foreign Equity Securities              X                X              -             X             X              -
---------------------------------- --------------- ---------------- ------------ ------------ --------------- ------------
---------------------------------- --------------- ---------------- ------------ ------------ --------------- ------------
    Developing Markets                   X                -              -             -             -              -
---------------------------------- --------------- ---------------- ------------ ------------ --------------- ------------
---------------------------------- --------------- ---------------- ------------ ------------ --------------- ------------
    Privatization Programs               -                -              -             -             -              -
---------------------------------- --------------- ---------------- ------------ ------------ --------------- ------------
---------------------------------- --------------- ---------------- ------------ ------------ --------------- ------------
  Investment Company Securities          -                X              X            X             X              X
---------------------------------- --------------- ---------------- ------------ ------------ --------------- ------------
---------------------------------- --------------- ---------------- ------------ ------------ --------------- ------------
Fixed Income Securities
---------------------------------- --------------- ---------------- ------------ ------------ --------------- ------------
---------------------------------- --------------- ---------------- ------------ ------------ --------------- ------------
  Floating Rate Securities               -                -              X            -             -              -
---------------------------------- --------------- ---------------- ------------ ------------ --------------- ------------
---------------------------------- --------------- ---------------- ------------ ------------ --------------- ------------
  Variable Rate Securities               -                -              X            -             -              -
---------------------------------- --------------- ---------------- ------------ ------------ --------------- ------------
---------------------------------- --------------- ---------------- ------------ ------------ --------------- ------------
  Zero Coupon Securities                 -                -              -            -             -              -
---------------------------------- --------------- ---------------- ------------ ------------ --------------- ------------
---------------------------------- --------------- ---------------- ------------ ------------ --------------- ------------
  Lower Grade Debt Securities            X                X              -             X             -              -
---------------------------------- --------------- ---------------- ------------ ------------ --------------- ------------
---------------------------------- --------------- ---------------- ------------ ------------ --------------- ------------
  Bank Obligations and Related           X                -              X            -             -              X
  Securities
---------------------------------- --------------- ---------------- ------------ ------------ --------------- ------------
---------------------------------- --------------- ---------------- ------------ ------------ --------------- ------------
  Loan Participation Interests           -                -              -            -             -              -
---------------------------------- --------------- ---------------- ------------ ------------ --------------- ------------
---------------------------------- --------------- ---------------- ------------ ------------ --------------- ------------
  Master Demand Notes                    -                -              -            -             -               -
---------------------------------- --------------- ---------------- ------------ ------------ --------------- ------------
---------------------------------- --------------- ---------------- ------------ ------------ --------------- ------------
  Foreign Debt Obligations               X                X              -             X             X              -
---------------------------------- --------------- ---------------- ------------ ------------ --------------- ------------
---------------------------------- --------------- ---------------- ------------ ------------ --------------- ------------
  U.S. Government Securities             X                X              X            X             X              X
---------------------------------- --------------- ---------------- ------------ ------------ --------------- ------------
---------------------------------- --------------- ---------------- ------------ ------------ --------------- ------------
    U.S. Treasury Obligations            X                X              X            X             X              X
---------------------------------- --------------- ---------------- ------------ ------------ --------------- ------------
---------------------------------- --------------- ---------------- ------------ ------------ --------------- ------------
    Government Agency Obligations        X                X              X            X             X              X
---------------------------------- --------------- ---------------- ------------ ------------ --------------- ------------
---------------------------------- --------------- ---------------- ------------ ------------ --------------- ------------
  Mortgage Related Securities            -                -              X            -             -              X
---------------------------------- --------------- ---------------- ------------ ------------ --------------- ------------
---------------------------------- --------------- ---------------- ------------ ------------ --------------- ------------
    Collateralized Mortgage              -                -              X            -             -              X
    Obligations (CMOs)
---------------------------------- --------------- ---------------- ------------ ------------ --------------- ------------
---------------------------------- --------------- ---------------- ------------ ------------ --------------- ------------
    Forward Rolls                        -                -              X            -             -              -
---------------------------------- --------------- ---------------- ------------ ------------ --------------- ------------
---------------------------------- --------------- ---------------- ------------ ------------ --------------- ------------
    Stripped Mortgage Related            -                -              X            -             -              -
    Securities
---------------------------------- --------------- ---------------- ------------ ------------ --------------- ------------
---------------------------------- --------------- ---------------- ------------ ------------ --------------- ------------
    Mortgage Related Government          -                -              X            -             -              X
    Obligations
---------------------------------- --------------- ---------------- ------------ ------------ --------------- ------------
---------------------------------- --------------- ---------------- ------------ ------------ --------------- ------------
    Commercial Mortgage Related            -            -               -               -               -          X
    Obligations
---------------------------------- --------------- ---------------- ------------ ------------ --------------- ------------
---------------------------------- --------------- ---------------- ------------ ------------ --------------- ------------
  Asset Backed Securities                -                -              X            -             -              -
---------------------------------- --------------- ---------------- ------------ ------------ --------------- ------------
---------------------------------- --------------- ---------------- ------------ ------------ --------------- ------------
  Money Market Instruments                X               X              X            X             X              X
---------------------------------- --------------- ---------------- ------------ ------------ --------------- ------------
---------------------------------- --------------- ---------------- ------------ ------------ --------------- ------------
  Commercial Paper                       -                -              X            X             X              X
---------------------------------- --------------- ---------------- ------------ ------------ --------------- ------------
---------------------------------- --------------- ---------------- ------------ ------------ --------------- ------------
Derivatives
---------------------------------- --------------- ---------------- ------------ ------------ --------------- ------------
---------------------------------- --------------- ---------------- ------------ ------------ --------------- ------------
  Futures                                X                X              X            X             X              X
---------------------------------- --------------- ---------------- ------------ ------------ --------------- ------------
---------------------------------- --------------- ---------------- ------------ ------------ --------------- ------------
  Options
---------------------------------- --------------- ---------------- ------------ ------------ --------------- ------------
---------------------------------- --------------- ---------------- ------------ ------------ --------------- ------------
    Write Covered Calls                  X                X              X            X             X              X
---------------------------------- --------------- ---------------- ------------ ------------ --------------- ------------
---------------------------------- --------------- ---------------- ------------ ------------ --------------- ------------
    Write Put Options                    X                X              X            X             X              X
---------------------------------- --------------- ---------------- ------------ ------------ --------------- ------------
---------------------------------- --------------- ---------------- ------------ ------------ --------------- ------------
    Purchase Puts and Calls              X                X              X            X             X              X
---------------------------------- --------------- ---------------- ------------ ------------ --------------- ------------
---------------------------------- --------------- ---------------- ------------ ------------ --------------- ------------
    Foreign Currency Options             X                X              X             X             X              X
---------------------------------- --------------- ---------------- ------------ ------------ --------------- ------------
---------------------------------- --------------- ---------------- ------------ ------------ --------------- ------------
  Forward Contracts                      X                X              X             X             X              X
---------------------------------- --------------- ---------------- ------------ ------------ --------------- ------------
---------------------------------- --------------- ---------------- ------------ ------------ --------------- ------------
  Interest Rate Swaps                    -                -              X            X             -              -
---------------------------------- --------------- ---------------- ------------ ------------ --------------- ------------
---------------------------------- --------------- ---------------- ------------ ------------ --------------- ------------
  Total Return Swaps                     X                X              -            -             -              -
---------------------------------- --------------- ---------------- ------------ ------------ --------------- ------------
---------------------------------- --------------- ---------------- ------------ ------------ --------------- ------------
  Swaptions                              -                -              X            -             -              -
---------------------------------- --------------- ---------------- ------------ ------------ --------------- ------------
---------------------------------- --------------- ---------------- ------------ ------------ --------------- ------------
  Credit Derivatives                     -                -              -            -             -              -
---------------------------------- --------------- ---------------- ------------ ------------ --------------- ------------
---------------------------------- --------------- ---------------- ------------ ------------ --------------- ------------
  Structured Notes                       -                X              -            -              -              -
---------------------------------- --------------- ---------------- ------------ ------------ --------------- ------------
---------------------------------- --------------- ---------------- ------------ ------------ --------------- ------------
Other Investments and Strategies
---------------------------------- --------------- ---------------- ------------ ------------ --------------- ------------
---------------------------------- --------------- ---------------- ------------ ------------ --------------- ------------
  Repurchase Agreements                  X                X              X            X             X              X
---------------------------------- --------------- ---------------- ------------ ------------ --------------- ------------
---------------------------------- --------------- ---------------- ------------ ------------ --------------- ------------
  Reverse Repurchase Agreements          X                -              X            -             -              X
---------------------------------- --------------- ---------------- ------------ ------------ --------------- ------------
---------------------------------- --------------- ---------------- ------------ ------------ --------------- ------------
  When Issued Securities                 -                -              X            X             -              X
---------------------------------- --------------- ---------------- ------------ ------------ --------------- ------------
---------------------------------- --------------- ---------------- ------------ ------------ --------------- ------------
  Delayed Delivery Securities            -                -              X            -             -              X
---------------------------------- --------------- ---------------- ------------ ------------ --------------- ------------
---------------------------------- --------------- ---------------- ------------ ------------ --------------- ------------
  Securities Lending                     X                X              X            X             X              X
---------------------------------- --------------- ---------------- ------------ ------------ --------------- ------------
---------------------------------- --------------- ---------------- ------------ ------------ --------------- ------------
  Borrowing for Leverage                 X                -              -            -             X               -
---------------------------------- --------------- ---------------- ------------ ------------ --------------- ------------
---------------------------------- --------------- ---------------- ------------ ------------ --------------- ------------
  Illiquid and Restricted                X                X              X            X             X              X
  Securities
---------------------------------- --------------- ---------------- ------------ ------------ --------------- ------------

---------------------------------- ------------- ------------ ------------- ---------------- -------------- --------------
                                   MidCap Fund    Real Asset   Real Estate    Small- & Mid-  U.S. Government  Value Fund
                                                                   Fund         Cap Value
---------------------------------- ------------- ------------ ------------- ---------------- -------------- --------------
---------------------------------- ------------- ------------ ------------- ---------------- -------------- --------------
Equity Securities
---------------------------------- ------------- ------------ ------------- ---------------- -------------- --------------
---------------------------------- ------------- ------------ ------------- ---------------- -------------- --------------
  Common Stock                          X             -            -               X               -              X
---------------------------------- ------------- ------------ ------------- ---------------- -------------- --------------
---------------------------------- ------------- ------------ ------------- ---------------- -------------- --------------
  Preferred Stock                       X             -            -               X               -              X
---------------------------------- ------------- ------------ ------------- ---------------- -------------- --------------
---------------------------------- ------------- ------------ ------------- ---------------- -------------- --------------
  Convertible Securities                X             X            X               X               -              X
---------------------------------- ------------- ------------ ------------- ---------------- -------------- --------------
---------------------------------- ------------- ------------ ------------- ---------------- -------------- --------------
  Rights                                X             -            X               X               -              X
---------------------------------- ------------- ------------ ------------- ---------------- -------------- --------------
---------------------------------- ------------- ------------ ------------- ---------------- -------------- --------------
  Warrants                              X             -            X               X               -              X
---------------------------------- ------------- ------------ ------------- ---------------- -------------- --------------
---------------------------------- ------------- ------------ ------------- ---------------- -------------- --------------
  Growth Companies                      X             -            -               -               -              -
---------------------------------- ------------- ------------ ------------- ---------------- -------------- --------------
---------------------------------- ------------- ------------ ------------- ---------------- -------------- --------------
  Value Companies                       -             -            -               X               -               X
---------------------------------- ------------- ------------ ------------- ---------------- -------------- --------------
---------------------------------- ------------- ------------ ------------- ---------------- -------------- --------------
  Mid-Cap Companies                     X             -            -               X               -               X
---------------------------------- ------------- ------------ ------------- ---------------- -------------- --------------
---------------------------------- ------------- ------------ ------------- ---------------- -------------- --------------
  Small-Cap Companies                   X             -            -               X               -               X
---------------------------------- ------------- ------------ ------------- ---------------- -------------- --------------
---------------------------------- ------------- ------------ ------------- ---------------- -------------- --------------
  Unseasoned Issuers                    X             -            -               X               -              -
---------------------------------- ------------- ------------ ------------- ---------------- -------------- --------------
---------------------------------- ------------- ------------ ------------- ---------------- -------------- --------------
  Cyclical Opportunities                X             -            -               X               -              -
---------------------------------- ------------- ------------ ------------- ---------------- -------------- --------------
---------------------------------- ------------- ------------ ------------- ---------------- -------------- --------------
  Real Estate Investment Trusts         -             -            X               -               -              -
  (REITs)
---------------------------------- ------------- ------------ ------------- ---------------- -------------- --------------
---------------------------------- ------------- ------------ ------------- ---------------- -------------- --------------
  Foreign Equity Securities             X             X            -                X               -              X
---------------------------------- ------------- ------------ ------------- ---------------- -------------- --------------
---------------------------------- ------------- ------------ ------------- ---------------- -------------- --------------
    Developing Markets                  X             X            -                X               -              X
---------------------------------- ------------- ------------ ------------- ---------------- -------------- --------------
---------------------------------- ------------- ------------ ------------- ---------------- -------------- --------------
    Privatization Programs              -             -            -                -               -              -
---------------------------------- ------------- ------------ ------------- ---------------- -------------- --------------
---------------------------------- ------------- ------------ ------------- ---------------- -------------- --------------
  Investment Company Securities         X             X            X               X               -              X
---------------------------------- ------------- ------------ ------------- ---------------- -------------- --------------
---------------------------------- ------------- ------------ ------------- ---------------- -------------- --------------
Fixed Income Securities
---------------------------------- ------------- ------------ ------------- ---------------- -------------- --------------
---------------------------------- ------------- ------------ ------------- ---------------- -------------- --------------
  Floating Rate Securities              -             X            X               -               X              X
---------------------------------- ------------- ------------ ------------- ---------------- -------------- --------------
---------------------------------- ------------- ------------ ------------- ---------------- -------------- --------------
  Variable Rate Securities              -             X            -               -               X              X
---------------------------------- ------------- ------------ ------------- ---------------- -------------- --------------
---------------------------------- ------------- ------------ ------------- ---------------- -------------- --------------
  Zero Coupon Securities                -             X            -               -               X              X
---------------------------------- ------------- ------------ ------------- ---------------- -------------- --------------
---------------------------------- ------------- ------------ ------------- ---------------- -------------- --------------
  Lower Grade Debt Securities           X             X            -                X               -              X
---------------------------------- ------------- ------------ ------------- ---------------- -------------- --------------
---------------------------------- ------------- ------------ ------------- ---------------- -------------- --------------
  Bank Obligations and Related          -             X             -              -               -              X
  Securities
---------------------------------- ------------- ------------ ------------- ---------------- -------------- --------------
---------------------------------- ------------- ------------ ------------- ---------------- -------------- --------------
  Loan Participation Interests          -             X            -               X               -              -
---------------------------------- ------------- ------------ ------------- ---------------- -------------- --------------
---------------------------------- ------------- ------------ ------------- ---------------- -------------- --------------
  Master Demand Notes                   -              X           -               X                -              X
---------------------------------- ------------- ------------ ------------- ---------------- -------------- --------------
---------------------------------- ------------- ------------ ------------- ---------------- -------------- --------------
  Foreign Debt Obligations              X             X            -               X               -               X
---------------------------------- ------------- ------------ ------------- ---------------- -------------- --------------
---------------------------------- ------------- ------------ ------------- ---------------- -------------- --------------
  U.S. Government Securities            X             X            X               X               X              X
---------------------------------- ------------- ------------ ------------- ---------------- -------------- --------------
---------------------------------- ------------- ------------ ------------- ---------------- -------------- --------------
    U.S. Treasury Obligations           X             X            X               X               X              X
---------------------------------- ------------- ------------ ------------- ---------------- -------------- --------------
---------------------------------- ------------- ------------ ------------- ---------------- -------------- --------------
    Government Agency Obligations       X             X            X               X               X              X
---------------------------------- ------------- ------------ ------------- ---------------- -------------- --------------
---------------------------------- ------------- ------------ ------------- ---------------- -------------- --------------
  Mortgage Related Securities           -             X           -                 -               X              X
---------------------------------- ------------- ------------ ------------- ---------------- -------------- --------------
---------------------------------- ------------- ------------ ------------- ---------------- -------------- --------------
    Collateralized Mortgage             -             X            -                -               X              X
    Obligations (CMOs)
---------------------------------- ------------- ------------ ------------- ---------------- -------------- --------------
---------------------------------- ------------- ------------ ------------- ---------------- -------------- --------------
    Forward Rolls                       -             X            -                -               X              X
---------------------------------- ------------- ------------ ------------- ---------------- -------------- --------------
---------------------------------- ------------- ------------ ------------- ---------------- -------------- --------------
    Stripped Mortgage Related           -             X            -                -               X              X
    Securities
---------------------------------- ------------- ------------ ------------- ---------------- -------------- --------------
---------------------------------- ------------- ------------ ------------- ---------------- -------------- --------------
    Mortgage Related Government         -             X            -                -               X              X
    Obligations
---------------------------------- ------------- ------------ ------------- ---------------- -------------- --------------
---------------------------------- ------------- ------------ ------------- ---------------- -------------- --------------
    Commercial Mortgage Related         -              X             -              -               X               -
    Obligations
---------------------------------- ------------- ------------ ------------- ---------------- -------------- --------------
---------------------------------- ------------- ------------ ------------- ---------------- -------------- --------------
  Asset Backed Securities               -             X             -               -               X              -
---------------------------------- ------------- ------------ ------------- ---------------- -------------- --------------
---------------------------------- ------------- ------------ ------------- ---------------- -------------- --------------
  Money Market Instruments              X             X            X               X              X                X
---------------------------------- ------------- ------------ ------------- ---------------- -------------- --------------
---------------------------------- ------------- ------------ ------------- ---------------- -------------- --------------
  Commercial Paper                      -             X            X               X               -              X
---------------------------------- ------------- ------------ ------------- ---------------- -------------- --------------
---------------------------------- ------------- ------------ ------------- ---------------- -------------- --------------
Derivatives
---------------------------------- ------------- ------------ ------------- ---------------- -------------- --------------
---------------------------------- ------------- ------------ ------------- ---------------- -------------- --------------
  Futures                               X             X            X               X               X              X
---------------------------------- ------------- ------------ ------------- ---------------- -------------- --------------
---------------------------------- ------------- ------------ ------------- ---------------- -------------- --------------
  Options
---------------------------------- ------------- ------------ ------------- ---------------- -------------- --------------
---------------------------------- ------------- ------------ ------------- ---------------- -------------- --------------
    Write Covered Calls                 X             X            X               X               X              X
---------------------------------- ------------- ------------ ------------- ---------------- -------------- --------------
---------------------------------- ------------- ------------ ------------- ---------------- -------------- --------------
    Write Put Options                   X             X            X               X               X              X
---------------------------------- ------------- ------------ ------------- ---------------- -------------- --------------
---------------------------------- ------------- ------------ ------------- ---------------- -------------- --------------
    Purchase Puts and Calls             X             X            X               X               X              X
---------------------------------- ------------- ------------ ------------- ---------------- -------------- --------------
---------------------------------- ------------- ------------ ------------- ---------------- -------------- --------------
    Foreign Currency Options            X             X            X               X               -              X
---------------------------------- ------------- ------------ ------------- ---------------- -------------- --------------
---------------------------------- ------------- ------------ ------------- ---------------- -------------- --------------
  Forward Contracts                     X             X            X               X               -              X
---------------------------------- ------------- ------------ ------------- ---------------- -------------- --------------
---------------------------------- ------------- ------------ ------------- ---------------- -------------- --------------
  Interest Rate Swaps                   -             X            X               -               X              -
---------------------------------- ------------- ------------ ------------- ---------------- -------------- --------------
---------------------------------- ------------- ------------ ------------- ---------------- -------------- --------------
  Total Return Swaps                    -             -            -               -               -              -
---------------------------------- ------------- ------------ ------------- ---------------- -------------- --------------
---------------------------------- ------------- ------------ ------------- ---------------- -------------- --------------
  Swaptions                             -             X            -                -               X              -
---------------------------------- ------------- ------------ ------------- ---------------- -------------- --------------
---------------------------------- ------------- ------------ ------------- ---------------- -------------- --------------
  Credit Derivatives                    -             X            -                -               -              -
---------------------------------- ------------- ------------ ------------- ---------------- -------------- --------------
---------------------------------- ------------- ------------ ------------- ---------------- -------------- --------------
  Structured Notes                      -             X            -                -                -              -
---------------------------------- ------------- ------------ ------------- ---------------- -------------- --------------
---------------------------------- ------------- ------------ ------------- ---------------- -------------- --------------
Other Investments and Strategies
---------------------------------- ------------- ------------ ------------- ---------------- -------------- --------------
---------------------------------- ------------- ------------ ------------- ---------------- -------------- --------------
  Repurchase Agreements                 X             X            X               X               X              X
---------------------------------- ------------- ------------ ------------- ---------------- -------------- --------------
---------------------------------- ------------- ------------ ------------- ---------------- -------------- --------------
  Reverse Repurchase Agreements         -             X            X               X               X              X
---------------------------------- ------------- ------------ ------------- ---------------- -------------- --------------
---------------------------------- ------------- ------------ ------------- ---------------- -------------- --------------
  When Issued Securities                -             X            -               X               X              X
---------------------------------- ------------- ------------ ------------- ---------------- -------------- --------------
---------------------------------- ------------- ------------ ------------- ---------------- -------------- --------------
  Delayed Delivery Securities           -             X             -              X               X              X
---------------------------------- ------------- ------------ ------------- ---------------- -------------- --------------
---------------------------------- ------------- ------------ ------------- ---------------- -------------- --------------
  Securities Lending                    X             -            X               X               X              X
---------------------------------- ------------- ------------ ------------- ---------------- -------------- --------------
---------------------------------- ------------- ------------ ------------- ---------------- -------------- --------------
  Borrowing for Leverage                X             -             -              -               X              -
---------------------------------- ------------- ------------ ------------- ---------------- -------------- --------------
---------------------------------- ------------- ------------ ------------- ---------------- -------------- --------------
  Illiquid and Restricted               X             X            X               X               -              X
  Securities
---------------------------------- ------------- ------------ ------------- ---------------- -------------- --------------


     The Funds and the  Underlying  Funds are not  required  to use all of these
investment  techniques and strategies in seeking their objectives.  They may use
some of the investment techniques and strategies only at certain times or not at
all.

     For more  complete  information  about each  Underlying  Fund's  investment
policies and strategies,  please refer to each Underlying Fund's prospectus. You
may obtain a copy of an Underlying Fund's prospectus by calling  1.800.225.5677,
or  by   downloading   it   from   the   OppenheimerFunds,   Inc.   website   at
www.oppenheimerfunds.com.



Equity Securities

     Some of the Underlying Funds focus their  investments in equity  securities
of U.S.  and/or  foreign  companies.  Equity  securities  include common stocks,
preferred stocks,  rights and warrants,  and securities  convertible into common
stock.  Investments in equity  securities may include stocks of companies of all
market capitalization ranges: small-cap,  mid-cap and large-cap.  Certain of the
Underlying  Funds  emphasis  equity  investments  in one or more  capitalization
ranges.  Certain of the Underlying Funds pursue a "Growth"  investing  strategy,
while others pursue a "Value" investing policy.

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

     If interest rates rise, the fixed dividend on preferred  stocks may be less
attractive,  causing the price of preferred  stocks to decline.  Preferred stock
may have mandatory sinking fund provisions, as well as provisions allowing calls
or  redemptions  prior to  maturity,  which can also have a  negative  impact on
prices when interest rates decline.

     Preferred  stocks are equity  securities  because they do not  constitute a
liability of the issuer and  therefore do not offer the same degree of assurance
of  continued  income  as debt  securities.  The  rights of  preferred  stock on
distribution  of a  corporation's  assets  in the  event  of a  liquidation  are
generally  subordinate  to  the  rights  associated  with a  corporation's  debt
securities.  Preferred stock generally has a preference over common stock on the
distribution  of a  corporation's  assets  in the  event of  liquidation  of the
corporation.

     |X|  Convertible  Securities.  Some of the  Underlying  Funds may invest in
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 the  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 prevailing interest rates fall and decrease when
prevailing  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 certain
cases their  conversion  feature  (allowing  conversion into equity  securities)
causes them to be regarded by the  Manager  more as "equity  equivalents."  As a
result, the credit rating assigned to the security might have less impact on the
Manager's investment decision with respect to convertible securities than in the
case of non-convertible fixed-income securities. Convertible debt securities are
subject to the credit risks and  interest  rate risks  described  below in "Main
Risks of Debt Securities."

     To determine whether  convertible  securities should be regarded as "equity
equivalents," the Manager may examine the following factors:

     (1) whether, at the option of the investor, the convertible security can be
exchanged  for a fixed  number  of shares of  common  stock of the  issuer,  (2)
whether the issuer of the  convertible  securities has restated its earnings per
share of  common  stock on a fully  diluted  basis  (considering  the  effect of
conversion  of the  convertible  securities),  and (3) the  extent  to which the
convertible  security  may be a defensive  "equity  substitute,"  providing  the
ability to participate in any  appreciation  in the price of the issuer's common
stock.

     |X|  Rights  and  Warrants.  Some of the  Underlying  Funds  may  invest in
warrants  or  rights.   For  specific   limitations  on  the  Underlying  Funds'
investments  in  rights  and  warrants,  refer to the  Statement  of  Additional
Information for each Underlying Fund.

     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.

     |X|  Growth  Companies.  Some of the  Underlying  Funds  invest  in  growth
companies.  Growth  companies are those companies that the Manager  believes are
entering into growth cycles in their businesses, with the expectation that their
stock will increase in value. They may be established companies as well as newer
companies in the development stage.

     Growth  companies  may  have a  variety  of  characteristics  that,  in the
Manager's  view,  define them as "growth"  issuers.  They may be  generating  or
applying  new  technologies,  new or  improved  distribution  techniques  or new
services. They may own or develop natural resources.  They may be companies that
can benefit from changing consumer demands or lifestyles, or companies that have
projected  earnings in excess of the average for their  sector or  industry.  In
each case,  they have prospects that the Manager  believes are favorable for the
long  term.  The  portfolio  managers  of the  Underlying  Funds look for growth
companies  with  strong,  capable  management  sound  financial  and  accounting
policies, successful product development and marketing and other factors.

     |X|  Value  Investing.  In  selecting  equity  investments,  the  portfolio
managers of certain Underlying Funds may use a value investing style. In using a
value approach,  the portfolio  managers seek stock and other equity  securities
that  appear  to be  temporarily  undervalued,  by  various  measures,  such  as
price/earnings  ratios.  Value investing seeks stocks having prices that are low
in  relation  to their  real  worth or  future  prospects,  in the hope that the
portfolios  will realize  appreciation in the value of their holdings when other
investors realize the intrinsic value of the stock.

     Using  value  investing  requires  research as to the  issuer's  underlying
financial  condition and prospects.  Some of the measures used to identify these
securities include, among others:

     o Price/Earnings  Ratio, which is the stock's price divided by its earnings
per share.  A stock  having a  price/earnings  ratio  lower than its  historical
range,  or the  market  as a whole  or  that  of  similar  companies  may  offer
attractive investment opportunities.

     o  Price/Book  Value  Ratio,  which is the stock price  divided by the book
value of the company per share,  which  measures  the  company's  stock price in
relation to its asset value.

     o Discounted Future Value Analysis,  which involves two steps:  determining
the probable value of the stock at a specific point in the future by researching
the current and future prospects of the company; and then comparing the probable
value to the  current  stock  price to  determine  if the stock is  sufficiently
undervalued and if it offers an attractive return over the investment horizon.

     o Valuation of Assets,  which  compares the stock price to the value of the
company's underlying assets,  including their projected value in the marketplace
and liquidation value.

     |X|   Small-  and   Mid-Cap   Issuers.   Securities   of  small-  and  mid-
capitalization  issuers may be subject to greater  price  volatility  in general
than  securities  of  large-cap  issuers.  Therefore,  to  the  degree  that  an
Underlying  Fund has  investments in small- or  mid-capitalization  companies at
times of market volatility, its share prices may fluctuate more than a fund that
invests  in  the  securities  of  large-capitalization   companies.  The  market
capitalization  ranges used by the Underlying Funds will vary from fund to fund.
For  specific  information  on the  market  capitalization  ranges  and types of
investments in equity  securities for an Underlying Fund, refer to the Statement
of Information for each Underlying Fund.

     |X| Investing in Small, Unseasoned Companies.  Some of the Underlying Funds
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 an 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, an Underlying Fund might
receive a lower price for its holdings  than might  otherwise  be obtained.  For
specific  limitations on the Underlying Fund's investments in small,  unseasoned
companies,  refer to the Statement of Additional Information for each Underlying
Fund.

     |X|  Cyclical  Opportunities.  Some of the  Underlying  Funds  seek to take
advantage  of changes in the business  cycle by investing in companies  that are
sensitive to those changes if the portfolio manager(s) of those Underlying Funds
believes they have growth potential. For example, when the economy is expanding,
companies in the consumer durable and technology sectors might benefit and offer
long-term growth opportunities. Other cyclical industries include insurance, for
example.  Those Underlying Funds focus on seeking growth over the long term, but
could seek to take tactical  advantage of short-term  market movements or events
affecting particular issuers or industries.

     |X| Real Estate Investment Trusts (REITs). Some of the Underlying Funds can
invest in real estate  investment  trusts,  as well as real  estate  development
companies and operating companies. They can also buy shares of companies engaged
in other real estate businesses.  REITs are trusts that sell shares to investors
and use the proceeds to invest in real estate.  A REIT can focus on a particular
project,  such as a  shopping  center  or  apartment  complex,  or may buy  many
properties or properties located in a particular geographic region.

     To the extent a REIT  focuses on a particular  project,  sector of the real
estate market or geographic region, its share price will be affected by economic
and  political  events  affecting  that project,  sector or  geographic  region.
Property  values  may  fall  due to  increasing  vacancies  or  declining  rents
resulting  from  unanticipated   economic,   legal,  cultural  or  technological
developments.  REIT prices also may drop  because of the failure of borrowers to
pay their  loans,  a dividend  cut, a disruption  to the real estate  investment
sales market, changes in federal or state taxation policies affecting REITs, and
poor management.

     |X|  Investing  in Foreign  Securities.  Some of the  Underlying  Funds may
invest in  foreign  securities.  "Foreign  securities"  include  equity and debt
securities  issued  or  guaranteed  by  companies  organized  under  the laws of
countries other than the United States and debt securities  issued or guaranteed
by  governments  other than the U.S.  government  or by  foreign  supra-national
entities,  such as the World Bank.  They also  include  securities  of companies
(including  those that are located in the U.S. or organized under U.S. law) that
derive  a  significant   portion  of  their  revenue  or  profits  from  foreign
businesses,  investments or sales,  or that have a significant  portion of their
assets abroad. Those securities may be traded on foreign securities exchanges or
in the  foreign  over-the-counter  markets.  Securities  denominated  in foreign
currencies  issued  by  U.S.  companies  are  also  considered  to  be  "foreign
securities."  For  specific  information  on the  type  of  securities  that  an
Underlying Fund considers "foreign  securities" and the limitations on the total
amount  of  assets of the  Underlying  Funds  that can be  invested  in  foreign
securities,  refer to the prospectuses and statements of additional  information
for the Underlying Funds.

     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 may be considered "foreign securities" for the purpose
of the Underlying Funds' investment allocations because they are subject to some
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 income  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 securities markets that do not move in a manner parallel to
U.S. markets, or to benefit from the appreciation relative to the U.S. Dollar of
foreign  currencies in which such  securities  may  denominated.  The Underlying
Funds will hold foreign currency only in connection with the purchase or sale of
foreign securities.

     |X| 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  devaluation,  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, securities 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  foreign   withholding  taxes;

     o possibilities in some countries of expropriation,  confiscatory taxation,
political,  financial or social instability or adverse diplomatic  developments;
and

     o possible  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.  Certain types of foreign
securities have other particular risks. The following information describes some
of the risks of particular foreign securities.

     |X| Passive Foreign Investment  Companies.  Some securities of corporations
domiciled  outside the U.S.  which the  Underlying  Funds may  purchase,  may be
considered passive foreign investment  companies  ("PFICs") under U.S. tax laws.
PFICs are those foreign  corporations  which generate  primarily passive income.
They tend to be growth  companies  or  "start-up"  companies.  For  federal  tax
purposes,  a  corporation  is  deemed  a  PFIC  if 75% or  more  of the  foreign
corporation's  gross  income for the income year is passive  income or if 50% or
more of its  assets  are assets  that  produce  or are held to  produce  passive
income. Passive income is further defined as any income to be considered foreign
personal  holding  company  income  within the subpart F  provisions  defined by
IRCss.954.

     Investing in PFICs involves the risks  associated with investing in foreign
securities, as described above. There are also the risks that an Underlying Fund
may not realize that a foreign  corporation  it invests in is a PFIC for federal
tax  purposes.  Federal  tax laws  impose  severe tax  penalties  for failure to
properly report investment income from PFICs. Following industry standards,  the
Underlying  Funds  make  every  effort to ensure  compliance  with  federal  tax
reporting of these investments.  PFICs are considered foreign securities for the
purposes of the Underlying Funds' minimum percentage requirements or limitations
of investing in foreign securities.

     Subject  to the  limits  under  the  Investment  Company  Act of 1940  (the
"Investment  Company  Act"),  the  Underlying  Funds may also  invest in foreign
mutual funds which are also deemed  PFICs  (since  nearly all of the income of a
mutual fund is generally passive income).  Investing in these types of PFICs may
allow exposure to various  countries  because some foreign  countries  limit, or
prohibit, all direct foreign investment in the securities of companies domiciled
therein.

     In  addition  to bearing  their  proportionate  share of a Fund's  expenses
(management fees and operating expenses), shareholders will also indirectly bear
similar  expenses  of such  entities.  Additional  risks of  investing  in other
investment  companies are described below under  "Investment in Other Investment
Companies."

     |X|  Special  Risks  of  Emerging  and  Developing  Markets.  Emerging  and
developing markets abroad may also offer special opportunities for investing but
have greater risks than more developed foreign markets, such as those in Europe,
Canada,  Australia,  New Zealand and Japan.  There may be even less liquidity in
their securities  markets,  and settlements of purchases and sales of securities
may be subject  to  additional  delays.  They are  subject  to greater  risks of
limitations  on the  repatriation  of income and  profits  because  of  currency
restrictions  imposed by local governments.  Those countries may also be subject
to the risk of greater  political  and economic  instability,  which can greatly
affect the volatility of prices of securities in those countries. The Underlying
Funds' manager will consider these factors when  evaluating  securities in these
markets.  For specific  limitations  on the  Underlying  Funds'  investments  in
emerging  and  developing   markets,   refer  to  the  Statement  of  Additional
Information for each Underlying Fund.

     o Settlement of Transactions.  Settlement  procedures in developing markets
may differ from those of more established  securities  markets.  Settlements may
also be  delayed  by  operational  problems.  Securities  issued  by  developing
countries and by issuers  located in those  countries may be subject to extended
settlement  periods.  Delays in  settlement  could result in  temporary  periods
during  which a portion of an  Underlying  Fund's  assets is  uninvested  and no
return is earned on those assets.  The  inability of an Underlying  Fund to make
intended  purchases of  securities  due to  settlement  problems  could cause an
Underlying  Fund to miss  investment  opportunities.  An  Underlying  Fund could
suffer  losses from the  inability  to dispose of  portfolio  securities  due to
settlement problems. As a result there could be subsequent declines in the value
of the portfolio security, a decrease in the level of liquidity of an Underlying
Fund's  portfolio or, if an Underlying  Fund has entered into a contract to sell
the security, a possible liability to the purchaser.

     o  Price  Volatility.  Securities  prices  in  developing  markets  may  be
significantly  more volatile than is the case in more  developed  nations of the
world.  In  particular,  countries  with  emerging  markets may have  relatively
unstable  governments.  That presents the risk of nationalization of businesses,
restrictions  on foreign  ownership or  prohibitions  of repatriation of assets.
These  countries may have less protection of property rights than more developed
countries.  The economies of developing  countries may be predominantly based on
only a few industries and, as such, may be highly vulnerable to changes in local
or global trade conditions.

     o Less Developed  Securities Markets.  Developing market countries may have
less  well-developed  securities  markets and exchanges.  Consequently they have
lower trading  volume than the securities  markets of more developed  countries.
These  markets  may be unable to respond  effectively  to  increases  in trading
volume.  Therefore,  prompt liquidation of substantial portfolio holdings may be
difficult at times. As a result,  these markets may be substantially less liquid
than those of more developed countries, and the securities of issuers located in
these markets may have limited marketability.

     o Government  Restrictions.  In certain  developing  countries,  government
approval may be required for the repatriation of investment  income,  capital or
the proceeds of sales of securities by foreign investors,  such as an Underlying
Fund.  Also,  a  government  might impose  temporary  restrictions  on remitting
capital abroad if the country's balance of payments deteriorates, or it might do
so for other  reasons.  If  government  approval  were  delayed or  refused,  an
Underlying Fund could be adversely  affected.  Additionally,  an Underlying Fund
could be adversely  affected by the imposition of restrictions on investments by
foreign entities.

     o Privatization Programs. The governments in some developing countries have
been   engaged  in  programs  to  sell  all  or  part  of  their   interests  in
government-owned  or controlled  enterprises.  Privatization  programs may offer
opportunities for significant capital  appreciation,  and the Manager may invest
Underlying  Funds  assets in  privatization  programs in what it considers to be
appropriate  circumstances.  In certain  developing  countries,  the  ability of
foreign  entities such as an Underlying  Fund to  participate  in  privatization
programs  may be  limited  by local  law.  Additionally,  the  terms on which an
Underlying Fund might be permitted to participate may be less  advantageous than
those afforded  local  investors.  There can be no assurance that  privatization
programs will be successful.

     |X| Investment in Other Investment Companies.  Some of the Underlying Funds
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 that apply to those types of
investments.  For  example,  an  Underlying  Fund may 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  fund's portfolio,  at times when the Underlying Fund may not be
able to buy those portfolio  securities directly.  As a non-fundamental  policy,
the  Underlying  Funds  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.

     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  Funds do 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,  an  Underlying  Fund  would be subject  to its  ratable  share of that
investment  company's  expenses,   including  its  advisory  and  administration
expenses.  For specific  limitations  on the  Underlying  Fund's  investments in
securities of other investment  companies,  refer to the Statement of Additional
Information  for each  Underlying  Fund. The Underlying  Funds do not anticipate
investing a substantial amount of their net assets in shares of other investment
companies.



Debt Securities

     Some of the  Underlying  Funds  invest in debt  securities  with  differing
credit and maturity characteristics,  and with fixed or floating interest rates,
to seek their  objectives.  Other Underlying Funds may invest in debt securities
for defensive purposes and/or for liquidity. Certain types of debt securities in
which  the  Underlying  Funds may  invest  are  described  below.  For  specific
limitations on an Underlying Fund's investments in debt securities, refer to the
Statement of Additional Information for that fund.

     |X| Floating Rate and Variable  Rate  Obligations.  Some of the  securities
that some of the  Underlying  Funds  can  purchase  have  variable  or  floating
interest   rates  The  interest  rate  on  a  floating  rate  note  is  adjusted
automatically  according to a stated  prevailing  market rate,  such as a bank's
prime rate,  the 91-day U.S.  Treasury  Bill rate, or some other  standard.  The
instrument's rate is adjusted automatically each time the base rate is adjusted.
The interest rates on variable rate  obligations are adjusted at stated periodic
intervals.

     Generally,  the changes in the interest  rate on floating and variable rate
obligations  reduce the  fluctuation  in their market value.  As interest  rates
decrease or increase,  the potential for capital appreciation or depreciation is
less than that for fixed-rate obligations of the same maturity.

     Floating rate and variable rate  obligations that have a stated maturity in
excess of one year may have  features  that  permit the  holder to  recover  the
principal amount of the underlying  security at specified  intervals,  generally
not  exceeding  one year and upon no more than 30 days'  notice.  Variable  rate
obligations  may have a demand feature that allows an Underlying  Fund to tender
the obligation to the issuer or a third party at certain  times.  The tender may
be  at  par  value  plus  accrued  interest,  according  to  the  terms  of  the
obligations.  Floating rate notes may also have a feature that allows the holder
to receive  payment  prior to  maturity.  The  issuer of a  "demand"  obligation
normally has a corresponding right to prepay the outstanding principal amount of
the note plus accrued  interest  after a given period.  The issuer  usually must
provide a specified number of days' notice to the holder.

     The floating rate and variable rate obligations in which an Underlying Fund
may invest generally must meet the credit quality requirements of that fund. The
Manager may determine that an unrated  floating rate or variable rate obligation
meets an  Underlying  Fund's  quality  standards  by reason of being backed by a
letter  of credit  or  guarantee  issued  by a bank  that  meets  those  quality
standards.

     |X| Zero Coupon Securities. An Underlying Fund may buy zero-coupon, delayed
interest and "stripped"  securities.  Stripped  securities  are debt  securities
whose interest coupons are separated from the security and sold  separately.  An
Underlying Fund can buy different  types of zero-coupon or stripped  securities,
including,  among others,  foreign debt  securities  and U.S.  Treasury notes or
bonds that have been stripped of their  interest  coupons,  U.S.  Treasury bills
issued without  interest  coupons,  and certificates  representing  interests in
stripped securities.

     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.  In the absence of threats to
the issuer's credit quality,  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.

     An Underlying Fund's investment in zero-coupon  securities may cause the it
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 Underlying 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 the Underlying Fund's shares.

     |X| 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 S&P or Fitch,  or similar  ratings by other
rating  organizations.  If they are unrated, and are determined by an Underlying
Fund's  manager to be of  comparable  quality  to debt  securities  rated  below
investment grade, they are considered part of the Underlying Fund's portfolio of
lower-grade  securities.  International Bond Fund and Global  Opportunities Fund
can invest in  securities  rated as low as "C" or "D" or which may be in default
at the time of purchase. A description of the debt security ratings  categories
of the  principal  rating  organizations  is  included  in  Appendix  A to  this
Statement of Additional Information.

     Because  lower-grade  debt  securities  tend to offer  higher  yields  than
investment-grade  securities,  an  Underlying  Fund might invest in  lower-grade
securities  if its  manager is trying to achieve  higher  income.  For  specific
limitations on Underlying  Funds'  investments in lower-grade  debt  securities,
refer to the Statement of Additional Information for each Underlying Fund.

     |X| Bank  Obligations  and Securities That Are Secured By Them. Some of the
Underlying  Funds  can  invest in bank  obligations,  including  time  deposits,
certificates  of  deposit,  and  bankers'  acceptances.   They  must  be  either
obligations  of a  domestic  bank with  total  assets of at least $1  billion or
obligations  of a foreign  bank with total  assets of at least U.S.  $1 billion.
Those  Underlying  Funds  may  also  invest  in  instruments   secured  by  bank
obligations (for example, debt which is guaranteed by the bank). For purposes of
this policy,  the term "bank"  includes  commercial  banks,  savings banks,  and
savings  and loan  associations  that may or may not be members  of the  Federal
Deposit Insurance Corporation.

     Time deposits are non-negotiable  deposits in a bank for a specified period
of time at a stated  interest rate. They may or may not be subject to withdrawal
penalties.  However,  time deposits  that are subject to  withdrawal  penalties,
other than those  maturing in seven days or less,  are subject to the limitation
on investments by the Underlying Funds in illiquid investments.

     Bankers'  acceptances are marketable  short-term credit instruments used to
finance  the  import,  export,  transfer  or storage  of goods.  They are deemed
"accepted" when a bank guarantees their payment at maturity.

     |X| Loan Participation  Interests.  Some of the Underlying Funds can invest
in  participation  interests,  subject to the Underlying  Funds'  limitations on
investments in illiquid  investments.  A participation  interest is an undivided
interest in a loan made by the issuing  financial  institution in the proportion
that the buyer's  participation  interest bears to the total principal amount of
the  loan.  The  issuing  financial  institution  may have no  obligation  to an
Underlying Fund other than to pay the Underlying Fund the  proportionate  amount
of the principal and interest payments it receives.  For specific limitations on
the Underlying  Funds'  investments  in  participation  interests,  refer to the
Statement of Additional Information for each Underlying Fund.

     Participation  interests are primarily dependent upon the  creditworthiness
of the borrowing  corporation,  which is obligated to make payments of principal
and interest on the loan.  There is a risk that a borrower  may have  difficulty
making  payments.  If a borrower  fails to pay  scheduled  interest or principal
payments,  an Underlying  Fund could  experience a reduction in its income.  The
value of that participation  interest might also decline, which could affect the
net  asset  value of an  Underlying  Fund's  shares.  If the  issuing  financial
institution fails to perform its obligations under the participation  agreement,
an Underlying Fund might incur costs and delays in realizing  payment and suffer
a loss of principal and/or interest.

     |X| Master Demand Notes. Master demand notes are corporate obligations that
permit the investment of fluctuating  amounts by the Underlying Funds at varying
rates of interest  under direct  arrangements  between an  Underlying  Fund,  as
lender, and the borrower.  They permit daily changes in the amounts borrowed. An
Underlying  Fund has the right to increase the amount under the note at any time
up to the full amount provided by the note agreement, or to decrease the amount.
The borrower may prepay up to the full amount of the note without penalty. These
notes may or may not be backed by bank letters of credit.

     Because these notes are direct lending  arrangements between the lender and
borrower, it is not expected that there will be a trading market for them. There
is no secondary  market for these notes,  although they are redeemable (and thus
are  immediately  repayable by the borrower) at principal  amount,  plus accrued
interest,  at any time.  Accordingly,  an Underlying Fund's right to redeem such
notes is  dependent  upon the  ability  of the  borrower  to pay  principal  and
interest on demand. For specific limitations on an Underlying Fund's investments
in  these  notes,  refer  to  the  Underlying  Fund's  Statement  of  Additional
Information.

     The  Underlying  Funds may have no  limitations  on the type of issuer from
whom these notes will be purchased.  However,  in connection with such purchases
and on an ongoing basis, the Manager will consider the earning power,  cash flow
and other liquidity  ratios of the issuer,  and its ability to pay principal and
interest on demand,  including  a  situation  in which all holders of such notes
made demand simultaneously. Investments in master demand notes may be subject to
the  limitation on  investments  by an Underlying  Fund in illiquid  securities,
described in the Underlying Fund's Prospectus.

     |X| Foreign Debt  Obligations.  Some of the Underlying  Funds can invest in
obligations issued by foreign governments and private foreign issuers.


     Foreign  Sovereign  Debt  Obligations.  The debt  obligations  of a foreign
government and its agencies and instrumentalities may or may not be supported by
the full faith and credit of the foreign government.


     Some of the  Underlying  Funds  also can buy  securities  issued by certain
"supra-national"  entities,  which include  entities  designated or supported by
various   governments  to  promote  economic   reconstruction   or  development,
international  banking  organizations and related government agencies.  Examples
are the International Bank for  Reconstruction and Development  (commonly called
the "World Bank"), the Asian Development bank and the Inter-American Development
Bank.

     The   governmental   members   of   these   supra-national   entities   are
"stockholders" that typically make capital contributions and may be committed to
make  additional  capital  contributions  if the  entity  is unable to repay its
borrowings.  A supra-national  entity's  lending  activities may be limited to a
percentage  of its  total  capital,  reserves  and net  income.  There can be no
assurance that the constituent  foreign  governments will continue to be able or
willing to honor their capitalization commitments for those entities.


     Brady   Bonds.   Some  of  the   Underlying   Funds  can   invest  in  U.S.
dollar-denominated   "Brady  Bonds."  These  foreign  debt  obligations  may  be
fixed-rate  par  bonds or  floating-rate  discount  bonds.  They  are  generally
collateralized in full as to repayment of principal at maturity by U.S. Treasury
zero-coupon  obligations  that have the same maturity as the Brady Bonds.  Brady
Bonds  can be  viewed  as having  three or four  valuation  components:  (i) the
collateralized repayment of principal at final maturity; (ii) the collateralized
interest payments;  (iii) the uncollateralized  interest payments;  and (iv) any
uncollateralized  repayment of principal  at  maturity.  Those  uncollateralized
amounts constitute what is called the "residual risk."


     If  there  is  a  default  on  collateralized   Brady  Bonds  resulting  in
acceleration  of the payment  obligations of the issuer,  the  zero-coupon  U.S.
Treasury  securities held as collateral for the payment of principal will not be
distributed to investors,  nor will those  obligations be sold to distribute the
proceeds.  The collateral will be held by the collateral  agent to the scheduled
maturity of the  defaulted  Brady Bonds.  The  defaulted  bonds will continue to
remain  outstanding,  and the face  amount  of the  collateral  will  equal  the
principal  payments  which  would  have then been due on the Brady  Bonds in the
normal  course.  Because of the residual  risk of Brady Bonds and the history of
defaults with respect to commercial bank loans by public and private entities of
countries   issuing  Brady  Bonds,   Brady  Bonds  are  considered   speculative
investments.

     |X| U.S. Government Securities.  Some of the Underlying Funds may invest in
U.S.  Government  securities.  These are securities  issued or guaranteed by the
U.S. Treasury or other U.S. government agencies or federally-chartered corporate
entities referred to as "instrumentalities."  The obligations of U.S. government
agencies or  instrumentalities  in which the Underlying  Funds can invest may or
may not be  guaranteed or supported by the "full faith and credit" of the United
States.  "Full faith and credit"  means  generally  that the taxing power of the
U.S. government is pledged to the payment of interest and repayment of principal
on a  security.  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.  The owner might not be able to assert a
claim against the United States if the issuing  agency or  instrumentality  does
not meet its commitment.


     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 Underlying Funds can buy include U.S.  Treasury  securities that
have been  "stripped"  by a Federal  Reserve  Bank,  zero-coupon  U.S.  Treasury
securities  described  below,  and  Treasury   Inflation-Protection   Securities
("TIPS").

     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.
Some are supported by the full faith and credit of the U.S. government,  such as
Government  National Mortgage  Association  pass-through  mortgage  certificates
(called "Ginnie Maes").  Some are supported by the right of the issuer to borrow
from the U.S.  Treasury under certain  circumstances,  such as Federal  National
Mortgage   Association   bonds  and  Federal  Home  Loan  Mortgage   Corporation
obligations.


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

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

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


     Collateralized Mortgage Obligations. Collateralized mortgage obligations or
CMOs,  are  multi-class  bonds  that are  backed by pools of  mortgage  loans or
mortgage pass-through certificates. They may be collateralized by:


     o  pass-through  certificates  issued or guaranteed by Government  National
Mortgage Association (Ginnie Mae), Federal National Mortgage Association (Fannie
Mae), or Federal Home Loan Mortgage Corporation (Freddie Mac),

     o   unsecuritized   mortgage   loans   insured  by  the   Federal   Housing
Administration or guaranteed by the Department of Veterans' Affairs,

     o unsecuritized conventional mortgages,

     o other mortgage-related securities, or

     o any combination of these.

     Each  class of CMO,  referred  to as a  "tranche,"  is issued at a specific
coupon rate and has a stated  maturity  or final  distribution  date.  Principal
prepayments  on the  underlying  mortgages  may cause the CMO to be retired much
earlier than the stated maturity or final  distribution  date. The principal and
interest on the underlying  mortgages may be allocated among the several classes
of a series of a CMO in  different  ways.  One or more  tranches may have coupon
rates that reset  periodically at a specified  increase over an index. These are
floating  rate  CMOs,  and  typically  have a cap on the  coupon  rate.  Inverse
floating rate CMOs have a coupon rate that moves in the reverse  direction to an
applicable  index.  The  coupon  rate on these  CMOs will  increase  as  general
interest  rates  decrease.  These are usually much more volatile than fixed rate
CMOs or floating rate CMOs.


     Forward Rolls.  Some of the Underlying  Funds can enter into "forward roll"
transactions  with  respect  to  mortgage-related  securities.  In this  type of
transaction, an Underlying Fund sells a mortgage-related security to a buyer and
simultaneously  agrees  to  repurchase  a  similar  security  (the  same type of
security,  and having the same  coupon  and  maturity)  at a later date at a set
price.  The securities that are repurchased  will have the same interest rate as
the securities that are sold, but typically will be  collateralized by different
pools of mortgages  (with  different  prepayment  histories) than the securities
that  have  been  sold.  Proceeds  from  the  sale are  invested  in  short-term
instruments,  such as repurchase agreements.  The income from those investments,
plus the fees from the forward roll transaction, are expected to generate income
to an Underlying  Fund in excess of the yield on the  securities  that have been
sold.


     An  Underlying  Fund will only enter into  "covered"  rolls.  To assure its
future payment of the purchase price,  the Underlying Funds will identify on its
books liquid assets in an amount equal to the payment obligation under the roll.

     These  transactions have risks.  During the period between the sale and the
repurchase,  Underlying  Funds  will not be  entitled  to receive  interest  and
principal  payments on the  securities  that have been sold. It is possible that
the market value of the securities an Underlying  Fund sells might decline below
the price at which the Underlying Funds are obligated to repurchase securities.


     "Stripped"  Mortgage Related  Securities.  Some of the Underlying Funds may
invest in stripped  mortgage-related  securities that are created by segregating
the cash flows from underlying  mortgage loans or mortgage  securities to create
two or more new  securities.  Each has a specified  percentage of the underlying
security's  principal  or  interest  payments.  These  are a form of  derivative
investment.


     Mortgage  securities may be partially  stripped so that each class receives
some interest and some principal.  However,  they may be completely stripped. In
that case all of the interest is distributed to holders of one type of security,
known as an  "interest-only"  security,  or "I/O," and all of the  principal  is
distributed to holders of another type of security,  known as a "principal-only"
security or "P/O." Strips can be created for pass through certificates or CMOs.

     The yields to maturity  of I/Os and P/Os are very  sensitive  to  principal
repayments  (including   prepayments)  on  the  underlying  mortgages.   If  the
underlying  mortgages   experience  greater  than  anticipated   prepayments  of
principal,  the Underlying Funds might not fully recoup its investment in an I/O
based on those assets. If underlying  mortgages experience less than anticipated
prepayments  of  principal,  the yield on the P/Os based on them  could  decline
substantially. The market for some of these securities may be limited, making it
difficult  for an  Underlying  Fund to dispose of its holdings at an  acceptable
price.


     Mortgage-Related  U.S.  Government  Securities.  These include interests in
pools of  residential  or commercial  mortgages,  in the form of  collateralized
mortgage obligations and other "pass-through" mortgage securities. CMOs that are
U.S.  government  securities  have  collateral to secure payment of interest and
principal.  They may be issued in different series with different interest rates
and  maturities.  The collateral is either in the form of mortgage  pass-through
certificates  issued  or  guaranteed  by a U.S.  agency  or  instrumentality  or
mortgage loans insured by a U.S. government agency. For specific  limitations on
the  Underlying  Funds'   investments  in   mortgage-related   U.S.   government
securities, refer to the Statement of Additional Information for each Underlying
Fund.


     The prices and yields of CMOs are determined, in part, by assumptions about
the cash flows from the rate of payments of the underlying mortgages. Changes in
interest rates may cause the rate of expected  prepayments of those mortgages to
change.  In general,  prepayments  increase when general interest rates fall and
decrease when interest rates rise.

     If  prepayments  of mortgages  underlying a CMO occur faster than  expected
when interest rates fall, the market value and yield of the CMO will be reduced.
Additionally, an Underlying Fund may have to reinvest the prepayment proceeds in
other  securities  paying  interest  at lower  rates,  which  could  reduce that
Underlying Funds' yield.

     When interest  rates rise rapidly,  if  prepayments  occur more slowly than
expected, a short- or medium-term CMO can in effect become a long-term security,
subject  to  greater  fluctuations  in  value.  These are the  prepayment  risks
described  above and can make the  prices of CMOs very  volatile  when  interest
rates change.  The prices of longer-term  debt securities tend to fluctuate more
than those of  shorter-term  debt  securities.  That  volatility will affect the
Underlying Funds' share prices.


     GNMA  (Ginnie  Mae)   Certificates.   The  Government   National   Mortgage
Association ("GNMA") is a wholly-owned  corporate  instrumentality of the United
States  within the U.S.  Department  of Housing  and Urban  Development.  GNMA's
principal programs involve its guarantees of privately-issued  securities backed
by pools of mortgages.  Ginnie Maes are debt securities representing an interest
in  one or a  pool  of  mortgages  that  are  insured  by  the  Federal  Housing
Administration or the Farmers Home  Administration or guaranteed by the Veterans
Administration.


     The Ginnie  Maes in which some of the  Underlying  Funds  invest are of the
"fully modified  pass-through" type. They provide that the registered holders of
the  Certificates  will receive timely monthly payments of the pro-rata share of
the scheduled  principal  payments on the underlying  mortgages,  whether or not
those amounts are collected by the issuers.  Amounts paid include, on a pro rata
basis,  any  prepayment  of principal  of such  mortgages  and interest  (net of
servicing and other charges) on the aggregate  unpaid  principal  balance of the
Ginnie Maes,  whether or not the interest on the  underlying  mortgages has been
collected by the issuers.

     The Ginnie Maes  purchased by the  Underlying  Funds are  guaranteed  as to
timely payment of principal and interest by GNMA. In giving that guaranty,  GNMA
expects that  payments  received by the issuers of Ginnie Maes on account of the
mortgages  backing the  Certificates  will be  sufficient  to make the  required
payments of principal of and  interest on those Ginnie Maes.  However,  if those
payments are insufficient,  the guaranty  agreements  between the issuers of the
Ginnie Maes and GNMA  require the issuers to make  advances  sufficient  for the
payments. If the issuers fail to make those payments, GNMA will do so.

     Under  federal  law,  the full  faith and  credit of the  United  States is
pledged to the payment of all amounts  that may be required to be paid under any
guaranty  issued by GNMA as to such mortgage  pools.  An opinion of an Assistant
Attorney General of the United States,  dated December 9, 1969, states that such
guaranties  "constitute  general  obligations of the United States backed by its
full faith and  credit."  GNMA is  empowered  to borrow  from the United  States
Treasury to the extent  necessary to make any payments of principal and interest
required under those guaranties.

     Ginnie  Maes  are  backed  by the  aggregate  indebtedness  secured  by the
underlying FHA-insured,  FMHA-insured or VA-guaranteed mortgages.  Except to the
extent of payments received by the issuers on account of such mortgages,  Ginnie
Maes do not  constitute a liability of those  issuers,  nor do they evidence any
recourse  against those  issuers.  Recourse is solely  against GNMA.  Holders of
Ginnie Maes (such as the Underlying  Funds) have no security interest in or lien
on the underlying mortgages.

     Monthly  payments of principal will be made, and additional  prepayments of
principal  may be made,  to the  Underlying  Funds with respect to the mortgages
underlying the Ginnie Maes held by the Underlying Funds. All of the mortgages in
the pools  relating  to the Ginnie Maes in the  Underlying  Funds are subject to
prepayment  without any  significant  premium or  penalty,  at the option of the
mortgagors.  While the mortgages on 1-to-4-family  dwellings  underlying certain
Ginnie Maes have a stated  maturity of up to thirty (30) years,  it has been the
experience  of the  mortgage  industry  that  the  average  life  of  comparable
mortgages,   as  a  result  of   prepayments,   refinancing  and  payments  from
foreclosures, is considerably less.


     Federal National Mortgage  Association  (Fannie Mae)  Certificates.  Fannie
Mae, a federally-chartered  and privately-owned  corporation,  issues Fannie Mae
Certificates which are backed by a pool of mortgage loans. Fannie Mae guarantees
to each  registered  holder of a Fannie Mae  Certificate  that the  holder  will
receive amounts  representing the holder's  proportionate  interest in scheduled
principal and interest payments, and any principal prepayments,  on the mortgage
loans in the pool represented by such Certificate,  less servicing and guarantee
fees, and the holder's  proportionate  interest in the full principal  amount of
any  foreclosed or other  liquidated  mortgage  loan. In each case the guarantee
applies whether or not those amounts are actually  received.  The obligations of
Fannie Mae under its guarantees are obligations solely of Fannie Mae and are not
backed by the full faith and credit of the United  States or any of its agencies
or instrumentalities other than Fannie Mae.

     Federal Home Loan  Mortgage  Corporation  (FHLMC)  Certificates.  FHLMC,  a
corporate  instrumentality  of the  United  States,  issues  FHLMC  Certificates
representing  interests in mortgage loans.  FHLMC  guarantees to each registered
holder of a FHLMC  Certificate  timely  payment of the  amounts  representing  a
holder's proportionate share of:


o        interest payments less servicing and guarantee fees,

o        principal prepayments, and

     o  the   ultimate   collection   of  amounts   representing   the  holder's
proportionate  interest in principal  payments on the mortgage loans in the pool
represented by the FHLMC  Certificate,  in each case whether or not such amounts
are actually received.

     The  obligations of FHLMC under its guarantees  are  obligations  solely of
FHLMC and are not backed by the full faith and credit of the United States.


     Commercial  (Privately-Issued)  Mortgage  Related  Securities.  Some of the
Underlying Funds can invest in commercial  mortgage-related securities issued by
private   entities.   Generally  these  are  multi-class  debt  or  pass-through
certificates  secured  by  mortgage  loans on  commercial  properties.  They are
subject  to the  credit  risk of the  issuer.  These  securities  typically  are
structured to provide  protection  to investors in senior  classes from possible
losses on the underlying  loans.  They do so by having  holders of  subordinated
classes take the first loss if there are defaults on the underlying  loans. They
may also be protected to some extent by guarantees,  reserve funds or additional
collateralization mechanisms.


     |X|  Asset-Backed  Securities.  Some of the Underlying  Funds may invest in
asset-backed  securities.  Asset-backed  securities are fractional  interests in
pools of assets,  typically  accounts  receivable  or consumer  loans.  They are
issued by trusts or special-purpose  corporations.  These securities are subject
to  prepayment  risks and the risk of  default  by the  issuer as well as by the
borrowers  of  the   underlying   loans  in  the  pool.   They  are  similar  to
mortgage-related securities, described above, and are backed by a pool of assets
that consist of obligations of individual borrowers. The income from the pool is
passed through to the holders of participation  interest in the pools. The pools
may  offer a credit  enhancement,  such as a bank  letter of  credit,  to try to
reduce the risks that the underlying debtors will not pay their obligations when
due.  However,  the enhancement,  if any, might not be for the full par value of
the  security.  If the  enhancement  is exhausted  and any required  payments of
interest or  repayments  of principal  are not made,  an  Underlying  Fund could
suffer losses on its investment or delays in receiving payment.

     The  value of an  asset-backed  security  is  affected  by  changes  in the
market's perception of the asset backing the security,  the  creditworthiness of
the  servicing  agent for the loan pool,  the  originator  of the loans,  or the
financial institution providing any credit enhancement,  and is also affected if
any  credit   enhancement  has  been  exhausted.   The  risks  of  investing  in
asset-backed  securities are ultimately  related to payment of consumer loans by
the  individual  borrowers.  As a  purchaser  of an  asset-backed  security,  an
Underlying  Fund would  generally have no recourse to the entity that originated
the  loans in the event of  default  by a  borrower.  The  underlying  loans are
subject  to  prepayments,  which  may  shorten  the  weighted  average  life  of
asset-backed securities and may lower their return, in the same manner as in the
case of mortgage-backed securities and CMOs.

     |X|  Money  Market  and  Other  Short-Term  Debt  Obligations.  Some of the
Underlying  Funds  can  invest  in  a  variety  of  high  quality  money  market
instruments  and other  short-term  debt  obligations,  under both normal market
conditions and for defensive purposes. Money market securities are high-quality,
short-term   debt   instruments   that  are  issued  by  the  U.S.   government,
corporations, banks or other entities. They may have fixed, variable or floating
interest  rates.  The  following  is a brief  description  of the types of money
market  securities  and short-term  debt  obligations  the Underlying  Funds can
invest in.


     Bank  Obligations.  Some of the  Underlying  Funds can buy time deposits,
certificates of deposit and bankers' acceptances. They must be:


     o  obligations  issued or  guaranteed  by a domestic  bank or foreign  bank
(including a foreign  branch of a domestic bank) having total assets of at least
U.S. $1 billion,

     o banker's  acceptances  (which may or may not be  supported  by letters of
credit) only if  guaranteed  by a U.S.  commercial  bank with total assets of at
least U.S. $1 billion.

     Some  of  the  Underlying   Funds  can  make  time   deposits.   These  are
non-negotiable  deposits in a bank for a specified  period of time.  They may be
subject to early withdrawal  penalties.  Time deposits that are subject to early
withdrawal  penalties  are subject to an  Underlying  Fund's  limits on illiquid
investments.  "Banks" include  commercial  banks,  savings banks and savings and
loan associations.


     Commercial  Paper.  Some of the  Underlying  Funds can invest in commercial
paper if it is rated within the top three rating  categories  of S&P and Moody's
or other rating organizations. If the paper is not rated, it may be purchased if
the  Underlying  Funds'  manager  determines  that  it is  comparable  to  rated
commercial  paper  in  the  top  three  rating  categories  of  national  rating
organizations.


     Some of the Underlying  Funds can buy  commercial  paper that is not in the
top three rating  categories  (including U.S.  dollar-denominated  securities of
foreign  branches of U.S.  banks) 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 an Underlying Fund.



Main Risks of Debt Securities

     In general,  debt  securities  are  subject to two  primary  types of risk:
credit  risk and  interest  rate  risk.  The  values of debt  securities  may be
affected  by changes in the  market's  perception  of the  likely  direction  of
interest rates and/or the creditworthiness of the entity issuing or guaranteeing
a  security.  Their  values  may  also be  affected  by  changes  in  government
regulations and tax policies.

     |X| Credit  Risk.  Credit risk relates to the ability of the issuer to meet
interest  or  principal  payments  or both  as  they  become  due.  In  general,
lower-grade,  higher-yield  bonds are subject to credit risk to a greater extent
than lower-yield, higher-quality bonds.

     Some  of  the  Underlying  Funds'  investments  are  investment-grade  debt
securities and 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  that are rated at least
"Baa" by Moody's  Investors  Service,  Inc.  ("Moody's"),  or at least  "BBB" by
Standard & Poor's Rating Service ("S&P") and Fitch, Inc.  ("Fitch"),  or
have comparable ratings by another nationally-recognized rating organization.

     While  securities  rated "Baa" by Moody's or "BBB" by S&P and Fitch 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&P,  and Fitch are
included in Appendix A to this Statement of Additional Information.

     Some of the Underlying Funds also buy non-investment-grade  debt securities
(commonly referred to as "junk bonds").  "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 S&P or Fitch or similar  ratings by other
nationally  recognized  rating  organizations.  If  they  are  unrated,  and are
determined by an Underlying  Fund's 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.

     |X| 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 prevailing  interest rates will tend to
reduce the market  value of  already-issued  debt  securities,  and a decline in
prevailing  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 an  Underlying
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 an Underlying  Fund's net asset values will be
affected by those fluctuations.

     |X| Special Risks of Lower-Grade Debt Securities.  Because lower-grade debt
securities  tend to offer higher  yields than  investment-grade  securities,  an
Underlying Fund might invest in lower-grade  securities if its manager is trying
to  achieve  higher  income.  For  specific  limitations  on  Underlying  Funds'
investments in lower-grade debt securities, refer to the Statement of Additional
Information for each Underlying Fund.

     "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 S&P or Fitch, or similar ratings by other rating  organizations.  If they
are  unrated,  and are  determined  by an  Underlying  Fund's  manager  to be of
comparable  quality to debt securities  rated below investment  grade,  they are
considered part of the Underlying  Fund's  portfolio of lower-grade  securities.
International  Bond and Global  Opportunities  can invest in securities rated as
low as "C" or "D" or which may be in  default at the time such  Underlying  Fund
buys them.  Some of the special credit risks of lower-grade  securities  include
the  following:  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.

     To the extent they can be converted into stock,  convertible securities may
be less subject to some of the risks of  volatility  than  non-convertible  high
yield bonds,  since stock may be more liquid and less  affected by some of these
risk factors.

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

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

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

Derivative Securities

     Many Underlying Funds can invest in a variety of derivative  investments to
seek income,  to seek income for liquidity needs or for hedging  purposes.  Some
derivative  investments the Underlying Funds can use are the hedging instruments
described below in this Statement of Additional Information. Segregated accounts
will be maintained for all derivative  transactions,  to the extent  required by
the Investment  Company Act. For specific  limitations on the Underlying  Funds'
investments in derivatives, refer to the Statement of Additional Information for
each Underlying Fund.

     Among the derivative investments some of the Underlying Funds can invest in
are  "index-linked"  or  "currency-linked"   notes.  Principal  and/or  interest
payments on index-linked notes depend on the performance of an underlying index.
Currency-indexed  securities are typically 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 some of the Underlying Funds 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 Underlying Funds' manager expected.

     |X| Using Derivatives for Hedging. Many Underlying Funds can use derivative
instruments  for  hedging,  even  if  they do not  use  them  in  seeking  their
objectives,  to attempt to protect  against  declines in the market value of the
Underlying Funds' portfolios, 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,  those Underlying Funds
could:

     o        sell futures contracts,
     o        buy puts on futures or on securities, or
     o write covered  calls on securities or futures.  Covered calls may also be
used to increase certain Underlying Funds' income.

     The  Underlying  Funds 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 the related  hedging  position.  An Underlying
Fund  might  also use that  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 an Underlying Fund could:

o        buy futures, or
o        buy calls on futures or on securities.

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

     |X|  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.

     An 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 Funds 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.

     An  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 an  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.

     An Underlying  Fund may 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 an Underlying
Fund does so the market might decline.  If an 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.

     |X|  Futures  Contracts.  Some of the  Underlying  Funds  can buy and  sell
futures  contracts  that  relate  to (1)  broadly-based  bond or other  security
indices (these are referred to as "financial futures");  (2) commodity contracts
(these are referred to as "commodity  futures");  (3) debt securities (these are
referred to as  "interest  rate  futures");  (4) foreign  currencies  (these are
referred to as "forward contracts"); (5) individual stock (these are referred to
as "single  stock  futures");  (6) bond indices  (these are referred to as "bond
index futures");  and (7) broadly-based  stock indices (these are referred to as
"stock  index  futures").  For specific  information  on the  permitted  type of
futures  contract for an Underlying  Fund,  refer to the Statement of Additional
Information for each Underlying Fund.

     A  broadly-based  stock index is used as the basis for trading  stock index
futures.  In some  cases,  these  futures may be based on stocks of issuers in a
particular  industry  or group of  industries.  A stock index  assigns  relative
values to the  securities  included  in the index  and its value  fluctuates  in
response to the  changes in value of the  underlying  securities.  A stock index
cannot be purchased or sold directly.  Bond index 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.  Similarly,  a single  stock future  obligates  the seller to
deliver  (and the  purchaser  to take) cash or a  specified  equity  security to
settle the futures transaction. Either party could also enter into an offsetting
contract to close out the position. Single stock futures trade on a very limited
number of exchanges, with contracts typically not fungible among the exchanges.

     Certain  Underlying Funds may invest a portion of their 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.
Those  Underlying  Funds may  purchase  and sell  commodity  futures  contracts,
options on futures  contracts and options and futures on commodity  indices with
respect  to these five main  commodity  groups  and the  individual  commodities
within each group, as well as other types of commodities.

     No payment is made or received  by an  Underlying  Fund on the  purchase or
sale of a future. Upon entering into a futures  transaction,  an 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 an 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 an  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, an Underlying Fund may elect
to close out its position by taking an opposite position,  at which time a final
determination  of variation  margin is made and any additional cash must be paid
by or released to the Underlying  Funds.  Any loss or gain on the future is then
realized by the  Underlying  Funds for tax purposes.  All futures  transactions,
except forward contracts,  are effected through a clearinghouse  associated with
the exchange on which the contracts are traded.

     |X| Options.  Some  Underlying  Funds can buy and sell certain kinds of put
options  ("puts") and call options  ("calls").  The Underlying Funds 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  in this  Statement  of  Additional
Information.


     Writing  (Selling)  Covered Call Options.  Some Underlying  Funds can write
(that is, sell) covered  calls.  If an 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 calls on futures and  indices,
the call may be covered by  identifying  liquid assets to enable the  Underlying
Fund  to  satisfy  its  obligations  if the  call  is  exercised.  For  specific
limitations on the Underlying Funds'  investments in covered calls, refer to the
Statement of Additional Information for each Underlying Fund.


     When an  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
may  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.  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 may 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  on it books an  equivalent  dollar  amount  of liquid  assets.  The
Underlying Fund will identify additional liquid assets on its books to cover the
call if the value of the identified assets drops below 100% of the current value
of the future.  Because of this asset coverage 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.


     Writing  Put  Options.  Some  Underlying  Funds  can  sell put  options  on
securities,  broadly-based securities indices, foreign currencies and futures. 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. For specific limitations on the Underlying Funds' investments
in put  options,  refer to the  Statement  of  Additional  Information  for each
Underlying Fund.


     If an  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 an 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.

     An Underlying Fund may decide to effect a closing  purchase  transaction to
realize a profit on an  outstanding  put option it has written or to prevent the
underlying  security from being put.  Effecting a closing  purchase  transaction
will  also  permit  the  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.


     Purchasing  Puts  and  Calls.   Some  Underlying  Funds  can  buy  puts  on
securities,  broadly-based  securities indices,  foreign currencies and futures,
whether or not they own the underlying investment.  Convertible securities funds
may buy only those puts that relate to stocks  including  stocks  underlying the
convertible  securities  that the Underlying  Fund owns. When an 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 an 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 may sell the put prior to
its expiration. That sale may or may not be at a profit.

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

     Some of the Underlying Fund can purchase calls on securities, broadly-based
securities  indices,  foreign currencies and futures.  They may do so to protect
against the possibility that an Underlying Fund's portfolio will not participate
in an anticipated rise in the securities market.  When an 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.  For specific  limitations  on the  Underlying  Fund's
investments in calls and puts, refer to the Statement of Additional  Information
for each Underlying Fund.

     An  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.

     When an Underlying  Fund purchases a put or call 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.

        Buying  and  Selling  Options  on  Foreign  Currencies.  Some of the
Underlying  Funds 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.  An  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 their  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 their 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 an 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
identified on its books) 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 and identifying  cash, U.S.  government  securities or other liquid,
high grade  debt  securities  in an amount  equal to the  exercise  price of the
option.

     |X| 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.  An  Underlying  Fund may use them to "lock in" the U.S.  dollar
price of a security  denominated in a foreign  currency that an 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.  An Underlying Fund
may also use "cross-hedging"  where an 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.

     An Underlying Fund may 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 an
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 an 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 could enter into a forward
contract for the purchase or sale of the amount of foreign currency  involved in
the underlying  transaction,  in a fixed amount of U.S.  dollars per unit of the
foreign  currency.  This is called a "transaction  hedge." The transaction hedge
will protect the  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.

     An  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 an
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 an
Underlying  Fund's portfolio  securities  denominated in that foreign  currency.
When an Underlying Fund believes that the U.S. dollar might suffer a substantial
decline against a foreign  currency,  it could enter into a forward  contract to
buy  that  foreign  currency  for a  fixed  dollar  amount.  Alternatively,  the
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."

     An  Underlying  Fund  will  cover  its short  positions  in these  cases by
identifying on its books assets having a value equal to the aggregate  amount of
the Underlying  Fund's  commitment under forward  contracts.  An 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, an Underlying
Fund may 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, an Underlying Fund may 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,  an Underlying Fund may 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 contract 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 Underlying  Fund's 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 an 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 an 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  an  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  Funds value their  assets daily in terms of U.S.
dollars, they do not intend to convert their holdings of foreign currencies into
U.S. dollars on a daily basis. The Underlying Funds may convert foreign currency
from time to time, and will incur costs in doing so. Foreign exchange dealers do
not charge a fee for  conversion,  but they do seek to realize a profit based on
the difference between the prices at which they buy and sell various currencies.
Thus, a dealer might offer to sell a foreign currency to the Underlying Funds at
one rate,  while  offering a lesser  rate of exchange  if the  Underlying  Funds
desire to resell that currency to the dealer.

     |X| Interest Rate Swap Transactions. Some of the Underlying Funds can enter
into interest rate swap agreements. In an interest rate swap, an 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.  An Underlying  Funds can enter
into swaps only on securities that it owns. The Underlying Fund will identify on
its books liquid assets (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.  For  specific
limitations  on  the  Underlying  Funds'   investments  in  interest  rate  swap
transactions,  refer  to  the  Statement  of  Additional  Information  for  each
Underlying Fund.

     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 an 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 Fund has not yet
received.  The Underlying  Funds' manager will monitor the  creditworthiness  of
counterparties  to the Underlying  Funds' interest rate swap  transactions on an
ongoing basis.

     Some  Underlying  Funds  can  enter  into swap  transactions  with  certain
counterparties pursuant to master netting agreements. A master netting agreement
provides  that  all  swaps  done  between  those   Underlying   Funds  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  may 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."

     |X| Total Return Swap Transactions.  Some of the Underlying Funds may enter
into total return  swaps.  For specific  limitations  on the  Underlying  Funds'
investments  in  total  return  swaps,  refer  to the  Statement  of  Additional
Information  for each  Underlying  Fund. A swap contract is  essentially  like a
portfolio  of forward  contracts,  under  which one party  agrees to exchange an
asset (for  example,  bushels of wheat) for another  asset  (cash) at  specified
dates in the future. A one-period swap contract  operates in a manner similar to
a forward or futures  contract because there is an agreement to swap a commodity
for cash at only one  forward  date.  The  Underlying  Funds may  engage in swap
transactions that have more than one period and therefore more than one exchange
of assets.

     The  Underlying  Funds may invest in total return swaps to gain exposure to
the overall commodity  markets.  In a total return commodity swap the Underlying
Funds will receive the price appreciation of a commodity index, a portion of the
index, or a single  commodity in exchange for paying an agreed-upon  fee. If the
commodity  swap is for one period,  the  Underlying  Funds will pay a fixed fee,
established  at the outset of the swap.  However,  if the term of the  commodity
swap is more than one period,  with interim swap payments,  the Underlying Funds
will pay an  adjustable  or floating  fee.  With a "floating"  rate,  the fee is
pegged to a base rate such as the LIBOR, and is adjusted each period. Therefore,
if interest rates  increase over the term of the swap  contract,  the Underlying
Funds may be required to pay a higher fee at each swap reset date.

     |X| Swaption  Transactions.  Some of the Underlying  Funds may enter into a
swaption transaction,  which is a contract that grants the holder, in return for
payment of the purchase price (the "premium") of the option,  the right, but not
the  obligation,  to enter into an interest  rate swap at a preset rate within a
specified  period of time,  with the writer of the  contract.  The writer of the
contract  receives the premium and bears the risk of unfavorable  changes in the
preset rate on the underlying  interest rate swap.  Unrealized  gains/losses  on
swaptions are reflected in investment  assets and investment  liabilities in the
Underlying Funds' statement of financial condition.

     |X| Credit Derivatives.  Some of the Underlying Funds may enter into credit
default swaps, both directly  ("unfunded swaps") and indirectly in the form of a
swap embedded within a structured note ("funded swaps"),  to protect against the
risk that a security will default.  Unfunded and funded credit default swaps may
be on a single security, or on a basket of securities. An Underlying Fund pays a
fee to enter into the swap and receives a fixed  payment  during the life of the
swap. An Underlying  Fund may take a short  position in the credit  default swap
(also known as "buying credit  protection"),  or may take a long position in the
credit default swap note (also known as "selling credit protection").

     An  Underlying  Fund would take a short  position in a credit  default swap
(the "unfunded swap") against a long portfolio  position to decrease exposure to
specific  high yield  issuers.  If the short  credit  default  swap is against a
corporate issue, the Underlying Fund must own that corporate issue.  However, if
the short credit default swap is against sovereign debt, the Underlying Fund may
own  either:  (i) the  reference  obligation,  (ii) any  sovereign  debt of that
foreign  country,  or (iii)  sovereign  debt of any  country  that  its  manager
determines is closely correlated as an inexact bona fide hedge.

     If an Underlying Fund takes a short position in the credit default swap, if
there is a credit event (including bankruptcy, failure to timely pay interest or
principal,  or a restructuring),  the Underlying Fund will deliver the defaulted
bonds  and the  swap  counterparty  will pay the par  amount  of the  bonds.  An
associated risk is adverse pricing when purchasing bonds to satisfy the delivery
obligation. If the swap is on a basket of securities, the notional amount of the
swap is reduced by the par amount of the defaulted  bond, and the fixed payments
are then made on the reduced notional amount.

     Taking a long  position in the credit  default swap note (i.e.,  purchasing
the "funded  swap") would increase the  Underlying  Fund's  exposure to specific
high yield corporate  issuers.  The goal would be to increase  liquidity in that
market  sector via the swap note and its  associated  increase  in the number of
trading  instruments,  the  number and type of market  participants,  and market
capitalization.

     If an  Underlying  Fund takes a long  position in the credit  default  swap
note, if there is a credit event the Underlying  Fund will pay the par amount of
the bonds and the swap  counterparty will deliver the bonds. If the swap is on a
basket of  securities,  the  notional  amount of the swap is  reduced by the par
amount  of the  defaulted  bond,  and the  fixed  payments  are then made on the
reduced notional amount.

     Other risks of credit  default  swaps include the cost of paying for credit
protection if there are no credit events,  pricing  transparency  when assessing
the cost of a credit default swap,  counterparty  risk, and the need to fund the
delivery  obligation  (either cash or the defaulted bonds,  depending on whether
the  Underlying  Fund is long or short the  swap,  respectively).  For  specific
limitations on the Underlying Fund's investments in credit derivatives, refer to
the Statement of Additional Information for each Underlying Fund.

     |X| "Structured"  Notes.  Some of the Underlying Funds can buy "structured"
notes, which are  specially-designed  derivative debt investments with principal
payments or interest  payments that are linked to the value of an index (such as
a currency or securities index) or commodity. The terms of the instrument may be
"structured" by the purchaser (the Underlying Fund) and the borrower issuing the
note.

     The principal and/or interest  payments depend on the performance of one or
more other  securities or indices,  and the values of these notes will therefore
fall or rise in response to the changes in the values of the underlying security
or index.  They are subject to both credit and interest rate risks and therefore
the Underlying Fund could receive more or less than it originally  invested when
the notes  mature,  or it might  receive less  interest  than the stated  coupon
payment if the underlying  investment or index does not perform as  anticipated.
Their values may be very  volatile and they may have a limited  trading  market,
making  it  difficult  for the  Underlying  Fund to sell  its  investment  at an
acceptable price.

     |X| Regulatory Aspects of Certain Derivative  Instruments.  The Commodities
Futures Trading  Commission  (the "CFTC") has eliminated  limitations on futures
trading by certain regulated entities including registered  investment companies
and consequently registered investment companies may engage in unlimited futures
transactions  and options  thereon  provided that the Underlying  Fund claims an
exclusion from  regulation as a commodity pool  operator.  The Underlying  Funds
have claimed such an exclusion  from  registration  as a commodity pool operator
under the Commodity  Exchange Act ("CEA").  The Underlying Funds may use futures
and options for hedging and non-hedging  purposes to the extent  consistent with
their investment  objective,  internal risk management guidelines adopted by the
Underlying Funds' investment advisor (as they may be amended from time to time),
and as otherwise set forth in the Underlying Funds' prospectus or this Statement
of Additional  Information.  Transactions in options by the Underlying Funds 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
Funds may write or hold may be  affected  by  options  written  or held by other
entities,  including other  investment  companies having the same advisor as the
Underlying  Funds (or an advisor that is an affiliate of the  Underlying  Funds'
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 SEC staff  interpretations  regarding  applicable  provisions  of the
Investment  Company Act, when an  Underlying  Fund  purchases a future,  it must
segregate cash or readily  marketable  short-term debt  instruments in an amount
equal to the purchase price of the future, less the margin deposit applicable to
it. The account must be a segregated  account or accounts held by the Underlying
Fund.

     |X| Tax Aspects of Certain Derivative Instruments. Certain foreign currency
exchange  contracts  in which the  Underlying  Funds may invest  are  treated as
"Section  1256  contracts"  under the Internal  Revenue Code of 1986, as amended
(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 Funds 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 Funds to exempt those transactions from this  marked-to-market
treatment.

     Certain  forward  contracts the  Underlying  Funds enter 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 Funds 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 Funds accrue interest or other receivables
or accrue expenses or other  liabilities  denominated in a foreign  currency and
the time the  Underlying  Funds  actually  collect such  receivables or pay 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  Funds'  investment  income  available for distribution to its
shareholders.


Other Investments and Investment Strategies

     In seeking their investment  objectives,  certain Underlying Funds may from
time to time use the types of investments  and investment  strategies  described
below.  The Underlying Funds are not required to use these  strategies,  and may
not use any or all of them.

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

     In a repurchase  transaction,  an 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 Underlying Fund's 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 an
Underlying Fund's limits on holding illiquid investments.  There is generally no
limit on the amount of the  Underlying  Funds' net assets that may be subject to
repurchase  agreements  having  maturities  of seven days or less for  defensive
purposes.  For specific  limitations  on the  Underlying  Funds'  investments in
securities  subject  to  repurchase  agreements,   refer  to  the  Statement  of
Additional Information for each Underlying Fund.

     Repurchase agreements,  considered "loans" under the Investment Company Act
are collateralized by the underlying security.  The Underlying Funds' 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  Funds may incur costs
in disposing of the collateral  and may experience  losses if there is any delay
in its ability to do so. The Underlying Funds' 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  ("SEC"),  the Underlying Funds, along with other affiliated entities
managed by their 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| Reverse  Repurchase  Agreements.  Some of the Underlying  Funds can use
reverse  repurchase  agreements on debt  obligations  they own.  Under a reverse
repurchase agreement, an Underlying Fund sells an underlying debt obligation and
simultaneously agrees to repurchase the same security at an agreed-upon price on
an  agreed-upon  date.  The  Underlying  Fund will  identify on its books liquid
assets in an amount sufficient to cover its obligations under reverse repurchase
agreements, including interest, until payment is made to the seller.

     These transactions involve the risk that the market value of the securities
sold by the Underlying Fund under a reverse  repurchase  agreement could decline
below the price at which the  Underlying  Fund is obligated to repurchase  them.
These  agreements are considered  borrowings by the Underlying  Fund and will be
subject to the asset coverage  requirement under the Underlying Fund's policy on
borrowing.

     |X|  "When-Issued"  and  "Delayed-Delivery"   Transactions.   Some  of  the
Underlying  Funds may  invest in  securities  on a  "when-issued"  basis and may
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.   For  specific   limitations  on  the  Underlying  Fund's
investments in "when-issued" and "delayed-delivery"  transactions,  refer to the
Statement of Additional Information for each Underlying Fund.

     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 an  Underlying  Fund.  During the period  between  purchase  and
settlement,  no  payment  is made by an  Underlying  Fund to the  issuer  and no
interest  accrues to the Underlying  Fund from the investment  until it receives
the security at settlement.  There is a risk of loss to the  Underlying  Fund if
the value of the security changes prior to the settlement date, and there is the
risk that the other party may not perform.

     Some of the  Underlying  Funds may engage in  when-issued  transactions  to
secure what the Manager  considers to be an advantageous  price and yield at the
time the  obligation  is entered  into.  When an  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 an Underlying Fund to
lose the  opportunity  to obtain the  security  at a price and yield its manager
considers to be advantageous.

     When  an  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  an  Underlying  Fund will  enter into  delayed-delivery  or
when-issued  purchase  transactions to acquire  securities,  it may dispose of a
commitment prior to settlement.  If an 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 an 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 its
net asset value. In a sale transaction,  it records the proceeds to be received.
An  Underlying  Fund will  identify on its books liquid assets at least equal in
value to the value of its purchase commitments until it pays for the investment.

     When-issued and delayed-delivery  transactions can be used by an 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,  an 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, an 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.

     |X| Loans of  Portfolio  Securities.  To raise cash for income or liquidity
purposes,  some of the Underlying  Funds can lend their portfolio  securities to
brokers,  dealers and other  types of  financial  institutions  approved by each
Underlying  Fund's Board of Trustees or Directors.  For specific  limitations on
the Underlying Funds' loans of portfolio  securities,  refer to the Statement of
Additional  Information for each Underlying  Fund. In addition,  these loans are
subject  to the  other  conditions  described  in the  Statement  of  Additional
Information of each Underlying Fund.

     There are some risks in connection with securities  lending.  An Underlying
Fund might  experience a delay in receiving  additional  collateral  to secure a
loan, or a delay in recovery of the loaned securities if the borrower  defaults.
An 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  or  securities  of the U.S.
government or its agencies or  instrumentalities,  or other cash  equivalents in
which an 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
Funds 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 may
also pay reasonable  finder's,  custodian and administrative  fees in connection
with these loans. The terms of the Underlying  Fund's loans must meet applicable
tests in order to receive  beneficial  treatment 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.

     Some of the  Underlying  Funds  may  lend  their  portfolio  securities  to
brokers,  dealers and other  financial  institutions  pursuant to the Securities
Lending  Agreement (the  "Securities  Lending  Agreement") with JP Morgan Chase,
subject  to the  restrictions  stated in the  prospectuses  of those  Underlying
Funds.  Under  the  Securities  Lending  Agreement  and  applicable   regulatory
requirements  (which are subject to change),  the loan collateral  must, on each
business day, be at least equal to the value of the loaned  securities  and must
consist of cash, bank letters of credit or securities of the U.S. Government (or
its agencies or  instrumentalities),  or other cash  equivalents  in which those
Underlying  Funds are  permitted  to invest.  To be  acceptable  as  collateral,
letters  of credit  must  obligate a bank to pay to JP Morgan  Chase,  as agent,
amounts  demanded  by an  Underlying  Fund if the demand  meets the terms of the
letter.  Such  terms of the  letter  of  credit  and the  issuing  bank  must be
satisfactory  to JP Morgan Chase and the Underlying  Funds.  The Underlying Fund
will receive,  pursuant to the Securities Lending  Agreement,  80% of all annual
net income  (i.e.,  net of  rebates to the  Borrower)  from  securities  lending
transactions.  JP  Morgan  Chase  has  agreed,  in  general,  to  guarantee  the
obligations of borrowers to return loaned  securities and to be responsible  for
expenses  relating  to  securities   lending.   The  Underlying  Funds  will  be
responsible,   however,  for  risks  associated  with  the  investment  of  cash
collateral, including the risk that the issuer of the security in which the cash
collateral has been invested  defaults.  The Securities Lending Agreement may be
terminated by either JP Morgan Chase or the Underlying Funds on 30 days' written
notice.  The terms of an Underlying Fund's loans must also meet applicable tests
in order to receive  favorable  treatment  under the  Internal  Revenue Code and
permit the Underlying Fund to reacquire loaned securities on five business days'
notice or in time to vote on any important  matter. An Underlying Fund will lend
its portfolio  securities in conformity with its Securities Lending  Guidelines,
as adopted by each Underlying Fund's Board.

     |X| Borrowing for Leverage. The Funds and many of the Underlying Funds have
the ability to borrow  from banks,  to invest the  borrowed  funds in  portfolio
securities.  This speculative technique is known as "leverage." Currently, under
the Investment  Company Act, absent  exemptive  relief, 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  all  liabilities  and
indebtedness other than borrowing, except that a fund may borrow up to 5% of its
total  assets for  temporary  purposes  from any  person.  Under the  Investment
Company Act, there is a rebuttable presumption that a loan is temporary if it is
repaid within 60 days and not extended or renewed. If the value of the Funds' or
the Underlying  Funds' assets fail to meet the 300% asset coverage  requirement,
the Funds or the Underlying  Funds will reduce their bank debt within three days
to meet the requirement.  To do so, the Funds or the Underlying Funds might have
to sell a portion of their investments at a disadvantageous time.

     The Funds or the  Underlying  Funds will pay interest on their  borrowings,
and that  interest  expense will raise the overall  expenses of the Funds or the
Underlying  Funds and reduce their  returns.  If they do borrow,  their expenses
will  be  greater  than  comparable  funds  that  do not  borrow  for  leverage.
Additionally,  the Funds or the  Underlying  Funds'  net asset  values per share
might fluctuate more than that of funds that do not borrow.

     |X| Illiquid and Restricted  Securities.  Under the policies and procedures
established by an Underlying  Fund's Boards of  Trustees/Directors,  the Manager
determines  the liquidity of certain of an  Underlying  Fund's  investments.  To
enable an  Underlying  Fund to sell its  holdings of a  restricted  security not
registered  under  applicable  securities  laws, 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 may also acquire restricted  securities through private
placements.  Those  securities  have  contractual  restrictions  on their public
resale.  Those  restrictions may make it more difficult to value them, and might
limit an Underlying  Fund's ability to dispose of the securities and might lower
the amount the Underlying Fund could realize upon the sale.

     The Underlying Funds have limitations that apply to purchases of restricted
securities,  as  stated in their  prospectuses.  Those  percentage  restrictions
generally 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,  as amended  (the  "Securities  Act"),  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,  an  Underlying
Fund's holdings of that security may be considered to be illiquid.

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

     |X| Temporary Defensive and Interim Investments.  When market,  economic or
political conditions are unstable, or the Funds or the Underlying Funds' manager
believes it is otherwise appropriate to reduce holdings in stocks, the Funds and
the  Underlying  Funds can invest in a variety of debt  securities for defensive
purposes.  The Funds and the Underlying Funds can also purchase these securities
for liquidity  purposes to meet cash needs due to the redemption of a Fund or an
Underlying  Fund,  or to hold while  waiting to reinvest  cash received from the
sale of  other  portfolio  securities.  For  specific  types  of  securities  an
Underlying  Fund  can  buy  when  assuming  a  temporary  defensive  or  interim
investment position,  refer to the Statement of Additional  Information for each
Underlying  Fund.  Examples of temporary  defensive and interim  investments the
Funds may use, and that some of the Underlying Funds may use, include:

     o   high-quality   (rated   in   the   top   two   rating   categories   of
nationally-recognized  rating  organizations  or deemed by the  Manager to be of
comparable quality), short-term money market instruments, including those issued
by the U.S. Treasury or other government agencies,

     o commercial paper (short-term,  unsecured, promissory notes of domestic or
foreign companies),

     o short-term debt obligations of corporate issuers,

     o certificates of deposit and bankers'  acceptances of domestic and foreign
banks and savings and loan associations, and

     o repurchase agreements.

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



Portfolio Turnover

     "Portfolio  turnover"  describes  the  rate  at  which  the  Funds  and the
Underlying Funds trade their portfolio securities.  For example, if the Funds or
Underlying  Funds sold all of their securities  during a one year period,  their
portfolio  turnover  rate  would be  100%.  The  Funds'  and  Underlying  Funds'
portfolio turnover rates will fluctuate from year to year. It is not anticipated
that the Funds will have a high portfolio turnover rate, however, the Underlying
Funds may have a portfolio turnover rate of more than 100% annually.

     Increased portfolio turnover may result in higher brokerage and transaction
costs for the Underlying Funds, which may reduce their overall performance. Most
of the Funds'  portfolio  transactions,  however,  should  involve trades in the
Underlying  Funds that do not entail brokerage  commissions.  The realization of
capital gains from selling  portfolio  securities may result in distributions of
taxable  long-term  capital gains to shareholders.  The Funds and the Underlying
Funds will normally  distribute  all of the capital gains they realize each year
to avoid excise taxes under the Internal Revenue Code.

     Investment  Restrictions The Funds and the Underlying Funds each have their
own "fundamental"  and  "non-fundamental"  investment  restrictions as described
below.  Certain of those  restrictions  apply only to the extent required by the
Investment  Company Act, the rules or  regulations  thereunder  or any exemption
therefrom. If the applicable provisions of the Investment Company Act, the rules
or  regulations  or  any  exemption  should  change,   those  restrictions  will
automatically  reflect  the new  requirements.  Therefore  the  effect  of those
fundamental policies may change without notice and without a shareholder vote.

     Unless the Prospectus or SAI states that a percentage  restriction  applies
on an  ongoing  basis,  it applies  only at the time a Fund makes an  investment
(except in the case of borrowing and  investments  in illiquid  securities).  In
that  case a Fund or  Underlying  Fund  need  not  sell  securities  to meet the
percentage limits, even if the value of that investment  increases in proportion
to the size of its assets.

     |X|  What  Are  "Fundamental  Policies?"  Fundamental  policies  are  those
policies of each Fund or Underlying Fund that can be changed only by the vote of
a "majority" of such 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.

     Each  Fund's  investment   objective  is  not  a  fundamental  policy.  The
investment   objectives  of  the   Underlying   Funds  may  be   fundamental  or
non-fundamental,  according  to  the  Prospectus  and  Statement  of  Additional
Information of each Underlying Fund. Other policies  described in the Prospectus
or this Statement of Additional Information,  of the Funds and/or the Underlying
Funds, are "fundamental"  only if they are identified as such. Each Fund's Board
of Trustees and each Underlying Fund's Board of Directors or Trustees can change
non-fundamental  policies without  shareholder  approval.  However,  significant
changes to the Funds'  investment  policies will be described in  supplements or
updates to the  Prospectus  or this  Statement  of  Additional  Information,  as
appropriate.  The Funds'  principal  investment  policies  are  described in the
Prospectus.

     Do the Funds Have Additional Fundamental Policies? The following investment
restrictions are fundamental policies of the Funds:

     o A Fund cannot buy securities or other instruments issued or guaranteed by
any one  issuer  if more  than 5% of its  total  assets  would  be  invested  in
securities or other instruments of that issuer or if it would then own more than
10% of that issuer's voting  securities.  This limitation applies to 75% of each
Funds' total assets. The limit does not apply to securities issued or guaranteed
by the U.S. government or any of its agencies or instrumentalities or securities
of other  investment  companies.  For  purposes  of this  restriction,  a Fund's
investments will be considered be its pro rata portion of each Underlying Fund's
portfolio securities.

     o A Fund cannot  invest 25% or more of its total assets in any one industry
or in a group of related  industries.  That  limit does not apply to  securities
issued   or   guaranteed   by  the  U.S.   government   or  its   agencies   and
instrumentalities or to securities issued by investment companies.

     o A Fund may not 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 Funds, as such statute, rules or regulations
may be amended or interpreted from time to time.

     o A Fund  cannot  make  loans,  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 statute,  rules or regulations
may be amended or interpreted from time to time.

     o A Fund cannot invest in real estate,  physical  commodities  or commodity
contracts,  except to the extent permitted under the Investment Company Act, the
rules or  regulations  thereunder or any exemption  therefrom,  as such statute,
rules or regulations may be amended or interpreted from time to time.

     o A Fund cannot issue  senior  securities,  except to the extent  permitted
under the  Investment  Company Act, the rules or  regulations  thereunder or any
exemption  therefrom,  as such statute,  rules or regulations  may be amended or
interpreted from time to time.

     o A Fund may not  underwrite  securities  issued by  others,  except to the
extent that such Fund may be considered an underwriter within the meaning of the
Securities Act of 1933, as amended,  when reselling  securities  held in its own
portfolio.

     Currently,  under the Investment  Company Act, and the  Oppenheimer  funds"
exemptive order, a fund may borrow only from banks and/or affiliated  investment
companies in an amount up to one-third of its total assets (including the amount
borrowed less all liabilities and  indebtedness  other than  borrowing),  except
that a fund may borrow up to 5% of its total assets for temporary  purposes from
any person. Under the Investment Company Act, there is a rebuttable  presumption
that a loan is  temporary  if it is repaid  within 60 days and not  extended  or
renewed.  Also,  presently under the Investment Company Act, a fund may lend its
portfolio  securities  in an amount not to exceed 33 1/3 percent of the value of
its total assets.  The Investment Company Act also requires each registered fund
to adopt a  fundamental  policy  regarding  investments  in real  estate  and/or
commodities. To the extent that a Fund or an Underlying Fund has restrictions on
or not permitted to invest in real estate, real estate related securities and/or
commodities,  that information is set out in the investment restrictions in this
section.  Presently,  under the Investment  Company Act a registered mutual fund
cannot make any  commitment as an  underwriter,  if  immediately  thereafter the
amount  of its  outstanding  underwriting  commitments,  plus  the  value of its
investments in securities of issuers (other than investment  companies) of which
it owns more than ten  percent of the  outstanding  voting  securities,  exceeds
twenty-five  percent  of the  value of the fund "s total  assets,  except to the
extent that a fund may be  considered an  underwriter  within the meaning of the
Securities Act when reselling securities held in its own portfolio.


     Do the Funds Have Any Restrictions That Are Not Fundamental?  Each Fund has
investment restrictions that are not fundamental policies, which means that they
can be changed  by vote of a  majority  the  Fund's  Board of  Trustees  without
shareholder approval.  The following investment restriction is a non-fundamental
policies of the Funds:

     o A Fund may not  invest  in  illiquid  securities,  except  to the  extent
permitted under the Investment Company Act, the rules or regulations  thereunder
or any exemption  therefrom  that is  applicable to the Funds,  as such statute,
rules or  regulations  may be amended  or  interpreted  from time to time.  This
restriction  shall not apply to  securities  that  mature  within  seven days or
securities  that the Board of Directors of the Fund has otherwise  determined to
be liquid pursuant to applicable law.

     Currently, under the Investment Company Act, a mutual fund cannot invest in
illiquid  securities  (i.e.,  securities  that cannot be readily  resold or that
cannot  otherwise be marketed,  redeemed or put to the issuer or a third party),
if at the time of acquisition  more than 15% of its net assets would be invested
in such  securities.  The  shares  of the  Underlying  Funds  are  not  illiquid
investments under the Funds' policies or the applicable  Investment  Company Act
rules and regulations.

     Do the Underlying Funds Have Fundamental  Policies?  Each of the Underlying
Funds has its own  fundamental  policies.  Those  policies  may differ  from the
fundamental  policies of the Funds or the other Underlying  Funds. The Funds and
the  Underlying  Funds each apply their own  policies  with respect to their own
portfolio  investments.  The following  investment  restrictions are fundamental
policies of the Underlying Funds:

                                             Capital Appreciation Fund

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

     o Capital Appreciation may not 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 Capital  Appreciation  Fund, as such
statute, rules or regulations may be amended or interpreted from time to time.

     o Capital  Appreciation  cannot make loans,  except to the extent permitted
under the  Investment  Company Act, the rules or  regulations  thereunder or any
exemption  there from that is applicable to Capital  Appreciation  Fund, as such
statute, rules or regulations may be amended or interpreted from time to time.

     o Capital Appreciation cannot invest 25% or more of its total assets in any
one industry.  That limit does not apply to  securities  issued or guaranteed by
the U.S. government or its agencies and  instrumentalities  or securities issued
by investment companies.

     o Capital  Appreciation cannot invest in real estate,  physical commodities
or commodity  contracts,  except to the extent  permitted  under the  Investment
Company Act, the rules or regulations thereunder or any exemption therefrom,  as
such statute,  rules or regulations  may be amended or interpreted  from time to
time.

     o Capital Appreciation 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 Capital  Appreciation  cannot  issue senior  securities,  except to the extent
permitted under the Investment Company Act, the rules or regulations  thereunder
or any exemption therefrom, as such statute, rules or regulations may be amended
or interpreted from time to time.

                                               Champion Income Fund

     o Champion  Income  cannot buy  securities  issued or guaranteed by any one
issuer if more than 5% of its total  assets would be invested in  securities  of
that  issuer  or if it  would  then own more  than 10% of that  issuer's  voting
securities.  That restriction  applies to 75% of Champion Income'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.

     o Champion  Income cannot invest 25% or more of its total assets in any one
industry.  That limit does not apply to  securities  issued or guaranteed by the
U.S.  government  or its  agencies  and  instrumentalities.  Under this  policy,
utilities are divided into  "industries"  according to the services they provide
(for example,  gas, gas transmission,  electric and telephone  utilities will be
considered to be in separate industries).

     o Champion  Income  cannot  borrow money in excess of 33-?% of the value of
its total assets.  Champion Income may only borrow from banks and/or  affiliated
investment  companies.  Champion  Income  cannot make any  investment  at a time
during which its  borrowings  exceed 5% of the value of its total  assets.  With
respect to this  fundamental  policy,  Champion  Income  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.

     o  Champion  Income  cannot  make  loans  except  (a)  through  lending  of
securities, (b) through the purchase of debt instruments or similar evidences of
indebtedness,  (c) through an inter-fund  lending program with other  affiliated
funds,  provided that no such loan may be made if, as a result, the aggregate of
such loans would exceed 33 ?% of the value of its total assets  (taken at market
value at the time of such loans), and (d) through repurchase agreements.

     o Champion  Income cannot invest in real estate.  However,  Champion Income
can purchase debt securities secured by real estate or interests in real estate,
or issued by companies,  including real estate investment trusts, that invest in
real estate or interests in real estate.

     o Champion  Income cannot  invest in  commodities  or commodity  contracts.
However,  Champion  Income  may  buy and  sell  any of the  hedging  instruments
permitted  by  its  other  investment  policies,  whether  or  not  the  hedging
instrument  is  considered  a commodity or  commodity  contract,  subject to the
restrictions and limitations on such investments  specified in Champion Income's
Prospectus and Statement of Additional Information.

     o  Champion  Income  cannot  underwrite  securities  of  other  issuers.  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 Champion  Income  cannot  issue  "senior  securities",  but this does not
prohibit certain  investment  activities for which assets of Champion Income 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.

                                                  Core Bond Fund

     o Core Bond cannot buy securities issued or guaranteed by any one issuer if
more than 5% of its total assets would be invested in  securities of that issuer
or if it would then own more than 10% of that issuer's voting  securities.  This
restriction applies to 75% of Core Bond'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.

     o Core Bond cannot concentrate its investments (that means it cannot invest
25% or more of its total assets) in any one industry.  Gas, water,  electric and
telephone utilities are considered to be separate industries for this purpose.

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

     o Core Bond cannot  invest in real estate or real  estate  mortgage  loans.
However,  Core  Bond can  purchase  and sell  securities  issued or  secured  by
companies that invest in or deal in real estate or interests in real estate.

     o Core Bond cannot underwrite securities.  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 Core  Bond  cannot  borrow  money in  excess of 33 ?% of the value of its
total assets. Core Bond may borrow only from banks and/or affiliated  investment
companies. With respect to this fundamental policy, Core Bond 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.

     o Core Bond cannot issue  "senior  securities,"  but this does not prohibit
certain  investment  activities  for which assets of Core Bond 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.

                                                  Dividend Growth

     o Dividend  Growth  cannot buy  securities  issued or guaranteed by any one
issuer if more than 5% of its total  assets would be invested in  securities  of
that  issuer  or if it  would  then own more  than 10% of that  issuer's  voting
securities.  That restriction  applies to 75% of Dividend Growth's total assets.
The limit does not apply to securities  issued by the U.S.  government or any of
its agencies or instrumentalities.

     o  Dividend  Growth may not 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 Dividend  Growth,  as such statute,
rules or regulations may be amended or interpreted from time to time.

     o Dividend Growth cannot make loans,  except to the extent  permitted under
the Investment Company Act, the rules or regulations thereunder or any exemption
there from that is applicable to t Dividend  Growth,  as such statute,  rules or
regulations may be amended or interpreted from time to time.

     o Dividend  Growth  cannot  concentrate  investments.  That means it cannot
invest 25% or more of its total assets in companies in any one industry.

     o  Dividend  Growth  cannot  invest in real  estate,  except to the  extent
permitted under the Investment Company Act, the rules or regulations  thereunder
or any exemption therefrom, as such statute, rules or regulations may be amended
or interpreted from time to time.

     o Dividend  Growth  cannot  invest in  physical  commodities  or  commodity
contracts,  except to the extent permitted under the Investment Company Act, the
rules or  regulations  thereunder or any exemption  therefrom,  as such statute,
rules or regulations may be amended or interpreted from time to time.

     o Dividend  Growth  cannot  underwrite  securities  of other  companies.  A
permitted  exception  is in case it is  deemed  to be an  underwriter  under the
Securities Act when reselling any securities held in its own portfolio.

     o Dividend  Growth  cannot  issue senior  securities,  except to the extent
permitted under the Investment Company Act, the rules or regulations  thereunder
or any exemption therefrom, as such statute, rules or regulations may be amended
or interpreted from time to time.

                                                    Global Fund

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

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

     o Global  Fund  cannot  invest  25% or more of its total  assets in any one
industry.  That limit does not apply to  securities  issued or guaranteed by the
U.S.  government or its agencies and  instrumentalities  or securities issued by
investment companies.

     o Global  Fund  cannot  invest  in real  estate,  physical  commodities  or
commodity contracts, except to the extent permitted under the Investment Company
Act, the rules and regulations  thereunder or any exemption  therefrom,  as such
statute, rules or regulations may be amended or interpreted from time to time.

     o Global 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  Global  Fund  cannot  issue  senior  securities,  except  to the  extent
permitted under the Investment Company Act, the rules and regulations thereunder
or any exemption therefrom, as such statute, rules or regulations may be amended
or interpreted from time to time.

                                                    Growth Fund

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

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

     o Growth Fund may not borrow money,  except as permitted by the  Investment
Company Act, the rules or regulations thereunder or any exemption therefrom that
is  applicable  to Growth Fund, as such  statute,  rules or  regulations  may be
amended or interpreted from time to time.

     o Growth  Fund  cannot  invest  25% or more of its total  assets in any one
industry.  That limit does not apply to  securities  issued or guaranteed by the
U.S.  government or its agencies and  instrumentalities  or securities issued by
investment companies.

     o Growth  Fund  cannot  invest  in real  estate,  physical  commodities  or
commodity contracts, except to the extent permitted under the Investment Company
Act, the rules or  regulations  thereunder or any exemption  therefrom,  as such
statute, rules or regulations may be amended or interpreted from time to time.

     o Growth 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  Growth  Fund  cannot  issue  senior  securities,  except  to the  extent
permitted under the Investment Company Act, the rules or regulations  thereunder
or any exemption therefrom, as such statute, rules or regulations may be amended
or interpreted from time to time.

                                             International Growth Fund

     o  International  Growth cannot buy securities  issued or guaranteed by any
one issuer if more than 5% of its total assets  would be invested in  securities
of that  issuer or if it would  then own more than 10% of that  issuer's  voting
securities.  That restriction applies to 75% of the International Growth's total
assets. The limit does not apply to securities issued by the U.S.  government or
any of its agencies or instrumentalities.

     o International Growth cannot lend money.  However, it can invest in all or
a portion of an issue of bonds,  debentures,  commercial  paper or other similar
corporate  obligations,  whether or not they are publicly distributed  (however,
the  purchase of  obligations  that are not publicly  distributed  is limited by
International  Growth's policy on holding  restricted and illiquid  securities).
International  Growth  may also lend its  portfolio  securities  subject  to any
restrictions  adopted by the Board of  Trustees,  and may enter into  repurchase
agreements.

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

     o  International  Growth  cannot invest in real estate or interests in real
estate. However, International Growth can purchase readily-marketable securities
of companies holding real estate or interests in real estate.

     o International  Growth cannot issue senior  securities.  This  restriction
does not prevent  International  Growth from  borrowing  money for investment or
emergency  purposes,  or  from  entering  into  margin,   collateral  or  escrow
arrangements permitted by its other investment policies.

     o International Growth 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 International Growth cannot invest in commodities or commodity contracts,
other than the  hedging  instruments  permitted  by any of its other  investment
policies.  It does not matter whether the hedging instrument is considered to be
a commodity or commodity contract.

     o  International  Growth  cannot  invest in  companies  for the  purpose of
acquiring control or management of them.

     o  International  Growth cannot  purchase  securities  on margin.  However,
International  Growth may make  margin  deposits in  connection  with any of the
hedging instruments permitted by any of its other investment policies.

     o International Growth cannot invest in or hold securities of any issuer if
officers  and  Trustees  or  Directors  of  International  Growth or the Manager
individually  beneficially  own more  than 1/2 of 1% of the  securities  of that
issuer and together own more than 5% of the securities of that issuer.

     o  International  Growth  cannot  mortgage  or  pledge  any of its  assets.
However,  this does not prohibit  the escrow  arrangements  contemplated  by the
writing of covered call options or other  collateral or margin  arrangements  in
connection  with any of the hedging  instruments  permitted  by any of its other
investment policies.

     o  International   Growth  cannot  invest  in  other  open-end   investment
companies.  It  cannot  invest  more  than 5% of its net  assets  in  closed-end
investment  companies,  including  small  business  development  companies.  Any
brokerage  commissions it pays in investing in closed-end  investment  companies
must not exceed normal commission rates.

                                              Limited-Term Government

     o Limited-Term Government cannot buy securities or other instruments issued
or  guaranteed  by any one issuer if more than 5% of its total  assets  would be
invested in securities or other  instruments  of that issuer or if it would then
own more than 10% of that issuer's voting securities. This limitation applies to
75% of  Limited-Term  Government'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.

     o Limited-Term  Government cannot invest 25% or more of its total assets in
any one industry.  That limit does not apply to securities  issued or guaranteed
by the U.S. government or its agencies and instrumentalities.

     o Limited-Term  Government  cannot deviate from any of its other investment
policies that are described as  fundamental  policies in the  Prospectus or this
Statement of Additional Information.

     o Limited-Term  Government  cannot make loans except (a) through lending of
securities, (b) through the purchase of debt instruments or similar evidences of
indebtedness,  (c) through an inter-fund  lending program with other  affiliated
funds, and (d) through repurchase agreements.

     o Limited-Term  Government  cannot borrow money in excess of 33 1/3% of the
value of its total assets.  Limited-Term  Government  may borrow only from banks
and/or affiliated investment companies. With respect to this fundamental policy,
Limited-Term  Government  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.

     o Limited-Term Government cannot purchase or sell real estate,  commodities
or  commodity  contracts.  However,  Limited-Term  Government  may  use  hedging
instruments  approved  by its Board of  Trustees  whether  or not those  hedging
instruments are considered commodities or commodity contracts.

     o  Limited-Term  Government  cannot  underwrite  securities.   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 Limited-Term  Government cannot issue "senior  securities," but this does
not prohibit  certain  investment  activities  for which assets of  Limited-Term
Government  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,  contracts  to  buy  or  sell  derivatives,  hedging  instruments,
options, or futures.

                                                 Main Street Fund

     o Main Street 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 Main  Street'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.

     o Main Street 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 Main Street cannot invest in  commodities.  However,  Main Street 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 Main Street  cannot invest in real estate or in interests in real estate.
However,  Main Street can purchase  securities of issuers holding real estate or
interests  in  real  estate  (including  securities  of real  estate  investment
trusts).

     o Main Street 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 Main Street cannot issue "senior  securities," but this does not prohibit
certain investment  activities for which assets of Main Street 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 Main Street  cannot  borrow  money in excess of 33 ?% of the value of its
total assets (including the amount  borrowed).  Main Street may borrow only from
banks and/or affiliated investment  companies.  With respect to this fundamental
policy,  Main Street 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 Main Street cannot make loans except (a) through  lending of  securities,
(b)  through  the  purchase  of  debt   instruments  or  similar   evidences  of
indebtedness,  (c) through an inter-fund  lending program with other  affiliated
funds, and (d) through repurchase agreements.

                                           Main Street Opportunity Fund

     o Main Street Opportunity cannot buy securities issued or guaranteed by any
one issuer if more than 5% of its total assets  would be invested in  securities
of that  issuer or if it would  then own more than 10% of that  issuer's  voting
securities.  This limitation applies to 75% of Main Street  Opportunity'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.

     o Main Street  Opportunity  cannot make loans except (a) through lending of
securities, (b) through the purchase of debt instruments or similar evidences of
indebtedness,  (c) through an inter-fund  lending program with other  affiliated
funds,  provided that no such loan may be made if, as a result, the aggregate of
such loans would exceed 33 ?% of the value of its total assets  (taken at market
value at the time of such loans), and (d) through repurchase agreements.

     o Main Street  Opportunity  cannot  borrow  money in excess of 33 ?% of the
value of its total assets.  Main Street  Opportunity  may borrow only from banks
and/or affiliated investment companies. With respect to this fundamental policy,
Main Street  Opportunity  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.

     o Main Street  Opportunity 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 Main Street Opportunity cannot invest in physical commodities or physical
commodity  contracts or buy  securities  for  speculative  short-term  purposes.
However, Main Street Opportunity can buy and sell any of the hedging instruments
permitted  by any of its  other  policies.  It can also  buy and  sell  options,
futures, securities or other instruments backed by physical commodities or whose
investment return is linked to changes in the price of physical commodities.

     o Main Street  Opportunity  cannot invest in real estate or in interests in
real estate. However, Main Street Opportunity can purchase securities of issuers
holding real estate or interests in real estate  (including  securities  of real
estate investment trusts).

     o Main Street Opportunity 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 Main Street Opportunity  cannot issue "senior  securities," but this does
not  prohibit  certain  investment  activities  for which  assets of Main Street
Opportunity  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.

                                               Main Street Small Cap

     o Main Street Small Cap cannot buy  securities  issued or guaranteed by any
one issuer if more than 5% of its total assets  would be invested in  securities
of that  issuer or if it would  then own more than 10% of that  issuer's  voting
securities.  That  restriction  applies to 75% of the Main  Street  Small Cap '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.

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

     o Main  Street  Small Cap cannot  borrow  money in excess of 33 1/3% of the
value of its total  assets.  Main  Street  Small Cap may borrow  only from banks
and/or affiliated investment companies. With respect to this fundamental policy,
Main Street  Small Cap can borrow only if it maintains a 300% ratio of assets to
borrowing at all times in the manner set forth in the Investment  Company Act of
1940.

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

     o Main Street  Small Cap cannot  invest in real estate or in  interests  in
real estate. However, Main Street Small Cap can purchase securities of companies
holding real estate or interests in real estate.

     o Main Street Small Cap cannot invest in physical  commodities  or physical
commodity  contracts or buy  securities  for  speculative  short-term  purposes.
However,  Main Street Small Cap can buy and sell any of the hedging  instruments
permitted  by any of its  other  policies.  It can also  buy and  sell  options,
futures, securities or other instruments backed by physical commodities or whose
investment return is linked to changes in the price of physical commodities.

     o Main Street Small Cap 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 Main Street Small Cap cannot issue "senior securities," but this does not
prohibit certain investment activities for which assets of Main Street Small Cap
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.

                                                    MidCap Fund

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

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

     o MidCap  Fund  cannot  invest  25% or more of its total  assets in any one
industry.  That limit does not apply to  securities  issued or guaranteed by the
U.S.  government or its agencies and  instrumentalities  or securities issued by
investment companies.

     o MidCap Fund cannot underwrite  securities issued by others, except to the
extent that a fund may be  considered an  underwriter  within the meaning of the
Securities Act of 1933, as amended,  when reselling  securities  held in its own
portfolio.

     o MidCap  Fund  cannot  invest  in real  estate,  physical  commodities  or
commodity contracts, except to the extent permitted under the Investment Company
Act, the rules or  regulations  thereunder or any exemption  therefrom,  as such
statute, rules or regulations may be amended or interpreted from time to time.

     o  MidCap  Fund  cannot  issue  senior  securities,  except  to the  extent
permitted under the Investment Company Act, the rules or regulations  thereunder
or any exemption therefrom, as such statute, rules or regulations may be amended
or interpreted from time to time.

                                                  Real Asset Fund

     o Real Asset will not purchase the securities, hybrid instruments and other
instruments  of any issuer if, as a result,  25% or more of Real  Asset's  total
assets would be invested in the securities of companies whose principal business
activities  are in the  same  industry.  This  restriction  does  not  apply  to
securities issued or guaranteed by the U.S. government or any of its agencies or
instrumentalities, or repurchase agreements secured by them.

     However,  Real  Asset  will  invest  25% or more  of its  total  assets  in
securities,  hybrid  instruments and other  instruments,  including  futures and
forward contracts,  related options and swaps,  linked to the energy and natural
resources,  agriculture,  livestock,  industrial  metals,  and  precious  metals
industries. The individual components of an index will be considered as separate
industries for this purpose.

     o Real Asset will not issue any senior  security.  However,  Real Asset may
enter into  commitments to purchase  securities in accordance  with Real Asset's
investment program,  including reverse repurchase  agreements,  delayed-delivery
and  when-issued  securities,  which may be  considered  the  issuance of senior
securities.  Additionally, Real Asset may engage in transactions that may result
in  the  issuance  of a  senior  security  to the  extent  permitted  under  the
Investment  Company  Act  and  applicable  regulations,  interpretations  of the
Investment  Company  Act or an  exemptive  order.  Real Asset may also engage in
short sales of securities to the extent permitted in its investment  program and
other  restrictions.  The  purchase  or  sale  of  hybrid  instruments,  futures
contracts and related options shall not be considered to involve the issuance of
senior  securities.  Moreover,  Real Asset may borrow money as authorized by the
Investment Company Act.

     o Real Asset will not purchase or sell physical commodities unless acquired
as a result of ownership of securities or other  instruments.  This  restriction
shall not prevent  Real Asset from  purchasing  or selling  hybrid  instruments,
options and futures contracts with respect to individual commodities or indices,
or from  investing  in  securities  or  other  instruments  backed  by  physical
commodities or indices.

     o Real Asset will not  purchase  or sell real estate  unless  acquired as a
result of direct ownership of securities or other instruments.  This restriction
shall not prevent Real Asset from  investing in securities or other  instruments
backed by real  estate or  securities  of  companies  engaged in the real estate
business,  including real estate  investment  trusts.  This restriction does not
preclude Real Asset from buying securities backed by mortgages on real estate or
securities of companies  engaged in such activities.  Real Asset can also invest
in real estate operating companies and shares of companies engaged in other real
estate related businesses.

     o Real  Asset  cannot  underwrite  securities  issued by other  persons.  A
permitted  exception  is in case it is  deemed  to be an  underwriter  under the
Securities Act of 1933 when reselling securities held in its own portfolio.

     o Real Asset  cannot make loans except (a) through  lending of  securities,
(b)  through  the  purchase  of  debt   instruments  or  similar   evidences  of
indebtedness,  (c) through an inter-fund  lending program with other  affiliated
funds,  provided that no such loan may be made if, as a result, the aggregate of
such loans would exceed 33 ?% of the value of its total assets  (taken at market
value  at the  time  of such  loans),  and (d)  through  repurchase  agreements.
Currently,  the Investment  Company Act permits (a) lending of  securities,  (b)
purchasing debt securities or similar evidences of indebtedness,  (c) repurchase
agreements and (d) interfund lending consistent with Real Asset Fund's exemptive
order; or

     o Real  Asset  cannot  borrow  money in excess of 33 ?% of the value of its
total assets. Real Asset may borrow only from banks and/or affiliated investment
companies.  With respect to this fundamental  policy, Real Asset 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.  Currently,  the Investment Company Act
permits  a  mutual  fund to  borrow  from  banks  and/or  affiliated  investment
companies up to one-third of its total assets  (including the amount  borrowed).
Real Asset may borrow up to 5% of its total assets for  temporary  purposes from
any person.  Interfund  borrowing must be consistent with Real Asset's exemptive
order.

                                                 Real Estate Fund

     o Real Estate Fund cannot buy  securities  issued or  guaranteed by any one
issuer if more than 5% of its total  assets would be invested in  securities  of
that  issuer  or if it  would  then own more  than 10% of that  issuer's  voting
securities.  That  restriction  applies to 75% of the Real Estate  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.

     o Real Estate Fund cannot make loans except as permitted by the  Investment
Company Act, the rules or regulations thereunder or any exemption therefrom that
is applicable to the Real Estate Fund, as such statue,  rules or regulations may
be amended or interpreted from time to time.

     o Real Estate  Fund may not 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 Real Estate Fund, as such statute,
rules or regulations may be amended or interpreted from time to time.

     o Real Estate Fund cannot  concentrate its investments to the extent of 25%
of its total assets in any industry.  However, there is no limitation as to Real
Estate Fund's investments in the real estate industry in general.

     o Real Estate Fund cannot  underwrite  securities of other companies except
as permitted by the Investment Company Act. 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 Real Estate Fund cannot invest in real estate,  physical  commodities  or
commodity contracts, except to the extent permitted under the Investment Company
Act, the rules or  regulations  thereunder or any exemption  therefrom,  as such
statute, rules or regulations may be amended or interpreted from time to time.

     o Real Estate Fund cannot issue senior  securities,  except as permitted by
the Investment Company Act, the rules or regulations thereunder or any exemption
therefrom,  as such statute,  rules or regulations may be amended or interpreted
from time to time.

                                           Small- & Mid- Cap Value Fund

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

     o Small- & Mid- Cap Value cannot  invest 25% or more of its total assets in
any one industry.  That limit does not apply to securities  issued or guaranteed
by the U.S.  government  or its agencies  and  instrumentalities  or  securities
issued by investment companies.

     o Small- & Mid- Cap Value may not borrow money,  except as permitted by the
Investment  Company Act, the rules or  regulations  thereunder  or any exemption
therefrom that is applicable to Small- & Mid- Cap Value, as such statute,  rules
or regulations may be amended or interpreted from time to time.

     o  Small-  &  Mid-  Cap  Value  cannot  invest  in  real  estate,  physical
commodities or commodity  contracts,  except to the extent  permitted  under the
Investment  Company Act, the rules or  regulations  thereunder  or any exemption
therefrom,  as such statute,  rules or regulations may be amended or interpreted
from time to time.

     o Small- & Mid- Cap Value may not underwrite  securities  issued by others,
except that a fund may be  considered an  underwriter  within the meaning of the
Securities Act of 1933, as amended,  when reselling  securities  held in its own
portfolio.

     o Small- & Mid- Cap Value  cannot issue  senior  securities,  except to the
extent  permitted  under the  Investment  Company Act, the rules or  regulations
thereunder or any exemption therefrom, as such statute, rules or regulations may
be amended or interpreted from time to time.

     o Small- & Mid-Cap Value cannot make loans,  except to the extent permitted
under the  Investment  Company Act, the rules or  regulations  thereunder or any
exemption  therefrom  that is  applicable  to  Small- & Mid-Cap  Value,  as such
statute, rules or regulations may be amended or interpreted from time to time.

                                             Quest International Value

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

     o Quest  International  Value  cannot  make  loans,  except  to the  extent
permitted under the Investment Company Act, the rules or regulations  thereunder
or any exemption therefrom that is applicable to Quest  International  Value, as
such statute,  rules or regulations  may be amended or interpreted  from time to
time.

     o Quest  International  Value cannot invest 25% or more of its total assets
in any one  industry.  That  limit  does  not  apply  to  securities  issued  or
guaranteed  by the U.S.  government  or its  agencies and  instrumentalities  or
securities issued by investment companies.

     o Quest International Value may not underwrite securities issued by others,
except  to the  extent  that  Quest  International  Value may be  considered  an
underwriter  within the meaning of the Securities Act of 1933, as amended,  when
reselling securities held in its own portfolio.

     o  Quest  International  Value  cannot  invest  in  real  estate,  physical
commodities or commodity  contracts,  except to the extent  permitted  under the
Investment  Company Act, the rules or  regulations  thereunder  or any exemption
therefrom,  as such statute,  rules or regulations may be amended or interpreted
from time to time.

     o Quest  International  Value may not  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 Quest  International  Value, as
such statute,  rules or regulations  may be amended or interpreted  from time to
time.

     o Quest International  Value cannot issue senior securities,  except to the
extent  permitted  under the  Investment  Company Act, the rules or  regulations
thereunder or any exemption therefrom, as such statute, rules or regulations may
be amended or interpreted from time to time.

                                               U.S. Government Trust

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

     o U.S.  Government cannot invest 25% or more of its total assets in any one
industry.  That limit does not apply to  securities  issued or guaranteed by the
U.S.  government or its agencies and  instrumentalities  or securities issued by
investment companies.

     o U.S.  Government  cannot invest in real estate,  physical  commodities or
commodity contracts, except to the extent permitted under the Investment Company
Act, the rules or  regulations  thereunder or any exemption  therefrom,  as such
statute, rules or regulations may be amended or interpreted from time to time.

     o U.S.  Government  cannot  issue senior  securities,  except to the extent
permitted under the Investment Company Act, the rules or regulations  thereunder
or any exemption therefrom, as such statute, rules or regulations may be amended
or interpreted from time to time.

     o U.S. Government may not underwrite securities issued by others, except to
the extent that a fund may be  considered an  underwriter  within the meaning of
the Securities Act of 1933, as amended,  when reselling  securities  held in its
own portfolio.

     o U.S.  Government cannot make loans,  except to the extent permitted under
the Investment Company Act, the rules or regulations thereunder or any exemption
therefrom  that is applicable  to U.S.  Government,  as such  statute,  rules or
regulations may be amended or interpreted from time to time.

     o U.S.  Government  may not 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 U.S.  Government,  as such statute,
rules or regulations may be amended or interpreted from time to time.

                                                    Value Fund

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

     o Value  Fund  cannot  invest  25% or more of its  total  assets in any one
industry.  That limit does not apply to  securities  issued or guaranteed by the
U.S.  government or its agencies and  instrumentalities  or securities issued by
investment companies.

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

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

     o  Value  Fund  cannot  invest  in real  estate,  physical  commodities  or
commodity contracts, except to the extent permitted under the Investment Company
Act, the rules or  regulations  thereunder or any exemption  therefrom,  as such
statute, rules or regulations may be amended or interpreted from time to time.

     o Value Fund cannot issue senior securities, except to the extent permitted
under the  Investment  Company Act, the rules or  regulations  thereunder or any
exemption  therefrom,  as such statute,  rules or regulations  may be amended or
interpreted from time to time.

     o Value Fund cannot  underwrite  securities of other  issuers.  A permitted
exception is in case it is deemed to be an underwriter  under the Securities Act
of 1933 in reselling its portfolio securities.

     Do the Underlying  Funds Have Any  Restrictions  That Are Not  Fundamental?
Each of the Underlying  Funds has its own investment  restrictions  that are not
fundamental policies, which means that they can be changed by vote of a majority
of each  respective  Underlying  Fund's  Board of Trustees  without  shareholder
approval.  Those policies may differ from the policies of the Funds or the other
Underlying  Funds.  The Funds and the  Underlying  Funds  each  apply  their own
policies  with  respect  to  their  own  portfolio  investments.  The  following
investment restrictions are non-fundamental  policies of the Underlying Funds as
indicated below.

     o None of the  Underlying  Funds  can  invest  in the  securities  of other
registered 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
and U.S.  Government  Trust cannot invest in any securities of other  investment
companies  except  if it  acquires  them as part of a merger,  consolidation  or
acquisition of assets. Global Fund cannot invest in securities of other open-end
investment  companies,  except  in  connection  with  a  merger,  consolidation,
reorganization  or  acquisition  of  assets,  or invest  more than 5% of its net
assets in closed-end investment  companies,  including small business investment
companies,  and the commission rates on such investments may not be in excess of
normal brokerage commissions.

     o  For  purposes  of  each  applicable  Underlying  Fund's  policy  not  to
concentrate its assets,  as described  above and in each  applicable  Underlying
Fund's prospectus and/or Statement of Additional  Information,  those Underlying
Funds  have  adopted  the  non-fundamental  industry  classifications  listed in
Appendix B.

     o U.S. Government and Small- & Mid- Cap Value cannot invest in interests in
oil, gas, or other mineral exploration or development programs.

     o U.S.  Government  and  Small- & Mid- Cap Value  will  provide at least 60
days' prior  notice of any change in their  non-fundamental  policies to invest,
under normal  circumstances,  at least 80% of net assets (plus the amount of any
borrowings used for investment  purposes) in U.S.  government  securities and in
equity   securities  of  small-  and  mid-cap   domestic  and  foreign  issuers,
respectively.

     o MidCap Fund cannot purchase  securities on margin or pledge,  mortgage or
hypothecate any of its assets.  However,  it can make margin deposits and escrow
arrangements in connection with any of the hedging instruments  permitted by any
of its other investment policies. MidCap Fund cannot invest in companies for the
purpose  of  acquiring  control  or  management  of  them or  invest  in or hold
securities of any issuer if officers and Trustees or directors of MidCap Fund or
the Manager individually or beneficially own more than1/2of 1% of the securities
of that issuer and together own more than 5% of the securities of that issuer.

     o  Global  Fund  cannot  sell  securities  short  except  in  "short  sales
against-the-box."

     o Small- & Mid- Cap Value cannot make short sales or purchase securities on
margin.  However,  Small- & Mid- Cap Value can make  short-term  borrowings when
necessary for the clearance of purchases of portfolio securities.

              Disclosure of Portfolio Holdings

     Each Fund and each  Underlying  Fund have adopted  policies and  procedures
concerning the  dissemination of information  about their portfolio  holdings by
employees,  officers and/or directors of the Manager,  Distributor, and Transfer
Agent.  These policies are designed to ensure that non-public  information about
portfolio  securities is distributed only for a legitimate business purpose, and
is done in a manner that (a) conforms to applicable laws and regulations and (b)
is  designed  to prevent  that  information  from being used in a way that could
negatively  affect a Funds' or Underlying  Funds'  investment  program or enable
third parties to use that  information  in a manner that is harmful to the Funds
or Underlying Funds.

     o  Public  Disclosure.  The  Funds'  and the  Underlying  Funds'  portfolio
holdings  are made  publicly  available no later than 60 days after the close of
each of the Funds' or  Underlying  Funds'  fiscal  quarters in  semi-annual  and
annual reports to shareholders, or in its Statements of Investments on Form N-Q,
which  are  publicly  available  at the  SEC.  In  addition,  the top 10 or more
holdings are posted on the OppenheimerFunds' website at www.oppenheimerfunds.com
in the "Fund Profiles"  section.  Other general  information about the Funds' or
Underlying Funds' portfolio investments,  such as portfolio composition by asset
class,  industry,  country,  currency,  credit  rating or maturity,  may also be
posted with a 15-day lag.

     Until  publicly  disclosed,  the  Funds'  or  Underlying  Funds'  portfolio
holdings are proprietary,  confidential business information.  While recognizing
the importance of providing portfolio  information to a variety of third parties
to assist with the management, distribution and administrative process, the need
for  transparency  must be balanced against the risk that third parties who gain
access to the Funds' or Underlying Funds' portfolio  holdings  information could
attempt  to use that  information  to trade  ahead of or  against  the  Funds or
Underlying  Funds,  which  could  negatively  affect  the  prices  the  Funds or
Underlying   Funds  are  able  to  obtain  in  portfolio   transactions  or  the
availability  of the  securities  that the  portfolio  manager is trading on the
Funds' or Underlying Funds' behalf.

     The Manager and its subsidiaries and affiliates,  employees,  officers, and
directors,   shall  neither  solicit  nor  accept  any   compensation  or  other
consideration  (including  any  agreement to maintain  assets in the Funds or in
other investment  companies or accounts managed by the Manager or any affiliated
person of the  Manager)  in  connection  with the  disclosure  of the  Funds' or
Underlying  Funds'  non-public  portfolio  holdings.  The receipt of  investment
advisory  fees or  other  fees  and  compensation  paid to the  Manager  and its
subsidiaries pursuant to agreements approved by each Fund's or Underlying Funds'
Board  shall not be deemed to be  "compensation"  or  "consideration"  for these
purposes.  It is a  violation  of the Code of Ethics for any  covered  person to
release holdings in contravention of portfolio holdings  disclosure policies and
procedures adopted by the Funds or Underlying Funds.

     A list  of the top 10 or  more  portfolio  securities  holdings  (based  on
invested  assets),  listed by security or by issuer, as of the end of each month
may be disclosed to third parties  (subject to the  procedures  below) no sooner
than 15 days after month-end.

     Except under special limited circumstances discussed below, month-end lists
of the Funds' or Underlying Funds' complete  portfolio holdings may be disclosed
no sooner than 30-days after the relevant  month-end,  subject to the procedures
below. If the Funds' or Underlying Funds' complete  portfolio  holdings have not
been disclosed publicly,  they may be disclosed pursuant to special requests for
legitimate business reasons, provided that:

     o The  third-party  recipient  must first submit a request for release of a
Fund's or Underlying  Funds'  holdings,  explaining the business  reason for the
request;

     o Senior  officers  (a Senior  Vice  President  or above) in the  Manager's
Portfolio and Legal  departments must approve the completed  request for release
of a Fund's or Underlying Funds' holdings; and

     o The  third-party  recipient  must sign the Manager's  portfolio  holdings
non-disclosure agreement before receiving the data, agreeing to keep information
that is not  publicly  available  regarding  the  Funds'  or  Underlying  Funds'
holdings  confidential and agreeing not to trade directly or indirectly based on
the information.

     The Funds' or Underlying Funds' complete  portfolio  holdings positions may
be released to the following categories of entities or individuals on an ongoing
basis,  provided  that  such  entity  or  individual  either  (1) has  signed an
agreement to keep such  information  confidential  and not trade on the basis of
such information or (2) is subject to fiduciary obligations, as a member of each
Fund's or Underlying Fund's Board, or as an employee, officer and/or director of
the Manager,  Distributor, or Transfer Agent, or their respective legal counsel,
not to disclose such  information  except in conformity  with these policies and
procedures  and not to trade for his/her  personal  account on the basis of such
information:

     o Employees of each Fund's or Underlying  Fund's  Manager,  Distributor and
Transfer  Agent who need to have access to such  information  (as  determined by
senior officers of such entity),

     o Each  Fund's  or  Underlying  Fund's  certified  public  accountants  and
independent registered public accounting firm,

     o Members of each Fund's or  Underlying  Fund's Board and the Board's legal
counsel,

     o The Funds' or an Underlying Fund's custodian bank,

     o A proxy voting  service  designated by a Fund or Underlying  Fund and its
Board,

     o Rating/ranking organizations (such as Lipper and Morningstar),

     o Fund  pricing  services  retained  by the  Manager to  provide  portfolio
security prices, and

     o Dealers,  to obtain bids (price quotations,  if securities are not priced
by a Fund's or Underlying Fund's regular pricing services).

     Portfolio  holdings  information  of the Funds or  Underlying  Funds may be
provided,  under limited circumstances,  to brokers and/or dealers with whom the
Funds or Underlying Funds trade and/or entities that provide investment coverage
and/or analytical  information  regarding the Funds'  portfolios,  provided that
there is a legitimate  investment  reason for providing the  information  to the
broker,  dealer or other entity.  Month-end portfolio holdings  information may,
under this  procedure,  be provided to vendors  providing  research  information
and/or analytics to the Funds or Underlying  Funds, with at least a 15-day delay
after  the month  end,  but in  certain  cases  may be  provided  to a broker or
analytical  vendor with a 1- 2 day lag to facilitate  the provision of requested
investment  information  to the Manager to facilitate a particular  trade or the
portfolio  manager's  investment  process for the Funds or Underlying Funds. Any
third party receiving such information  must first sign the Manager's  portfolio
holdings   non-disclosure   agreement  as  a  pre-condition  to  receiving  this
information.

     Portfolio holdings information (which may include information on individual
securities  positions  or multiple  securities)  may be provided to the entities
listed below (1) by portfolio traders employed by the Manager in connection with
portfolio  trading,  and (2) by the members of the Manager's  Security Valuation
Group and Accounting  Departments in connection with portfolio  pricing or other
portfolio evaluation purposes:

     o Brokers and dealers in connection with portfolio transactions  (purchases
and sales),

     o Brokers and dealers to obtain bids or bid and asked prices (if securities
held by the Funds or  Underlying  Funds are not priced by a Fund's or Underlying
Fund's regular pricing services),

     o Dealers to obtain price  quotations  where the Funds or Underlying  Funds
are not identified as the owner.

     Portfolio holdings  information (which may include  information on a Funds'
or Underlying Funds' entire portfolio or individual  securities  therein) may be
provided by senior officers of the Manager or attorneys on the legal
staff of the Manager, Distributor, or Transfer Agent, in the following circumstances:

     o Response to legal  process in  litigation  matters,  such as responses to
subpoenas or in class action matters where the Funds or Underlying  Funds may be
part of the plaintiff  class (and seeks  recovery for losses on a security) or a
defendant,

     o Response to regulatory  requests for  information  (the SEC, NASD,  state
securities regulators, and/or foreign securities authorities,  including without
limitation  requests for  information in  inspections or for position  reporting
purposes),

     o To potential  sub-advisors  of  portfolios  (pursuant to  confidentiality
agreements),

     o To consultants for retirement plans for plan  sponsors/discussions at due
diligence meetings (pursuant to confidentiality agreements),

     o Investment  bankers in connection  with merger  discussions  (pursuant to
confidentiality agreements).

     Portfolio  managers and analysts may, subject to the Manager's  policies on
communications with the press and other media, discuss portfolio  information in
interviews  with members of the media,  or in due diligence or similar  meetings
with clients or prospective purchasers of the Funds' or Underlying Funds' shares
or their financial intermediary representatives.

     The  Funds'  or  Underlying   Funds'   shareholders   may,   under  unusual
circumstances  (such as a lack of liquidity in the Funds' or  Underlying  Funds'
portfolio to meet  redemptions),  receive  redemption  proceeds of their Fund or
Underlying  Fund  shares  paid as pro  rata  shares  of  securities  held in the
applicable  Fund's  or  Underlying  Fund's  portfolio.  In  such  circumstances,
disclosure of the Funds' or Underlying Funds' portfolio  holdings may be made to
such shareholders.

     The Chief  Compliance  Officer  (the  "CCO") of the Funds,  the  Underlying
Funds,  the  Manager,  the  Distributor,  and the Transfer  Agent shall  oversee
compliance by the Manager, Distributor, Transfer Agent, and their personnel with
these policies and procedures.  At least annually,  the CCO shall report to each
Fund's and  Underlying  Fund's  Board on such  compliance  oversight  and on the
categories of entities and individuals to which disclosure of portfolio holdings
of the Funds or  Underlying  Funds  has been  made  during  the  preceding  year
pursuant to these  policies.  The CCO shall report to each Fund's and Underlying
Fund's Board any material  violation of these policies and procedures during the
previous calendar quarter and shall make  recommendations to the Board as to any
amendments  that the CCO believes are  necessary  and  desirable to carry out or
improve these policies and procedures.

     The Manager  and/or the Funds and the  Underlying  Funds have  entered into
ongoing  arrangements to make available  information  about the Funds' portfolio
holdings.  One or more of the Oppenheimer funds may currently disclose portfolio
holdings information based on ongoing arrangements to the following parties:

A.G. Edwards & Sons                      Fortis Securities                      Nomura Securities
ABG Securities                           Fox-Pitt, Kelton                       Pacific Crest
ABN AMRO                                 Friedman, Billing, Ramsey              Pacific Crest Securities
Advest                                   Fulcrum Global Partners                Pacific Growth Equities
AG Edwards                               Garp Research                          Petrie Parkman
American Technology Research             George K Baum & Co.                    Pictet
Auerbach Grayson                         Goldman                                Piper Jaffray Inc.
Banc of America Securities               Goldman Sachs                          Plexus
Barclays                                 HSBC                                   Prager Sealy & Co.
Baseline                                 HSBC Securities Inc                    Prudential Securities
Bear Stearns                             ING Barings                            Ramirez & Co.
Belle Haven                              ISI Group                              Raymond James
Bloomberg                                Janney Montgomery                      RBC Capital Markets
BNP Paribas                              Jefferies                              RBC Dain Rauscher
BS Financial Services                    Jeffries & Co.                         Research Direct
Buckingham Research Group                JP Morgan                              Robert W. Baird
Caris & Co.                              JP Morgan Securities                   Roosevelt & Cross
CIBC World Markets                       JPP Eurosecurities                     Russell Mellon
Citigroup                                Keefe, Bruyette & Woods                Ryan Beck & Co.
Citigroup Global Markets                 Keijser Securities                     Sanford C. Bernstein
Collins Stewart                          Kempen & Co. USA Inc.                  Scotia Capital Markets
Craig-Hallum Capital Group LLC           Kepler Equities/Julius Baer Sec        SG Cowen & Co.
Credit Agricole Cheuvreux N.A. Inc.      KeyBanc Capital Markets                SG Cowen Securities
Credit Suisse First Boston               Leerink Swan                           Soleil Securities Group
Daiwa Securities                         Legg Mason                             Standard & Poors
Davy                                     Lehman                                 Stone & Youngberg
Deutsche Bank                            Lehman Brothers                        SWS Group
Deutsche Bank Securities                 Lipper                                 Taylor Rafferty
Dresdner Kleinwort Wasserstein           Loop Capital Markets                   Think Equity Partners
Emmet & Co                               MainFirst Bank AG                      Thomas Weisel Partners
Empirical Research                       Makinson Cowell US Ltd                 UBS
Enskilda Securities                      Maxcor Financial                       Wachovia
Essex Capital Markets                    Merrill                                Wachovia Corp
Exane BNP Paribas                        Merrill Lynch                          Wachovia Securities
Factset                                  Midwest Research                       Wescott Financial
Fidelity Capital Markets                 Mizuho Securities                      William Blair
Fimat USA Inc.                           Morgan Stanley                         Yieldbook
First Albany                             Morningstar
First Albany Corporation                 Natexis Bleichroeder
Fixed Income Securities                  Ned Davis Research Group

         How the Funds Are Managed


     Organization and History.  The Funds are open-end,  diversified  management
investment companies with an unlimited number of authorized shares of beneficial
interest.  The Funds were organized as Massachusetts  business trusts on June 5,
2006.

     |X| Classes of Shares.  The Trustees are  authorized,  without  shareholder
approval,  to create  new series and  classes of shares to  reclassify  unissued
shares into additional  series or classes and to 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 Funds. Shares do not
have cumulative voting rights,  preemptive rights or subscription rights. Shares
may be voted in person or by proxy at shareholder meetings.

     Each Fund currently has five classes of shares:  Class A, Class B, Class C,
Class N and Class Y. All classes invest in the same investment  portfolio.  Only
retirement  plans  may  purchase  Class N  shares.  Only  certain  institutional
investors may purchase Class Y shares. Each class of shares:

o        has its own dividends and distributions,
o        pays certain expenses which may be different for the different classes,
o        will generally have a different net asset value,
o        will generally 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 a Fund  represents  an
interest in the Fund  proportionately  equal to the interest of each other share
of the same class.

     |X| Meetings of Shareholders.  As a Massachusetts business trust, each Fund
is not required to hold, and does not plan to hold,  regular annual  meetings of
shareholders,  but may hold shareholder  meetings from time to time on important
matters  or  when  required  to do so by the  Investment  Company  Act or  other
applicable  law.  Shareholders  have the right,  upon a vote or  declaration  in
writing  of  two-thirds  of the  outstanding  shares of the  Funds,  to remove a
Trustee or to take other action described in the Funds' Declaration of Trust.

     The Trustees will call a meeting of  shareholders to vote on the removal of
a  Trustee  upon  the  written  request  of  the  record  holders  of 10% of its
outstanding  shares.  If the  Trustees  receive  a  request  from  at  least  10
shareholders  stating that they wish to communicate  with other  shareholders to
request a meeting to remove a Trustee,  the  Trustees  will then either make the
applicable  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 such Fund's  outstanding  shares.  The Trustees may
also take other action as permitted by the Investment Company Act.

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

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

     Board of  Trustees  and  Oversight  Committees.  Each 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 Funds'  activities,  review its performance,  and review
the actions of the Manager.

     The Board of Trustees  has an Audit  Committee,  a  Regulatory  & Oversight
Committee, a Governance Committee and a Proxy Committee.  Each of the committees
is comprised solely of Independent Trustees.

     The members of the Audit Committee are Joel W. Motley  (Chairman),  Mary F.
Miller,  Kenneth A. Randall and Joseph M. Wikler. The Audit Committee  furnishes
the Board with recommendations regarding the selection of the Fund's independent
registered  public  accounting  firm  (also  referred  to  as  the  "independent
Auditors").  Other main functions of the Audit  Committee  outlined in the Audit
Committee Charter,  include, but are not limited to: (i) reviewing the scope and
results of financial statement audits and the audit fees charged; (ii) reviewing
reports  from the Fund's  independent  Auditors  regarding  the Fund's  internal
accounting  procedures and controls;  (iii) reviewing reports from the Manager's
Internal Audit  Department;  (iv)  maintaining a separate line of  communication
between  the Fund's  independent  Auditors  and the  Independent  Trustees;  (v)
reviewing  the  independence  of  the  Fund's  independent  Auditors;  and  (vi)
pre-approving  the  provision of any audit or  non-audit  services by the Fund's
independent  Auditors,  including tax services,  that are not  prohibited by the
Sarbanes-Oxley  Act, to the Fund,  the Manager  and  certain  affiliates  of the
Manager.

     The members of the  Regulatory  & Oversight  Committee  are Robert G. Galli
(Chairman),  Matthew P. Fink, Phillip A. Griffiths,  Joel W. Motley and Brian F.
Wruble. The Regulatory & Oversight  Committee evaluates and reports to the Board
on the Fund's contractual  arrangements,  including the Investment  Advisory and
Distribution Agreements,  transfer agency and shareholder service agreements and
custodian  agreements as well as the policies and procedures adopted by the Fund
to comply with the Investment  Company Act and other applicable law, among other
duties as set forth in the Regulatory & Oversight Committee's Charter.

     The  members  of  the   Governance   Committee  are  Phillip  A.  Griffiths
(Chairman),  Kenneth A. Randall, Russell S. Reynolds, Jr. and Peter I. Wold. The
Governance Committee reviews the Fund's governance  guidelines,  the adequacy of
the Fund's  Codes of  Ethics,  and  develops  qualification  criteria  for Board
members consistent with the Fund's governance guidelines, among other duties set
forth in the Governance Committee's Charter.

     The  Governance  Committee's  functions  also  include  the  selection  and
nomination  of  Trustees,  including  Independent  Trustees  for  election.  The
Governance  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  Governance  Committee has been able to identify from its own
resources  an ample  number  of  qualified  candidates.  Nonetheless,  under the
current policy of the Board, if the Board determines that a vacancy exists or is
likely to exist on the Board, the Governance  Committee will consider candidates
for Board membership including those recommended by the Fund's shareholders. The
Governance  Committee will consider  nominees  recommended by Independent  Board
members or  recommended  by any other  Board  members  including  Board  members
affiliated  with the Fund's  Manager.  The Governance  Committee may, upon Board
approval,  retain an  executive  search  firm to assist in  screening  potential
candidates.  Upon Board  approval,  the  Governance  Committee  may also use the
services of legal,  financial, or other external counsel that it deems necessary
or desirable in the screening process.  Shareholders wishing to submit a nominee
for election to the Board may do so by mailing  their  submission to the offices
of OppenheimerFunds,  Inc., Two World Financial Center, 225 Liberty Street, 11th
Floor, New York, New York 10281-1008,  to the attention of the Board of Trustees
of the applicable Fund, c/o the Secretary of the Fund.

     Submissions should, at a minimum, be accompanied by the following:  (1) the
name, address, and business,  educational,  and/or other pertinent background of
the person being recommended;  (2) a statement  concerning whether the person is
an "interested  person" as defined in the Investment  Company Act; (3) any other
information  that the Fund would be  required  to  include in a proxy  statement
concerning the person if he or she was  nominated;  and (4) the name and address
of  the  person  submitting  the  recommendation   and,  if  that  person  is  a
shareholder,  the period for which that  person held Fund  shares.  Shareholders
should note that a person who owns  securities  issued by  Massachusetts  Mutual
Life  Insurance  Company (the parent  company of the Manager) would be deemed an
"interested person" under the Investment Company Act. In addition, certain other
relationships   with   Massachusetts   Mutual  Life  Insurance  Company  or  its
subsidiaries,  with registered broker-dealers,  or with the Funds' outside legal
counsel may cause a person to be deemed an "interested person."

     The Governance Committee has not established  specific  qualifications that
it believes must be met by a trustee nominee.  In evaluating  trustee  nominees,
the  Governance  Committee  considers,   among  other  things,  an  individual's
background,  skills,  and  experience;  whether the individual is an "interested
person" as defined in the  Investment  Company Act;  and whether the  individual
would be deemed an "audit  committee  financial  expert"  within the  meaning of
applicable  SEC rules.  The  Governance  Committee  also  considers  whether the
individual's background,  skills, and experience will complement the background,
skills, and experience of other Trustees and will contribute to the Board. There
are no  differences in the manner in which the  Governance  Committee  evaluates
nominees  for  trustees  based  on  whether  the  nominee  is  recommended  by a
shareholder. Candidates are expected to provide a mix of attributes, experience,
perspective  and skills  necessary  to  effectively  advance  the  interests  of
shareholders.

     The members of the Proxy Committee are Russell S. Reynolds, Jr. (Chairman),
Matthew P. Fink and Mary F. Miller.  The Proxy Committee provides the Board with
recommendations  for the proxy voting of portfolio  securities held by the Funds
and monitors proxy voting by the Funds.

     Trustees  and  Officers of the Funds.  Except for Mr.  Murphy,  each of the
Trustees is an  Independent  Trustee.  All of the Trustees are also directors or
trustees of the following Oppenheimer funds (referred to as "Board I Funds"):


Oppenheimer AMT-Free Municipals                             Oppenheimer Limited Term California Municipal Fund
Oppenheimer AMT-Free New York Municipals                    Oppenheimer Money Market Fund, Inc.
Oppenheimer Balanced Fund                                   Oppenheimer Multi-State Municipal Trust
Oppenheimer California Municipal Fund                       Oppenheimer Portfolio Series
Oppenheimer Capital Appreciation Fund                       Oppenheimer Real Estate Fund
Oppenheimer Developing Markets Fund                         Oppenheimer Rochester Arizona Municipal Fund
Oppenheimer Discovery Fund                                  Oppenheimer Rochester Maryland Municipal Fund
Oppenheimer Dividend Growth Fund                            Oppenheimer Rochester Massachusetts Municipal Fund
Oppenheimer Emerging Growth Fund                            Oppenheimer Rochester Michigan Municipal Fund
Oppenheimer Emerging Technologies Fund                      Oppenheimer Rochester Minnesota Municipal Fund
Oppenheimer Enterprise Fund                                 Oppenheimer Rochester North Carolina Municipal Fund
Oppenheimer Global Fund                                     Oppenheimer Rochester Ohio Municipal Fund
Oppenheimer Global Opportunities Fund                       Oppenheimer Rochester Virginia Municipal Fund
Oppenheimer Gold & Special Minerals Fund                    Oppenheimer Select Value Fund
Oppenheimer Growth Fund                                     Oppenheimer Series Fund, Inc.
Oppenheimer Institutional Money Market Fund                 OFI Tremont Core Strategies Hedge Fund
Oppenheimer International Diversified Fund                  OFI Tremont Market Neutral Hedge Fund
Oppenheimer International Growth Fund                       Oppenheimer Tremont Market Neutral Fund LLC
Oppenheimer International Small Company Fund                Oppenheimer Tremont Opportunity Fund LLC
Oppenheimer International Value Fund                        Oppenheimer U.S. Government Trust


     In addition to being a Board  member of each of the Board I Funds,  Messrs.
Galli and  Wruble are  directors  or  trustees  of ten other  portfolios  in the
OppenheimerFunds complex.

     Present or former  officers,  directors,  trustees and employees (and their
immediate  family  members) of the Funds,  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 charge on Class A shares is waived
for that group because of the reduced sales efforts realized by the Distributor.

     Messrs. Wolfgruber,  Schadt, Webman, Gillespie, Murphy, Petersen, Szilagyi,
Vandehey,  Wixted and Zack and Mss.  Bloomberg  and Ives who are officers of the
Funds,  hold the same offices with one or more of the other Board I Funds. As of
the  date of  this  Statement  of  Additional  Information,  the  Funds  had not
commenced operations and therefore none of the Trustees or officers owned shares
of any of the Funds. In addition,  none of the Independent  Trustees (nor any of
their  immediate  family  members) owns  securities of either the Manager or the
Distributor  of the  Board I  Funds  or of any  entity  directly  or  indirectly
controlling,  controlled  by or under  common  control  with the  Manager or the
Distributor.

     Biographical  Information.  The Trustees and officers, their positions with
the Fund,  length of service in such  position(s) and principal  occupations and
business  affiliations  during at least the past  five  years are  listed in the
charts  below.  The  charts  also  include   information  about  each  Trustee's
beneficial  share ownership in the Fund and in all of the registered  investment
companies  that  the  Trustee  oversees  in  the  Oppenheimer  family  of  funds
("Supervised Funds"). The address of each independent Trustee in the chart below
is 6803 S. Tucson Way, Centennial,  Colorado 80112-3924. Each Trustee serves for
an  indefinite  term,  or until  his or her  resignation,  retirement,  death or
removal.

--------------------------------------------------------------------------------------------------------------------------------
                                                     Independent Trustees
--------------------------------------------------------------------------------------------------------------------------------
----------------------------- ---------------------------------------------------------------------- ---------------------------
Name, Position(s) Held with   Principal Occupation(s) During the Past 5 Years; Other                 Aggregate Dollar Range Of
the Fund, Length of           Trusteeships/Directorships Held; Number of Portfolios in the Fund      Shares Beneficially Owned
Service, Age                  Complex Currently Overseen                                                in Supervised Funds
----------------------------- ---------------------------------------------------------------------- ---------------------------
----------------------------- ---------------------------------------------------------------------- ---------------------------
                                                                                                       As of December 31, 2005
----------------------------- ---------------------------------------------------------------------- ---------------------------
----------------------------- ---------------------------------------------------------------------- ---------------------------
Clayton K. Yeutter,           Director of American Commercial Lines (barge company) (since January   Over $100,000
Chairman of the Board of      2005); Attorney at Hogan & Hartson (law firm) (since June 1993);
Trustees and                  Director of Covanta Holding Corp. (waste-to-energy company) (since
Trustee since 2006            2002); Director of Weyerhaeuser Corp. (1999-April 2004); Director of
Age: 75                       Caterpillar, Inc. (1993-December 2002); Director of ConAgra Foods
                              (1993-2001); Director of Texas Instruments (1993-2001); Director of
                              FMC Corporation (1993-2001). Oversees 45 portfolios in the
                              OppenheimerFunds complex.
----------------------------- ---------------------------------------------------------------------- ---------------------------
----------------------------- ---------------------------------------------------------------------- ---------------------------
Matthew P. Fink,              Trustee of the Committee for Economic Development (policy research     Over $100,000
Trustee since 2006            foundation) (since 2005); Director of ICI Education Foundation
Age: 65                       (education foundation) (since October 1991); President of the
                              Investment Company Institute (trade association) (October 1991-June
                              2004); Director of ICI Mutual Insurance Company (insurance company)
                              (October 1991-June 2004). Oversees 45 portfolios in the
                              OppenheimerFunds complex.
----------------------------- ---------------------------------------------------------------------- ---------------------------
----------------------------- ---------------------------------------------------------------------- ---------------------------
Robert G. Galli,              A director or trustee of other Oppenheimer funds. Oversees 55          Over $100,000
Trustee since 2006            portfolios in the OppenheimerFunds complex.
Age: 72
----------------------------- ---------------------------------------------------------------------- ---------------------------
----------------------------- ---------------------------------------------------------------------- ---------------------------
Phillip A. Griffiths,         Distinguished Presidential Fellow for International Affairs (since     Over $100,000
Trustee since 2006            2002) and Member (since 1979) of the National Academy of Sciences;
Age: 67                       Council on Foreign Relations (since 2002); Director of GSI Lumonics
                              Inc. (precision medical equipment supplier) (since 2001); Senior
                              Advisor of The Andrew W. Mellon Foundation (since 2001); Chair of
                              Science Initiative Group (since 1999); Member of the American
                              Philosophical Society (since 1996); Trustee of Woodward Academy
                              (since 1983); Foreign Associate of Third World Academy of Sciences;
                              Director of the Institute for Advanced Study (1991-2004); Director
                              of Bankers Trust New York Corporation (1994-1999); Provost at Duke
                              University (1983-1991). Oversees 45 portfolios in the
                              OppenheimerFunds complex.
----------------------------- ---------------------------------------------------------------------- ---------------------------
----------------------------- ---------------------------------------------------------------------- ---------------------------
Mary F. Miller,               Trustee of the American Symphony Orchestra (not-for-profit) (since     Over $100,000
Trustee since 2006            October 1998); and Senior Vice President and General Auditor of
Age: 63                       American Express Company (financial services company) (July
                              1998-February 2003). Oversees 45 portfolios in the OppenheimerFunds
                              complex.
----------------------------- ---------------------------------------------------------------------- ---------------------------
----------------------------- ---------------------------------------------------------------------- ---------------------------
Joel W. Motley,               Director of Columbia Equity Financial Corp. (privately-held            Over $100,000
Trustee since 2006            financial adviser) (since 2002); Managing Director of Carmona
Age: 53                       Motley, Inc. (privately-held financial adviser) (since January
                              2002); Managing Director of Carmona Motley Hoffman Inc.
                              (privately-held financial adviser) (January 1998-December 2001);
                              Member of the Finance and Budget Committee of the Council on Foreign
                              Relations, the Investment Committee of the Episcopal Church of
                              America, the Investment Committee and Board of Human Rights Watch
                              and the Investment Committee of Historic Hudson Valley. Oversees 45
                              portfolios in the OppenheimerFunds complex.
----------------------------- ---------------------------------------------------------------------- ---------------------------
----------------------------- ---------------------------------------------------------------------- ---------------------------
Kenneth A. Randall,           Director of Dominion Resources, Inc. (electric utility holding         Over $100,000
Trustee since 2006            company) (February 1972-October 2005); Former Director of Prime
Age: 78                       Retail, Inc. (real estate investment trust), Dominion Energy Inc.
                              (electric power and oil & gas producer), Lumberman's Mutual Casualty
                              Company, American Motorists Insurance Company and American
                              Manufacturers Mutual Insurance Company; Former President and Chief
                              Executive Officer of The Conference Board, Inc. (international
                              economic and business research). Oversees 45 portfolios in the
                              OppenheimerFunds complex.
----------------------------- ---------------------------------------------------------------------- ---------------------------
----------------------------- ---------------------------------------------------------------------- ---------------------------
Russell S. Reynolds, Jr.,     Chairman of The Directorship Search Group, Inc. (corporate             $10,001-$50,000
Trustee since 2006            governance consulting and executive recruiting) (since 1993); Life
Age: 74                       Trustee of International House (non-profit educational
                              organization); Founder, Chairman and Chief Executive Officer of
                              Russell Reynolds Associates, Inc. (1969-1993); Banker at J.P. Morgan
                              & Co. (1958-1966); 1st Lt. Strategic Air Command, U.S. Air Force
                              (1954-1958). Oversees 45 portfolios in the OppenheimerFunds complex.
----------------------------- ---------------------------------------------------------------------- ---------------------------
----------------------------- ---------------------------------------------------------------------- ---------------------------
Joseph M. Wikler,             Director of the following medical device companies: Medintec (since    Over $100,000
Trustee since 2006            1992) and Cathco (since 1996); Director of Lakes Environmental
Age: 65                       Association (since 1996); Member of the Investment Committee of the
                              Associated Jewish Charities of Baltimore (since 1994); Director of
                              Fortis/Hartford mutual funds (1994-December 2001). Oversees 45
                              portfolios in the OppenheimerFunds complex.
----------------------------- ---------------------------------------------------------------------- ---------------------------
----------------------------- ---------------------------------------------------------------------- ---------------------------
Peter I. Wold,                President of Wold Oil Properties, Inc. (oil and gas exploration and    Over $100,000
Trustee since 2006            production company) (since 1994); Vice President, Secretary and
Age:  58                      Treasurer of Wold Trona Company, Inc. (soda ash processing and
                              production) (since 1996); Vice President of Wold Talc Company, Inc.
                              (talc mining) (since 1999); Managing Member of Hole-in-the-Wall
                              Ranch (cattle ranching) (since 1979); Director and Chairman of the
                              Denver Branch of the Federal Reserve Bank of Kansas City
                              (1993-1999); and Director of PacifiCorp. (electric utility)
                              (1995-1999). Oversees 45 portfolios in the OppenheimerFunds complex.
----------------------------- ---------------------------------------------------------------------- ---------------------------
----------------------------- ---------------------------------------------------------------------- ---------------------------
Brian F. Wruble,              General Partner of Odyssey Partners, L.P. (hedge fund) (since          Over $100,000
Trustee since 2006            September 1995); Director of Special Value Opportunities Fund, LLC
Age: 63                       (registered investment company) (since September 2004); Member of
                              Zurich Financial Investment Advisory Board (insurance) (since
                              October 2004); Board of Governing Trustees of The Jackson Laboratory
                              (non-profit) (since August 1990); Trustee of the Institute for
                              Advanced Study (non-profit educational institute) (since May 1992);
                              Special Limited Partner of Odyssey Investment Partners, LLC (private
                              equity investment) (January 1999-September 2004); Trustee of
                              Research Foundation of AIMR (2000-2002) (investment research,
                              non-profit); Governor, Jerome Levy Economics Institute of Bard
                              College (August 1990-September 2001) (economics research); Director
                              of Ray & Berendtson, Inc. (May 2000-April 2002) (executive search
                              firm). Oversees 55 portfolios in the OppenheimerFunds complex.
----------------------------- ---------------------------------------------------------------------- ---------------------------

     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.  The address of Mr. Murphy is Two
World  Financial  Center,  225 Liberty  Street,  11th Floor,  New York, New York
10281-1008.  Mr.  Murphy serves as a Trustee and as an officer for an indefinite
term, or until his resignation, retirement, death or removal.

--------------------------------------------------------------------------------------------------------------------------------
                                                Interested Trustee and Officer
--------------------------------------------------------------------------------------------------------------------------------
----------------------------- ---------------------------------------------------------------------- ---------------------------
Name, Position(s) Held with   Principal Occupation(s) During the Past 5 Years; Other                 Aggregate Dollar Range Of
the Funds, Length of          Trusteeships/Directorships Held; Number of Portfolios in the Fund      Shares Beneficially Owned
Service, Age                  Complex Currently Overseen                                                in Supervised Funds
----------------------------- ---------------------------------------------------------------------- ---------------------------
----------------------------- ---------------------------------------------------------------------- ---------------------------
                                                                                                       As of December 31, 2005
----------------------------- ---------------------------------------------------------------------- ---------------------------
----------------------------- ---------------------------------------------------------------------- ---------------------------

John V. Murphy,               Chairman, Chief Executive Officer and Director (since June 2001) and   Over $100,000
Trustee since 2006 and        President (since September 2000) of the Manager; President and a
President and Principal       director or trustee of other Oppenheimer funds; President and
Executive Officer since 2006  Director of Oppenheimer Acquisition Corp. ("OAC") (the Manager's
Age: 57                       parent holding company) and of Oppenheimer Partnership Holdings,

                              Inc. (holding company subsidiary of the Manager) (since July 2001);
                              Director of OppenheimerFunds Distributor, Inc. (subsidiary of the
                              Manager) (since November 2001); Chairman and Director of Shareholder
                              Services, Inc. and of Shareholder Financial Services, Inc. (transfer
                              agent subsidiaries of the Manager) (since July 2001); President and
                              Director of OppenheimerFunds Legacy Program (charitable trust
                              program established by the Manager) (since July 2001); Director of
                              the following investment advisory subsidiaries of the Manager: OFI
                              Institutional Asset Management, Inc., Centennial Asset Management
                              Corporation, Trinity Investment Management Corporation and Tremont
                              Capital Management, Inc. (since November 2001), HarbourView Asset
                              Management Corporation and OFI Private Investments, Inc. (since July
                              2001); President (since November 1, 2001) and Director (since July
                              2001) of Oppenheimer Real Asset Management, Inc.; Executive Vice
                              President of Massachusetts Mutual Life Insurance Company (OAC's
                              parent company) (since February 1997); Director of DLB Acquisition
                              Corporation (holding company parent of Babson Capital Management
                              LLC) (since June 1995); Member of the Investment Company Institute's
                              Board of Governors (since October 3, 2003); Chief Operating Officer
                              of the Manager (September 2000-June 2001); President and Trustee of
                              MML Series Investment Fund and MassMutual Select Funds (open-end
                              investment companies) (November 1999-November 2001); Director of
                              C.M. Life Insurance Company (September 1999-August 2000); President,
                              Chief Executive Officer and Director of MML Bay State Life Insurance
                              Company (September 1999-August 2000); Director of Emerald Isle
                              Bancorp and Hibernia Savings Bank (wholly-owned subsidiary of
                              Emerald Isle Bancorp) (June 1989-June 1998). Oversees 92 portfolios
                              in the OppenheimerFunds complex.
----------------------------- ---------------------------------------------------------------------- ---------------------------

The addresses of the officers in the chart below is as follows: for Messrs. Gillespie, Schadt, Webman,
Wolfgruber, and Zack, and Ms. Bloomberg, Two World Financial Center, 225 Liberty Street, 11th Floor, New York, NY
10281-1008, for Messrs. Petersen, Szilagyi, Vandehey, and Wixted and Ms. Ives, 6803 S. Tucson Way, Centennial, CO
80112-3924. Each officer serves for an indefinite term or until his or her earlier resignation, retirement, death
or removal.




----------------------------------------------------------------------------------------------------------------------------
                                                Other Officers of the Funds
----------------------------------------------------------------------------------------------------------------------------
------------------------------------------ ---------------------------------------------------------------------------------
Name, Position(s) Held with the Funds,     Principal Occupation(s) During Past 5 Years
Length of Service, Age
------------------------------------------ ---------------------------------------------------------------------------------
------------------------------------------ ---------------------------------------------------------------------------------
Kurt Wolfgruber                            Executive Vice President of the Manager since March 2003 and Chief Investment
Vice  President  and  Portfolio   Manager  Officer and Director of the Manager since July 2003 of the Manager.  He has
since 2006                                 been Director of HarbourView Asset Management Corporation and of OFI
Age: 54                                    Institutional Asset Management, Inc. since June 2003 and of Tremont Capital
                                           Management, Inc. since October 2001.  He is also an officer of 8 other
                                           portfolios in the OppenheimerFunds complex.
------------------------------------------ ---------------------------------------------------------------------------------
------------------------------------------ ---------------------------------------------------------------------------------
Rudi W. Schadt,                            Vice President, Director of Research in Product Design and Risk Management of
Vice President and Portfolio Manager       the Manager and an officer of 7 portfolios in the OppenheimerFunds complex.
since 2006                                 Prior to joining the Manager in February 2002, he was a Director and Senior
Age: 47                                    Quantitative Analyst from 2000 through 2001 at UBS Asset Management prior to
                                           which he was an Associate Director and Senior Researcher and Portfolio Manager
                                           from June 1997 at State Street Global Advisors.
------------------------------------------ ---------------------------------------------------------------------------------
------------------------------------------ ---------------------------------------------------------------------------------
Jerry Webman                               Senior Vice President of the Manager since February 1996 and a Senior
Vice  President  and  Portfolio   Manager  Investment Officer and Director of the Manager's Fixed Income Investments since
since 2006                                 1999 and Senior Vice President of HarbourView Asset Management Corporation
Age: 55                                    since May 1999.  He is also an officer of 8 other portfolios in the
                                           OppenheimerFunds complex.
------------------------------------------ ---------------------------------------------------------------------------------
------------------------------------------ ---------------------------------------------------------------------------------

Mark S. Vandehey,                          Senior Vice President and Chief Compliance Officer of the Manager (since March
Vice President and Chief Compliance        2004); Vice President of OppenheimerFunds Distributor, Inc., Centennial Asset
Officer since 2006                         Management Corporation and Shareholder Services, Inc. (since June 1983). Former
Age: 56                                    Vice President and Director of Internal Audit of the Manager (1997-February

                                           2004). An officer of 92 portfolios in the OppenheimerFunds complex.
------------------------------------------ ---------------------------------------------------------------------------------
------------------------------------------ ---------------------------------------------------------------------------------

Brian W. Wixted,                           Senior Vice President and Treasurer of the Manager (since March 1999);
Treasurer since 2006                       Treasurer of the following: HarbourView Asset Management Corporation,
Age: 47                                    Shareholder Financial Services, Inc., Shareholder Services, Inc., Oppenheimer

                                           Real Asset Management Corporation, and Oppenheimer Partnership Holdings, Inc.
                                           (since March 1999), OFI Private Investments, Inc. (since March 2000),
                                           OppenheimerFunds International Ltd. (since May 2000), OppenheimerFunds plc
                                           (since May 2000), OFI Institutional Asset Management, Inc. (since November
                                           2000), and OppenheimerFunds Legacy Program (charitable trust program
                                           established by the Manager) (since June 2003); Treasurer and Chief Financial
                                           Officer of OFI Trust Company (trust company subsidiary of the Manager) (since
                                           May 2000); Assistant Treasurer of the following: OAC (since March
                                           1999),Centennial Asset Management Corporation (March 1999-October 2003) and
                                           OppenheimerFunds Legacy Program (April 2000-June 2003); Principal and Chief
                                           Operating Officer of Bankers Trust Company-Mutual Fund Services Division (March
                                           1995-March 1999). An officer of 92 portfolios in the OppenheimerFunds complex.
------------------------------------------ ---------------------------------------------------------------------------------
------------------------------------------ ---------------------------------------------------------------------------------

Brian Petersen,                            Assistant Vice President of the Manager (since August 2002); Manager/Financial
Assistant Treasurer since 2006             Product Accounting of the Manager (November 1998-July 2002). An officer of 92
Age: 36                                    portfolios in the OppenheimerFunds complex.

------------------------------------------ ---------------------------------------------------------------------------------
------------------------------------------ ---------------------------------------------------------------------------------
Brian C. Szilagyi,                         Assistant Vice President of the Manager (since July 2004); Director of
Assistant Treasurer since 2006             Financial Reporting and Compliance of First Data Corporation (April 2003-July
Age: 36                                    2004); Manager of Compliance of Berger Financial Group LLC (May 2001-March
                                           2003); Director of Mutual Fund Operations at American Data Services, Inc.
                                           (September 2000-May 2001). An officer of 92 portfolios in the OppenheimerFunds
                                           complex.
------------------------------------------ ---------------------------------------------------------------------------------
------------------------------------------ ---------------------------------------------------------------------------------

Robert G. Zack                             Executive Vice President (since January 2004) and General Counsel (since March
Secretary since 2006                       2002) of the Manager; General Counsel and Director of the Distributor (since
Age: 58                                    December 2001); General Counsel of Centennial Asset Management Corporation

                                           (since December 2001); Senior Vice President and General Counsel of HarbourView
                                           Asset Management Corporation (since December 2001); Secretary and General
                                           Counsel of OAC (since November 2001); Assistant Secretary (since September
                                           1997) and Director (since November 2001) of OppenheimerFunds International Ltd.
                                           and OppenheimerFunds plc; Vice President and Director of Oppenheimer
                                           Partnership Holdings, Inc. (since December 2002); Director of Oppenheimer Real
                                           Asset Management, Inc. (since November 2001); Senior Vice President, General
                                           Counsel and Director of Shareholder Financial Services, Inc. and Shareholder
                                           Services, Inc. (since December 2001); Senior Vice President, General Counsel
                                           and Director of OFI Private Investments, Inc. and OFI Trust Company (since
                                           November 2001); Vice President of OppenheimerFunds Legacy Program (since June
                                           2003); Senior Vice President and General Counsel of OFI Institutional Asset
                                           Management, Inc. (since November 2001); Director of OppenheimerFunds (Asia)
                                           Limited (since December 2003); Senior Vice President (May 1985-December 2003),
                                           Acting General Counsel (November 2001-February 2002) and Associate General
                                           Counsel (May 1981-October 2001) of the Manager; Assistant Secretary of the
                                           following: Shareholder Services, Inc. (May 1985-November 2001), Shareholder
                                           Financial Services, Inc. (November 1989-November 2001), and OppenheimerFunds
                                           International Ltd. (September 1997-November 2001). An officer of 92 portfolios
                                           in the OppenheimerFunds complex.
------------------------------------------ ---------------------------------------------------------------------------------
------------------------------------------ ---------------------------------------------------------------------------------

Kathleen T. Ives                           Vice President (since June 1998) and Senior Counsel and Assistant Secretary
Assistant Secretary since 2006             (since October 2003) of the Manager; Vice President (since 1999) and Assistant
Age: 41                                    Secretary (since October 2003) of the Distributor; Assistant Secretary of

                                           Centennial Asset Management Corporation (since October 2003); Vice President
                                           and Assistant Secretary of Shareholder Services, Inc. (since 1999); Assistant
                                           Secretary of OppenheimerFunds Legacy Program and Shareholder Financial
                                           Services, Inc. (since December 2001); Assistant Counsel of the Manager (August
                                           1994-October 2003). An officer of 92 portfolios in the OppenheimerFunds complex.
------------------------------------------ ---------------------------------------------------------------------------------
------------------------------------------ ---------------------------------------------------------------------------------
Lisa I. Bloomberg,                         Vice President and Associate Counsel of the Manager (since May 2004); First
Assistant Secretary since 2006             Vice President (April 2001-April 2004), Associate General Counsel (December
Age: 38                                    2000-April 2004), Corporate Vice President (May 1999-April 2001) and Assistant
                                           General Counsel (May 1999-December 2000) of UBS Financial Services Inc.
                                           (formerly, PaineWebber Incorporated). An officer of 92 portfolios in the
                                           OppenheimerFunds complex.
------------------------------------------ ---------------------------------------------------------------------------------
------------------------------------------ ---------------------------------------------------------------------------------
Phillip Gillespie                          Senior Vice President and Deputy General Counsel of the Manager (since
Assistant Secretary since 2006             September 2004); Mr. Gillespie held the following positions at Merrill Lynch
Age: 42                                    Investment Management: First Vice President (2001-September 2004); Director
                                           (2000-September 2004) and Vice President (1998-2000). An officer of 92
                                           portfolios in the OppenheimerFunds complex.
------------------------------------------ ---------------------------------------------------------------------------------


     Remuneration of Trustees. The officers of the Funds who are affiliated with
the Manager  receive no salary or fee from the Funds.  It is estimated that each
Independent  Trustee of the Funds will receive the Aggregate  Compensation  from
the Funds shown  below for  serving as a Trustee  and member of a committee  (if
applicable),   with  respect  to  each  Fund's  first  fiscal  year.  The  total
compensation,  including accrued  retirement  benefits,  from the Funds and fund
complex represents  compensation received for serving as a Trustee and member of
a committee (if applicable) on the Boards of other funds in the OppenheimerFunds
complex during the calendar year ended December 31, 2006. The Interested Trustee
receives no compensation for serving as an officer or Trustee of the Funds.


          --------------------------------------- ------------------------- --------------------------
           NAME AND OTHER FUND POSITION(S) (AS      Estimated Aggregate      Total Compensation From
                                                   Compensation From the       the Funds and Fund

                                                         Funds (1)                   Complex
                                                     Fiscal Year ended       Year ended December 31,
                       APPLICABLE)                   February 28, 2007                2006

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

                   Clayton K. Yeutter             $14 (2)                   $173,700

          Chairman of the Board
          --------------------------------------- ------------------------- --------------------------
          --------------------------------------- ------------------------- --------------------------

                   Matthew P. Fink                  $9                     $113,472
                   Proxy Committee Member and
          Regulatory & Oversight Committee
          Member

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

                  Robert G. Galli                 $11                      $264,812 (3)

          Regulatory & Oversight Committee
          Chairman
          --------------------------------------- ----------------------------------------------------
          --------------------------------------- ------------------------- --------------------------

          Phillip A. Griffiths                    $13 (4)                   $150,760

          Governance Committee Chairman and
          Regulatory & Oversight Committee
          Member
          --------------------------------------- ------------------------- --------------------------
          --------------------------------------- ------------------------- --------------------------

          Mary F. Miller                          $9                        $106,792

          Audit Committee Member and Proxy
          Committee Member
          --------------------------------------- ------------------------- --------------------------
          --------------------------------------- ------------------------- --------------------------

                   Joel W. Motley                 $13 (5)                   $150,760

          Audit Committee Chairman and
          Regulatory & Oversight Committee
          Member
          --------------------------------------- ------------------------- --------------------------
          --------------------------------------- ------------------------- --------------------------

          Kenneth A. Randall                      $11                       $134,080

          Audit Committee Member and Governance
          Committee Member
          --------------------------------------- ------------------------- --------------------------
          --------------------------------------- ------------------------- --------------------------

          Russell S. Reynolds, Jr.                $9                        $110,120

          Proxy Committee Chairman and
          Governance Committee Member
          --------------------------------------- ------------------------- --------------------------
          --------------------------------------- ------------------------- --------------------------

          Joseph M. Wikler                        $8 ((6))                  $99,080

          Audit Committee Member
          --------------------------------------- ------------------------- --------------------------
          --------------------------------------- ------------------------- --------------------------

          Peter I. Wold                           $8                        $99,080

          Governance Committee Member
          --------------------------------------- ------------------------- --------------------------
          --------------------------------------- ------------------------- --------------------------

                   Brian F. Wruble                 $9                       $241,260 ((7))
          Regulatory & Oversight Committee
          Member

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



     (1) "Estimated  Aggregate  Compensation  From the Funds"  includes fees and
deferred compensation, if any, for a Trustee.

     (2) Includes $4 deferred by Mr.  Yeutter under the  "Deferred  Compensation
Plan" described below.

     (3)  Includes  $135,500  paid to Mr.  Galli for  serving  as a  trustee  or
director of 10 other Oppenheimer funds that are not Board I Funds.

     (4) Includes $13 deferred by Mr. Griffiths under the "Deferred Compensation
Plan" described below.

     (5)  Includes $5 deferred by Mr.  Motley under the  "Deferred  Compensation
Plan" described below.

     (6)  Includes $4 deferred by Mr.  Wikler under the  "Deferred  Compensation
Plan" described below.

     (7)  Includes  $135,500  paid to Mr.  Wruble  for  serving  as a trustee or
director of 10 other Oppenheimer funds that are not Board I Funds.



     |X| Deferred  Compensation  Plan for Trustees.  The Boards of Trustees have
adopted a Deferred  Compensation Plan for Independent Trustees that enables them
to elect to defer  receipt  of all or a  portion  of the  annual  fees  they are
entitled to receive from the 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 is  determined  based  upon  the
performance of the selected funds.

     Deferral of Trustees'  fees under the plan will not  materially  affect the
Funds' assets,  liabilities or net income per share.  The plan will not obligate
the Funds to retain the services of any Trustee or to pay any  particular  level
of  compensation  to any  Trustee.  Pursuant to an Order  issued by the SEC, the
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 compensation account.

     Major  Shareholders.  As of  the  date  of  this  Statement  of  Additional
Information,  the Funds had not commenced operations and OppenheimerFunds,  Inc.
was the only shareholder of record of the Funds.

         The Manager

     The Manager is  wholly-owned  by Oppenheimer  Acquisition  Corp., a holding
company  controlled by Massachusetts  Mutual Life Insurance  Company,  a global,
diversified insurance and financial services organization.

     |X| Code of Ethics.  The Funds, 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 Funds' portfolio transactions.  Covered persons include persons
with knowledge of the  investments  and  investment  intentions of the Funds and
other funds  advised by the  Manager.  The Code of Ethics does permit  personnel
subject to the Code of Ethics to invest in securities, including securities that
may be purchased or held by the Funds,  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 each  Fund's  registration  statement
filed with the SEC 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 each 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| Portfolio Proxy Voting. Each Fund is structured as a fund of funds and,
as such,  will invest assets in certain of the  Underlying  Funds.  Accordingly,
each Fund,  in its capacity as a shareholder  in the  Underlying  Funds,  may be
requested to vote on a matter pertaining to those Underlying Funds. With respect
to any such matter,  each Fund will vote its shares in the  Underlying  Funds in
the same  proportion as the vote of all other  shareholders  in that  Underlying
Fund.

     Each Underlying Fund has adopted Proxy Voting Policies and Procedures under
which the  Underlying  Fund votes  proxies  relating to  securities  ("portfolio
proxies")  held  by  the  Underlying   Fund.  Each  Underlying   Fund's  primary
consideration  in voting  portfolio  proxies is the  financial  interests of the
Underlying  Fund and its  shareholders.  The  Underlying  Funds  will  retain an
unaffiliated  third-party as its agent to vote  portfolio  proxies in accordance
with the Underlying  Funds' Proxy Voting  Guidelines and to maintain  records of
such portfolio proxy voting.  The Proxy Voting Guidelines  include provisions to
address  conflicts of interest that may arise between the  Underlying  Funds and
the Manager where one of the Manager's directly-controlled affiliates manages or
administers the assets of a pension plan of a company  soliciting the proxy. The
Underlying  Funds'  Proxy Voting  Guidelines  on routine and  non-routine  proxy
proposals are summarized below.

     o Each  Underlying  Fund  votes  with the  recommendation  of the  issuer's
management  on routine  matters,  including  election of directors  nominated by
management  and  ratification  of  auditors,   unless   circumstances   indicate
otherwise.

     o In general,  each  Underlying  Fund opposes  anti-takeover  proposals and
supports elimination of anti-takeover proposals, absent unusual circumstances.

     o  Each  Underlying  Fund  supports  shareholder   proposals  to  reduce  a
super-majority  vote  requirement,  and opposes  management  proposals  to add a
super-majority vote requirement.

     o  Each  Underlying  Fund  opposes  proposals  to  classify  the  board  of
directors.

     o Each Underlying Fund supports proposals to eliminate cumulative voting.

     o Each Underlying Fund opposes re-pricing of stock options.

     o Each Underlying Fund generally considers executive compensation questions
such as stock  option  plans and bonus plans to be ordinary  business  activity.
Each Underlying Fund analyzes stock option plans, paying particular attention to
their dilutive effect.  While each Underlying Fund generally supports management
proposals, it opposes plans it considers to be excessive.

     The Funds,  and each  Underlying  Fund, is required to file Form N-PX, with
each  complete  proxy voting  record for the 12 months ended June 30th, no later
than August 31st of each year.  Each  Fund's Form N-PX filing is  available  (i)
without charge, upon request, by calling the Funds' toll-free at 1.800.525.7048;
and (ii) on the SEC's website at www.sec.gov.

     |X| The Investment  Advisory  Agreement.  The Manager  provides  investment
advisory  and  management  services  to  the  Funds  under  investment  advisory
agreements between the Manager and the Funds. The Manager selects securities for
the Funds'  portfolios  and handles  their  day-to-day  business.  The portfolio
managers  of the Funds are  employed  by the Manager and are the persons who are
principally  responsible for the day-to-day management of the Funds' portfolios.
Other members of the Manager's  investment teams provide the portfolio  managers
with counsel and support in managing the Funds' portfolios.

     The agreements  require the Manager,  at its expense,  to provide the Funds
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 Funds.
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 Funds.

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

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

     Portfolio Managers.  The Funds are managed by an Asset Allocation Committee
which  includes  Rudi W. Schadt,  Jerry A. Webman and Kurt  Wolfgruber  (each is
referred to as a "Portfolio  Manager" and  collectively  they are referred to as
the "Portfolio  Managers") who are responsible for the day-to-day  management of
the Funds' investments.


     |X| Other Accounts Managed. In addition to managing the Funds' investments,
members of the portfolio management team also manage other investment portfolios
and other accounts,  on behalf of the Manager or its  affiliates.  The following
table  provides  information  regarding  those  portfolios  and  accounts  as of
November 30, 2006:


-----------------------------------------------------------------------------------------------------------------
Portfolio Manager                      Total Assets                   Total Assets                Total Assets
                                                                        in Other
                         Registered    in Registered   Other Pooled      Pooled
                         Investment     Investment      Investment     Investment      Other        in Other
                          Companies      Companies       Vehicles       Vehicles     Accounts       Accounts

                           Managed      Managed(1)        Managed        Managed    Managed(2)     Managed(2)

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

                              7          $3,073.6          None           None         None           None

 Rudi W. Schadt
-----------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------

                              4          $2,625.6          None           None         None           None
 Jerry A. Webman

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

                            4         $2,625.6        None           None            None            None

 Kurt Wolfgruber
-----------------------------------------------------------------------------------------------------------------

         1.  In millions

     2. Does not include  personal  accounts  of  portfolio  managers  and their
families, which are subject to the Code of Ethics.



     As indicated above, each of the Portfolio Managers also manage other funds.
Potentially,  at times, those responsibilities could conflict with the interests
of the Funds.  That may occur  whether the  investment  strategies  of the other
funds are the same as, or different from, the Funds'  investment  objectives and
strategies.  For example,  the Portfolio Manager may need to allocate investment
opportunities  between a Fund and another  fund  having  similar  objectives  or
strategies,  or he may need to execute  transactions for another fund that could
have a negative  impact on the value of securities held by a Fund. Not all funds
and  accounts  advised  by the  Manager  have the same  management  fee.  If the
management  fee  structure of another fund is more  advantageous  to the Manager
than the fee  structure  of the Funds,  the Manager  could have an  incentive to
favor the other funds.  However, the Manager's compliance procedures and Code of
Ethics  recognize  the  Manager's  fiduciary  obligations  to  treat  all of its
clients, including the Funds, fairly and equitably, and are designed to preclude
the Portfolio Managers from favoring one client over another. It is possible, of
course,  that those compliance  procedures and the Code of Ethics may not always
be adequate to do so. At  different  times,  the  Portfolio  Managers may manage
other funds or accounts  with  investment  objectives  and  strategies  that are
similar to those of a fund,  or may manage  funds or  accounts  with  investment
objectives and strategies that are different from those of the Funds.

     |X|  Compensation  of the Portfolio  Managers.  The Portfolio  Managers are
employed and  compensated  by the Manager,  not the Funds.  Under the  Manager's
compensation  program for its portfolio managers and portfolio  analysts,  their
compensation  is based  primarily on the investment  performance  results of the
Funds and accounts  they  manage,  rather than on the  financial  success of the
Manager.  This is  intended  to align  the  portfolio  managers'  and  analysts'
interests  with the success of the Funds and accounts and their  investors.  The
Manager's  compensation  structure  is  designed  to attract  and retain  highly
qualified investment management  professionals and to reward individual and team
contributions  toward  creating  shareholder  value.  As of  the  date  of  this
Statement of  Additional  Information,  each  Portfolio  Manager's  compensation
consisted of three elements:  a base salary, an annual  discretionary  bonus and
eligibility  to  participate  in  long-term  awards of options and  appreciation
rights in regard to the common stock of the Manager's  holding  company  parent.
Senior  portfolio  managers may also be eligible to participate in the Manager's
deferred compensation plan.

     The base pay component of each portfolio  manager is reviewed  regularly to
ensure that it reflects the performance of the individual,  is commensurate with
the requirements of the particular  portfolio,  reflects any specific competence
or specialty of the individual manager, and is competitive with other comparable
positions.  The annual discretionary bonus is determined by senior management of
the  Manager and is based on a number of  factors,  including  a Fund's  pre-tax
performance  for periods of up to five years,  measured  against an  appropriate
Lipper benchmark  selected by management.  The Portfolio Managers do not receive
additional  compensation  with respect to the performance of the Funds. They are
compensated  based on the  performance  of the Underlying  Funds.  Other factors
considered  include   management  quality  (such  as  style  consistency,   risk
management,  sector coverage,  team leadership and coaching) and  organizational
development.  The compensation  structure is intended to be internally equitable
and serve to reduce  potential  conflicts of interest  between the Portfolio and
other Funds managed by the Portfolio  Managers.  The  compensation  structure of
certain other portfolios managed by the Portfolio Managers may be different from
the  compensation  structure  of the  Underlying  Funds,  described  above.  The
Portfolio  Manager's  compensation  with regard to those  portfolios  may, under
certain  circumstances,  include an amount based on the amount of the management
fee.

     |X|  Ownership  of  Funds  Shares.  As of the  date  of this  Statement  of
Additional  Information,  the Funds have not commenced operations.  Accordingly,
none of the Portfolio Managers beneficially owned any shares of the Funds.

                  Brokerage Policies of the Funds

     Most of the  portfolio  transactions  of the Funds will be the  purchase or
sale of securities of the Underlying Funds, which do not involve any commissions
or other transaction  fees. If a Fund invests in other  securities,  the Manager
will follow the brokerage practices of the Underlying Funds described below.

     Brokerage  Provisions of the  Investment  Advisory  Agreements.  One of the
duties of the Manager under the investment advisory agreement of each Underlying
Fund is to arrange the  portfolio  transactions  for those  funds.  The advisory
agreements  contains  provisions relating to the employment of broker-dealers to
effect the Underlying Funds' portfolio  transactions.  The Manager is authorized
'to  employ  broker-dealers,  including  "affiliated  brokers,"  as that term is
defined in the  Investment  Company Act,  that the Manager  thinks,  in its best
judgment based on all relevant  factors,  will implement the policy of the Funds
to obtain, at reasonable  expense,  the "best execution" of the Funds' portfolio
transactions.  "Best execution" means prompt and reliable  execution at the most
favorable price obtainable for the services provided.  The Manager need not seek
competitive commission bidding.  However, the Manager 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 each Underlying Fund as
established by its Board of Trustees.

     Under the Underlying Funds'  investment  advisory  agreements,  in choosing
brokers to execute portfolio transactions, the Manager may select brokers (other
than  affiliates)  that provide  both  brokerage  and  research  services to the
Underlying  Funds  and/or  the other  accounts  over  which the  Manager  or its
affiliates have investment  discretion..  The commissions  paid to those 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.

     Brokerage  Practices  Followed  by  the  Manager.   The  Manager  allocates
brokerage for each  Underlying  Fund subject to the provisions of the Underlying
Fund's investment  advisory  agreement and other applicable rules and procedures
described below.

     The   Manager's   portfolio   traders   allocate   brokerage   based   upon
recommendations  from  the  Manager's  portfolio  managers,  together  with  the
portfolio  traders'  judgment as to the  execution  capability  of the broker or
dealer. 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.

     Other accounts  advised by the Manager have investment  policies similar to
those of an Underlying  Fund. Those other accounts may purchase or sell the same
securities as an Underlying Fund at the same time as an Underlying  Fund,  which
could  affect the supply and price of the  securities.  If two or more  accounts
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.  When possible,  the Manager tries to combine concurrent orders to
purchase or sell the same  security by more than one of the accounts  managed by
the Manager or its affiliates.  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.

     Rule  12b-1  under  the  Investment  Company  Act  prohibits  any fund from
compensating  a broker or dealer for  promoting or selling the fund's  shares by
(1) directing to that broker or dealer any of the fund's portfolio transactions,
or (2)  directing  any other  remuneration  to that  broker or  dealer,  such as
commissions,  mark-ups,  mark  downs or other  fees  from the  fund's  portfolio
transactions,  that were  effected  by another  broker or dealer  (these  latter
arrangements  are considered to be a type of "step-out"  transaction).  In other
words, a fund and its investment adviser cannot use the fund's brokerage for the
purpose of rewarding broker-dealers for selling the fund's shares.

     However,  the Rule permits funds to effect brokerage  transactions  through
firms that also sell fund shares,  provided that certain  procedures are adopted
to prevent a quid pro quo with respect to portfolio  brokerage  allocations.  As
permitted by the Rule, the Manager has adopted (and the Underlying Funds' Boards
of Trustees have approved) procedures that permit the Underlying Funds to direct
portfolio  securities  transactions  to brokers or dealers  that also promote or
sell  shares  of  the  Underlying   Funds,   subject  to  the  "best  execution"
considerations  discussed above.  Those procedures are designed to prevent:  (1)
the Manager's  personnel who effect an Underlying Fund's portfolio  transactions
from  taking  into  account a broker's  or  dealer's  promotion  or sales of the
Underlying Fund's shares when allocating those portfolio  transactions,  and (2)
the  Underlying  Funds,  the  Manager and the  Distributor  from  entering  into
agreements or  understandings  under which the Manager directs or is expected to
direct  an  Underlying  Funds'  brokerage  directly,  or  through  a  "step-out"
arrangement,  to any  broker or  dealer in  consideration  of that  broker's  or
dealer's  promotion or sale of the Underlying Funds' shares or the shares of any
of the other Oppenheimer funds.

     The Underlying Funds' investment  advisory agreements permit the Manager to
allocate  brokerage for research  services.  The research services provided by a
particular broker may be useful both to an Underlying Fund and to one or more of
the other accounts advised by the Manager or its affiliates. Investment research
may be supplied to the Manager by the broker or 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,  analytical software 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.

     Although the Manager  currently does not do so, the Board of Trustees of an
Underlying  Fund may permit 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  of an  Underlying  Fund may also  permit 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 broaden the scope and supplement
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 an
Underlying  Fund's portfolio or are being  considered for purchase.  The Manager
provides  information to the Underlying Funds' Boards 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 Funds,
the  Distributor  acts as the Funds'  principal  underwriter  in the  continuous
public  offering  of the Funds'  classes of shares.  The  Distributor  bears the
expenses normally  attributable to sales,  including advertising and the cost of
printing  and  mailing  prospectuses,  other than those  furnished  to  existing
shareholders.  The  Distributor  is not  obligated to sell a specific  number of
shares.

     Distribution  and Service  Plans.  Each 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
Funds  pay the  Distributor  for  all or a  portion  of the  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,  including a majority of the Independent Trustees, cast in person at a
meeting  called for the purpose of voting on that plan. In accordance  with Rule
12b-1 of the  Investment  Company Act, the term  "Independent  Trustees" in this
Statement  of  Additional  Information  refers  to  those  Trustees  who are not
"interested  persons"  of the Fund and who do not have any  direct  or  indirect
financial  interest in the operation of the  distribution  plan or any agreement
under the plan.

     Under the Plans,  the  Manager  and the  Distributor  may make  payments to
affiliates.  In their  sole  discretion,  they may also  from  time to time make
substantial  payments  from their own  resources,  which include the profits the
Manager derives from the advisory fees it receives from the Funds, to compensate
brokers, dealers,  financial institutions and other intermediaries for providing
distribution assistance and/or administrative services or that otherwise promote
sales of the Funds' shares. These payments,  some of which may be referred to as
"revenue   sharing,"  may  relate  to  the  Funds'   inclusion  on  a  financial
intermediary's preferred list of funds offered to its clients.

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

     The  Board of  Trustees  and the  Independent  Trustees  must  approve  all
material amendments to a plan. An amendment to increase materially the amount of
payments to be made under a plan must be approved by  shareholders  of the class
affected by the  amendment.  Because  Class B shares of the Funds  automatically
convert into Class A shares 72 months after purchase,  the Funds 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 Funds shall  provide
separate  written  reports  on the  plans  to the  Board  of  Trustees  at least
quarterly  for its review.  The reports  shall detail the amount of all payments
made  under a plan and the  purpose  for which the  payments  were  made.  Those
reports are subject to the review and approval of the Independent Trustees.

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

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

     |X| Class A  Service  Plan  Fees.  Under  the  Class A  service  plan,  the
Distributor  currently  uses the fees it receives from the Funds 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 Funds,  assisting in establishing  and maintaining
accounts  in the  Funds,  making  the  Funds'  investment  plans  available  and
providing  other  services at the request of the Funds or the  Distributor.  The
Class A service plan permits  reimbursements  to the Distributor at a rate of up
to 0.25% of average net assets of Class A shares.  The Board has set the rate at
that level.  The Distributor does not receive or retain the service fee on Class
A  shares  in  accounts  for  which  the  Distributor  has  been  listed  as the
broker-dealer of record.  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,  except in the case of the  special  arrangement  described
below  regarding  grandfathered   retirement  accounts.  The  Distributor  makes
payments to plan  recipients  periodically 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.

     With  respect  to  purchases  of Class A  shares  subject  to a  contingent
deferred  sales charge by certain  retirement  plans that  purchased such shares
prior to March 1, 2001 ("grandfathered  retirement  accounts"),  the Distributor
currently  intends to pay the service fee to recipients in advance for the first
year after the shares are purchased.  During the first year the shares are sold,
the  Distributor  retains the service fee to  reimburse  itself for the costs of
distributing  the  shares.  After the first  year  shares are  outstanding,  the
Distributor  makes  service fee  payments to  recipients  periodically  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 A shares  purchased by grandfathered  retirement  accounts 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.

     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.

     |X| Class B, Class C and Class N Distribution  and Service Plan Fees. Under
each plan,  distribution and service 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.  Each plan  provides  for the
Distributor  to  be  compensated  at a  flat  rate,  whether  the  Distributor's
distribution  expenses are more or less than the amounts paid by the Funds 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 periodic
basis, without payment in advance. However, the Distributor currently intends to
pay the service fee to  recipients  in advance for the first year after Class B,
Class C or Class N shares are  purchased.  After the first year Class B, Class C
or Class N shares are outstanding,  after their purchase,  the Distributor makes
periodic  service fee payments 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.
Class B,  Class C or  Class N  shares  may not be  purchased  by a new  investor
directly  from  the  Distributor   without  the  investor   designating  another
registered broker-dealer. If the investor no longer has another broker-dealer of
record for an existing account,  the Distributor is automatically  designated as
the  broker-dealer  of  record,  but  solely  for the  purpose  of acting as the
investor's agent to purchase the shares. In those cases, the Distributor retains
the  asset-based  sales  charge paid on Class B, Class C or Class N shares,  but
does not retain any service fees as to the assets represented by that account.

     The asset-based  sales charge and service fees increase Class B and Class C
expenses by 1.00% and the  asset-based  sales charge and service fees  increases
Class N expenses by 0.50% of the net assets per year of the respective class.

     The Distributor retains the asset-based sales charge on Class B 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 or Class N service  fee and the
asset-based sales charge to the dealer  periodically 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 Funds pay 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  Funds in  various
third-party distribution programs that may increase sales of Fund shares,

     o may experience increased difficulty selling the Funds' 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 Funds, 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.

     During a calendar year, 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
asset-based  sales  charges  paid to the  Distributor  by the  Funds  under  the
distribution  and service plans.  Those excess  expenses are carried over on the
Distributor's  books and may be recouped from asset-based  sales charge payments
from the Funds in future years.  However, the Distributor has voluntarily agreed
to cap the amount of expenses under the plans that may be carried over from year
to year and recouped  that relate to (i) expenses the  Distributor  has incurred
that represent  compensation  and expenses of its sales personnel and (ii) other
direct  distribution  costs it has  incurred,  such as sales  literature,  state
registration  fees,  advertising and prospectuses used to offer Fund shares. The
cap on the carry-over of those  categories of expenses is set at 0.70% of annual
gross sales of shares of the Funds.  If those  categories of expenses exceed the
capped amount,  the Distributor  bears the excess costs. If the Class B, Class C
or Class N plan were to be  terminated  by a Fund,  the Fund's Board of Trustees
may allow the Fund to continue  payments of the asset-based  sales charge to the
Distributor for distributing shares prior to the termination of the plan.

     All payments under the 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.

                  Payments to Fund Intermediaries

     Financial  intermediaries  may receive  various  forms of  compensation  or
reimbursement  from the Fund in the form of 12b-1 plan  payments as described in
the preceding section of this Statement of Additional Information. They may also
receive payments or concessions from the Distributor, derived from sales charges
paid by the clients of the  financial  intermediary,  also as  described in this
Statement  of  Additional  Information.  Additionally,  the  Manager  and/or the
Distributor   (including  their  affiliates)  may  make  payments  to  financial
intermediaries  in connection with their offering and selling shares of the Fund
and  other  Oppenheimer  funds,  providing  marketing  or  promotional  support,
transaction  processing  and/or  administrative  services.  Among the  financial
intermediaries  that may receive these payments are brokers and dealers who sell
and/or  hold  shares of the Fund,  banks  (including  bank  trust  departments),
registered  investment  advisers,  insurance  companies,   retirement  plan  and
qualified tuition program administrators,  third party administrators, and other
institutions  that have  selling,  servicing  or similar  arrangements  with the
Manager or  Distributor.  The  payments to  intermediaries  vary by the types of
product  sold,  the  features of the Fund share class and the role played by the
intermediary.

     Possible  types of payments to financial  intermediaries  include,  without
limitation, those discussed below.

     o Payments made by the Fund, or by an investor  buying or selling shares of
the Fund may include:

     o  depending  on the share  class  that the  investor  selects,  contingent
deferred sales charges or initial  front-end sales charges,  all or a portion of
which  front-end  sales  charges are  payable by the  Distributor  to  financial
intermediaries (see "About Your Account" in the Prospectus);

     o ongoing  asset-based  payments  attributable to the share class selected,
including  fees  payable  under the Fund's  distribution  and/or  service  plans
adopted under Rule 12b-1 under the  Investment  Company Act, which are paid from
the Fund's assets and allocated to the class of shares to which the plan relates
(see "About the Fund -- Distribution and Service Plans" above);

     o  shareholder   servicing  payments  for  providing  omnibus   accounting,
recordkeeping,  networking,  sub-transfer  agency  or  other  administrative  or
shareholder  services,  including  retirement  plan and 529 plan  administrative
services fees,  which are paid from the assets of a Fund as reimbursement to the
Manager or Distributor for expenses they incur on behalf of the Fund.

     o Payments  made by the  Manager  or  Distributor  out of their  respective
resources  and assets,  which may  include  profits  the  Manager  derives  from
investment  advisory  fees  paid by the  Fund.  These  payments  are made at the
discretion of the Manager and/or the Distributor. These payments, often referred
to as "revenue sharing" payments, may be in addition to the payments by the Fund
listed above.

     o These types of payments may reflect  compensation for marketing  support,
support provided in offering the Fund or other Oppenheimer funds through certain
trading platforms and programs, transaction processing or other services;

     o The Manager and Distributor  each may also pay other  compensation to the
extent the payment is not  prohibited by law or by any  self-regulatory  agency,
such as the NASD.  Payments are made based on the guidelines  established by the
Manager and Distributor, subject to applicable law.

     These  payments may provide an incentive  to  financial  intermediaries  to
actively  market or promote the sale of shares of the Fund or other  Oppenheimer
funds, or to support the marketing or promotional  efforts of the Distributor in
offering shares of the Fund or other Oppenheimer funds. In addition,  some types
of payments may provide a financial  intermediary with an incentive to recommend
the Fund or a particular share class. Financial  intermediaries may earn profits
on these  payments,  since the  amount of the  payment  may  exceed  the cost of
providing  the service.  Certain of these  payments  are subject to  limitations
under applicable law. Financial intermediaries may categorize and disclose these
arrangements to their clients and to members of the public in a manner different
from the  disclosures in the Fund's  Prospectus and this Statement of Additional
Information.  You should ask your financial  intermediary for information  about
any payments it receives from the Fund, the Manager or the  Distributor  and any
services it provides, as well as the fees and commissions it charges.

     Although  brokers or dealers that sell Fund shares may also act as a broker
or dealer in connection  with the execution of the purchase or sale of portfolio
securities by the Fund or other  Oppenheimer  funds, a financial  intermediary's
sales  of  shares  of  the  Fund  or  such  other  Oppenheimer  funds  is  not a
consideration  for the  Manager  when  choosing  brokers  or  dealers  to effect
portfolio transactions for the Fund or such other Oppenheimer funds.

     Revenue  sharing  payments  can  pay  for   distribution-related  or  asset
retention items including, without limitation,

     o  transactional  support,  one-time  charges for setting up access for the
Fund or other  Oppenheimer funds on particular  trading systems,  and paying the
intermediary's networking fees;

     o program  support,  such as expenses  related to including the Oppenheimer
funds in retirement plans, college savings plans, fee-based advisory or wrap fee
programs,  fund  "supermarkets",  bank or trust  company  products or  insurance
companies' variable annuity or variable life insurance products;

     o  placement  on  the  dealer's   list  of  offered   funds  and  providing
representatives  of the  Distributor  with access to a financial  intermediary's
sales meetings, sales representatives and management representatives.

     Additionally,  the  Manager  or  Distributor  may  make  payments  for firm
support,  such as business  planning  assistance,  advertising,  and educating a
financial  intermediary's  sales  personnel  about  the  Oppenheimer  funds  and
shareholder financial planning needs.

     For  the  year  ended   December  31,   2005,   the   following   financial
intermediaries that are broker-dealers offering shares of the Oppenheimer funds,
and/or  their  respective  affiliates,   received  revenue  sharing  or  similar
distribution-related  payments from the Manager or Distributor  for marketing or
program support:

Advantage Capital Corp./Financial Services Corp.           Advest, Inc.
Aegon USA                                                  Aetna Retirement Services, Inc.
A.G. Edwards & Sons, Inc.                                  AIG Life
Allianz Life Insurance Company                             Allmerica Financial Life Insurance and Annuity Co.
Allstate Financial Advisors                                American Enterprise Life Insurance
American General Securities, Inc.                          American General Annuity
Ameriprise Financial Services, Inc.                        American Portfolio Financial Services, Inc.
Ameritas Life Insurance Corporation                        Annuity Investors Life
Associated Securities                                      AXA Advisors
Banc One Securities Corp.                                  BNY Investment Center, Inc.
Cadaret Grant & Co. Inc.                                   Charles Schwab - Great West Life
Chase Investment Services Corp.                            CitiCorp Investment Services, Inc.
Citigroup Global Markets, Inc. (SSB)                       CitiStreet
Citizens Bank of Rhode Island                              CJM Planning Corp.
Columbus Life Insurance Company                            Commonwealth Financial Network
CUNA Brokerage Services, Inc.                              CUSO Financial Services, L.P.
Federal Kemper Life Assurance Company                      Financial Network (ING)
First Global Capital                                       GE Financial Assurance - GE Life & Annuity
Glenbrook Life and Annuity Co.                             Hartford
HD Vest                                                    HSBC Brokerage (USA) Inc.
ING Financial Advisers                                     ING Financial Partners
Jefferson Pilot Life Insurance Company                     Jefferson Pilot Securities Corp.
John Hancock Life Insurance Co.                            Kemper Investors Life Insurance Co.
Legend Equities Corp.                                      Legg Mason
Lincoln Benefit Life                                       Lincoln Financial
Lincoln Investment Planning, Inc.                          Lincoln National Life
Linsco Private Ledger                                      MassMutual Financial Group and affiliates
McDonald Investments, Inc.                                 Merrill Lynch & Co. and affiliates
MetLife and affiliates                                     Minnesota Life Insurance Company
Mony Life Insurance Co.                                    Morgan Stanley Dean Witter, Inc.
Multi-Financial (ING)                                      Mutual Service Corporation
National Planning Holdings, Inc.                           Nationwide and affiliates
NFP                                                        New York Life Securities, Inc.
Park Avenue Securities LLC                                 PFS Investments, Inc.
Prime Capital Services, Inc.                               Primevest Financial Services, Inc. (ING)
Protective Life Insurance Co.                              Prudential Investment Management Services LLC
Raymond James & Associates                                 Raymond James Financial Services
RBC Dain Rauscher Inc.                                     Royal Alliance
Securities America Inc.                                    Security Benefit Life Insurance Co.
Sentra Securities                                          Signator Investments
Sun Life Assurance Company of Canada                       SunAmerica Securities, Inc.
SunTrust Securities                                        Thrivent
Travelers Life & Annuity Co., Inc.                         UBS Financial Services Inc.
Union Central Life Insurance Company                       United Planners
Valic Financial Advisors, Inc.                             Wachovia Securities LLC
Walnut Street Securities (Met Life Network)                Waterstone Financial Group
Wells Fargo Investments, LLC

     For the year ended  December 31, 2005, the following  firms,  which in some
cases are broker-dealers,  received payments from the Manager or Distributor for
administrative   or  other  services   provided   (other  than  revenue  sharing
arrangements), as described above:

ABN AMRO Financial Services Inc.                           ACS HR Solutions LLC
Administrative Management Group                            ADP Broker/Dealer Inc.
Aetna Financial Services                                   Alliance Benefit Group
American Stock Transfer & Trust Co                         Ameriprise Financial Services, Inc.
Baden Retirement Plan Services LLC                         Banc One Securities Corp.
BCG Securities                                             Benefit Administration Company LLC
Benefit Administration Inc.                                Benefit Plans Administrative Services
Benetech Inc.                                              Bisys Retirement Services
Boston Financial Data Services Inc.                        Ceridian Retirement Plan Services
Charles Schwab & Co Inc.                                   Charles Schwab Trust Company
Circle Trust Company                                       Citigroup Global Markets Inc.
CitiStreet                                                 City National Bank
Columbia Funds Distributor Inc.                            CPI Qualified Plan Consultants Inc.
Daily Access.Com Inc.                                      Digital Retirement Solutions
DST Systems Inc.                                           Dyatech LLC
Edgewood/Federated Investments                             ERISA Administrative Services Inc.
Expert Plan Inc.                                           FASCorp
FBD Consulting Inc.                                        Fidelity Institutional Operations Co.
Fidelity Investments                                       First National Bank of Omaha
First Trust Corp.                                          First Trust-Datalynx
Franklin Templeton                                         Geller Group LTD
GoldK Inc.                                                 Great West Life & Annuity Ins Co.
Hartford Life Insurance Co                                 Hewitt Associates LLC
ICMA-RC Services LLC                                       Independent Plan Coordinators Inc.
ING                                                        Ingham Group
Interactive Retirement Systems                             Invesco Retirement Plans
Invesmart                                                  InWest Pension Management
John Hancock Life Insurance Co.                            JPMorgan Chase & Co
JPMorgan Chase Bank                                        July Business Services
Kaufman & Goble                                            Leggette & Company Inc.
Lincoln National Life                                      MassMutual Financial Group and affiliates
Matrix Settlement & Clearance Services                     Mellon HR Solutions
Mercer HR Services                                         Merrill Lynch & Co., Inc.
Metavante 401(k) Services                                  Metlife Securities Inc.
MFS Investment Management                                  Mid Atlantic Capital Corp.
Milliman Inc.                                              Morgan Stanley Dean Witter Inc.
National City Bank                                         National Financial Services Corp.
Nationwide Investment Service Corp.                        New York Life Investment Management
Northeast Retirement Services                              Northwest Plan Services Inc.
Pension Administration and Consulting                      PFPC Inc.
Plan Administrators Inc.                                   PlanMember Services Corporation
Princeton Retirement Group Inc.                            Principal Life Insurance Co
Programs for Benefit Plans Inc.                            Prudential Retirement Insurance & Annuity Co.
Prudential Retirement Services                             PSMI Group
Putnam Investments                                         Quads Trust Company
RSM McGladrey Retirement Resources                         SAFECO
Standard Insurance Co                                      Stanley Hunt DuPree Rhine
Stanton Group Inc.                                         State Street Bank & Trust
Strong Capital Management Inc.                             Symetra Investment Services Inc.
T Rowe Price Associates                                    Taylor Perky & Parker LLC
Texas Pension Consultants                                  The 401(K) Company
The Chicago Trust Company                                  The Retirement Plan Company LLC
The Vanguard Group                                         TruSource
Unified Fund Services Inc.                                 Union Bank & Trust Co. (Nebraska)
USI Consulting Group (CT)                                  Valic Retirement Services Co
Wachovia Bank NA                                           Web401k.com
Wells Fargo Bank NA                                        Wilmington Trust Company
WySTAR Global Retirement Solutions


         Performance of the Funds

     Explanation of Performance Terminology. The Funds use a variety of terms to
illustrate their 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.  You can obtain  current  performance
information  by  calling  the  Funds'  Transfer  Agent at  1.800.225.5677  or by
visiting the OppenheimerFunds Internet website at www.oppenheimerfunds.com.

     The Funds'  illustrations of their performance data in advertisements  must
comply with rules of the SEC. Those rules describe the types of performance data
that  may  be  used  and  how  they  are  to  be  calculated.  In  general,  any
advertisement  by the Funds of their  performance  data must include the average
annual total returns for the advertised class of shares of the Funds.

     Use of standardized performance calculations enables an investor to compare
the Funds'  performance to the  performance of other funds for the same periods.
However,  a number of  factors  should be  considered  before  using the  Funds'
performance information as a basis for comparison with other investments:

     o Total returns measure the performance of a hypothetical account in a 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 The Funds'  performance  returns  may not  reflect the effect of taxes on
dividends and capital gains distributions.

     o An  investment  in the  Funds is not  insured  by the  FDIC or any  other
government agency.

     o The  principal  value of the Funds'  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 Funds are affected by market  conditions,  the quality of
the  Funds'  investments,  the  maturity  of  those  investments,  the  types of
investments  the Funds 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  each Fund's  performance.  Total  return is the change in value of a
hypothetical  investment  in the Funds 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
Funds 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" in the  formula  below)  (unless  the  return is shown
without sales charge,  as described below).  For Class B shares,  payment of the
applicable contingent deferred sales charge is applied,  depending on the period
for which the return is shown:  5.0% in the first year, 4.0% in the second year,
3.0% in the third and fourth  years,  2.0% in the fifth year,  1.0% in the sixth
year and none thereafter. For Class C shares, the 1.0% contingent deferred sales
charge is deducted for returns for the one-year period.  For Class N shares, the
1.0%  contingent  deferred sales charge is deducted for returns for the one-year
period.

     o 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

     o 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 Funds 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 Funds
distributions,  but not on the  redemption  of  Fund  shares,  according  to the
following formula:

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

     o  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
Funds  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:

                                ATV     1/n
                                   DR          - 1 = Average Annual Total Return
                                                     (After Taxes on Distributions
                                 P                    and Redemption)

     o 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

     o Total  Returns at Net Asset  Value.  From time to time the Funds 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.  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.  Each 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.  Each Fund may also compare its  performance to that of
other  investments,  including  other  mutual  funds,  or  use  rankings  of its
performance  by  independent  ranking  entities.  Examples of these  performance
comparisons are set forth below.

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

     |X| Morningstar  Ratings.  From time to time the Funds may publish the star
rating of the  performance of their classes of shares by  Morningstar,  Inc., an
independent mutual funds monitoring  service.  Morningstar rates mutual funds in
their specialized market sector. The Funds are not yet rated.

     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 the funds' 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.

     |X|   Performance   Rankings  and   Comparisons   by  Other   Entities  and
Publications.  From time to time the Funds may include in its advertisements and
sales literature performance information about the Funds 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
Funds' 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 funds statistical services.

     Investors  may also wish to compare the returns on the Funds' 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
Funds' 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 Funds 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 funds 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 Funds may  include  in its  advertisements  and sales
literature the total return  performance of a  hypothetical  investment  account
that  includes  shares of the Funds 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 Funds and the total return  performance of other  Oppenheimer funds included
in the account.  Additionally,  from time to time, the Funds' 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 Funds.

              About Your Account

         How to Buy Shares

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

     When you  purchase  shares of the Funds,  your  ownership  interest  in the
shares in the Funds  will be  recorded  as a book  entry on the  records  of the
Funds. The Funds will not issue or re-register physical share certificates.

     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.  Accounts
established  prior  to  November  1,  2002  will  remain  at $25 for  additional
purchases.  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 Funds  receive  Federal  Funds for the
purchase through the ACH system before the close of 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 Funds 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 Funds are not responsible for any delays
in purchasing shares resulting from delays in ACH  transmissions.  Reduced Sales
Charges.  As discussed  in the  Prospectus,  a reduced  sales charge rate may be
obtained  for Class A shares under Right of  Accumulation  and Letters of Intent
because of the economies of sales efforts and reduction in expenses  realized by
the  Distributor,  dealers and brokers  making  such sales.  No sales  charge is
imposed in certain other circumstances described in Appendix C to this Statement
of Additional  Information  because the  Distributor  or dealer or broker incurs
little or no selling expenses.

     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 Municipals                               Oppenheimer Pennsylvania Municipal Fund
Oppenheimer AMT-Free New York Municipals                      Oppenheimer Portfolio Series:
Oppenheimer Balanced Fund                                         Active Allocation Fund
Oppenheimer Core Bond Fund                                        Aggressive Investor Fund
Oppenheimer California Municipal Fund                             Conservative Investor Fund
Oppenheimer Capital Appreciation Fund                             Moderate Investor Fund
Oppenheimer Capital Income Fund                               Oppenheimer Principal Protected Main Street Fund
Oppenheimer Champion Income Fund                              Oppenheimer Principal Protected Main Street Fund II
Oppenheimer Convertible Securities Fund                       Oppenheimer Principal Protected Main Street Fund III
Oppenheimer Developing Markets Fund                           Oppenheimer Quest Balanced Fund
Oppenheimer Discovery Fund                                    Oppenheimer Quest Capital Value Fund, Inc.
Oppenheimer Dividend Growth Fund                              Oppenheimer Quest International Value Fund, Inc.
Oppenheimer Emerging Growth Fund                              Oppenheimer Quest Opportunity Value Fund
Oppenheimer Emerging Technologies Fund                        Oppenheimer Quest Value Fund, Inc.
Oppenheimer Enterprise Fund                                   Oppenheimer Real Asset Fund
Oppenheimer Equity Fund, Inc.                                 Oppenheimer Real Estate Fund
Oppenheimer Global Fund                                       Oppenheimer Rochester Arizona Municipal Fund
Oppenheimer Global Opportunities Fund                         Oppenheimer Rochester Maryland Municipal Fund
Oppenheimer Gold & Special Minerals Fund                      Oppenheimer Rochester Massachusetts Municipal Fund
Oppenheimer Growth Fund                                       Oppenheimer Rochester Michigan Municipal Fund
Oppenheimer International Bond Fund                           Oppenheimer Rochester Minnesota Municipal Fund
Oppenheimer International Diversified Fund                    Oppenheimer Rochester National Municipals
Oppenheimer International Growth Fund                         Oppenheimer Rochester North Carolina Municipal Fund
Oppenheimer International Small Company Fund                  Oppenheimer Rochester Ohio Municipal Fund
Oppenheimer International Value Fund                          Oppenheimer Rochester Virginia Municipal Fund
Oppenheimer Limited Term California Municipal Fund            Oppenheimer Select Value Fund
Oppenheimer Limited-Term Government Fund                      Oppenheimer Senior Floating Rate Fund
Oppenheimer Limited Term Municipal Fund                       Oppenheimer Small- & Mid- Cap Value Fund
Oppenheimer Main Street Fund                                  Oppenheimer Strategic Income Fund
Oppenheimer Main Street Opportunity Fund                      Oppenheimer U.S. Government Trust
Oppenheimer Main Street Small Cap Fund                        Oppenheimer Value Fund
Oppenheimer MidCap Fund                                       Limited-Term New York Municipal Fund
Oppenheimer New Jersey Municipal Fund                         Rochester Fund Municipals

And the following money market funds:
Oppenheimer Cash Reserves                                     Centennial Government Trust
Oppenheimer Money Market Fund, Inc.                           Centennial Money Market Trust
Oppenheimer Institutional Money Market Fund                   Centennial New York Tax Exempt Trust
Centennial California Tax Exempt Trust                        Centennial Tax Exempt Trust

     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.  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.

     Letters of Intent. Under a Letter of Intent ("Letter"),  you can reduce the
sales  charge  rate  that  applies  to your  purchases  of Class A shares if you
purchase  Class A,  Class B or Class C shares of the Funds or other  Oppenheimer
funds during a 13-month  period.  The total amount of your purchases of Class A,
Class B and Class C shares will  determine the sales charge rate that applies to
your  Class A share  purchases  during  that  period.  You can choose to include
purchases  that you made up to 90 days  before the date of the  Letter.  Class A
shares of Oppenheimer  Money Market Fund, Inc. and Oppenheimer  Cash Reserves on
which you have not paid a sales charge and any Class N shares you  purchase,  or
may have  purchased,  will  not be  counted  towards  satisfying  the  purchases
specified in a Letter.

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

     Each  purchase  of  Class A shares  under  the  Letter  will be made at the
offering  price  (including  the  sales  charge)  that  would  apply to a single
lump-sum  purchase of shares in the amount  intended to be  purchased  under the
Letter.

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

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

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

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

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

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

     2. If the total minimum investment  specified under the Letter is completed
within the 13-month Letter period, the escrowed shares will be promptly released
to the investor.

     3.  If,  at the end of the  13-month  Letter  period  the  total  purchases
pursuant to the Letter are less than the intended  purchase amount  specified in
the Letter,  the investor must remit to the  Distributor  an amount equal to the
difference  between the dollar  amount of sales  charges  actually  paid and the
amount of sales charges which would have been paid if the total amount purchased
had been made at a single time.  That sales charge  adjustment will apply to any
shares  redeemed  prior to the  completion of the Letter.  If the  difference in
sales  charges  is not  paid  within  twenty  days  after  a  request  from  the
Distributor  or the  dealer,  the  Distributor  will,  within  sixty days of the
expiration  of the Letter,  redeem the number of escrowed  shares  necessary  to
realize such difference in sales charges.  Full and fractional  shares remaining
after such redemption will be released from escrow.  If a request is received to
redeem escrowed shares prior to the payment of such additional sales charge, the
sales charge will be withheld from the redemption proceeds.

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

     5. The shares  eligible  for  purchase  under the Letter (or the holding of
which may be counted toward completion of a Letter) include:

     (a) Class A shares sold with a front-end sales charge or subject to a Class
A contingent deferred sales charge,

     (b) Class B and Class C shares of other  Oppenheimer funds acquired subject
to a contingent deferred sales charge, and

     (c) Class A, Class B or Class C shares  acquired  by exchange of either (1)
Class A shares of one of the other  Oppenheimer funds that were acquired subject
to a Class A initial or contingent  deferred  sales charge or (2) Class B shares
or Class C shares  of one of the other  Oppenheimer  funds  that  were  acquired
subject to a contingent deferred sales charge.

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

     Asset  Builder  Plans.  As indicated in the  Prospectus,  you normally must
establish  your Fund account with $1,000.  However,  you can open a Fund account
for as little as $500 if you  establish an Asset  Builder Plan to  automatically
purchase  additional  shares  directly  from a bank  account at the time of your
initial share purchase.  An Asset Builder Plan is available only if your bank is
an ACH member. Under an Asset Builder Plan payments to purchase shares of a Fund
will be debited from your bank account automatically. Normally the debit will be
made two  business  days  prior  to the  investment  dates  you  select  on your
application.  Neither the Distributor,  the Transfer Agent nor the Funds will be
responsible  for any delays in purchasing  shares that result from delays in ACH
transmissions.

     To establish an Asset Builder Plan at the time you initially  purchase Fund
shares,   complete  the  "Asset   Builder  Plan"   information  on  the  Account
Application. To establish an Asset Builder Plan for an existing account, use the
Asset Builder  Enrollment  Form. The Account  Application  and the Asset Builder
Enrollment Form are available by contacting the Distributor or may be downloaded
from our website at:  www.oppenheimerfunds.com.  Before you establish a new Fund
account  under the Asset  Builder  Plan,  you should  obtain a prospectus of the
selected fund and read it carefully.

     You  may  change  the  amount  of your  Asset  Builder  payment  or you can
terminate  your  automatic  investments  at any time by writing to the  Transfer
Agent. The Transfer Agent requires a reasonable  period  (approximately 10 days)
after receipt of your  instructions  to implement  them. The minimum  additional
purchase  under a new  Asset  Builder  Plan  is $50.  For  Asset  Builder  Plans
established prior to November 1, 2002, the minimum  additional  purchase is $25.
Shares  purchased by Asset Builder Plan  payments are subject to the  redemption
restrictions for recent purchases described in the Prospectus.  An Asset Builder
Plan  may not be  used to buy  shares  for  OppenheimerFunds  employer-sponsored
qualified retirement accounts.  The Funds reserve the right to amend, suspend or
discontinue offering Asset Builder Plans at any time without prior notice.

     Retirement  Plans.  Certain  types of  retirement  plans  are  entitled  to
purchase  shares of the Funds  without  sales charges or at reduced sales charge
rates, as described in an Appendix to this Statement of Additional  Information.
Certain  special sales charge  arrangements  are maintained on a daily valuation
basis by Merrill  Lynch  Pierce  Fenner & Smith,  Inc.  ("Merrill  Lynch") or an
independent record keeper that has a contact 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 $1  million  in assets  invested  in
applicable  investments (other than assets invested in money market funds), than
the retirement plan may purchase only Class C shares of the  Oppenheimer  funds.
If on the date the plan sponsor signed the Merrill Lynch record keeping  service
agreement  the plan has $1 million or more in assets but less than $5 million in
assets invested in applicable investments (other than assets invested in Class N
shares of the  Oppenheimer  funds).  If on the date the plan sponsor  signed the
Merrill Lynch record keeping  service  agreement the plan has $5 million or more
in assets  invested in  applicable  investments  (other than assets  invested in
money market funds),  then the retirement  plan may purchase only Class A shares
of the Oppenheimer funds.

     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
Funds'  shares  (for  example,  when a purchase  check is  returned to the Funds
unpaid)  causes a loss to be  incurred  when the net asset  values of the Funds'
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 Funds for the loss,  the
Distributor  will do so. The Funds may reimburse the Distributor for that amount
by redeeming shares from any account  registered in that investor's name, or the
Funds or the Distributor may seek other redress.

     Classes of Shares. Each class of shares of the Funds represents an interest
in the same  portfolio  of  investments  of the Funds.  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 Funds. 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 a purchase order of more than $100,000 for
Class B shares or a purchase  order of $1 million  or more to  purchase  Class C
shares on behalf of a single  investor (not  including  dealer  "street name" or
omnibus accounts).

     Class B, Class C or Class N shares may not be  purchased  by a new investor
directly  from  the  Distributor   without  the  investor   designating  another
registered broker-dealer.

     |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 72 months after 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 six years.

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

o        to all rollover IRAs (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 C 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.  Each 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 each 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 a 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 such 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).

     Fund  Account  Fees.  As stated in the  Prospectus,  a $12 annual  "Minimum
Balance  Fee" is assessed on a Fund account  with a share  balance  valued under
$500.  The Minimum  Balance Fee is  automatically  deducted  from each such Fund
account on or about the second to last business day of September.

     Listed  below are  certain  cases in which  each Fund has  elected,  in its
discretion,  not to assess the Minimum Balance Fee. These exceptions are subject
to change:

     o A Fund account whose shares were  acquired  after  September  30th of the
prior year;

     o A Fund  account  that  has a  balance  below  $500  due to the  automatic
conversion of shares from Class B to Class A shares.  However,  once all Class B
shares held in the account have been converted to Class A shares the new Class A
share account balance may become subject to the Minimum Balance Fee;

     o Accounts of  shareholders  who elect to access  their  account  documents
electronically  via eDoc Direct (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);

     o A Fund account that has only certificated shares and, has a balance below
$500 and is being escheated;

     o Accounts of shareholders that are held by  broker-dealers  under the NSCC
Fund/SERV system;

     o Accounts held under the Oppenheimer Legacy Program and/or holding certain
Oppenheimer Variable Account Funds;

     o Omnibus  accounts  holding  shares  pursuant to the  Pinnacle,  Ascender,
Custom Plus, Recordkeeper Pro and Pension Alliance Retirement Plan programs; and

     o A Fund  account  that falls below the $500  minimum  solely due to market
fluctuations within the 12-month period preceding the date the fee is deducted.

     Each Fund  reserves  the  authority  to  modify  Fund  Account  Fees in its
discretion.

     Determination of Net Asset Values Per Share. The net asset values per share
of each class of shares of each Fund is  determined  as of the close of business
of the  NYSE on each day that  the  NYSE is  open.  The  calculation  is done by
dividing the value of a Fund's' net assets attributable to a class by the number
of shares of that class that are  outstanding.  The NYSE normally closes at 4:00
p.m., Eastern time, but may close earlier on some 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  are to "Eastern  time." The
'NYSE'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 NYSE members may conduct  trading in certain  securities
on days on which the NYSE is closed  (including  weekends and holidays) or after
4:00 p.m. on a regular  business  day.  Because the Funds' net asset values will
not be  calculated  on those days,  the Funds' net asset values per share may be
significantly  affected  on days when  shareholders  may not  purchase or redeem
shares.   Additionally,   trading  on  many  foreign  stock   exchanges  and  in
over-the-counter markets normally is completed before the close of the NYSE.

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

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

     o Equity securities traded on a U.S. securities exchange or on NASDAQ(R)are
valued as follows:

     (1) if last sale information is regularly reported,  they are valued at the
last reported  sale price on the principal  exchange on which they are traded or
on NASDAQ(R)as applicable, on that day, or

     (2) if last sale information is not available on a valuation date, they are
valued at the last  reported sale price  preceding  the valuation  date if it is
within the spread of the closing "bid" and "asked"  prices on the valuation date
or, if not, at the closing "bid" price on the valuation date.

     o Equity securities traded on a foreign  securities  exchange generally are
valued in one of the following ways:

     (1) at the last sale price available to the pricing service approved by the
Board of Trustees, or

     (2) at the last sale price  obtained by the Manager  from the report of the
principal  exchange on which the security is traded at its last trading  session
on or immediately before the valuation date, or

     (3) at the mean  between the "bid" and  "asked"  prices  obtained  from the
principal  exchange  on  which  the  security  is  traded  or,  on the  basis of
reasonable inquiry, from two market makers in the security.

     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 each 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 each 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 funds 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  funds 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  such  Board's
procedures. If the Manager is unable to locate two market makers willing to give
quotes,  a  security  may be priced at the mean  between  the "bid" and  "asked"
prices  provided by a single  active market maker (which in certain cases may be
the "bid" price if no "asked" price is available).

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

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

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

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

                  How to Sell Shares

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

     Sending  Redemption  Proceeds by Federal Funds Wire. The Federal funds wire
of redemption  proceeds may be delayed if the Funds'  custodian bank is not open
for  business on a day when the Funds would  normally  authorize  the wire to be
made,  which is usually the Funds'  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 Funds are 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 Funds or any of the other  Oppenheimer  funds into which shares of the Funds
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,
Class N or Class Y shares.  The Funds 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
Funds or another of the Oppenheimer funds within 90 days of payment of the sales
charge,  the  shareholder's  basis in the shares of the Funds 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." As  stated in the  Prospectus,  payments  for  shares
tendered for  redemption  are ordinarily  made in cash.  However,  under certain
circumstances, the Board of Trustees of each Fund may determine that it would be
detrimental to the best interests of the remaining  shareholders of the Funds to
make payment of a redemption  order wholly or partly in cash. In that case,  the
Funds may pay the redemption  proceeds in whole or in part by a distribution "in
kind" of liquid securities from the portfolio of the Funds, in lieu of cash. The
Funds have  elected to be governed by Rule 18f-1  under the  Investment  Company
Act. Under that rule, the Funds are obligated to redeem shares solely in cash up
to the lesser of $250,000 or 1% of the net assets of the Funds during any 90-day
period for any one shareholder.

     If shares are redeemed in kind, the redeeming  shareholder  would generally
receive  shares of one or more of the  Underlying  Funds.  Those shares would be
subject to the applicable  Underlying  Fund's normal fees,  sales  charges,  and
redemption  and exchange  policies.  If a redemption  in kind were made in other
types of securities,  the  shareholder  might incur  brokerage or other costs in
selling the  securities for cash.  The Funds will value  securities  used to pay
redemptions in kind using the same method the Funds and the Underlying Funds use
to value their 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.  Each 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  (but  not  less  than 30  days).
Alternatively,  the Board may 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 Funds' other
                  redemption requirements.

     Participants     (other    than    self-employed    plan    sponsors)    in
OppenheimerFunds-sponsored  pension or  profit-sharing  plans with shares of the
Funds 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 Funds,  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 each  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.

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

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

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

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

     |X| Automatic Exchange Plans. Shareholders can authorize the Transfer Agent
to  exchange a  pre-determined  amount of shares of the Funds for shares (of the
same class) of other  Oppenheimer funds  automatically on a monthly,  quarterly,
semi-annual or annual basis under an Automatic Exchange Plan. The minimum amount
that may be exchanged to each other fund account is $50.  Instructions should be
provided   on   the   OppenheimerFunds   Application   or   signature-guaranteed
instructions.  Exchanges made under these plans are subject to the  restrictions
that  apply  to  exchanges  as set  forth  in "How to  Exchange  Shares"  in the
Prospectus and below in this Statement of Additional Information.

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

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

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

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

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

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

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

                  How to Exchange Shares

     As stated in the  Prospectus,  shares of a particular  class of Oppenheimer
funds having more than one class of shares may be  exchanged  only for shares of
the same class of other Oppenheimer funds. Shares of Oppenheimer funds that have
a single class without a class  designation are deemed "Class A" shares for this
purpose.  You can obtain a current list showing  which funds offer which classes
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 California Tax Exempt Trust                      Centennial New York Tax Exempt Trust
Centennial Government Trust                                 Centennial Tax Exempt Trust
Centennial Money Market Trust

  The following funds do not offer Class N shares:
Limited Term New York Municipal Fund                          Oppenheimer Rochester Arizona Municipal Fund
Oppenheimer AMT-Free Municipals                               Oppenheimer Rochester Maryland Municipal Fund
Oppenheimer AMT-Free New York Municipals                      Oppenheimer Rochester Massachusetts Municipal Fund
Oppenheimer California Municipal Fund                         Oppenheimer Rochester Michigan Municipal Fund
Oppenheimer Institutional Money Market Fund                   Oppenheimer Rochester Minnesota Municipal Fund
Oppenheimer International Value Fund                          Oppenheimer Rochester National Municipals
Oppenheimer Limited Term California Municipal Fund            Oppenheimer Rochester North Carolina Municipal Fund
Oppenheimer Limited Term Municipal Fund                       Oppenheimer Rochester Ohio Municipal Fund
Oppenheimer Money Market Fund, Inc.                           Oppenheimer Rochester Virginia Municipal Fund
Oppenheimer New Jersey Municipal Fund                         Oppenheimer Senior Floating Rate Fund
Oppenheimer Principal Protected Main Street Fund II           Rochester Fund Municipals
Oppenheimer Pennsylvania Municipal Fund

  The following funds do not offer Class Y shares:
Limited Term New York Municipal Fund                         Oppenheimer Principal Protected Main Street Fund
Oppenheimer AMT-Free Municipals                              Oppenheimer Principal Protected Main Street Fund II
Oppenheimer AMT-Free New York Municipals                     Oppenheimer Principal Protected Main Street Fund III
Oppenheimer Balanced Fund                                    Oppenheimer Quest Capital Value Fund, Inc.
Oppenheimer California Municipal Fund                        Oppenheimer Quest International Value Fund, Inc.
Oppenheimer Capital Income Fund                               Oppenheimer Rochester Arizona Municipal Fund
Oppenheimer Cash Reserves                                     Oppenheimer Rochester Maryland Municipal Fund
Oppenheimer Convertible Securities Fund                       Oppenheimer Rochester Massachusetts Municipal Fund
Oppenheimer Dividend Growth Fund                              Oppenheimer Rochester Michigan Municipal Fund
Oppenheimer Gold & Special Minerals Fund                      Oppenheimer Rochester Minnesota Municipal Fund
Oppenheimer Institutional Money Market Fund                   Oppenheimer Rochester National Municipals
Oppenheimer Limited Term California Municipal Fund            Oppenheimer Rochester North Carolina Municipal Fund
Oppenheimer Limited Term Municipal Fund                       Oppenheimer Rochester Ohio Municipal Fund
Oppenheimer New Jersey Municipal Fund                         Oppenheimer Rochester Virginia Municipal Fund
Oppenheimer Pennsylvania Municipal Fund

     o  Oppenheimer  Money  Market  Fund,  Inc.  only offers Class A and Class Y
shares.

     o Class B, and Class C 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, Inc. or Oppenheimer Cash
Reserves acquired by exchange of Class M shares.

     o Class A shares of  Oppenheimer  funds may be exchanged at net asset value
for shares of any money market funds offered by the  Distributor.  Shares of any
money market funds purchased  without a sales charge may be exchanged for shares
of  Oppenheimer  funds  offered  with a sales  charge upon  payment of the sales
charge.

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

     o  Shares  of  Oppenheimer  Principal  Protected  Main  Street  Fund may be
exchanged  at net  asset  value  for  shares  of any of the  Oppenheimer  funds.
However,  shareholders are not permitted to exchange shares of other Oppenheimer
funds for shares of Oppenheimer Principal Protected Main Street Fund until after
the expiration of the warranty period (8/5/2010).

     o Shares of  Oppenheimer  Principal  Protected  Main  Street Fund II may be
exchanged  at net  asset  value  for  shares  of any of the  Oppenheimer  funds.
However,  shareholders are not permitted to exchange shares of other Oppenheimer
funds for shares of  Oppenheimer  Principal  Protected Main Street Fund II until
after the expiration of the warranty period (3/3/2011).

     o Shares of  Oppenheimer  Principal  Protected  Main Street Fund III may be
exchanged  at net  asset  value  for  shares  of any of the  Oppenheimer  funds.
However,  shareholders are not permitted to exchange shares of other Oppenheimer
funds for shares of Oppenheimer  Principal  Protected Main Street Fund III until
after the expiration of the warranty period (12/6/2011).

     The Funds may amend,  suspend or terminate  the  exchange  privilege at any
time.  Although the Funds 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  funds  (other  than  Oppenheimer
Rochester  National  Municipals  and  Rochester  Fund  Municipals)  acquired  by
exchange of Class A shares of any Oppenheimer funds 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  Oppenheimer  Rochester  National  Municipals  and
Oppenheimer  Rochester Fund Municipals acquired by exchange of Class A shares of
any Oppenheimer funds 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 funds 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 funds 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
funds  purchased  subject  to a Class A  contingent  deferred  sales  charge are
redeemed  within  the Class A holding  period of the Funds from which the shares
were exchanged,  the Class A contingent  deferred sales charge of the Funds from
which the shares were exchanged is imposed on the redeemed shares.

     o Except  with  respect  to the  Class B shares  described  in the next two
paragraphs,  the  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 B shares of  Oppenheimer  Limited-Term  Government
Funds, Oppenheimer Limited Term Municipal Funds, Limited Term New York Municipal
Funds and Oppenheimer Senior Floating Rate Fund, the Class B contingent deferred
sales charge is imposed on the acquired  shares if they are redeemed within five
years of the initial purchase of the exchanged Class B shares.

     o With respect to Class B shares of  Oppenheimer  Cash  Reserves  that were
acquired  through the  exchange  of Class B shares  initially  purchased  in the
Oppenheimer  Capital  Preservation  Funds, the Class B contingent deferred sales
charge is imposed on the acquired  shares if they are redeemed within five years
of that initial purchase.

     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  funds 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 funds.

     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 Funds  reserve the right to
reject  telephone or written  exchange  requests  submitted in bulk by anyone on
behalf of more than one account.

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

     Processing  Exchange  Requests.  Shares to be exchanged are redeemed on the
regular  business day the Transfer Agent receives an exchange  request in proper
form (the "Redemption Date").  Normally,  shares of the Funds to be acquired are
purchased on the  Redemption  Date,  but such purchases may be delayed by either
Fund up to five business days if they determine that they would be disadvantaged
by an  immediate  transfer of the  redemption  proceeds.  The Funds  reserve the
right, in their discretion, to refuse any exchange request that may disadvantage
them. 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 Funds, the Funds 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 funds 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  Funds,  the  Distributor,  and the  Transfer  Agent are  unable to  provide
investment,  tax or legal advice to a shareholder in connection with an exchange
request or any other investment transaction.

                  Dividends, Capital Gains and Taxes

         Dividends and Distributions.

     The Funds have no fixed dividend rate.  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 Funds'  portfolios,  and
expenses  borne by the  Funds  or borne  separately  by a class.  Dividends  are
calculated  in the same manner,  at the same time,  and on the same day for each
class of shares.  However,  dividends on Class B, Class C and Class N shares are
expected  to be lower  than  dividends  on Class A and Class Y  shares.  That is
because of the effect of the  asset-based  sales  charge on Class B, Class C and
Class N shares.  Those  dividends will also differ in amount as a consequence of
any difference in the net asset values of the different classes of shares.

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

     Some of the  Underlying  Funds have no fixed dividend rate and there can be
no  assurance  as to the  payment of any  dividends  or the  realization  of any
capital gains.

     Tax  Status of the  Funds'  Dividends,  Distributions  and  Redemptions  of
Shares.  The federal tax  treatment of the Funds'  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 Funds
and their 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 Funds 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 Funds.

     Generally,  the  character  of the income or  capital  gains that the Funds
receive from the Underlying  Funds will pass through to the Funds'  shareholders
as long as the Funds and  Underlying  Funds  continue  to qualify  as  regulated
investment  companies.  However,  short-term  capital  gains  received  from the
Underlying Funds will be taxed as ordinary income to the Funds and therefore may
not be offset  against  long-term  capital  losses of the Funds and  foreign tax
credits  or  deductions  passed  through by the  Underlying  Funds may not "pass
through" to the Funds' shareholders.  Additionally, the redemption of Underlying
Fund shares by the Funds may be more frequently  characterized  as a dividend as
opposed  to a  sale  or  exchange  of  shares  under  tax  rules  applicable  to
redemptions,  thereby  resulting in ordinary income without basis offset for the
redeeming Fund rather than capital gain. This will have the effect of increasing
the amount of ordinary income the Funds must distribute to shareholders.

     Qualification as a Regulated  Investment Company. The Funds have elected to
be taxed as regulated  investment  companies under  Subchapter M of the Internal
Revenue Code of 1986, as amended. As regulated investment  companies,  the Funds
are not  subject to federal  income tax on the  portion of their 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 they distribute
to shareholders.  Qualification as a regulated investment company enables a 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 a Fund  (unless  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 a Fund might not meet in a particular year. If a Fund did not
qualify as a regulated  investment company, it 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,  a 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.  Each  Fund  must  also  satisfy  certain  other
requirements of the Internal  Revenue Code,  some of which are described  below.
Distributions  by a 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, a 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)  or certain  other  income and net income  derived from an
interest in qualified publicly traded  partnerships,  as defined in the Internal
Revenue Code.

     In addition to satisfying the requirements  described above, each 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 a Fund's
taxable  year,  at least 50% of the value of its 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,  such  Fund must not have  invested  more than 5% of the
value of its total  assets in  securities  of such  issuer and the Fund must not
hold more than 10% of the outstanding  voting securities of such issuer. No more
than 25% of the value of a Fund's 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),  in two or more issuers which the Fund controls
and which are  engaged in the same or  similar  trades or  businesses  or in the
securities of one or more qualified  publicly traded  partnerships as defined in
the Internal  Revenue  Code.  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.

     Excise Tax on Regulated  Investment  Companies.  Under the Internal Revenue
Code,  by December 31 each year,  each 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, such Fund must pay an
excise tax on the amounts not distributed.  It is presently anticipated that the
Funds  will meet  those  requirements.  To meet  this  requirement,  in  certain
circumstances the Funds 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  a  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.

     Taxation  of  Fund   Distributions.   The  Funds  anticipate   distributing
substantially  all of their  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.  The tax rate on certain
dividend  income  and  long-term   capital  gain  applicable  to   non-corporate
shareholders  has been reduced for taxable  years  beginning  before  January 1,
2009.  Distributions  comprised  of dividends  from  domestic  corporations  and
certain  foreign  corporations  (generally,   corporations   incorporated  in  a
possession of the United States, some corporations  eligible for treaty benefits
under a treaty with the United  States and  corporations  whose stock is readily
tradable on an established  securities  market in the United States) are treated
as "qualified  dividend  income"  eligible for taxation at a maximum tax rate of
15% in the  hands  of  non-corporate  shareholders.  A  certain  portion  of the
Underlying Funds' dividends when paid to the Funds may be eligible for treatment
as  qualified  dividend  income when paid to  noncorporate  shareholders  of the
Funds.  In order for dividends paid by a Fund to be qualified  dividend  income,
the  respective  Underlying  Fund must meet  holding  period and  certain  other
requirements with respect to the dividend-paying  stocks in its portfolio,  such
Fund must meet the holding  period and other  requirements  with  respect to the
Underlying  Fund shares,  and the  non-corporate  shareholder  must meet holding
period and certain other  requirements with respect to the Fund's shares. To the
extent that an  Underlying  Fund or a Fund  engages in  securities  lending with
respect to stock paying qualified  dividend income, the ability to pay qualified
dividend income to shareholders will be limited.

     Special provisions of the Internal Revenue Code govern the eligibility of a
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 a Fund that may  qualify  for the
deduction is limited to the aggregate  amount of qualifying  dividends  that the
Fund derives from  portfolio  investments  that such 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 a 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 Funds may either retain or distribute to shareholders their net capital
gain for each taxable year.  The Funds  currently  intend to distribute any such
amounts  although  their ability to do so will depend on whether the  Underlying
Funds  distribute such gains. If net long term capital gains are distributed and
designated as a capital gain distribution,  they will be taxable to shareholders
as  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 distributing  Fund before the shareholder  acquired his or her
shares.

     If a Fund elects to retain its net capital  gain, it will be subject to tax
on it at the 35%  corporate tax rate. If a 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 his or her tax return as long-term capital gain, will
receive a  refundable  tax credit for  his/her pro rata share of tax paid by the
respective  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 certain  Underlying  Funds 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 an  Underlying  Fund to a reduced rate of, or exemption
from,  taxes on such income.  The Funds will not be able to pass through certain
foreign  tax  credits or  deductions  that would  otherwise  be  available  to a
shareholder in an Underlying Fund.

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

     Distributions  by the Funds will be treated in the manner  described  above
regardless  of  whether  the  distributions  are paid in cash or  reinvested  in
additional  shares of the  applicable  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.

     Each Fund will be  required in certain  cases to  withhold  28% 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).  Any tax withheld by a Fund is remitted by
the Fund to the U.S.  Treasury and all income and any tax withheld is identified
in reports  mailed to  shareholders  in January of each year with a copy sent to
the IRS.

     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 same Fund (including through dividend
reinvestment) 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.

     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  applicable  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 paid to stockholders  who are nonresident  aliens
or  foreign  entities  (which are deemed  not  "effectively  connected  income")
generally  will  be  subject  to a  30%  U.S.  withholding  tax  under  existing
provisions of the Internal  Revenue Code  applicable to foreign  individuals and
entities  unless a reduced rate of  withholding  or a  withholding  exemption is
provided under applicable  treaty law. Under the provisions of the American Jobs
Creation  Act of 2004 (the "2004 Tax  Act"),  dividends  derived by a  regulated
investment  company from  short-term  capital gains and  qualifying net interest
income  (including  income from original issue discount and market discount) and
paid to stockholders  who are nonresident  aliens and foreign entities if and to
the extent properly  designated as  "interest-related  dividends" or "short-term
capital gain dividends,"  generally will not be subject to U.S. withholding tax.
Where  possible,  the  Funds  intend  to make such  designations.  Under  recent
guidance  issued by the IRS, a regulated  investment  company will  generally be
allowed to  designate  the  maximum  amount of its  qualified  dividend  income,
interest related  dividends and short term capital gain dividends even where the
aggregate  of the  amounts  designated  exceeds  the  amounts  of the  regulated
investment company  distributions.  However, in any given tax year, there may be
circumstances  which would cause a Fund not to designate  the maximum  amount of
interest-related   income  or  short  term  capital  gain  income  eligible  for
exemption.  It is not  possible  to predict  what  portion,  if any, of a Fund's
distributions  will be designated as short-term capital gains or interest income
exempt from withholding in the hands of nonresident and foreign stockholders.

     The 2004 Tax Act also provides that distributions of a Fund attributable to
gains from sales or exchanges of "U.S.  real property  interests," as defined in
the Internal Revenue Code and Treasury regulations  (including gains on the sale
or exchange of shares in certain  "U.S.  real  property  holding  corporations,"
which may include certain real estate investment trusts among other entities and
certain real estate  investment  company capital gain dividends)  generally will
cause a foreign  stockholder to treat such gain as income effectively  connected
to a trade or business within the United States, generally subject to tax at the
graduated  rates  applicable to U.S.  stockholders.  Such  distributions  may be
subject to U.S.  withholding tax and may require the foreign stockholder to file
a U.S. federal income tax return.

     These  provisions  generally would apply to  distributions  with respect to
taxable years of the Funds  beginning after December 31, 2004 and before January
1, 2008.

     If the ordinary income dividends from a Fund are effectively connected with
the conduct of a U.S.  trade or business,  then the foreign  person may claim an
exemption from 30%  withholding  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  28%  on  ordinary  income  dividends,  capital  gains
distributions and the proceeds of the redemption of shares,  paid to any foreign
person. Any tax withheld (in this situation) by the Fund is remitted by the Fund
to the U.S.  Treasury  and all  income and any tax  withheld  is  identified  in
reports mailed to  shareholders  in January of each year with a copy sent to the
IRS.

     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 Funds,  including  the  applicability  of the U.S.
withholding taxes described above.

     Dividend Reinvestment in Another Fund.  Shareholders of a 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 into which the Funds' shares may be
exchanged. Reinvestment will be made without sales charge at the net asset value
per share in effect at the close of business on the payable date of the dividend
or distribution.  To elect this option, the shareholder must notify the Transfer
Agent in writing  and must have an  existing  account in the fund  selected  for
reinvestment.  Otherwise the shareholder first must obtain a prospectus for that
fund and an application from the Distributor to establish an account.  Dividends
and/or  distributions  from  shares of certain  other  Oppenheimer  funds may be
invested in shares of the Fund on the same basis.

         Additional Information About the Funds

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

     The Custodian.  Citibank,  N.A. is the custodian of the Funds' assets.  The
custodian's  responsibilities  include  safeguarding  and controlling the Funds'
portfolio  securities  and handling the delivery of such  securities to and from
the  Funds.  It is the  practice  of the Funds to deal with the  custodian  in a
manner uninfluenced by any banking  relationship the custodian may have with the
Manager and its  affiliates.  The Funds' 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  Registered  Public  Accounting  Firm.  KPMG LLP  serves as the
Independent Registered Public Accounting Firm for the Funds. KPMG LLP audits the
Funds' financial statements and performs other related audit services.  KPMG LLP
also act as the independent  registered public accounting firm for certain other
Funds advised by the Manager and its  affiliates.  Audit and non-audit  services
provided by KPMG LLP to the Funds must be pre-approved by the Audit Committee.



              Report of Independent Registered Public Accounting Firm


     The Board of Trustees and Shareholders of Oppenheimer Transition 2010 Fund,
Oppenheimer   Transition  2015  Fund,  Oppenheimer  Transition  2020  Fund,  and
Oppenheimer Transition 2030 Fund:

     We have audited the  accompanying  statements of assets and  liabilities of
Oppenheimer  Transition 2010 Fund, Oppenheimer Transition 2015 Fund, Oppenheimer
Transition 2020 Fund, and Oppenheimer  Transition 2030 Fund  (collectively  "the
Funds"),  as of August 21, 2006 and the related  statements  of  operations  and
changes in net assets for the period from June 5, 2006 through  August 21, 2006.
These financial statements are the responsibility of the Funds' management.  Our
responsibility  is to express an opinion on these financial  statements based on
our audits.

     We  conducted  our audits in  accordance  with the  standards of the Public
Company Accounting Oversight Board (United States). Those standards require that
we plan and perform the audit to obtain  reasonable  assurance about whether the
financial  statements  are free of  material  misstatement.  An  audit  includes
examining,  on a test basis,  evidence supporting the amounts and disclosures in
the  financial  statements.  An audit also  includes  assessing  the  accounting
principles  used  and  significant  estimates  made  by  management,  as well as
evaluating the overall  financial  statement  presentation.  We believe that our
audits provide a reasonable basis for our opinion.

     In our opinion,  the financial statements referred to above present fairly,
in all material respects,  the financial position of Oppenheimer Transition 2010
Fund,  Oppenheimer  Transition 2015 Fund,  Oppenheimer Transition 2020 Fund, and
Oppenheimer Transition 2030 Fund as of August 21, 2006, and the results of their
operations  and  changes in their net  assets  for the period  from June 5, 2006
through August 21, 2006, in conformity with U.S. generally  accepted  accounting
principles.

/s/ KPMG LLP
KPMG LLP


Denver, Colorado
August 25, 2006






                                       Statements of Assets and Liabilities
                                                  August 21, 2006

                                            Oppenheimer Transition 2010 Fund

                                                             Composite
ASSETS:
Cash                                                         $104,000

Receivable from Adviser                                     7,000
Total Assets                                                     111,000

LIABILITIES:

Payable for organization and initial offering costs         7,000
Net Assets                                                      $104,000

COMPOSITION OF NET ASSETS:
                                                             $
Par value of shares of beneficial interest                  10
Additional paid-in capital                                     103,990
Net Assets                                                   $104,000



                                                              Class A      Class B     Class C     Class N      Class Y
NET ASSETS-                                                     $100,000      $1,000      $1,000      $1,000       $1,000

Shares of Beneficial Interest Outstanding, $0.001 par
value, unlimited shares authorized                               10,000   100         100         100                100

NET ASSET VALUE PER SHARE (net assets divided by
shares of beneficial interest of Class A, B, C, N,
and Y, respectively)                                         $    10.00    $ 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


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

See accompanying Notes to Financial Statements








                                       Statements of Assets and Liabilities
                                                  August 21, 2006

                                            Oppenheimer Transition 2015 Fund

                                                             Composite
ASSETS:
Cash                                                         $104,000

Receivable from Adviser                                     7,000
Total Assets                                                     111,000

LIABILITIES:

Payable for organization and initial offering costs         7,000
Net Assets                                                      $104,000

COMPOSITION OF NET ASSETS:
                                                             $
Par value of shares of beneficial interest                  10
Additional paid-in capital                                     103,990
Net Assets                                                   $104,000



                                                              Class A      Class B     Class C     Class N      Class Y
NET ASSETS-                                                     $100,000      $1,000      $1,000      $1,000       $1,000

Shares of Beneficial Interest Outstanding, $0.001 par
value, unlimited shares authorized                               10,000   100         100         100                100

NET ASSET VALUE PER SHARE (net assets divided by
shares of beneficial interest of Class A, B, C, N,
and Y, respectively)                                         $    10.00    $ 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


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

See accompanying Notes to Financial Statements







                                       Statements of Assets and Liabilities
                                                  August 21, 2006

                                            Oppenheimer Transition 2020 Fund

                                                             Composite
ASSETS:
Cash                                                         $104,000

Receivable from Adviser                                     7,000
Total Assets                                                     111,000

LIABILITIES:

Payable for organization and initial offering costs         7,000
Net Assets                                                      $104,000

COMPOSITION OF NET ASSETS:
                                                             $
Par value of shares of beneficial interest                  10
Additional paid-in capital                                     103,990
Net Assets                                                   $104,000



                                                              Class A      Class B     Class C     Class N      Class Y
NET ASSETS-                                                     $100,000      $1,000      $1,000      $1,000       $1,000

Shares of Beneficial Interest Outstanding, $0.001 par
value, unlimited shares authorized                               10,000   100         100         100                100

NET ASSET VALUE PER SHARE (net assets divided by
shares of beneficial interest of Class A, B, C, N,
and Y, respectively)                                         $    10.00    $ 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


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

See accompanying Notes to Financial Statements







                                       Statements of Assets and Liabilities
                                                  August 21, 2006

                                            Oppenheimer Transition 2030 Fund

                                                             Composite
ASSETS:
Cash                                                         $104,000

Receivable from Adviser                                     7,000
Total Assets                                                     111,000

LIABILITIES:

Payable for organization and initial offering costs         7,000
Net Assets                                                      $104,000

COMPOSITION OF NET ASSETS:
                                                             $
Par value of shares of beneficial interest                  10
Additional paid-in capital                                     103,990
Net Assets                                                   $104,000



                                                              Class A      Class B     Class C     Class N      Class Y
NET ASSETS-                                                     $100,000      $1,000      $1,000      $1,000       $1,000

Shares of Beneficial Interest Outstanding, $0.001 par
value, unlimited shares authorized                               10,000   100         100         100                100

NET ASSET VALUE PER SHARE (net assets divided by
shares of beneficial interest of Class A, B, C, N,
and Y, respectively)                                         $    10.00    $ 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


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

See accompanying Notes to Financial Statements









                                                     Statements of Operations
                         For the period from June 5, 2006 (date of organization) through August 21, 2006

                                                 Oppenheimer            Oppenheimer            Oppenheimer          Oppenheimer
                                               Transition 2010        Transition 2015        Transition 2020      Transition 2030
                                                     Fund                  Fund                   Fund                 Fund


                                              $                      $                      $                    $
INVESTMENT INCOME:                            -                      -                      -                    -

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


EXPENSES:

Organizational and initial offering costs     7,000                  7,000                  7,000                7,000

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


Less: Reimbursement of expenses by the
Adviser                                       (7,000)                (7,000)            #   (7,000)              (7,000)


                                              $                      $                      $                    $
NET INVESTMENT INCOME                         -                      -                      -                    -

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


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

See accompanying Notes to Financial Statements










                                             Statements of Changes in Net Assets
                       For the period from June 5, 2006 (date of organization) through August 21, 2006

                                             Oppenheimer            Oppenheimer           Oppenheimer           Oppenheimer
                                           Transition 2010        Transition 2015       Transition 2020       Transition 2030
                                                Fund                   Fund                  Fund                  Fund

Operations

                                          $                      $                     $                     $
Net Investment Income                    -                       -                     -                     -

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


Beneficial Interest Transactions
Net increase in net assets
resulting from beneficial
interest transactions:

Class A                                  100,000                 100,000               100,000               100,000

Class B                                  1,000                   1,000                 1,000                 1,000

Class C                                  1,000                   1,000                 1,000                 1,000

Class N                                  1,000                   1,000                 1,000                 1,000

Class Y                                  1,000                   1,000                 1,000                 1,000

Net Assets

Total Increase                           104,000                 104,000               104,000               104,000

Beginning of Period                      -                       -                     -                     -

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


                                                                  $                     $                     $
End of Period                             $         104,000      104,000               104,000               104,000

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


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

See accompanying Notes to Financial Statements








Notes to Financial Statements:

Note 1. Organization

     Oppenheimer   Transition  2010  Fund,  Oppenheimer  Transition  2015  Fund,
Oppenheimer   Transition  2020  Fund,  and  Oppenheimer   Transition  2030  Fund
(collectively,  the "Funds",  individually  a "Fund"),  were each organized as a
business  trust  in the  Commonwealth  of  Massachusetts  on June  5,  2006 as a
diversified,   open-end  management  investment  company  registered  under  the
Investment  Company  Act of 1940,  as  amended.  Each Fund is a special  type of
mutual fund known as a "fund of funds" because it invests in other mutual funds.
Under normal market conditions, OppenheimerFunds, Inc. ("OFI" or the "Adviser"),
the  investment  manager  of each  Fund,  will  invest  the  Fund's  assets in a
diversified portfolio of Oppenheimer mutual funds (the "Underlying Funds").

     The Funds have had no operations  through  August 21, 2006 other than those
relating  to  organizational  matters  and the sale and  issuance  of  shares of
beneficial interest to OFI as noted in the table below:


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

Fund                                   Class A         Class B      Class C      Class N        Class Y

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

Oppenheimer Transition 2010 Fund           10,000          100          100           100           100

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

Oppenheimer Transition 2015 Fund           10,000          100          100           100           100

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

Oppenheimer Transition 2020 Fund           10,000          100          100           100           100

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

Oppenheimer Transition 2030 Fund           10,000          100          100           100           100

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


     On June 15,  2006,  each Fund's  Board of Trustees  approved an  Investment
Advisory Agreement with OFI and a Distributor's  Agreement with OppenheimerFunds
Distributor,  Inc. ("OFDI" or the  "Distributor"),  a wholly owned subsidiary of
OFI.

     Each Fund's  investment  objective is to seek total return until the target
retirement  date  included  in its name and then seeks  income  and  secondarily
capital growth.

     The Funds  offer  Class A,  Class B,  Class C, Class N, and Class Y shares.
Class A shares are sold at their  offering  price,  which is normally  net asset
value plus a front-end  sales  charge.  Class B, Class C, and Class N shares are
sold  without a  front-end  sales  charge  but may be  subject  to a  contingent
deferred sales charge ("CDSC"). Class Y shares are sold to certain institutional
investors without either a front-end sales charge or a CDSC.


Note 2.  Significant Accounting Policies

     The Funds' 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.

     OFI has directly assumed certain organization and initial offering costs of
each Fund,  which are  estimated  at $77,000  per Fund,  and has also  agreed to
voluntarily  reimburse each Fund for  organizational  and initial offering costs
borne directly by each Fund, which are estimated at $7,000 per Fund.

     Income, expenses (other than those attributable to a specific class), gains
and  losses are  allocated  on a daily  basis to each  class of shares  upon the
relative proportion of net assets represented by such class.  Operating expenses
directly  attributable to a specific class are charged against the operations of
that class.

     The Funds intend 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.


Note 3. Fees and Other Transactions with Affiliated Parties

     Under the Investment Advisory  Agreement,  OFI will not charge a management
fee to the Funds;  however OFI will collect indirect management fees through the
investments in the Underlying  Funds.  OFI has  voluntarily  undertaken to waive
fees and/or  reimburse the Funds for certain expenses so that "Total Annual Fund
and Underlying  Fund Operating  Expenses",  as a percentage of average daily net
assets,  will not exceed 1.50% for Class A, 2.25% for Class B and Class C, 1.75%
for  Class N and 1.25% for Class Y  shares.  OFI may  modify or  terminate  that
undertaking at any time.

     OppenheimerFunds  Services ("OFS"), a division of the Adviser,  acts as the
transfer and shareholder servicing agent for the Funds. The Funds will pay OFS a
per account fee. OFS has  voluntarily  agreed to limit transfer and  shareholder
servicing  agent fees paid  directly  by each Fund to an annual rate of 0.35% of
the average daily net assets of each class.

     OFDI acts as the principal underwriter in the continuous public offering of
shares of the  Funds.  Each Fund has  adopted a Service  Plan for Class A shares
that reimburses the Distributor for a portion of its costs incurred for services
provided  to  accounts  that  hold  Class  A  shares.   Reimbursement   is  made
periodically  at an annual rate up to 0.25% of the average  annual net assets of
Class A shares of each Fund.  Each Fund has  adopted  Distribution  and  Service
Plans for Class B, Class C, and Class N shares.  Under the plans, each 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.


Note 4.  Litigation

     A  consolidated  amended  complaint  was filed as a putative  class  action
against  the  Adviser  and  OFS  and  other  defendants  (including  51  of  the
Oppenheimer  funds  excluding  the  Funds)  in the U.S.  District  Court for the
Southern  District  of New York on January  10, 2005 and was amended on March 4,
2005.  The  complaint  alleged,  among other  things,  that the Manager  charged
excessive fees for distribution  and other costs, and that by permitting  and/or
participating in those actions, the  Directors/Trustees  and the Officers of the
funds breached their fiduciary duties to fund shareholders  under the Investment
Company  Act of 1940  and at  common  law.  The  plaintiffs  sought  unspecified
damages,  an  accounting of all fees paid,  and an award of attorneys'  fees and
litigation expenses.

     In response to the  defendants'  motions to dismiss the suit,  seven of the
eight  counts in the  complaint,  including  the claims  against  certain of the
Oppenheimer funds, as nominal defendants, and against certain present and former
Directors,  Trustees  and  officers  of  the  funds,  and  the  Distributor,  as
defendants,  were dismissed with prejudice, by court order dated March 10, 2006,
and the remaining count against the Adviser and OFS was dismissed with prejudice
by court  order  dated April 5, 2006.  The  plaintiffs  filed an appeal of those
dismissals on May 11, 2006.

     The Adviser  believes that the  allegations  contained in the complaint are
without  merit and that there are  substantial  grounds to sustain the  district
court's  rulings.  The Adviser also  believes that it is premature to render any
opinion as to the  likelihood of an outcome  unfavorable  to it, the funds,  the
Directors/Trustees  or the  Officers  on the  appeal  of  the  decisions  of the
district  court,  and  that no  estimate  can yet be made  with  any  degree  of
certainty as to the amount or range of any potential loss.




                                                    Appendix A

RATINGS DEFINITIONS

     Below   are   summaries   of   the   rating   definitions   used   by   the
nationally-recognized  rating agencies listed below. Those ratings represent the
opinion  of the agency as to the credit  quality of issues  that they rate.  The
summaries below are based upon publicly  available  information  provided by the
rating organizations.

Moody's Investors Service, Inc. ("Moody's")

LONG-TERM RATINGS: BONDS AND PREFERRED STOCK ISSUER RATINGS

     Aaa:  Bonds and  preferred  stock  rated  "Aaa"  are  judged to be the best
quality.  They carry the smallest degree of investment risk.  Interest  payments
are protected by a large or by an  exceptionally  stable margin and principal is
secure.  While the various protective elements are likely to change, the changes
that can be  expected  are most  unlikely  to impair  the  fundamentally  strong
position of such issues.

     Aa: Bonds and  preferred  stock rated "Aa" are judged to be of high quality
by all  standards.  Together  with  the  "Aaa"  group,  they  comprise  what are
generally  known as high-grade  bonds.  They are rated lower than the best bonds
because  margins of protection  may not be as large as with "Aaa"  securities or
fluctuation of protective  elements may be of greater  amplitude or there may be
other elements present which make the long-term risk appear somewhat larger than
that of "Aaa" securities.

     A: Bonds and preferred  stock rated "A" possess many  favorable  investment
attributes and are to be considered as upper-medium grade  obligations.  Factors
giving  security to principal and interest are considered  adequate but elements
may be present which  suggest a  susceptibility  to impairment  some time in the
future.

     Baa:  Bonds and  preferred  stock rated "Baa" are  considered  medium-grade
obligations;  that is, they are neither  highly  protected  nor poorly  secured.
Interest  payments and principal  security  appear  adequate for the present but
certain  protective  elements  may  be  lacking  or  may  be  characteristically
unreliable over any great length of time. Such bonds lack outstanding investment
characteristics and have speculative characteristics as well.

     Ba:  Bonds and  preferred  stock rated "Ba" are judged to have  speculative
elements. Their future cannot be considered  well-assured.  Often the protection
of interest and  principal  payments  may be very  moderate and thereby not well
safeguarded  during  both good and bad times  over the  future.  Uncertainty  of
position characterizes bonds in this class.

     B: Bonds and preferred  stock rated "B" generally lack  characteristics  of
the desirable  investment.  Assurance of interest and  principal  payments or of
maintenance  of other terms of the contract  over any long period of time may be
small.

     Caa:  Bonds and  preferred  stock  rated "Caa" are of poor  standing.  Such
issues may be in default or there may be present elements of danger with respect
to principal or interest.

     Ca: Bonds and preferred  stock rated "Ca" represent  obligations  which are
speculative  in a high  degree.  Such  issues are often in default or have other
marked shortcomings.

     C: Bonds and preferred  stock rated "C" are the lowest class of rated bonds
and can be regarded as having  extremely  poor  prospects of ever  attaining any
real investment standing.

     Moody's  applies  numerical  modifiers 1, 2, and 3 in each  generic  rating
classification  from "Aa" through  "Caa." The modifier  "1"  indicates  that the
obligation ranks in the higher end of its generic rating category;  the modifier
"2" indicates a mid-range  ranking;  and the modifier "3" indicates a ranking in
the lower end of that generic rating category. Advanced refunded issues that are
secured by certain assets are identified with a # symbol.

     PRIME RATING SYSTEM  (SHORT-TERM  RATINGS - TAXABLE DEBT) These ratings are
opinions of the ability of issuers to honor  senior  financial  obligations  and
contracts.  Such obligations  generally have an original  maturity not exceeding
one year, unless explicitly noted.

     Prime-1:  Issuer has a superior ability for repayment of senior  short-term
debt obligations.

     Prime-2:  Issuer has a strong  ability for  repayment of senior  short-term
debt obligations.  Earnings trends and coverage ratios, while sound, may be more
subject to variation. Capitalization characteristics,  while appropriate, may be
more affected by external conditions. Ample alternate liquidity is maintained.

     Prime-3:   Issuer  has  an  acceptable  ability  for  repayment  of  senior
short-term  obligations.  The  effect of  industry  characteristics  and  market
compositions may be more pronounced.  Variability in earnings and  profitability
may  result in  changes  in the level of debt  protection  measurements  and may
require  relatively high financial  leverage.  Adequate  alternate  liquidity is
maintained.

     Not Prime: Issuer does not fall within any Prime rating category.

     Standard & Poor's Ratings Services ("Standard & Poor's"), a division of The
McGraw-Hill Companies, Inc.

LONG-TERM ISSUE CREDIT RATINGS

     Issue  credit  ratings  are  based in  varying  degrees,  on the  following
considerations:

     o Likelihood of payment-capacity and willingness of the obligor to meet its
financial  commitment  on an  obligation  in  accordance  with the  terms of the
obligation;

     o Nature of and provisions of the obligation; and

     o Protection  afforded by, and relative  position of, the obligation in the
event of  bankruptcy,  reorganization,  or other  arrangement  under the laws of
bankruptcy  and other  laws  affecting  creditors'  rights.  The  issue  ratings
definitions  are expressed in terms of default  risk.  As such,  they pertain to
senior  obligations of an entity.  Junior  obligations are typically rated lower
than senior obligations,  to reflect the lower priority in bankruptcy,  as noted
above.

     AAA: An obligation rated "AAA" have the highest rating assigned by Standard
&  Poor's.  The  obligor's  capacity  to meet its  financial  commitment  on the
obligation is extremely strong.

     AA: An obligation rated "AA" differ from the highest rated obligations only
in small degree. The obligor's capacity to meet its financial  commitment on the
obligation is very strong.

     A: An  obligation  rated "A" are somewhat more  susceptible  to the adverse
effects of changes in circumstances and economic  conditions than obligations in
higher-rated  categories.  However, the obligor's capacity to meet its financial
commitment on the obligation is still strong.

     BBB: An obligation  rated "BBB"  exhibit  adequate  protection  parameters.
However,  adverse economic conditions or changing  circumstances are more likely
to lead to a weakened  capacity of the obligor to meet its financial  commitment
on the obligation.

     BB, B, CCC, CC, and C: An obligation rated 'BB', 'B', 'CCC',  'CC', and 'C'
are regarded as having significant speculative  characteristics.  'BB' indicates
the least degree of speculation and 'C' the highest. While such obligations will
likely have some quality and protective characteristics, these may be outweighed
by large uncertainties or major exposures to adverse conditions.

     BB: An obligation  rated "BB" are less  vulnerable to nonpayment than other
speculative issues.  However,  they face major ongoing uncertainties or exposure
to adverse business,  financial,  or economic conditions which could lead to the
obligor's   inadequate  capacity  to  meet  its  financial   commitment  on  the
obligation.

     B:  An  obligation  rated  "B"  are  more  vulnerable  to  nonpayment  than
obligations  rated "BB", but the obligor  currently has the capacity to meet its
financial commitment on the obligation. Adverse business, financial, or economic
conditions will likely impair the obligor's  capacity or willingness to meet its
financial commitment on the obligation.

     CCC: An obligation rated "CCC" are currently vulnerable to nonpayment,  and
are dependent upon favorable  business,  financial,  and economic conditions for
the obligor to meet its financial commitment on the obligation.  In the event of
adverse business,  financial, or economic conditions,  the obligor is not likely
to have the capacity to meet its financial commitment on the obligation.

CC: An obligation rated "CC" are currently highly vulnerable to nonpayment.

     C: Subordinated debt or preferred stock obligations rated "C" are currently
highly vulnerable to nonpayment. The "C" rating may be used to cover a situation
where a bankruptcy petition has been filed or similar action taken, but payments
on this  obligation  are  being  continued.  A "C" also  will be  assigned  to a
preferred stock issue in arrears on dividends or sinking fund payments, but that
is currently paying.

     D: An obligation rated "D" are in payment default.  The "D" rating category
is used when payments on an obligation  are not made on the date due even if the
applicable grace period has not expired,  unless Standard & Poor's believes that
such payments will be made during such grace period. The "D" rating also will be
used upon the filing of a bankruptcy  petition or the taking of a similar action
if payments on an obligation are jeopardized.

     The ratings  from "AA" to "CCC" may be  modified by the  addition of a plus
(+) or  minus  (-)  sign to show  relative  standing  within  the  major  rating
categories.

     c: The 'c' subscript is used to provide additional information to investors
that the bank may terminate its  obligation  to purchase  tendered  bonds if the
long-term credit rating of the issuer is below an investment-grade  level and/or
the issuer's bonds are deemed taxable.

     p: The letter 'p' indicates that the rating is  provisional.  A provisional
rating  assumes the  successful  completion of the project  financed by the debt
being rated and indicates that payment of debt service  requirements  is largely
or entirely  dependent upon the  successful,  timely  completion of the project.
This rating,  however,  while addressing credit quality subsequent to completion
of the  project,  makes no comment on the  likelihood  of or the risk of default
upon failure of such  completion.  The investor should exercise his own judgment
with respect to such likelihood and risk.

     Continuance of the ratings is contingent  upon Standard & Poor's receipt of
an executed  copy of the escrow  agreement or closing  documentation  confirming
investments and cash flows.

     r: The 'r' highlights  derivative,  hybrid,  and certain other  obligations
that  Standard  &  Poor's  believes  may  experience  high  volatility  or  high
variability in expected returns as a result of noncredit risks. Examples of such
obligations  are  securities  with  principal  or  interest  return  indexed  to
equities,   commodities,   or  currencies;   certain  swaps  and  options;   and
interest-only  and  principal-only  mortgage  securities.  The absence of an 'r'
symbol should not be taken as an indication  that an obligation  will exhibit no
volatility or variability in total return.

N.R. Not rated.

     Debt  obligations of issuers  outside the United States and its territories
are rated on the same basis as domestic  corporate  and  municipal  issues.  The
ratings measure the creditworthiness of the obligor but do not take into account
currency exchange and related uncertainties.

Bond Investment Quality Standards

     Under present  commercial bank regulations issued by the Comptroller of the
Currency,  bonds rated in the top four  categories  ('AAA',  'AA',  'A',  'BBB',
commonly known as  investment-grade  ratings) generally are regarded as eligible
for  bank  investment.   Also,  the  laws  of  various  states  governing  legal
investments  impose certain rating or other standards for  obligations  eligible
for investment by savings  banks,  trust  companies,  insurance  companies,  and
fiduciaries in general

Short-Term Issue Credit Ratings
     Short-term ratings are generally  assigned to those obligations  considered
short-term  in the  relevant  market.  In the  U.S.,  for  example,  that  means
obligations  with an  original  maturity  of no  more  than  365  days-including
commercial paper.

     A-1: A short-term  obligation  rated "A-1" is rated in the highest category
by Standard & Poor's. The obligor's capacity to meet its financial commitment on
the  obligation  is  strong.  Within  this  category,  certain  obligations  are
designated  with a plus sign (+). This indicates that the obligor's  capacity to
meet its financial commitment on these obligations is extremely strong.

     A-2: A short-term  obligation  rated "A-2" is somewhat more  susceptible to
the adverse  effects of changes in  circumstances  and economic  conditions than
obligations in higher rating categories. However, the obligor's capacity to meet
its financial commitment on the obligation is satisfactory.

     A-3: A  short-term  obligation  rated "A-3"  exhibits  adequate  protection
parameters.  However,  adverse economic conditions or changing circumstances are
more likely to lead to a weakened  capacity of the obligor to meet its financial
commitment on the obligation.

     B: A  short-term  obligation  rated "B" is regarded  as having  significant
speculative characteristics.  The obligor currently has the capacity to meet its
financial  commitment  on  the  obligation;  however,  it  faces  major  ongoing
uncertainties which could lead to the obligor's  inadequate capacity to meet its
financial commitment on the obligation.

     C: A short-term  obligation rated "C" is currently vulnerable to nonpayment
and is dependent upon favorable business, financial, and economic conditions for
the obligor to meet its financial commitment on the obligation.

     D: A short-term  obligation rated "D" is in payment default. The "D" rating
category  is used when  payments on an  obligation  are not made on the date due
even if the applicable  grace period has not expired,  unless  Standard & Poor's
believes  that such  payments  will be made  during such grace  period.  The "D"
rating also will be used upon the filing of a bankruptcy  petition or the taking
of a similar action if payments on an obligation are jeopardized.

NOTES:

     A Standard & Poor's note rating  reflects the liquidity  factors and market
access  risks  unique to notes.  Notes  due in three  years or less will  likely
receive a note  rating.  Notes  maturing  beyond  three  years will most  likely
receive a long-term debt rating.  The following  criteria will be used in making
that assessment:

     o Amortization  schedule-the  larger the final  maturity  relative to other
maturities, the more likely it will be treated as a note; and

     o Source of  payment-the  more dependent the issue is on the market for its
refinancing, the more likely it will be treated as a note.

     SP-1:  Strong capacity to pay principal and interest.  An issue with a very
strong capacity to pay debt service is given a (+) designation.

     SP-2:  Satisfactory  capacity  to pay  principal  and  interest,  with some
vulnerability  to adverse  financial  and economic  changes over the term of the
notes.

     SP-3: Speculative capacity to pay principal and interest.

Fitch, Inc.

     International  credit ratings assess the capacity to meet foreign  currency
or local  currency  commitments.  Both "foreign  currency" and "local  currency"
ratings are internationally  comparable  assessments.  The local currency rating
measures  the  probability  of payment  within the  relevant  sovereign  state's
currency and  jurisdiction  and therefore,  unlike the foreign  currency rating,
does not take account of the possibility of foreign exchange  controls  limiting
transfer into foreign currency.

INTERNATIONAL LONG-TERM CREDIT RATINGS
The following ratings scale applies to foreign currency and local currency ratings.

Investment Grade:

     AAA: Highest Credit Quality. "AAA" ratings denote the lowest expectation of
credit risk. They are assigned only in the case of exceptionally strong capacity
for timely payment of financial commitments. This capacity is highly unlikely to
be adversely affected by foreseeable events.

     AA: Very High Credit Quality. "AA" ratings denote a very low expectation of
credit  risk.  They  indicate  a very  strong  capacity  for  timely  payment of
financial  commitments.   This  capacity  is  not  significantly  vulnerable  to
foreseeable events.

     A: High Credit  Quality.  "A" ratings  denote a low  expectation  of credit
risk.  The capacity for timely  payment of financial  commitments  is considered
strong.  This  capacity  may,  nevertheless,  be more  vulnerable  to changes in
circumstances or in economic conditions than is the case for higher ratings.

     BBB: Good Credit Quality.  "BBB" ratings indicate that there is currently a
low  expectation  of credit risk.  The capacity for timely  payment of financial
commitments is considered adequate,  but adverse changes in circumstances and in
economic conditions are more likely to impair this capacity.  This is the lowest
investment-grade category.

Speculative Grade:

     BB:  Speculative.  "BB" ratings  indicate  that there is a  possibility  of
credit risk  developing,  particularly as the result of adverse  economic change
over time. However, business or financial alternatives may be available to allow
financial  commitments  to be met.  Securities  rated in this  category  are not
investment grade.

     B: Highly Speculative. "B" ratings indicate that significant credit risk is
present,  but a limited  margin of safety  remains.  Financial  commitments  are
currently being met. However,  capacity for continued payment is contingent upon
a sustained, favorable business and economic environment.

     CCC, CC C: High Default Risk.  Default is a real possibility.  Capacity for
meeting  financial  commitments  is solely  reliant  upon  sustained,  favorable
business or economic developments.  A "CC" rating indicates that default of some
kind appears probable. "C" ratings signal imminent default.

     DDD, DD, and D: Default.  The ratings of  obligations  in this category are
based  on  their  prospects  for  achieving   partial  or  full  recovery  in  a
reorganization or liquidation of the obligor. While expected recovery values are
highly  speculative  and cannot be estimated with any  precision,  the following
serve as general  guidelines.  "DDD"  obligations have the highest potential for
recovery,  around  90%-100% of outstanding  amounts and accrued  interest.  "DD"
indicates  potential  recoveries  in the range of  50%-90%,  and "D" the  lowest
recovery potential, i.e., below 50%.

     Entities  rated in this  category  have  defaulted  on some or all of their
obligations.  Entities  rated "DDD" have the highest  prospect for resumption of
performance  or  continued  operation  with or  without a formal  reorganization
process.  Entities  rated  "DD"  and  "D"  are  generally  undergoing  a  formal
reorganization or liquidation process;  those rated "DD" are likely to satisfy a
higher portion of their outstanding obligations, while entities rated "D" have a
poor prospect for repaying all obligations.

     Plus (+) and minus (-) signs may be appended  to a rating  symbol to denote
relative status within the major rating categories. Plus and minus signs are not
added to the "AAA"  category or to  categories  below  "CCC," nor to  short-term
ratings other than "F1" (see below).

     INTERNATIONAL SHORT-TERM CREDIT RATINGS The following ratings scale applies
to foreign currency and local currency  ratings.  A short-term rating has a time
horizon of less than 12 months for most  obligations,  or up to three  years for
U.S.  public  finance  securities,  and  thus  places  greater  emphasis  on the
liquidity necessary to meet financial commitments in a timely manner.

     F1:  Highest  credit  quality.  Strongest  capacity  for timely  payment of
financial commitments.  May have an added "+" to denote any exceptionally strong
credit feature.

     F2: Good credit  quality.  A  satisfactory  capacity for timely  payment of
financial  commitments,  but the margin of safety is not as great as in the case
of higher ratings.

     F3:  Fair  credit  quality.   Capacity  for  timely  payment  of  financial
commitments is adequate.  However,  near-term  adverse changes could result in a
reduction to non-investment grade.

     B:   Speculative.   Minimal   capacity  for  timely  payment  of  financial
commitments,  plus  vulnerability to near-term  adverse changes in financial and
economic conditions.

     C: High default risk.  Default is a real possibility.  Capacity for meeting
financial commitments is solely reliant upon a sustained, favorable business and
economic environment.

     D: Default. Denotes actual or imminent payment default.



                                                    Appendix B

Industry Classifications

Aerospace & Defense                                          Household Products
Air Freight & Couriers                                       Industrial Conglomerates
Airlines                                                     Insurance
Auto Components                                              Internet & Catalog Retail
Automobiles                                                  Internet Software & Services
Beverages                                                    IT Services
Biotechnology                                                Leisure Equipment & Products
Building Products                                            Machinery
Chemicals                                                    Marine
Consumer Finance                                             Media
Commercial Banks                                             Metals & Mining
Commercial Services & Supplies                               Multiline Retail
Communications Equipment                                     Multi-Utilities
Computers & Peripherals                                      Office Electronics
Construction & Engineering                                   Oil & Gas
Construction Materials                                       Paper & Forest Products
Containers & Packaging                                       Personal Products
Distributors                                                 Pharmaceuticals
Diversified Financial Services                               Real Estate
Diversified Telecommunication Services                       Road & Rail
Electric Utilities                                           Semiconductors and Semiconductor Equipment
Electrical Equipment                                         Software
Electronic Equipment & Instruments                           Specialty Retail
Energy Equipment & Services                                  Textiles, Apparel & Luxury Goods
Food & Staples Retailing                                     Thrifts & Mortgage Finance
Food Products                                                Tobacco
Gas Utilities                                                Trading Companies & Distributors
Health Care Equipment & Supplies                             Transportation Infrastructure
Health Care Providers & Services                             Water Utilities
Hotels Restaurants & Leisure                                 Wireless Telecommunication Services
Household Durables


                                                    Appendix C

                          OppenheimerFunds Special Sales Charge Arrangements and Waivers

     In certain  cases,  the initial  sales  charge that applies to purchases of
Class A shares(3) 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.

     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 plans(5)

     4) Group Retirement Plans(6)

     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  funds.  These  waivers  and  special
arrangements may be amended or terminated at any time by a particular Funds, 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."(7)  This waiver
provision applies to:

     o Purchases of Class A shares aggregating $1 million or more.

     o 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.

     o 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.

     o  Purchases  of Class A shares by  Retirement  Plans  that have any of the
following record-keeping arrangements:

     1) The record  keeping is performed by Merrill Lynch Pierce Fenner & Smith,
Inc.  ("Merrill  Lynch") on a daily valuation basis for the Retirement  Plan. On
the date the plan  sponsor  signs  the  record-keeping  service  agreement  with
Merrill Lynch,  the Plan must have $3 million or more of its assets  invested in
(a)  mutual  funds,  other than  those  advised  or  managed  by  Merrill  Lynch
Investment  Management,  L.P. ("MLIM"),  that are made available under a Service
Agreement  between Merrill Lynch and the mutual fund's principal  underwriter or
distributor,  and (b) Funds  advised or managed by MLIM (the funds  described in
(a) and (b) are referred to as "Applicable Investments").

     2) The record  keeping  for the  Retirement  Plan is  performed  on a daily
valuation  basis by a record keeper whose services are provided under a contract
or arrangement  between the Retirement  Plan and Merrill Lynch.  On the date the
plan sponsor signs the record keeping service  agreement with Merrill Lynch, the
Plan must have $3 million or more of its assets  (excluding  assets  invested in
money market funds) invested in Applicable Investments.

     3) The record  keeping  for a  Retirement  Plan is handled  under a service
agreement  with  Merrill  Lynch  and on the  date the plan  sponsor  signs  that
agreement,  the Plan has 500 or more eligible  employees  (as  determined by the
Merrill Lynch plan conversion manager).

     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):

o        The Manager or its affiliates.

     o Present or former officers,  directors, trustees and employees (and their
"immediate  families")  of the  Funds,  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.

     o  Registered  management  investment  companies,  or separate  accounts of
insurance  companies having an agreement with the Manager or the Distributor for
that purpose.

     o 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.

     o 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).

     o 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 Funds 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.

     o  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.

     o "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.

     o 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.

     o 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.

     o  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.

     o A unit  investment  trust that has entered into an appropriate  agreement
with the Distributor.

     o 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.

     o Retirement Plans and deferred compensation plans and trusts used to Funds
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.

     o 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.

     o 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 Fund 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):

     o  Shares  issued  in  plans  of  reorganization,  such as  mergers,  asset
acquisitions and exchange offers, to which each Fund is a party.

     o Shares purchased by the reinvestment of dividends or other  distributions
reinvested  from the Funds or other  Oppenheimer  funds (other than  Oppenheimer
Cash Reserves) or unit  investment  trusts for which  reinvestment  arrangements
have been made with the Distributor.

     o 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.

     o Shares purchased in amounts of less than $5.

     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:

     o To make Automatic  Withdrawal Plan payments that are limited  annually to
no more than 12% of the account value adjusted annually.

     o  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).

     o 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.

o        Hardship withdrawals, as defined in the plan.(8)

     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.(9)

     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.

     o For distributions from 401(k) plans sponsored by broker-dealers that have
entered into a special  agreement with the Distributor  allowing this waiver.

     o 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.

     o 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:

     o Shares redeemed involuntarily, as described in "Shareholder Account Rules
and Policies," in the applicable Prospectus.

     o 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.

     o 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.

     o  Distributions  from accounts for which the  broker-dealer  of record has
entered into a special agreement with the Distributor allowing this waiver.

     o 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.

     o 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.

     o  Redemptions  of Class C shares of an  Oppenheimer  fund in amounts of $1
million or more requested in writing by a Retirement  Plan sponsor and submitted
more than 12 months  after  the  Retirement  Plan's  first  purchase  of Class C
shares,  if the  redemption  proceeds are invested to purchase Class N shares of
one or more Oppenheimer funds.

     o  Distributions(10)  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.(11)

     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.(12)

     9) On account of the participant's separation from service.(13)

     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.

     o  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:

o        Shares sold to the Manager or its affiliates.

     o 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.

     o Shares issued in plans of reorganization to which each Fund is a party.

     o Shares  sold to  present  or  former  officers,  directors,  trustees  or
employees (and their  "immediate  families" as defined above in Section I.A.) of
the Funds,  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 Fund

     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 Fund. 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 Fund. Those Funds include:

Oppenheimer Quest Value Fund, Inc.                           Oppenheimer Small- & Mid- Cap Value Fund
Oppenheimer Quest Balanced Funds                             Oppenheimer Quest International 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 Funds
Quest for Value Investment Quality Income Fund                  Quest for Value National Tax-Exempt Funds
Quest for Value Global Income Fund                              Quest for Value California Tax-Exempt Funds

     All of the Funds  listed  above are  referred  to in this  Appendix  as the
"Former  Quest for Value Fund." The waivers of initial and  contingent  deferred
sales charges  described in this Appendix apply to shares of an Oppenheimer fund
that are either:

     o acquired  by such  shareholder  pursuant  to an  exchange of shares of an
Oppenheimer fund that was one of the Former Quest for Value Fund, or

     o  purchased  by  such   shareholder  by  exchange  of  shares  of  another
Oppenheimer funds that were acquired pursuant to the merger of any of the Former
Quest for Value Fund into that other Oppenheimer funds on November 24, 1995.

A.       Reductions or Waivers of Class A Sales Charges.

     o Reduced Class A Initial  Sales Charge Rates for Certain  Former Quest for
Value Fund 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 Fund or received a proposal to purchase  such shares from
OCC Distributors prior to November 24, 1995.

------------------------------- ---------------------------- ------------------------------ --------------------------
Number of Eligible Employees    Initial Sales Charge as a    Initial Sales Charge as a %    Concession as % of
or Members                      % of Offering Price          of Net Amount Invested         Offering Price
------------------------------- ---------------------------- ------------------------------ --------------------------
------------------------------- ---------------------------- ------------------------------ --------------------------

9 or Fewer                                 2.50%                        2.56%                          2.00%
------------------------------- ---------------------------- ------------------------------ --------------------------
------------------------------- ---------------------------- ------------------------------ --------------------------

At least 10 but not more than              2.00%                        2.04%                          1.60%
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 funds' 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  funds'  Prospectus  and Statement of Additional  Information.
Individuals who qualify under this arrangement for reduced sales charge rates as
members  of  Associations  also may  purchase  shares  for their  individual  or
custodial  accounts at these  reduced  sales charge  rates,  upon request to the
Distributor.

     |_|  Waiver of Class A Sales  Charges  for  Certain  Shareholders.  Class A
shares  purchased  by the  following  investors  are not  subject to any Class A
initial or contingent deferred sales charges:

     o 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 Fund by
merger of a portfolio of the AMA Family of Funds.

     o  Shareholders  who acquired  shares of any Former Quest for Value Fund by
merger of any of the portfolios of the Unified Funds.

     |_|  Waiver  of  Class  A  Contingent  Deferred  Sales  Charge  in  Certain
Transactions.  The Class A  contingent  deferred  sales charge will not apply to
redemptions  of Class A shares  purchased by the  following  investors  who were
shareholders of any Former Quest for Value Fund:

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

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

     |_| Waivers for Redemptions of Shares  Purchased Prior to March 6, 1995. In
the following  cases,  the  contingent  deferred sales charge will be waived for
redemptions  of Class A, Class B or Class C shares of an  Oppenheimer  fund. The
shares must have been  acquired  by the merger of a Former  Quest for Value Fund
into the fund or by exchange  from an  Oppenheimer  fund that was a Former Quest
for Value  Fund or into which such Funds  merged.  Those  shares  must have been
purchased prior to March 6, 1995 in connection with:

     o 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

     o liquidation of a  shareholder's  account if the aggregate net asset value
of shares held in the account is less than the  required  minimum  value of such
accounts.

     |_| Waivers for  Redemptions of Shares  Purchased on or After March 6, 1995
but Prior to November 24, 1995. In the following cases, the contingent  deferred
sales  charge  will be waived  for  redemptions  of Class A,  Class B or Class C
shares of an Oppenheimer  fund. The shares must have been acquired by the merger
of a Former  Quest  for  Value  Fund  into  the  funds  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:

     o 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);

     o 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

     o 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  funds  described in this section if the proceeds are
invested in the same Class of shares in that fund or another  Oppenheimer  funds
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 Core Bond Fund,
Oppenheimer Value Fund and
Oppenheimer Disciplined Allocation Fund

     are  modified  as  described  below for those Funds  shareholders  who were
shareholders  of the  following  funds  (referred to as the "Former  Connecticut
Mutual  Fund")  on  March  1,  1996,  when  OppenheimerFunds,  Inc.  became  the
investment adviser to the Former Connecticut Mutual Fund:

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

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

     |_| Class A Contingent Deferred Sales Charge.  Certain  shareholders of the
Funds and the other Former  Connecticut  Mutual Fund 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 the Funds and other Former
Connecticut  Mutual Fund were  $500,000  prior to March 18, 1996, as a result of
direct  purchases  or  purchases  pursuant  to the Funds'  policies  on Combined
Purchases or Rights of  Accumulation,  who still hold those shares in that Funds
or other Former Connecticut Mutual Fund, 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  Fund 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 the  Funds  and the other  Former  Connecticut
Mutual Fund that were  purchased  at net asset  value  prior to March 18,  1996,
remain  subject  to the prior  Class A CDSC,  or if any  additional  shares  are
purchased by those  shareholders at net asset value pursuant to this arrangement
they will be subject to the prior Class A CDSC.

     |_| Class A Sales Charge  Waivers.  Additional  Class A shares of the Funds
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 Funds
or any one or more of the Former  Connecticut  Mutual Fund  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 Fund or the Funds into which such funds merged;

     2) any  participant  in a qualified  plan,  provided that the total initial
amount  invested  by the  plan in the  Funds  or any  one or more of the  Former
Connecticut Mutual Fund totaled $500,000 or more;

     3)  Directors  of the  Funds or any one or more of the  Former  Connecticut
Mutual Fund 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 Fund, 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 Funds or any one or more of
the Former  Connecticut  Mutual Fund,  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  Fund  described
above.

     Additionally,  Class A shares of the Funds 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
Funds a qualified plan, if that holder  exchanges the variable  annuity contract
proceeds to buy Class A shares of the Funds.

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 the Funds and exchanges of Class A
or Class B  shares  of the  Funds  into  Class A or  Class B shares  of a Former
Connecticut Mutual Fund provided that the Class A or Class B shares of the Funds
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;

     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  Funds due to a
combination with another investment  company by virtue of a merger,  acquisition
or similar reorganization transaction;

     7) in connection with the Funds' right to involuntarily redeem or liquidate
the Funds;

     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 each Fund's  Declaration of Trust,  or as adopted by the
Board of Directors of each Fund.

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

     Shareholders  of  Oppenheimer   AMT-Free   Municipals,   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  Fund,  Inc.  into  those
Oppenheimer  funds on October 18, 1991,  and who held shares of Advance  America
Fund,  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 Funds'  then-existing Class A and were permitted to purchase
those shares at net asset value without sales charge:

o        the Manager and its affiliates,

     o present or former officers,  directors, trustees and employees (and their
"immediate   families"  as  defined  in  the  fund's   Statement  of  Additional
Information),  the Manager and its affiliates,  and retirement plans established
by them or the prior investment advisor of the fund for its employees,

     o  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,

     o 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,

     o 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,

     o 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

     o 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 D QUALIFYING  HYBRID  INSTRUMENTS  Section 2(f) of the Commodities
Exchange Act (the "Act") ("Exclusion for qualifying hybrid instruments")

     (1) In general

     Nothing in this  chapter  (other than  section  16(e)(2)(B)  of this title)
governs  or is  applicable  to a  hybrid  instrument  that  is  predominantly  a
security.

     (2) Predominance.

     A hybrid instrument shall be considered to be predominantly a security if -

     (A) the issuer of the  hybrid  instrument  receives  payment in full of the
purchase price of the hybrid instrument,  substantially  contemporaneously  with
delivery of the hybrid instrument;

     (B) the  purchaser  or holder of the hybrid  instrument  is not required to
make any  payment to the issuer in  addition  to the  purchase  price paid under
subparagraph (A), whether as margin,  settlement payment,  or otherwise,  during
the life of the hybrid instrument or at maturity;

     (C) the issuer of the hybrid  instrument is not subject by the terms of the
instrument to mark-to-market margining requirements; and

     (D) the  hybrid  instrument  is not  marketed  as a  contract  of sale of a
commodity  for future  delivery  (or option on such a contract)  subject to this
chapter.

     (3) Mark-to-market margining requirements.

     For the purposes of paragraph (2)(C), mark-to-market margining requirements
do not include  the  obligation  of an issuer of a secured  debt  instrument  to
increase  the  amount  of  collateral  held in  pledge  for the  benefit  of the
purchaser of the secured debt instrument to secure the repayment  obligations of
the issuer under the secured debt instrument.

CFTC Rule 34.3 Hybrid Instrument Exemption

     (a) A hybrid  instrument  is exempt from all  provisions of the Act and any
person  or class  of  persons  offering,  entering  into,  rendering  advice  or
rendering other services with respect to such exempt hybrid instrument is exempt
for such  activity  from all  provisions of the Act (except in each case Section
2(a)(1)(B)), provided the following terms and conditions are met:

     (1) The instrument is:

     (i) An equity or debt  security  within the meaning of Section  2(l) of the
Securities Act of 1933; or

     (ii) A demand  deposit,  time  deposit or  transaction  account  within the
meaning  of 12 CFR  204.2(b)(1),  (c)(1)  and (e),  respectively,  offered by an
insured  depository  institution as defined in Section 3 of the Federal  Deposit
Insurance  Act; an insured credit union as defined in Section 101 of the Federal
Credit  Union Act; or a Federal or State  branch or agency of a foreign  bank as
defined in Section 1 of the International Banking Act;

     (2) The sum of the  commodity-dependent  values of the  commodity-dependent
components   is   less   than   the    commodity-independent    value   of   the
commodity-independent component;

     (3) Provided that:

     (i) An issuer must receive full payment of the hybrid instrument's purchase
price,  and a purchaser or holder of a hybrid  instrument may not be required to
make  additional  out-of-pocket  payments  to the issuer  during the life of the
instrument or at maturity; and

     (ii) The  instrument  is not marketed as a futures  contract or a commodity
option,  or, except to the extent  necessary to describe the  functioning of the
instrument or to comply with applicable disclosure  requirements,  as having the
characteristics of a futures contract or a commodity option; and

     (iii) The  instrument  does not  provide  for  settlement  in the form of a
delivery  instrument  that is  specified  as such in the  rules of a  designated
contract market;

     (4) The  instrument  is  initially  issued or sold  subject  to  applicable
federal or state securities or banking laws to persons  permitted  thereunder to
purchase or enter into the hybrid instrument.

     Appendix E

     QUALIFYING SWAP TRANSACTIONS  Section 2(g) of the Commodities  Exchange Act
(the "Act") ("Excluded swap transactions")

     No provision of this chapter (other than section 7a (to the extent provided
in section  7a(g) of this title),  7a-1,  7a-3, or 16(e)(2) of this title) shall
apply to or govern any agreement,  contract, or transaction in a commodity other
than an agricultural commodity if the agreement, contract, or transaction is -

     (1)  entered  into  only  between   persons  that  are  eligible   contract
participants  at  the  time  they  enter  into  the  agreement,   contract,   or
transaction;

     (2) subject to individual negotiation by the parties; and

     (3) not executed or traded on a trading facility.

CFTC Rule 35.2 Exemption

     A swap agreement is exempt from all provisions of the Act and any person or
class of persons offering,  entering into,  rendering advice, or rendering other
services  with respect to such  agreement,  is exempt for such activity from all
provisions  of  the  Act  (except  in  each  case  the  provisions  of  Sections
2(a)(1)(B),  4b, and 4o of the Act and Section  32.9 of this  chapter as adopted
under Section 4c(b) of the Act, and the  provisions of Sections 6(c) and 9(a)(2)
of the Act to the extent these  provisions  prohibit  manipulation of the market
price of any  commodity  in  interstate  commerce  or for future  delivery on or
subject to the rules of any contract  market),  provided the following terms and
conditions are met:

     (a) the swap  agreement  is  entered  into  solely  between  eligible  swap
participants at the time such persons enter into the swap agreement;

     (b) the swap agreement is not part of a fungible  class of agreements  that
are standardized as to their material economic terms;

     (c) the  creditworthiness  of any  party  having  an  actual  or  potential
obligation  under  the swap  agreement  would  be a  material  consideration  in
entering into or determining the terms of the swap agreement, including pricing,
cost, or credit enhancement terms of the swap agreement; and

     (d) the swap  agreement  is not  entered  into and  traded on or  through a
multilateral transaction execution facility;

     Provided,  however,  that  paragraphs (b) and (d) of Rule 35.2 shall not be
deemed  to  preclude   arrangements  or  facilities   between  parties  to  swap
agreements,  that provide for netting of payment obligations resulting from such
swap agreements nor shall these  subsections be deemed to preclude  arrangements
or  facilities  among  parties to swap  agreements,  that provide for netting of
payments resulting from such swap agreements;  provided further, that any person
may apply to the  Commission for exemption from any of the provisions of the Act
(except  2(a)(1)(B))  for other  arrangements  or facilities,  on such terms and
conditions  as the  Commission  deems  appropriate,  including  but not  limited
thereto, the applicability of other regulatory regimes.

     (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 only applies to qualified retirement plans and 403(b)(7)
custodial  plans  after your  separation  from  service in or after the year you
reached age 55.

     (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.

Oppenheimer LifeCycle Funds

o        Oppenheimer Transition 2010 Fund
o        Oppenheimer Transition 2015 Fund
o        Oppenheimer Transition 2020 Fund
o        Oppenheimer Transition 2030 Fund

Internet Website
         www.oppenheimerfunds.com

Investment Advisor
         OppenheimerFunds, Inc.
         Two World Financial Center
         225 Liberty Street-11th Floor
         New York, New York 10281-1008

Distributor
         OppenheimerFunds Distributor, Inc.
         Two World Financial Center
         225 Liberty Street-11th Floor
         New York, New York 10281-1008

Transfer Agent
         OppenheimerFunds Services
         P.O. Box 5270
         Denver, Colorado 80217
         1.800.CALL OPP (225.5677)

Custodian Bank
         Citibank, N.A.
         111 Wall Street
         New York, New York 10005

Independent Registered Public Accounting Firm

         KPMG LLP
         707 Seventeenth Street
         Denver, Colorado 80202


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











                              OPPENHEIMER TRANSITION 2010 FUND

                                         FORM N-1A

                                           PART C

                                     OTHER INFORMATION

Item 23. - Exhibits

(a)   Declaration of Trust dated June 5, 2006: Previously filed with Registrant's initial
Registration Statement (Reg. No. 333-135516), 06/30/06, and incorporated herein by
reference.

(b)   By-Laws dated June 5, 2006: Previously filed with Registrant's initial Registration
Statement (Reg. No. 333-135516), 06/30/06, and incorporated herein by reference.

(c)   Not applicable.

(d)   Investment Advisory Agreement dated June 15, 2006: Filed herewith.

(e)   (i)  General Distributor's Agreement dated June 15, 2006: Filed herewith.

(ii)  Form of Dealer Agreement of OppenheimerFunds Distributor, Inc.: Previously filed with
Post-Effective Amendment No. 34 to the Registration Statement of Oppenheimer Main Street
Funds, Inc. (Reg. No.33-17850), (10/23/06), and incorporated herein by reference.

(iii) Form of Broker Agreement of OppenheimerFunds Distributor, Inc.: Previously filed with
Post-Effective Amendment No. 34 to the Registration Statement of Oppenheimer Main Street
Funds, Inc. (Reg. No.33-17850), (10/23/06), and incorporated herein by reference.

(iv)  Form of Agency Agreement of OppenheimerFunds Distributor, Inc.: Previously filed with
Post-Effective Amendment No. 34 to the Registration Statement of Oppenheimer Main Street
Funds, Inc. (Reg. No.33-17850), (10/23/06), and incorporated herein by reference.

       (v) Form of Trust Company Fund/SERV Purchase Agreement of OppenheimerFunds
Distributor, Inc.: Previously filed with Post-Effective Amendment No. 45 to the
Registration Statement of Oppenheimer High Yield Fund (Reg. No. 2-62076), (10/26/01), and
incorporated herein by reference.

      (vi) Form of Trust Company Agency Agreement of OppenheimerFunds Distributor, Inc.:
Previously filed with Post-Effective Amendment No. 34 to the Registration Statement of
Oppenheimer Main Street Funds, Inc. (Reg. No.33-17850), (10/23/06), and incorporated herein
by reference.

(f)   (i) Amended and Restated Retirement Plan for Non-Interested Trustees or Directors
dated 8/9/01: Previously filed with Post-Effective Amendment No. 34 to the Registration
Statement of Oppenheimer Gold & Special Minerals Fund (Reg. No. 2-82590), (10/25/01), and
incorporated herein by reference.

      (ii) Form of Deferred Compensation Plan for Disinterested Trustees/Directors:
Previously filed with Post-Effective Amendment No. 26 to the Registration Statement of
Oppenheimer Gold & Special Minerals Fund (Reg. No. 2-82590), (10/28/98), and incorporated
by reference.

(g)      (i) Global Custody Agreement dated August 16, 2002: Previously filed with
         Post-Effective Amendment No. 51 to the Registration Statement of Oppenheimer
         Capital Appreciation Fund (Reg. No. 2-69719), (10/23/06), and incorporated herein
         by reference.

         (ii) Amendment dated October 2, 2003 to the Global Custody Agreement dated August
      16, 2002: Previously filed with Pre-Effective Amendment No. 1 to the Registration
      Statement of Oppenheimer Principal Protected Trust II (Reg. 333-108093), (11/6/03),
      and incorporated herein by reference.

(h)   Not applicable.

(i)   Opinion and Consent of Counsel dated December 7, 2006: Filed herewith.

(j)   Independent Registered Public Accounting Firm's Consent: Filed herewith.

(k)   Not applicable.

(l)   Investment Letter from OppenheimerFunds, Inc. to Registrant: Filed herewith.

(m)   (i)  Service Plan and Agreement for Class A shares dated June 5, 2006: Filed herewith.

(ii)  Distribution and Service Plan and Agreement for Class B shares dated June 5, 2006:
Filed herewith.

(iii) Distribution and Service Plan and Agreement for Class C shares dated June 5, 2006:
Filed herewith.

(iv)  Distribution and Service Plan and Agreement for Class N shares dated June 5, 2006:
Filed herewith.

(n)   Oppenheimer Funds Multiple Class Plan under Rule 18f-3 updated through 10/24/06:
Previously filed with Post-Effective Amendment No. 62 to the Registration Statement of
Oppenheimer Capital Income Fund (Reg. No. 2-33043), 11/21/06, and incorporated herein by
reference.

(o)      (i)Power of Attorney for all Trustees/Directors dated October 11, 2006: Previously
filed with Post-Effective Amendment No. 51 to the Registration Statement of Oppenheimer
Capital Appreciation Fund (Reg. No. 2-69719), 10/23/06, and incorporated herein by
         reference.

(ii)  Power of Attorney for Brian W. Wixted dated October 11, 2006: Previously
filed with Post-Effective Amendment No. 51 to the Registration Statement of Oppenheimer
Capital Appreciation Fund (Reg. No. 2-69719), 10/23/06, and incorporated herein by
reference.

(p)   Amended and Restated Code of Ethics of the Oppenheimer Funds dated March 31, 2006
under Rule 17j-1 of the Investment Company Act of 1940: Previously filed with
Post-Effective Amendment No. 13 to the Registration Statement of Oppenheimer MidCap Fund
(Reg. No. 333-31533), (4/7/06), and incorporated herein by reference.


Item 24. - Persons Controlled by or Under Common Control with the Fund

None.

Item 25. - Indemnification

Reference is made to the provisions of Article Seven of Registrant's Declaration of Trust
filed as Exhibit 23(a) to this Registration Statement, and incorporated herein by reference.

Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be
permitted to trustees, officers and controlling persons of Registrant pursuant to the
foregoing provisions or otherwise, Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy as
expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that
a claim for indemnification against such liabilities (other than the payment by Registrant
of expenses incurred or paid by a trustee, officer or controlling person of Registrant in
the successful defense of any action, suit or proceeding) is asserted by such trustee,
officer or controlling person, Registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public policy as
expressed in the Securities Act of 1933 and will be governed by the final adjudication of
such issue.


Item 26. - Business and Other Connections of the Investment Adviser

(a)   OppenheimerFunds, Inc. is the investment adviser of the Registrant; it and certain
subsidiaries and affiliates act in the same capacity to other investment companies,
including without limitation those described in Parts A and B hereof and listed in Item
26(b) below.

 (b)  There is set forth below information as to any other business, profession, vocation
or employment of a substantial nature in which each officer and director of
OppenheimerFunds, Inc. is, or at any time during the past two fiscal years has been,
engaged for his/her own account or in the capacity of director, officer, employee, partner
or trustee.

--------------------------------------------------------------------------------
Name and Current Position
with OppenheimerFunds, Inc. Other Business and Connections  During the Past Two
                            Years
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Timothy L. Abbuhl,          Vice  President  of  OppenheimerFunds  Distributor,
Vice President              Inc.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Robert Agan,                Senior  Vice  President  of  Shareholder  Financial
Senior Vice President       Services,  Inc. and  Shareholders  Services,  Inc.;
                            Vice  President  of  OppenheimerFunds  Distributor,
                            Inc.,  Centennial Asset Management  Corporation and
                            OFI Private Investments Inc.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Carl Algermissen,           Formerly   Associate  Counsel  &  Legal  Compliance
Vice President & Associate  Officer at Great West-Life & Annuity  Insurance Co.
Counsel                     (February 2004-October 2004).
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Michael Amato,              None
Assistant Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Erik Anderson,              None
Assistant Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Tracey Beck Apostolopoulos, None
Assistant Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Janette Aprilante,          Secretary  (since  December  2001)  of:  Centennial
Vice President & Secretary  Asset  Management   Corporation,   OppenheimerFunds
                            Distributor,  Inc.,  HarbourView  Asset  Management
                            Corporation  (since  June 2003),  Oppenheimer  Real
                            Asset  Management,   Inc.,   Shareholder  Financial
                            Services,   Inc.,   Shareholder   Services,   Inc.,
                            Trinity  Investment  Management  Corporation (since
                            January  2005),  OppenheimerFunds  Legacy  Program,
                            OFI Private  Investments Inc. (since June 2003) and
                            OFI  Institutional  Asset  Management,  Inc. (since
                            June  2003).   Assistant  Secretary  of  OFI  Trust
                            Company (since December 2001).
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Hany S. Ayad,               None
Assistant Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Robert Baker,               None
Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
James F. Bailey,            Senior  Vice  President  of  Shareholder  Services,
Senior Vice President       Inc.  (since March 2006).  Formerly Vice  President
                            at T. Row  Price  Group  (September  2000 - January
                            2006).
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Michael Baldwin,            President  and  Director of  Shareholder  Financial
Executive Vice President    Services,   Inc.  and  Shareholder  Services,  Inc.
                            Formerly  Managing Director at Deutsche Bank (March
                            2001 - March 2005).
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
John Michael Banta,         None
Assistant Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Joanne Bardell,             None
Assistant Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Adam Bass,                  None
Assistant Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Kevin Baum,                 None
Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Jeff Baumgartner,           None
Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Marc Baylin,                Formerly  Portfolio  Manager at J.P.  Morgan  (June
Vice President              2002-August 2005.)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Todd Becerra,               None
Assistant Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Lalit K. Behal              Assistant    Secretary   of    HarbourView    Asset
Assistant Vice President    Management Corporation.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Kathleen Beichert,          Vice  President  of  OppenheimerFunds  Distributor,
Senior Vice President       Inc.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Gerald B. Bellamy,          Assistant  Vice  President  (Sales  Manager  of the
Assistant Vice President    International  Division) of OFI Institutional Asset
                            Management, Inc.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Erik S. Berg,               None
Assistant Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Robert Bertucci,            None
Assistant Vice President:
Rochester Division
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Rajeev Bhaman,              None
Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Craig Billings,             None
Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Mark Binning,               None
Assistant Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Robert J. Bishop,           Treasurer (since October 2003) of  OppenheimerFunds
Vice President              Distributor,  Inc. and Centennial  Asset Management
                            Corporation.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Beth Bleimehl,              None
Assistant Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
John R. Blomfield,          None
Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Lisa I. Bloomberg,          None.
Vice President & Associate
Counsel
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Veronika Boesch,            None
Assistant Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Chad Boll,                  None
Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Antulio N. Bomfim,          None
Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Michelle Borre Massick,     None
Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Lori E. Bostrom,            Formerly  Vice  President  &  Corporate  Counsel at
Vice President & Senior     Prudential  Financial Inc. (October 2002 - November
Counsel                     2004).
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Lisa Bourgeois,             Assistant Vice  President of Shareholder  Services,
Assistant Vice President    Inc.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
John Boydell,               None
Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Garrett C. Broadrup         Formerly  an  Associate  at  Davis  Polk &  Wardell
Assistant Vice President &  (October 2002 - October 2006)
Assistant Counsel
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Michael Bromberg,           None
Assistant Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Joan Brunelle,              None
Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Kristine Bryan-Levin,       Formerly  Senior Vice  President at Brown  Brothers
Vice President              Harriman (November 2002 - May 2005).
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Stephanie Bullington,       Formerly   Fund   Accounting   Manager  at  Madison
Assistant Vice President    Capital  Management  Company  (July  2005 - October
                            2005 and Fund  Accounting  Officer  at  Butterfield
                            Fund  Services  (Bermuda)  Limited (a wholly  owned
                            subsidiary  of the Bank of NT  Butterfield  & Sons)
                            (September 2003 - June 2005).
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Paul Burke,                 None
Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Mark Burns,                 None
Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Geoffrey Caan,              None
Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Patrick Campbell,           None
Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Catherine Carroll,          None
Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Debra Casey,                None
Assistant Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Maria Castro,               None
Assistant Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Lisa Chaffee,               None
Assistant Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Charles Chibnik,            None
Assistant Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Patrick Sheng Chu,          None
Assistant Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Brett Clark,                None
Assistant Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
H.C. Digby Clements,        None
Vice President:
Rochester Division
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Peter V. Cocuzza,           None
Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Gerald James Concepcion,    Formerly  (until  November  2004) an RIA  Marketing
Assistant Vice President    Associate of OppenheimerFunds, Inc.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Robert Corbett,             None
Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Susan Cornwell,             Senior  Vice  President  of  Shareholder  Financial
Senior Vice President       Services,  Inc.  and  Shareholder  Services,  Inc.;
                            Vice  President  of  OppenheimerFunds  Distributor,
                            Inc.,  Centennial Asset Management  Corporation and
                            OppenheimerFunds Legacy Program.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Cheryl Corrigan,            None
Assistant Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Belinda J. Cosper,          None
Assistant Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Scott Cottier,              None
Vice President:
Rochester Division
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Laura Coulston,             None
Assistant Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
George Curry,               Vice  President  of  OppenheimerFunds  Distributor,
Vice President              Inc.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Julie C. Cusker,            None
Assistant Vice President:
Rochester Division
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Kevin Dachille,             Formerly   Fixed   Income   Director   at  National
Vice President              Railroad  Retirement  Investment  Trust (May 2003 -
                            May 2005).
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
John Damian,                None
Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Richard Demarco,            None
Assistant Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Craig P. Dinsell,           None
Executive Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Randall C. Dishmon,         None
Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Gavin Dobson,               Formerly  President at Britannic  Asset  Management
Vice President              International (September 2001 - May 2005).
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Rebecca K. Dolan,           None
Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Steven D. Dombrower,        Senior Vice  President  of OFI Private  Investments
Vice President              Inc.;    Vice    President   of    OppenheimerFunds
                            Distributor, Inc.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Thomas Doyle,               None
Assistant Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Bruce C. Dunbar,            None
Senior Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Brian Dvorak,               None
Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Richard Edmiston,           None
Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
A. Taylor Edwards,          Formerly  Associate at Dechert LLP (September  2000
Assistant Vice President &  - December 2005).
Assistant Counsel
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Venkat Eleswarapu,          Formerly  Associate  Professor  of Finance at Texas
Vice President              Tech  University  (July 2005 -  December  2005) and
                            Assistant   Professor   of  Finance   at   Southern
                            Methodist University (January 1999 - May 2005).
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Daniel R. Engstrom,         None
Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
James Robert Erven          None
Assistant Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
George R. Evans,            None
Senior Vice President &
Director of International
Equities
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Edward N. Everett,          None
Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Kathy Faber,                None
Assistant Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
David Falicia,              None  Assistant  Secretary  (as of  July  2004)  of
Assistant Vice President    HarbourView Asset Management Corporation.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Matthew Farkas,             Formerly  Associate at Epstein Becker & Grenn, P.C.
Assistant Vice President    (September 2000 - March 2006).
and Assistant Counsel
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Kristie Feinberg,           None
Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Emmanuel Ferreira,          None
Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Ronald H. Fielding,         Vice  President  of  OppenheimerFunds  Distributor,
Senior Vice President;      Inc.;  Director  of ICI Mutual  Insurance  Company;
Chairman of the Rochester   Governor  of St.  John's  College;  Chairman of the
Division                    Board  of  Directors  of  International  Museum  of
                            Photography at George Eastman House.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Bradley G. Finkle,          None
Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
John E. Forrest,            Senior   Vice    President   of    OppenheimerFunds
Senior Vice President       Distributor, Inc.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
David Foxhoven,             Assistant   Vice   President  of   OppenheimerFunds
Vice President              Legacy Program.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Colleen M. Franca,          None
Assistant Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Barbara Fraser,             Formerly  Attorney in Private  Practice (April 2000
Vice President & Associate  - November 2005).
Counsel
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Thomas Frengillo,           None
Assistant Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Dominic Freud,              None
Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Dan Gagliardo,              None
Assistant Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Hazem Gamal,                None
Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Seth Gelman,                None.
Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Timothy Gerlach,            None
Assistant Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Subrata Ghose,              None
Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Charles W. Gilbert,         None
Assistant Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Kurt Gibson,                Formerly  Manager at Barclays Capital (January 2002
Assistant Vice President    - April 2006).
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Phillip S. Gillespie,       None.
Senior Vice President &
Assistant Secretary
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Alan C. Gilston,            None
Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Jacqueline Girvin-Harkins,  None
Assistant Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Jill E. Glazerman,          None
Senior Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Benjamin J. Gord,           Vice  President  of  HarbourView  Asset  Management
Vice President              Corporation   and   of  OFI   Institutional   Asset
                            Management, Inc.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Leyla Greengard,            None
Assistant Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Robert B. Grill,            None
Senior Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Carol Guttzeit,             None
Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Robert Haley,               None
Assistant Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Marilyn Hall,               None
Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Kelly Haney,                None
Assistant Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Steve Hauenstein,           None
Assistant Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Robert W. Hawkins,          Formerly an  Associate at Shearman and Sterling LLP
Assistant Vice President &  (July 2004 - August 2005).
Assistant Counsel
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Thomas B. Hayes,            None
Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Jennifer Heathwood,         None
Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Heidi Heikenfeld,           None
Assistant Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Annika Helgerson,           None
Assistant Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Edward Henderson,           Formerly Director of Corporate  Purchasing and Risk
Assistant Vice President    Management  at  StarTek  Inc.  (January  2003 - May
                            2005).
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Daniel Hermann,             None
Assistant Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Dennis Hess,                None
Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Joseph Higgins,             Vice   President   of   OFI   Institutional   Asset
Vice President              Management, Inc.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Dorothy F. Hirshman,        None
Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Daniel Hoelscher,           None
Assistant Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Brian Hourihan,             Assistant  Secretary  of  OFI  Institutional  Asset
Vice President & Associate  Management,  Inc. (since April 2006). Formerly Vice
Counsel                     President  and  Senior  Counsel  at   Massachusetts
                            Financial Service Company (June 2004 - March 2006).
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Edward Hrybenko,            Vice  President  of  OppenheimerFunds  Distributor,
Vice President              Inc.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Scott T. Huebl,             Assistant   Vice   President  of   OppenheimerFunds
Vice President              Legacy Program.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Margaret Hui,               None
Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Dana Hunter,                None
Assistant Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
John Huttlin,               Senior   Vice    President    (Director    of   the
Vice President              International  Division)  (since  January  2004) of
                            OFI Institutional Asset Management,  Inc.; Director
                            (since  June  2003)  of   OppenheimerFunds   (Asia)
                            Limited.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
James G. Hyland,            None
Assistant Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Kelly Bridget Ireland,      None.
Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Kathleen T. Ives,           Vice   President   and   Assistant   Secretary   of
Vice President, Senior      OppenheimerFunds  Distributor, Inc. and Shareholder
Counsel & Assistant         Services,  Inc.;  Assistant Secretary of Centennial
Secretary                   Asset  Management   Corporation,   OppenheimerFunds
                            Legacy Program and Shareholder  Financial Services,
                            Inc.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
William Jaume,              Senior  Vice   President   of   HarbourView   Asset
Vice President              Management  Corporation and OFI Institutional Asset
                            Management, Inc.; Director of OFI Trust Company.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Frank V. Jennings,          None
Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
John Jennings,              None
Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
John Michael Johnson,       None
Assistant Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Lisa Kadehjian,             Formerly Vice  President,  Compensation  Manager at
Assistant Vice President    The Bank of New York (November 1996-November 2004).
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Charles Kandilis,           None
Assistant Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Amee Kantesaria             Assistant Vice President and General Counsel
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Rezo Kanovich,              None
Assistant Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Thomas W. Keffer,           None
Senior Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Michael Keogh,              Vice  President  of  OppenheimerFunds  Distributor,
Vice President              Inc.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
John Kiernan,               Formerly  Vice  President  and  Senior   Compliance
Assistant Vice President &  Officer,   Guardian  Trust  Company,   FSB  at  The
Marketing Compliance        Guardian Life  Insurance  Company of America (since
Manager                     February 1998 - November 2005).
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Audrey Kiszla               Formerly Vice  President at First Horizon  Merchant
Vice President              Services  (December  2005- May 2006);  Director  at
                            Janus (January 1998 - August 2005).
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Lisa Klassen                None
Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Martin S. Korn,             None.
Senior Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Brian Kramer,               None
Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Paul Kunz,                  None
Assistant Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Gloria LaFond,              None
Assistant Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Lisa Lamentino,             None
Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Tracey Lange,               Vice  President  of  OppenheimerFunds  Distributor,
Vice President              Inc. and OFI Private Investments Inc.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Jeffrey P. Lagarce,         President of OFI  Institutional  Asset  Management,
Senior Vice President       Inc. as of January 2005.  Formerly  Executive  Vice
                            President-Head  of  Fidelity   Tax-Exempt  Services
                            Business    at   Fidelity    Investments    (August
                            1996-January 2005).
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
John Latino,                None
Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Kristina Lawrence,          None
Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Gayle Leavitt,              None
Assistant Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Christopher M. Leavy,       None
Senior Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Kevin Lee,                  Formerly  Vice  President  at Delaware  Investments
Vice President              (October 2000 - February 2005).
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Randy Legg,                 None
Vice President & Assistant
Counsel
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Laura Leitzinger,           Senior  Vice  President  of  Shareholder  Services,
Senior Vice President       Inc. and Shareholder Financial Services, Inc.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Justin Leverenz,            None  Formerly,  a  research/technology  analyst at
Vice President              Goldman Sachs, Taiwan (May 2002-May 2004).
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Michael S. Levine,          None
Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Brian Levitt,               None
Assistant Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Gang Li,                    None
Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Shanquan Li,                None
Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Julie A. Libby,             Senior Vice  President  of OFI Private  Investments
Senior Vice President       Inc.  Formerly  Executive  Vice  President  & Chief
                            Operating  Officer at Fred Alger  Management,  Inc.
                            (July 1996 - February 2005).
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Daniel Lifshey,             None
Assistant Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Mitchell J. Lindauer,       None
Vice President & Assistant
General Counsel
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Bill Linden,                None
Assistant Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Malissa B. Lischin,         Assistant   Vice   President  of   OppenheimerFunds
Vice President              Distributor, Inc.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
David P. Lolli,             None
Assistant Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Daniel G. Loughran          None
Vice President:
Rochester Division
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Patricia Lovett,            Vice President of Shareholder  Financial  Services,
Vice President              Inc.  and  Senior  Vice  President  of  Shareholder
                            Services, Inc.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Misha Lozovik,              Formerly  Senior  Director at Clinical  Development
Vice President              Capital   LLC/Care   Capital  LLC  (August  2002  -
                            October 2005).
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Steven Lucaccini,           Formerly  Director  and High  Yield  Analyst at UBS
Assistant Vice President    Global  Asset  Management  (November  2001 -  April
                            2005).
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Dongyan Ma,                 None
Assistant Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Steve Macchia,              None
Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Mark H. Madden,             None.
Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Jerry Mandzij,              None
Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Angelo G. Manioudakis       Senior  Vice   President   of   HarbourView   Asset
Senior Vice President       Management  Corporation  and of  OFI  Institutional
                            Asset Management, Inc.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Carolyn Maxson,             None
Assistant Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
William T. Mazzafro,        Formerly  self-employed as a consultant  securities
Assistant Vice President    (January 2004 - December 2005).
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Trudi McKenna,              Formerly  Leadership   Development   Supervisor  at
Assistant Vice President    JetBlue Airways (July 2003 - October 2005).
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Jay Mewhirter,              Formerly  Director of  Application  Development  at
Vice President              AMVESCAP (September 1999 - March 2005).
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Elizabeth McCormack,        Vice   President   and   Assistant   Secretary   of
Vice President              HarbourView Asset Management Corporation.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Joseph McDonnell,           Formerly  Senior  Vice  President  at Lehman  Bros.
Vice President              (April 1995 - March 2006).
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Joseph McGovern,            None
Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Charles L. McKenzie,        Chairman of the Board,  Director,  Chief  Executive
Senior Vice President       Officer  and   President  of  OFI  Trust   Company;
                            Chairman,    Chief   Executive    Officer,    Chief
                            Investment    Officer    and    Director   of   OFI
                            Institutional   Asset   Management,   Inc.;   Chief
                            Executive  Officer,   President,   Senior  Managing
                            Director   and   Director  of   HarbourView   Asset
                            Management   Corporation;    Chairman,   President;
                            Director   of   Trinity    Investment    Management
                            Corporation and Vice President of Oppenheimer  Real
                            Asset Management, Inc.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
William McNamara            None
Assistant Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Michael Medev,              None
Assistant Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Lucienne Mercogliano,       None
Assistant Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Andrew J. Mika,             None
Senior Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Jan Miller,                 Formerly a  Supervisor  at Janus (May  2004-October
Assistant Vice President    2004).
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Heather Minks               None
Assistant Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Rejeev Mohammed,            None
Assistant Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Nikolaos D. Monoyios,       None
Senior Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Jill Mulachy,               None
Vice President:
Rochester Division
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
John V. Murphy,             President and  Management  Director of  Oppenheimer
Chairman, President, Chief  Acquisition   Corp.;   President  and  Director  of
Executive Officer &         Oppenheimer Real Asset Management,  Inc.;  Chairman
Director                    and  Director of  Shareholder  Services,  Inc.  and
                            Shareholder  Financial Services,  Inc.; Director of
                            Centennial    Asset     Management     Corporation,
                            OppenheimerFunds     Distributor,     Inc.,     OFI
                            Institutional   Asset  Management,   Inc.,  Trinity
                            Investment  Management  Corporation,  Tremont Group
                            Holdings,   Inc.,   HarbourView   Asset  Management
                            Corporation  and  OFI  Private   Investments  Inc.;
                            Executive  Vice President of  Massachusetts  Mutual
                            Life   Insurance    Company;    Director   of   DLB
                            Acquisition   Corporation;    a   member   of   the
                            Investment Company Institute's Board of Governors.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Meaghan Murphy,             Formerly Marketing  Professional,  RFP Writer at JP
Assistant Vice President    Morgan  Fleming  Asset   Management   (May  2002  -
                            October 2004).
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Suzanne Murphy,             None
Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Thomas J. Murray,           None
Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Kenneth Nadler,             None
Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Paul Newman,                None
Assistant Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Richard Nichols,            None
Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
James B. O'Connell,         Formerly    a   Senior    Designer    Manager    of
Assistant Vice President    OppenheimerFunds,   Inc.  (April  2002  -  December
                            2004).
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Matthew O'Donnell,          None
Assistant Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Tony Oh,                    Formerly  Director  of SEC  Reporting  at  Teletech
Assistant Vice President    Holdings (July 2004 - April 2005.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
John O'Hare,                None
Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
John J. Okray,              Formerly Vice President,  Head of Trust  Operations
Vice President              at Lehman Brothers (June 2004-October 2004)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Lerae A. Palumbo,           None
Assistant Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Anthony Parish,             None
Assistant Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Kathleen Patton,            None
Assistant Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
David P. Pellegrino,        None
Senior Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Allison C. Pells,           None
Assistant Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Robert H. Pemble,           None
Assistant Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Lori L. Penna,              None
Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Brian Petersen,             None
Assistant Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Marmeline Petion-Midy,      None
Assistant Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
David Pfeffer,              Senior  Vice   President   of   HarbourView   Asset
Senior Vice President &     Management Corporation since February 2004.
Chief Financial Officer
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Sanjeev Phansalkar,         Formerly   Consultant  at  The  Solomon-Page  Group
Assistant Vice President    (October 2004 - September 2005).
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
James F. Phillips,          None
Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Scott Phillips,             None
Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Gary Pilc,                  None
Assistant Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
John Piper,                 Assistant Vice  President of Shareholder  Services,
Assistant Vice President    Inc.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Jeaneen Pisarra,            None
Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Nicolas Pisciotti,          Formerly  Assistant  Vice  President  at ING (April
Assistant Vice President    2002 - May 2005).
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
David Poiesz,               None
Senior Vice President,
Head of Growth Equity
Investments
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Sergei Polevikov,           None
Assistant Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Semyon Polyak,              Formerly Vice  President and  Co-Portfolio  Manager
Vice President              at Pioneer Investments (June 1998 - August 2005).
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Jeffrey Portnoy,            None
Assistant Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
David Preuss,               None
Assistant Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Ellen Puckett,              None
Assistant Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Jane C. Putnam,             None
Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Paul Quarles,               Formerly a Principal at AIM Management  Group, Inc.
Assistant Vice President    (October 1997-October 2004).
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Michael E. Quinn,           None
Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Julie S. Radtke,            None
Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Norma J. Rapini,            None
Assistant Vice President :
Rochester Division
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Corry E. Read,              None
Assistant Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Marc Reinganum,             None
Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Jill Reiter,                None
Assistant Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Eric Rhodes,                None
Assistant Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Eric Richter,               Vice  President  of  HarbourView  Asset  Management
Vice President              Corporation.  Formerly Investment Officer at Alaska
                            Permanent Fund  Corporation  (April 2005 - February
                            2006);  Vice President at Loomis Sayles & Co. (July
                            1997 - April 2005).
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Claire Ring,                None
Assistant Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Grace Roberts,              None
Assistant Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
David Robertson,            Senior   Vice    President   of    OppenheimerFunds
Senior Vice President       Distributor, Inc.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Robert Robis,               Formerly a Proprietary  Trader at J.P. Morgan Chase
Assistant Vice President    & Co. (May 2004-May 2005).
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Antoinette Rodriguez,       None
Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Stacey Roode,               None
Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Jeffrey S. Rosen,           None
Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Stacy Roth,                 None
Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
James H. Ruff,              President    &   Director    of    OppenheimerFunds
Executive Vice President    Distributor,  Inc. and Centennial  Asset Management
                            Corporation;   Executive   Vice  President  of  OFI
                            Private Investments Inc.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Adrienne Ruffle,            Formerly an  Associate  with Sidley  Austin Brown &
Assistant Vice President &  Wood LLP (September 2002-February 2005).
Assistant Counsel
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Kim Russomanno,             None
Assistant Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Gerald Rutledge,            None
Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Julie Anne Ryan,            None
Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Timothy Ryan,               None
Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Rohit Sah,                  None
Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Valerie Sanders,            None
Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Rudi W. Schadt,             None
Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Ellen P. Schoenfeld,        None
Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Patrick Schneider           Formerly  Human  Resources  Manager at ADT Security
Assistant Vice President    Services (December 2001 - July 2006).
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Mary Beth Schellhorn,       Formerly  Human   Resources   Generalist  at  Misys
Assistant Vice President    Banking Systems (November 2000 - June 2006).
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Scott A. Schwegel,          None
Assistant Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Allan P. Sedmak             None
Assistant Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Jennifer L. Sexton,         Senior Vice  President  of OFI Private  Investments
Vice President              Inc.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Asutosh Shah,               Formerly   Vice    President   at   Merrill   Lynch
Vice President              Investment   Managers  (February  2002  -  February
                            2006).
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Kamal Shah,                 Formerly  Senior Vice  President  Chief  Technology
Vice President              Officer at Tremont Capital  Management  (March 1998
                            - July 2005).
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Nava Sharma,                None
Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Thomas Siomades,            Formerly Vice  President,  Portfolio  Management at
Vice President              Curian  Capital  LLC  (December  2002  -  September
                            2005).
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
David C. Sitgreaves,        None
Assistant Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Edward James Sivigny        None
Assistant Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Enrique H. Smith,           None
Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Louis Sortino,              None
Vice President:
Rochester Division
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Keith J. Spencer,           None
Senior Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Marco Antonio Spinar,       None
Assistant Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Brett Stein                 Formerly  Vice  President  of  Client  Services  at
Vice President              XAware, Inc. (October 2002 - August 2006).
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Richard A. Stein,           None
Vice President:
Rochester Division
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Arthur P. Steinmetz,        Senior  Vice   President   of   HarbourView   Asset
Senior Vice President       Management Corporation.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Jennifer Stevens,           None
Assistant Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Benjamin Stewart            None
Assistant Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
John P. Stoma,              Senior   Vice    President   of    OppenheimerFunds
Senior Vice President       Distributor, Inc.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Amy Sullivan,               None
Assistant Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Deborah A. Sullivan,        Secretary of OFI Trust Company.
Vice President & Assistant
Counsel
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Michael Sussman,            Vice  President  of  OppenheimerFunds  Distributor,
Vice President              Inc.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Thomas Swaney,              None
Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Brian C. Szilagyi,          Director of Financial  Reporting and  Compliance at
Assistant Vice President    First Data Corporation (April 2003-June 2004).
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Matthew Tartaglia,          None
Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Martin Telles,              Senior   Vice    President   of    OppenheimerFunds
Senior Vice President       Distributor, Inc.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Vincent Toner,              None
Assistant Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Melinda Trujillo,           Formerly  Senior  Manager at CoBank,  ACB  (January
Assistant Vice President    2004 - April 2006).
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Leonid Tsvayg,              None
Assistant Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Keith Tucker,               None
Assistant Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Cameron Ullyat,             None
Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Angela Uttaro,              None
Assistant Vice President:
Rochester Division
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Mark S. Vandehey,           Vice  President  and Chief  Compliance  Officer  of
Senior Vice President &     OppenheimerFunds   Distributor,   Inc.,  Centennial
Chief Compliance Officer    Asset   Management   Corporation   and  Shareholder
                            Services,   Inc.;  Chief   Compliance   Officer  of
                            HarbourView  Asset  Management  Corporation,   Real
                            Asset  Management,   Inc.,   Shareholder  Financial
                            Services,   Inc.,  Trinity  Investment   Management
                            Corporation,  OppenheimerFunds  Legacy Program, OFI
                            Private  Investments Inc. and OFI Trust Company and
                            OFI Institutional Asset Management, Inc.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Maureen Van Norstrand,      None
Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Nancy Vann,                 Formerly   Assistant  General  Counsel  at  Reserve
Vice President & Assistant  Management Company, Inc. (April to December 2004).
Counsel
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Rene Vecka,                 None
Assistant Vice President:
Rochester Division
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Vincent Vermette,           Assistant   Vice   President  of   OppenheimerFunds
Assistant Vice President    Distributor, Inc.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Elaine Villas-Obusan,       None
Assistant Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Phillip F. Vottiero,        None
Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Lisa Walsh,                 None
Assistant Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Jerry A. Webman,            Senior  Vice   President   of   HarbourView   Asset
Senior Vice President       Management Corporation.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Christopher D. Weiler,      None
Vice President:
Rochester Division
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Adam Weiner,                None
Assistant Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Barry D. Weiss,             Vice  President  of  HarbourView  Asset  Management
Vice President              Corporation  and  of  Centennial  Asset  Management
                            Corporation.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Melissa Lynn Weiss,         None
Vice President & Associate
Counsel
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Christine Wells,            None
Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Joseph J. Welsh,            Vice  President  of  HarbourView  Asset  Management
Vice President              Corporation.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Diederick Werdmolder,       Director  of  OppenheimerFunds  International  Ltd.
Senior Vice President       and   OppenheimerFunds   plc  and  OppenheimerFunds
                            (Asia)  Limited;  Senior Vice  President  (Managing
                            Director  of  the  International  Division)  of OFI
                            Institutional Asset Management, Inc..
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Catherine M. White,         Assistant   Vice   President  of   OppenheimerFunds
Assistant Vice President    Distributor,  Inc.;  member of the American Society
                            of Pension Actuaries (ASPA) since 1995.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
William L. Wilby,           None
Senior Vice President &
Senior Investment Officer,
Director of Equities
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Troy Willis,                None
Vice President:
Rochester Division
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Donna M. Winn,              President,  Chief  Executive  Officer & Director of
Senior Vice President       OFI Private  Investments Inc.; Director & President
                            of  OppenheimerFunds  Legacy  Program;  Senior Vice
                            President of OppenheimerFunds Distributor, Inc.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Philip Witkower,            Senior   Vice    President   of    OppenheimerFunds
Senior Vice President       Distributor, Inc.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Brian W. Wixted,            Treasurer   of   HarbourView    Asset    Management
Senior Vice President &     Corporation;  OppenheimerFunds  International Ltd.,
Treasurer                   Oppenheimer    Real   Asset    Management,    Inc.,
                            Shareholder Services,  Inc.,  Shareholder Financial
                            Services,  Inc., OFI Private  Investments Inc., OFI
                            Institutional      Asset     Management,      Inc.,
                            OppenheimerFunds  plc and  OppenheimerFunds  Legacy
                            Program;  Treasurer and Chief Financial  Officer of
                            OFI   Trust   Company;   Assistant   Treasurer   of
                            Oppenheimer Acquisition Corp.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Carol E. Wolf,              Senior  Vice   President   of   HarbourView   Asset
Senior Vice President       Management  Corporation  and  of  Centennial  Asset
                            Management Corporation;  serves on the Board of the
                            Colorado Ballet.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Meredith Wolf               None.
Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Oliver Wolff,               None
Assistant Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Kurt Wolfgruber,            Director   of   Tremont   Group   Holdings,   Inc.,
Executive Vice President,   HarbourView  Asset  Management  Corporation and OFI
Chief Investment Officer &  Institutional  Asset  Management,  Inc. (since June
Director                    2003).    Management    Director   of   Oppenheimer
                            Acquisition Corp. (since December 2005).
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Caleb C. Wong,              None
Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Edward C. Yoensky,          None
Assistant Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Geoff Youell,               Formerly   Principal   Consultant   at  XAware  Inc
Assistant Vice President    (January 2004 - June 2005).
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Lucy Zachman,               None
Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Robert G. Zack              General  Counsel  of  Centennial  Asset  Management
Executive Vice President &  Corporation;   General   Counsel  and  Director  of
General Counsel             OppenheimerFunds  Distributor,  Inc.;  Senior  Vice
                            President and General Counsel of HarbourView  Asset
                            Management  Corporation and OFI Institutional Asset
                            Management,  Inc.;  Senior Vice President,  General
                            Counsel  and  Director  of  Shareholder   Financial
                            Services,  Inc.,  Shareholder  Services,  Inc., OFI
                            Private  Investments  Inc.  and OFI Trust  Company;
                            Director     and     Assistant     Secretary     of
                            OppenheimerFunds      International     Ltd     and
                            OppenheimerFunds  plc;  Vice  President,  Secretary
                            and  General  Counsel  of  Oppenheimer  Acquisition
                            Corp.;   Director   of   Oppenheimer   Real   Asset
                            Management,   Inc.  and   OppenheimerFunds   (Asia)
                            Limited; Vice President of OppenheimerFunds  Legacy
                            Program.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Neal A. Zamore,             None
Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Anna Zatulovskaya,          None
Assistant Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Mark D. Zavanelli,          None
Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Alex Zhou,                  None
Assistant Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Ronald Zibelli,             Formerly  Managing  Director  and Small Cap  Growth
Vice President              Team Leader at Merrill Lynch.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Arthur J. Zimmer,           Senior  Vice   President   of   HarbourView   Asset
Senior Vice President       Management Corporation.
--------------------------------------------------------------------------------


The Oppenheimer Funds include the following:

Centennial California Tax Exempt Trust
Centennial Government Trust
Centennial Money Market Trust
Centennial New York Tax Exempt Trust
Centennial Tax Exempt Trust
Limited Term New York Municipal Fund (a series of Rochester Portfolio Series)
OFI Tremont Core Strategies Hedge Fund
OFI Tremont Market Neutral Hedge Fund
Oppenheimer AMT-Free Municipals
Oppenheimer AMT-Free New York Municipals
Oppenheimer Balanced Fund
Oppenheimer California Municipal Fund
Oppenheimer Capital Appreciation Fund
Oppenheimer Capital Income Fund
Oppenheimer Cash Reserves
Oppenheimer Champion Income Fund
Oppenheimer Convertible Securities Fund (a series of Bond Fund Series)
Oppenheimer Core Bond Fund (a series of Oppenheimer Integrity Funds)
Oppenheimer Developing Markets Fund
Oppenheimer Discovery Fund
Oppenheimer Dividend Growth Fund
Oppenheimer Emerging Growth Fund
Oppenheimer Emerging Technologies Fund
Oppenheimer Enterprise Fund
Oppenheimer Equity Fund, Inc.
Oppenheimer Global Fund
Oppenheimer Global Opportunities Fund
Oppenheimer Gold & Special Minerals Fund
Oppenheimer Growth Fund
Oppenheimer International Bond Fund
Oppenheimer Institutional Money Market Fund
Oppenheimer International Diversified Fund
Oppenheimer International Growth Fund
Oppenheimer International Small Company Fund
Oppenheimer International Value Fund (a series of Oppenheimer International Value Trust)
Oppenheimer Limited Term California Municipal Fund
Oppenheimer Limited-Term Government Fund
Oppenheimer Limited Term Municipal Fund (a series of Oppenheimer Municipal Fund)
Oppenheimer Main Street Fund (a series of Oppenheimer Main Street Funds, Inc.)
Oppenheimer Main Street Opportunity Fund
Oppenheimer Main Street Small Cap Fund
Oppenheimer MidCap Fund
Oppenheimer Money Market Fund, Inc.
Oppenheimer Multi-State Municipal Trust (3 series):
     Oppenheimer New Jersey Municipal Fund
     Oppenheimer Pennsylvania Municipal Fund
     Oppenheimer Rochester National Municipals
Oppenheimer Portfolio Series (4 series)
     Active Allocation Fund
     Aggressive Investor Fund
     Conservative Investor Fund
     Moderate Investor Fund
Oppenheimer Principal Protected Main Street Fund (a series of Oppenheimer Principal
     Protected Trust)
Oppenheimer Principal Protected Main Street Fund II (a series of Oppenheimer Principal
     Protected Trust II)
Oppenheimer Principal Protected Main Street Fund III (a series of Oppenheimer Principal
     Protected Trust III)
Oppenheimer Quest Capital Value Fund, Inc.
Oppenheimer Quest For Value Funds (3 series)
     Oppenheimer Quest Balanced Fund
     Oppenheimer Quest Opportunity Value Fund
     Oppenheimer Small- & Mid- Cap Value Fund
Oppenheimer Quest International Value Fund, Inc.
Oppenheimer Quest Value Fund, Inc.
Oppenheimer Real Asset Fund
Oppenheimer Real Estate Fund
Oppenheimer Rochester Arizona Municipal Fund
Oppenheimer Rochester Maryland Municipal Fund
Oppenheimer Rochester Massachusetts Municipal Fund
Oppenheimer Rochester Michigan Municipal Fund
Oppenheimer Rochester Minnesota Municipal Fund
Oppenheimer Rochester North Carolina Municipal Fund
Oppenheimer Rochester Ohio Municipal Fund
Oppenheimer Rochester Virginia Municipal Fund
Oppenheimer Select Value Fund
Oppenheimer Senior Floating Rate Fund
Oppenheimer Series Fund, Inc. (1 series):
Oppenheimer Value Fund
Oppenheimer Strategic Income Fund
Oppenheimer Tremont Market Neutral Fund, LLC
Oppenheimer Tremont Opportunity Fund, LLC
Oppenheimer U.S. Government Trust
Oppenheimer Variable Account Funds (11 series):
     Oppenheimer Balanced Fund/VA
     Oppenheimer Capital Appreciation Fund/VA
     Oppenheimer Core Bond Fund/VA
     Oppenheimer Global Securities Fund/VA
     Oppenheimer High Income Fund/VA
     Oppenheimer Main Street Fund/VA
     Oppenheimer Main Street Small Cap Fund/VA
     Oppenheimer MidCap Fund/VA
     Oppenheimer Money Fund/VA
     Oppenheimer Strategic Bond Fund/VA
     Oppenheimer Value Fund/VA
Panorama Series Fund, Inc. (4 series):
     Government Securities Portfolio
     Growth Portfolio
     Oppenheimer International Growth Fund/VA
     Total Return Portfolio
Rochester Fund Municipals

The address of the Oppenheimer funds listed above, Shareholder Financial Services, Inc.,
Shareholder Services, Inc., OppenheimerFunds Services, Centennial Asset Management
Corporation, Oppenheimer Real Asset Management, Inc. and OppenheimerFunds Legacy Program is
6803 South Tucson Way, Centennial, Colorado 80112-3924.

The address of OppenheimerFunds, Inc., OppenheimerFunds Distributor, Inc., HarbourView
Asset Management Corporation, Oppenheimer Acquisition Corp., OFI Private Investments Inc.,
OFI Institutional Asset Management, Inc. and Oppenheimer Trust Company is Two World
Financial Center, 225 Liberty Street, 11th Floor, New York, New York 10281-1008.

The address of Tremont Group Holdings, Inc. is 555 Theodore Fremd Avenue, Suite 206-C, Rye,
New York 10580.

The address of OppenheimerFunds International Ltd. is Bloc C, Irish Life Center, Lower
Abbey Street, Dublin 1, Ireland.

The address of Trinity Investment Management Corporation is 301 North Spring Street,
Bellefonte, Pennsylvania 16823.

The address of OppenheimerFunds (Asia) Limited is Central Tower, 28 Queen's Road, Suite
1601, Central, Hong Kong.

Item 27. Principal Underwriter

(a)   OppenheimerFunds Distributor, Inc. is the Distributor of the Registrant's shares. It
is also the Distributor of each of the other registered open-end investment companies for
which OppenheimerFunds, Inc. is the investment adviser, as described in Part A and Part B
of this Registration Statement and listed in Item 26(b) above (except Panorama Series Fund,
Inc.) and for MassMutual Institutional Funds.

(b)   The directors and officers of the Registrant's principal underwriter are:

---------------------------------------------------------------------------------
Name & Principal                Position & Office         Position and Office
Business Address                with Underwriter          with Registrant
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Timothy Abbhul(1)               Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Robert Agan(1)                  Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Anthony Allocco(2)              Assistant Vice President  None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Janette Aprilante(2)            Secretary                 None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
James Barker                    Vice President            None
1723 W. Nelson Street
Chicago, IL 60657
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Christopher Barlow(2)           Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Kathleen Beichert(1)            Senior Vice President     None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Rocco Benedetto(2)              Assistant Vice President  None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Rick Bettridge                  Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Robert J. Bishop(1)             Treasurer                 None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Tracey Blinzler(1)              Assistant Vice President  None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
David A. Borrelli               Vice President            None
105 Black Calla Ct.
San Ramon, CA 94583
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Jeffrey R. Botwinick            Vice President            None
4431 Twin Pines Drive
Manlius, NY 13104
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Sarah Bourgraf(1)               Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Michelle Brennan(2)             Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Kevin E. Brosmith               Senior Vice President     None
5 Deer Path
South Natlick, MA 01760
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Jeffrey W. Bryan                Vice President            None
1048 Malaga Avenue
Coral Gables, FL 33134
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Patrick Campbell(1)             Assistant Vice President  None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Andrew Chonofsky                Vice President            None
109 Wade Avenue, Apt. 365
Raleigh, NC 27605
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Angelanto Ciaglia(2)            Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Melissa Clayton(2)              Assistant Vice President  None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Craig Colby(2)                  Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Rodney Constable(1)             Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Susan Cornwell(1)               Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Neev Crane                      Vice President            None
1530 Beacon Street, Apt. #1403
Brookline, MA 02446
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Jeffrey D. Damia                Vice President            None
21 Woodhill Road
Chatham, NY 12037
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Fredrick Davis                  Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
John Davis(2)                   Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Stephen J. Demetrovits(2)       Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Steven Dombrower                Vice President            None
13 Greenbrush Court
Greenlawn, NY 11740
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
George P. Dougherty             Vice President            None
328 Regency Drive
North Wales, PA 19454
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Ryan C. Drier                   Vice President            None
2240 Breton Road SE
Grand Rapids, MI 49525
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Cliff H. Dunteman               Vice President            None
N 53 W 27761 Bantry Road
Sussex, WI 53089-45533
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Hillary Eigen(2)                Assistant Vice President  None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Kent M. Elwell                  Vice President            None
35 Crown Terrace
Yardley, PA 19067
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Gregg A. Everett                Vice President            None
4328 Auston Way
Palm Harbor, FL 34685-4017
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
George R. Fahey                 Senior Vice President     None
9511 Silent Hills Lane
Lone Tree, CO 80124
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Eric C. Fallon                  Vice President            None
10 Worth Circle
Newton, MA 02458
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Deanna Farrugia(1)              Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
James Fereday                   Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Joseph Fernandez                Vice President            None
1717 Richbourg Park Drive
Brentwood, TN 37027
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Mark J. Ferro                   Senior Vice President     None
104 Beach 221st Street
Breezy Point, NY 11697
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Ronald H. Fielding(3)           Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Bradley Finkle(2)               Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Eric P. Fishel                  Vice President            None
725 Boston Post Rd., #12
Sudbury, MA 01776
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Patrick W. Flynn                Senior Vice President     None
14083 East Fair Avenue
Englewood, CO 80111
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
John E. Forrest(2)              Senior Vice President     None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
John ("J") Fortuna(2)           Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Jayme D. Fowler                 Vice President            None
3818 Cedar Springs Road,
#101-349
Dallas, TX 75219
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Richard Fuermann                Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Lucio Giliberti                 Vice President            None
6 Cyndi Court
Flemington, NJ 08822
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Michael Gottesman               Vice President            None
255 Westchester Way
Birmingham, MI 48009
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Raquel Granahan(4)              Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Ralph Grant                     Senior Vice President     None
10 Boathouse Close
Mt. Pleasant, SC 29464
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Kahle Greenfield(2)             Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Eric Grossjung                  Vice President            None
4002 N. 194th Street
Elkhorn, NE 68022
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Michael D. Guman                Vice President            None
3913 Pleasant Avenue
Allentown, PA 18103
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
James E. Gunther                Vice President            None
603 Withers Circle
Wilmington, DE 19810
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Kevin J. Healy(2)               Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Kevin Hennessey                 Vice President            None
8634 Forest Run Lane
Orlando, FL 32836
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Elyse R. Jurman Herman          Vice President            None
5486 NW 42 Avenue
Boca Raton, FL 33496
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Wendy G. Hetson(2)              Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
William E. Hortz(2)             Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Edward Hrybenko(2)              Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Amy Huber(1)                    Assistant Vice President  None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Brian F. Husch                  Vice President            None
37 Hollow Road
Stonybrook, NY 11790
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Keith Hylind                    Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Kathleen T. Ives(1)             Vice President &          Assistant Secretary
                                Assistant Secretary
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Shonda Rae Jaquez(2)            Assistant Vice President  None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Nivan Jaleeli                   Vice President            None
13622 E. Geronimo Rd.
Scottsdale, AZ 85259
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Eric K. Johnson                 Vice President            None
8588 Colonial Drive
Lone Tree, CO 80124
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Christina J. Keller(2)          Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Michael Keogh(2)                Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Lisa Klassen(1)                 Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Richard Klein                   Senior Vice President     None
4820 Fremont Avenue South
Minneapolis, MN 55419
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Richard Knott(1)                Senior Vice President     None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Brent A. Krantz                 Senior Vice President     None
61500 Tam McArthur Loop
Bend, OR 97702
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Eric Kristenson(2)              Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
David T. Kuzia                  Vice President            None
10258 S. Dowling Way
Highlands Ranch, CO 80126
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Tracey Lange(2)                 Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Paul R. LeMire                  Assistant Vice President  None
7 Cormorant Drive
Middletown, NJ 07748
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Eric J. Liberman                Vice President            None
27 Tappan Ave., Unit West
Sleepy Hollow, NY 10591
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Malissa Lischin(2)              Assistant Vice President  None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Thomas Loncar                   Vice President            None
1401  North Taft  Street,  Apt.
726
Arlington, VA 22201
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Craig Lyman                     Vice President            None
7425 Eggshell Drive
N. Las Vegas, NV 89084
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Peter Maddox(2)                 Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Michael Malik                   Vice President            None
546 Idylberry Road
San Rafael, CA 94903
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Steven C. Manns                 Vice President            None
1627 N. Hermitage Avenue
Chicago, IL 60622
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Todd A. Marion                  Vice President            None
24 Midland Avenue
Cold Spring Harbor, NY 11724
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
LuAnn Mascia(2)                 Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Theresa-Marie Maynier           Vice President            None
2421 Charlotte Drive
Charlotte, NC 28203
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
John C. McDonough               Vice President            None
533 Valley Road
New Canaan, CT 06840
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Kent C. McGowan                 Vice President            None
9510 190th Place SW
Edmonds, WA 98020
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Brian F. Medina                 Vice President            None
3009 Irving Street
Denver, CO 80211
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Daniel Melehan                  Vice President            None
906 Bridgeport Court
San Marcos, CA 92069
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Mark Mezzanotte                 Vice President            None
16 Cullen Way
Exeter, NH 03833
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Matthew L. Michaelson           Vice President            None
1250 W. Grace, #3R
Chicago, IL 60613
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Noah Miller(1)                  Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Clint Modler(1)                 Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Robert Moser                    Vice President            None
9650 East Aspen Hill Circle
Lone Tree, CO 80124
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
David W. Mountford              Vice President            None
7820 Banyan Terrace
Tamarac, FL 33321
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Gzim Muja                       Vice President            None
269 S. Beverly Dr. #807
Beverly Hills, CA 90212
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
John V. Murphy(2)               Director                  President & Trustee
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Wendy Jean Murray               Vice President            None
32 Carolin Road
Upper Montclair, NJ 07043
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
John S. Napier                  Vice President            None
17 Hillcrest Ave.
Darien, CT 06820
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Christina Nasta(2)              Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Kathleen Nelkin(2)              Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Kevin P. Neznek(2)              Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Bradford G. Norford             Vice President            None
5095 Lahinch Ct.
Westerville, OH 43082
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Alan Panzer                     Vice President            None
6755 Ridge Mill Lane
Atlanta, GA 30328
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Michael Park(2)                 Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Brian C. Perkes                 Vice President            None
6 Lawton Ct.
Frisco, TX 75034
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Charles K. Pettit(2)            Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Elaine M. Puleo-Carter(2)       Senior Vice President     None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Minnie Ra                       Vice President            None
100 Dolores Street, #203
Carmel, CA 93923
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Dusting Raring                  Vice President            None
27 Blakemore Drive
Ladera Ranch, CA 92797
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Michael A. Raso                 Vice President            None
3 Vine Place
Larchmont, NY 10538
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Richard E. Rath                 Vice President            None
46 Mt. Vernon Ave.
Alexandria, VA 22301
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
William J. Raynor(5)            Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Ruxandra Risko(2)               Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
David R. Robertson(2)           Senior Vice President     None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Nicole Robbins(2)               Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Ian M. Roche                    Vice President            None
7070 Bramshill Circle
Bainbridge, OH 44023
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Kenneth A. Rosenson             Vice President            None
24753 Vantage Pt. Terrace
Malibu, CA 90265
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Matthew Rutig                   Vice President            None
199 North Street
Ridgefield, CT 06877
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
William R. Rylander             Vice President            None
85 Evergreen Road
Vernon, CT 06066
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Thomas Sabow                    Vice President            None
6617 Southcrest Drive
Edina, MN 55435
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
John Saunders                   Vice President            None
2251 Chantilly Ave.
Winter Park, FL 32789
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Jill Schmitt(2)                 Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Thomas Schmitt                  Vice President            None
40 Rockcrest Rd
Manhasset, NY 11030
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
William Schories                Vice President            None
3 Hill Street
Hazlet, NJ 07730
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Charles F. Scully               Vice President            None
125 Cypress View Way
Apex, NC 27502
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Jennifer Sexton(2)              Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Eric Sharp                      Vice President            None
862 McNeill Circle
Woodland, CA 95695
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
William Sheluck(2)              Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Debbie A. Simon                 Vice President            None
55 E. Erie St., #4404
Chicago, IL 60611
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Bryant Smith(1)                 Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Douglas Bruce Smith             Vice President            None
3635 NW Sierra Drive,
Camas, WA 98607
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Christopher M. Spencer          Vice President            None
2353 W 118th Terrace
Leawood, KS 66211
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
John A. Spensley                Vice President            None
375 Mallard Court
Carmel, IN 46032
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Alfred St. John(2)              Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Bryan Stein                     Vice President            None
8 Longwood Rd.
Voorhees, NJ 08043
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
John Stoma(2)                   Senior Vice President     None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Wayne Strauss(3)                Assistant Vice President  None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Brian C. Summe                  Vice President            None
2479 Legends Way
Crestview Hills, KY 41017
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Michael Sussman(2)              Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
George T. Sweeney               Senior Vice President     None
5 Smokehouse Lane
Hummelstown, PA 17036
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
William K. Tai                  Vice President            None
12701 Prairie Drive
Urbandale, IA 50323
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
James Taylor(2)                 Assistant Vice President  None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Martin Telles(2)                Senior Vice President     None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Paul Temple(2)                  Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
David G. Thomas                 Vice President            None
16628 Elk Run Court
Leesburg, VA 20176
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Barrie L. Tiedemann             Vice President            None
1774 Sheridan Drive
Ann Arbor, MI 48104
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Mark S. Vandehey(1)             Vice President and Chief  Vice President and
                                Compliance Officer        Chief Compliance
                                                          Officer
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Vincent Vermete(2)              Assistant Vice President  None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Cynthia Walloga(2)              Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Kenneth Lediard Ward            Vice President            None
1400 Cottonwood Valley Circle
N.
Irving, TX 75038
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Teresa Ward(1)                  Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Michael J. Weigner              Vice President            None
4905 W. San Nicholas Street
Tampa, FL 33629
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Donn Weise                      Vice President            None
3249 Earlmar Drive
Los Angeles, CA 90064
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Chris G. Werner                 Vice President            None
98 Crown Point Place
Castle Rock, CO 80108
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Catherine White(2)              Assistant Vice President  None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Ryan Wilde(1)                   Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Julie Wimer(2)                  Assistant Vice President  None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Donna Winn(2)                   Senior Vice President     None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Peter Winters                   Vice President            None
911 N. Organce Ave, Pat. 514
Orlando, FL 32801
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Patrick Wisneski(1)             Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Philip Witkower(2)              Senior Vice President     None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Meredith Wolff(2)               Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Cary Patrick Wozniak            Vice President            None
18808 Bravata Court
San Diego, CA 92128
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
John Charles Young              Vice President            None
3914 Southwestern
Houston, TX 77005
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Jill Zachman(2)                 Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Robert G. Zack(2)               General Counsel &         Secretary
                                Director
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Walter Zinych                   Vice President            None
630 North Franklin St., Apt.
718
Chicago, IL 60610
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Steven Zito(1)                  Vice President            None
---------------------------------------------------------------------------------

(1)6803 South Tucson Way, Centennial, CO 80112-3924
(2)Two World Financial Center, 225 Liberty Street, 11th Floor, New York, NY 10281-1008
(3)350 Linden Oaks, Rochester, NY 14623
(4)555 Theodore Fremd Avenue, Rye, NY 10580
(5)Independence Wharf, 470 Atlantic Avenue, 11th Floor, Boston, MA 02210



(c)   Not applicable.


Item 28. Location of Accounts and Records

The accounts, books and other documents required to be maintained by Registrant pursuant to
Section 31(a) of the Investment Company Act of 1940 and rules promulgated thereunder are in
the possession of OppenheimerFunds, Inc. at its offices at 6803 South Tucson Way,
Centennial, Colorado 80112-3924.

Item 29. Management Services

Not applicable

Item 30. Undertakings

Not applicable.

                                         SIGNATURES

Pursuant to the  requirements  of the Securities  Act of 1933 and/or the Investment  Company
Act of 1940,  the  Registrant  has duly caused this Initial  Registration  Statement on Form
N-1A to be signed on its behalf by the undersigned,  thereunto duly authorized,  in the City
of New York and State of New York on the 7th day of December, 2006.

                              OPPENHEIMER TRANSITION 2010 FUND

                              By:  /s/ John V. Murphy
                              --------------------------------------------------
                              John V. Murphy, President, Principal
                              Executive Officer, & Trustee


Pursuant to the requirements of the Securities Act of 1933, this Registration  Statement has
been signed below by the following persons in the capacities on the dates indicated:

Signatures                    Title                        Date



/s/ Clayton K. Yeutter*       Chairman of the
Clayton K.Yeutter             Board of Trustees            December 7, 2006


/s/ John V. Murphy*           President, Principal
John V. Murphy                Executive Officer and Trustee  December 7, 2006


/s/ Brian W. Wixted*          Treasurer, Principal         December 7, 2006
Brian W. Wixted               Financial & Accounting Officer


/s/ Matthew P. Fink*          Trustee                      December 7, 2006
Matthew P.Fink


/s/ Robert G. Galli*          Trustee                      December 7, 2006
Robert G. Galli


/s/ Phillip A. Griffiths*      Trustee                     December 7, 2006
Phillip A. Griffiths


/s/ Mary F. Miller*           Trustee                      December 7, 2006
Mary F. Miller


/s/ Joel W. Motley*           Trustee                      December 7, 2006
Joel W. Motley


/s/ Kenneth A. Randall*       Trustee                      December 7, 2006
Kenneth A. Randall


/s/ Russell S. Reynolds, Jr.* Trustee                      December 7, 2006
Russell S. Reynolds, Jr.


/s/ Joseph M. Wikler*      Trustee                         December 7, 2006
Joseph M. Wikler


/s/ Peter I. Wold*            Trustee                      December 7, 2006
Peter I. Wold


/s/ Brian F. Wruble*          Trustee                      December 7, 2006
Brian F. Wruble


*By:  /s/ Mitchell J. Lindauer
      Mitchell J. Lindauer, Attorney-in-Fact

                              Oppenheimer Transition 2010 Fund


                               Pre-Effective Amendment No. 2

                           Registration Statement No. 333-135516




                                       EXHIBIT INDEX


Exhibit No.       Description


23(d)             Investment Advisory Agreement dated June 15, 2006.

23(e)(i)          General Distributor's Agreement dated June 15, 2006.

23(i)             Opinion and Consent of Counsel dated December 7, 2006.

23(j)             Independent Registered Public Accounting Firm's Consent.

23(l)             Investment Letter from OppenheimerFunds, Inc. to Registrant.

23(m)(i)          Service Plan and Agreement for Class A shares dated June 5, 2006.

23(m)(ii)         Distribution and Service Plan and Agreement for Class B shares dated June
                  5, 2006.

23(m)(iii)        Distribution and Service Plan and Agreement for Class C shares dated June
                  5, 2006.

23(m)(iv)         Distribution and Service Plan and Agreement for Class N shares dated June
                  5, 2006.